Washington Employment Law Blawg » Law Updates

Washington Law Updates for September 2009

Cheryl Angeletti-Harris — Wed, 23 Sep 2009 14:00:09 +0000

EEOC Settles Sexual Harassment and Retaliation Suit Against Lowe’s Home Improvement

On August 20, 2009, Lowe’s Home Improvement settled a sexual harassment and retaliation suit brought by the U.S. Equal Employment Opportunity Commission (EEOC) on behalf of three employees at its Longview, Washington store for $1.72 million. EEOC v. Lowe’s Home Improvement Warehouse Inc., W.D. Wash., No. 08-331 (consent decree approved Aug. 20, 2009).

Among the many allegations in the litigation, the EEOC alleged that the female employee was sexually assaulted by a store manager and the two male employees were harassed by managers and co-workers for allegedly being gay. The two also said they were not promoted and were ultimately discharged due to discrimination.

The three-year consent decree requires Lowe’s to provide comprehensive training to management, non-management, and human resources employees in all Washington and Oregon stores. Employees will be trained on what constitutes harassment and retaliation, and on their obligation not to harass or retaliate against any individual. Managers and supervisors will be trained on what constitutes harassment and retaliation, their obligation to provide a discrimination-free work environment, and their responsibilities if an employee complains about harassment or retaliation, or if they observe it. Human resources personnel will be trained on what constitutes harassment and retaliation, how to institute policies and practices to correct past discrimination and prevent future occurrences, informing complainants about the outcome of internal investigations, and the steps Lowe’s will take to assure a discrimination-free workplace in the future.

In addition to the comprehensive training and monetary relief, the consent decree requires Lowe’s to revise its sexual harassment and anti-retaliation policies, issue an anti-harassment statement to all employees in Washington and Oregon, revise its method for tracking employee complaints of harassment, and report regularly to the EEOC on harassment and retaliation complaints which arise in Washington and Oregon stores during the term of the decree.

Company Officials Plead Guilty to Submission of False I-9 Forms

On August 18, 2009, the U.S. Immigration and Customs Enforcement (ICE) announced that two corporate directors of Yamato Engine Specialists pleaded guilty to aiding and abetting the use of a false statement on federal immigration employment forms.

The two admitted they knew employees at the family-owned Bellingham company submitted false names and Social Security numbers on the I-9 forms used to verify workers’ right-to-work status. Shafique Amirali Dhanani, 46, and his sister, Shirin Dhanani Makalai, 52, will be sentenced to probation.

This is western Washington’s first successful prosecution of an employer for knowingly hiring undocumented workers, U.S. Attorney Jeffrey C. Sullivan said. “This case should put employers on notice that if they knowingly employ those who lack legal status, they face prosecution for federal felonies.”

Dhanani admitted that he knew of an employee who left Yamato after an ICE audit of its I-9 forms. The worker returned the following year and filled out a second I-9 with documents Dhanani admitted he knew were false. Makalai admitted that she knew of another employee who filled out an I-9 form in one name and five years later completed a second form in another name under the new date.

The company, which has not yet entered a plea, is expected to pay a significant fine under the directors’ guilty agreement, ICE said, adding that a total of 28 illegal aliens were found to be working for Yamato. All have been put on removal proceedings, according to ICE, but allowed to remain in the country as potential witnesses pending the conclusion of the case.

The federal I-9 form requires employers to examine documents providing information about newly hired workers’ identities and right to work in the United States. Employers are not required to be document experts, but do attest on the form that the documents provided by the workers appear to be genuine. ICE expects employers to use common sense in making that determination.

Washington Supreme Court Rejects Wrongful Discharge Claim

In Briggs v. Nova Services, No. 79615-7 (Aug. 27, 2009), the Washington Supreme Court rejected wrongful discharge and retaliation claims asserted by two employees who were fired after they complained about the management of their employer and by six other employees who walked off the job after the first two employees were fired.

The eight workers—six of them managers— were employed by Nova Services, a corporation that provides services to disabled persons. They wrote to the board of directors to complain about CEO Linda Brennan’s performance.

The board hired an attorney to investigate the complaints and he determined that Brennan had not engaged in any illegal conduct. He recommended that either she or two of the managers be terminated because personal animosity prevented their working effectively together.

The board hired a human resources consultant to mediate the situation between the CEO and the two managers, but mediation failed. Brennan fired the two managers for insubordination. The remaining six workers send a letter to the board saying they would quit if the terminated managers were not reinstated and Brennan was not fired, and demanding that the board contact them the following day.

The board did not respond to the employees’ second letter and the employees did not come to work. Brennan decided they had resigned and hired replacements. The employees sued, claiming their terminations were in violation of public policy because they had engaged in concerted activities protected under RCW 49.32.020. The trial court dismissed the suit before discovery, finding that Nova was entitled to judgment as a matter of law because the employees’ “concerns did not relate to a term or condition of employment.” The appeals court upheld the ruling.

Concerted activity “must relate to the ‘terms and conditions of employment,’ ‘collective bargaining’ or for ‘other mutual aid or protection,’” the Washington Supreme Court ruled. It includes things such as better wages, improved medical coverage, better treatment by supervisors, production quotas and work rules, the court explained. It “does not include ‘managerial decisions, which lie at the core of entrepreneurial control.’” Management rights “continue to include the hiring and firing of management, such as the executive director here.”

Because the record did “not present a genuine issue as to any material fact,” Nova was “entitled to a judgment as a matter of law,” the court ruled, affirming the appeals court decision.

Four justices disagreed. In the dissenters’ opinion, “concerted activity means ‘action in concert’ or simply acting together” for “mutual aid and protection,” which “includes listing grievances or complaints” and “walking off their jobs for . . . mutual aid and protection . . . in protest of working conditions.” And “working conditions” included, in this case, the employees’ “dissatisfaction with Brennan’s professional performance as executive director of Nova,” specifically allegations of lack of adequate supervision, failure to properly delegate authority, failure to hire needed staff, failure to accurately apply accrued sick leave, failure to communicate with employees, and failure to adequately manage finances. Moreover, the dissenters wrote, “Courts also have recognized that employees are protected in engaging in concerted activity for the purpose of seeking the reinstatement of a co-worker.”

It is important to note that although five supreme court justices (a majority of the court) agreed with the result in the Briggs case, only four justices agreed that the employees had not engaged in protected concerted activities. One justice’s opinion did not address the issue. Because the court split evenly on the question of whether the employees in Briggs were engaged in protected concerted activity, the law remains less than clear on that subject. The lesson for employers, thus, is that caution is appropriate, and advice of counsel should be sought before disciplining or discharging employees who have joined together to assert grievances of any nature.

Shared-Work Programs: A Little Used Alternative to Layoffs

Cheryl Angeletti-Harris — Wed, 02 Sep 2009 14:00:27 +0000

In today’s economy, many employers are faced with the challenge of retaining their employees but reducing costs. According to the Center for Law and Social Policy (CLASP), even if economic growth resumes, the job market is not likely to fully recover until mid-2010 or beyond. What is an employer to do until that happens?

Shared-work programs offer employers an alternative to layoffs. The program allows an employer to reduce the work hours of its full-time employees, while the employees collect partial unemployment benefits to replace a portion of their lost wages. Seventeen states offer some type of shared-work program: Arkansas, Arizona, California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Maryland, Minnesota, Missouri, New York, Oregon, Rhode Island, Texas, Vermont and Washington.

Each state’s program is a little different, but they have common attributes. In Washington State, a business must submit an application and participant list. An employer must reduce the weekly work hours of its participating employees by at least 10 percent, but not more than 50 percent. The health benefits that an employer provides to its employees must continue as though the employer did not reduce its work hours. The employer must designate a company representative to manage its shared-work plan. If the company is represented by a union, the collective-bargaining agent must approve the plan in writing for the participating employees. Your state labor department’s website, such as Washington’s Employment Security Department, will get you started on seeing if this program meets your needs.

As with anything, there are benefits and costs associated with shared-work programs.

Benefits:

The employer avoids the expense of rehiring and retraining later
The employer avoids the anger and drop in productivity associated with layoffs
The employer avoids severance payments
Employees get to keep their jobs and they receive replacement wages for a portion of what they’ve lost
The state reduces the number of laid off workers

Costs:

Employers will have higher unemployment insurance tax rates
Employees will burn through their unemployment insurance benefits

On August 7, 2009, Senator Jack Reed (D-RI) introduced the Keep Americans Working Act (S. 1646). For a period of two years, the bill would provide states with temporary financing for 100 percent of the work-share benefits paid to employees for up to 26 weeks. The bill has been referred to the Senate Committee on Finance.

No related posts.

Washington Law Updates for July 2009

Cheryl Angeletti-Harris — Wed, 22 Jul 2009 13:00:34 +0000

Washington Paid Family Leave Law Delayed

Washington Gov. Christine Gregoire has signed a new law, SB 6158, that pushes back the effective date of Washington’s paid family leave law. The law was originally intended to go into effect on October 1, 2009 but will now go into effect on October 1, 2012. The delay in implementing the program is due to budget shortfalls.

The law will create a state-run insurance program. Under the program employees who take time off from work for the birth of a child or to care for a newly adopted child will receive up to five weeks of family leave insurance benefits. The maximum weekly benefits will be $250 per week. In order to qualify for the benefits, an employee must have worked at least 680 hours during the employee’s “qualifying year” and provided written notice of the intent to take leave. Part-time employees will be eligible for a pro-rated payment.

Only two other states, California and New Jersey, have paid family leave programs.

Domestic Partnership Law Update

The Office of the Secretary of State for the state of Washington stated that the sponsors of Referendum 71, the challenge to the Domestic Partnership law, have scheduled an appointment to bring in their petition by the July 25 deadline. However, the sponsors didn’t say how many signatures they have. 120,577 valid voter signatures are required to qualify for the state’s fall ballot.

If the referendum is submitted the new law won’t go into effect on July 26, 2009. Instead the law will be on hold until the vote is held on November 3.

Unemployment Exemption for Service Member Replacements

On July 26, 2009 an amendment to Washington’s unemployment insurance law, RCW 50.29.021 goes into effect. The amendment exempts an employer from being charged for unemployment compensation to workers hired to temporarily replace Armed Forces members called to active duty.

Federal and state law require that members of the Armed Services, including the National Guard and Reserves, who are called to active duty and serve honorably generally must be reinstated in their civilian jobs when that active duty ends if they make a request to their former employers. Without the amendment to the unemployment law, if an employer hired a worker to fill the service member’s job during the period of active military duty, that worker would be entitled to unemployment benefits when the service member was re-employed and the benefits would be charged against the employer’s experience rating account.

Employers Personally Liable for Not Paying Wages

In Morgan v. Kingen, Wash., No. 81202-1 (July 2, 2009), the Washington Supreme Court was asked to determine whether bankruptcy under Chapter 7 liquidation is a valid defense for not paying wages.

Gerald Kingen (CEO) and Scott Switzer (CFO) established Funsters Grand Casino Inc. in 2001. One year later, in 2002, Funsters voluntarily filed for protection under Chapter 11 of the bankruptcy laws. Kingen and Switzer were unwilling to provided additional capital to satisfy the casino’s debts and wages owed. Because of their unwillingness, the court converted the Chapter 11 proceedings to Chapter 7 liquidation.

State wage and hour laws make employers liable for violations, including failure to pay wages due. If the violation is willful, the person or persons responsible for payment may be held personally liable. The employees sued for back wages and the King County superior court held that Kingen and Switzer were personally liable. The court of appeals upheld the trial court ruling. The Washington Supreme Court held in a 6-3 decision that Chapter 7 doesn’t protect business owners from the requirement that they pay employees wages owed when the failure to pay was willful.

Seattle Adds Veterans to Protected Classes

The City of Seattle amended its anti-discrimination ordinance to include veterans to its list of those protected from discrimination in employment. The Seattle City Council unanimously passed the amendments on June 15, 2009. Mayor Greg Nichols signed the amendments to the anti-discrimination ordinance on June 22, 2009. The amendment prohibits discrimination against honorably discharged veterans, as well as any member of the Armed Forces, on the basis of military status.

Federal and state laws already provide protection against discrimination against veterans. According to Seattle City Council President, Rich Conlin’s website, “advocates for veterans and the state legislator who authored the state anti-discrimination statute encouraged the city to adopt similar provisions” because it can be difficult to access the remedies provided under federal and state laws.

Healthy Families Act of 2009 Re-Introduced

Cheryl Angeletti-Harris — Thu, 02 Jul 2009 13:00:40 +0000

On May 18, 2009, Representative Rosa L. DeLauro (D-CT) introduced the Healthy Families Act of 2009 (H.R. 2460) in the House of Representatives. The bill is similar to a proposal she sponsored in March 2007 (H.R. 1542). The legislation faced stiff opposition from Republicans and stalled in the House and Senate. At the time, President George W. Bush threatened to veto the bill if enacted by Congress.

The current bill would require employers with more than 15 employees to provide workers with up to 56 hours of paid sick leave each year. Under the bill, workers would accrue paid sick leave at the rate of one hour for every 30 hours worked, could begin using the paid sick leave after 60 days of employment, and could roll over unused sick leave into the next calendar year.

In a written statement, DeLauro stated, “Every worker should have paid sick days; it is a matter of right and wrong. Being a working parent should not mean choosing between your job, taking care of yourself, and taking care of your family. With the H1N1 outbreak, countless public health officials urged people to follow a simple guideline: If you get sick, stay home from work or school and limit contact with others to keep from infecting them. Yet for many Americans, following this sound advice is impossible.”

The reintroduced legislation, with its 101 co-sponsors in the House, could gain traction. President Barack Obama has stated that he supports the proposal and would sign the bill. Senator Edward Kennedy (D-Mass.) is expected to introduce a Senate version of the bill soon.

Three advocacy groups—the National Partnership for Women and Families, the Fairness Initiative on Low-Wage Worker and the National Association of Working Women—have called upon Congress to pass the bill.

The Society for Human Resource Management (SHRM) is proposing alternative legislation. SHRM has proposed a comprehensive public policy outlining a new set of workplace flexibility principles. According to Michael Aitken, SHRM’s director of government affairs, the principles will offer a new approach to federal leave policy by encouraging employers to provide paid leave voluntarily in exchange for no longer being encumbered by certain complex federal rules. According to the SHRM website, it opposes rigid government-imposed mandates on employers. Employer groups voiced their opposition to H.R. 2460, claiming that the bill could further hurt employers that are struggling to survive in a rocky economic climate.

Paid sick leave legislation has been passed in three cities—San Francisco, CA,
Washington, D.C. and Milwaukee, WI—and is being introduced in Philadelphia, PA and New York City, NY. Paid leave bills are also pending in some states, including Connecticut and Massachusetts.

Washington Law Updates for May 2009

What Does the Ricci Decision Mean for Employers?

Cheryl Angeletti-Harris — Wed, 01 Jul 2009 11:00:36 +0000

The U.S. Supreme Court ruled on June 29 in favor of the New Haven, Connecticut firefighters in Ricci v. DeStefano. White firefighters and one Hispanic firefighter had charged the city discriminated against them when it refused to promote them after they passed an examination that made them eligible for promotion. Few black firefighters passed that same examination and of those who did pass, none could be promoted based on the examination scores.

In a 5-4 ruling, Justice Anthony M. Kennedy, writing for the majority, ruled that the City of New Haven should not have discarded the promotion examination results for the firefighters and in doing so, discriminated against them based on their race. The court’s majority rejected the City’s argument that setting aside the results was permissable because the tests appeared to violate Title VII’s disparate impact provisions. “Fear of litigation alone,” Justice Kennedy wrote, “cannot justify an employer’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions.”

Additionally, the Court said that before an employer throws out the results of a pre-hire exam because it fears a discrimination lawsuit, it must have a “strong basis in evidence” to believe the test is discriminatory under Title VII. Thus, the court imposed a new standard on employers seeking to comply with Title VII.

Justice Ruth Bader Ginsburg wrote the dissent. She said that restricting what employers can do after a policy is found to be discriminatory runs counter to the intent of Title VII, citing previous Supreme Court decisions. She said that by straying so far from precedent, the decision “will not have staying power.” Justice Ginsburg went on to fault the court’s majority for ignoring the history of discrimination against blacks and Hispanics in the New Haven fire department.

So, what does the Ricci decision mean for employers?

The decision arguably creates a quandary for employers. The decision has created a “damned if you do, damned if you don’t” situation for employers.

Disparate treatment (overt, intentional discrimination) and disparate impact (a hiring or promotional standard that has a discriminatory effect, regardless of intent) are both addressed under Title VII. Under the Ricci decision, they are now pitted against one another.

The new standard announced by the court will make it much more difficult for employers to discard results of hiring and promotion tests once they are administered, even if they have a disproportionately negative impact on members of a given racial group. Nevertheless, an employer who concludes it lacks a strong basis in the evidence (and the court did not define what that is) for refusing to throw out a test cannot prevent the filing of a disparate impact lawsuit nor can it be assured it will win that lawsuit. In fact, according to the court’s majority, an employee can still win a disparate impact claim if the employer refuses to adopt an available alternative practice that has less disparate impact and serves the employer’s legitimate needs.

It is now imperative for employers to put much more work and consideration to testing on the front end of the process. Employers need to make sure a test does not have a disparate impact before administering the test, not after, as the City of New Haven did. Additionally, employers who use testing will need to be able to rule out other alternatives that it might have used to make its hiring and promotional decisions.

One thing is almost certain, there are going to be changes made to this law. Justice Ginsburg has already predicted that this decision “will not have staying power.”

There is a strong possibility that Congress will step forward and address the matter. Senator Patrick Leahy (D-Vt.) released a statement saying that the majority’s decision “interprets the critical protections of Title VII in a way never intended by Congress when it passed this landmark law to prevent workplace discrimination more than 40 years ago.” Senator Leahy is the Chair of the Senate Judiciary Committee, which often has jurisdiction over civil rights issues. Another way that changes can be brought about is through further court actions. Stay tuned….

The 93-page Ricci decision can be found here: http://www.supremecourtus.gov/opinions/08pdf/07-1428.pdf

Reverse Discrimination: How Will It Impact Sotomayor’s Confirmation?

Washington Law Updates for May 2009

Cheryl Angeletti-Harris — Wed, 17 Jun 2009 13:53:24 +0000

Below are employment related law updates in the State of Washington through May 2009.

Domestic Partnerships

Under legislation signed by Gov. Christine Gregoire on May 18, 2009, state registered domestic partners are “family members” for purposes of employment. The bill passed the State House by a vote of 62-35 and the Senate by 30-8.

The new law essentially makes registered domestic partnerships the equivalent of marriages. The law expands on previous Washington state domestic partnership laws by adding such partnerships to all remaining areas of state law where currently only married couples are mentioned. The statutes range from labor and employment rights to pensions and other public employee benefits. There are currently over 5,000 domestic partnerships registered in the State of Washington.

On May 4, 2009, a referendum was filed. Referendum 71 was filed by Larry Stickney, president of the Washington Values Alliance. Supporters need to get more than 120,500 valid voter signatures by July 25 in order to qualify for the November ballot. The filing of the referendum delays the July 26 effective date of the law until the signatures are counted. If opponents qualify for the ballot, the law is delayed until the results of the November election.

Unemployment Compensation

Gov. Christine Gregoire signed legislation temporarily increasing unemployment compensation. The new law temporarily increases unemployment benefits by adding $45 to weekly benefits and making $155 the minimum weekly payment. The new law took effect on April 5 and applies to all weeks of benefits for claims with an effective date between May 3, 2009, and Jan. 3, 2010. The hope is that the additional benefits will help the state’s economy.

Independent Contractor or Employee?

In Afinson v. FedEx Ground Package System, Inc., Wash.Super.Ct., No. 04-2-39981-5 (March 31, 2009), a superior court jury found that FedEx Ground delivery drivers were independent contractors and not entitled to overtime compensation.

The plaintiffs had argued that they were FedEx Ground employees misclassified as independent contractors and, therefore, erroneously denied overtime compensation. FedEx Ground claimed all of its package delivery drivers are contract employees who are their own bosses. The contracts between the drivers and FedEx Ground stated that the drivers owned and operated their own businesses “as they chose.” The jury agreed with FedEx. The drivers said they will appeal.

In these difficult time, misclassification of employees may become a major issue that employers need to be aware of. In 2008, Washington passed a law for purposes of unemployment compensation and workers’ compensation statutes that establishes a definition of independent contractor.

Reverse Discrimination: How Will It Impact Sotomayor’s Confirmation?

Cheryl Angeletti-Harris — Thu, 11 Jun 2009 22:58:11 +0000

The nomination of Judge Sonia Sotomayor as a justice of the United States Supreme Court has brought even more scrutiny to a reverse discrimination case now pending before the United States Supreme Court, Ricci v. Destefano.

At the center of the case is the city of New Haven, Connecticut’s 2003 promotion exam to select firefighters for 15 open captain and lieutenant positions. Out of the 118 candidates who took the exam, 27 of them were African-American.

After the exams were scored, no African-American candidates scored high enough to qualify for consideration for promotion as captain or lieutenant. In response, the City refused to certify the test results and did not promote anyone. The City’s rationale—because of the disparate impact the exam had on African-American firefighters it could be in violation of Title VII of the Civil Rights Act. Seventeen White and two Hispanic firefighters, all of whom would have qualified for consideration for promotion, filed suit alleging racial discrimination.

In the federal district court, Judge Janet Bond Arterton, ruled in favor of the City, granting its motion for summary judgment which precluded the case from going to trial. On appeal, a three-judge panel of the Second Circuit Court of Appeals affirmed the district court’s ruling in a summary order, without opinion. The panel later withdrew its summary order and then issued a unanimous per curium opinion.

The per curium opinion characterized the trial court’s decision as “thorough, thoughtful and well-reasoned” but also stated that there were “no good alternatives in the case.” The Supreme Court granted certiorari and heard oral arguments in April. Justice Antonin Scalia scoffed at the claim that rejecting the results was racially neutral. The justice who seemed most sympathetic to New Haven’s position was the man that Judge Sotomayor will replace, if confirmed. Justice David Souter stated that New Haven was placed in a “damned if you do, damned if you don’t situation.” The Supreme Court’s ruling is expected in the coming weeks. Transcripts of the oral argument can be found at http://www.supremecourtus.gov/oral_arguments/argument_transcripts/07-1482.pdf.

This reverse discrimination case is certain to come up at Judge Sotomayor’s confirmation hearings. Judge Sotomayor will likely be asked not only about the substantive ruling, but about the panel’s decision to issue a per curium decision, rather than a lengthy opinion. However, one only has to read Judge Atherton’s district court opinion to know the answer to the question. There was not much more the panel could have added in its opinion that was not already addressed in Judge Atherton’s opinion in the court below.

I encourage readers to review the entire district court decision at http://www.nysd.uscourts.gov/courtweb/public.htm and decide for themselves whether the judges on the 2nd Circuit Court of Appeals panel were justified in upholding the lower court’s decision and, more importantly, whether the Supreme Court should uphold it.

What Does the Ricci Decision Mean for Employers?