This Employment Law Update was furnished by Masterman, Culbert & Tully LLP, One Lewis Wharf, Boston 02110, (617) 722-8100, www.mctlaw.com and addresses a range of issues from statutory amendments to recent cases to help keep you informed of relevant changes in the employment law field and to assist you in managing your workforce.
• Nursing Mothers Entitled to Reasonable Break Time. The federal health care reform legislation enacted by President Obama on March 23, 2010 contains an amendment to the federal Fair Labor Standards Act requiring employers to provide nursing mothers with reasonable break time, as needed, to express breast milk during the first year after her child’s birth. Covered employers are also required to provide their employees with a private place, other than a bathroom, in which to take these breaks. Employers are exempt from these requirements if they have fewer than 50 employees and if providing the breaks would constitute an undue hardship by causing significant difficulty or expense. Pursuant to this amendment, employees need not be compensated during this break time; however, employers should note that the Fair Labor Standards Act regulations provide that short breaks between 5 and 20 minutes must be counted as time worked (and paid), but based on the language of the amendment, it appears that Congress intended that these breaks be an exception to these general regulations and that the time need not be counted as time worked or paid. In addition, with respect to the exemption based on undue hardship, the amendment does not state who is to make the determination whether providing the breaks would constitute an undue hardship. Regardless of this particular amendment, in light of a 2007 Massachusetts Appeals Court decision in which the Court acknowledged that “any condition premised on a pregnancy-related condition constitutes sex discrimination,” and identified breastfeeding as a “post-pregnancy condition,” employers should carefully consider any request for accommodation by breastfeeding employees because failure to comply with the amendment my trigger a claim of gender discrimination.
• COBRA Premium Reduction Period Extended. On April 15, 2010, President Obama signed into law a further extension of the COBRA premium subsidy legislation to extend the time period for a qualifying event through May 31, 2010 (e.g. an involuntary termination occurring up through May 31, 2010). As a result, employees who are otherwise eligible for COBRA continuation coverage as a result of their losing their group health insurance coverage as a result of an involuntary termination between March 2, 2010 and May 31, 2010, will be eligible to elect COBRA continuation coverage and pay just 35% of the COBRA premium for up to 15 months. This extension does not affect the maximum periods of COBRA continuation coverage nor does it extend beyond the 15-month maximum period for the premium subsidy. President Obama has urged lawmakers to pass legislation to extend the COBRA premium subsidies to employees laid off through the end of the year, which is currently pending.
• Updated Identity Theft Regulations Tailored to Small Employers. In response to the concerns of small businesses regarding the Massachusetts identity theft regulations, the Office of Consumer Affairs and Business Regulation has released updated regulations that took effect March 1, 2010. The regulations make clear that the approach to data security is a risk-based approach. Under this risk-based approach, a business, in developing a written security program, should take into account its size, nature of its business, the kinds of records it maintains, and the risk of identity theft posed by its operations.
• Misclassification is on the federal DOL radar screen. As we in Massachusetts are aware, misclassification of workers as independent contractors can have a significant and potentially expensive impact upon employers and their officers and managers. This is because of the Massachusetts statute creating a presumption that workers are employees and setting out strict factors to be proven by the employer where it seeks to classify a worker as an independent contractor. In addition, liability for misclassification includes mandatory triple damages and mandatory attorney’s fees, as well as individual exposure with respect to the employer’s officers and managers, even where the employer is a corporation (as a result of which, typically, its officers and managers have no personal liability for acts of the corporate entity). The federal Department of Labor (“DOL”) is now focused on the misclassification issue, emphasizing it as an important item in its ongoing 2010 enforcement strategy. Among other things, the DOL strongly supports legislation recently introduced at the federal level regarding the issue of misclassification. In a recent statement, the DOL’s Secretary of Labor identified that one of her goals in supporting the misclassification legislation is to secure minimum and overtime wages and to help middle class families remain in the middle class, with the issue of misclassification being key to attaining those goals because misclassification of employees as independent contractors deprives employees of critical workplace protections and employment benefits to which they are legally entitled. Now, more than ever, employers must analyze their workforce and the classifications of their workers to insure compliance with the Massachusetts law and protect against potentially costly, personal liability.
Case Law Updates
• Suit for Failure to Hire Based on Applicant’s Nicotine Use Dismissed. Last summer, the District Court of Massachusetts granted summary judgment for an employer dismissing the claim of an applicant who was not hired after he tested positive for nicotine. Rodrigues v. EG Systems raises two important issues. Firstly, where an employer makes the job offer contingent upon a satisfactory drug screening, even if the individual begins work, he or she will not necessarily be considered an employee. Rodrigues’s ERISA claim failed because the employer’s health plan included carefully defined eligibility requirements which excluded those to whom only a conditional job offer had been made. The second issue raised by this case was whether the employer’s discovery of nicotine in the applicant’s system constitutes an invasion of privacy. Here, Rodrigues smoked in public and made his use of nicotine known to his employer by having a pack of cigarettes visible in his car, thereby defeating his invasion of privacy claim. Remarkably, Rodrigues did not challenge the test itself as being an invasion of privacy so there was no determination as to whether the testing for nicotine use (lawful, off-the-job behavior which arguably does not affect job performance) constitutes an invasion of privacy. This case demonstrates that employers conducting drug screening should (1) carefully review their benefit plans to ensure that the eligibility criteria are clearly defined and (2) be mindful that the circumstances under which Massachusetts courts have found that drug testing constitutes an invasion of privacy is very fact specific and still developing.
• Maximum Age Restriction Deemed Unconstitutional. The Montana Supreme Court held that a statute requiring that firefighters not be more than 34 years of age at the time of their initial appointment was unconstitutional. Although this decision is not controlling in Massachusetts, it is interesting as generally age claims are brought under federal and/or state anti-discrimination laws which, under the Massachusetts age discrimination statute and the federal Age Discrimination in Employment Act, protect only those age 40 and older. In finding that the age requirement was wholly arbitrary because there was no factual or empirical basis, the Montana Supreme Court ruled that the state had violated the Montana equal protection clause. The Massachusetts Constitution’s equal protection clause is not drafted identically to that of Montana; however, employers should carefully consider whether an age restriction is a bona fide occupational qualification with a rational basis.
• Employee Manual Deemed an Implied Contract. The Appellate Division of the Massachusetts District Court recently upheld a decision that serves to remind employers that an employee manual will, in certain circumstances, be treated as an implied contract between the employer and the employees. In Buttrick v. Intercity Alarms, LLC, the lengthy employee manual included a progressive discipline policy which Intercity Alarms failed to follow when terminating Buttrick’s employment (resulting in a $41,888 award to Buttrick). During the trial, Buttrick testified that he was required to sign the non-competition agreement in the manual, and he believed he was bound by the manual. Before issuing or amending an employee manual, employers should consult with employment counsel to minimize the risk that it will be deemed to be an implied contract.
If you have any questions about these topics, please do not hesitate to contact Mary E. O’Neal at firstname.lastname@example.org, Patricia A. Granger at email@example.com or Angela L. Rapko at firstname.lastname@example.org. You may also reach us by telephone at (617) 722-8100. We also welcome your inquiries regarding other employment-related issues you may be facing in your business.