Employment Law Alert : Gibbons P.C.: Labor Relations, Employment Contracts, Employee Benefits, & Wrongful Discharge Lawyers & Attorneys

The U.S. Supreme Court has just decided that an employer cannot “get back” at an employee who has complained about discrimination by going after other employees related to or in a close relationship with the complaining employee. By ruling in favor of a man who was fired after his fiancée complained about alleged sex discrimination at the same company, the Court’s decision in Thompson v. North American Stainless, LP has expanded Title VII anti-retaliation jurisprudence to encompass employees who themselves do not engage in “protected activity” as defined by the statute. Finding that the fiancée fell within the “zone of interests” of protection afforded by Title VII, he thus qualified as a “person aggrieved with standing to sue.” The decision is significant for employers because it establishes important precedent authorizing retaliation claims by employees other than the employee who made the original complaint of discrimination. Employers should make sure that their written anti-retaliation policies make clear to managers and supervisors that, after a claim of discrimination has been made, it is against company policy to retaliate not only against the employee making the claim but against any employee related to or in a close relationship with the complaining party.

Background

Eric Thompson and his fiancée, Miriam Regalado, both worked for North American Stainless (“NAS”). Their relationship was common knowledge to their employer. In February 2003, Regalado filed a charge with the Equal Employment Opportunity Commission (“EEOC”) alleging sex discrimination. Three weeks later, NAS fired Thompson. Conciliation efforts with the EEOC were unsuccessful, and Thompson then sued NAS under Title VII, claiming that NAS had fired him in order to retaliate against Regalado for filing her charge with the EEOC. Reasoning that because Thompson did not “engage in any statutorily protected activity, either on his own behalf or on behalf of Regalado,” and that he “was not included in the class of persons for whom Congress created a retaliation cause of action,” the district court granted summary judgment to NAS, concluding that Title VII “does not permit third party retaliation claims.” The Sixth Circuit Court of Appeals affirmed.

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2011 should be the year in which all companies renew their commitment to training employees. Specifically, all employees should be trained on important company policies, such as the anti-harassment and discrimination policies, and human resources employees and supervisors should be trained on consistently problematic topics such as performance management, accommodating disabilities under the Americans with Disabilities Act and leaves under the Family and Medical Leave Act and similar state laws.

Although the new year’s budgets might not be what they were pre-recession, training is a cost-effective way to reduce costs associated with employee complaints and litigation. Training can also help companies increase productivity and employee retention, both of which have a positive impact on revenues. For example, anti-harassment and discrimination training, when conducted company-wide, can improve morale, reduce distracting and unlawful conduct in the workplace, and provide an affirmative defense to claims. Similarly, training directed to human resources and supervisory employees on topics like performance management, leaves, and accommodation of disabilities can have a positive impact on performance, attendance, and the potential for claims.

This week the United States Equal Employment Opportunity Commission reported a 7% increase in claims in 2010 over 2009. The highest number of claims alleged retaliation, with race, gender, disability and age discrimination claims following in order. The statistical information further reveals that both retaliation and disability claims are on the rise. Although commentators can speculate as to the reasons for the overall and specific claims increases, the fact remains that these are claims employers must continue to work to prevent.

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The U.S. Department of Labor’s Employee Benefits Security Administration (“EBSA”) recently provided additional guidance on its website regarding implementation of provisions of the Patient Protection and Affordable Care Act (PPACA), implementation of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This guidance, which is provided in the form of Frequently Asked Questions and responses, was prepared jointly by the Departments of Health and Human Services, Labor and the Treasury.

Some of the highlights from the guidance include the following:

• For preventive services, group health plans can steer individuals towards a particular high-value setting such as ambulatory care so long as the plan provides for a waiver of the co-payment for those individuals for whom it would be medically inappropriate to go to an ambulatory setting.
• Until regulations are issued by the Secretary of Labor, employers do not have to comply with the new automatic enrollment requirements in section 18A of the Fair Labor Standards Act. The Department of Labor intends to complete this rulemaking by 2014.
• While the PPACA generally prohibits distinctions based upon age in dependent coverage of children, distinctions based upon age that apply to all coverage under the plan, including coverage for employees and spouses as well as dependent children, are not prohibited.
• Under certain circumstances, issuers may screen applicants for eligibility for alternative coverage options before offering a child-only policy, provided this practice does not violate any state law.
• Small employers continue to be exempt from the MHPAEA requirements.
• Only employment-based wellness programs that are, or are part of, a group health plan are subject to the HIPAA nondiscrimination rules. Wellness programs that are not part of the group health plan may be covered by other federal or state nondiscrimination laws, but are not subject to the HIPAA nondiscrimination regulations.

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On December 14, 2010, New York Governor David Patterson signed the Wage Theft Prevention Act (“WTPA”), a new law that significantly changes the wage and hour landscape for all New York employers. This amendment to the New York Labor Law targets those employers who engage in “wage theft” by underpaying employees. In application, however, the WTPA will affect all New York employers by imposing burdensome notification and recordkeeping requirements, expanding the scope of penalties for violations, and increasing opportunities for employment litigation through strengthened anti-retaliation provisions. In compliance with these new amendments, New York employers will need to amend their payroll practices on or before April 12, 2011. Our summary and analysis of the key amendments is set forth below.

Notification Obligations

Under the WTPA, New York employers must now provide all employees with written notifications that contain the following information:

• The employee’s rate of pay, the basis thereof (e.g., hourly, weekly, salary, commission, etc.), the regular pay date, and allowances claimed against the minimum wage (e.g., tip, meal, or lodging allowances);
• The employer’s name (including any “doing business as” names), telephone number, and the physical address of the employer’s main office or principal place of business;
• Nonexempt employees must also be given notice of their regular rate of pay as well as their overtime rate of pay.

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