Minnesota Labor & Employment Law Blog : Minnesota Employment Lawyers & Attorneys : Abrams & Schmidt Law Firm : Unfair Labor Practices, Workplace Investigations : Minneapolis, St. Paul, Twin Cities

Many firms have blogged about the most recent U.S. Supreme Court decision, Lewis v. City of Chicago No. 08-974 (May 24, 2010) including Ford & Harrison and Jackson Lewis.

In Lewis, the City of Chicago gave a written examination to applicants seeking positions with the city as firefighters. After the examination, the applicants with passing scores were categorized as “well qualified” or “qualified.” More than a year after receiving notice of the examination results, several African-American applicants who had been categorized by the City of Chicago as “qualified,” but had not been hired, filed discrimination charges with the Equal Employment Opportunity Commission (EEOC). Federal law required EEOC charges be brought within 300 days after the unlawful employment practice occurred. Lewis and others then filed suit against the City alleging, the City’s practice of selecting only applicants who scored 89 or above, categorized as “well qualified,” had a disparate impact on African-Americans in violation of Title VII. The City objected claiming the petitioners had not filed the EEOC charges within the required 300 days.

The issue before the U.S. Supreme court was, “[w]hether a plaintiff who does not filed a timely charge challenging the adoption of a practice – here, an employer’s decision to exclude employment applicants who did not achieve a certain score on an examination – may assert a disparate-impact claim in a timely charge challenging the employer’s later application of that practice.” The U.S. Supreme Court held, a plaintiff may timely challenge an employer’s later application of a practice, as long as he alleges each of the elements of a disparate-impact claim.

What is disparate impact? Disparate impact is defined as, “an unnecessary discriminatory effect on a protected class caused by an employment practice or policy that appears to be nondiscriminatory.” What is a protected class? A protected class is, “a group of people intended by a legislature to benefit from the protection of a statute.”

Since the enactment of Title VII of the Civil Rights Act of 1964, employers have known they are prohibited from discriminating against an individual based on their race, color, religion, sex, or national origin. However, as originally enacted, Title VII did not expressly prohibit employment practices that caused a disparate impact on individuals. In 1971, the United States Supreme Court first recognized “disparate impact” claims.

What does this decision mean for employers? It isn’t when a policy or practice is adopted that may start the time clock for discrimination or disparate-impact claims, but when the policy or practice is applied/used that is important.

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Class action grievances permit a group of individuals who are similarly situated to arbitrate claims together under one umbrella case. Previously, if a labor contract or arbitration agreement was silent on class action grievances, they were generally allowed by most arbitrators. However, according to the U.S. Supreme Court that is no longer the case.

In April, the U.S. Supreme Court ruled “[A] party may not be compelled under the FAA (Federal Arbitration Act) to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” Stolt-Nielsen v. Animal Feeds Intl’ Corp. This means unless an arbitration agreement specifically permits class action arbitrations, none will be allowed.

But wait, in May the Minnesota legislature passed legislation overhauling the Minnesota Uniform Arbitration Act. In the overhaul there is a provision for consolidating separate arbitration proceedings if some or all of the claims are between the same parties, the claims arise in substantial part from the same transaction or series of related transactions, there is a common issue of law which creates the possibility of conflicting decisions, and the prejudice for failing to consolidate claims is not outweighed by the risk of delay or prejudice to the party opposing consolidation. In essence, the law provides a vehicle to combine grievances, much like a class action grievance.

What the U.S. Supreme Court had put asunder, the Minnesota legislature now has put together….
 

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Native Minnesotans are all too familiar with the ravages that temperature and moisture can play on asphalt roads. We even grade our potholes from mere fissures all the way up to an abyss which is capable of devouring a small vehicle and its driver. As the driver of a small car, I am constantly alert for these roadway gouges, in hopes of averting a flat tire or the need for yet another wheel alignment.

Much to my dismay in March, local Channel 5 KSTP investigative reporters caught a number of St. Paul public workers on tape, spending more time in convenience stores, and restaurants on breaks, than actually fixing potholes. The story culminated this week with 17 public works employees being disciplined for their extremely poor pothole performance. The discipline included eight letters of reprimand, two demotions, and a total of 59 days of suspensions without pay.

Local newspaper columnist Joe Soucheray described the public works crews, “…are more lawyered up than British Petroleum.” Grievances have been filed on all of the disciplinary actions by five different unions, and a federal U.S. Department of Labor complaint has been filed by the employees alleging a new bathroom break policy violates their rights. It begs the question, How many unions does it take to fill a Minnesota pothole? Answer: Five. One union official was quoted as stating, “I don’t think my workers did nothing wrong” instead blaming the problem on supervisors and inefficiencies in the workplace.

Obviously something went very wrong, and it took an investigative reporter to bring the problem to light. Workplace accountability, active supervision of employees, and better work site controls need to be implemented immediately. To the unions, I say: Use some common sense before you take these cases forward to expensive arbitrations. No one has much sympathy for lazy public workers in today’s challenging economy. 

 

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I have previously posted about the topic of “at-will” employees and cautioned employers that it is possible to create an expectation of job security in the documents issued to employees, thus negating the “at-will” status.

In the case Ellis v. BlueSky Charter School, A09-1205 (Minn. Ct. App. 2010) (pdf) the school director challenged his termination based on language in his employment agreement. Mr. Ellis was hired as school director for the 2008-2009 school year. An employment agreement was executed between Mr. Ellis and the school board stating, “[t]his is a general at will agreement.” It also set forth the work year as July 1, 2008 – June 30, 2009 and provided, “[p]ositions will automatically renew for one year after one year of service unless specific actions are taken by the board before April 15th of each year.” Mr. Ellis was terminated by the board on May 7, 2009.

In Minnesota, an employment contract for a fixed term is generally interpreted as terminable only for cause. The Minnesota Court of Appeals in an unpublished decision held in this case, “[t]he plain language of the “at-will” phrase overrides the general rule for construing a fixed-term contract, expressly replacing any implication that might have been drawn from the reference to start and end dates. The asserted tension between the at-will declaration and the stated dates of service does not create ambiguity.” Mr. Ellis’s position was determined to be at-will.

If you are hiring new employees, make sure their employment status is clear to them. If an employee is “at-will,” tell them so.

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My firm provides training to employers on various topics concerning labor and employment law. For example, we do training (pdf) on the United States Supreme Court case, Garrity v. New Jersey, (pdf) as well as, how to address and prevent employee fraud and theft in a workplace. We think training is very important. It provides instruction on best business practices and it can also reduce liability for an employer.

Training has even been raised in the press lately. The Federal Aviation Administration recently distributed an “Information for Operators” guide, urging airlines to train their crews about in-flight distractions. This stemmed from the October 2009 incident, where a Northwest Airlines plane over-shot the Minneapolis-St. Paul International airport by more than 100 miles, before circling back and landing an hour late. During an investigation into the incident it was determined the pilots were immersed in working on their laptops during the flight.

Also, as part of a settlement in a religious discrimination lawsuit brought by the Equal Employment Opportunity Commission (EEOC), Alliance Rental Center, L.P. is being required to provide training to its managers on the laws enforced by the EEOC.

When problems occur in your workplace, one of the first questions that will be asked is, “Was training provided?” Questions to ponder: What training do you do in your workplace, and do your employees need training or a refresher? 
 

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Understanding the scope and impact of the recent health care reform legislation is difficult for any employer. The law itself is several thousand pages long and spans 8 years of phased-in implementation to reach its full impact on the health care system.

The new health care reform legislation includes some errant twists which on their face, do not appear to involve health care. These include requiring unpaid employee lactation breaks for one year after the birth of a child which amends the FLSA, and a new mandate requiring fast-food chains to disclose the calorie count of foods they serve.

The new health care law also removes student loan processing from private banks and institutions and places the job in the hands of the federal government, much to the dismay of my college age son who lost a great summer job processing student loans.

The best phase-in discussion I have seen outlining what employers need to know right now is in a blog from the Texas law firm Hutton & Williams. It outlines what to expect now, and each successive year in the future.

This massive piece of legislation can only be understood if you take it one bite at a time, otherwise you could choke on the massive overhaul coming our way.

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