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Advocacy & Compliance News

Legal Watch - April 6, 2016
April 6, 2016

By Ira Michael Shepard, CUPA-HR general counsel and partner with Saul Ewing LLP

Court of Appeals Reverses Federal Trial Court, Rules HR Director May be Personally Liable as an “Employer” for FMLA Breach

The U.S. Court of Appeals for the Second Circuit recently reversed a federal trial court’s dismissal of a Family and Medical Leave Act (FMLA) claim brought against The Culinary Institute of America and its HR director, holding that under the FMLA, an HR director may be liable as an “employer” in addition to the named employer. The Second Circuit joined three other federal appeals courts in applying the “economic reality” test, holding that under the FMLA, an individual manager may be liable as an employer because the Act defines an “employer” as including “any person who acts directly or indirectly in the interest of the employer” toward the employee (Graziadio v. Culinary Institute of America (2016 BL 81760, 2nd Cir., No. 15-888, 3/17/16)).

Under the economic reality test, when determining whether a staff official is an employer, the jury is asked to consider whether or not the staff person had the power to hire and fire the employee, supervised and controlled the employee’s work schedules or conditions of employment, determined the rate and method of payment, and/or maintained employment records.

The trial court had dismissed the case against the HR director because it determined that the director’s boss (the vice president) had ultimate authority on hiring and firing. The court of appeals reversed, holding that the HR director “played an important role” in the plaintiff’s termination, that the vice president conducted no investigation independent of the HR director’s, and that a reasonable jury could find that the HR director had “sufficient control” over the plaintiff’s employment to be individually liable under the FMLA.

State Gun Law Protecting the Right to Store Guns and Ammo “Out of Plain Sight” in a Locked Vehicle Does Not Protect an Employee From Discharge if a Loaded Gun Is Visible in the Vehicle

An Indiana state appellate court reversed an adverse jury verdict granting the discharged employee $75,000 in damages after he was fired for leaving a loaded weapon in his car in the employee parking lot. The gun was wedged between the center console and the driver’s seat and was visible though the driver’s side window. The applicable Indiana state statute gives employees the right to store firearms and ammunition “out of plain sight in an employee’s locked vehicle” (Caterpiller Inc v. Sudlow ( 2016 BL 64122, Ind St. Ct App., No. 79A02-1507-CT-801, 3/3/16)).

The court of appeals rejected the plaintiff’s argument that the law was supposed to protect an individual’s right to gun ownership (which the plaintiff had argued successfully to the trial court and the jury), holding that the plaintiff was not protected by the applicable law because the weapon in his car was in plain sight, whereas the law required the weapon to be stored out of sight. The court ruled that the employer was within its rights to discharge the employee. 

NLRB Rules That Private College Must Bargain With Faculty Union Over the “Effects” of Its Lawful, Unilateral Decision to Reduce Credit Hours of Some Courses

A divided National Labor Relations Board (NLRB) ruled 2 to 1 that a private college with a collective bargaining agreement with a faculty union must bargain with the union over the “effects” of its lawful, unilateral decision to reduce course credit hours of certain courses (Columbia College Chicago (2016 BL 91242, 363 N.L.R.B. No. 54, 3/24/16)). The applicable collective bargaining unit, which covered part-time faculty, set minimum compensation for teaching three credit-hour courses, with a prorated minimum for lesser credit-hour courses. The collective bargaining agreement also gave the college the unilateral right of “subcontracting, reduction, modification, alteration, combination or transfer” of jobs or courses.

The college argued that the faculty union had waived its right to bargain over the effects of the decision as a result of giving the college the right to make the changes in credit hours. Both parties conceded that the college had the lawful right to make the change in credit hours unilaterally. The NLRB rejected the college’s argument regarding its obligation to bargain over the effects of its decision to reduce credit hours. The NLRB pointed out that the salaries contained in the collective bargaining agreement were minimums and that nothing precluded the parties form bargaining higher pay given the new circumstances. The NLRB majority also pointed out that the parties at bargaining might come up with alternatives that neither had thought of previously. 

Another Federal Court Rules That Transgender Discrimination Is Covered by Title VII’s Sex Discrimination Prohibition

While several early court cases found that Title VII did not protect transgender plaintiffs from discrimination on various grounds, including that Title VII did not reach sexual preference cases, the recent trend is that federal courts are allowing such transgender discrimination cases to proceed as a violation of Title VII’s prohibition of discrimination on the basis of sex.

The Ninth Circuit (including California, Oregon and Washington) have ruled in favor of such coverage. And a federal district court in Connecticut recently ruled in favor of a transgender surgeon who sued her hospital, alleging that she was denied employment because she planned to have sex reassignment surgery (Fabian v. Hospital of Central Connecticut (2016 BL 83361, D. Conn., No. 3:12-cv-01154, 3/18/16)).

That court agreed with a growing number of courts that have ruled that “sex” in Title VII refers to more than just “male” and “female” and held that “sex” refers to bias based on factors sufficiently related to or having to do with sex.

The hospital claimed that the plaintiff was not hired for reasons unrelated to sex — specifically, her alleged lack of enthusiasm for late-night calls. The plaintiff contended that she was all but hired, but that when she stated that she was transgender and was transitioning from male to female, the hospital decided not to hire her. The court ruled that she had a right to go forward to a jury trial under federal and state antidiscrimination laws.