Quirky Question # 187: When an Employee Is On a Disability Leave, Is It the Employer’s Responsibility to Determine Whether Jobs Are Available for the Employee?

One of our employees has been out of work on a disability.  We’ve accommodated her by letting her take a prolonged leave of absence.  During this time, she also has been availing herself of both our Short-Term Disability (STD) and Long-Term Disability (LTD) policies.  She’s been out of work for a full year.

We’ve periodically conducted internal reviews to see whether we might have any jobs that would be appropriate for the employee on leave, but we just haven’t had any positions that fit both her qualifications and her limitations.  Moreover, she has not contacted our company at all during her extended leave.  She has not accessed our on-line position listings (we’d know because our system records all site visits), she has not come into the office where she could check bulletin boards with internal job listings, and she has not contacted either her former supervisor or our HR Department.

Given these facts, we terminated her employment at the end of the anniversary of her separation.  She now claims that we have discriminated against her on the basis of her disability.  She further contends that it was our company’s responsibility to determine whether there were any positions she could have performed during her leave of absence.  Frankly, even though we did check periodically to see what might be available, we think that was her responsibility.  Who’s right?

David’s Analysis of Quirky Question # 186: Can Arbitration Agreements Ban Class Claims?

[Readers:  My colleague, David Trevor, has provided the analysis to Quirky Question # 186, which addresses a recent decision of the NLRB regarding the ban of class or representative actions in an arbitration agreement.  For more information about this issue, do not hesitate to contact David at 612.340.8718, or at trevor.david@dorsey.com.  Additional data regarding David is available at: http://www.dorsey.com/trevor_david/.

I hope you find this information to be helpful.  Regards, Roy]

Quirky Question # 186:

For many years, our company has required all employees to sign a contract agreeing to arbitrate any employment claims, including discrimination claims.  Last year we changed our form contract to make it clear that any arbitration only would cover the individual employee making the claim.  There would be no “class action” arbitrations or anything like that.  (We were told by another law firm that the Supreme Court had just ruled that this approach was legal.)

Now, we’ve got a terminated employee threatening to bring a class action against us.  His lawyer says our new arbitration contract violates the National Labor Relations Act and something called the Norris-Laguardia Act.  But, we aren’t even a union shop!  What’s going on here?  I thought the Supreme Court just said that we could ban class actions in our arbitration agreements.

David’s Analysis:

Unfortunately, your ex-employee’s lawyer may have a point.  A very recent decision of the National Labor Relations Board (NLRB), D.R. Horton, Inc. and Michael Cuda, Case 12-CA-25764, held that it was a violation of the National Labor Relations Act to require employees to sign an arbitration agreement preventing them from filing class, joint or collective claims.  While that decision has not yet been reviewed by the courts, the NLRB’s analysis of the legal issues was thorough and addressed the relevant statutes and cases in some detail.  In particular, the NLRB considered the recent Supreme Court case you reference (AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011)), but found that it did not apply in this context.

The NLRB’s ruling in the D.R. Horton matter was based on a provision in the National Labor Relations Act that not only protects classic union activity, such as organizing and collective bargaining, but also guarantees employees the right “to engage in … concerted activities for the purpose of … other mutual aid or protection …” 29 U.S.C. § 157.  In other words, employees have the right to work together (or “collectively”) even outside of the traditional union context, for their “mutual aid or protection.”

The NLRB determined that collective litigation, such as class actions, constitutes the type of collective activity protected by the National Labor Relations Act.  Therefore, the NLRB determined that the right to pursue employment claims collectively was protected activity.  According to the NLRB, forcing employees, as a condition of employment, to sign a contract waiving that right was a violation of the Norris-LaGuardia Act, 29 U.S.C. § 101 et seq., which prohibits contracts that force employees to surrender certain protected rights.  The NLRB distinguished this from cases allowing such contracts where the employee had the choice to sign (and receive additional benefits) or not sign but still remain employed.

The NLRB also analyzed the 2011 Supreme Court opinion in Concepcion, which upheld the validity of consumer contracts waiving rights to collective action.  Concepcion involved cell phone customers claiming that certain fees had been fraudulently imposed.  In that context, the NLRB ruled, class action rights were merely “procedural” and could be waived.  In the employment context, by contrast, the right to act collectively for mutual aid and protection is “substantive,” and the employer cannot force employees to waive that right prospectively as a condition of employment.  The NLRB also noted that if the National Labor Relations Act’s protection of collective action is in conflict with the Federal Arbitration Act’s (FAA) provision making arbitration agreements enforceable, the National Labor Relations Act, as the later statute, would control over the earlier FAA.

As noted above, this issue has not been litigated in court yet, so it may be that the NLRB’s ruling in D.R. Horton will be overruled, but it is a thorough and thoughtful opinion and represents the most recent statement on this issue.

As a practical matter, there are a number of issues your company should address going forward:

• Consider dropping the requirement that the waiver of class or collective action rights be a condition of employment.  Instead, you could offer your employees additional consideration if they choose to sign a contract waiving those rights;

• If you can’t absolutely bar class or collective actions by employees, make a decision as to whether you would rather have any such actions brought in court or in arbitration.  Note that some of the procedural protections in class action litigation are quite favorable to employers.  You might decide that those offer better defensive prospects than the more informal rules which often prevail in arbitration;

• Once you have made the decision as to whether class litigation or class arbitration is the lesser of two evils, make sure any agreement you require employees to sign clearly specifies whether the employee is required to litigate or to arbitrate any class claims; and

• More broadly, don’t forget to consider the implications of the National Labor Relations Act and other labor statutes, even if you are not a unionized employer.  As this situation illustrates, those laws can impact even non-union employers in some situations.

Roy’s Analysis of Quirky Question # 185; Accommodating a Disabled Employee Who Only Can Work a Partial Shift

Quirky Question # 185: 

We run a manufacturing company.  We are fortunate in that, despite the difficult economy, our products remain in high demand.  One of our employees has a couple of related disabilities, the consequence of which is that he only can work a maximum of 8 hours each day.  In the past, we have been able to accommodate this limitation.  But, given the ever-increasing demand for our products, we have had to convert from 8-hour shifts to 12-hour shifts on all of our production lines.

Our employee has asked us to accommodate him further by allowing him to work just 8 hours each day.  We don’t think that would be fair to our other employees, all of whom have to work 12-hour shifts.  We also think it would be unfair to force us to incur the additional expense associated with this requested accommodation.  What’s your reaction?  Do we have to accommodate this employee by allowing him to work just 8 hours per day?

Roy’s Analysis: 

My first thought is that your company deserves congratulations.  It’s wonderful that your firm has been able to increase sales of your products in the difficult economic conditions of the last several years. 

Although I cannot provide you complete assurance regarding your treatment of your employee, there are reasons for your company to be quite optimistic about your position.  Initially, I like the backdrop facts that you have shared in part.  As you describe, your employee has had a disability for some time.  Even more important, your company has been accommodating your employee’s disability by agreeing not to ask him to work more than 8 hours each day.  This demonstrates that your firm did not discriminate against your employee when you discovered his physical limitations. 

These facts would be enhanced even further if your company hired this individual knowing of his disability.  Similarly, the longer the period you employed him while accommodating his disability, the more persuasive your arguments that your company does not discriminate against employees with disabilities and that your organization attempts to accommodate persons who need an accommodation to perform the essential functions of the job.

Due to your company’s success and the resulting demand for your products, however, it is apparent that the accommodations you have offered in the past (basically, limiting the employee’s workday to just 8 hours) no longer will suffice.  With your new requirement of 12-hour shifts, your employee seemingly will not be able to perform the essential functions of the job.  The job requires 12 hours of work; with an 8-hour limitation, your employee will come up four hours short each day.

As you may know, the basic analytical structure of a failure to accommodate disability discrimination case has four elements.  A plaintiff must show that: a) he has a disability; b) he is a “qualified disabled person;” c) the employer knew of the disability; and d) the employer failed to make a reasonable accommodation of the disability.  Here, you acknowledge that your employee is disabled.  Moreover, your company knew of the disability (and, in fact, have been accommodating it for some time).  Consequently, the potential battleground, if this dispute evolves into litigation, will be the second and fourth elements referenced above.

To determine whether an individual is a “qualified disabled person,” courts examine whether the employee can perform the essential functions of the job.  The EEOC has promulgated regulations to assist employers and employees alike to evaluate whether a job requirement constitutes an “essential function” of the job.  These variables include: 1) the employer’s judgment as to which job functions are essential; 2) the content of the written job descriptions relating to the job; 3) the amount of time spent on the specific function in question; 4) the consequences associated with not compelling the employee to perform the function; 5) the terms of the collective bargaining agreement (if any); 6) the past work experience of other employees in the same job; and 7) the current experience of other employees in the same or similar jobs.  See 29 CFR § 1630.2(n)(3).

Here, an analysis of these factors would appear to support your company’s position that working a 12-hour shift is an essential function of the job you would like this employee to perform.  Many courts have reached this same conclusion, finding that an employer’s standard shift schedule is an essential job function. See, e.g., Rehrs v. Iams Co., 486 F.3d 353, 357 (8th Cir.2007 (rotating shift schedule is an essential function); Kallail v. Alliant Energy Corp. Servs., Inc., 2011 WL 1833347, at * 12-13 (N.D. Iowa 2011) (rotating, 12-hour shift, was an essential function of job); Tompson v.Dep’t of Mental Health, 924 N.E.2d 747 (Mass. Ct. App. 2010) (8-hour shift was essential function). As the Eighth Circuit pointed out in Rehrs, “[i]t is not the province of the court to question the legitimate operation of a production facility or determine what is the most productive or efficient shift schedule for a facility.” Rehrs, 486 F.3d at 357-58.

Further, the fourth element (did the employer failure to make a “reasonable accommodation”) of the failure to accommodate analysis also supports your position that the employee needs to work the full 12-hour shift.  When evaluating whether an employer can make a reasonable accommodation of an employee’s disability, courts examine whether the proposed accommodation would cause an “undue hardship” to the employer.  Here, you should be able to present persuasive evidence that an accommodation that would result in your employee working only two-thirds of the standard shift (8 of the 12 hours) would constitute an undue hardship for your company.

As you point out, were your firm to continue to employ this individual and continue to allow him to work just eight hours daily, you would  have to determine how to cover the four-hour gap.  You undoubtedly have considered a few possible alternatives.  First, you could ask your other employees to work extra to cover the four-hour gap.  But, that might require another employee to work 16 hours (the original 12 hour shift, plus the four additional hours), a schedule that will require your company to expend additional resources for overtime compensation.  Moreover, when employees are working 16 consecutive hours, work quality is likely to deteriorate. 

Second, your company could hire a new employee to cover the extra four hours per day, employing that individual 20 hours per week. Even assuming your firm could find an employee willing to work only 20 hours per week, here too there clearly will be additional expense for your company (recruiting, hiring, training, and potentially, significant benefits). 

Third, another accommodation your company might consider would be to provide your employee an indefinite leave of absence.  Any number of courts have accepted short-term leaves (sometimes as long as a year) as a reasonable accommodation for an individual with a physical or mental impairment.  But, here too, the accommodation is not without costs.  Your firm would have to hire a “temporary” replacement, perhaps for a prolonged period.  Again, hiring and training employees is expensive, especially if the expectation is that this person will not be employed for a lengthy period.  Moreover, this type of accommodation presumes your employee’s disability will improve as a result of the time away from work and as a result of the leave, he later will be able to work the 12-hour shifts.  Here, it sounds as though your employee already has had the 8-hour workday limit for a lengthy period of time.  If there is little prospect of improvement in your employee’s condition and time away from work is unlikely to increase the chances that he will be able to work a longer day, this accommodation may be pointless.

Further, when considering each of the three alternatives above, it is not just the financial consequences that should be assessed when considering “undue hardship.”  The impact on employee morale, the effect on other employees (some of whom may not be too thrilled with having to work 12-hour shifts), and other intangibles also are part of the undue hardship calculus.

The bottom line is that the various hypothetical solutions to this problem would likely cause your company an undue hardship.  Couple that fact with the judicial analyses that schedules or shifts constitute an essential function of the job, and your firm should not have much to worry about.  In sum, your company should be able to require your employee to work the full 12-hour shift.  If you have to terminate your employee because he is unable to do so, your company should not be exposed to liability on a failure to accommodate theory.  Whether you will be able to persuade your employee of that fact before he proceeds with a lawsuit is a question, however, about which I can offer few insights.

Employment Trivia Game

Readers:  The latest winner to my Employment Trivia Game is Mark Tobin of Grand Forks, North Dakota.  My Herman Cain inspired questions were:  ”What was one of the early movie portrayals of this subject [sexual harassment]?  Identify the actresses in the movie and describe their response to the abusive boss. ”

As Mark correctly described, the movie I was looking for was “Nine to Five,” starring Lily Tomlin, Dolly Parton, and Jane Fonda.  The abusive boss, played by Dabney Coleman, is tied up and held captive by the women.  For providing these answers, Mark is the latest winner of one of amazing prizes. 

The next question goes up now.  Good luck!  Roy

Thanks for a Great 2011!

Readers:  I hope you had a prosperous 2011 and a wonderful holiday season. 2011 is over, and we’re all off to a fresh start in 2012.  Before looking ahead, however, I wanted to express my appreciation to all of the clients with whom I had the opportunity to work during the past year.

For me, the first half of 2011 was dominated by my representation of Revis Stephenson III, the former Chairman and CEO of Advanced BioEnergy, LLC.  Along with my colleagues, David Trevor and Marilyn Clark, we were able to achieve an outstanding result for Revis, following an arbitration involving 15 days of testimony.  For a description of that representation, see the article below, “How to Lose $4 Million When Firing an Executive—What Happens When It All Goes Wrong?”

In the second half of 2011, my practice was largely devoted to a new Dorsey client, Edwards Lifesciences LLC, an Irving, California medical device company that has developed a revolutionary, life-saving, transcatheter heart valve.  This new technology, which was approved for commercial sale in the U.S. by the FDA on November 2, 2011, will enable individuals suffering from severe aortic stenosis to have their aortic valves replaced without the need for open heart surgery.  The Edwards’ representation involved litigation in Minnesota, Massachusetts and Colorado, principally relating to the movement of employees from Boston Scientific Corporation to Edwards Lifesciences.  Happily, the two adversarial medical device companies were able to resolve their disputes amicably in December.

During 2011, I also had the opportunity to continue representing clients, both companies and individuals, with whom I have had a chance to work for years (some, for decades), as well as new clients with whom I established relationships last year.  You know who you are so I won’t list you here.  You also should know how deeply appreciative I have been for the chance to represent you.

One aspect of 2011 that was particularly gratifying was that I was retained by a Fortune 500 company that I had opposed in commercial litigation just two years ago and separately, retained by an opposing counsel who opposed one of my clients in a trade secrets dispute in 2010.  I strive to treat opposing parties and their counsel with dignity and respect, and these two retentions suggest that I achieve that goal, at least some of the time.  I also was pleased by the fact that near the end of last year, I was retained by a client from Chicago solely on the basis of this Blog.

Another aspect of 2011 that was both gratifying and humbling was the honor bestowed upon me by Minnesota Lawyer Magazine, which named me as one of its “2011 Attorneys of the Year.”  This is the second time I have won this award, the first coming in 2006 in connection with my defense of Cisco Systems, Inc. and two individual Cisco employees.  Because this was the second time I received this honor, Minnesota Lawyer Magazine also gave me its “Circle of Excellence Award.”

One consequence of my hectic year, however, was that I had much less time for my Quirky Employment Questions Blog.  I hope to rectify that problem in 2012.  Tomorrow I will post my first 2012 question and I will try to keep up with the weekly questions thereafter.  I also hope to include more submissions from my colleagues, and more submissions from guest contributors. (If you would like to write an article for my Blog, please contact me.)  I also will present a few more polls, and of course, will continue to pose more Employment Trivia Questions (look for a new question on Thursday).  In 2012, I also plan to incorporate more video into the Blog.  More to come on that issue.  Lastly, I hope to publish a few series this year, focusing on issues of importance to employers.

In sum, thanks again to all of you with whom I had the chance to work last year.  I look forward to continuing those relationships this year. I also remain hopeful that 2012 will enable me to establish new client relationships.  If you feel that I could provide assistance or guidance to you or your company, I hope that you will contact me.  Best regards, Roy