Thursday, March 25, 2010

Wall Street Journal Reports Sharp Increase in Workplace Harassment Claims by Men

The Wallstreet Journal reported yesterday that, since the start of the recession, a growing number of sexual harassment complaints have come from men. The Journal reports that some 16.4% of all sexual harassment claims—or 2,094 claims—were filed by men in fiscal 2009, up from 15.4%, or 1,869 claims, in fiscal 2006, according to the U.S. Equal Employment Opportunity Commission. The Journal's LawBlog contains an interesting discussion of this issue.

New Lawsuit Charges Goldman Sachs With Pregnancy Discrimination

Businessweek reports today that the Goldman Sachs Group Inc. has been charged with employment discrimination by a former vice president who alleges that she was pushed onto the “mommy-track” and eventually fired after she chose to work part-time following her pregnancy. The lawsuit -- Hanna v. Goldman, 10-cv-02637, U.S. District Court, Southern District of New York (Manhattan) -- alleges violations of the Family Medical Leave Act, as well as gender and pregnancy discrimination. By way of background, Charlotte Hanna joined Goldman in 1998 as an associate and rose to vice president while at Goldman Sachs University, an internal training program, according to the complaint. After deciding to work part-time when she became pregnant with her first child, she said she was channeled into lesser positions that compromised her earnings and prospects for better jobs. According to the lawsuit, “[t]he ‘off-ramp’ was a direct path to a mommy-track that ultimately derailed Ms. Hanna’s career.” Hanna, who is unemployed, said she was demoted, lost her office and pushed into a job in operations in the training program, according to the complaint. She said she was fired before her return from her second maternity leave in 2008.

Wednesday, March 24, 2010

Medical Marijuana and the Workplace

There is an interesting short story on today on the intersection of medical marijuana and employment. As the story notes, to date, 14 states have laws allowing the use of medical marijuana, which shield legal users from criminalization but don't protect them from them penalties enforced by their employers. As more people are being prescribed marijuana across the nation, they are wrestling with a caveat: they could be fired. This story raises interesting legal issues - namely, whether medical marijuana users have any protection under state and federal employment discrimination laws. The story does not discuss the potential application of the Americans with Disabilities Act to the issue. One issue to consider is whether employees can reasonably argue that, under existing law, employers should be prohibited from enforcing otherwise neutral drug testing policies against medical marijuana users due to the users' underlying medical conditions. In other words, should medical marijuana users be exempted from such testing as a "reasonable accommodation" in the workplace? We will discuss this issue in further detail in the near future.

Second Circuit Overturns Jury Verdict in "Shy Bladder" Case

The United States Court of Appeals for the Second Circuit recently overturned a jury verdict for an employee who claimed that he was denied a reasonable accommodation for his “shy bladder” syndrome during a random government-mandated drug test. The employee, Joseph Kinneary, was a sludge boat captain employed by the City of New York’s Department of Environmental Protection - making him subject to drug and alcohol testing under federal Department of Transportation regulations. Kinneary was terminated by the City for failing to retain his captian's license - as a result of refusing to submit to a urine test.

Kinneary alleged that he suffered from paruresis, also known as “shy bladder” syndrome, which made it difficult for him to urinate on demand (as required for a drug test). Kinneary claimed that this condition constituted a disability, that the City failed to reasonably accommodate his disability, and that he was terminated unlawfully because of his disability. Kinneary prevailed at a jury trial, asserting that he had been terminated for refusing to provide a urine sample when required to do so. A jury awarded him $100,000 in back pay and $125,000 in non-economic damages.

On appeal, the United States Court of Appeals for the Second Circuit concluded that the City had, indeed, provided Kinneary with the accommodation he sought. The Court found that the City had permitted Kinneary to be evaluated by a physician and had provided instructions to the physician that were consistent with the applicable DOT regulations. The Court further found that the note Kinneary’s physician provided to the City did not constitute a basis for cancelling his test because it did not say that Kinneary had a medical condition that did, or with a high probability could have, precluded Kinneary from providing a sufficient amount of urine for the test. Instead, the note simply stated the name of the condition, noted that it was chronic and could be helped by an alpha blocker that Kinneary had been given, and indicated that Kinneary was not a substance abuser. As such, the note did not comply with relevant Department of Transportation and Coast Guard regulations. The Court therefore held that the evidence unequivocally demonstrated that the City gave Kinneary the accommodation he sought (the opportunity to have his drug test cancelled based upon a physician’s evaluation pursuant to relevant Department of Transportation regulations), but Kinneary failed to comply with the regulatory requirements that would have allowed him successfully to cancel his test and save his license. Because Kinneary failed to retain his captain’s license despite receiving the accommodation, he was not otherwise qualified to perform the essential functions of his job and could not make out a successful claim under the ADA.

Thursday, March 18, 2010

Do Employers Performing Background Checks Risk Discrimination Lawsuits?

An article in today's Pittsburgh Post-Gazette has an interesting discussion of the recent surge in employment discrimination claims based on background checking and the Equal Employment Opportunity Commission's ("EEOC") recent launch of its "E-Race" initiative (Eradicating Racism and Colorism from Employment), which is aimed specifically at combating discrimination in employment selection.

The article appropriately notes that, in some cases, the mere act of running a background check can land employers in a costly lawsuit (because certain minority groups have a disproportionate rate of negative records, such as convictions, arrests and poor credit ratings, screening for that information in background checks can exclude higher numbers of those applicants).

To read the arcile, visit

Thursday, March 11, 2010

COBRA Subsidy Extended Again

The U.S. Government has once again extended the sixty-five percent (65%) federal COBRA subsidy under the American Recovery and Reinvestment Act ("ARRA") available to employees who have been involuntarily terminated from their employment. Signed into law on March 2 by President Obama, this "stop-gap" measure extended February 28, 2010 to March 31, 2010, the prior deadline. The measure also made other changes to the existing law, including (among other things): (a)providing that health plan participants who initially lose coverage due to a reduction in hours, but are later involuntarily terminated, will be eligible for the COBRA subsidy; (b) creating a new penalty of up to $110 per day for plan sponsors or health insurers that fail to comply Department of Labor ("DOL") determinations that an individual’s qualifying event was, in fact, an “involuntary termination”; and (c) protecting employers from inadvertently overstating their employment tax credits based on the COBRA subsidy. More information about this issue can be found on the DOL's website (

Monday, March 8, 2010

DOL Issues Final Rule Regarding Provision of Plan Documents

The United States Department of Labor ("DOL") has issued a final rule requiring multiemployer benefit plans to provide copies of certain actuarial and financial documents regarding the plan upon written request. The DOL published the new plan document requirements in the March 2, 2010 Federal Register.

Generally speaking, the final rule provides that requested documents must be furnished within 30 days of the date a written request is made by a plan participant, beneficiary, employee representative or contributing employer. Failure to timely provide the requested documents may result in a civil penalty of up to $1,000 per day late (note that this is significantly more than the $110/day penalty plan administrators historically have faced for failing to turn over copies of benefit plans and summary plan descriptions).

More specifically, the following documents must now be provided upon written request:
(a) a copy of any periodic actuarial report (including sensitivity testing) received by the plan for any plan year which has been in the plan’s possession for at least 30days prior to the date of the written request; (b) a copy of any quarterly, semi-annual, or annual financial report prepared by any plan investment manager or advisor or other fiduciary which has been in the plan’s possession for at least 30 days before the plan receive written request; and (c) a copy of applications filed with the Secretary of the Treasury requesting an extension under Internal Revenue Code Section 431(d) or ERISA Section 304 and the determination of such Secretary pursuant to such application. There are also limits to what plan administrators are required to furnish upon request. A plan administrator is not required to produce the following:(a) more than one copy of a document during any 12-month period; (b) any report or application that has been in the plan’s possession for 6 years or more as of the date on which the request was received by the plan; (c) information that has not been in the plan’s possession for less than 30 days prior to the date of the written request - because requestors may not know about this limitation, plan administrators must provide a notice to the requestor informing them of the existence of the report and the earliest date it may be available; (d) any information or data that served as the basis for any report or application that is required to be furnished; or (e) individually identifiable information regarding any plan participant, beneficiary, employee, fiduciary, or contributing employer or proprietary information.

The final rule is effective April 1, 2010. Multiemployer plans will need to amend their summary plan descriptions to include language that informs participants and beneficiaries of their disclosure request rights.

Tuesday, March 2, 2010

Walmart Settles EEOC Sex Discrimination Suit

Walmart Stores ("Walmart) will pay approximately $11.7 million in back wages and com­pen­satory damages, its share of employer taxes, and up to $250,000 in administration fees and will furnish other relief, including jobs, to settle a sex discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission ("EEOC"). According to the EEOC’s lawsuit, Walmart’s London, Kentucky distribution center denied jobs to female applicants from 1998 through February 2005. During that time period, the EEOC alleged, Walmart regularly hired male entry-level applicants for warehouse positions, but excluded female appli­cants who were equally or better qualified. The EEOC also alleged in the lawsuit that Walmart regularly used gender stereotypes in filling entry-level order filler positions.

DOL Issues Proposed Regulation to Increase Workers' Access to High Quality Investment Advice

The Pension Protection Act of 2006 (“PPA”) amended the Employee Retirement Income Security Act of 1974 (“ERISA”) to create a new statutory exemption from the prohibited transaction rules to expand the availability of investment advice to participants in 401(k)-type plans and individual retirement accounts (“IRAs”), subject to safeguards and conditions. The Department of Labor (“DOL”) announced on February 26, 2010 that it is publishing in the Federal Register a proposed rule to implement these PPA provisions and make investment advice more accessible for millions of Americans in 401(k) type plans and IRAs.

According to DOL’s notice, as of 2007, more than one-half of private-sector employees participated in defined contribution plans that allow for participant direction, with these plans covering 60 million active participants and holding about $3 trillion in assets. In general, investment advice given by an investment adviser to plan participants on investments that pay additional fees to the adviser or its affiliates can violate the prohibited transaction rules of ERISA and the Internal Revenue Code. This has limited the types of investment advice arrangements available to participants in 401(k) plans and IRAs. Given the rise in participation in 401(k) type plans and IRAs, the retirement security of millions of America’s workers increasingly depends on their investment decisions. Thus, there is increased recognition of the importance of investment advice in helping participants avoid costly investment errors.

The proposed regulation allows investment advice to be given under the statutory exemption in two ways: (1) through the use of a computer model certified as “unbiased”; or (2) through an adviser compensated on a “level-fee” basis (meaning that fees do not vary based on investments selected by the participant). Several other requirements also must be satisfied, including disclosure of fees the adviser is to receive. The regulation contains some key safeguards and conditions, including: (a) requiring that a plan fiduciary (independent of the investment adviser or its affiliates) select the computer model or fee leveling investment advice arrangement; (b) imposing recordkeeping requirements for investment advisers relying on the exemption for computer model or fee leveling advice arrangements; (c) requiring that computer models must be certified in advance as unbiased and meeting the exemption’s requirements by an independent expert; (d) establishing qualifications and a selection process for the investment expert who must perform the above certification; (e) clarifying that the fee-leveling requirements do not permit investment advisers (including its employees) to receive compensation from affiliates on the basis of their recommendations; (e) establishing an annual audit of investment advice arrangements, including the requirement that the auditor be independent from the investment advice provider; and (f) requiring disclosures by advisers to plan participants.

The Department published the proposed regulation in the Federal Register on March 2, 2010. The Notice of Proposed Rulemaking (NPRM) invites public comments from interested persons on the proposed regulation’s conditions applicable to investment advice arrangements.