Rod Satterwhite and David Greenspan are members of the Labor & Employment group at McGuireWoods LLP. Both handle employment litigation on behalf of employers, and advise companies on employment issues regularly.

September 2008 - Posts

Standards Are Standards

    Notwithstanding my dislike of the Family and Medical Leave Act because of the latent uncertainty it introduces into attendance issues, the statute does have some well-defined requirements, especially regarding eligibility.  A recent case out of the 7th Circuit shows just how tightly those requirements should be applied. 
    A former postal worker sued the USPS for an FMLA violation when it terminated her for absenteeism. 
    The facts in this case could only apply to someone working for the government.  The employee was hired in 1993 as a mail handler and terminated at least four times over the next seven years for poor attendance.  She also received multi-day suspensions for failure to show up to work regularly.  However, following each termination, the plaintiff was able to talk her way back and get the firing changed to a suspension instead. 
     In October, 2001, plaintiff's supervisor ordered her to clock out two hours early as a punishment because she was being insubordinate.  Plaintiff later disagreed with the supervisor's determination, but failed to properly grieve the discipline within the appropriate time frame.
    After plaintiff missed more time in December, 2001, the USPS had enough and fired her.  She sued under the FMLA, claiming that she had a bona fide medical reason for missing work.  The USPS initially admitted that the plaintiff worked the required 1250 hours in the 12 months preceding her unscheduled absence, but then amended its answer and denied that plaintiff was qualified for FMLA leave.  In support of its contention, the Post Office produced plaintiff's payroll records crediting her with 1248.8 paid hours and 1249.8 time-clock measured hours.  On the basis of the 1.2 or .2 hour shortfall, the district court awarded summary judgment to the Postal Service, finding that the plaintiff was ineligible for FMLA protection because of the failure to meet the 1250 hour threshold. 
    The plaintiff appealed, arguing:  that the time that she spent putting on her Post-Office issued gloves, shirt and shoes should have been factored in to give her the needed additional time (the FLSA exception); that the two hours that she lost on the suspension should be added to her work totals because she was wrongly ordered to clock out (the union contract exception); and that the 1.2/.2 hour shortfall was so minor that the court shouldn't really count it, but should instead give her credit for meeting the minimum threshold (the teenager coming in after curfew exception).
    The Seventh Circuit upheld the district court, noting that the ex-employee introduced no evidence to dispute the accuracy of the payroll records and that a failure to meet the requirement is a failure to meet the requirement.  The court would not add in the additional 1.2 / .2 hours to bring her to 1250 hours, nor would it give her credit for the 2-hour suspension (because she had not grieved the suspension timely) and finally ruled that the donning and doffing of minimal amounts of non-unique safety clothing is not compensable time and could not be counted.
    There are two important lessons here.  The first is that statutory standards are exactly that, and courts will enforce them when confronted with irrefutable evidence that an employee has failed to make the grade.  The second is that even small disparities in things like time records can have huge effects down the road.  This case would have gone the other way if the company had not held the plaintiff to her grievance requirements, or if its timekeeping records had not been pristine.  Particularly with troublesome employees, the company that plays strictly by the rules can usually hold the employee to the same strict standard.
posted Wednesday, September 24, 2008 3:40 PM by Lou Michels with 1 Comments

USERRA Reemployment Obligations are Firm and Fixed.

A U.S. appeals court has ordered a Nashville, Tenn., police department to reinstate a soldier's job that he left for active duty in Kuwait, in a case affirming the fixed nature of re-employment rights for persons returning from military service.   
An Army reservist left his job as a police officer in November 2003 for active duty overseas.  While overseas he faced disciplinary proceedings for making homemade wine and sharing it with other soldiers. Petty was arraigned, but the charges were eventually dropped.  In January 2005, Petty received an honorable discharge.  When Petty tried to return to his job as a police officer, the department delayed his rehiring during a three-week “return-to-work” process (a mandatory set of tests, evaluations and questions designed to determine if a returning soldier is able and ready to serve in a police force - a process that was .  Alleging that he had lied about the alcohol charges, the department launched its own  investigation into the military's charges. During the investigation Petty was asked to sit at a desk answering phones and taking police reports.  Indeed, years later (during the litigation), the City maintains that pending the outcome of its on-going investigation, Petty may be unqualified. 
The Court found that Petty's reemployment rights were violated on two bases.  First, it found the "return to work" process violated USERRA.  The Court specifically noted that the City's well-intended policy of testing to ensure that individuals entrusted with the protection of the public are temperamentally and emotionally ready to work, violated USERRA's reemployment rights.  Although not in and of itself a determinative factor, it was of note that this "return to work" period was unpaid - which also resulted in a denial of a benefit of pay under USERRA.
The Court also found that it was not for the City (i.e., an employer) to launch its own investigation into the nature of a returning veteran's conduct in the service.  Otherwise stated, an employer cannot substitute its own judgment for that of the military. 
Reinstatement rights under USERRA are intentionally rigid and always construed in favor of the returning service member.  Prompt reinstatement to the employee's escalator position is mandatory absent very narrow (and difficult to establish) exceptions.
Thanks to David Greenspan in our Tysons office for this input.
posted Wednesday, September 17, 2008 11:18 AM by Lou Michels with 0 Comments

Protecting Retiree Medical Benefits

    I have some interest in companies trying to modify medical benefits offered to their retirees, both from a public policy perspective and a legal one.  Generous retiree medical plans have proven to be the bane of large manufacturing companies, including General Motors, Ford and the rest of the U.S. auto industry.  To the extent that companies find themselves with an increasingly aging workforce and its associated higher medical costs, modifying retiree medical benefits may become a matter of corporate survival. 
    Of course, cutting the medical benefits of people who have been relying on them for years creates a huge problem for the affected retirees, and a great incentive to sue.  Hell hath no fury like an AARP member scorned.  So, it's not surprising that post hoc modifications of retiree medical plans are becoming a very contentious issue.  These cases typically involve a company moving to alter the benefit plans that it set up years ago in an effort to rein in spiraling medical costs.  Such benefit plans are typically modifiable at-will by the company because they are welfare plans and not pension plans (which cannot be altered under ERISA).  The problems typically arise when unions are involved, because there are circumstances where a collective bargaining agreement can be used to limit the company's discretion on modifying retiree medical benefits.
    Such was the case here.  Exelon made unilateral changes to its retiree medical benefits programs in January 2004.  Exelon's changes immediately created problems for some retirees, and had the potential to affect its current employees when they ultimately retired.  Exelon's union, which negotiated retiree medical benefits in various MOAs as supplements to its collective bargaining agreements with Exelon, proceeded to file grievances over the modifications in an effort to ultimately force the company into arbitration over its changes.  Exelon processed the grievances through the first three steps and even participated in the selection of an arbitrator and setting hearing dates.  In advance of the hearing, however, Exelon argued that retirees were not part of the bargaining unit (which is technically correct ) and that Exelon did not have an obligation to bargain with its union with respect to the current retirees.
    Exelon filed a declaratory judgment complaint, asking the court to declare that any dispute over Exelon's decisions to modify retiree medical benefits was not subject to arbitration under the collective bargaining agreement.  The union, represnting a handful of retirees, opposed the claim, probably because it realized that arbitration was its only avenue to protest the changes, given the discretion the company would have in a lawsuit. 
    The district court ruled in favor of the union, and the Seventh Circuit agreed.  The court noted that when a collective bargaining agreement says that disputes over interpretation are subject to arbitration, such a clause includes disputes over retiree medical rights that the collective bargaining agreement confers.  Once the company entered into a collective bargaining agreement that included language giving rights to retirees and coupled that with a broad arbitration clause, the company consented to an arbitration of grievances brought on behalf of retirees.
    And the union does not have to get the consent of all the retirees under such a circumstance before proceeding.  In fact, the Seventh Circuit noted that unless the retirees are themselves suing, and the union is proceeding along a parallel track representing another group of retirees over the same issue, the company cannot block an arbitration request by the union on behalf of even just one employee.  The court held that the arbitrator's decision would be final and binding as to the parties of the arbitration, which is all that is contemplated by the collective bargaining agreement.  Conceivably, the union could bring such grievances over and over again, or it could bring the grievance on behalf of a few employees, and then let the remainder go into court to try to enforce their rights. 
    The key issue here, of course, is that the company somehow ended up linking retiree benefits to the collective bargaining agreement.  It is absolutely imperative that companies negotiating these kinds of agreements state clearly and forcefully in the collective bargaining agreement or in MLAs associated with it, that the rights of the retirees are not part of the collective bargaining agreement, or will end with the end of the term of this particular collective bargaining agreement, and that the company will retain discretion at all times to modify its retiree medical plans as it sees fit. 
posted Tuesday, September 09, 2008 9:26 AM by Lou Michels with 0 Comments