Wednesday, December 23, 2009

Year in review: "Top ten" developments of 2009

CCH editors provide our "top ten" list of the most significant developments in labor and employment over the past year (in no particular order):

Massive health reform still pending
A top story throughout 2009 was the ongoing daily drama involving the massive health reform overhaul. The fate of health reform still hangs in the balance but, as of now, the Senate appears poised to pass the measure with a final vote set for tomorrow morning. Differences between the House and Senate versions would still need to be ironed out in a debate that seems likely to last well into early 2010. Contrary to popular opinion, not all health reform provisions would take effect years down the road. If health reform is signed into law, employers would need to respond quickly. Exact health reform provisions could vary, but some areas employers should watch for include the need to: (1) eliminate cost-sharing requirements for a variety of preventive measures; (2) cover dependents until a later age; (3) modify all preexisting condition limits; and (4) revamp health summary plan descriptions to meet new requirements. Stay on top of the latest health reform news at CCH’s blog Health Reform Talk, where our benefits editors provide daily updates and expert analysis on the ever-changing developments.

H1N1 flu preparedness drives reexamination of employment policies
2009 was the year of the swine – flu, that is. The H1N1 flu virus emerged in March and was a global pandemic by June. In October, President Obama declared the H1N1 flu a national emergency. With the H1N1 threat, came a flurry of guidance on what employers should do about it. Employer preparedness implicates a whole host of practical and legal considerations including absenteeism, “presenteeism,” paid sick leave, vaccination programs, employee cross-training, telecommuting, travel, disability and employee communications. “Although the instances of H1N1 have not been as widespread as once feared, and the disease appears to be winding down for now, employer preparedness remains important,” says Joyce Gentry, CCH’s resident HR expert. “The wrong reaction could create liability for an employer under the various employment laws.”

Lilly Ledbetter Fair Pay Act signed into law
On January 29, amidst the worst financial crisis since the Great Depression, President Obama signed into law the Lilly Ledbetter Fair Pay Act (P.L. 111-2). Though not technically the first bill he signed—that would be legislation fixing the salary of the Secretary of the Interior—the Fair Pay Act is the first major legislation Obama signed into law, and the first having to do with labor and employment law. The law, seen as a legislative “fix” to the Supreme Court’s controversial May 2007 decision in Ledbetter v Goodyear Tire & Rubber Co, Inc, amends four anti-discrimination laws – Title VII, the ADEA, the ADA and the Rehabilitation Act – to restart the statute of limitations for filing a charge of discrimination each time a discriminatory paycheck is issued, not just when an employer makes an adverse pay-setting decision. So, what’s next for employers? “As a result of the law, employers must review their HR, benefits and compensation practices to ensure that they are consistently applied, both at the employee’s time of hire and during their tenure with the company to reduce the risk of any potential employer liability resulting from the Lilly Ledbetter Fair Pay Act,” said Brett Gorovsky, CCH WorkWeek editor.

Obama Administration ramps up enforcement of labor and employment laws…
The election of Barack Obama promised a renewed focus on new labor and employment law legislation. Eleven months into his first term, however, these laws have not yet surfaced. Instead, with Congress focused on Obama’s top legislative priority, health care reform, the Obama Administration has increased its enforcement of existing labor and employment laws in the areas of minimum wage, overtime and prevailing wage violations, federal contractor compliance, Form I-9 compliance and employee misclassification, which have not made employers very happy.

…while for OSHA, 2009 was the year of the record fine
The Obama Administration, vowing to aggressively enforce safety and health standards to protect America's workers, hit the ground running in 2009 with high penalty amounts, including a record-setting $87.4 million fine issued to BP Products North America, Inc, for its alleged failure to correct potential hazards at its Texas City, Texas, refinery, following a 2005 explosion that killed and injured many employees. The fine, which is the largest in OSHA's history, is being contested by BP. High fines were also proposed against other companies, including Tempel Grain Elevators, of Wiley, Colorado, for more than $1.6 million; G.S. Robins & Co, of St. Louis, Missouri, for more than $1.2 million; and Milk Specialties Co, of Whitehall, Wisconsin, for $1.1 million. "Even during these difficult times, when many companies are cutting back, these high fines are OSHA's way of sending a strong ‘zero tolerance’ message that worker safety cannot be compromised and that employers should look elsewhere to reduce their expenses," according to Laurel Gershon, CCH's resident OSHA expert.

Ricci: Tension between disparate treatment and disparate impact
The High Court adopted a new Title VII standard in its 5-4 Ricci v DeStefano decision, holding that before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, it must have a “strong basis in evidence” to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action. The city of New Haven, Connecticut, failed to make this showing and, thus, should not have tossed the results of its firefighter exams solely because it feared litigation from black or Hispanic applicants who were disparately impacted by the exam. “If, after it certifies the test results, the City faces a disparate-impact suit, then in light of [our] holding the City can avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability,” wrote the Court, reading the proverbial writing on the wall. "The decision underscores a tension between Title VII’s disparate treatment and disparate impact provisions that has created a real conundrum for employers," observed CCH employment law expert, Pamela Wolf. Fourteen of the white firefighters (and one Hispanic) who brought the case all the way to the top have since been promoted. And the writing on the wall materialized as a group of black firefighters filed a motion to intervene when, on remand, the city announced it would certify the exam results – an act that provided them with standing to challenge the test’s disparate impact, which has never been validated, they assert. Another black firefighter has separately filed a suit challenging the exam’s disparate impact.

Supreme Court raises the bar for plaintiffs in Gross and Iqbal
In June, the Supreme Court in Gross v FBL Servs, Inc ruled that the Title VII mixed-motive framework does not apply in ADEA cases, leaving age bias plaintiffs to prove age was the "but-for" cause of the adverse action taken against them. There is no question that the case has radically changed the ground rules for proving ADEA claims. (Some circuit courts, including the First, Third, Sixth and Seventh circuits, are interpreting the High Court’s decision somewhat differently, finding that because the Court had not made a definitive decision on the matter, the McDonnell Douglas framework can still be used to analyze ADEA claims based on circumstantial evidence.) And in Ashcroft v Iqbal, a non-employment case issued a month earlier, the Supreme Court imposed heightened pleading standards for plaintiffs of every stripe when it concluded that plaintiffs cannot survive a motion to dismiss by relying on "mere conclusory statements," but must instead set forth specific facts that establish "a plausible claim for relief." Much like what happened after the Supreme decided Ledbetter, Congress took notice: corrective legislation is already in the works with bills to overturn both decisions pending in Congress.

I'll see your no-match and raise you an E-Verify
In a major reversal of Bush Administration immigration policy, DHS rescinded its controversial 2007 no-match rule, while at the same time announcing the Obama Administration’s full support for E-Verify by increasing the reach of the program to require certain federal contractors and subcontractors, including those who receive Recovery Act funds, to use the program to verify the employment eligibility of their new hires and existing employees. “While it is unclear whether the Obama Administration or Congress will push to make E-Verify mandatory as part of its push for comprehensive immigration reform in 2010, what we do know is that the program, which has critics as far-ranging as business groups and immigrant advocacy groups, has been extended for three more years, and DHS has been given $137 million for FY 2010 to further improve its accuracy and compliance rates,” said Brett Gorovsky, CCH’s WorkWeek editor and resident immigration expert. While the agency is expected to make a number of enhancements to the program, including adding a self-check option to give job applicants an opportunity to check their employment eligibility before they submit to such a check by potential employers, employers must remember that besides contractors that are subject to the E-Verify federal contractor rule, E-Verify still continues to be a voluntary program for employers.

Validity of two-member NLRB rulings will be heard by the Supreme Court
With the precedential value of nearly 500 NLRB decisions at stake, the US Supreme Court granted cert November 2 in New Process Steel v NLRB (Dkt No 08-1457) to consider whether a two-member panel of the NLRB has the authority to hear cases and issue orders regarding unfair labor practice charges. Circuit courts have been split on the matter; the current score is 5-1 in favor of Board authority. In fact, just yesterday, the Tenth Circuit became the latest circuit to hold that the NLRB has the statutory authority to act with only two members. The NLRB has been operating with only two members for nearly two years. Rather than cease functioning, Chairman Wilma Liebman, a Democrat, and Member Peter Schaumber, a Republican, have continued to issue decisions in matters on which they can agree. The Board acted on the advice of the Justice Department’s Office of Legal Counsel, which concluded that “if the Board delegated all of its powers to a group of three members, that group could continue to issue decisions and orders as long as a quorum of two members remained.” The Board made such a delegation in December 2007 and, since that time, Liebman and Schaumber, acting as a quorum, have issued nearly 500 decisions. The issue came to a head in 2009 with the Supreme Court’s decision to hear the case and determine whether years of NLRB authority should be upheld or thrown out. Meanwhile, three NLRB nominees (Brian E. Hayes, Mark G. Pearce and Craig Becker) are awaiting confirmation by the full Senate.

Economy goes into a free fall
The economy was big news, of course, in 2009—unrelenting news and, for much of the year, unnerving news. As 2009 draws to a close, unemployment has reached the 10 percent mark and, despite some positive signs, employers remain hesitant to add to their payrolls. Employers faced painful choices in 2009, forced to cut hours and workers—and they stared down the risk of lawsuits as a result. Amid the worst of it, CCH employment law expert Pamela Wolf offered guidance on complying with the WARN Act and other statutory obligations.

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