by Jack B. Harrison
Effective in 2004, Ohio’s “apology” statute, ORC 2317.43, was designed to protect physicians from having statements they might make in the context of providing care and comfort to patients used against them in a subsequent medical malpractice action. Specifically, Ohio’s “apology” statute states:
In any civil action brought by an alleged victim of an unanticipated outcome of medical care or in any arbitration proceeding related to such a civil action, any and all statements, affirmations, gestures, or conduct expressing apology, sympathy, commiseration, condolence, compassion, or a general sense of benevolence that are made by a health care provider or an employee of a health care provider to the alleged victim, a relative of the alleged victim, or a representative of the alleged victim, and that relate to the discomfort, pain, suffering, injury, or death of the alleged victim as the result of the unanticipated outcome of medical care are inadmissible as evidence of an admission of liability or as evidence of an admission against interest.
What has been perplexing to Ohio’s courts has been whether statements by a physician of responsibility were within the reach of this statute.
For example, in Davis v. Wooster Orthopaedics & Sportsmedicine, the Ninth District Court of Appeals held that statements of sympathy or apology could be separated and distinguished from statements of fault or responsibility. In Davis, the Court of Appeals held that, under the “apology” statute, statements of sympathy or apology would be inadmissible, but that statements of fault would be admissible. Similar reasoning was followed by the Franklin County Court of Common Pleas in Dimitroff v. Grischow, where the trial judge facing a physician’s statement that “he was sorry, he had a made a mistake,” concluded that the “sorry” statement was inadmissible under the “apology” statute, but that the “mistake” statement was admissible.
Recently, the Ohio Supreme Court was faced with the reach of the “apology” statute in Johnson v. Smith. In a decision issued, April 13, 2013, the Supreme Court reversed the decision of the Court of Appeals of the Eleventh District and signaled a fairly broad reading of the “apology” statute.
In Johnson, Dr. Smith performed a gall bladder operation on Ms. Johnson in 2001. Complications resulted from the surgery and Ms. Johnson was forced to return to the hospital. Subsequently, these complications required that she be transferred to another hospital for treatment. Apparently in an effort to give comfort to an emotional Ms. Johnson, Dr. Smith took her hand and said, “I take full responsibility for this. Everything will be okay.”
Ms. Johnson and her husband then sued Dr. Smith in 2002 for medical malpractice, but voluntarily dismissed the case in 2006. The Johnsons then refiled their case in 2007. In a pretrial motion, Dr. Smith sought to have his statement excluded under the “apology” statute. The trial court granted Dr. Smith’s motion and excluded his statements under the “apology” statute, concluding that these were statements of comfort. The jury returned a verdict in favor of Dr. Smith.
On appeal, the Court of Appeals for the Eleventh District held that the “apology” statute did not apply to Dr. Smith’s statement because it was not in effect at the time the statement was made. The Court of Appeals further indicated that a reasonable jury could have concluded that Dr. Smith’s statement was not a statement of comfort, but rather an admission of fault.
In reversing the Court of Appeals, the Supreme Court first held that the “apology” statute applies to any cause of action filed after September 13, 2004, the effective date of the statute, regardless of when the statement was made. The Supreme Court further held that it was not an abuse of discretion for the trial court to have excluded Dr. Smith’s statement under the “apology” statute, in that the trial court “determined that Dr. Smith was faced with a distressed patient who was upset and made a statement that was designed to comfort his patient.”
While the Supreme Court’s decision in Johnson appears to give broad latitude to a trial court to determine whether a provider’s admission of responsibility is protected under the “apology” statute, health care providers must be cautious in providing statements to patients in situations where unanticipated outcomes result from their medical care. It is likely that courts will continue to admit statements that can best be characterized as statements of fault, where words such as “mistake, “error,” or “fault” are used.
by Jack B. Harrison
On Tuesday, May 7, 2013, in National Ass’n of Manufacturers v. National Labor Relations Board, a three-judge panel of the United States Court of Appeals for the D.C. Circuit issued an opinion striking down a controversial rule issued in 2011 by the National Labor Relations Board (“NLRB”). This rule would have required companies to post a notice affirmatively advising employees of their rights under federal labor law, including the right to form or join a union. While the rule had been scheduled to go into effect on April 30, 2013, its implementation had been stymied by the issuance of an injunction and several court challenges.
The Court of Appeals was troubled by the fact that the rule made the failure of a company to post the required poster an unfair labor practice in itself or, at a minimum, prima facie evidence of union animus in an unfair labor practice proceeding. In striking down the rule, the Court of Appeals relied upon section 8(c) of the National Labor Relations Act (“NLRA”), which states:
The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.
29 U.S.C. § 158(c). Using this provision, the Court of Appeals ultimately concluded that if the expression of views was protected under the NLRA against a charge that such an expression was an unfair labor practice, so long as the expression was noncoercive, so too was silence or the failure to express a particular viewpoint. In his opinion, Senior Judge Randolph wrote, "[t]his is why, for example, a company official giving a noncoercive speech to employees describing the disadvantages of unionization does not commit an unfair labor practice if, in his speech, the official neglects to mention the advantages of having a union." As a result, the Court of Appeals concluded that the NLRB’s poster requirement rule violated section 8(c), in that the rule made the failure of an employer to speak in a particular manner a per se unfair labor practice.
This may mean the end of the line for the NLRB’s poster requirement rule. However, the NLRB could seek rehearing of this decision by the en banc Court of Appeals for the D.C. Circuit or the NLRB could seek to immediately appeal this decision to the Supreme Court. Additionally, a federal district judge in South Carolina in April, 2012 also held that the NLRB lacked the authority to issue this poster requirement rule. That South Carolina decision is currently on appeal to the United States Court of Appeals for the Fourth Circuit. In the unlikely event that the Fourth Circuit should reverse the district court’s holding and uphold the NLRB’s rule, a split in the Circuits would exist, making it more likely that the Supreme Court would ultimately resolve the issue.
Thus far, the NLRB has had a very rough ride before the D.C. Court of Appeals of late. Because implementation of the poster requirement rule has been placed on hold as a result of various challenges, employers are currently relieved of the obligation to prominently display the poster in their workplaces. Prudent employers should continue to monitor this issue and the actions taken by the NLRB in this area. We will continue to provide updates as new issues arise.
by Jack B. Harrison
The past few years have seen the rise of litigation involving “collective actions” under the Fair Labor Standards Act (“FLSA”). In these collective actions, groups of employees have alleged that they were denied required overtime pay by employers in violation of the FLSA. In a recent decision, Genesis Healthcare Corp. v. Symczyk, the United States Supreme Court, in a 5-4 decision, upheld one possible defense strategy for employers in attempting to resolve FLSA collective actions early in the litigation process and before the collective action has been certified by the court
In Symczyk, Laura Symczyk, who worked as a nurse, claimed that Genesis Healthcare had violated the FLSA by automatically deducting break time from her and other employees’ pay, regardless of whether they performed compensable work during their breaks. Symczyk sued on her own behalf and on behalf of “all other persons similarly situated” to recover compensation for that time, along with attorneys’ fees and liquidated damages. Early in the case and before the court had ruled on whether a collective action could be properly certified in this case, Genesis Healthcare made an offer of judgment, pursuant to F.R.C.P. 68, to Symczyk for $7,500 plus costs and attorneys’ fees to be determined by the Court. This offer represented all that Symczyk could possibly recover individually in the case. However, she made no response to the offer of judgment before it expired, thus, in effect, rejecting the offer. Genesis Healthcare then sought dismissal of the case, arguing that since it had offered Symczyk all that she could possibly recover individually in the case, no case or controversy remained for the court to adjudicate. The court granted Genesis Healthcare’s motion to dismiss, ending the lawsuit before any decision was made as to the certification of the collective action.
On appeal to the United States Court of Appeals for the Third Circuit, Symczyk argued that, despite the offer of complete relief, she continued to have a personal stake in the litigation and further argued that the interests of potential plaintiffs that had yet to join the collective action creates ongoing jurisdiction for the court. The Court of Appeals reversed the decision of the district court dismissing the case, concluding that while Symczyk’s claim was moot as a result of the offer of judgment, the overall collective action was not made moot as a result. The Court of Appeals rationale for this decision was that to allow defendants to “pick off” named plaintiffs before certification would undermine the goals of collective actions.
In its decision, the Supreme Court did not decide whether an offer of judgment for full relief always moots a claim for relief even where the offer is declined. Because a split among the Courts of Appeals of the various circuits exists on this fundamental issue, it had been hoped that the Supreme Court would resolve this issue. Instead, the Supreme Court, relying on Third Circuit precedents, held that it was the law of the Third Circuit that a rejected offer of judgment for full relief moots the claim of the individual litigant. Based on this conclusion, the Supreme Court then held that, in a collective action context, where the claim of the individual named plaintiff is mooted, the FLSA collective action (unlike a class action certified under Federal Rule of Civil Procedure 23) has no remaining independent legal status, and dismissal of the entire lawsuit is proper.
This decision impacts FLSA collective-action litigation for both plaintiffs and defendants, including plaintiffs’ use of the discovery process to identify and then join additional plaintiffs to the collective action and defendants’ use of individual offers of judgment to resolve collective actions early in the litigation process and before certification. The Supreme Court essentially endorsed a strategy by defendants to try and “pick off” individual named plaintiffs in collective actions by making offers of judgment to those named plaintiffs in an effort to moot the claims of the individual named plaintiffs prior to a collective action being certified. This would arguably be an effective defense strategy, particularly in those jurisdictions where a rejected offer of judgment moots a claim. A prudent employer might conclude that paying the full amount an individual plaintiff claims to be owed, along with some measure of attorney’s fees, might well be preferable to being involved in a large collective action with significant risks and defense costs.
by Hans M. Zimmer
Having done estate planning for 30 years, what I have come to realize is that many people from all walks of life not only do not have a will but in addition, do not really understand what a will is and what it does. Within the last month, I have given presentations at 2 seminars put on by employers for their employees: one was at an engineering firm, the other was at the local office of a government agency. The employees attending the seminar at the engineering firm nearly all had advanced degrees in engineering, while the employees at the government office nearly all had advanced degrees in either chemistry or biology. I started both seminars with a very basic question: who doesn’t have a will? Out of a total of approximately 60 people attending the seminars, it may surprise you to hear that more than half did not have a will or any form of estate plan in place. The follow-up question that I asked is: Why not? The answer typically came back as that the people in question did not think they needed a will or that they did not understand what a will really could and should do for their family. In light of these responses, this article will try to answer some basic questions and also clear up some common misconceptions about wills.
In its most basic form, a will is a document that you sign in front of 2 witnesses who cannot be family members that spells out who should receive your property if you pass away. This includes your house, your car, your furniture, your bank accounts and anything else that you own (with some exceptions). How many people in the seminars I gave do you think owned some or all of those items? Actually everyone in those rooms had property in various shapes and sizes that would be governed by a will. After I explained this basic role of a will, the question came up: what happens if I die without a will?
If a person dies without a will, Ohio law states that this person died “intestate.” What exactly does that mean? A common misconception is that if a person dies without a will, his or her property goes to the State. That is certainly wrong. Ohio law spells out a detailed scheme for distributing a deceased person’s property if that person dies without a will. Without spelling out the law in all of its details, Ohio laws would say that a deceased person’s property goes to his or her spouse, and if there is no spouse, but surviving children, then the property goes to the children of the decedent. If a person has neither a spouse nor children, Ohio law would give the property to the deceased person’s brothers or sisters. If no brothers or sisters survive, the property is transferred to the deceased person’s parents. Several more steps are provided in the law to insure that a deceased person’s relatives receive the property and only if no relatives are found, does a deceased person’s property revert to the State.
The next question would be: since a state law exists that really deals with the situation, why should I bother paying a lawyer to put a will together? The first reason is that the state law may not really reflect what you would want to happen. You may want to have your property pass to certain of your relatives and not others or not in equal shares. You may have some charitable objectives. None of these considerations would be taken into account under state law. The second reason is that the administration of a person’s estate is substantially more complicated for a person who dies without a will. In a will, not only do you designate who gets your property, but you designate a person, known as an executor, who is in charge of transferring your property. Without a will, the court appoints a person, who you may or may not know, to administer your estate. While an administrator has the same authority as an executor that you designate, 2 substantial differences exist that any person should take into account. An administrator appointed by the court will have to post a bond with Probate Court equal to double the value of your assets. Depending on the value of your property, this may cost several thousand dollars or more. An executor named in your will does not have to deal with this requirement. In addition, a court appointed administrator may not know much about your family and will struggle to find addresses or other contact information. It is likely that any administrator will be required by the court to prove that notice of the estate is given to all your relatives and the only way to insure that is to publish a notice in a local newspaper for several weeks. This again adds substantial cost to the administration of your estate.
If a person is not worried about his property in considering whether to have a will prepared, then the next main reason for having a will prepared is to designate a person to take care of your children, if any. Children under the age of 18 are required to have a legal guardian. Obviously, if a person is married, a surviving spouse automatically becomes guardian. But what if both parents die in an automobile accident or some other situation? Who takes care of the children then? In a will, a person can designate a family member to act in that role and this person would be somebody that is known and trusted. Without a will, the guardian would be appointed by a state agency and any relatives of the decedent would have to work through the state agencies to be able to help out any children under the age of 18. That process not only adds cost to the estate administration but it potentially places any children in an undesirable situation.
Reduced to its basics, every person should at least have a basic will to insure that their property goes to intended recipients and their children are taken care of by trusted individuals. Why take chances on what happens when the process of putting a will together is not that difficult or expensive?
by Jack B. Harrison
On March 27, 2013, the United States Supreme Court, in Comcast Corp. v. Behrend, Case No. 11-864 (U.S. Mar. 27, 2013), issued an important decision regarding the role of a district court in determining whether to certify a class under Federal Rule of Civil Procedure 23(b)(3). Consistent with its prior decisions in this area, specifically Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S. 2011), the Court reasserted its position that a district court must conduct a “rigorous analysis” as to whether a putative class satisfies the predominance requirement of Rule 23(b)(3), even where that “rigorous analysis” forces the district court to conduct some review of the merits of the underlying claim. The Court further indicated that, in certain cases, the individualized nature of the damages claimed might preclude class certification. The importance of this decision is that it provides defendants with a clearly articulable and reasonable defense to class certification.
Factual and Procedural Background
The original class action in Comcast had been brought by subscribers to Comcast’s cable television services. The plaintiffs alleged that Comcast’s operations in the Philadelphia area violated federal antitrust laws, leading to the elimination of competition and anti-competitive pricing. Ultimately, the plaintiffs asked the district court to certify a class containing approximately two million current and former Comcast subscribers. While the plaintiffs asserted four different theories of injury in the case, the district court accepted only one of these theories – the “overbuilder theory” – as forming an allowable basis for class certification. However, the damage model that was offered by the plaintiffs’ expert in support of class certification was based on calculated damages for all four theories of injury, rather than providing a damage calculation specifically related to the one theory of injury that the district court had accepted. Despite this flaw in the analysis, the district court certified the class.
In reviewing the certification decision on appeal, the United States Court of Appeals for the Third Circuit rejected the argument that class certification was improper because plaintiffs’ damage calculation was not limited to the specific theory of injury on which class certification was based. While the Court of Appeals was divided on this issue, the Court of Appeals affirmed the certification decision of the district court on the basis that the challenge to the methodology used for the calculation of damages required a review of the merits of the underlying substantive claim which had “no place in the class certification inquiry.” Behrend v. Comcast Corp., 655 F.3d 182, 207 (3d Cir. 2011).
Supreme Court Decision
The Supreme Court, in a 5-4 decision authored by Justice Scalia, reversed the decision of the Court of Appeals, holding that it was improper for the Court of Appeals to refuse to consider the individualized questions raised by the flaws in plaintiffs’ damage calculation simply because such a consideration would invariably force the district court to make some inquiry into the merits of the underlying substantive claim at the class certification stage. The Supreme Court held that this approach by the Court of Appeals was inconsistent with its precedents, most recently in Wal-Mart, requiring a “rigorous analysis” into whether the requirements of Rule 23 are satisfied, even where that “rigorous analysis” forces the district court to inquire into the merits of the underlying substantive claim.
In its decision, the Court focused on four key areas that have important implications for future class certification decisions by district courts:
- The Court made it clear that it may well be legal error for a district court to refuse to review the evidence offered by the plaintiffs to determine whether the requirements of the class-certification rule have been satisfied on the basis that the evidence relates to the merits of the case.
- Building upon its decision in Wal-Mart, the Court stated that the “predominance” requirement of Rule 23 is more demanding in a Rule 23(b)(3) damages class action than in other types of class actions.
- The Court indicated that expert evidence that is offered in support of class certification, specifically evidence related to damage calculations, must be reasonably linked to the specific theory of liability on which a plaintiff seeks certification.
- Perhaps most importantly for future class certifications decisions, the Court concluded that the individualized nature of damages in a case such as this often “will inevitably overwhelm questions common to the class.”
In dissent, Justice Ginsburg and Breyer sought to limit the reach of the majority opinion by asserting that because the briefing of the parties had focused on the standard for the admissibility of expert opinion at the class certification stage, the Court should not have expanded its review to include the question of the adequacy of the plaintiffs’ damage model to support class certification. In seeking to limit the opinion of the Court, the dissent asserted that the opinion of the Court “should not be read to require, as a prerequisite to certification, that damages attributable to a classwide injury be measurable on a classwide basis.”
Importance of the Comcast Decision for Future Class Actions
This decision, following the trajectory from the Court’s decision in Wal-Mart, further clarifies the role district court’s must play in analyzing the requirements for certifying a class. The Court makes it clear that the “rigorous analysis” to be conducted by the district court must indeed be rigorous, particularly in Rule 23(b)(3) damages class actions, even if it requires the district court to delve into the merits of the underlying claims. The district court must conduct a thorough analysis of whether the damage calculation methodology put forth by plaintiffs in support of class certification is reasonably tied to the asserted theory of liability or whether it is simply speculative. The Court also makes it clear that where damages are individualized, rather than subject to classwide proof, class certification may be inappropriate. The result of this decision, along with the Court’s prior decision in Wal-Mart, is to continue a trend where it may become increasingly difficult and expensive for plaintiffs’ to obtain class certification in Rule 23(b)(3) damages class actions.
by Jack B. Harrison
In Lineberry v. Detroit Medical Center, et al., Case No. 11-13752 (E.D. Mich., S.D. Feb. 5, 2013), a court was faced with the question of whether an employee’s posts on Facebook could form the basis for the employee’s termination for dishonesty, even when the employee was on a lawful FMLA leave.
In Lineberry, an RN, employed at the Detroit Medical Center, was on FMLA as a result of her claim that she could only walk or stand for limited periods of time. However, the employee posted photos to Facebook of her vacation in Mexico, photos of her riding in a motorboat, photos of her lying on her side on a bed holding up two bottles of beer in one hand, and of her standing and holding both her infant grandchildren, one in each arm. Additionally, she had made other postings indicating that she was far more active than she had represented when applying for FMLA leave. These postings on Facebook were discovered by the employee’s coworkers, who reported them to hospital management.
While the Mexico vacation had been preapproved by the employee’s doctor, the employee had represented to her supervisor that she employed wheelchairs in all airports through which she travelled. The employee’s supervisor responded to an email complaint from the employee regarding the fact that the employee had not received a get well card from staff by stating that “the staff were waiting until you came back from your vacation in Mexico to determine the next step. Since you were well enough to travel on a 4+ hour flight, wait in customs lines, bus transport, etc., we were assuming you would be well enough to come back to work.” The employee responded to this email from her supervisor as follows:
As far as the airport, customs, etc., goes, I was in a wheelchair because I couldn’t stand that long. As far as the plane goes (3.5 hr. flight), I was up and down the entire flight, but sitting is so much easier on me than standing. I am able to walk short distances, but am unable to stand for more than 10 minutes at a time.
* * * * *
I want to come back to work as soon as possible and wouldn’t have went to Mexico if a wheelchair was not available at both airports so I would not have to stand for any length of time.
When the employee was subsequently asked at a meeting with hospital management about this trip, she reiterated her contention that she had used wheelchairs throughout the trip. When the employee was then confronted with her Facebook postings and reminded that all airports have security cameras throughout, she admitted that she had lied about the use of wheelchairs on her trip and admitted that she had never used a wheelchair at all on the trip. As a result of these admissions, the employee was terminated by the hospital for dishonesty, even though she was still on a lawful FMLA leave.
Following her termination, the employee filed suit against the hospital. In her suit, the employee claimed that the hospital had violated her rights under the FMLA by refusing to reinstate her and by retaliating against her for taking the FMLA leave in the first instance. The Court, in granting the hospital’s motion for summary judgment, held that the undisputed evidence, including the employee’s admissions and Facebook postings, supported the fact that she had been terminated for dishonesty, not in retaliation for taking the FMLA leave.
While prudent employers should always be cautious regarding the termination of an employee who is on a lawful FMLA leave, Lineberry does support the proposition that an employer may lawfully terminate an employee who is on FMLA leave when the employer has undisputed evidence that the employee has been dishonest as to the basis for the need for FMLA leave.
by Jack B. Harrison
Approximately forty states, including Ohio and Kentucky, have laws that allow individuals to obtain a permit to carry a concealed weapon. Typically, these laws place some restrictions on where concealed weapons can be carried. For example, in Ohio, concealed weapons are banned by statute from government buildings, schools, universities, day care centers and bars/restaurants with liquor licenses.
What is not always clear with concealed carry laws is the extent to which they place limits on individuals to carry concealed weapons in the workplace. In many cases, concealed carry laws do not explicitly ban concealed weapons from a workplace, but do allow employers to ban concealed weapons from their property or premises. However, some states limit an employer’s right to restrict employees from storing concealed weapons in vehicles that are parked on the employer’s property. In almost all instances, if an employer wishes to prohibit employees from bringing concealed weapons into the workplace, the employer must place appropriate notices throughout the workplace and, in some states, those notices must contain specific language defined by statute. (This (above left) is an example of a notice that the Ohio Attorney General recommends.)
Where a business is open to the general public and the business wishes to prohibit both employees and patrons from bringing concealed weapons onto the premises, the business must post a sign in a conspicuous location indicating that such weapons are prohibited. Where a business posts such a prohibition, in some states, a person who then knowingly brings a concealed weapon onto the business property in violation of a posted notice may be criminally prosecuted for carrying a concealed weapon.
Whether or not employers post notices prohibiting concealed weapons from the business or the workplace, employers should consider including a written policy within their employee handbook or within their general employment policies that makes it clear that employees are prohibited from carrying concealed weapons onto the employer’s property and into the workplace. This policy should be clearly conveyed to employees in orientation and subsequent training. The policy should specifically identify those areas of the workplace in which an employee is prohibited from carrying a concealed weapon, keeping in mind that some state’s limit an employer’s ability to restrict an employee’s right to keep a weapon stored in their personal vehicle while on the employer’s property.
Given that the law in this area is constantly evolving, prudent employers should periodically review their policies and practices related to concealed weapons with their counsel, revising such policies where appropriate.
by Jack B. Harrison
The United States Supreme Court recently heard arguments in United States v. Windsor, 133 S.Ct. 786 (2012), a case that turns on the constitutionality of a section of the federal Defense of Marriage Act (DOMA). The section of DOMA at issue defines marriage for the purpose of federal law, including federal tax and benefits law, as a legal union between one man and one woman. Specifically, the question before the Supreme Court is whether DOMA violates the equal protection rights of same-sex couples legally married under state law by treating those couples differently than opposite-sex couples for the purposes of federal law.
The factual background of Windsor involves a lesbian couple married legally in Canada. The couple then moved to New York, which recognized their marriage as valid under New York state law. Edith Windsor’s spouse subsequently died, leaving her a sizeable estate. However, because DOMA prohibited the IRS from recognizing her marriage, Ms. Windsor was denied the benefit of the unlimited marital deduction on property left to her by her spouse. As a result of this impact of DOMA, Ms. Windsor was forced to pay a federal tax bill of over $300,000 on the estate left to her by her late spouse. Had Ms. Windsor’s marriage been an opposite-sex marriage, she would have been required to pay no federal tax on the estate. Ms. Windsor then brought a lawsuit against the IRS, asserting that this differential treatment under DOMA violated the Equal Protection Clause of the United States Constitution. Both the district court and the United States Court of Appeals for the 2nd Circuit found that the section of DOMA at issue did, indeed, violate the Constitution. The Supreme Court subsequently agreed to hear the case.
Employers in states where same-sex marriage is recognized or who have employees whose same-sex marriage took place in a state where such marriages are recognized generally see the impact of DOMA in the tax treatment of healthcare insurance benefits that the employer provides for employees’ same-sex spouses. Because federal tax laws are covered within DOMA’s reach, same-sex spouses are not considered a spouse under federal tax laws. As a result of this, unless a same-sex spouse meets the IRS definition of "dependent," the imputed value of the healthcare insurance benefit provided to the same-sex spouse is taxed as additional employee income.
In addition to tax considerations for employers who are providing healthcare benefits to the same-sex spouses of their employees, employers have had to be concerned about the impact of DOMA on the tax treatment of spousal retirement benefits, on benefit contributions (pre-tax for opposite-sex spouses; after-tax for same-sex spouses), on COBRA eligibility for same-sex spouses, on FMLA leave rights, and on ERISA-controlled retirement plans. These concerns have forced many employers to find "workarounds" to lessen the impact of DOMA on their employees. These “workarounds” often involve greater costs and higher administrative burdens for the employer.
In fact, a number of employers joined together to file a “friend of the court” brief in the Windsor case. In their brief, these employers asked the Supreme Court to affirm the decision of the Court of Appeals finding DOMA unconstitutional. Among the employers joining in this brief were Amazon, Apple, CBS Corporation, eBay, Google, Microsoft, Morgan Stanley, Thomson Reuters, and the Walt Disney Company. In their brief, these employers assert that as a result of the operation of DOMA, they are forced to "craft the policies and structure systems that can record gross-up amounts, educate human resources, benefits, and payroll administrators, and manage the dual systems," all to deal with the differential treatment of their employees’ same-sex marriage. These employers made it clear that it is not in their business interest to be forced to treat their employees differently based on the nature of a particular employee’s marriage.
While making predictions regarding what the Supreme Court may do in a particular case, based on oral argument, is a risky proposition, there were some clear signs in the argument that took place in Windsor on March 27, 2013. Based on the questions and comments from the Justices during oral argument, it did appear that there were at least five justices who would be inclined to find DOMA unconstitutional. Justices Kagan, Ginsburg, Sotomayor, and Breyer seemed inclined to find DOMA unconstitutional because of its differential treatment of same-sex couples, while Justice Kennedy appeared concerned that DOMA was an unconstitutional intrusion by the Congress on a matter that had historically been a matter of state’s rights – marriage. It will be very interesting to see how these positions are articulated in any opinions coming from the Court.
The outcome of the case will undoubtedly affect employers that operate in states where same-sex marriage is legal and, perhaps, will have some broader impact. A decision from the Court is not expected until June. We will continue to monitor this matter and provide an update when the decision is issued.
by Jack B. Harrison
While the United States Court of Appeals for the District of Columbia Circuit issued an order on January 25, 2013 striking President Obama's recess appointments to the National Labor Relations Board ("NLRB") as unconstitutional (Noel Canning v NLRB, Case No. 12-1115), the NLRB has given no indication that it intends to slow down in its work. For example, the Board recently rendered two decisions that have importance for employers in the areas of discipline and investigations.
For example, in Alan Ritchey, Inc., 359 NLRB No. 50 (Dec. 14, 2012, published Dec. 20, 2012), the Board held that where a collectively bargained grievance and arbitration system does not already exist, as is normal where an employer and a union are negotiating a first contract, an employer generally may no longer unilaterally exercise discretion in imposing significant discipline upon employees (i.e., suspension and termination). Instead, the Board held that the employer must give the union notice and an opportunity to bargain before imposing such discipline on an employee. This was the first time that the Board had reached such a conclusion. The Board held that that the imposition of individual discipline in such a context was “inherently discretionary.”
As a result, the Board stated that such discipline represented a mandatory topic of bargaining each time discipline took place. The decision is to be applied prospectively from the date it was issued and will be applied to any newly organized companies without collective bargaining agreements or negotiated grievance procedures in effect. Under this ruling, however, employers may still impose discipline without first bargaining where an employee’s continued presence would threaten safety, health, or security.
It will be more challenging for employers under Ritchey to impose serious discipline, such as suspension, demotion, or termination, where no grievance and arbitration system is in place. In cases such as this, an employer must notify and bargain with the union before it issues such discipline. This required bargaining potentially might necessitate furnishing the union with information on past discipline or other matters related to the discipline imposed.
In Piedmont Gardens, 359 NLRB No. 46 (Dec. 15, 2012), the Board overruled its long-standing precedent that all written statements by employee-witnesses are automatically exempt from disclosure as long as they qualify as “witness statements.” Anheuser-Busch, 237 NLRB 982 (1978). In Piedmont Gardens, the issue before the Board was whether written statements by two charge nurses and a CNA regarding alleged misconduct by another CNA at a continuing-care facility were subject to disclosure to the union. Overruling its prior holding that such statements were automatically exempt from disclosure, the Board held that it would now apply a balancing test that weighed the union’s need for the information against any legitimate and substantial confidentiality interest established by the employer. On the specific facts before it, the Board found that one charge nurse’s statement was subject to disclosure, in that it had not been provided under an assurance of confidentiality.
Because the decision in Piedmont Gardens overrules a longstanding precedent and because employers have previously relied on the Board’s holding in Anheuser-Busch, the Board held that its decision will not be applied retroactively. As a result, in cases where the employer’s refusal to provide requested witness statements occurred before December 15, 2012, the NLRB will continue to apply Anheuser-Busch.
As a result of the Board’s decision in Piedmont Gardens, prudent employers should ensure that those who are taking witness statements as part of an investigation provide assurances of confidentiality to those witnesses prior to taking statements from the witnesses. Additionally, employers should take care to document the employer’s specific concerns about its inability to obtain witness statements in the future if disclosure were to take place.
by Stephen S. Holmes & Robert J. Hollingsworth
The first National Master Freight Agreement (“NMFA”), the primary labor agreement between the Teamsters Union and the motor carrier industry, was signed on January 15, 1964. The NMFA was the vision of legendary Teamster President Jimmy Hoffa. It was truly a revolutionary achievement, as for the first time in our country’s history, an entire industry was tied together under one labor agreement.
At its highest point, the NMFA reportedly covered some 450,000 trucking related employees. Since the signing of that first NMFA, the Teamster organized sector of the trucking industry has changed dramatically. The current NMFA was signed in 2008 and will expire this year and now covers only a handful of motor carriers. Attorney Hal F. Franke, who was of counsel with Cors & Bassett since the early 1990’s, spent over 50 years in the field of trucking industry labor relations, working as a representative of management. In this role, Hal gained national prominence and participated in the negotiation of every NMFA from 1964 to the current 2008-2013 agreement.
Sadly, Hal passed away in September of 2012. He was preceded in death by Cors & Bassett attorney Paul R. Moran, who was also a leading labor lawyer in his day, and passed away in 2009. Hal and Paul were long time friends who worked together on many of the major Ohio trucking labor cases.
Cors & Bassett has had a long history in the practice of labor and employment law and representation of motor carriers, which continues to this day. In honor of Hal’s and Paul’s life and their years of service to the trucking industry, Cors & Bassett members Stephen S. Holmes and Robert J. Hollingsworth have co-authored an article on the history of the NMFA. This colorful history is written from the viewpoint of Hal who was interviewed extensively by the authors and who gave the authors access to the many thousands of pages of historical notes and documents accumulated by him during his time in the industry.
To view the article in its entirety, along with photos of Hal, please click here. If you would like a hard copy of the article, please email Steve at firstname.lastname@example.org or Bob at email@example.com.