employment

by Steve Lewicky

Supreme Court hears arguments on whether employers can require employees to waive right to class action lawsuits, and mandate arbitration of disputes

On the first day of its term earlier this month, the Supreme Court took up the very important question of whether employers may require, in employment contracts, that any controversy between the employer and its employees be decided through arbitration, instead of in court. Employers have increasingly been including in written employment contracts a requirement that employees arbitrate any disputes with the company individually, and waive their rights to resolve disputes through class action lawsuits.

This exposes a tension between federal laws — the Federal Arbitration Act on the one hand, and the National Labor Relations Act, which guarantees employees a right to engage in “concerted activities” for “mutual aid or protection.” In the pending cases before the Supreme Court, employers have argued that the Federal Arbitration Act is unequivocal and that contractual arbitration provisions must be enforced. The employers also argue that the National Labor Relations Act does not expressly prohibit waivers of class action lawsuits. The employees in these pending cases and the National Labor Relations Board, however, argue that there is no need for the justices to harmonize the National Labor Relations Act and the Federal Arbitration Act because arbitration agreements cannot be enforced by courts when they are illegal. They argue that the National Labor Relations Act’s reference to the right of employees to engage in “concerted activities” for “mutual aid or protection” has long been interpreted by courts to include the right of employees to pursue joint legal claims, which should include class action lawsuits. Contractual limits on asserting class-action lawsuits, therefore, should be seen as illegal and unenforceable. Twenty-eight amicus curia briefs were filed by non-parties in these cases, suggesting how important this issue is to both employers and employees.

Amy L. Howe of SCOTUSblog.com reports that, during the Supreme Court’s oral arguments on October 2, a majority of the justices appeared inclined to come down on the side of employers, and uphold employment agreements that require an employee to resolve a dispute through individual arbitration, waiving class action lawsuits. Chief Justice Roberts, in a back-and-forth with a law professor representing one of the employees in the case, observed that a decision in favor of the employees would invalidate employment agreements covering 25 million people – a step that several of the justices would be reluctant to take, particularly given the court’s strong support of arbitration in recent years. Justice Breyer, on the other hand, told an attorney representing employers that he did not see a path for the employers to win without “undermining and changing radically” the labor laws that are the “entire heart of the New Deal.” An attorney representing employers was pressed repeatedly by the court’s four more liberal justices to explain how the employers’ position could be reconciled with the National Labor Relations Act, but the attorney argued that the NLRA was only intended to protect collective action in the workplace, and to allow employees to get to a forum in which to raise their grievances with employers. Once an employee arrives at that forum, the attorney argued, the employer can raise any defenses that it may have, such as the fact that the employee had agreed to arbitrate any disputes individually. Justice Kagan pointed out that another federal statute, the Norris-La Guardia Act, in her view bars courts from enforcing any waiver of an employee’s right to concerted activity.
The U.S. Government initially filed a brief with the National Labor Relations Board asking the justices to review these cases, but with the change of administrations, the Government thereafter sided with the employers in briefs and argument. Based on questioning during argument, Ms. Howe of SCOTUSblog believes that employers can be assured of the votes of Justices Roberts, Kennedy and Alito, but the two remaining conservative justices – Thomas and Gorsuch – were silent during oral argument and gave no indication of their thinking. Justice Thomas has voted in favor of a broader reading of the Federal Arbitration Act, however, and Justice Gorsuch generally interpreted arbitration clauses broadly while he was a judge prior to appointment to the Supreme Court. Both sides now wait with anticipation for the Supreme Court’s ruling, which will probably be handed down next spring.

More details of the briefs and oral arguments in these cases may be read at SCOTUSblog.

by Steve Lewicky

Maryland employers may need to provide accommodation to employees with disabilities by offering alternative job postings

The Maryland Fair Employment Practices Act (“MFEPA”) makes it unlawful for an employer to refuse to make reasonable accommodation for an employee that has a disability known to the employer.  Regulations implementing the Act provide that an employer may not deny an employment opportunity to an employee with a disability, if the basis for the denial is a need to accommodate the individual’s physical or mental limitations, and the accommodation would be reasonable.

Earlier this year, in Townes v. Md. Dept. of Juvenile Services, the U.S. District Court in Maryland had an opportunity to apply this law to a government employee who was diagnosed with bipolar disorder. The employee’s treating psychiatrist recommended that she work from a different office location within the state-wide department, in order to reduce travel. The employee contended that there were open positions within the department that would require her to engage in less travel, but the department declined to consider her for any of those jobs when she returned from disability leave.  She further alleged that her employer failed to perform an individual assessment to determine whether she was qualified for another job, beyond her current position. The employer filed a motion for summary judgment, arguing that it was entitled to a favorable judgment as a matter of law on the facts as alleged by the employee, without need to proceed to trial on those facts.

The employee argued that the MFEPA is similar to the Americans with Disabilities Act (“ADA”) in requiring an interactive process by which an employer conducts an individualized assessment for an employee with a disability.  She pointed to an earlier decision by the Maryland Court of Appeals, in which that court broadly interpreted the phrase “job in question.” The court also looked to a Maryland state regulation that requires an employer to consider an employee’s request for another job position if she becomes disabled.

The question in the summary judgment motion came down to whether a Maryland employer is required by the MFEPA to assess whether an employee with a disability can perform the essential functions of any job opening within the organization, or only those that are located in the employee’s existing work location.   While the employer did not dispute that it was required to perform a review to determine whether a reasonable accommodation was available to allow the disabled employee to perform essential job duties, it questioned whether it had to assess whether the employee can perform job functions at any job posting within a multi-site organization.  In ruling on this pre-trial motion, the court found that the MFEPA statute does not preclude a jury from finding that there is such an obligation, and therefore the court allowed the case to proceed toward trial.

This ongoing case suggests that federal courts in Maryland may be inclined to interpret the MFEPA in a similar manner as the Americans With Disabilities Act (“ADA”) and the Rehabilitation Act.  If so, then upon learning of an employee’s request for a transfer to another job location due to a claim of disability, an employer should engage in good faith interactions with the employee (and an individualized assessment), and try to find an appropriate job posting for the employee elsewhere within the organization.  As noted, this case has not yet reached trial, and the plaintiff still must prove her case to a jury in order to prevail on her theory.

For information about employment law claims, please contact the Law Office of Steven J. Lewicky.

by Steve Lewicky

Maryland court clarifies the burden of proof to be applied in defamation lawsuits

People often think that any false statement asserted about a person is defamatory.  In fact, the law of defamation is complicated, and different standards apply to public figures and to private citizens outside of public life.

To successfully make a case of defamation in Maryland, you must establish that the accused defendant made a defamatory statement to a third person, that this statement was false, that the defendant was legally at fault in making the statement, and that the plaintiff suffered harm as a result of the statement’s publication.  A statement is only “defamatory” if it tends to expose a person to public scorn, hatred, contempt, or ridicule, and thereby discourages the community from having a good opinion of, or associating with, the person that was the subject of the statement.  Even if a statement is defamatory, a defendant still may raise what is known as a “qualified” or “conditional” privilege from being held responsible and thereby be excused for the defamation if the defense is proven.

One form of conditional privilege is the First Amendment privilege.  The U.S. Supreme Court established decades ago that statements pertaining to public figures on matters of public concern are excepted from defamation liability, unless the speaker or writer had actual knowledge that the statement was false, or acted with reckless disregard for the truth.  This is a very high standard of proof and makes it very difficult for a public figure to win a defamation action.

Private citizens that are not public figures do not have to overcome this First Amendment privilege to prevail in a defamation action, but there are other privileges, arising under the common law, that may derail a defamation action brought against a private person.  There is a “public interest” privilege, for example, permitting persons to communicate to public officials about matters that are within their public responsibility.  There is a privilege to communicate with someone who shares a common interest or to make statements in defense of oneself, or in the interest of others.  There is a “fair comment” privilege, and a privilege to make a fair and accurate report of public proceedings.  The breadth of these common-law privileges is not precisely defined by case law.

On November 22, 2016, the Maryland Court of Appeals issued a decision clarifying one aspect of defamation law:  In cases of private defamation, the plaintiff has the burden of proving the falsity of the allegedly defamatory statement.  If the defendant asserts a common law conditional privilege, the plaintiff also bears the burden of overcoming that privilege.  The Court, in this recent case, has now clarified that the standard of proof that the plaintiff must meet in overcoming a conditional privilege is proof by a preponderance of the evidence.  This decision establishes that a plaintiff in such a case need not meet the higher standard of overcoming a conditional privilege by clear and convincing evidence, which is required in some other states.

by Steve Lewicky

Confusion reigns as new overtime rule is placed in limbo

Maryland employers and workers have reason to be confused about an anticipated expansion of eligibility for overtime pay.  In May, the U.S. Department of Labor issued a regulation that would have doubled (to $47,476) the salary threshold at which many workers have a right to receive time-and-a-half pay, for workweeks that exceed 40 hours.  The rule also would have indexed to inflation future increases in this threshold.  The rule was to have taken effect on December 1, but a few days ago a U.S. District Court judge in Texas issued an injunction barring the rule’s implementation, holding that the Department of Labor may have exceeded its authority in issuing the rule.

The court’s ruling was handed down as Congressional leaders were giving consideration to adjourning earlier than Congress otherwise would have, to preserve the incoming Republican Congress’ ability to legislatively block the new rule in January 2017.  Under the Congressional Review Act, adjourning the current Congress early would stop the clock for legislative review until the new Congress convenes.  Congress might still go forward with this blocking action in January, despite the Texas court’s injunction, since the injunction could prove to be temporary.  In addition, Congressional action would have a nation-wide effect, while the impact of court action could eventually become regionally fractured if some federal Circuit Courts continue to block the regulation, while other Circuits uphold the regulation (should Congress fail to act in January).  As long as the ninth seat on the Supreme Court remains vacant, anticipated splits between the Circuit Courts of Appeal on this issue would remain in place, if Congress does not legislatively block the regulation.

Many employers have already informed their employees of pay increases that would take categories of their workers above the regulation’s $47,476 threshold.  This new threshold now no longer is legally binding – as long as the Texas injunction remains in place, and/or if Congress blocks the rule in January – yet employers fear an adverse impact on employee morale should they rescind previously-awarded pay increases.  On the other hand, honoring previously-announced increases that are no longer necessary in order to keep an employee under the applicable salary threshold would mean incurring salary costs that are not legally required.

by Steve Lewicky

Confusion reigns as new overtime rule is placed in limbo

Maryland employers and workers have reason to be confused about an anticipated expansion of eligibility for overtime pay.  In May, the U.S. Department of Labor issued a regulation that would have doubled (to $47,476) the salary threshold at which many workers have a right to receive time-and-a-half pay, for workweeks that exceed 40 hours.  The rule also would have indexed to inflation future increases in this threshold.  The rule was to have taken effect on December 1, but a few days ago a U.S. District Court judge in Texas issued an injunction barring the rule’s implementation, holding that the Department of Labor may have exceeded its authority in issuing the rule.

The court’s ruling was handed down as Congressional leaders were giving consideration to adjourning earlier than Congress otherwise would have, to preserve the incoming Republican Congress’ ability to legislatively block the new rule in January 2017.  Under the Congressional Review Act, adjourning the current Congress early would stop the clock for legislative review until the new Congress convenes.  Congress might still go forward with this blocking action in January, despite the Texas court’s injunction, since the injunction could prove to be temporary.  In addition, Congressional action would have a nation-wide effect, while the impact of court action could eventually become regionally fractured if some federal Circuit Courts continue to block the regulation, while other Circuits uphold the regulation (should Congress fail to act in January).  As long as the ninth seat on the Supreme Court remains vacant, anticipated splits between the Circuit Courts of Appeal on this issue would remain in place, if Congress does not legislatively block the regulation.

Many employers have already informed their employees of pay increases that would take categories of their workers above the regulation’s $47,476 threshold.  This new threshold now no longer is legally binding – as long as the Texas injunction remains in place, and/or if Congress blocks the rule in January – yet employers fear an adverse impact on employee morale should they rescind previously-awarded pay increases.  On the other hand, honoring previously-announced increases that are no longer necessary in order to keep an employee under the applicable salary threshold would mean incurring salary costs that are not legally required.

by Steve Lewicky

Policies to include in employee handbooks

Maintaining current employee handbooks is a critical protection for Maryland employers. Here is a short article written in October 2012 by my colleague, Cheryl Brown, listing some recent developments in the law that employers should consider adding to their employee handbooks as we move into the new year.