Connecticut Supreme Court Holds That Volunteers Are Not “Employees”

The Connecticut Supreme Court, in Commission on Human Rights and Opportunities v. Echo Hose Ambulance et al., ruled that unpaid volunteers are not “employees” for the purposes of the Connecticut Fair Employment Practices Act, which contains Connecticut’s workplace anti-discrimination laws.

Specifically, the Connecticut Supreme Court decided that a volunteer must satisfy the ‘‘remuneration test’’ used to resolve similar federal causes of action, as opposed to Connecticut’s common-law ‘‘right to control’’ test. The remuneration test is comprised of a two-step inquiry. As a threshold matter, the volunteer first demonstrate remuneration. Remuneration may consist of either direct compensation, such as a salary or wages, or indirect benefits that are not merely incidental to the activity performed. The second step involves analyzing the putative employment relationship under the common-law agency test.

Upholding the Appellate Court’s ruling, the Connecticut Supreme Court held that the Plaintiff was not an “employee” under the Connecticut Fair Employment Practices Act, because she failed to meet the remuneration prong of the remuneration test.

 

 

Employer’s Arbitration Agreement Deemed Unlawful

In Lewis v. Epic Systems Corporation, No. 15-2997 (May 26, 2016), the Court of Appeals for the Seventh Circuit ruled that an employer-imposed agreement that required that employees bring any wage-and-hour claims against the employer only through individual arbitration, and prohibited collective arbitration or collective action in any other forum, violated the National Labor Relations Act (NLRA), and was unenforceable under the Federal Arbitration Act (FAA).

An employee sued Epic Systems in federal court, contending that it had violated the Fair Labor Standards Act (FLSA) and state law by misclassifying him and fellow employees, and thereby unlawfully deprived them of overtime pay. Epic Systems moved to dismiss the claim and compel individual arbitration pursuant to the agreement. The Plaintiff responded that the arbitration clause violated the NLRA because it interfered with employees’ right to engage in concerted activities for mutual aid and protection and was therefore unenforceable. The district court agreed and denied Epic Systems’ motion.

The Seventh Circuit Court of Appeals upheld the district court’s determination, stating that the agreement ran straight “into the teeth” of  the employees’ Section 7 right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, and that contracts that stipulate away employees’ Section 7 rights or otherwise require actions unlawful under the NLRA are unenforceable. 

Department of Labor Releases New Overtime Rules

In May, the United States Department of Labor  issued its final rule updating the regulations governing the exemption of employees from the minimum wage and overtime pay protections of the Fair Labor Standards Act. Significant components of the final rule are as follows:

1. Sets the standard salary level at $913 per week or $47,476 annually for a full-year worker;

2. Sets the total annual compensation requirement for highly compensated employees subject to the duties test to $134,004.

3. Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level, so long as they are provided on a quarterly or more frequent basis; and

4. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Notably, the final rule makes no changes to the duties test. Employers have until December 1, 2016 to comply with the new rule.

State Legislature Passes “Ban the Box” Bill

In early May, the Connecticut legislature passed H.B. 5237, which prohibits employers from inquiring about a prospective employee’s prior arrests, criminal charges, or convictions on an initial employment application, unless (1) the employer is required to do so by an applicable state or federal law; or (2) a security or fidelity bond or an equivalent bond is required for the position for which the prospective employee is seeking employment. Significantly, the bill does not prohibit requesting arrest, criminal charge, or conviction information beyond the initial employment application. The bill also provides that complaints as to alleged violations are to be filed with the Labor Commissioner.

Employers have until January 1, 2017 to update their application forms to comply with the new law.

Second Circuit Rules That HR Director May Be Held Personally Liable Under the FMLA

In March, the Second Circuit issued a significant decision in ruling that a human resources director can be held personally liable under the FMLA.

 In Graziadio v. Culinary Institute of America, the Plaintiff sued her former employer, alleging that she was terminated in violation of the FMLA and the ADA after taking leave to care for her son’s medical issues. Specifically, the Plaintiff requested and was granted FMLA leave to care for her son’s diabetes. On the date of her return to work, her other son broke his leg. As a result, the Plaintiff requested additional leave, including intermittent leave. The Culinary Institute of America (“CIA”) countered that, despite several requests, the Plaintiff failed to provide medical information certifying the need for intermittent leave. When the Plaintiff asked for what specific information was needed, CIA’s Director of Human Resources allegedly refused to provide details and informed the employee that it was her responsibility to provide complete medical information without any guidance from CIA. Eventually, the Plaintiff was terminated for job abandonment.

 The Plaintiff filed suit, claiming retaliation and interference in violation of the FMLA, and discrimination on the basis of her association with her son in violation of the ADA. In addition to naming the CIA as a defendant, she also personally named its Director of Human Resources.

 The District Court granted summary judgment in favor of CIA and the Human Resources Director, which included a finding that the Human Resources Director was not an “employer” under the FMLA. The Second Circuit reversed, finding that the Human Resources Director could be considered an “employer,” and remanded the case for a jury trial.

 In support of its finding, the Second Circuit relied on the “economic realities” test utilized in Fair Labor Standards Act cases. Pursuant to this test, a manager may be considered an employer if they have the power to control the employee. In making this determination, courts consider the totality of the circumstances based on a set of nonexclusive and overlapping factors including whether the employer: (1) has the power to hire and fire the employees; (2) supervises and controls employee work schedules or conditions of employment; (3) determines the rate and method of payment, and (4) maintains employment records.

 Under this test, the Circuit Court found that there was adequate evidence to indicate that the Human Resources Director sufficiently controlled the Plaintiff’s employment to be subject to liability under the FMLA.

 The application of the “economic realities” test in the FMLA context is groundbreaking, and means an increased risk of individual liability for human resource professionals, managers, and supervisory personnel.

Connecticut Federal Court Denies Employer’s Motion for Summary Judgment in Transgender Discrimination Suit

Recently, a Connecticut Federal Court ruled that a transgender discrimination claim based on a failure to hire can proceed under both Title VII and Connecticut’s counterpart, the Connecticut Fair Employment Practices Act (“CFEPA”). Notably, during the pendency of the case, Connecticut passed a law prohibiting discrimination on the basis of gender identity.

The Plaintiff alleged that she was nearly hired as an on-call orthopedic surgeon at the Hospital of Central Connecticut, and relied on the impending finalization of her hiring, but that the hospital declined to hire her because she disclosed her identity as a transgender woman who would begin working after transitioning to presenting as female.

The hospital moved for summary judgment on several grounds, including that Title VII (and the CFEPA at the time of the alleged discrimination) does not prohibit employment discrimination on the basis of transgender identity.

The District Court denied summary judgment. In so doing, it read Title VII’s prohibition of discrimination “because of . . . sex” to include transgender discrimination. Examining the plain language of the statute, and in light of prior Supreme Court precedent acknowledging gender-stereotype discrimination as discrimination “because of sex,” Judge Stefan Underhill concluded that discrimination on the basis of transgender identity is cognizable under Title VII.

NLRB Rules That Employers Cannot Ban Secret Recordings At Work

In Whole Foods Market, Inc. 363 NLRB 87 (2015), the NLRB held that two rules prohibiting recording in the workplace violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”). The work rules at issue are quoted below:

In order to encourage open communication, free exchange of ideas, spontaneous and honest dialogue and an atmosphere of trust, Whole Foods Market has adopted the following policy concerning the audio and/or video recording of company meetings: It is a violation of Whole Foods Market policy to record conversations, phone calls, images or company meetings with any recording device (including but not limited to a cellular telephone, PDA, digital recording device, digital camera, etc.) unless prior approval is received from your Store/Facility Team Leader, Regional President, Global Vice President or a member of the Executive Team, or unless all parties to the conversation give their consent. Violation of this policy will result in corrective action, up to and including discharge. Please note that while many Whole Foods Market locations may have security or surveillance cameras operating in areas where company meetings or conversations are taking place, their purposes are to protect our customers and Team Members and to discourage theft and robbery.

The second rule stated:

It is a violation of Whole Foods Market policy to record conversations with a tape recorder or other recording device (including a cell phone or any electronic device) unless prior approval is received from your store or facility leadership. The purpose of this policy is to eliminate a chilling effect on the expression of views that may exist when one person is concerned that his or her conversation with another is being secretly recorded. This concern can inhibit spontaneous and honest dialogue especially when sensitive or confidential matters are being discussed.

Whole Foods advanced several arguments in support of these policies. The vice president testified that it was essential to Whole Foods’ core values that employees felt free to speak openly on issues, regardless of whether they were work related. For example, the vice president testified as to annual “town hall” style meetings, where work issues are discussed. The issue raised at the “town hall” meetings are later presented to management, but the identities of the employees who spoke up are not disclosed. The vice president also testified that the policies were vital to the integrity of store meetings, and other team meetings. In addition, Whole Foods argued that absent its recording prohibitions, its internal appeal process for employment termination decisions would be compromised, and that the policies were essential for the handling of employee requests to the Team Member Emergency Fund, which often involved confidential and personal matters.

The NLRB rejected Whole Foods’ arguments, instead finding that the policies violated Section 8(a)(1) because the policies explicitly restricted activities protected by Section 7 of the NLRA, and would “reasonably chill the employees in the exercise of their Section 7 rights.” Specifically, it found that the policies at issue would reasonably be construed by employees to prohibit Section 7 activity. Relying on Rio All Suites Hotel & Casino, 362 NLRB 190 (2015), in which the NLRB held that, absent overriding employer interest, recording in the workplace is protected by Section 7 if employees are acting for their mutual aid and protection, the NLRB deemed Whole Foods’ recording policies unlawful because they did not differentiate between recordings protected by Section 7 and those which are not. In this regard, the NLRB cited to testimony wherein Whole Foods’ vice president admitted that the rules applied regardless of whether the employee was engaged in protected activity.

The NLRB also distinguished Whole Foods’ reliance on Flagstaff Medical Center, 357 NLRB 65 (2011), wherein it held that an employer policy prohibiting the use of cameras in a hospital did not violate the Act. The NLRB noted that the Flagstaff decision was based on patient privacy interests and the employer’s HIPAA obligations, and therefore employees would reasonably interpret the rule as legitimate means of protecting those interests as opposed to prohibiting protected activity. Finding the present case “plainly distinguishable,” the NLRB stated that Whole Foods’ business justification was based on narrow circumstances which were “not nearly as pervasive or compelling as the patient privacy interest in Flagstaff.”

In light of this decision, employers should review any policies restricting recording by employees to ensure that they are tailored only to the extent necessary to accomplish business objectives.

Connecticut Union Representation Increased in 2015

According to the Federal Bureau of Labor Statistics, 15.7% of Connecticut’s total approximate 1,564,000 workers were represented by a union in 2014. In 2015, while the total number of workers increased to approximately 1,587,000, the percentage of those workers represented by unions jumped to 17.4%. This 1.7% swing translates to an increase of approximately 30,590 workers gaining union representation from 2014 to 2015.

Court Grants Summary Judgment In Favor Of Ryan & Ryan, LLC Client In Federal Discrimination Case

The United States District Court for the District of Connecticut recently granted the summary judgment motion that Ryan & Ryan, LLC filed on behalf of its client, a machine and metal component company in Milford, Connecticut.

In the lawsuit, the Plaintiff alleged that she was subject to discrimination based on her disability, that her employer refused to provide a reasonable accommodation for her disability (wrist and knee injuries), and that she was retaliated against on account of her filing a worker’s compensation claim.

Ryan & Ryan, LLC conducted fact discovery and marshaled support for the defense theories that (a) the Plaintiff failed to demonstrate a prima facie case; (b) there were legitimate non-discriminatory business reasons for altering the plaintiff’s job duties; (c) the employer reasonably accommodated any alleged disability; and (d) the plaintiff failed to establish conduct sufficient to support a claim for intentional infliction of emotional distress.

Thereafter, Ryan & Ryan, LLC submitted a written motion for summary judgment. Judge Victor Bolden granted summary judgment in favor of Ryan & Ryan, LLC’s client as to all of the Plaintiff’s claims.