Hunton Employment & Labor Perspectives

As was predicted following the passage of the ADA Amendments Act of 2008 (ADAAA), which went into effect in January 2009, there has been a subsequent surge in the filing of lawsuits under the Americans with Disabilities Act (ADA).  Lawsuits brought under the ADA now comprise the highest percentage of claims filed by former employees.  When compared with the number of ADA-related lawsuits filed in the first three months of 2009, there has been a nearly 40% percent increase in the number of ADA-related suits filed in 2010  during the same period.  Moreover, the second quarter of 2010 saw the number of ADA-related lawsuits increase by 15% over those filed in the first quarter.

In Waffle House v. Cathie Williams, the Texas Supreme Court on June 11, 2010, rejected the idea that a plaintiff who prevailed on a sexual harassment claim under §21.0015 of the Texas Labor Code could instead opt to recover damages under a more generous common law scheme. The Court held that plaintiff could only recover under the Texas Commission on Human Rights Act (TCHRA).

In what has been deemed a victory for many non-traditional families, on June 22, 2010, the U.S. Department of Labor (“DOL”) issued an opinion clarifying the definition of “son or daughter” under the Family and Medical Leave Act (“FMLA”).  Now, according to the Administrator’s Interpretation Letter No. 2010-3, any employee who “intends to assume the responsibilities of a parent with regard to a child” and has either “day-to-day” responsibilities for, or “financially supports” that child, is entitled to leave under the Act -- even if that employee does not have a traditional biological or legal relationship with the child.

The NLRB has issued an RFI (Request for Information) to identify firms who can provide the means for employees at businesses across the country to "vote" electronically on whether they want union representation.  The idea would be that, sitting in the comfort of their own home . . . or the union hall, employees can use a computer, telephone or some other electronic means to register their choice on election day.  This method of voting, so the argument goes, avoids the "intimidation" employees may feel when voting in a voting booth by secret ballot at their place of employment.  Not only that, it would save the NLRB money by avoiding the need to send field agents to the companies where elections are scheduled.  No ballot, no voting booth, no assurance of privacy, and no protection from someone looking over the employee's shoulder, or worse, as she votes.  And electronic voting can be ordered administratively by the agency in the dead of night rather than through legislation undertaken in the light of day.

Who decides whether an arbitration agreement is unconscionable when the agreement explicitly delegates that decision to the arbitrator?  According to a slim majority of the U.S. Supreme Court in Rent-A-Center v. Jackson, No. 09-497, ___ U.S. ___, slip op. (June 21, 2010), the arbitrator does, if a party challenges the enforceability of the arbitration agreement.  The district court may only intervene if a party specifically challenges the validity of the agreement to delegate that decision to the arbitrator.  The decision makes it more difficult for a current or former employee who has signed an arbitration agreement with a proper delegation provision to avoid arbitration and bring a private lawsuit.  That is a positive result for pro-arbitration employers.

In a recent decision, a federal district court judge held that Abbott Laboratories, Inc.’s pharmaceutical sales representatives do not qualify for either the outside sales or administrative exemptions of the Fair Labor Standards Act (“FLSA”).  Under the FLSA, employers are required to pay overtime for hours worked over 40 in a week, unless an employee qualifies for an exemption under the Act. While the FLSA contains many such exemptions, the most commonly used exemptions are the executive, outside sales, and administrative exemptions.  Each exemption has specific requirements that must be met.

Two significant developments last week affect the functioning of the country's federal agency in charge of overseeing union-management relations. The first is a decision by the US Supreme Court and the second is the resignation of the agency's general counsel effective June 18th.

As a result of political disagreements over nominations to fill vacancies on the National labor Relations Board, the Board operated with only two of its five members during 2008, 2009 and into 2010.  During that time, the two members decided almost 600 cases (though most were not particularly controversial from the standpoint of illuminating policy or setting precedent).  On June 17, the Supreme Court ruled in New Process Steel v. National Labor Relations Board, No. 08-1457, that the two members did not have the authority to decide those cases because they did not constitute a proper quorum under the National Labor Relations Act.  Instead, the Court ruled that at least three sitting Board members were required for the NLRB to act.  The ruling nullifies the decisions made in all 600 cases and effectively remands the cases back to the Board for re-adjudication.

On May 21st, we reported on the newly-announced Department of Labor (“DOL”) proposal to narrow the “advice exception” to the reporting requirements of section 203 of the Labor-Management Reporting and Disclosure Act (“LMRDA”).  In a nutshell, section 203 requires employers to annually report any arrangement with a third-party consultant to persuade employees as to their rights to organize and bargain collectively or to obtain certain information concerning the activities of employees or a labor organization involved in a labor dispute with the employer.  The “advice exception” of section 203(c) provides that no annual report need be filed when a consultant gives “advice” to the employer.  DOL’s current policy is to construe this exception broadly to exclude arrangements where the consultant has no direct contact with employees, but DOL now views this policy as overbroad and seeks to narrow it through rulemaking, as outlined in its Spring 2010 Regulatory Agenda.

The Senate Committee on Health, Education, Labor, and Pensions has announced that it will conduct a hearing on Thursday, June 17, 2010 on the Employee Misclassification Prevention Act, which was introduced in both the Senate and House on April 22, 2010.  The Act seeks to amend the Fair Labor Standards Act so that worker misclassification is a violation of federal law.  The act also requires employers to maintain records reflecting hours worked and wages paid to independent contractors.  See our previous post for a detailed discussion of the legislation.

A recent Eleventh Circuit Court of Appeals decision upheld the validity of noncompetition and nonsolicitation covenants in an employment agreement governed by Georgia law.  In H&R Block Eastern Enterprises, Inc. v. Morris, the Eleventh Circuit reversed the United States District Court and ruled that provisions in H&R Block’s employment agreement with its former employee, Vicki D. Morris, were valid and enforceable restrictive covenants under Georgia law.  This decision provides additional guidance to employers attempting to draft enforceable employment agreements to protect legitimate business interests.  It also highlights why the Georgia General Assembly recently passed legislation attempting to offer clarity in this area of the law.