2008 EMPLOYMENT LAW UPDATE Keith M. Weddington May 7, 2008.

2008 EMPLOYMENT 2008 EMPLOYMENT LAW UPDATELAW UPDATE

Keith M. WeddingtonKeith M. WeddingtonMay 7, 2008May 7, 2008

U.S. SUPREME COURTU.S. SUPREME COURTU.S. SUPREME COURTU.S. SUPREME COURT

Preston v. Ferrer Preston v. Ferrer (Feb. 20, 2008)(Feb. 20, 2008)

• Under FAA, arbitrator designated in agreement Under FAA, arbitrator designated in agreement determines validity of the agreement, regardless determines validity of the agreement, regardless of whether state law would vest that decision in of whether state law would vest that decision in some other forum.some other forum.

• FAA preempts state lawFAA preempts state law

Employees’ ability to challenge arbitration Employees’ ability to challenge arbitration agreements in court is further limited.agreements in court is further limited.


Hall Street Associates, LLC v. Mattel, Inc.Hall Street Associates, LLC v. Mattel, Inc. (March 25, 2008) (March 25, 2008)

• FAA’s provisions for vacating and reviewing arbitration FAA’s provisions for vacating and reviewing arbitration awards are exclusive and cannot be expanded by parties’ awards are exclusive and cannot be expanded by parties’ contract.contract. Limited to corruption, fraud, undue means and if arbitrators guilty Limited to corruption, fraud, undue means and if arbitrators guilty

of misconduct or exceeding their powers.of misconduct or exceeding their powers.

If your agreement provides for broader court review, issue If your agreement provides for broader court review, issue remains as to severability vs. enforceabilityremains as to severability vs. enforceability

Be prepared to live with the resultsBe prepared to live with the results

Choice of knowledgeable and experienced arbitrators is Choice of knowledgeable and experienced arbitrators is increasingly importantincreasingly important


Sprint/United Mgmt. Co. v. MendelsohnSprint/United Mgmt. Co. v. Mendelsohn

(February 26, 2008)(February 26, 2008)

• Admissibility of “me too” testimony by non-Admissibility of “me too” testimony by non-party witnesses to be determined by district party witnesses to be determined by district court on a case-by-case basis. No per se rule.court on a case-by-case basis. No per se rule.

H.R. 101 – policies, preventative actions, H.R. 101 – policies, preventative actions, consistency and thorough documentation are consistency and thorough documentation are essential to help contradict “me too” evidence.essential to help contradict “me too” evidence.


Fed Ex v. HoloweckiFed Ex v. Holowecki (February 27, 2008) (February 27, 2008)

• Under ADEA, no civil action may be filed until 60 Under ADEA, no civil action may be filed until 60 days after a charge alleging unlawful days after a charge alleging unlawful discrimination has been filed with EEOC.discrimination has been filed with EEOC.

• What is a charge?What is a charge?

EEOC intake questionnaire sufficientEEOC intake questionnaire sufficient

Information filed with EEOC that contains a request for Information filed with EEOC that contains a request for EEOC to take remedial actionEEOC to take remedial action


LaRue v. DeWolff, Boberg & Associates, Inc.LaRue v. DeWolff, Boberg & Associates, Inc. (February 20, (February 20, 2008)2008)

• Individual plan participants can recover under ERISA § Individual plan participants can recover under ERISA § 502 (a)(2) for losses to their individual plan account where 502 (a)(2) for losses to their individual plan account where there has been a breach of fiduciary duty – relief need not there has been a breach of fiduciary duty – relief need not inure to the plan as a whole.inure to the plan as a whole.

Look for increased number of lawsuitsLook for increased number of lawsuits

Monitor daily plan administrationMonitor daily plan administration

Check your fiduciary insurance policies, renegotiate if Check your fiduciary insurance policies, renegotiate if necessarynecessary

Require participants to deal directly with TPA’sRequire participants to deal directly with TPA’s

Review TPA contractsReview TPA contracts

PENDING U.S. SUPREME PENDING U.S. SUPREME COURT CASESCOURT CASES


Kentucky Retirement Systems v. Kentucky Retirement Systems v. EEOCEEOC (Argued January 9, 2008) (Argued January 9, 2008)

• Whether any use of age as a factor Whether any use of age as a factor in a retirement plan is “arbitrary” in a retirement plan is “arbitrary” and thus renders the plan facially and thus renders the plan facially discriminatory in violation of discriminatory in violation of ADEA?ADEA?



CBOCS West, Inc. v. HumphriesCBOCS West, Inc. v. Humphries (Argued February 20, 2008)(Argued February 20, 2008)

• Whether a race retaliation claim is Whether a race retaliation claim is cognizable under 42 U.S.C. § cognizable under 42 U.S.C. § 1981?1981?



Meacham v. Knolls Atomic Power Meacham v. Knolls Atomic Power LaboratoryLaboratory (Argued April 23, 2008) (Argued April 23, 2008)

• Whether an employee alleging Whether an employee alleging disparate impact under ADEA bears disparate impact under ADEA bears the burden of persuasion on the the burden of persuasion on the “reasonable factors other than age” “reasonable factors other than age” defense?defense?



Metlife v. GlennMetlife v. Glenn (Argued April 23, 2008) (Argued April 23, 2008)

• Whether the fact that a claim administrator Whether the fact that a claim administrator of an ERISA plan also funds the plan of an ERISA plan also funds the plan benefits, without more, constitutes a benefits, without more, constitutes a “conflict of interest” that must be weighed “conflict of interest” that must be weighed in the judicial review of the administrator’s in the judicial review of the administrator’s benefit determination?benefit determination?

• If such an administrator is deemed to be If such an administrator is deemed to be operating under a conflict of interest, how operating under a conflict of interest, how should such conflict be taken into account should such conflict be taken into account on judicial review?on judicial review?

PENDING U.S. SUPREMEPENDING U.S. SUPREME COURT CASES COURT CASES


Crawford v. Metropolitan Govt. of Crawford v. Metropolitan Govt. of Nashville & Davidson County, TNNashville & Davidson County, TN (cert. granted January 18, 2008 – (cert. granted January 18, 2008 – argument Fall 2008)argument Fall 2008)

• Does the anti-retaliation provision of Does the anti-retaliation provision of section 704(a) of Title VII protect a section 704(a) of Title VII protect a worker from being dismissed because worker from being dismissed because she cooperated with her employer’s she cooperated with her employer’s internal investigation of sexual internal investigation of sexual harassment?harassment?



14 Penn Plaza LLC v. Pyett14 Penn Plaza LLC v. Pyett (cert. granted (cert. granted February 19, 2008, argument Fall 2008)February 19, 2008, argument Fall 2008)

• Whether an arbitration clause in a Whether an arbitration clause in a CBA that was freely negotiated and CBA that was freely negotiated and that clearly waives union members’ that clearly waives union members’ right to judicial forum for statutory right to judicial forum for statutory discrimination claims is enforceable?discrimination claims is enforceable?

U.S. SUPERME COURT – PETITION U.S. SUPERME COURT – PETITION FOR CERT. PENDINGFOR CERT. PENDING

U.S. SUPERME COURT – PETITION U.S. SUPERME COURT – PETITION FOR CERT. PENDINGFOR CERT. PENDING

Taylor v. Progress EnergyTaylor v. Progress Energy

• Fourth Circuit, en banc, ruled in July Fourth Circuit, en banc, ruled in July 2007 that any waiver or release of 2007 that any waiver or release of FMLA rights must be approved by a FMLA rights must be approved by a court or DOL to be enforceable.court or DOL to be enforceable.

• Petition for cert pending. U.S. Solicitor Petition for cert pending. U.S. Solicitor General invited by Supreme Court to General invited by Supreme Court to file brief.file brief.

44THTH CIRCUIT CIRCUIT44THTH CIRCUIT CIRCUIT

Holland v. Washington Homes, Inc.Holland v. Washington Homes, Inc. (May 2007) (May 2007)

• Employer barely sustains summary Employer barely sustains summary judgment victory on former employee’s judgment victory on former employee’s discrimination claim due to employer’s discrimination claim due to employer’s inconsistent documentation regarding reason inconsistent documentation regarding reason for discharge.for discharge.

No good deed goes unpunished.No good deed goes unpunished.

Documentation should be truthful and Documentation should be truthful and accurate – despite desire to be charitable to accurate – despite desire to be charitable to employees.employees.


EEOC v. Firestone Fibers & Textiles, Co.EEOC v. Firestone Fibers & Textiles, Co. (February (February 2008)2008)

• Reasonable accommodation of religious beliefs and Reasonable accommodation of religious beliefs and practices does not require complete practices does not require complete accommodation.accommodation.

• Employer may consider impact of potential Employer may consider impact of potential accommodation on both the employer and co-accommodation on both the employer and co-workersworkers

Employers must still make reasonable Employers must still make reasonable accommodation analysis; but, threshold for undue accommodation analysis; but, threshold for undue hardship is lower than in ADA analysis and hardship is lower than in ADA analysis and employer can consider effect on coworkers.employer can consider effect on coworkers.


Wilson v. Phoenix SpecialtyWilson v. Phoenix Specialty (January 2008) (January 2008)

• Employee, whose Parkinson Disease was Employee, whose Parkinson Disease was controlled by medication, was regarded as controlled by medication, was regarded as disabled by employer. disabled by employer.

• Employer’s use of its company M.D. to Employer’s use of its company M.D. to provide a second opinion after employee was provide a second opinion after employee was cleared to return to work by his own M.D. cleared to return to work by his own M.D. was held to show that employee was was held to show that employee was “regarded as” disabled.“regarded as” disabled.

Careful what you ask for…Careful what you ask for…


EEOC v. Fed ExEEOC v. Fed Ex (January 2008) (January 2008)

• Managers’ awareness of and disregard Managers’ awareness of and disregard of company’s ADA policy held to be of company’s ADA policy held to be malice or reckless indifference sufficient malice or reckless indifference sufficient to support punitive damages award.to support punitive damages award.

TRAIN SUPERVISORS!!!TRAIN SUPERVISORS!!!


Darveau v. Detecon, Inc.Darveau v. Detecon, Inc. (January 2008) (January 2008)

• Scope of FLSA’s anti-retaliation Scope of FLSA’s anti-retaliation provision extends beyond workplace-provision extends beyond workplace-related or employment-related related or employment-related retaliatory acts.retaliatory acts.

• Both former and current employees are Both former and current employees are protected from retaliation.protected from retaliation.


Long v. Dunlap Sports Group America Long v. Dunlap Sports Group America (October 2007)(October 2007)

• While WARN Act requires 60 days notice of While WARN Act requires 60 days notice of plant closing or mass layoff, employer may plant closing or mass layoff, employer may provide pay and benefits in lieu of notice provide pay and benefits in lieu of notice and continued work.and continued work.

• Employees who voluntarily accept other Employees who voluntarily accept other employment prior to the end of 60 day employment prior to the end of 60 day period suffer no “employment loss” under period suffer no “employment loss” under WARN.WARN.


Meson v. GATX Technology Services Meson v. GATX Technology Services Corp. Corp. (November 2007)(November 2007)

• For purposes of determining threshold For purposes of determining threshold requirements for notice of a plant requirements for notice of a plant closing or mass layoff, the fixed closing or mass layoff, the fixed worksite/home base of traveling worksite/home base of traveling employees is the relevant site of employees is the relevant site of employmentemployment

NORTH CAROLINA CASESNORTH CAROLINA CASESNORTH CAROLINA CASESNORTH CAROLINA CASES

Better Business Forms & Products, Inc. v. CraverBetter Business Forms & Products, Inc. v. Craver (November (November 2007 – N.C. Bus. Ct.)2007 – N.C. Bus. Ct.)

• Assignment of an employee’s covenant not to compete in Assignment of an employee’s covenant not to compete in connection with an asset sale triggers the running of the connection with an asset sale triggers the running of the restricted period.restricted period.

• Failure to renegotiate a new covenant will leave new Failure to renegotiate a new covenant will leave new employer unprotected after term of assigned covenant employer unprotected after term of assigned covenant expires.expires.

Determine what employees you “acquired” via asset Determine what employees you “acquired” via asset purchase and consider negotiating a new noncompete.purchase and consider negotiating a new noncompete.

When acquiring assets, be alert to need for new agreements When acquiring assets, be alert to need for new agreements and price being paid for assignment of noncompetes.and price being paid for assignment of noncompetes.

NORTH CAROLINA CASESNORTH CAROLINA CASESNORTH CAROLINA CASESNORTH CAROLINA CASES

Clark v. United Emergency ServicesClark v. United Emergency Services (April (April 15, 200815, 2008

• No public policy wrongful discharge No public policy wrongful discharge claim for constructive discharge.claim for constructive discharge.

Public policy exception to at will Public policy exception to at will employment doctrine remains narrow.employment doctrine remains narrow.

LEGISLATIONLEGISLATIONLEGISLATIONLEGISLATION

Family and Medical Leave ActFamily and Medical Leave Act

• Spouses, parents and children can take 12 Spouses, parents and children can take 12 weeks of FMLA leave for issues arising from weeks of FMLA leave for issues arising from relative’s activation for National Guard or relative’s activation for National Guard or reservist duty – (effective upon DOL issuing reservist duty – (effective upon DOL issuing regulations).regulations).

• Relatives of injured service members can Relatives of injured service members can take a one time 26 week FMLA leave to take a one time 26 week FMLA leave to provide care (currently effective).provide care (currently effective).

Update FMLA policies and forms.Update FMLA policies and forms.


Genetic Information Nondiscrimination Act Genetic Information Nondiscrimination Act

• Health insurance companies may not use Health insurance companies may not use genetic information to set premiums or genetic information to set premiums or determine enrollment eligibility.determine enrollment eligibility.

• Employers may not use genetic information Employers may not use genetic information in hiring, firing, promotion and job in hiring, firing, promotion and job assignment decisions.assignment decisions.

• House & Senate have passed, awaiting House & Senate have passed, awaiting signature by Bush.signature by Bush.


Ledbetter Fair Pay Act of 2007Ledbetter Fair Pay Act of 2007

• Legislative effort to overturn U.S. Supreme Legislative effort to overturn U.S. Supreme Court’s decision in Court’s decision in Ledbetter v. Goodyear Tire & Ledbetter v. Goodyear Tire & Rubber Co.,Rubber Co., requiring filing of charge under Title requiring filing of charge under Title VII 180 days after discriminatory pay decisions.VII 180 days after discriminatory pay decisions.

• Act would treat each payday as an act of Act would treat each payday as an act of discriminatory conduct. discriminatory conduct.

• Act would allow employees to recover damages for Act would allow employees to recover damages for the two year period preceding the filing of a the two year period preceding the filing of a charge.charge.

• Passed in House, failed in Senate. Watch for Passed in House, failed in Senate. Watch for revised version next year.revised version next year.


Trade and Globalization Act of 2007Trade and Globalization Act of 2007

• Goal: assist workers laid off as a result of Goal: assist workers laid off as a result of international tradeinternational trade

• Increases WARN notice to 90 days where Increases WARN notice to 90 days where layoffs occur because of globalizationlayoffs occur because of globalization

• 30 months of COBRA benefits30 months of COBRA benefits

• Passed by House; awaiting Senate actionPassed by House; awaiting Senate action

Keith M. WeddingtonKeith M. WeddingtonAttorney at LawAttorney at Law

Keith M. WeddingtonKeith M. WeddingtonAttorney at LawAttorney at Law

Three Wachovia Center401 South Tryon StreetSuite 3000Charlotte, NC 28202

Direct Dial 704-335-9035Facsimile 704-335-9697Main [email protected]

2008 EMPLOYMENT LAW UPDATE Keith M. Weddington May 7, 2008.

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