EEOC's Proposed Rule on the 2008 ADA Amendments

The Federal Register version of the EEOC's proposed rule on the ADA Amendments of 2008 is now available. As with any proposed rule, anyone is entitled to comment.

One of the easiest ways to comment is through www.regulations.gov (docket EEOC-2009-0012). The nice thing about regulations.gov is that it is not just a way to submit comments, users can also pull up other comments.

As of now, the final comment date is November 23, 2009 (this is sometimes but not always extended). Comments complaining about the changes Congress made will fall on deaf ears. The EEOC has no authority (or inclination) to overrule Congress' decision to broaden the scope of coverage under the ADA by legislatively overruling supreme court decisions.

On the other hand, showing how the proposed regulations will impact (adversely or positively) your business is always fair game. Pointing out ambiguities in the wording is also fair and important.

A later post will address some of the EEOC's proposals.

EEOC Issues Notice of Proposed Rules under 2008 ADA Amendments

Today, shortly before lunch, the EEOC announced that it would issue a "notice of proposed rulemaking" (NRPM) that will conform the existing ADA to the changes made by the ADA Amendments Act of 2008.

I previously posted on most of the ADA amendments and on the "regarded as" changes.

The NPRM should be formally issued next week. I'll post a link to the formal notice in the federal register then.

The EEOC posted a Q and A section on its website. The EEOC Announcement about the NPRM is also available. The Q and A illuminates some of the issues but doesn't say much more than what is in the statute. One key question was how would the EEOC define when an impairment substantially limits a major life activity. The Q and A simply (and unhelpfully) states that the

determination of whether an individual is experiencing a substantial limitation in performing a major life activity is a common-sense assessment based on comparing an individual’s ability to perform a specific major life activity (which could be a major bodily function) with that of most people in the general population.

Communicating without Referring to Age

I'm working on the paper I'll give for Kramer Rayson LLP's Labor and Employment Seminar on October 1, 2009. I came across a recent age discrimination decision from the federal court of appeals in St. Louis (the Eighth Circuit) that caused my jaw to drop.

The employee was the director of an assisted living center and, when she was terminated, she attributed it to her age. She alleged, the decision stated, that the CEO said in meetings that the assisted living facility should:

be a "youth oriented company." He stated that "there was no room for dead wood," that Silver Oak was a "young company" that "enjoy[s] hiring energetic people," and that "if you can't keep up, you're going to get left behind." He also remarked that Silver Oak was "missing the boat by not hiring more younger, vibrant people because they would last longer and they would have more energy and be willing to work more hours," and that employees "should start looking over applications better and try to consider hiring younger people."

There were more similar statements alleged but you get the picture.

The point the court made, which is important, was that some of these statements were "open to interpretation." Specifically, a "'desire to rid the company of "dead wood' could be a legitimate preference to terminate unproductive workers regardless of age" but when uttered by the same manager who made other, overtly ageist statements, the court had to assume even the "open to interpretation" statements referred to an employee's age.

Of course, the court of appeals was deciding whether the age claim should be dismissed prior to a jury trial so it had to resolve any factual disputes in the employee's favor. For all we know the CEO will flatly deny making the ageist statements but would admit to saying the "dead wood" comment. Still, the point is that employers should be careful to never combine references to age (including relative age) with otherwise legitimate assessments of an employee's performance or the needs of the company.

Glimpses - Taxing Settlements

It won't change anything for employers but today's (9/15/09) federal register includes a notice from the IRS that it is amending the regulations that govern taxation of damages received on account of personal physical injuries or physical sickness. It only took the IRS thirteen years.

Before 1996, there was an argument, weakened by United States v. Burke, 504 U.S. 229 (1992), that settlements (and jury awards) in employment discrimination claims were not taxable. Burke held that a back pay award under the pre-1991 version of Title VII of the 1964 Civil Rights Act was not excluded from income but rested its conclusion on the type of damages that could be awarded in a Title VII suit (at that time). The decision caused more confusion than it resolved leading to later Court decisions and, ultimately, led Congress to close the discrimination "loophole" in 1996. Now, to be excluded from gross income, the settlement must be for personal physical injuries or physical sickness, emphasizing the "new" (as of 1996) changes. That exclusion (from income) effectively includes most every amount paid to settle a discrimination or retaliation claim. The IRS is now getting around to eliminating language from its regulation that was obsolete in 1996.

Most employers probably don't care whether the amount paid to an employee is taxable income to the employee. Be assured that employees do. Virtually every time I settle a discrimination or retaliation claim, the other lawyer asks me whether the settlement amount is taxable. Most have caught on that it is but they just want to make sure they haven't missed any recent change on this front.

They have good reason to ask, I suppose. Every Congress since 2001, has had introduced a bill that would permit parts of a discrimination settlement to be excluded from income. H.R. 3035 is the current iteration. It would exclude emotional distress damages in discrimination but would still tax back pay and punitive damages. It would permit employees to average the back pay damages over the period covered by the lawsuit or settlement.

Short Post - Proving Pretext in Comparing Physical Restrictions

Friday, the Seventh Circuit issued an interesting decision involving a Title VII race-based challenge to an employer's decision to terminate an employee who returned to work with a 25 pound lifting restriction.

The employee didn't seriously challenge the decision under the Americans with Disabilities Act. Instead, he claimed the termination was wrong because other white employees with supposedly lesser restrictions were given jobs he felt he should have been awarded. The argument failed because the employee's evidence failed to provide enough details about the restrictions on the other two employees. That was enough to sink the lawsuit.

The decision, however, is a good reminder for employers that the ADA is not the only means employees have of challenging an employer's decision that it cannot accommodate an employee's restriction. Even here, the court emphasized, race discrimination is not established merely because the imposed restriction was not accurate.

Managing Sick Leave Abuse under the FMLA

I've been pondering the Sixth Circuit's decision in Allen v. Butler County ever since the court issued it in mid-August. The decision held that the employer did not violate the FMLA when it fired the employee because he failed to comply with a daily call-in requirement while he was on leave and had not provided the employer with a doctor's statement saying when the employee was expected to return to work.

I'm bothered by the decision. I'm not bothered by the holding. I'm bothered by the complexity of the court's reasoning in reaching the conclusion. Expecting employees who are on leave and who have not said when they will (or expect to) return to keep in daily contact with the employer doesn't seem to be onerous. The employee isn't being denied FMLA leave – just being told the conditions expected of him to make sure the leave is valid. Yet, the decision was unpublished, a 2 to 1 split, and the 2-judge majority seemed to say the employer could not fire the employee for having not called-in while on FMLA leave but it could fire him for not calling in while the employee was on sick-leave that ran concurrent with the FMLA leave.

I'll simplify the facts to eliminate some that are unimportant. The employer/county had a sick leave policy that ran concurrent with its FMLA leave. The sick leave policy (which was set forth in the county's union contract) required employees to contact the employer every day they were absent unless the employee was hospitalized or had provided a written doctor's statement saying when the employee was expected to return to work. The employee – who had a history of absences and was on a last chance agreement for other issues - missed work, failed to provide a doctor's note and failed to comply with the daily call-in requirement. He was conditionally certified for FMLA at the time he was fired.

The district court granted summary judgment for the employee reasoning that the county's daily call-in requirement while on sick-leave interfered with the employee's FMLA rights. The court submitted the case to a jury to determine damages. The jury, however, ruled for the county, saying the employee was not entitled to any damages because the employer would have fired the employee anyway, as the employee had failed to comply with a last chance agreement that had nothing to do with his leave. Both sides appealed.

The Sixth Circuit reversed the district court's ruling that the county's call-in policy violated the FMLA. The majority held the daily call-in requirement did not violate the FMLA because the "procedure 'merely sets forth obligations of employees who are on leave, regardless of whether the leave is pursuant to the FMLA.'" Quoting Callison v. City of Philadelphia, 430 F.3d 117, 120 (3d Cir. 2005). The court also cited with approval the holding Gilliam v. U.P.S., 233 F.3d 969 (7th Cir. 2000), that "nothing in the FMLA or the implementing regulations prevents an employer from enforcing a rule requiring employees on FMLA leave to keep the employer informed about the employee's plans."

One judge dissented. While the judge agreed with the majority's decision to reverse summary judgment for the employee, he felt the jury should have decided whether the firing was motivated by the taking of FMLA leave. To this judge, the FMLA and sick leave issues had to be kept separate. There is a question of motive, it seems the judge was saying, anytime an employer does anything more than refuse to grant paid sick leave benefits when the employee does not satisfy the requirements for sick leave.

What tripped up the court were several prior court decisions which had held that, as long as the reason is "unrelated to the employee's exercise of FMLA rights," the employer may refuse to reinstate (or take other adverse action against) an employee who has taken FMLA leave. One illustration of this rule (though by no means the easiest to understand) occurred in a decision I recounted last March, where the employer fired the employee because of misconduct that the employer learned about when the employee had taken FMLA leave. But when the employee fails to comply with reasonable (more on what that means in a moment) notice requirements, it only needlessly complicates things to insist that the reason for firing must be "unrelated" to the exercise of leave. That is splitting a fat hair too finely.

Of course, the FMLA prohibits employers "from discriminating against employees or prospective employees who have used FMLA leave." 29 C.F.R. § 825.220(c). This, the regulation explains, requires equivalent treatment of employees on FMLA leave and other types of leave: "if an employee on leave without pay would otherwise be entitled to full benefits (other than health benefits), the same benefits would be required to be provided to an employee on unpaid FMLA leave." Id. In this context, the regulation simply means that employers cannot impose more onerous notice conditions on employees for taking FMLA leave than it imposes on other types of leave. So it shouldn't matter that the call-in requirement is part of the sick leave requirement but not part of the FMLA leave requirement; all that should matter is that the conditions for leave do not discriminate against FMLA takers.

The confusion also seems to have been caused by the FMLA regulation that permits paid leave to run concurrent with unpaid leave. Simply, this regulation provided (and still provides in the 2009 FMLA amendments) that the employer may deny paid leave if the employee fails to comply with the "additional requirements" for obtaining paid leave but the employee is still entitled to unpaid FMLA leave. 29 C.F.R. § 825.207(a).

Now, as to the court's decision, it didn't ultimately make a difference that the call-in requirement was an "additional requirement." The county's denial of paid leave was valid and so too was firing the employee for violating the sick-leave requirements (as the court held). What troubles me is whether the call-in requirement was really an "additional requirement" in the first place. If not, then there is no reason to worry about the employer's motive.

Suppose, for the sake of argument, an employer has no "sick leave" policy (paid or unpaid); all it does is fully comply with FMLA requirements. Like Butler County, the employer requires employees to call-in every day until the employee provides a medical note that includes an expected return to work date. To carry the court's reasoning to its logical conclusion, the employer probably violated the FMLA because it would not be able to show its decision was "unrelated" the exercise of FMLA rights. There would be no violation, however, if only the employer had created a piece of paper (identical in substance to its FMLA policy) entitled "Sick Leave Policy." That borders on the ridiculous (to be polite).

What complicates matters is another Sixth Circuit decision, Cavin v. Honda, 346 F.3d 713 (6th Cir. 2003). Honda fired an employee because he did not comply with Honda's leave notification requirements when he missed work for medical reasons. The employee had called in to security (every day) but not to Honda's leave compliance department. The court of appeals invalidated Honda's notice requirement entirely, saying that "employers cannot deny FMLA relief for failure to comply with their internal notice requirements." Under the reasoning in Cavin, any notice requirement other than that allowed by the FMLA regulations (which at the time did not say what notice can be required) would seem to be an "additional requirement." Maybe Honda's notice requirements were too onerous under the circumstances – maybe Honda should have been more flexible and treated the employee's calls to security as adequate notice. That wasn't what the court addressed, however.

Fortunately, the 2009 FMLA regulations change the result in Cavin. Explaining the purpose of the rule change (to 29 C.F.R. § 825.303) the DOL recognized that "call-in procedures are a routine part of many workplaces and are critical to an employer's ability to manage its work force. Adherence to such policies is even more critical when the need for leave is unforeseen." 73 Fed.Reg. 68009 (Nov. 17, 2008). Thus, the "final rule in § 825.303(d) includes the provision that FMLA-protected leave may be delayed or denied when an employee does not comply with the employer's usual notice and procedural requirements and no unusual circumstances justify the failure to comply." This makes the rule on notice for unforeseen leave consistent with the requirements for foreseeable leave. See 29 C.F.R. § 825.302(d).

This doesn't mean that it is open season to create new and onerous requirements or to deny FMLA leave whenever there is a non-compliance. The DOL expects employer policies to be consistent with the principle that when the need for leave is unforeseen, the notice will be provided "as soon as practicable" under the circumstances.

Now that the FMLA regulations permit employers to expect compliance with their usual and customary notice requirements, employers can impose reasonable notice requirements as part of their FMLA without running afoul of the FMLA. Being reasonable and taking into account the individual circumstances ("no unusual circumstances") is the key. If you go overboard in policy or practice you are asking for it.

The same should be true for reasonable "call-in" requirements that take into account the individual circumstances (though this can't be guaranteed as it can take some persuading of even good judges to get them to discard past court holdings). It is one thing to expect to be told (if possible) an expected date the employee should be able to return. But treating every employee who needs FMLA (but has not yet provided medical certification) as if the employee must wear a GPS tracked ankle bracelet is probably not a good idea (exceptional circumstances aside).

Of course, remember that policies (and practices) must not impose more onerous prerequisites for taking FMLA leave than for non-FMLA leave. There are other complications (in the new FMLA regulations) I've not mentioned here so, as always, but especially where the FMLA is involved, consult with qualified counsel before betting the farm.