FUCT at the Trademark Office – Not So Fast!

On Monday, June 24, 2019 the United States Supreme Court ruled that FUCT branded clothing was entitled to trademark protection. In so doing, the Supreme Court struck down a long standing Disparagement Clause of the Lanham Act (AKA the Trademark Act) that banned registration of proposed trademarks that are scandalous or immoral.

Hopefully you have realized by now that “FUCT” when read phonetically sounds similar to the past tense of another F-word. In the early 1990s, a couple of entrepreneurs were looking for a brand name for their clothing line that would be anti-establishment and counter culture. They developed FUCT, which founder Erik Brunetti says stands for “Friends U Can’t Trust.” Read Brunetti’s response to the ruling through his lawyer, John R. Sommer here.

The Trademark Office, relying upon the Disparagement Clause, rejected the application. This led many to believe that the entrepreneurs were Fuct. However, the entrepreneurs appealed to the Federal Circuit Court of Appeals and prevailed. The Federal Circuit ruled that although FUCT was scandalous, the Disparagement Clause barring such trademarks violated freedom of speech.

In a 6-3 decision, the Supreme Court agreed with the Federal Circuit. In an odd combination, Justice Kagan wrote the majority opinion and was joined by Justices Ginsberg, Thomas, Alito, Gorsuch and Kavanaugh, and held that the Disparagement Clause restricting registration permitted “registration of marks that champion society’s sense of rectitude and morality, but not marks that denigrate those concepts.” The majority opinion further held that the Disparagement Clause did “not draw the line at lewd, sexually explicit or profane marks” and as a result the provision was overly broad in application.

The FUCT decision continues the course the Supreme Court set in 2017, when the Court permitted a band in Oregon to register and trademark the name of a rock band “The Slants.” Although the Court has turned decisively conservative, it appears that a majority exists on the Court that values First Amendment protections over trademarks that can be interpreted as scandalous, divisive, vulgar and/or profane.

If you are interested in exploring trademarking a name and need guidance, contact Jim Shrimp at jshrimp@highswartz.com or visit High Swartz’s Intellectual Property page for more information.

Update on the Philadelphia Wage Equity Ordinance

The OrdinanceOn January 23, 2017, the Philadelphia Wage Equity Ordinance (“Ordinance”) was signed by the Mayor.  The Ordinance made it unlawful for any business that employs individuals in the City of Philadelphia to (1) inquire about a job applicant’s wage history (“Inquiry Provision”); or (2) to rely upon wage history information in determining a salary for an employee at any stage in the employment process (“Reliance Provision”).The Ordinance was set to take effect on May 23, 2017, but the City agreed not to enforce the Ordinance until a lawsuit challenging the constitutionality of the Ordinance was decided.The Lawsuit/DecisionOn April 30, 2018, Judge Goldberg of the United States District Court for the Eastern District of Pennsylvania issued a split decision on the constitutionality of the Ordinance.  The Court enjoined (prevented) the enforcement of the Inquiry Provision on First Amendment grounds, but did not enjoin (allowed) the enforcement of the Reliance Provision.  Because of the constitutional issues that had to be decided, the decision is long and contains a significant amount of legal language.What Does the Decision MeanIn the short-term, the decision may not have much effect.  Both the City and the Chamber of Commerce will likely appeal Judge Goldberg’s decision to the Third Circuit Court of Appeals. The appeals will take at least another nine months to decide.  In the meantime, the City will probably agree not to enforce the entire Ordinance.In the long-term, Judge Goldberg’s decision may very well indicate what an employer’s responsibilities will be when interviewing candidates and making job offers in the City of Philadelphia.Initially, it is important to note that in the decision, Judge Goldberg highlighted that the City defined “employer” via regulation as “any person who does business in the City of Philadelphia through employees” and “who engages in the process of interviewing a Prospective Employee with the intention of considering such Prospective Employee for a position located within the City.” Thus, the Ordinance will only impact businesses that are searching for job candidates that will work within the City of Philadelphia.Should Judge Goldberg’s decision be upheld, an employer will be permitted to ask about a job applicant’s wage history, because the Inquiry Provision will be invalidated.  Practically speaking, however, the employer will not want to ask a job applicant about salary history, because the Reliance Provision will still be in effect.  Employers will take the view that it makes no sense to ask about information that the employers cannot use.  Practically speaking, an inquiry about wage history will end up in the ash heap of unaskable questions at job interviews.With that said, if a job applicant “knowingly and willfully” discloses his/her wage history, the employer is permitted to use that information, but only if the disclosure was not prompted by the employer’s questioning.Businesses that employ individuals in the City need to keep a close eye on this litigation.  In the meantime, no action is necessary, although it would be prudent to begin auditing certain aspects of the hiring process, including review job application formats and interview outlines, to perhaps eliminate any questions regarding wage history.If you have any questions about the Philadelphia Wage Equity Ordinance, please contact James B. Shrimp at 610-275-0700 or jshrimp@highswartz.com. Our employment law attorneys provide businesses and nonprofit organizations throughout the Pennsylvania region, including Bucks County, Montgomery County, Delaware County, Philadelphia and Chester County with sound advice and excellent representation.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Franchisees – Things to Watch Out for in 2018

Increased ICE EnforcementAs many of you have probably read about already, on January 10, 2018, Immigration and Customs Enforcement (“ICE”) performed raids at over 100 7-Eleven convenience stores checking on the immigration status of those stores’ employees.  After the raids, Acting ICE Director Thomas Homan cautioned employers that “today’s actions send a strong message to U.S. businesses that hire and employ an illegal work force – ICE will enforce the law, and if you are found to be breaking the law, you will be held accountable.” He continued – “businesses that hire illegal workers are a pull factor for illegal immigration and we are working hard to remove this magnet. ICE will continue its efforts to protect jobs for American workers by eliminating unfair competitive advantages for companies that exploit illegal immigration.”If you are a franchisee that relies on minimum wage labor, make sure you obtain proof of legal immigration status and have a copy of the I-9 in all employees’ files.  Importantly, a violation of Federal regulation/statute is a default pursuant to most franchise agreements.  Therefore, not only are you as the franchisee going to be dealing with fines and legal action with respect to your employment of undocumented workers, you may also be dealing with the loss of your business.In short, any savings you might be realizing by hiring undocumented workers is not worth the risk, especially in this environment.Browning-Ferris Overruled by NLRB – Franchisors Will Reassert Control Over BrandingIn late December 2017, the National Labor Relations Board (“NLRB”) overruled the Browning-Ferris decision of two years ago regarding joint employer.  You may remember that the Browning-Ferris decision caused franchisors concern, because over-asserting control over the brand, in relation to employment standards, policy standards, etc… might lead to liability on the franchisor for the acts of the franchisee. Thus, franchisors seemingly had to choose between tight brand control, with potential liability for the acts of the franchisee, or loose brand control, but no risk of liability for the acts of the franchisee.In December’s Hy-Brand ruling, the NLRB restored the traditional joint employer standard, requiring proof that the alleged joint employer actually “exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control) and that “the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’”As a result, franchisees will likely see franchisors reasserting control over the brand – meaning more inspections, more policies and more training.  In addition, for new franchisees you will also likely see more control of the brand/business set forth in the franchise agreement.If you have questions about franchise law, please contact James B. Shrimp at (610) 275-0700 or jshrimp@highswartz.comOur attorneys in Bucks County and Montgomery County are here to assist you.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Protests and Discipline in the Private Workplace: It’s More Complicated than a Tweet

October 17, 2017By James B. ShrimpOn September 23, 2017, at a purported campaign rally for Senator Luther Strange, President Trump made the following extemporaneous comments regarding the National Football League, its owners, and its players:
Wouldn’t you love to see one of these NFL owners, when somebody disrespects our flag, to say, ‘Get that son of a bitch off the field right now. Out! He’s fired. He’s fired!’
Putting aside whether you believe it is appropriate for the President to call American citizens a “son of a bitch” – the President’s comments, and subsequent tweets, added fuel and wind to a brush fire and turned it into a forest fire.  The small and isolated protests by players kneeling during the National Anthem have become more widespread since and continue to fill the news on Sundays and Mondays.These events have raised the question for management – what, if any, protests must I permit in the workplace.  The answer to this question depends on a number of factors discussed below.The ConstitutionOften, the first reaction is that if it’s a protest, it is protected by the First Amendment, and therefore an employee engaging in a protest cannot be terminated.  As a blanket statement, this is not accurate.  The First Amendment provides:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
Political speech (including protest) in traditional public forums, such as parks, streets, outside government buildings, is provided a high degree to Constitutional protection and blanket prohibitions of that speech is unconstitutional.  A government entity may place reasonable time, place and manner restrictions on such speech (protest) so long as the restrictions are content neutral.If a government worker engages in a protest, whether that government worker may be terminated for a protest is a complicated analysis that requires an article of its own.As for private workplaces, however, the First Amendment protections do not apply.  But as described below that is not the end of the analysis.Protest in Private WorkplacesA private employer is not Constitutionally prevented from disciplining or terminating an employee for protests in the workplace.  For instance, if an employer has the National Anthem played prior to the commencement of every workday, if an employee kneels, the employer is not Constitutionally prevented from terminating that employee.However, if a group of employees turn their back to the boss, or verbally disagree, in protest of that boss’ decision not to provide free lunches, or to pay a bonus that was promised, or the employees kneel during the playing of the National Anthem to protest poor working conditions, the employee may have protections beyond those provided by the First Amendment.  In these situations, employers may be in a situation similar to the NFL owners where they may not have a free hand to terminate their players for kneeling during the National Anthem.Concerted ActivityMembers of unions in the United States are provided certain statutory rights regarding the ability to join together in organizations and jointly bargain for better terms and conditions of employment.  One of the rights provided to members of unions is the right to engage in concerted activity.  Concerted activity is defined by Section 7 of the National Labor Relations Act as:
Employees shall have the right to … engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities . . . .
More simply, if the employees (whether or not unionized) are engaging in collective activity to improve their working conditions, those activities are protected and an employer will likely be prevented from taking disciplinary action against the employees for said concerted activity.  If discipline occurs the employees may enforce their rights through their union, the National Labor Relations Board and/or the state/federal courts.Thus, whether the NFL owners “have their hands tied” regarding the National Anthem protests depends to a great extent on “why” the players are kneeling.  If the kneeling relates to the terms and conditions of employment – e.g., the “black listing” of Colin Kaepernick or the disciplinary powers of Commissioner Roger Goodell –  the NFL owners ability to terminate or discipline any player is likely very limited.  However, if the kneeling is simply an expression of displeasure of the President calling the players “sons of bitches” this is likely not concerted action and the NFL owners have a greater ability to discipline the player.In short, there is no simple answer. This is not meant to minimize the understandable displeasure and anger many Americans feel over citizens not standing for the National Anthem.  But, whether an employer can take action against the employee is not governed only by displeasure/anger.Despite Jerry Jones’ recent comment that he will fire any player who kneels during the National Anthem, he may not have a legal basis to do so, if the kneeling players’ activity falls within the concerted activity protection.  Moreover, one imagines that Mr. Jones’ position might change if the kneeling player were Dak Prescott or Dez Bryant.Other Limitations on a Private EmployersRetaliation – In circumstances relating to complaints of harassment/discrimination in the workplace or whistleblower events, a private employer may be prohibited by statute from taking disciplinary action against a complaining/protesting employee.  In circumstances where an employee has made complaints to any government agency, the employer is well served to discuss with counsel whether the employer may take disciplinary action against that employee.SummaryDespite the strong feelings that are being evoked by the kneeling during the National Anthem, a private employer’s decision to terminate an employee cannot be governed by that emotion, unless a lawsuit is of no concern.  Although First Amendment protections, in general, do not concern private employers, a private employer must still be on guard not to violate an employees’ concerted activity rights or their anti-retaliation rights.  The emotion of this issue wants to evoke a black and white response – however, the law surrounding employee rights is often gray.  With that said, consultation with a lawyer is always a good idea before terminating an employee.If you have any questions about employment law, please contact James B. Shrimp at 610-275-0700 or jshrimp@highswartz.com. Our attorneys in Bucks County and Montgomery County are here to assist you.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.  

Hey Boss, Give Me the Tips I Earned! Not So Fast.

August 8, 2017By James B. ShrimpThere is a common misconception that an employee that works for tips – e.g., restaurant and hotel workers –  are always entitled to the tips they earn.  However, this is not true if the employer pays you at least minimum wage.Legal BackgroundThe Fair Labor Standards Act (FLSA) is the federal law that applies to the payment of workers – most notably minimum wage ($7.25 per hour) and overtime (time and a half over 40 hours in a week).  Importantly, however, the FLSA does not require an employer to pay its employees their tips in every situation.In 1974, Congress established an exception to the minimum wage for workers that receive at least $30.00 per month in tips.  The exception (or special minimum wage) is that an employer is permitted to pay the tip-employee an hourly rate of $2.13, so long as the employee receives all of his/her tips.  (29 U.S.C. § 203(m))  This is often referred to as the “tip-credit provision.”  However, the “tip-credit provision” makes no reference to employees that are compensated at the full minimum wage.In 2011, the Department of Labor (DOL) issued a regulation that declared that tips are the property of the employee regardless of whether the employer pays the employee the special or full minimum wage.  (29 C.F.R. § 531.52)  However, this regulation has been invalidated by a number of Federal Circuit courts, most recently by the Tenth Circuit, on the basis that the DOL did not have the authority to issue the regulation. See Marlow v. The New Food Guy, Inc., __ F.3d __, 2017 WL 2818874 (10th Cir. June 30, 2017).  More specifically, a federal agency may issue a regulation only if the statute is silent or vague with respect to an issue and the vast majority of Federal courts believe that “tip-credit provision” is not vague or silent regarding the ownership of tips.What It MeansMost Federal courts that have reviewed the DOL regulation have determined that the regulation is not enforceable and I don’t anticipate that the Trump administration will continue to attempt to enforce the regulation.With that said, if an employer pays an employee the full minimum wage, the employer is legally entitled to keep all of the tips.  From a practical standpoint, however, such a policy will negatively effect employee morale.  What is legally permissible is not always best.For those employers that use the special minimum wage, all tips must be passed on to the employee.If you have any questions, please contact James B. Shrimp at 610-275-0700 or via email at jshrimp@highswartz.com.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation. 

Compensatory Time Coming to a Private Employer Near You?

May 10, 2017By James B. ShrimpLast week the U.S. House of Representatives passed House Resolution 1180, entitled the Working Families Flexibility Act of 2017 (“WFFA”). Consideration of the WFFA is now onto the Senate. The WFFA will amend the Fair Labor Standards Act to permit an employer, at the employer’s option, to provide it’s employees with compensatory time in lieu of overtime.  Should certain conditions apply, the employee will receive 1.5 hours of compensatory time for each hour of overtime worked.ConditionsUnder the WFFA, an employer may only provide compensatory time only if – (1) there is a written agreement wherein in the employee agrees to accept compensatory time in lieu of pay; (2) entered into voluntarily; and (3) the employee has worked with the employer for at least 1,000 hours during a 12-month period of continuous employment.Hour Limit/PayoutUnder the WFFA:
  • an employee may not accrue more than 160 hours of compensatory time (approximately 105 overtime hours)
  • there is no carry over to the next year, e., should an employee have unused compensatory time on December 31 of any given year, it must be paid out to the employee on or before January 31 of the next year.
  • if an employee has earned compensatory time in excess of 80 hours, the employer has the right to pay out any compensatory time hours exceeding 80 hours.
  • An employee may withdraw from the compensatory plan, or seek payment for all compensatory time with 30 days notice to the employer.
Use of TimeUnder the WFFA the employee has a right to utilize his/her compensatory time within a reasonable time after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer.Termination of PlanAny employer that has instituted a compensatory time policy under the WFFA may terminate the plan on 30 days notice.Compensatory time is at the employer’s option, but only with agreement of the employee.  There is not much in the WFFA to object to – so keep your eye on it – the White House has advised that if the WFFA stays in its current form President Trump will sign it.If you have any questions about employment law, please contact James B. Shrimp at 610-275-0700 or via email at jshrimp@highswartz.com.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation. 

Sexual Orientation Discrimination: The Legal Jumble

April 5, 2017By James ShrimpImagine getting married, legally, on Saturday and then getting terminated by your employer on Monday because of who you married?  For members of the LGBT community that is a possibility for which currently there is no, or very limited, legal recourse.  But the tide may slowly be changing.On July 28, 2016, the Seventh Circuit dismissed a sexual orientation claim, ruling that until Congress or the Supreme Court acts, Title VII does not protect against discrimination in the workplace based on sexual orientation.  That decision is not remarkable, as all of the Circuit Courts, save the Ninth Circuit, currently share that view.  What makes it remarkable is that the Seventh Circuit expressed significant frustration over the current state of the law, explaining why the current jurisprudence on sexual orientation discrimination is cumbersome and unworkable – but adding, that their hands were tied until Congress or the Supreme Court speaks on the issue.BackgroundImportant to a discussion on Title VII, sexual orientation discrimination, is the Supreme Court’s 1989 decision in Price Waterhouse v. Hopkins.  In Price Waterhouse, the Supreme Court held that Title VII, as written, does prevent discrimination based on sex/gender stereotypes, but not sexual orientation.  Thus, an employer is not permitted to discriminate against a male employee because he dresses to “feminine” or a female employee that is too “aggressive”, but the employer is permitted to discriminate against an employee because he married another man.But that begs the question, is not discrimination against a male, because he has a relationship with another male, the violation of a stereotype?  This is the seeming lack of logic within the current state of the law.EEOC Decision in BaldwinLast year, in a case involving a Federal employee, the EEOC ruled that Title VII prohibits discrimination based upon sexual orientation for a number of reasons, including that “sexual orientation discrimination … is based on gender stereotypes in which employees are harassed or punished for failing to live up to societal norms about appropriate masculine and feminine behaviors, mannerisms and appearances.”  The EEOC than criticized Federal courts for trying to distinguish between sexual stereotype and sexual orientation discrimination.  However, EEOC decisions do not have the force of law, but this EEOC decision has led to some Federal Courts taking another look at their own sexual orientation discrimination decisions.The Current Analytical Quagmire Currently, the Federal Courts recognize claims from LGBT employees who couch their Title VII claims as sexual stereotype claims, not sexual orientation claims.  Thus, the law currently sanctions the absurd conclusion that “the law protects effeminate men from employment discrimination, but only if they are (or are believed to be) heterosexuals.”  But, if the effeminate man is openly homosexual, the individual has no protection.Since most instances sexual orientation discrimination have their genesis in the violation of a sexual stereotype the Courts have found the line between sexual orientation and sexual stereotype discrimination difficult to pinpoint and difficult to apply.  This is evidenced by the fact that some Courts have disallowed most, if not all, sexual stereotype claims – throwing the baby out with the bathwater.The Seventh Circuit in its decision concluded that “the distinction between sexual stereotype and sexual orientation claims has created an odd state of affairs in the law in which Title VII protects LGBT individuals, but only to the extent that those individuals meet society’s stereotypical norms about how LGBT men or women look or act.”    The Seventh Circuit mused that the current state of the law creates “a paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act … from an employee’s perspective, the right to marriage might not feel like a real right if she can be fired for exercising it.”With all of that said, however, the Seventh Circuit concluded that only when Congress or the Supreme Court acts, will sexual orientation discrimination be prevented by Title VII.TakeawayIt is still Federal law in the vast majority of the United States that there is no protection for sexual orientation discrimination (although most major cities have adopted their own ordinances/statutes providing protection).  However, the Seventh Circuit’s decision and analysis reflects a Federal Court system anxious for Congress and the Supreme Court to provide clarity on the bounds of Title VII with respect to sexual orientation.  In the meantime, those who are discriminated against based on sexual orientation and the Courts hearing those cases, will continue to split the hairs, presuming any hairs exist in reality, between sexual stereotype and sexual orientation discrimination.If you have any questions, please contact James Shrimp at 610-275-0700 or via email at jshrimp@highswartz.com.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

The Oscars®, March Madness and Work: How Does an Employer Manage Distracted Working

March 8, 2017By James ShrimpAs most of you know, at the Oscars® Warren Beatty and Faye Dunaway announced the wrong movie for the Best Picture Award.  In the initial hours after the show, many held Warren Beatty accountable (including me), because he clearly recognized something was wrong with the card – but showed the card to Faye Dunaway to read anyway.  However, in the days that followed, it became clear that multitasking was the blame.Specifically, a Price Waterhouse Coopers’ partner who was responsible for providing the correct envelope to the presenters, decided to send a tweet in the moments before handing the Best Picture Award card to Warren Beatty.  This PwC partner was guilty of TWW (Tweeting While Working).  As a result of his TWW, the partner provided the wrong envelope to Mr. Beatty and chaos ensued.Similarly, next week, millions of workers in the United States will be guilty of MMWW (watching March Madness While Working).  As a result of MMWW, work productivity will be lost and mistakes will be made on March 16 and 17.  In addition, FWW (Facebook While Working), SCWW (SnapChat While Working) and many other distractions are becoming endemic in the US workplace.In fact, even in government, TWP (Tweeting While President), although entertaining at times, is a strain of distracted working at the paramount level.A millennial will be quick to say, engaging in TWW, MMWW, FWW or SCWW is no big deal because humans can multitask.  Unfortunately, that is not true.  Numerous studies have found that the human brain does not multitask, instead, the brain cycles back-and-forth between the different tasks and as a result the brain’s output drops during multitasking and it leads to quicker brain fatigue – and mistakes.In this world of 140 characters where distractions are all around, what can an employer do to minimize the effect of distracted working in its workplace.  Short of engaging a supervisor for every employee, or installing a cell signal dampener in the office, there is no way to completely eliminate distracted working.  However, there are a few things that can be implemented to discourage excess distracted working.
  • Adopt a Cell Phone/Tablet Usage Policy – In this policy, the employer will explicitly restrict the usage of cell phones at the work station, except in emergency situations. For this to be effective, however, it must be enforced.  This policy is distinct from a social media policy which governs the content of social media postings.
    • Notably, the PwC partner at the Oscars® asked for permission to tweet during the show. The partner’s request was denied and he was told not to tweet during the show.  But, he did it anyway.
  • Don’t Provide WiFi – Unless your computer system operates on WiFi, do not provide a system that is “open” to your employees. If they are going to be a distracted worker, at least make them pay for the data.  This may curtail usage, although unlimited data plans may limit the effectiveness of this idea.
  • Restrict Access on Work Computers – On the desktop or laptop computers at work, an employer can and should limit access to social media websites. In addition, the employee should be clearly advised, that anything entered or typed on the work computer is the property of the employer and there is no expectation of privacy.
  • Safety/Training Programs – For employers that have employees who operate machinery, drive (or hand out envelopes), periodic safety and training programs that incorporate cell phone best practices is crucial. In workplaces where machines are operated, having a policy of keeping the phone in a locker is completely acceptable; or if driving, to have the phone in the glove compartment.
  • Keep Your Employees Busy and Interested – Employees are more apt to become distracted if they are bored or not interested in their work. Boredom is the employers fault – lack of interest is perhaps an employee issue.
If you have any questions, please contact James Shrimp at 610-275-0700 or via email at jshrimp@highswartz.com.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

“Subgroup” Disparate Impact is a Basis for Age Discrimination Claim

January 17, 2017By James B. ShrimpFor any business contemplating a reduction in force (“RIF”) it is no doubt a difficult process given the knowledge that you are going to layoff a significant number of employees.  From a business perspective, for businesses in PA, NJ and DE, the Third Circuit Court of Appeals has added an additional layer of difficulty.  Specifically, in examining whether your RIF guidelines/policies violate the Age Discrimination in Employment Act (“ADEA”), the Third Circuit in Karlo, et al. v. Pittsburgh Glass Works, LLC, has concluded that a disparate impact on a subgroup of employees is a basis for a claim under the ADEA.What is Subgroup Disparate Impact?This is a fair question, because with respect to most other protected classes there are no subgroups. For instance, Title VII protects group identities such as race, which are no subject to subgroups.  The ADEA is different, because the protected class of individuals is defined as an age – forty (40) and those older.  Subgroup disparate impact is possible because although the protected class begins at 40, the ADEA prevents discrimination as to “age” not “those over 40”.  As stated by the Third Circuit, “age is a continuous variable, whereas race and sex are treated categorically in the mine-run of Title VII cases.”Therefore, it is possible that a subgroup of the age protected class – those aged 50 to 55 – are disparately impacted by a policy, which favored individuals aged 40 to 45 who are also in the protected class.  The question for the Third Circuit was whether such an impact is unlawful.ADEA Disparate ImpactTo win a disparate impact claim under the ADEA a plaintiff must (1) identify a specific, facially neutral policy, and (2) proffer statistical evidence that the policy caused a significant age-based disparity.  Once a plaintiff proves this, the employer can defend by arguing that the challenged practice was based on “reasonable factors other than age.Notably, the ADEA’s disparate impact prohibition makes it unlawful for an employer to adversely affect an employee’s status because of such individual’s age.  Importantly, the Third Circuit emphasized, the ADEA does not state that the impact must be adverse to those over 40 years old and favorable to those under 40 years of age.Although the Third Circuit’s decision is contrary to three other circuit courts that have ruled on this issue, the Third Circuit’s legal analysis is more persuasive.  Thus, subgroup disparate impact in ADEA cases is the law in PA, NJ and DE for now and will in my opinion be the law of the land should the Supreme Court consider the matter.What Does It Mean for EmployersWhen planning a RIF, an employer must now review the impact its RIF guidelines/policies will have on age subgroups.  By example, an employer will run afoul of the Third Circuit’s decision if it simply concludes that the RIF is impact neutral because 4 employees over 50 are being terminated while 4 employees 40 to 45 are being retained.  Instead, unless the employer feels confident in its reasonable factors other than age, the RIF should be planned to evenly impact age groups.  For instance, if 50 employees are being terminated, approximately 10 employees each should be terminated in the following age ranges – 40 to 45, 46 to 50, 51 to 55, 56 to 60, and 61 to 65.Also, there is a chance that enterprising plaintiff’s lawyers will expand subgroup disparate impact to other subgroup-able protected classes, such as religion or disability.  Therefore, employers should contact an attorney when contemplating/planning a reduction in force.If you have any questions, contact James B. Shrimp at 610-275-07000 or via email at jshrimp@highswartz.com. The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation. 

Alert: Federal Judge Prevents Implementation of New Overtime Rule

November 23, 2016By James B. ShrimpThe word "overtime" seen through a magnifying glassLast evening, a Federal Judge in Texas issued a nationwide injunction to prevent the implementation of the new overtime rules on December 1, 2016.  It is possible that the Judge’s injunction will be overturned by next Wednesday, however, such a decision would have to come from the Fifth Circuit Court of Appeals which is a politically conservative Circuit.In his decision in the case State of Nevada, et al. v. U.S. Department of Labor, et al, Judge Amos L. Mazzant III, of the Eastern District of Texas, concluded that the Department of Labor exceeded its authority in issuing regulations raising the salary test from $23,660 to  $47,476 per year.   Specifically, the Judge ruled that the salary test of $47,476 is such a significant increase, it effectually eviscerates the executive, administrative and professional (“EAP”) duties test.  In other words, salary becomes the critical test not the duties test.Judge Mazzant, an Obama appointee, hinted that given the language of the Fair Labor Standards Act, the salary test itself may not be permissible.  Notably, the FLSA only references EAP positions/duties, not salary.Judge Mazzant’s decision puts employers in limbo for a couple of reasons.First, at this point, Judge Mazzant’s decision is only a temporary stay of the implementation of the new overtime rule until he makes a final decision.  However, a temporary injunction may only be entered by a judge if he/she believes that there is a likelihood of success on the merits.Second, although the injunction is appealable, the politically conservative Fifth Circuit is unlikely to overturn Judge Mazzant’s injunction.  The injunction would then be reviewable by the U.S. Supreme Court, however, the Supreme Court is currently in a 4 to 4 conservative/liberal split.  Thus, Judge Mazzant’s decision is likely to endure.As an employer, whether you have or have not made changes to your employee’s classifications and schedules to comply, I recommend not reacting to this decision until we see how any appeals play out next week.  If Judge  Mazzant’s decision/injunction stays in place, employers then have to manage and work through employee morale issues related to reverting back to the prior system.If you have questions about employment law, contact James B. Shrimp at 610-275-0700 or via email at jshrimp@highswartz.comThe information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation. 

Employers: An Applicant’s Past Salary Soon May Be None of Your Business

November 11, 2016By James B. Shrimphigh swartz, moneyA day may soon be coming when hiring managers are so limited in their ability to ask questions of a job applicant that they will have to gather their feelings and use the Force to pick the applicant that best fits the open position.  I may be being a little facetious – but only a little.Many of you may know that over the last few years, a handful of states and many cities have passed or amended laws to prohibit employers from asking about a job applicants’ criminal history, until after a conditional employment offer is made to the applicant.  In March 2016, a law took effect in the City of Philadelphia that prohibits nearly all employers from asking about a job applicant’s criminal background prior to a conditional offer being made by the employer. For more details please see my prior blog on the subject.  [hyperlink]Now, states and cities are taking aim at prohibiting questions regarding a topic that is a nearly universal area of inquiry for employers – past salary history of the job applicant.Advocates in support of the salary inquiry prohibition believe that such inquiries are a factor in the wage disparity between men and women/minorities. According to the U.S. Census Bureau, women are paid 79 cents for every $1 that men earn.  Although other factors affect that 21-cent disparity, economists believe that a significant portion of it is related to discrimination.Advocates concede that the pay disparity often is not intentional, but they believe it is a legacy of lower entry pay for women and minorities versus men.  Therefore, if women and minorities are required to disclose their prior salary during the application process, their pay will never “catch up.” The prohibition is meant to compel the employer to set the pay to the job and its duties/requirements and not to the past pay of the applicant, which in theory would drive up pay.In August, Massachusetts became the first state to pass a law making it unlawful to ask an applicant during screening (e.g., an application) or during an interview about his/her past salary history. Effective July 2018, the Massachusetts law prohibits employers from compelling job applicants to disclose their pay at previous employers. The Massachusetts law also prohibits employers from preventing current employees from sharing with each other how much they are paid.In late September, legislation was introduced before the Philadelphia City Council that, if approved, would prohibit employers in the City from asking job applicants about their salary history and it would prohibit employers from finding out the salary information on their own. A violation of the proposed law would lead to a civil fine and other possible damages. For employers in the City it is worth keeping an eye on this legislation and perhaps contacting your Council representative to express your opinion.A similar bill has also been introduced in Harrisburg for the entire state, but I do not anticipate that bill will become law, given the Republican-controlled legislature. A similar bill also has been introduced in New York City.If you have questions about employment law in Pennsylvania, contact James B. Shrimp at 610-275-0700 or via email at jshrimp@highswartz.com.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.  

The Wait is Over – Time for Employers to Audit Payrolls

June 3, 2016By: James B. Shrimpover-time for employersThe Background – Employment Law and ExemptionsOn May 18, 2016, the Department of Labor issued its Final Rule to update the Federal Regulations defining and delimiting the exemption for Executive, Administrative and Professional (“EAP”) employees as they relate to overtime in employment law. As a start, below is a brief summary of the EAP exemptions. Continue reading “The Wait is Over – Time for Employers to Audit Payrolls”

Medical Marijuana in Pennsylvania: A Budding Problem in the Workplace

May 24, 2016By: James B. Shrimpmedical marijuana in workplaceOn April 17, 2016, Pennsylvania became the 24th state to legalize medical marijuana. There is no doubt that the passage of this law, in a state with a fairly conservative legislature, speaks to the medicinal value of marijuana in the management of severe and terminal diseases. However, the introduction of medical marijuana into workplaces that are dominated by no-drug policies creates a significant tension under Pennsylvania employment law that must be analyzed and hashed out.As the medical marijuana movement is state-by-state, there are now 24 different state statutes that legalize medical marijuana. Some of those statutes directly address employment-related marijuana issues and some do not. In both circumstances, however, no statute provides the straight dope on how medical marijuana affects employment law, so it is primarily left to the courts to try to blunt the tension.Continue reading “Medical Marijuana in Pennsylvania: A Budding Problem in the Workplace”

The NLRB Takes Aim at Employee Handbooks Affecting Employment Law

April 19, 2016By: James B. Shrimpemployee handbook, NLRBThe National Labor Relations Board (NLRB) and it’s field offices continue to seek to influence the non-unionized, private sector workplace. Last week, an administrative law judge in an NLRB proceeding involving Quicken Loans, and affiliated companies, Fathead and One Reverse Mortgage, ruled that over 20 provisions of an employee handbook, known as the “Big Book,” violated the National Labor Relations Act. Specifically, the judge ruled that these Big Book provisions violated more than 15,000 employees’ rights to engage in concerted activity. Continue reading “The NLRB Takes Aim at Employee Handbooks Affecting Employment Law”

Employment Law Protections for Caregivers of Individuals with Alzheimer’s

February 9, 2016By: James ShrimpThis post originally appeared in the Local Living Magazine on February 2016 issue.High Swartz, handsAccording to the Alzheimer’s Association website, 5.3 million Americans currently have Alzheimer’s, with 5.1 million of those being 65 years of age or older. Barring a yet undiscovered treatment or cure, by 2025, the number of senior citizens with Alzheimer’s will be 7.1 million and by 2050, the number may reach 13.8 million. Continue reading “Employment Law Protections for Caregivers of Individuals with Alzheimer’s”

More Employees “Work” for Multiple Employers: The U.S. Department of Labor Clarifies “Joint Employer”

January 26, 2016By: James B. Shrimphigh swartz, joint employmentLast week, before the Blizzard of 2016 (a/k/a Snowzilla) left the streets of Washington D.C. deserted, the U.S. Department of Labor issued an interpretation related to joint employment.  So what you say? Well, if you are the owner of a business that has multiple locations, or are the owner of a business that utilizes contract labor, or shares employees with another related employer, or a franchisor, or an employee in any of these situations, and more, it matters to you. Continue reading “More Employees “Work” for Multiple Employers: The U.S. Department of Labor Clarifies “Joint Employer””

Ban the Box: Hiring Just Got More Complicated in the City of Philadelphia

Criminal background checkDecember 18, 2015By: Jim B. Shrimp, Esq.For decades, private employers have used a number of tools to analyze and evaluate candidates for positions, including requiring resumes, work and personal references and the completion of an application.  Two tools that have also been used are credit checks and criminal background checks.  I wrote an article back in September on the use of credit reports in hiring and the fact that Federal legislation has been introduced to significantly limit the use of credit checks.  To date that legislation has not advanced toward becoming law. Continue reading “Ban the Box: Hiring Just Got More Complicated in the City of Philadelphia”

Employment Eye on the Supreme Court

high swartzDecember 7, 2015By: James B. Shrimp, EsquireThe United States Supreme Court will examine and decide dozens of interesting and impactful cases in its 2015-2016 Term.  The Court will hear cases around voting rights, water rights, affirmative action, the contraceptive mandate under the Affordable Care Act and First and Fourth Amendment rights.  Also, as is typical, the Court will decide a handful of cases involving employment and labor law that are worth keeping a watchful eye on: Continue reading “Employment Eye on the Supreme Court”

Facebook and Employee Discipline: Employers “Dislike” the NLRB

November 16, 2015

By James B. Shrimp, Esq.

Can an employer get into trouble for firing an employee over something the employee wrote on Facebook? Apparently, yes.

Facebook and Employee Discipline

The United States Second Circuit Court of Appeals recently agreed with the National Labor Relations Board (NLRB) that an employer violated the National Labor Relations Act “by taking certain actions against its employees, including discharge, for their Facebook activity.” The Second Circuit further found that the employer’s social media policy violated the Act.

Importantly, this decision applies to both union and non-union shops. In fact, over the last several years the NLRB has increasingly used its enforcement powers against non-union employers.

An Employee’s Protections Under the Act

The Act guarantees that “employees shall have the right to self-organization, to form, join, or assist labor organizations … and to engage in other concerted activities for the purpose of … mutual aid of protection…” The Act protects an employee’s rights by prohibiting an employer from interfering with, restraining, or coercing employees in the exercise of these rights.

An employee’s rights have to be balanced against an employer’s interest in preventing disparagement of its products or services and protecting the reputation of the business. Thus, an employee’s communications may lose protection if they are sufficiently disloyal or defamatory. Importantly, if an employee relays in good faith what he has been told by another employee, reasonably believing it to be true, the fact that the initial report was inaccurate does not eliminate the employee’s protection.

The Triple Play Sports Bar – Facts

The NLRB’s decision in a case at the Triple Play Sports Bar serves as a cautionary tale for employers. Here are the details of the case, which can be ound at 361 NLRB 31 (August 22, 2014). I have cleaned up the language a bit for family consumption, just in case you want to read this to your kids at bedtime.

“The employer employed Jillian Sanzone as a waitress and bartender, and Vincent Spinella as a cook. In approximately January 2011, Sanzone and at least one other employee discovered that they owed more in State income taxes than they had expected. Sanzone discussed this at work with other employees, and some employees complained to the employer. In response to the complaints, the employer planned a staff meeting for February with its payroll provider to discuss the employees’ concerns.

Sanzone, Spinella, and former employee Jamie LaFrance, who left the employer’s employ in November 2010, have Facebook accounts. On January 31, LaFrance posted the following “status update” to her Facebook page:

Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money…Wtf!!!!

The following pertinent comments were posted to LaFrance’s page in response:

DESANTIS (a Facebook “friend” of LaFrance’s and a customer): “You owe them money…that’s f*%&ed up.”

 *                      *                      *

LAFRANCE: “The state. Not Triple Play. I would never give that place a penny of my money.

Ralph [DelBuono] f*%&ed up the paperwork…as per usual.”

DESANTIS: “yeah I really dont go to that place anymore.”

LAFRANCE: “It’s all Ralph’s fault. He didn’t do the paperwork right. I’m calling the labor board to look into it bc he still owes me about 2000 in paychecks.”

(At this juncture, employee Spinella selected the “Like” option under LaFrance’s initial status update. The discussion continued as follows.)

 *                      *                      *

SANZONE: “I owe too. Such an a**hole.”

Sanzone added her comment from her cell phone on February 1. On February 2, when Sanzone reported to work, the employer told her she was being discharged. When Sanzone asked why, the employer, having learned of the Facebook post, responded that she was not loyal enough to be working for the employer because of her Facebook comment.

When Spinella reported for work on February 3, he was summoned to a meeting. The Facebook comments from LaFrance’s account were displayed on a computer screen in the office. After asking Spinella if he “had a problem with them, or the company,” he was interrogated about the Facebook discussion, the meaning of his “Like” selection, the identity of the other people who had participated in the conversation, and whether Spinella had written anything negative to say about the employer. Spinella was told that because he “liked the disparaging and defamatory comments,” it was “apparent” that Spinella wanted to work somewhere else. Spinella was then discharged.”

In the case there were two instances of employee conduct at issue.

  • Spinella, “Lik[ing]” the post of Ms. LaFrance, which stated “maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money … Wtf!!!!”
  • Sanzone, commenting on the LaFrance post stating “I owe too. Such an a**hole.”

The Triple Play Sports Bar – Legal Decision

The Court and the NLRB both determined that Mr. Spinella and Ms. Sanzone’s conduct on Facebook was concerted activity under Section 7 of the Act, because it involved an “ongoing sequence of discussions that began in the workplace about [the] calculation of employees’ tax withholding.” The Court and the NLRB further determined that the statements were not defamatory, even though profanity was used, because the conversation wasn’t directed at customers and did not relate to the employer’s brand. The Court also determined that the employer violated the Act by (1) threatening employees with discharge for Facebook activity; (2) interrogating employees about their Facebook activity; and (3) informing employees that they were being discharged for their Facebook activity.

In addition, the Court determined that the employer social media policy violated the Act. The employer maintained the following work rule as part of its Internet/Blogging policy in its employee handbook:

The Company supports the free exchange of information and supports camaraderie among its employees. However, when internet blogging, chat room discussions, e-mail, text messages, or other forms of communication extend to employees revealing confidential and proprietary information about the Company, or engaging in inappropriate discussions about the company, management, and/or co-workers, the employee may be violating the law and is subject to disciplinary action, up to and including termination of employment. Please keep in mind that if you communicate regarding any aspect of the Company, you must include a disclaimer that the views you share are yours, and not necessarily the views of the Company. In the event state or federal law precludes this policy, then it is of no force or effect.

The Court determined that “employees would reasonably interpret [this] rule as proscribing any discussions about their terms and conditions of employment deemed ‘inappropriate’ by the employer.”

Takeaways for Employers

  • “Concerted activity” is being interpreted very broadly by the NLRB. Any statements, expressions or shows of support by employees about terms and conditions of employment and/or support for union activities, even if the employer is non-union, should be deemed concerted activity by the employer.
  • Employers must view any social media, including Facebook, as an extension of the workplace. If something is said by an employee on social media that would be protected if it were said in the workplace, it is likely protected on social media.
  • Employers must review and reevaluate their social media policies. Many of these policies were drafted near the beginning of the social media explosion and did not contemplate the assertion of NLRB authority in the social media space.
  • In reviewing social media policies focus on the protection of the employer’s product and/or brand. Statements by employees disparaging or defaming an employer’s product or brand can still lead to the lawful termination of an employee.
  • Realize that many employees under 35 (Gen Xers) complain about everything on social media – work, food, people, TV shows, etc… Whereas an employee currently in their 50s used to complain about their boss or working conditions to others around the water cooler, younger employees do so on social media – social media is their water cooler. Unfortunately, social media provides more publicity to discussions about issues at work, but the NLRB deems social media to be the equivalent of the water cooler. With that said, the torts of defamation, tortious interference, and invasion of privacy still provide some protection to the employer.

For more information about employment law, feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com.

Visit the firm’s Employment Law page.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Employer Firearms Policies in light of Bring Your Gun to Work Laws

October 27, 2015

By James B. Shrimp, Esq.

Preventing violence in the workplace is (or should be) a major concern for every employer. After all, the business is the owner’s livelihood; it and the employees who keep the business running should be carefully guarded. Workplace violence can take many forms, including physical threats, bullying, verbal and physical abuse and the use of weapons, from knifes to firearms.  In their quest to keep their workplaces and their employees safe, it’s important that employers understand what they can or cannot do when it comes to restricting firearms in the workplace.

Background on Workplace Homicides

The Bureau of Labor Statistics (“BLS”) Census of Fatal Occupational Injuries reported that from 1992 to 2012, 14,770 individuals were the victim of homicide in the workplace, an average of more than 700 individuals per year.  In 2014, there were 403 people killed in the workplace, including 307  killed by a gun.

Studies show that workplace homicides due to shootings are not limited to any specific industry or type of job.  The chart below shows that workplace homicides occurred in eleven different industries in 2010.

Workplace homicides due to shootings, by industry, 2010

The Second Amendment of the United States Constitution sets forth the Right to Bear Arms as follows: “A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”  This article will not argue the reach of the Second Amendment, except to say that the Right to Bear Arms is subject to some regulation by the Federal government and some State governments as to where you may lawfully carry your gun.

For instance, Federal law prohibits the carrying of a gun, or having a gun in one’s car within any designated “school zone,” a United States post office, a Federal Courthouse, Federal cemeteries and commercial aircraft.  Many states also prevent an individual from carrying a gun into schools and government buildings, including courthouses.

So, the question is what, if anything, can a private employer do regarding its employees carrying guns onto its property or into the workplace?

Most employers attempt to promote a safe work environment by instituting workplace anti-violence policies. In many, if not most of these policies, employers prohibit the carrying of a firearm onto the property of the employer. Such a policy will not prevent a premeditated homicide in the workplace, where the worker will carry a weapon onto the employer’s property to immediately commit murder, but it may prevent an impulsive or heat-of-passion act of violence.  These are good policies which I recommend and include in all employee handbook/policies that I prepare.

Private employer policies preventing firearms on the property, are not recognized or enforced by any Federal law.  On the contrary, a couple dozen states have passed laws that prohibit employers from restricting employees from carrying firearms or keeping them in their automobiles.

Bring Your Gun to Work Laws

In 2004, Oklahoma passed a law that prohibited employers from preventing workers from storing firearms in their locked vehicles on the employer’s premises. Since then, at least twenty-one other states have passed similar laws, specifically Alabama, Alaska, Arizona, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Minnesota, Missouri, Mississippi, Nebraska, North Carolina, North Dakota, Tennessee, Texas, Utah and Wisconsin.  These laws are all nuanced, with some preventing discrimination against gun owners, others permitting prohibition of firearms in parking lots, so long as notices are posted, and others restricting or preventing the search of employees’ automobiles in employer parking lots.

The stated purpose behind these laws is that workplace shootings will be reduced if the potential shooter knows that other employees have firearms in their automobiles. This justification presumes several things:

  1. That the potential shooter is thinking logically.
  2. That the employee can get to his/her car during the shooting to utilize the firearm in self-defense.
  3. That the employee is trained to effectively and safely use his/her firearm in such a trying situation, without wounding or killing innocents.  Moreover, it’s hard enough for law enforcement to respond to an active shooter scene when there is one person with a gun; just imagine if five employees also had guns – who’s the bad guy and what innocents might get killed in the crossfire?

Putting aside the reasonableness of such laws, these state-by-state laws create special challenges for multi-state companies that attempt to keep their employee policies and procedures as consistent as possible.  Moreover, these laws create potential expense for employers, as some of these laws include provisions regarding parking lot safety/security and the provision of locked storage areas on the employer’s premises.

Best Practices Moving Forward

For employers in states where a Bring Your Gun to Work Law has not yet been passed, I encourage you to continue to prohibit your employees from bringing firearms onto the employer’s premises, and if they do, to make it an offense that leads to suspension or termination.

For employers in states where there is a Bring Your Gun to Work Law, I encourage you to review the law to determine what obligations you have and whether there is anything under the statute you can do to legally limit or prevent firearms in your workplace.

If you are an employer with locations in both types of states, I encourage you to have two different policies.  Although I am a believer in having one policy throughout the company whenever possible, I believe this is a time when it is not possible.

Other best practices include:

  • Conduct pre-employment criminal background checks
  • Address all “minor” conflicts in the office, as minor slights or arguments can lead to more significant incidents if not dealt with promptly and fairly
  • Implement and enforce an anti-bullying and anti-violence policy in the workplace
  • Train supervisors on conflict avoidance and the anti-bullying and anti-violence policies, as frequently as anti-discrimination training
  • If legally permissible, prohibit firearms on the employer’s premises, including any company owned vehicles, and at any employer events
  • Properly secure the employer premises, if possible, limiting entrance to one or two locations

For some employers, this may be a Constitutional Right to Bear Arms issue, and for those employers there is nothing to prevent you from permitting firearms throughout your workplace.  However, the best practice policy for safety and to minimize liability, is to prohibit firearms on the employer’s premises which, unfortunately, is itself prohibited in nearly half the country.

For more information about employment law, feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile.

Visit the firm’s Employment Law page.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Association Discrimination: Another Consideration When You Cut One (an employee that is)

October 9, 2015

By James B. Shrimp, Esq.

This past weekend, I was thinking about blogging, while standing in my kitchen cutting the cheese (I was cutting the cheese for a party I was having). I concluded that there are some blogs that you need to hold in because you aren’t quite sure the audience can handle it. Then, there are other blogs that you have to let loose, because if you hold it in your stomach just won’t feel right. Well, this is one of those blogs that I had to let rip, because staying silent on this issue could be deadly for employers (well, not really deadly).

Discrimination

Last month, a Trenton, New Jersey business was sued for violations of the Americans with Disabilities Act (“ADA”) and the New Jersey Law Against Discrimination (“LAD”). The Plaintiff in the lawsuit was a part-time employee of the business, who assisted and was the wife of the business’ comptroller.

According to the Complaint, Plaintiff’s husband was obese, weighing 420 pounds and in October of 2010, Plaintiff’s husband underwent gastric bypass surgery. Also, according to the Complaint after the surgery, Plaintiff’s husband suffered the side effects of extreme flatulence and uncontrollable diarrhea. These symptoms allegedly worsened over time and caused the Plaintiff significant disruption in the workplace.

Plaintiff’s employer aired its concerns about the side effects and asked that Plaintiff’s husband work from home. Plaintiff’s employer also allegedly made statements to Plaintiff about her husband’s side effects and whether there was anything that could be done to alleviate the issue.

About three and a half years after the surgery, Plaintiff’s husband was terminated. Instead of just letting one go, the business also terminated Plaintiff. Plaintiff brought the lawsuit alleging that she was terminated for associating with her husband, who allegedly has a disability.

In reading this, many employers might think it stinks, thinking how can an employee bring a claim under the Americans with Disabilities Act when they don’t have a disability. Well, the fact is that in some instances an employee without a disability can bring a claim under the ADA, as the Plaintiff has done, for association discrimination.

The ADA’s anti-discrimination by association provision prohibits:

excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association.

In order to establish a case of association discrimination in the case of a termination, a plaintiff must prove that:

  1. she was qualified for her job at the time of the termination;
  2. she was terminated;
  3. at the time of the termination, plaintiff was known by her employer to have a relative or an associate with a disability; and
  4. the termination occurred under circumstances raising a reasonable inference that the disability of the relative or associate was a determining factor in the termination decision.

Notably, the ADA refers to terminations (or other adverse actions) motivated by ‘the known disability of an individual’ with whom an employee associates, as opposed to actions occasioned by the association. For instance, being terminated for missing work related to someone else’s disability is not actionable under the ADA (although it may be under the Family and Medical Leave Act). The termination must be because of the relationship or association itself.

In passing, just because an employee is not disabled, does not mean that the ADA might not provide protection for an employee, should that employee have associated with a disabled individual. Employers, be alert, because the last thing you want is to get a whiff of an association claim after its already been let loose.

For more information about employment law, feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.

Visit the firm’s Employment Law page here.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Workplace Conflict: Management Lessons from Jonathan Papelbon

By James B. Shrimp, Esq.

This past weekend Jonathan Papelbon, the talented and unpredictable closer for the Washington Nationals, had a heated discussion with MVP-candidate Bryce Harper about Harper’s failure to run hard after hitting a fly ball. The heated discussion quickly turned physical, when Papelbon grabbed Harper around the neck and pushed him up against the dugout wall. Papelbon and Harper were then separated by their teammates. In response, the Nationals have suspended Papelbon for four games.

work conflict

As a life-long Phillies fan, I take some degree of warped pleasure in seeing how Papelbon, a Phillie until two months ago, has apparently unsettled the Nationals. The Nationals were one game ahead of the Mets at the time of the trade and are now nine games behind the Mets and have been eliminated from playoff contention. My twisted interest aside, this incident does raise the issue of how an employer should deal with conflict and fights at work. Importantly, this is conflict that does not rise to the level of unlawful discrimination or harassment.

No workplace is utopian. We are all human, so if you employ more than just yourself, the ingredients are present for conflict, and if allowed to simmer, fights. The conflicts can range from high-school style “clique” drama, to manufactured power-play disputes, to professional disputes. Many of these conflicts cannot be avoided, but what an employer can do is address and manage the conflict so it does not disrupt workplace harmony, or simmer into a physical altercation, both of which are bad for the employees involved, bad for morale and could lead to potential legal liability.

Although inevitable, there are some things employers can do to manage workplace conflict.

Accept Conflict and Manage It

As stated above, conflict happens in the workplace, whether it be conflict derived from “drama” or whether it is serious decision-based conflict. In either case, the employer cannot take the position that conflict “cannot happen in my workplace.” The employer must not dismiss out-of-hand the position of one employee over another. Listening, not just hearing, is key to managing conflict. Moreover, the employee and employer must understand that the goal is not circling around the campfire signing kumbaya. One does not have to like who you work with, but you have to function in the workplace in a respectful manner. The key for the employer is to manage the conflict so the parties can move forward in a respectful manner.

Look for Personality Conflicts

Oil and water. It happens. Sometimes you have two good employees who work hard and there is something that just does not work between them. It could be present from the first interaction, or it could develop later. If those individuals with the conflict cannot recognize and accept those conflicts between them, which would allow them to move forward in a respectful manner, the management of the conflict may well include the separation of the two individuals. Personality conflicts, as opposed to “workplace drama” or professional conflict, can quickly and seriously infect the morale of a workplace.

Open Door Policy/Communication

Your employee handbook should contain, and management should make clear, that an open door policy exists, and that employees should feel comfortable raising and discussing the conflict in hopes of resolving the matter.

Don’t Be Afraid to Discipline or Terminate

If the conflict is continuous, or if the conflict extends beyond verbal disagreement, the employer must not be hesitant to take disciplinary action, including termination if the circumstances require it.

Most employers have, and I would recommend, a zero tolerance policy with respect to physical fighting, or threats of bodily harm. For instance, if an employee punches or threatens physical harm with an instrument (e.g., knife, gun, etc…) the employer should contact the police and the employee should be terminated.

If the employer fails to take disciplinary action regarding an employee with a propensity for intense conflict and violence, the employer may be liable for negligent supervision and other torts. In short, in the real world of everyday employment, Papelbon would have been terminated, not just suspended for four games.

For more information about employment law, feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.Visit the firm’s Employment Law page here.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Grab the Popcorn: Top 10 Legal Movies Worth Watching

September 29, 2015By James B. Shrimp, Esq.I have written a number of articles on business and legal concerns for readers – but now it’s time for some fun. Since everyone loves a list, below is what I believe to be the Top Ten Legal Movies post 1970.
  1. A Few Good Men – A movie with a unique crime and the focus of the drama being who is ultimately responsible for the crime. The courtroom scenes are dramatic and fairly realistic. This movie has it all, including great actors: Jack Nicholson, Tom Cruise, Kevin Bacon, and Demi Moore. A fantastic movie, but not for those that “Can’t Handle the Truth!”
  2. My Cousin Vinny – This movie is a rare combination of humor and courtroom drama. Putting the comedy aside, this movie includes good courtroom and cross-examination scenes. And I’ll never forget that a ’64 Buick Skylark does not have positraction – thank you Mona Lisa Vito!
  3. Presumed Innocent – Another movie that has it all. Great actors – Harrison Ford and Raul Julia, originality, dramatic and fairly realistic courtroom scenes, flawed heroes and a memorable twist at the end – “the destroyer is destroyed.” Yikes!
  4. Erin Brockovich – This movie represents accurately that lawyers are more often than not supported by dedicated, intelligent paralegals and staff and it accurately represents that there are bad people/industries out there looking to cover up liability. A great representation of the back room, after hours work that is necessary to successfully represent clients.
  5. Philadelphia – An Oscar winner that took on discrimination and stereotypes related to HIV and AIDS that stands the test of time. A great cast including Tom Hanks, Denzel Washington, Jason Robards, with a story loosely based on a discrimination case actually tried in Philadelphia.
  6. 12 Angry Men (new version) – The new version is nearly as great as the old – minus Henry Fonda. A look into the jury room and how bias and prejudice can affect the deliberation of a jury.
  7. The Verdict – Paul Newman, enough said. But a great movie regarding the redemption of a lawyer and the pursuit of justice in a medical malpractice case.
  8. Chicago – A musical that includes courtroom scenes. It does not get any more original than that. “Find a flask, we’re playing fast and loose and all that jazz…”
  9. Primal Fear – A terrific courtroom thriller with a great twist at the end, staring Richard Gere and Ed Norton. There are not many dramatic cross examinations better than this one.
  10. And Justice for All – Al Pacino, enough said. Pacino is forced to represent a guilty judge in a criminal trial. What lawyer hasn’t wanted to yell at some point in his or her career “You’re out of order! You’re out of order! The whole trial’s out of order!”
Feel free to disagree – this is just one guy’s opinion. Honorable mentions include Michael Clayton, A Civil Action, A Time to Kill, The People v. Larry Flynt, The Insider, and Kramer vs. Kramer.Republished with permission of the Local Living Magazine© 2015 Blue Water Media LLC. All rights reserved. Further duplication without permission is prohibited.

Use of Credit Reports in Hiring Decisions

September 17, 2015

By James B. Shrimp, Esq.

This week Senator Elizabeth Warren penned an op-ed, with Representative Steve Cohen, wherein she opined that a person’s credit history has no correlation to his or her ability to succeed in the workplace. Senator Warren asserts, with no supporting data, that “many” employers are unfairly shutting the door on applicants with less than stellar credit, and she calls it discrimination. Warren and Cohen then baldly accuse employers to “discriminating against people who have fallen on hard times.”

equal employment

To address this “discrimination,” Senator Warren and Representative Cohen have re-introduced the Equal Employment for All Act (EEAA) which would amend the Fair Credit Reporting Act (FCRA) to prohibit employers from requiring prospective employees to disclose their credit history as part of the job application process. Given that Senator Warren and Representative Cohen see this as a matter of discrimination, there should be no exceptions to the rule – as there are no exceptions for other protected classes, such as race, sex, national origin, religion and disability, among others.

But, the EEAA contains exceptions. Specifically, if the job requires a national security clearance or if a credit report is required by state or local law, a credit background check is permitted.  This begs the question, why is a credit background report relevant to a national security clearance, but not to an employee that handles company checks or has access to other’s confidential financial information.

Senator Warren and Representative Cohen’s opinion might be more compelling if (1) there were no exceptions, or (2) employers utilized credit reports to judge a candidates ability to perform, or (3) employers abused the right provided to them in the FCRA.  However, employers do not use credit reports to judge ability, nor do employers abuse the right.

In a 2012 survey of human resource professionals, the Society for Human Resource Management (SHRM) found that 53% of employers DO NOT conduct credit background checks. Of the 47% that do conduct credit background checks:

  • 58% are conducted after a contingent job offer,
  • 33% are conducted after an interview.

Thus, over 90% of the time an employer has made a decision to hire, or feels positive about the candidates’ ability to perform the job. Of the 47% of employers that conduct credit background checks, they do so to reduce/prevent theft and embezzlement (45%) and to reduce legal liability for negligent hiring (22%). It’s clear that employers are not conducting credit background checks to measure the potential for performance.

Moreover, of the 47% of employers that conduct credit background checks, 80% have hired a job candidate whose credit report contained negative information, in part, because 92% of employers permitted the candidate to explain the negative information, negating the op-ed’s concern that employees cannot explain errors to the potential employer.

A credit background check is one of many valuable tools employers utilize to evaluate the benefit and risk of hiring a candidate. It is clear that employers in the United States are being prudent to not overly utilize credit background checks. It is equally clear that employers primarily utilize the credit checks to evaluate candidates who have applied for positions involving financial responsibilities, executive positions and those with access to highly confidential information.  Frankly, these are some of the very reasons why the Federal government would run a credit background check on candidates for positions requiring a security clearance.

The Equal Employment for All Act is an unnecessary bridge too far.

For more information feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.Visit the firm’s Employment Law page here.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Franchise Businesses Beware: The NLRB in Browning-Ferris Expands the Joint Employer Doctrine

September 1, 2015

By James B. Shrimp, Esq.

You might think it’s easy to figure out who’s an employer and who’s an employee, but the definitions are changing and things are getting complex. Last week, the National Labor Relations Board (NLRB) changed the definition of a “joint employer,” a decision that will likely cause widespread impacts in the franchising, subcontracting and temporary staffing industries.joint employer

The joint employment doctrine is a legal concept utilized by several Federal agencies to determine what “employers” are legally responsible to employees for certain statutory obligations – such as collective bargaining, payment of overtime, workplace safety and employment conduct (discrimination, harassment and retaliation).

Last week,  in a case involving Browning-Ferris Industries, the NLRB expanded the application of the joint employer doctrine.  For the last thirty (30) years the NLRB has only held employers responsible for obligations under the National Labor Relations Act if the employers had direct control over employees.  More specifically, under the prior standard, the employer had to have direct control over the employees’ pay, schedule, discipline and termination.

In the Browning-Ferris decision, the NLRB expanded this standard to find that two or more entities are joint employers of a single workforce if:

  • they are both employers within the meaning of the common law,
  • they share or codetermine the essential terms and conditions of employment.

Moving forward, the NLRB will consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary (or whether it has reserved the authority to do so) when it evaluates whether the employer has sufficient control over employees to qualify as a joint employer. These terms includes wages and hours, the size of the workforce, scheduling, seniority and overtime and determining the manner and method of work performance.

In its decision to expand the doctrine, the NLRB stated that the expanded standard is designed “to better effectuate the purposes of the [National Labor Relations] Act in the current economic landscape.” The NLRB describes the current economic landscape as one becoming significantly impacted by temporary, subcontracted employment; as of August 2014, 2,870,000 of the America’s workers were employed through temporary agencies.  The NLRB concluded that its previous joint employer doctrine had failed to keep pace with changes in the workplace and economic circumstances.

Understanding the Browning-Ferris case

Browning-Ferris Industries (“BFI”) owns and operates a recycling facility.  BFI has 60 direct employees.  BFI entered into a temporary labor services agreement with Leadpoint for Leadpoint to provide approximately 150 additional employees to work at the recycling facility.  The Leadpoint employees are screened, hired, disciplined and supervised by Leadpoint employees.  However, the temporary labor services agreement gave BFI the ability to “step in” on matters of hiring, discipline, scheduling and wages.  As a result, the NLRB found that BFI was a joint employer of both its own employees and Leadpoint’s employees, and therefore BFI will have to collectively bargain with Leadpoint’s employees, if the employees vote to form a union.

How it applies to franchises

As for franchises, a case currently before the NLRB is involving 291 charges against McDonalds’ franchises and whether corporate locations and franchisees are engaging in “discriminatory discipline, reduction in hours, discharges and other coercive conduct directed at employees in response to union and protected concerted activity.”

If the NLRB determines that McDonalds corporate maintains indirect control over the employees, it could order that McDonalds corporate is responsible for the actions of its franchisees. It may even require McDonalds to collectively bargain with employees of local McDonalds franchisees.

Moreover, should the expanded joint employer doctrine be adopted by other Federal agencies, such as the Fair Labor Standards Agency, the Occupational Health and Safety Administration or the Equal Employment Opportunity Commission, franchisors could become responsible for safety issues, overtime issues, or employment discrimination by the franchisee.  This would fundamentally alter the design and advantages of the franchise system.  The International Franchise Association (“IFA”), which represents the franchise industry, believes there will be a significant adverse impact on the franchise system. The IFA released a statement saying “the [NLRB]’s tortured analysis will undoubtedly be met with skepticism and will be rejected by local franchise owners, legislators, and ultimately, the courts.”

There is no doubt that the Browning-Ferris decision will be subject to court review and will likely be heard in the Supreme Court in the next couple of years.  In the meantime, however, if you are in a franchise business (franchisor or franchisee) or utilize temporary staffing, it is worth reviewing your contracts to determine whether revisions need to be made to the relationship to protect against a finding of joint employer. For more information feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.

Visit the firm’s Employment Law page here.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances. The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Working at Amazon: A Demanding Workplace or Just Normal?

August 25, 2015

By James B. Shrimp, Esq.

Many of you likely had the opportunity to review the New York Times expose on employment attitudes and conditions within Amazon. It makes a good summer beach read. The article paints a picture of aggressive and uncaring management, employer sanctioned back-biting among coworkers, long hours, few vacations and a lot of time away from family. White collar workers at other computer-based companies, such as Netflix, Facebook, Microsoft and Google are likely shocked. However, blue collar workers in America, that work one or two jobs, totaling 60+ hours per week away from their families and who don’t get the chance to take a vacation, are unmoved and not crying in their milk. The real question is whether there is anything abnormal or unlawful about what is going on at Amazon?

Working at Amazon: A Demanding Workplace or Just Normal?

Is it Abnormal?

Before deciding to never work for Amazon or purchase any products from Amazon, it makes sense to take a moment to look at the article from a distance. The Times states that it interviewed approximately 100 individuals for the article and there are about 20 individuals identified in the article that have had issues with management. Let’s presume for sake of argument that the individuals the Times spoke to represent one-half of one percent of those employees at Amazon that have issues with management – that would mean a total of 4,000 employees have issues with Amazon management. Amazon has a total of 180,000 employees. Therefore, the 4,000 disgruntled employees equal 2.2 percent of Amazon’s workforce. With that said, would anyone be surprised if a workforce of fifty had one disgruntled worker, or a workforce of 1,000 had 22 disgruntled workers?

Admittedly, my statistics are unscientific and of course everyone wants to work at a place where there is no discord. But if there is discord caused by unfair treatment the employee has the freedom to leave and find another job. Importantly, the Times article does not say these employees are underpaid, in fact, the article infers the opposite. The next question is whether Amazon’s conduct is lawful.

Is Amazon’s Conduct Unlawful?

The Times interviewed local employment lawyers in the Seattle area (where Amazon is headquartered) and those lawyers stated that for the most part what Amazon is doing may be unfair, but it is not unlawful. There were some circumstances within the article regarding the application of Family and Medical Leave and the management-sanctioned employee versus employee “rat-out” line that concern me as a lawyer that represents employers. However, there was nothing in these employees’ stories that made me conclude with certainty that something unlawful is occurring.

Employees may think it’s unfair, but there is nothing per se unlawful about requiring employees to work long hours and to judge those who don’t harshly. Employees may think it’s unfair, but there is nothing per se unlawful about requiring employees to log-in during vacation. Employees may think it’s unfair, but there is nothing per se unlawful about asking employees to report poor performance by coworkers (although in my opinion this is terrible for morale). Employees may think it’s unfair, but there is nothing per se unlawful about memorizing 14 leadership principals and punishing those who don’t. As long as Amazon is complying with wage and hour and discrimination statutes the employee must decide whether to stay at Amazon or leave.

Conclusions

The Times positioned its article on Amazon as whether Amazon’s experiment to push white collar workers to the brink will succeed or fail. The Times, however, fails to recognize that there are plenty of industries and employers that push white collar workers just as far as Amazon’s employees. Many doctors, lawyers, stockbrokers and IT professionals work 60 plus hours per week, are often away from family and have limited vacations. Amazon’s “experiment” is limited to a specific sector of the American economy.

Amazon is a quasi-technology and retail company. The real question for Amazon is whether, as a technology company, it can push its white collar workers when other technology companies such as Google, Facebook and Microsoft have much more employee-friendly workplaces. For example, Netflix recently announced that it will provide one year of paid maternity leave (although Netflix has received flak for not extending that benefit to those employees in its DVD division).

If Amazon’s poor treatment of employees is real and widespread, Amazon will begin having issues hiring new employees. Jeff Bezos, CEO of Amazon, recognizes this market force, and in a response to Amazon’s employees, Mr. Bezos stated that Amazon would not tolerate the “shockingly callous management practices” described in the article. Mr. Bezos urged employees who knew of “stories like those reported” in the Times to contact him directly.

For more information feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.Visit the firm’s Employment Law page here.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Suspension with Pay is Not Discrimination

August 18, 2015

By James B. Shrimp, Esq.

When an employer investigates potential wrongdoing by an employee, there are a number of potential landmines. One is the issue of how to treat the employee during the internal investigation; it’s possible the treatment of the employee could lead to liability under various employment discrimination statutes. In a decision last week, the United States Third Circuit Court of Appeals provided clarity on one common aspect of that treatment: “suspension with pay.”In the case Jones v. Southeastern Pennsylvania Transportation Authority the court was asked to determine for the first time whether a suspension with pay can be considered discrimination under Title VII. The Third Court held that, absent unusual circumstances, a suspension with pay cannot support a discrimination or hostile environment claim. The Third Circuit did not decide whether a suspension with pay could support a retaliation claim.suspension with payThe details of this caseThe plaintiff in Jones began working as an administrative assistant with SEPTA in 2001. In 2010, Jones’ supervisor suspended her with full pay after discovering apparent fraud in her timesheets, and referred the investigation to SEPTA’s office of inspector general. Within days, the plaintiff filed a complaint against the supervisor alleging that the supervisor sexually harassed and retaliated against her. She had never filed any complainst against him before.After a nearly three month investigation, SEPTA’s office of inspector general concluded that the plaintiff had in fact submitted fraudulent timesheets. SEPTA suspended her without pay, and formally terminated her approximately two months later. In March 2011, the plaintiff filed a complaint with the Pennsylvania Human Relations Commission and thereafter filed an action in Federal court.Here’s what employers need to considerSubstantive Discrimination – In order to establish a substantive discrimination claim, a plaintiff must prove that she suffered an “adverse employment action.” The Third Circuit has described an adverse employment action as “an action by an employer that is serious and tangible enough to alter an employee’s compensation, terms, conditions, or privileges of employment.” Based on this definition and a review of decisions from other Federal Circuit Courts of Appeal, the Third Circuit held that “a paid suspension pending an investigation of an employee’s alleged wrongdoing does not fall under any of the forms of adverse action mentioned by Title VII’s substantive provision.” To circumvent this bright line rule, a plaintiff must prove that the suspension with pay is somehow “atypical.”In Jones, the Third Circuit held that there was nothing “atypical” about the plaintiff’s suspension with pay. Notably, the plaintiff’s suspension with pay lasted three months, and therefore it can be concluded that an extended period of suspension with pay does not create an atypical situation.Hostile Environment – In hostile environment cases, even if a plaintiff establishes severe and pervasive hostile conduct, the employer can defend against such a claim if the plaintiff suffered no “tangible employment action.” The Third Circuit held that the suspension with pay is not a tangible employment action, which is akin to adverse employment action, and therefore the plaintiff in Jones could not bring a hostile environment claim.What it means for employersThe Third Circuit has provided clarity for employers in Pennsylvania, New Jersey and Delaware on when, or if, to incorporate a suspension with pay into a progressive discipline policy. In Jones, the court declared that a suspension with pay cannot support a discrimination or hostile environment claim unless it is atypical. To avoid a finding of an atypical suspension with pay, I recommend that an employer specifically incorporate a suspension with pay into its progressive discipline policy and that suspension with pay be neutrally applied among protected classes.For more information feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.Visit the firm’s Employment Law page here.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Legal Marijuana Use, Disability and Employment Discipline

August 4, 2015

By James B. Shrimp, Esq.

An emerging and very hazardous area of the law for employers is the intersection of legal marijuana use, disability and employment discipline. This intersection is hazardous for employers, because it can involve employees with legitimate physical injuries/disabilities, who have a legal right to use medicinal marijuana, but whose use of marijuana would typically not be permitted by the employer.

Legal Marijuana Use, Disability and Employment Discipline

This area of law that will grow over the coming years as states that have legalized recreational marijuana and/or medicinal marijuana continue to expand. Currently, twenty-three (23) states and the District of Columbia have legalized medicinal marijuana in some form:

Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington.

Recreational marijuana is legal in Oregon, Washington, Colorado and Alaska. For those reading this in Pennsylvania, at the end of June 2015, Republicans in the House introduced a bill, HR1432, that would legalize medicinal marijuana use.

Truck drivers are used to navigating hazardous intersections involving blind spots, unexpected dangers and speeding cars. The key to avoiding an accident (and potential liability) is for the truck driver is to anticipate those potential hazards before they occur. Employers must similarly look ahead to navigate potential liability.

In Colorado, a truck driver (plaintiff) with Lumbar Degenerative disease utilized medicinal marijuana and was on Colorado’s medical marijuana registry. Steele v. Stallion Rockies Ltd., __ F.Supp.3d __, 2015 WL 33396417 (D.Colo. May 26, 2015). The employer maintained a drug and alcohol policy which prohibited off-the-job use of controlled substances interfering with job performance and testing positive for such substances at work.

In March of 2013, the plaintiff took a company-wide drug test and his results were indeterminate due to a malfunction of the test mechanism. The plaintiff was asked to re-take the test and prior to that test, the plaintiff informed a regional safety manager of the employer that he was a medical marijuana participant and had been since the start of his employment. The safety manager immediately terminated plaintiff’s employment for violation of the employer’s drug and alcohol policy. The plaintiff sued the employer for among other things violation of the Americans with Disabilities Act (ADA).

The court, in dismissing the plaintiff’s ADA claim, held, inter alia, that:

*          use of medical marijuana alone does not establish a disability under the ADA; and

*          an antidiscrimination law (e.g., ADA) does not extend so far as to shield a disabled employee from the implementation of his employer’s standard policies against employee misconduct.

Importantly, the plaintiff in the Steele case failed to allege that his Lumbar Degenerative disease substantially limited one or more of plaintiff’s major life activities and/or that the employer knew of the disease and its affects, or knew that plaintiff was on Colorado’s medical marijuana registry. If plaintiff had alleged one or both of those facts his case may not have been dismissed. For instance, if the employer knew of the disability or the medicinal marijuana use prior to the test and termination, the employer’s termination decision would necessarily become more complicated. With respect to a truck driver, the employer would have to consider Commercial Drivers License regulations, public safety and whether any non-driving light duty positions exist.

However, the uncertain area that exists for the employer is whether it can take action against the employee for after-hours and off-site use of marijuana if the employee has a valid prescription or if the state permits recreational use. Some states have attempted to answers those questions by statute. For instance, employers are prohibited from terminating employees for a positive drug test in Arizona, Delaware, and Minnesota, if that employee has a marijuana prescription. In other states where marijuana use is permitted either recreationally or medicinally (e.g., California, Oregon, Washington and Colorado), statute or case law permit an employer to have and implement a zero-tolerance drug use policy. Remember, however, even in states where zero-tolerance enforcement is permitted, remember that the zero-tolerance enforcement must not disproportionately target a protected class (e.g., the Equal Employment Opportunities Commission will review the application of zero-tolerance criminal background check hiring decisions).

Multi-state companies and companies located in the states listed above must closely review the case law and statutes of the states within which they operate to ensure that its drug policies and employment decisions are lawful.

For more information feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.

Visit the firm’s Employment Law page here.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Background Check on Potential and Current Employees

July 24, 2015By James B. Shrimp, Esq.

Today, most employers run some sort of background check on potential employees and current employees, including credit, financial and criminal background checks. In some industries, these background checks go right to the heart of the job. For instance, passing a background check is a requirement of school teachers and security guards because they are responsible for others, and for bank tellersand telemarketers that deal with credit card and social security information. In other industries, employers request background checks when criminal or poor financial conduct might not be as pertinent to the job responsibilities. In either case, the employer has certain responsibilities with respect to this information, as a recent lawsuit brought by the Equal Employment Opportunity Commission (“EEOC”) illustrates.

Employee Background Check
Employee Background Check

Federal law does not prohibit employers from seeking criminal background information regardless of how much it pertains to the job; however, Title VII does prohibit employers from discriminating when they use criminal history information. Specifically, Title VII prohibits employers from using policies or practices that screen individuals based on criminal background information if:

*          The criminal background checks significantly disadvantages Title VII protected individuals such as African-Americans or Hispanics; and

*          The criminal background information does not help the employer accurately decide if the person is likely to be a responsible, reliable or safe employee.

Moreover, the EEOC views an arrest record different than a conviction. For instance, if a potential employee has been arrested for theft, the arrest record alone should not be used by the employer to take an adverse employment action (e.g., not hiring, firing or suspension). On the other hand, a conviction record alone can usually be used by the employer to justify an adverse employment action.

The recent EEOC lawsuit relates to the records of criminal background checks that need to be kept by the employer. Federal regulations require that if an employer uses a “test” or other selection procedures to make employment decisions (e.g., hiring, promotion, and mass layoff) the employer must keep records regarding the test or the selection procedure, so that the EEOC can inspect to determine if the test of selection procedures have an adverse impact on any protected class. A criminal background check is such a “test.”

In 2010, the EEOC commenced an investigation into a Philadelphia area janitorial service company. The janitorial service company routinely ran criminal background checks on potential employees; however, when the EEOC subpoenaed the company for documents related to the criminal background checks and the decisions resulting from them, the janitorial service company said there were no records. Earlier this month, the EEOC brought an action asking the Court to order the janitorial service company to keep records related to criminal background checks and to pay the EEOC’s costs related to bringing the action.

In short, if you are an employer that uses criminal background checks or other tests to cull potential or current employees, make sure you maintain the background checks and tests for two reasons. First, the employer should periodically self-audit to ensure that its use of background checks and tests are not, for example, unfairly/unlawfully excluding a specific protected class from hiring. Second, the employer needs to keep the information in case the EEOC requests the information.

There are some state-by-state laws and regulations regarding the acquisition and use of criminal background checks and these laws and regulations also need to be consulted by employers.

For more information feel free to contact James B. Shrimp at (610) 275-0700 or by email at jshrimp@highswartz.com. Visit his attorney profile here.

Visit the firm’s Employment Law page here.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

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Violation of overtime regulations. Employers Beware: The Joint Employer Doctrine is Alive!

July 10, 2015

By James B. Shrimp, Esquire

Earlier this week the United States Department of Labor (“DOL”) fined two Philadelphia companies $1,450,000 for violations of the Fair Labor Standards Act’s overtime regulations.  Frankly, it was foolish for the companies to believe that the conduct they engaged in was appropriate and it has caught up with them.  What is most important from this fine, however, is how and why the DOL justified their action, namely the assertion of the joint employer doctrine.

Violation of overtime regulations
Violation of Overtime Regulations

The underlying case involved a direct mailing company that employed over 150 machine operators, printers, cutters and sorters in the last two years. These workers would clock out to ensure that the direct mailing company would not pay for more than 40 hours of work in a week, avoiding overtime. The issue arises from the fact that these workers, after they clocked out, would go back to their stations and continue to perform work, for less of an hourly wage and for no overtime.  During these “extra” hours, the employees were “employed” by a staffing agency hired by the direct mailing company and paid in cash.  It’s impossible to read the above description without thinking how did the companies think they would get away with this.

The DOL in levying fines against both companies concluded that the companies were “joint employers.”  The standard of asserting the joint employer doctrine is in flux at the DOL and within its agencies, including the National Labor Relations Board (“NLRB”) and the Occupation Health and Safety Administration. The long standing joint employer standard is whether the party has direct and immediate control over the employee. The direct mailing company described above very likely had that control, since the employees worked at the same location, with the same equipment and were likely supervised by the same individuals.

The NLRB has proposed a broader standard that extends the doctrine to parties that have the potential ability to wield indirect control over its employees.  This broader standard would cover businesses much closer to the proverbial “line” than the direct mailing company above.

In public comments regarding the fine, the DOL cited its concern of the “fissuring” of the American workforce and its concern about “vulnerable employees.”  The DOL’s new focus results from the leadership of the current Administrator of the Wage and Hour Division of the DOL, Dr. David Weil.  In May of 2010, Dr. Weil authored a report entitled Improving Workplace Conditions Through Strategic Enforcement which examined the “fissuring” of the American workforce, which in turn, according to Dr. Weil, has caused a significant increase in “vulnerable employees.”[1]

The fissuring of the workforce refers to the breakdown of the traditional large employer, by that large employer reducing the number of its direct employees via, inter alia, independent contractors, staffing agencies and franchising (“Smaller Employer”). Vulnerable employees are employees that work at or near the minimum wage, have no benefits and are employed by a Smaller Employer in a larger industry.

In order to protect the vulnerable employees, the DOL is utilizing the joint employer doctrine to ensure compliance with wage and hour laws, by, when appropriate, holding the traditional large employer liable for wage and hour violations of the Smaller Employer.  In proposing strategies for DOL enforcement, Dr. Weil suggested in his report that in a “fissured” industry, enforcement must focus on both “workplaces where labor standards violations occur [Smaller Employer] and also at the higher level of industry structure, where ‘lead firms’ play a key role in setting the competitive and employment conditions for employers at ‘lower levels’ of the industry structure.”

Within that new strategy, Dr. Weil proposed two tactics to reach the “lead firms”:

(1) “specific outreach … to major brands” that have a positive employment reputation, and reaching a cooperative agreement that the “major brand” be “committed to review employment practices with franchisees when other franchise standards are being reviewed,” creating a model for other franchise systems; or

(2) “target several major brands that had documented histories of systemic violations amount their franchisees … once identified, the WHD could undertake broad and coordinated investigations in multiple parts of the country and across multiple franchisees, in order to establish the level of system-wide violations, and pursue statutory penalties for those violations.”

Based on its actions to date, it appears the DOL is utilizing the more aggressive approach to enforcement. Although the direct mailing company described above engaged in a seemingly obvious violation of overtime regulations, the expansion and use of the joint employer doctrine should be watched and examined by any employer that utilizes staffing agencies and independent contractors or those involved in franchising.

[1] Dr. David Weil, Improving Workplace Conditions Through Strategic Enforcement, A Report to the Wage and Hour Division (Boston University May 2010)

For more information feel free to contact James B. Shrimp at 610-275-0700 or by email at jshrimp@highswartz.com.

Visit the firm’s Employment Law page here.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Obama Administration to Announce New Overtime Rules

July 1, 2015By James B. Shrimp, Esquire
Overtime
New Overtime Regulations
It has been reported that later this week, President Obama will announce new overtime regulations that will make 5 to 15 million additional Americans eligible for overtime.  The rules, which will take effect in 2016, would raise the income threshold below which workers automatically qualify for time-and-a-half overtime wages to $970 per week ($50,440 annually). The Economic Policy Institute estimates that the new rule will cover nearly fifty percent of salaried workers, as opposed to just eleven percent under the current rule.Under current overtime regulations, there are millions of Americans in salaried managerial and professional jobs that work over 40 hours a week, sometimes 50 to 60 hours per week that cannot earn overtime.  If you are having trouble picturing who these individuals are, think about your local grocery store manager, the manager of your favorite clothing store, the manager of your go-to restaurant, the office manager at your dentist, etc. Under current overtime rules, as long as that manager-professional earns more than $455 per week ($23,660 per year), he/she is not entitled to overtime.  To bring that into focus, under current law, a grocery store manager can be required to work 60+ hours in a week and earn less than the poverty line for a family of four.In response to the new regulations, employers will have two options:*          The employer can raise the manager-professional’s pay to $970 per week to avoid paying overtime; or*          The employer will have to begin paying overtime to the manager for all hours worked over 40 each week.Which option the employer takes will depend largely upon how close the manager’s current pay is to the $970 per week threshold.  If the manager’s current pay is $900 per week, a raise to $970 per week is likely, whereas, if the manager’s current pay is $500 per week, it is likely the employer will pay overtime and reduce the overtime hours worked.  Either way, the goal is that the overworked and underpaid manager will see an increase in pay and possibly a decrease in overtime hours worked.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

For more information feel free to contact James B. Shrimp at 610-275-0700 or by email at jshrimp@highswartz.com.

Can an employer who does not know anything about a job applicant’s religion still be sued for religious discrimination? As of today, the answer is a definitive yes.

June 2, 2015By James B. Shrimp, Esq.Yesterday, the United States Supreme Court ruled 8 to 1 that an employer is in violation of Title VII if the employer assumes that a job applicant’s religion would require a workplace accommodation, and therefore doesn’t hire the person.In the case of Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, InEmployment Discriminationc., a woman who is a practicing Muslim sued Abercrombie for religious discrimination after she was not hired for a position for which she interviewed.  Specifically, the woman wore a headscarf to her interview, which the job applicant believed was required by her Muslim faith.  The initial interviewer believed the job applicant was qualified for the job, but asked her superiors whether the headscarf would violate Abercrombie’s dress code.  Notably, the job applicant never requested an accommodation and never indicated to the interviewer that she was wearing the headscarf because of her religion.  Abercrombie presumed the applicant wore the headscarf because of her Muslim faith and did not hire the job applicant.  The job applicant then brought suit.Abercrombie argued that since it did not have actual knowledge that the job applicant wore the headscarf because of her Muslim beliefs (i.e., the job applicant never told the potential employer and the employer never asked), it could not be held liable for not hiring her. In Abercrombie’s argument, the company was simply enforcing its neutrally applied dress code.The Supreme Court rejected Abercrombie’s argument.  In a decision that focused on Title VII’s language, the Court concluded that Title VII does not require an employer’s actual knowledge to find liability.  Title VII makes unlawful employment decisions that are “because of” an applicant/employee’s protected class (race, sex, color, national origin and religion).  The Supreme Court concluded that “because of” does not require actual knowledge, it only requires that the protected class (or characteristic thereof) is a “motivating factor” in the employment decision.  The Supreme Court continued stating that “Title VII forbids adverse employment decisions made with a forbidden motive, whether this motive derives from actual knowledge, a well-founded suspicion, or merely a hunch.”The decision extends beyond hiring situations to others, such as employee discipline actions or terminations. In short, the employer’s assumptions or impressions of a job applicant or a current employee can lead to liability, if those assumptions or impressions are a motivating factor in any adverse employment decision (e.g., failure to hire, discipline, termination). This decision emphasizes that businesses should only consider objective factors that relate to the performance of the job, such as experience, education and job performance, in making employment decisions and keep the speculation to a minimum.The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

What The Abercrombie Religious Discrimination Case Means For Your Business

By James B. Shrimp, Esq. March 25, 2015Employment 

Abercrombie & Fitch may not sell one-size fits all clothing, but it hopes later this spring that the United States Supreme Court will create a one-size fits all rule as to when an employer is on notice of a request for a religious accommodation.

Religious Accommodation Under Federal Law

Federal law requires that an employer accommodate an employee’s religious practices so long as the accommodation does not cause the employer an undue hardship in the conduct of its business.  These accommodations might include requesting certain days off from work, wearing certain attire or keeping a certain appearance (e.g., facial hair).  As with many employment issues, when and how an employee must request a religious accommodation is composed of fifty shades of gray (no not that Grey).  A case before the United States Supreme Court this spring will hopefully bring more clarity to when an employer is on notice that an employee is seeking a religious accommodation.

The Abercrombie Discrimination Case, Explained

In the case of Elauf v. Abercrombie & Fitch, a 17 year old female practicing Muslim applied for a job at an Abercrombie store in Oklahoma.  Ms. Elauf interviewed for the position and wore her hijab.  The hijab did not come up during the interview, but the assistant manager who interviewed Ms. Elauf, asked her superior whether Ms. Elauf could be hired given Abercrombie’s strict no headgear policy.  Appearance at the interview is an important element of Abercrombie’s hiring process, and Abercrombie chose not to hire Ms. Elauf.Ms. Elauf won her case at the trial court level and Abercrombie appealed.  Before the Tenth Circuit Court of Appeals, Abercrombie successfully argued that it could not have failed to accommodate Ms. Elauf for her religious beliefs, because Ms. Elauf never said she was wearing the hijab in practice of her Muslim faith.Ms. Elauf appealed and the United States Supreme Court will decide upon whom the burden falls in seeking a religious accommodation, the employer or the employee.  In other words, must the employee specifically state she is engaging in conduct or request a certain schedule because of religious beliefs, or is the employer on “notice” if the employer concludes a religious motive to the request.  Complicating the analysis is the fact that EEOC Guidance prohibits an employer from asking about a job applicant’s religious beliefs.

What the Supreme Court Might Do

Recently, the Supreme Court has leaned toward religious freedom in its decisions.  For instance, in the Hobby Lobby case, the Supreme Court permitted certain private, non-religious employers to refuse birth control coverage to employees on religious grounds, and in a decision last fall, Holt v. Hobbs, the Supreme Court permitted an inmate in Arkansas to grow a beard on religious grounds, even though the beard was against a Department of Corrections regulation.  However, a decision supporting Ms. Elauf would place a burden on employers that the Supreme Court has been hesitant to do in past employment decisions.The Abercrombie case was argued on February 25, 2015 and a decision is expected in May or June.For more information regarding the employment discrimination or employment law, please contact James B. Shrimp at 610-275-0700 or by email at jshrimp@highswartz.comThe information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation. 

Equal Employment Opportunity Commission Expands Rights of Women in the Workplace – But for How Long?

By James B. Shrimp, Esq.July 18, 2014On July 14, 2014, the Equal Employment Opportunity Commission (“EEOC”) issued updated enforcement guidance (“Guidance”) on pregnancy discrimination and related issues. The issuance of this new enforcement guidance is the first comprehensive update by the EEOC on the subject of the Pregnancy Discrimination Act (“PDA”) since 1983. The EEOC maintains that this Guidance is necessary because of increased charges filed alleging pregnancy discrimination. Specifically, the Guidance provides that in 1997, more than 3,900 pregnancy discrimination charges were filed, and that number increased to 5,342 charges in 2008.Who Should Review this new Guidance?EEOC enforcement guidance is a must read for employees and employers alike, as the enforcement guidance is what EEOC investigators review and follow in their investigation of Charges of discrimination. However, enforcement guidance is not law; it is guidance as to how the EEOC interprets the law – in this instance the PDA. Accordingly, EEOC guidance can be overruled by Congress and the President through statute, or by the federal courts, in particular the United States Supreme Court. This is an important point to make, as the Supreme Court will rule on a case next year that confronts a key aspect of the new guidance, as described herein.More About the Pregnancy Discrimination ActThe PDA was signed into law in 1978, as an amendment to Title VII of the Civil Rights Act of 1964. The Guidance provides that the PDA’s purpose was “to make clear that discrimination based on pregnancy, childbirth, or related medical conditions is a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964.” The PDA (1) prohibits an employer from discriminating against an employee on the basis of pregnancy, childbirth, or related medical conditions; and (2) requires an employer to treat equally an employee affected by pregnancy, childbirth, or related medical conditions as an employee not so affected but similar in their ability or inability to work.The Guidance provides that the PDA protects women:
  • who are pregnant;
  • who have been pregnant in the past;
  • who may become pregnant in the future; and
  • who suffer medical conditions resulting from pregnancy (e.g., back pain, preeclampsia, gestational diabetes, complications requiring bed rest).
Some important aspects of the PDA Guidance include:
  • If the employer provides light duty accommodations to non-pregnant employees, the employer is required to provide light duty accommodations to pregnant employees;
  • An employer, but for very limited exceptions, is not permitted to “protect” a pregnant employee from work conditions it deems dangerous to a pregnant employee – such as working around hazardous chemicals;
  • An employer may not compel a pregnant employee to take leave; and
  • The requirements of the Americans with Disabilities Act (“ADA”) will apply to pregnant employees if the employee is suffering from a pregnancy-related disability (e.g., pregnancy-related carpal tunnel syndrome, gestational diabetes, pregnancy-related sciatica and preeclampsia).
There is a possibility that the EEOC’s Guidance on the PDA may have limited legal impact for two reasons. First, in its next term, the Supreme Court will hear two cases that address whether federal agencies subject to the Administrative Procedure Act can revise/update interpretive rules without engaging in a formal notice and comment rule making process. Depending upon how the Supreme Court rules in those cases, it may make the Guidance vulnerable to attack. Second, in its next term the Supreme Court will hear a case – Young v. United Parcel Services, Inc.—on the extent to which an employer must provide an accommodation to a pregnant employee under the PDA.Until the Supreme Court rules in those cases, it would be prudent for employers to review and incorporate the Guidance into its policies and procedures. For more information about pregnancy discrimination and to address related employment law questions, please contact Jim Shrimp at 610-275-0700 or by email at jshrimp@highswartz.com.The information above is general: we recommend that you consult an attorney regarding your specific circumstances. The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

My House … No, MY House: In Which Party’s ‘Backyard’ Will a Lawsuit be Brought in a Contract Dispute?

gameover-contractsHome-field advantage is important – just ask the Patriots and 49ers who will be sitting on the beach in front of their seaside vacation villas on some Caribbean island when we are all watching the Super Bowl, many of us in our houses protecting us from the freezing cold.  Was that bitter?Everyone remembers the clashes we had when we were kids, when you wanted to play at your house, but your friend wanted to play at his or her house.  You weren’t being selfish – because you honestly felt that your Nintendo was better than their Atari – for those of you who don’t know what an Atari is, just substitute with PS4 or Xbox Live – everyone has their favorite.  Of course, your friend felt the exact opposite and believed their games, backyard and snacks were better than yours.  Fortunately, kids have a way of working things out.  But businesses need contracts, and yes, lawyers.

How Contracts Initially Set the Forum (“Backyard”) in Which You Play

In contracts between business – or even most consumer contracts for products or services – there is undoubtedly a provision that attempts to govern in “whose backyard” a dispute will be heard if there is a lawsuit brought about the contract.  Despite these provisions, a party will sometimes try to bring the lawsuit in their own backyard, as opposed to the backyard of the other party – even if that is contrary to what the contract provides.  In other words, “I want to play Madden’14 on my PS4 and not his Xbox Live.”If the parties to a contract dispute choose the backyard, or forum, that is provided for in the contract, there is no issue.  (Sure, I’ll play Madden’14 at your house because we both have PS4s).  However, when a party to a contract dispute chooses the forum that is not provided for in the contract, the courts have to decide in whose backyard the case should be decided.  In other words, “I want to play Madden’14 at my house because I have a PS4 and you have Xbox Live” – playing at your house would give you an advantage.

How to Possibly Change the Home Field Advantage for Your Dispute

To decide this issue, the courts often employ a set of factors that are analyzed and balanced to determine whether the forum chosen by the party should keep jurisdiction over the case, or whether the case should be transferred to the court set forth in the contract.  The factors to be balanced include, among others, financial wherewithal of the parties, location of witnesses and documents, which state has a greater interest in the decision, and which state’s law will be applied.In December 2013, the United States Supreme Court issued a decision that involved technical procedural aspects of what statutory provision should be used to assert a forum selection clause.  [Atlantic Marine Construction Co., Inc. v. U.S. District Court for the Western District of Texas, et al., 571 U.S. 104 S. Ct. 568 (December 3, 2013)].  Also in this decision, the Supreme Court ruled that if a defendant seeks to enforce a valid contractual forum selection clause – attempting to move the case back to “his house” so to speak, the clause should ordinarily be enforced, unless the plaintiff had extraordinary circumstances for filing the case where it did, the extraordinary circumstances being unrelated to the convenience of the parties.  There are still questions to be answered – for one, the Atlantic Marine case involved two experienced commercial parties – does this case also apply to consumer cases?  Second, the decision only applies if there is a valid forum selection clause, so does the decision apply when a state statute invalidates certain forum selection clauses?  There will also be additional questions to be answered as well.On thing is clear, however – when there are two experienced commercial parties, if the contract says the lawsuit is going to be in one party’s backyard, you better be ready to play Madden’14 on either PS4 or Xbox Live.The information above is general; we recommend that you consult with an attorney regarding your specific circumstances.  The content contained herein is not meant to be considered as legal advice or as a substitute for legal representation.

“Yes to Arbitration, but Did I Also Agree to Class Action and Consolidated Arbitration?” by James B. Shrimp and Joel D. Rosen

Published in the American Bar Association’s The Franchise Law Journal, the article discusses the enforcement of arbitration provisions within franchise agreements and analyzes the April 2010 Stolt-Nielsen decision.