Hunton Employment & Labor Perspectives

On September 20, 2012, Administrative Law Judge Clifford H. Anderson struck down telecommunications company EchoStar Corp.’s policy prohibiting employees from making disparaging comments about it on social media sites. The NLRB judge found that the prohibition, as well as a ban on employees using social media sites with company resources or on company time, chilled employees’ exercise of their rights under Section 7 of the National Labor Relations Act (“NLRA”). The EchoStar decision comes on the heels of the NLRB’s recent ruling striking down Costco Wholesale Corp.’s policy barring employees from posting statements online that were harmful to the company’s reputation.

We live in a society that is obsessed with appearance, and studies show that many people equate appearance to success.  While employers may not be aware of these studies, some are trying to control appearance in the workplace by imposing weight restrictions on job applicants or employees as a condition of employment.  

Whether these policies are permissible can only be answered with a “maybe.” 

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On September 7, 2012, the National Labor Relations Board invalidated Costco Wholesale Corp.’s policy of prohibiting employee electronic posts in its first decision involving an employer’s social media policy.  In Costco Wholesale Corporation and UFCW Local 371, Case No. 3A-CA-012421, the Board held, among other things, that Costco’s rule prohibiting employees from posting statements electronically that “damage the Company, defame any individual or damage any person’s reputation” was overly broad.  The Board reasoned that the policy language contained no restrictions on its application and, thus, clearly encompassed protected concerted communications, such as speech that is critical of Costco or its agents.  Accordingly, the rule had a tendency to chill employees’ protected activity in violation of Section 8(a)(1) of the National Labor Relations Act, which makes it an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of their rights guaranteed by Section 7.

Employers, payroll vendors and executives should be planning for the additional Medicare tax that will apply to high wage earners beginning in 2013.  The 2010 Health Care Reform Act imposes an additional Medicare tax of 0.9% on employee’s wages in excess of the applicable dollar amount for the employee’s filing status (as shown below):

• Married, filing jointly —  $250,000
• Married, filing separately — $125,000
• Single — $200,000
• Head of household (with qualifying person) — $200,000
• Qualifying widow(er) with dependent child — $200,000

Thus, for employees above the threshold, the Medicare tax rate will increase from 1.45% to 2.35% (on the employee portion) for wages in excess of the threshold.  The employer portion of the tax will remain unchanged at 1.45%.

On August 20, 2012, the Eleventh Circuit Court of Appeals affirmed the ruling of the U.S. District Court for the Southern District of Florida in Seff v. Broward County, finding that premium surcharge imposed under Broward County’s employee wellness program did not violate the American with Disabilities Act (ADA) because it was part of a bona fide benefit plan.

A recent case from Ohio highlights the evolution of both “cat’s paw” liability and “gender stereotyping” claims in employment litigation.  In Koren v. The Ohio Bell Telephone Company, No. 1:11-cv-2674 (N.D.Ohio Aug. 14, 2012), plaintiff Jason Koren, then known as Jason Cabot, first worked for Ohio Bell from 2000 to 2006.  He told his co-workers he was gay and had AIDS.   He left his employment on good terms and subsequently married his partner in Massachusetts, taking his husband’s last name of Koren.  Koren was rehired by Ohio Bell as a sales consultant in 2009.   Koren alleged one of his managers refused to recognize his marriage or name change and persisted in calling him Cabot.  Koren also described a number of allegedly discriminatory job actions.  In 2009, Koren’s father died, and he missed nine days of work.  Ohio Bell terminated Koren for excessive absences.  He sued for gender and disability discrimination under Federal and Ohio law.