Last February we reported on Woods v. START Treatment and Recovery Centers, Inc., a case before the Second Circuit in which the primary issue was whether to allow FMLA retaliation claims when the alleged retaliation was motivated only in part because of ...


FMLA Retaliation Claims: I Fired Her Because She Was a Bad Employee…and She Took FMLA Leave and more...

FMLA Retaliation Claims: I Fired Her Because She Was a Bad Employee…and She Took FMLA Leave

Last February we reported on Woods v. START Treatment and Recovery Centers, Inc., a case before the Second Circuit in which the primary issue was whether to allow FMLA retaliation claims when the alleged retaliation was motivated only in part because of the employee’s FMLA leave.  The Second Circuit issued its decision on July 19, 2017 and held that it would give Chevron deference to a Department of Labor regulation which applied a motivating factor causation standard for FMLA retaliation claims, as opposed to the “but for” standard used by the district court.

According to Woods, who worked as a substance abuse counselor for START since 2007, she requested medical leave for her severe anemia in February 2011. Woods claimed that she subsequently withdrew her request for leave after her supervisor told her to do so.  Woods was hospitalized for her anemia in August 2011.  In 2012, Woods was put on 90 day probationary period after she struggled with compliance and documentation, specifically in regards to inputting patient notes into her employer’s state-mandated note system.  Woods further claims that START would not allow her to take FMLA leave during her probationary period, although START denies that.  In April 2012, while Woods was still on probation, she was hospitalized again.  Woods returned to work on April 28, 2012 and was terminated a few weeks later.  As a result of her termination, Woods filed suit and alleged that she was terminated in retaliation for taking FMLA leave, while START asserted that she was fired because of her poor job performance.  As we noted in our earlier report, the facts lend credence to both positions, making this a “mixed motive” case, meaning that the employer may have had both lawful and unlawful reasons for discharging the employee.

At trial, START argued, and the district court agreed, that “FMLA lacks “motivating factor” language and thus, under Nassar, the default “but for” causation standard applies.”  Nassar dealt with a Title VII claim under the Civil Rights Act of 1964.   The court ruled that it does not permit ‘mixed-motive’ retaliation claims under Title VII. The Supreme Court reiterated this position in Gross v. FBL Financial Services Inc., when reviewing claims under the Age Discrimination in Employment Act (ADEA).  Under the “but for” standard, employees would have to show that, “but for” an employer’s retaliatory motive, the employer would not have taken the adverse employment action.  In contrast, Woods argued that the appropriate causation standard that should be applied to her FMLA retaliation claim is the motivating factor standard, in that the standard is met if a jury finds that her FMLA leave was a negative factor in START’s decision to terminate her.  The Second Circuit ruled in favor of Woods, relying on a DOL regulation which, in part, stated “employers cannot use the taking of FMLA leave as a negative factor in employment actions.” 29 C.F.R. 825.220(c).  The court also held that FMLA retaliation claims such as this are actionable under § 2615(a)(1), since “[f]iring an employee for having exercised her rights under the FMLA is certainly “interfere[nce]” with or “restrain[t]” of those rights.”

Stay tuned for more updates on this case to see if it makes its way up to the Supreme Court.

Woods v. START Treatment & Recovery Centers, Inc., No. 16-1318-CV, 2017 WL 3044628 (2d Cir. July 19, 2017)

Are You Withholding Enough from Your Employees’ Paychecks?

The Illinois budget impasse is resolved. After nearly two years without a budget, on July 6, 2017 the General Assembly passed its first budget since Governor Rauner was inaugurated. Of course, the price for the resolution of this impasse was the largest permanent income tax increase in Illinois history, with the individual tax rate increasing from 3.75% to 4.95%, and the corporate tax rate increasing from 5.25% to 7%*.

Although this income tax increase passed on July 6, it applies retroactively to July 1. This means that employers need to withhold not only 4.95% of their employees’ incomes from all paychecks issued after July 6, but also need to apply this increased withholding for any paychecks issued on between July 1 and July 5. The Illinois Department of Revenue has issued guidance on this, which you can access by clicking here. This guidance contains the tax rate tables that employers can use to calculate the amount that needs to be withheld from their employees’ paychecks in light of the increased tax rate. Some takeaways from this guidance that employers should note include:

  • Any taxes that were not withheld prior to the income tax increase can be prorated across future income tax withholdings for the rest of the fiscal year.
  • Employers can elect to calculate the amount of income tax they withhold by either “blending” the two different income tax rates together (i.e. averaging the two different income tax rates over the entire year) or treating the time before and after July 1 as essentially two separate fiscal years.
  • The formula to enter into an automated payroll calculator to calculate the amount to withhold is:

You can click here to access the withholding allowance worksheet, and click here for the Illinois Department of Revenue’s publications on the withholding of income tax payments and filing requirements. Properly calculating the amount of income tax to withhold can be difficult. Contact us for help.

*In addition to this 7% corporate income tax rate, Illinois charges corporations a 2.5% “Personal Property Replacement Tax.” So, the effective rate of state taxes on corporations is 9.5%.

Beware: Policies Prohibiting Employees From Recording Conversations Are Subject To Legal Scrutiny

Both the Illinois Labor Relations Board (“ILRB”) and the National Labor Relations Board (“NLRB”) have found that employers are prohibited from unilaterally recording audio and video of unionized employees without first bargaining over the use of recording technology because it impacts wages, hours, and working conditions and thus constitutes a mandatory subject of bargaining. When it comes to an employee seeking to record conversations in the workplace, however, there is a very different position taken.

Employers often prohibit employees from recording their conversations in the workplace. Many practical reasons exist for enforcing this kind of workplace prohibition on recording conversations in the workplace. Not only might the person being recorded be unaware of the recording, more importantly, the Illinois Eavesdropping Act prohibits recording private conversations unless all parties consent to it. The NLRB scrutinizes employer policies that restrict employees from recording workplace conversations because it considers the recording of conversations to be a form of protected activity.

Recently, consistent with a long line of precedent, an NLRB Administrative Law Judge concluded in AT&T Mobility that the employer’s workplace rule that prohibited employees from recording conversations was overly broad. The workplace rule provided, in pertinent part, that “Employees may not record telephone or other conversations they have with their coworkers, managers or third parties unless such recordings are approved in advance by the Legal Department, required by the needs of the business, and fully comply with the law and any applicable company policy.” The ALJ found that this rule interfered with employees’ Section 7 and Section 8 rights under the NLRA, when it was used as a basis to delete a recording of a disciplinary meeting recorded by a witness employee. Although AT&T argued that the policy was aimed at protecting the privacy of the customer, the administrative law judge found that the policy, when balanced against employees’ rights to engage in protected and concerted activity, was over broad and there were narrower ways for the employer to protect its legitimate interests without interfering with these employee rights. AT&T was ordered to rescind the rule and refrain from any action that would limit the exercise of employees’ Section 7 rights.

Similarly, there is ongoing litigation involving a Mercedes-Benz workplace rule prohibiting the use of cameras and video recording devices in its vehicle manufacturing plant without obtaining prior authorization from a supervisor. The NLRB argued that the rule interfered with employees’ right to engage in union activity and protected concerted activity for their mutual aid or protection. That case was remanded to an administrative law judge so that Mercedes-Benz could have the opportunity to defend its rule against employees using cameras and video recording devices.

While these cases involving AT&T and Mercedes-Benz are from the private sector, they serve as important guidance for Illinois public sector employers as well because the ILRB, when confronted with unique issues or cases of first impression, often follows NLRB precedent. Moreover, the ILRB so far has not been confronted with an issue concerning an employer’s policy prohibiting employees from record conversations. That is why these NLRB decisions are important for public sector employers to be mindful of not only to avoid an unfair labor practice, but also in designing workplace policies.

These cases further illustrate that policies that provide blanket prohibitions on the recording of conversations in the workplace are likely to be too broad and subject to scrutiny. Policies that prohibit recording conversations but include exceptions for concerted protected activities will likely sustain NLRB or ILRB scrutiny. And policies that restrict recording confidential information, work product, or information protected by state or federal privacy laws, will certainly withstand legal challenges. That does not mean, however, that there are no circumstances in which privacy will outweigh protected activity. Similar to the dicta in City of Chicago, CTA and several NLRB cases, audio or video recording in areas traditionally recognized as private, i.e. locker rooms, changing areas, restrooms, etc., are off limits. To that end, a policy that prohibits audio or video recording will certainly be upheld. Notwithstanding, Illinois employers should also be mindful of the Illinois Eavesdropping Act when drafting policies respective to recording conversations. Employers also should consider whether their anti-recording policies are tied into specific workplace concerns rather than applying a blanket prohibition.

Please do not hesitate to contact us with any questions about workplace policies that prohibit audio and video recording or if you need any assistance drafting a workplace policy.

Marijuana Update: When “we follow federal law, not state law” Misses the Mark

As state laws regarding both medicinal and recreational marijuana use become more lax, it comes as no surprise that workplace-related issues arise.  Testing for marijuana is especially challenging since a person can test positive for days, sometimes weeks, after use, depending on how frequently the person uses.  Therefore, even if a workplace policy prohibits a person from being “high” on the job, a drug test alone would not be conclusive proof.

Earlier this week, the Supreme Judicial Court of Massachusetts held that an employer unlawfully terminated one of its employees for testing positive for marijuana.  The employer in that case, Advantage Sales and Marketing, LLC (ASM), offered Cristina Barbuto an entry-level position, pending a drug test.  Barbuto informed an ASM representative that she would test positive for marijuana because her physician prescribed her the drug to treat the side-effects of her Crohn’s disease, making her a qualified medical marijuana patient under Massachusetts law.  Barbuto stated that she would not use the drug before or during work, as she only uses small quantities of the drug at her home, two to three nights per week.  The ASM told Barbuto that her medical marijuana use was not an issue and, after Barbuto submitted to the drug test, she started her first day of work.  Later that evening an ASM Human Resources employee informed Barbuto that she was terminated for testing positive for marijuana and, in justifying the termination, stated, “we follow federal law, not state law.”  In response, Barbuto filed a complaint alleging, amongst other claims, handicap discrimination.

Barbuto alleged that, as a qualified handicapped person, a waiver of ASM policy on marijuana was an appropriate accommodation.  The Superior Court of Massachusetts stated that even if an employer had a policy prohibiting the use of lawfully prescribed medication, the employee would still “have a duty to engage in an interactive process with the employee to determine whether there were equally effective medical alternatives to the prescribed medication whose use would not be in violation of its policy.”

The court acknowledged that marijuana continues to be a Schedule I controlled substance under Federal law, regardless of whether it was lawfully prescribed by a physician pursuant to state law.  However, the court was not persuaded by ASM’s reliance on Federal law to justify the termination of Barbuto since, under Massachusetts law, a prescription for medical marijuana is treated the same as any other prescribed drug.  The court, relying on the Massachusetts Medical Marijuana Act which states that a qualified patient will not be denied “any right or privilege” due to his or her medical marijuana use, found that the use of medical marijuana was not a facially unreasonable accommodation.  Even if it were, the employer nonetheless had a duty to explore other alternatives before terminating the employee.  Some employers, such as Federal contractors or those receiving Federal grants, will be able to show that allowing the use of medical marijuana will cause an undue burden, thereby making it an unreasonable accommodation.

This case raises the question: "What are your workplace policies on marijuana use?"


San Francisco Council Votes for Prohibition on Salary History Inquiries

In a trend that is increasingly taking hold in the U.S., the San Francisco city council last week passed an ordinance prohibiting employers who do business in the city from inquiring about salary history from job applicants. San Francisco joins other major cities such as New York City and Philadelphia in this trend. The ordinance awaits signature by the mayor.

As we have reported before, laws which prohibit employers from asking about salary history are designed to eliminate perpetuation of the wage gap between genders. Even today, women still earn less than men in virtually all segments of the workforce. Many believe that this gap is perpetuated, in part, because employers base starting salaries on a candidate’s salary history, lowering the starting pay offer for applicants who were earning less at their last jobs than other candidates or employees. Since men still generally earn more than women, basing starting pay on a candidate’s salary history will maintain this wage disparity. The logic in prohibiting questioning job applicants on salary history is, of course, that if an employer doesn’t know what a candidate earned in the past, then that employer will offer a salary commensurate with the job, and not commensurate with the candidate’s job history, thus closing the gender gap.

Unequal pay based on gender has been prohibited by the Equal Pay Act for decades. Recently, courts have seen an uptick in claims based on this Act, specifically in professions, such as the law, where it has long been thought that salaries are tied to merit and bringing in business, rather than gender.

One major obstacle to laws limiting inquiries on salary history is their possible infringement on free speech. No other employment law actually prohibits an employer from talking about specific topics. While many people believe, for instance, that in protecting employees against age discrimination that Title VII prohibits an employer from asking a candidate or employee about their age, the law carries no such specific prohibition. Rather, the EEOC or a court may find that an employer’s inquiry about the age of an applicant, coupled with an adverse action, like that individual not getting the job, is evidence of age discrimination. The inquiry itself does not violate the law, but if a negative outcome occurs after that inquiry, then a court may conclude that the two were connected. That’s why employment lawyers advise employers to avoid those kinds of questions from the start. On the other hand, salary inquiry prohibitions actually prevent employers from even asking about salary history, although it is not unlawful for applicants to voluntarily reveal this information. This may indeed amount to an unlawful restraint on speech. Currently, Philadelphia’s law is on hold, amidst just such claims.

We’ll keep you posted on this trend and the challenges that it faces.


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