Legal Watch - July 12, 2017
July 12, 2017

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

Fifteenth University Sued in Federal Class-Action Suit Alleging Retirement Plan Administrative and Recordkeeping Fees Are Excessive and Retirement Plan Investment Options Underperform in Violation of ERISA   

In early June, Washington University became the 15th institution to be on the receiving end of a class-action complaint alleging that its retirement plan violates the Employee Retirement Income Security Act (ERISA)’s fiduciary provisions. The lawsuit alleges that Washington University’s administrative and recordkeeping fees are “excessive” and that it is offering “underperforming” investment options (Davis et Al. v. Washington University in St Louis (ED Mo., No. 4:17-cv-01641, complaint filed6/8/17)). 

The complaint’s allegations are at this point unproven, and many strong defenses have already been filed by institutions receiving similar complaints. The suit against Washington University was the latest in a string of three suits filed against universities following court decisions in the parallel cases filed against Emory University and Duke University in which a federal district court refused to dismiss the class-action complaints.  

Appeals Court Rules Undocumented Worker Can Sue Both Her Employer and Employer’s Counsel for Retaliation for Trying to Get Her Deported in Response to Pressing a Wage and Hour Complaint

The Ninth Circuit U.S. Court of Appeals (covering California, Oregon, Washington, Nevada, Idaho, Montana and Arizona) recently ruled that the federal Fair Labor Standards Act (FLSA) provisions prohibiting “retaliation” by any “person” means that an aggrieved worker can sue his or her employer and the employer’s counsel. The “person” provision is in the retaliation section, which is separate from the FLSA wage and hour provision which states that wage and hour violations can only be brought against an “employer.”

The plaintiff’s counsel alleged that it is “all too common” for employers to avoid calling Immigration and Customs Enforcement themselves and accomplish the retaliation through a third party such as counsel. The court reacted by allowing the case to proceed in light of the different statutory language contained in the retaliation provisions of the FLSA.

Fifth Circuit Court of Appeals Rejects “Permanent Telecommuting” as Reasonable ADA Accommodation, Holding That Regular Workplace Attendance Can Be an Essential Job Function

The federal Fifth Circuit Court of Appeals (covering Texas, Louisiana and Mississippi) has ruled that “regular worksite attendance” can be an essential requirement of most jobs, especially those involving teamwork or those in which the employee is required to interact with co-employees or clients (Credeur v. Louisiana (2017 BL 217392, 5th Cir., No. 16-30658, 6/23/17)). 

The case involved an attorney working in the State of Louisiana attorney general’s office who was recovering from complications from kidney transplant surgery and was working from home as an accommodation. Her accommodation was terminated after what the state deemed a reasonable amount of time for recovery, and she sued. 

The appeals court ruled against requiring employers to provide “unlimited” telecommuting as an Americans with Disabilities Act (ADA) accommodation where the essential job functions do require workplace presence. 

NLRB Rules That Employer’s Blanket Ban on Recording Conversations in the Workplace Without Prior Management Approval Is Overbroad and Violates the NLRA

The U.S. Court of Appeals for the Second Circuit (covering New York, Connecticut and Vermont) affirmed a prior National Labor Relations Board (NLRB) ruling that held that Whole Foods Market’s blanket ban on any recording in the workplace without management approval was overbroad and violated the National Labor Relations Act (NLRA) because it chilled employees’ rights to discuss unions or engaging in concerted activities protected by the NLRA (Whole Foods Market Group v. NLRB (2nd Cir., 2017 BL 183726, case no. 16-0002-ag, unpublished 6/1/17)).

The appeals court stated that there should be a way for the company to rewrite the policy, narrowing it to protect employees’ rights to discuss unions and concerted activity and still require management approval for other circumstances. The company defended the blanket ban, stating that it protected free discussion in the workplace. 

Trump Administration’s Proposed EEOC-OFCCP Merger May Need Congressional Action

The proposed merger of the Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs (OFCCP) is likely to run into a political fight and face a series of complications which make it unlikely absent congressional approval. 

The initial proposal was objected to by both civil rights organizations and federal contractor stakeholders. Moreover, some congressional leaders wonder how it could be accomplished with the EEOC’s own budget requests containing no line item for increased costs for the proposed merger. Absent the budget considerations, there are other congressional concerns and possible roadblocks. 

It is argued that the president could transfer the OFCCP’s affirmative action and fair employment practice/discrimination jurisdiction over government contractors to the EEOC because it was created by Executive Order in the first place by issuing a new Executive Order. However, the OFCCP’s jurisdiction and enforcement of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act was given to the EEOC by an act of Congress, and it is argued that it would take an act of Congress to transfer jurisdiction to the EEOC. 

However, some argue there is ample precedent for the president to act by Presidential Reorganization Order, citing the fact that President Jimmy Carter in 1978 transferred enforcement of the Age Discrimination in Employment Act and the Equal Pay Act from the Department of Labor to the EEOC. However, in Carter’s case, Congress had passed the Reorganization Act of 1977, which specifically allowed the president to make these changes over a specific period of time. Therefore, it is argued that Congress may need to pass a new Reorganization Act to give the president authority to accomplish the merger of the EEOC and OFCCP.