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Advocacy & Compliance News

Legal Watch - July 27, 2016
June 29, 2016

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

U.S. Courts of Appeals Split Over Whether an Employer May Collect Attorney Fees in Frivolous FLSA Cases

The U.S. Court of Appeals for the Fourth Circuit (covering Virginia, Maryland, West Virginia, North Carolina and South Carolina) recently held that an employer may be allowed to collect attorney fees against a plaintiff who brought a frivolous Fair Labor Standards Act (FLSA) case if the court specifically finds that the plaintiff was “vexatious or acted in bad faith” (Andrews v. America’s Living Centers LLC (2016 BL 206482, 4th Cir., No. 15-1658, 6/28/16)). The court concluded that attorney fees are collectable against a plaintiff in such a case under Federal Rule of Civil Procedure 41(d), which allows attorney fees if the underlying statute provides for them.

The Fourth Circuit, in handing down its decision, recognized that the Eighth Circuit (North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Missouri and Arkansas) and the Tenth Circuit (Colorado, Utah, Wyoming, New Mexico, Kansas and Oklahoma) have awarded attorney fees under Federal Rule 41(d) in FLSA cases, but those circuits did not elaborate on their reasoning. The Sixth Circuit Court of Appeals (Ohio, Kentucky and Tennessee) found differently, holding that “costs” provided under Rule 41(d) do not include attorney fees. The Seventh Circuit (Illinois, Wisconsin and Indiana) also agrees with the Fourth Circuit, holding that a party may receive attorney fees in an FLSA case brought vexatiously or in bad faith. 

Is Alcoholism a Disability Covered by the ADA?

A federal court recently found that alcoholism is not a disability covered by ADA protections because the plaintiff did not submit proof that one of his major life functions was “substantially limited” by the condition (Young v. Town of Bar Harbor (2016 BL 204982, D. Me. No. 14-00146, 6/27/16)). In the case, a police chief alleged he was suffering from alcoholism and filed a complaint of ADA discrimination following his termination. He claimed that his enrollment in a rehabilitation program demonstrated that one of his major life activities was “substantially limited.”

The court rejected the argument, holding that he did not put forward evidence that any specific major life activity was “substantially limited,” and enrollment itself was insufficient to prove that point. Moreover, the court found, he presented no evidence that town officials regarded him as disabled or as an alcoholic and that there was no record of such. Although the plaintiff claimed that some town officials knew of his “drinking problem,” there was no evidence that anyone thought he was an alcoholic or was impaired as a result of his drinking. Therefore, the court dismissed the case.

However, a court of appeals for the District of Columbia circuit reached a slightly different conclusion in a different case involving a complaint filed by a mechanic against the District of Columbia transit system. The plaintiff filed a discrimination case under the ADA after successfully completing an alcohol rehabilitation program which he entered following his discharge from the transit system. He was terminated for repeatedly failing drug and alcohol tests but was told he would be eligible for rehire after a year and the successful completion of a rehab program. Upon meeting those conditions, he reapplied but was not rehired. He then filed an ADA claim, alleging he was discriminated against because he was regarded as disabled (having alcoholism) even though he was not an alcoholic.

The court held that he did not have to prove that a major life activity was substantially limited by alcoholism because he was “regarded as disabled” even though he was not. In these circumstances, the court of appeals reversed the trial court’s dismissal, stating he had the right to a jury trial over the regarded-as-disabled theory (Alexander v. Washington Metropolitan Transit Authority (2016 BL 202763 DC Cir., No. 15-7039, 6/24/16)).  

NLRB Rules Employee Handbook Provision Barring Employees From Conducting “Personal Business” at Work Is Unlawful

The National Labor Relations Board (NLRB) recently ruled that an employer’s handbook provision prohibiting employees from conducting “personal business” at work is overbroad and therefore unenforceable, and thus is a violation of the National Labor Relations Act (NLRA) regardless of whether or not the employees affected are members of a union (Casino Paurna (2016 BL 229670, NLRB Administrative Law Judges, No. 21-CA-161832, 7/18/16)). The decision is enforceable at all private college and university campuses throughout the country. It is not enforceable at public colleges and universities over which the NLRB does not have jurisdiction, although many state labor boards with jurisdiction over public colleges and universities tend to follow NLRB case developments.

The NLRB administrative law judges ruled that the handbook rule violated the NLRA, which allows employees to solicit for union membership while at work during non-working hours (breaks and before and after work) in non-working areas at the employer’s premises, and also held that a separate handbook rule, which required employees to “immediately cease any solicitation or distribution that caused the intended recipient to experience any discomfort or non-receptiveness whatsoever” was illegal and unenforceable. The administrative law judges cited another NLRB decision — Ryder Truck Rental (175 LRRM 1179, 2004) — which specifically prohibited such a rule.  

White HR Coordinator Loses Reverse Discrimination Allegations Following Layoff

A federal district court judge recently dismissed a claim of reverse discrimination filed by a white HR coordinator who alleged that she was laid off instead of a black HR coordinator with less seniority because of her race. The judge dismissed the case on summary judgment, holding that in a reverse discrimination case, the plaintiff must do more than show he/she was a member of a class to make a prima facie case of discrimination forcing the other side to rebut the allegations of “pretext” (Roschival v. Gavulic (2016 BL 168401, ED Mich., No. 2:15-cv-10182, 5/26/16)).

The court held that while the plaintiff and the employee she alleges was a comparator had similar titles, they had different job duties, and the alleged comparator had no responsibilities for the department in which the plaintiff worked. Moreover, the plaintiff was laid off when her entire department was laid off, and her work was absorbed by a third-party administrator, not the alleged comparator.

The court concluded that the plaintiff failed to prove that under these facts the plaintiff had any rights under the employer’s policy to bump a less senior employee.