January 23, 2014
January 23, 2014
By Bullard Law,
Portland law firm
THE YEAR ENDS, THE YEAR BEGINS: 2013 WORKPLACE ISSUES THAT WILL CONTINUE TO BE STORIES IN 2014
Although 2013 is now in the rearview mirror, the shadow it casts looms large before us. Here are five stories from 2013 (Affordable Care Act, Portland Sick Time Ordinance, EEOC overstepping its bounds, bereavement leave under OFLA, and legalized marijuana) that we predict will continue to be significant in 2014.
Affordable Care Act: Law and Politics
As we all know, the Patient Protection and Affordable Care Act (“ACA”) has not been a story since June 28, 2012, right? On that date the United States Supreme Court rejected a Constitutional challenge to most of the ACA, which Congress had enacted in 2010 to make significant changes to how health care is provided in America. The Court held that the “individual mandate,” which requires most individuals to have health insurance coverage, was a valid exercise of Congress’s power to tax (referring to the penalty imposed on individuals who fail to obtain insurance as required).
Case closed; next issue. Yes? In the oft-repeated words of Lee Corso, “Not so fast, my friend.” ACA was THE story of 2013, from the beginning of the year through the end. Whether it was explanations of the law’s provisions, delays in its implementation, or the endless political backbiting, grandstanding and other tomfoolery, the ACA was always news.
For example, on January 24, 2013, the Internal Revenue Service and the United States Departments of Labor and Health and Human Services jointly issued a new set (Part XI) of Frequently Asked Questions relating to the Patient Protection and Affordable Care Act, which FAQs we addressed in our February 19 and March 8, 2013 Bullard Alerts.
Additionally, on July 2, 2013 the Obama Administration delayed for a year one important piece of the ACA. Specifically, a key feature of the health care reform laws is the “employer shared responsibility” mandate, often referred to as “play-or-pay” rules. Those rules require “applicable large employers” either to offer “affordable” health coverage that provides “minimum essential coverage” and “minimum value” to their “full-time” employees or risk paying an excise tax. The play-or-pay rules delayed for a year, had been scheduled to take effect January 1, 2014, with some relief for certain employers with fiscal-year health plans. In our July 3, 2013 Bullard Alert we detailed what the delay did and did not do.
Finally, on October 1, 2013 the ACA enrollment website debuted as a colossal failure. The website’s primary purpose is to facilitate the purchase of health insurance. Unfortunately, the website was ill-equipped for the volume of traffic, and even those who were able to access it reported that navigating was not easy. This rollout led to a scramble on the part of federal officials to right the ship. It also fueled political recriminations from opponents and supporters alike (as if more fuel was needed). Despite website improvement, enrollment problems persisted through the end of 2013.-Page 2 of 5-
The ACA story clearly is not yesterday’s news. As 2014 dawned, people learned that in addition to having pushed the button that dropped the crystal ball in Times Square, United States Supreme Court Justice Sonia Sotomayor also spent part of New Year’s Eve ruling on an application for injunction sought by the Little Sisters of the Poor Home for the Aged. Justice Sotomayor granted a temporary injunction against a portion of the ACA, much of which went into effect at midnight on New Year’s Day. Her order stated that the federal government is “temporarily enjoined from enforcing against applicants the contraceptive coverage requirements imposed by [ACA] pending the receipt of a response and further order of the undersigned or of the Court.”
This order, along with all of the other litigation related to the ACA, insures that in this midterm election year the ACA will be front and center at all times. Bullard Law will continue to follow developments important to employers.
Portland Protected Sick Time Ordinance
On March 13, 2013, the Portland City Council voted unanimously to make Portland one of several U.S. cities requiring paid and unpaid sick leave. With limited debate and against significant business opposition, the City Council acted to quickly adopt the Portland Protected Sick Time Ordinance and set January 1, 2014 as the Ordinance’s effective date.
Pursuant to the Ordinance, businesses doing work in the City must give eligible employees up to 40 hours (five days) of sick leave each year (paid leave, unless the employer has five or fewer employees). Those employees (including part-time and temporary) who work the equivalent of 240 hours (30 consecutive full-time days) within the Portland city limits will be able to accrue job-protected time off (one hour of sick time for every 30 hours of work), which time may be used for the employee’s illness, for a family member’s illness and for certain health and safety purposes. We summarized and analyzed the Ordinance in our March 19, 2013 Bullard Alert.
When the Ordinance passed, the promise was that the City, working with BOLI, would develop and publish specific rules to implement the Ordinance. In other words, the promise was that the fine points of the Ordinance would be adequately explained ahead of the January 1, 2014 effective date. However, months passed and Final Protected Sick Time Administrative Rules were not issued until November 1, 2013.
The rules alone have not settled matters and the City has issued a sample notice to employees (due by the first pay period of 2014,) and a series of FAQs to assist with details ranging from the accrual and use of sick time to the notices, postings and recordkeeping required of employers. The FAQs are evidence that the City has tried to bring order to the situation; they also are evidence that the City itself is still working to resolve the details.
Thus, it is clear that a full understanding of the basic details of the Portland Protected Sick Time Ordinance is still developing as 2014 gets underway. Bullard Law will continue to follow and report on developments.
EEOC’s Blustery 2013 Has Continued Into 2014
The EEOC had a difficult 2013. It does not have unfettered authority to issue regulations and to adopt enforcement strategies; its discretion is limited by the laws (such as Title VII) that it is charged with enforcing. Too often the EEOC stepped outside of its mission as a law enforcement agency and has pushed positions that exceed the agency’s scope of authority or that bear little relation to the spirit of the laws being enforced. In 2013 a number of employer challenges to the EEOC succeeded, resulting in a series of high profile losses in court for the EEOC and/or its regulations/interpretations.
One of the most visible of these decisions was part of the United States Supreme Court’s June 24, 2013 decision in Vance v Ball State University, which we analyzed in our June 28, 2013 Bullard Alert. In Vance, a divided Supreme Court answered two questions that had lingered for the past 15 years: for purposes of Title VII workplace harassment claims, who is a “supervisor” and what is a “tangible employment action”? The Supreme Court held that a supervisor for purposes of Title VII is an employee “empowered by the employer to take tangible employment actions against the victim.” Further, the Supreme Court clarified that “tangible employment actions” include “hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.”
As part of its holding on the definition of supervisor, Vance rejected a number of less precise definitions as unworkable, including the EEOC’s definition (which it described as “a study in ambiguity”). The Court found “no clear meaning” in the EEOC’s 1999 Enforcement Guidance titled Vicarious Employer Liability for Unlawful Harassment by Supervisors, which defined supervisor as an employee who wields authority “of sufficient magnitude so as to assist the harasser explicitly or implicitly in carrying out the harassment.” It also stated that the EEOC’s definition “would present daunting problems for the lower federal courts and for juries.”
In addition to the drubbing it took in Vance, the EEOC also experienced a number of other setbacks. For example, in EEOC v. CRST Van Expedited Inc., the EEOC filed a complaint on behalf of an alleged class of sexual harassment victims. After dismissing all charges, on August 1, 2013 the United States District Court for the Northern District of Iowa ordered the EEOC to pay $4,189,296.10 in attorney’s fees to CRST.
In a similarly harsh result, on October 7, 2013 the Sixth Circuit Court of Appeals upheld a $751,942.48 attorney’s fees and costs award against the EEOC in EEOC v Peoplemark, Inc. The appellate court found the award appropriate where the EEOC had filed a complaint “alleging that Peoplemark had a blanket, companywide policy of denying employment opportunities to persons with felony records and that this companywide policy had a disparate impact on African Americans”, but “[a]s it turned out, the alleged companywide policy did not exist. Eventually, the Commission dismissed its claim through joint motion of the parties. Peoplemark moved for costs and attorney’s and expert fees.”
The start of 2014 has been equally bleak for the EEOC. On January 2, 2014 the United States District Court for the Western District of New York recommended that summary judgment be granted the employer on the EEOC’s claim of a nationwide pattern or practice of employment discrimination. See EEOC v. Sterling Jewelers Inc. The EEOC had filed the lawsuit and released a splashy press release in 2008, conclusorily alleging that Sterling had “violated federal law by discriminating against a large class of female employees at stores nationwide.” In recommending summary judgment on this claim, the trial court found that the EEOC had not met its burden of showing that it had conducted an appropriate nationwide investigation of Sterling’s alleged employment practices prior to filing the lawsuit. The court rejected the EEOC’s argument that “the Courts should not inquire into the sufficiency of [its] investigation.”
We will continue to monitor developments regarding the EEOC throughout 2014.
OFLA Amended To Include Bereavement Leave
On June 13, 2013 Governor Kitzhaber signed HB 2950, which added bereavement to the list of reasons for which an eligible employee may take OFLA leave. HB 2950 took effect on January 1, 2014. We described the new law in our July 15, 2013 Bullard Alert.
Pursuant to the law, within 60 days of receiving notice that a “family member” (as defined ORS 659A.150) has died, an eligible employee may take up to two weeks off to: attend the funeral or alternative to a funeral; make arrangements necessitated by the death of a family member; or grieve the death of the family member. If an employee experiences the death of more than one family member in a year, the employee may take up to two weeks for each death; the employer may not require the leave to be taken in concurrent two-week periods.
Bereavement leave counts towards the twelve weeks of total leave permitted under OFLA (it does not add additional leave). Note, however, that the federal Family and Medical Leave Act (FMLA) does not provide for bereavement leave and employers should not count bereavement leave against the total amount of leave permitted under FMLA.
The new legislation provides that employees do not have to give advance notice to take bereavement leave so long as the employee gives oral notice within 24 hours of taking leave and written notice within three days of returning to work. BOLI has adopted rules addressing the relationship between leave for the death of a family member under ORS 659A.159(1)(e) and family medical leave.
The bereavement leave provision is fairly straightforward. However, because it has flown under the radar, we want to make sure that all employers have incorporated the bereavement leave provision into their OFLA policies. Bullard Law would be happy to help with this.
Weed is the Word
Marijuana is an issue that has been on the horizon for a number of years. Every time it seems that all questions have been answered, new questions emerge. For example, over the past two decades, numerous states (including Oregon, California, and Washington) have enacted medical marijuana laws. However, the state supreme courts in each of these states have now held that the state laws do not require that employers accommodate the medical use of marijuana or engage in the interactive process regarding potential accommodations. See our April 16, 2010 (Oregon) and June 10, 2011 (Washington) Bullard Alerts.
That did not settle things, though. On November 6, 2012, voters in Colorado and Washington approved “personal use” (no medical need required for marijuana use). The new laws caused employers in those states to worry about the possibility of having to permit marijuana use or modify their drug policies. However, the weight of analysis in early 2013 reasoned that neither of these laws created any employment protections for applicants or employees.
Nevertheless, we identified a number of practical considerations for employers.
• The Obama Administration said it will not be prosecuting recreational drug users in states (such as Washington and Colorado) that have decriminalized marijuana use.
• Consequently, employers in those states should expect that there may be an increase in the number of residents using marijuana. This will mean an increase in the number of marijuana users seeking employment and, likely, an increase in the number of applicants/employees testing positive for marijuana use.
• Moreover, if there is an increase in disciplinary actions related to violations of workplace drug and alcohol policies, this may spur greater legislative or judicial pressure to adjust the law in a manner that provides some form of workplace protection for the lawful (state law) recreational and/or medical use of marijuana.
This brings us to 2014 and the ever increasing signs that marijuana is gaining momentum.
• On New Year’s Day the Colorado personal use law went into effect and marijuana sales were instantly brisk. A similar result is expected in Washington later this year when personal use sales begin there
• On January 6, 2014 The National Review published an editorial (“Sensible on Weed”) in which it lauded Colorado as “the first state to make the prudent choice of legalizing the consumption and sale of marijuana, thus dispensing with the charade of medical restrictions and recognizing the fact that, while some people smoke marijuana to counter the effects of chemotherapy, most people smoke marijuana to get high — and that is not the worst thing in the world.”
• In his January 8, 2014 State of the State address, New York Governor Andrew Cuomo unveiled a limited medical marijuana program. “We have to make New York healthier. Research suggests that medical marijuana can help manage the pain and treatment of cancer and other serious illnesses. 20 states have already started to use it. We’ll establish a program allowing up to 20 hospitals to prescribe medical marijuana, and we will monitor the program to evaluate the effectiveness and the feasibility of a medical marijuana system.”
Bullard Law will continue to follow medical marijuana issues and to report on developments.
Happy 2014 to all. Bullard Law is on the job and will continue to monitor developments in these and other areas. Please feel free to contact us anytime with any questions about any labor, employment, or benefits issues of interest or concern to you.
~MICHAEL G. MCCLORY
~THOMAS I. KRAMER
~KATHRYN M. HINDMAN
~DAVID J. RIEWALD
~DANIEL L. ROWAN