The Employer E-Letter: Labor and Employment Law News
from the Duluth, Minnesota law firm of
Hanft Fride, A Professional Association.
Co-Editors, Scott A. Witty, saw@hanftlaw.com and Richard R. Burns, rrb@hanftlaw.com, or 218.722.4766. Please feel free to forward this e-mail or share it with others. If there are other topics of interest to you or any other suggestions concerning this newsletter, please let us know.
This Month’s Topics:
- WORKPLACE BENEFITS UNDER AMERICAN RESCUE PLAN ACT
- EMPLOYER MUST HAVE A REASONABLE OPPORTUNITY TO ADDRESS AN EMPLOYEE’S SEXUAL HARASSMENT COMPLAINT
- SIXTH CIRCUIT RULES THE FALSE CLAIMS ACT ANTI-RETALIATION PROVISION EXTENDS TO FORMER EMPLOYEES
- COUNTING OF BONUSES IN OVERTIME CALCULATIONS
- Tip Of The Month
WORKPLACE BENEFITS UNDER AMERICAN RESCUE PLAN ACT
The American Rescue Plan Act (ARPA) does include some provisions beneficial to employers. Although there was no continuation of the requirement that employers provide short-term paid sick leave for various reasons tied to COVID-19, employers covered by this law can still claim tax credits, if they voluntarily provide these benefits until the end of September 2021. It also allows employers until that date to provide long-term paid leave to employees to care for children whose school or childcare facility was closed. Indeed, it appears that one could provide an incentive to take the vaccine or recover from any side effects and take a tax credit for this benefit. Another tax credit is available to provide subsidies for COBRA health care benefits. This benefit is available only for the period April 1 until September 30, 2021, and the employer needs to provide notice of this benefit within 60 days of April 1 for persons who lost their benefits since November 1, 2019. Again, the benefit to the employer is a tax credit. Finally, one might argue that another employee benefit was that ARPA did not include a phased-in minimum wage increase to $15. However, we will likely hear more on the minimum wage in the near future.
EMPLOYER MUST HAVE A REASONABLE OPPORTUNITY TO ADDRESS AN EMPLOYEE’S SEXUAL HARASSMENT COMPLAINT
Under Title VII of the Civil Rights Act, if an employer knew or should have known an employee was being sexually harassed by another employee and failed to take remedial action, it may be liable for sexual harassment. According to a recent decision from the Eighth Circuit Court of Appeals, employees who allege harassment by another employee must give their employers a “reasonable time to address” the complaint before determining that an employer’s response is inadequate.
In Lopez v. Whirlpool Corporation, No. 19 – 2357 (8th Cir. March 4, 2021) the employee alleged that she complained to the Human Resources Department that she was experiencing unwelcome physical touching by a coworker. Four days after she submitted a written complaint, which failed to mention the touching, she resigned. Subsequently, she sued the employer alleging a hostile work environment. The district court dismissed the complaint because the employee had not met the requirements under Title VII for establishing a hostile work environment.
On appeal, the Eighth Circuit affirmed the decision on two grounds. First, the Court determined that the unwelcome touching alleged by the employee was not “severe” or “pervasive” enough to meet the standard required to demonstrate a hostile work environment. Second, because the employee submitted her written complaint and resigned only four days later, she did not allow the employer a reasonable time to address her complaint.
The Court did not provide a time limit for addressing sexual harassment or other complaints. Accordingly, employers should promptly begin reviewing any such complaints, but understand the law recognizes this review process does not happen overnight in most circumstances.
SIXTH CIRCUIT RULES THE FALSE CLAIMS ACT ANTI-RETALIATION PROVISION EXTENDS TO FORMER EMPLOYEES
The False Claims Act (“FCA”) contains an anti-retaliation provision which entitles employees to relief if the employee is discharged, demoted, suspended, threatened, harassed, discriminated or otherwise retaliated against because the employee investigated, reported, or sought to stop their employer from engaging in practices which defraud the government. The FCA does not define “employee,” failing to make clear whether the anti-retaliation provision applies only to current employees. Three years ago, a federal appellate court addressed the issue for the first time. The Tenth Circuit in Potts v. Ctr. For Excellence in Higher Educ., Inc., 908 F.3d 610 (10th Cir. 2018) held the FCA does not cover post-employment retaliation. On March 31, 2021, the Sixth Circuit disagreed, holding the FCA prohibits employers from retaliating against previous employees. United States ex. re. Felten v. William Beaumont Hosp., __ F.3d __ (6th Cir. 2021). The Felton court deemed the term “employee” ambiguous and in its analysis determined the statute’s terms “any employee” and “employed” can refer to someone who is employed or was employed. Further, the retaliatory acts proscribed by statute – “discharged,” “threatened,” “discriminated,” etc. ‑ are not restricted to a current employment relationship and can refer to former employees. The court reasoned, “If employers can simply threaten, harass, and discriminate against employees without repercussion as long as they fire them first, potential whistleblowers could be dissuaded from reporting fraud against the government.” This decision creates a circuit split and gives district courts two models to follow, leaving the issue ripe for further development.
COUNTING OF BONUSES IN OVERTIME CALCULATIONS
In a case of first impression, the 5th Circuit Court of Appeals held that employees, not their employers, have the burden to prove whether their bonuses must be included in overtime calculations or are discretionary and not included. Under the Fair Labor Standards Act (FLSA), employers must pay non-exempt employees time and a half for hours worked over 40 in a week. The bonuses in question were required to be included in the overtime calculation. In this case, it would not seem that it was difficult to make that determination, as the employer had set out two bonuses in a contract outlining how they were to be earned and the amount an employee could expect. However, there was another bonus that might be paid when a new stage of fracking operations was completed, which was determined to be discretionary as there was no specific description of how the amount was to be determined or when and whether certain employees were eligible. Edwards, et al v. 4JLJ LLC, et al, Case No. 19-40553 (5th Cir. 2020)
TIP OF THE MONTH: Employers considering disciplinary action, demotion or termination of an employee that recently requested or returned from FMLA leave must not ignore the fact that timing matters. Courts will often look to see how much time has passed between the employee’s protected activity (under the Family and Medical Leave Act) and the employer’s adverse employment action. The closer these two events are in time, the greater risk of liability under a retaliation claim. How long is long enough? Unfortunately, there is no hard and fast answer. What we do know, however, is solid documentation supporting reasons for disciplinary action (i.e. performance, conduct etc.) favors the employer’s odds of successfully defeating such claims.
Hanft Fride’s business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth, Minnesota. Visit our website at www.hanftlaw.com for general information on the firm and our attorneys. Our employment lawyers include Tom Torgerson, Rob Merritt and Scott Witty. Richard Burns is now of Counsel.
The information provided in this E-letter is general in nature and should not be used as a substitute for professional services and advice. The communication and receipt of this information is not intended to create an attorney-client relationship. Readers should consult with their legal counsel before taking any action on matters covered in this E‑letter.
To subscribe or unsubscribe to Employer E-Letter, e-mail your request to jaw@hanftlaw.com or call Scott Witty at 218.722.4766.
Copyright 2021 by Hanft Fride, P.A. All rights reserved. Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802. Phone 218.722.4766; Fax 218.529.2401.