Happy NEW YEAR from all of us at Hanft Fride
January 2019 – Vol. 21, No. 1
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, firstname.lastname@example.org and Richard R. Burns, email@example.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.
SAVE THE DATE!
25th ANNUAL EMPLOYMENT AND LABOR LAW SEMINAR
WEDNESDAY, MARCH 6, 2019
GREAT LAKES BALLROOM, HOLIDAY INN DOWNTOWN, DULUTH
We are planning another interesting and informative day for seminar attendees. Contact Lynn Lach at firstname.lastname@example.org or 218.529-2419 with questions.
Schedule and registration materials will be sent in February.
**New this year, online registration! – https://hanftlaw.com/seminar/
This Month’s Topics:
- NLRB Limits Application of Concerted Action
- FEDERAL JUDGE BLOCKS EMPLOYER MANDATED BIRTH CONTROL CARVEOUT
- Disproportionate Forfeiture Theory Successful in Employment Case
- Employers Can Avoid Lawsuits by Ensuring that Current Employees Know About All Job Openings
- Tip Of The Month
NLRB Limits Application of Concerted Action
In a case recently before the National Labor Relations Board (“NLRB”), a skycap at Kennedy International Airport was discharged for griping to a supervisor about being assigned to an area where it was unlikely he would be tipped. The NLRB’s General Counsel argued this was concerted action protected by the National Labor Relations Act (“NLRA”), but the Board, in a 3 to 1 decision, disagreed. This decision overruled recent decisions that had blurred the distinction between protected group action and unprotected individual action. The Board reaffirmed a prior case under which individual complaining did not automatically qualify for protection solely because it occurred in front of a supervisor or other employees. The Board commented that their decision overruled conflicting precedent that shield individual actions and, therefore, undermine congressional intent to limit the protection afforded under the NLRA to concerted action for purposes of mutual aid or protection. This was not a group activity, but an individual complaint and action. It was not for the mutual aid or protection other employees, nor did it relate to the worker’s wages, hours or terms of employment. Alstate Maintenance LLC, 367 NLRB No. 68 (June 11, 2019)
FEDERAL JUDGE BLOCKS EMPLOYER MANDATED BIRTH CONTROL CARVEOUT
A federal judge has issued a nationwide preliminary injunction preventing the Trump administration from implementing religious and moral exceptions to the Affordable Care Act’s mandate for covering birth control medications. The rules were final versions of previously announced interim rules by the U.S. Departments of Labor, Health and Human Services, and Treasury. The general purpose for the rules was to allow employers to obtain an exemption on religious or moral grounds from the Affordable Care Act’s mandate that employers provide contraceptive coverage in their health care plans with no copayment. The federal judge ruled that the rules exceeded the scope of the Affordable Care Act, and the injunction was necessary due to the harm the states would face in providing the coverage in place of employers. The decision will likely be appealed. Pennsylvania v. Trump, No. 17-4540 (E.D. Pa. Jan. 14, 2019).
Disproportionate Forfeiture Theory Successful in Employment Case
Upon retirement from his employer, John Capistrant was entitled to residual commissions that were potentially as much as $2.6 million. The employer, Lifetouch National School Studios refused to pay, the commissions, however, saying Capistrant forfeitured the entire amount. Lifetouch relied on a provision in the employment agreement requiring the return of all employer property upon termination of employment. During discovery, Capistrant stated he had several boxes of company documents (1,900 pages) stored in his home, some of which clearly contained confidential information. Capistrant returned those documents within three months of retirement. Lifetouch was successful at the District Court level in avoiding payment of the residual commissions. However, the Minnesota Court of Appeals reversed on two grounds. The first was that the forfeiture was disproportionate because: (1) timing of the return of the property was not a material part of the contract, (2) the contract’s language did not provide clear and unmistakable proof of Lifetouch’s right to forfeit, (3) the three month delay in returning the property caused no harm, and (4) Lifetouch was adequately protected by other provisions in the non-compete agreement concerning misuse of the property. The primary purpose of the forfeiture was to prevent disclosure of trade secrets, which clearly had not occurred in this case. Beyond those reasons, the Court concluded the non-compete was unenforceable as overly broad, because it would allow the forfeiture of a significant amount of money based on minimal harm to the employer. Capistrant v. Life Touch, 916 NW2d 23 (Minn. Ct. App. 2018).
Employers Can Avoid Lawsuits by Ensuring that Current Employees Know About All Job Openings
In a recent case out of the Louisiana Federal Court, an African American male in his late 60s sued his employer claiming age and race discrimination in relation to his employer’s failure to promote him to a supervisor position. The employee sued the employer notwithstanding the fact he had never even applied for the supervisor position. Generally, in failure to promote cases, a plaintiff’s failure to apply for the position sought is fatal to his or her claim. Yet, an exception exists if the employer does not advertise the job opening. Without advertising, the employee claiming discrimination must merely show he or she would have applied for the position had the opening been known. In this case, the position was not advertised, so the employee fell within the exception. If the employer had advertised the supervisor position, legal proceedings would likely have been prevented. This case shows that creating and observing a formal policy of posting jobs internally is an important step employers should take to protect against discrimination claims. Lewis v. Shreveport, No. 16-1115 (W.D. La. 2018).
TIP OF THE MONTH: If employee/applicant background and credit checks are to be undertaken, it is important to follow the notice requirements of the Federal Fair Credit Reporting Act (FCRA). www.ftc.gov/tips-advice/business-center/guidance/using-consumer-reports-what-employers-need-know. In a case involving Delta Airlines, which did not raise the issue of whether or not notice was given, but rather whether the notice included extraneous information, a settlement has been paid by Delta in the amount of $2.3 million. It was a class action in which 44,000 applicants were awarded approximately $52, less attorney’s fees, but it obviously was a lot more significant to Delta Airlines. Therefore, remember to provide the required notice and follow-up procedures if adverse action is taken in the case of an applicant due to something found in those background or credit checks.
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.
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Copyright 2019 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.