Bailey & Ehrenberg PLLC Announces New Web Site

Bailey & Ehrenberg PLLC announces the creation of a new “mini-site” focused on employee benefits issues – www.benefitslitigationcounsel.com. The firm intends to use benefitslitigationcounsel.com to provide information about the firm’s abilities and resources in the employee benefits field. In addition, as the site develops, the firm will provide additional news and analysis focusing in the ERISA litigation arena.

Pennsylvania Jury Awards Scientists $6.2 Million

Marcus v. PQ Corp.

Two scientists were awarded a total of $6.2 million (not including attorneys' fees), by a federal jury in Pennsylvania. The plaintiffs alleged that they were laid off due to their ages, instead of other, non-discriminatory criteria. The total is suprising for a few reasons. First, the plaintiffs were awarded approximately $900,000 in back pay. The layoffs occurred in 2005, so the plaintiffs were able to recover for back pay lost as a result of finding other work for less pay or for not finding work at all. These amounts were doubled because the jury found that the discrimination was willful. The plaintiffs also received front pay damages in the amounts of $1,100,000, presumptively as compensation for the time they would have worked past the date of the verdict had they not been wrongfully discharged. Add to that amount emotional-distress damages of $1.5 and $2 million each to get to a total award of $6.2 million. (via Law.com)

Insurer Uses Employee's Facebook Postings to Deny Benefits

A Canadian insurance company has ceased payment of sick-leave benefits to a woman who had been out of work for more than a year and a half due to depression. A former IBM employee claims that she called her insurance company when her monthly sick-leave checks stopped coming and was told that she was deemed as able to return to work based on what it had found on her Facebook page. The evidence the insurance company allegedly based its cessation of benefits upon was the employee's Facebook page, upon which the employee had posted photos of herself on at the beach and at a Chippendale’s show. The insurance company would not comment on the employee's specific case, but in a written statement sent to CBC News, the insurer said: "We would not deny or terminate a valid claim solely based on information published on websites such as Facebook." It did confirm, however, that it uses the popular social networking site to investigate clients.



See http://www.cbc.ca/canada/montreal/story/2009/11/19/quebec-facebook-sick-leave-benefits.html for the complete story.

Washington Times Editor Files Religious Discrimination Claim with EEOC

The former editorial page editor of the Washington Times has filed a discrimination complaint against the paper, saying he was forced to attend a Unification Church religious ceremony that culminated in a mass wedding conducted by the church's leader, the Rev. Sun Myung Moon. Richard Miniter, who was also vice president of opinion for the conservative newspaper, made the claim in a filing Tuesday with the Equal Employment Opportunity Commission that also disclosed he was fired last month. Mr. Miniter claimed in an interview that he "was made to feel there was no choice" but to attend the ceremony if he wanted to keep his job, and that newspapers' executives "gave me examples of people whose careers at the Times had grown after they converted" to the Unification Church. A Times spokesman said the paper would not comment.

For a more detailed discussion of this story, see http://www.washingtonpost.com/wp-dyn/content/article/2009/11/17/AR2009111703325.html?hpid=newswell.

Proposed DOL Exemption - New Chrysler Corp.

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) today announced a proposed exemption that, if granted, would allow the New Chrysler Corp. to transfer approximately $4.59 billion promissory note and company securities to a Voluntary Employees Benefit Association (VEBA) Plan established to provide health benefits for the company's retirees. The retiree health plan would cover about 120,000 retirees and dependents when it becomes effective on Jan. 1, 2010.

New Chrysler requested an exemption under the Employee Retirement Income Security Act (ERISA) to allow the VEBA plan to hold stock and debt of New Chrysler in order to facilitate the sale of the company to Fiat North America LLC. ERISA prohibits certain plans from holding large percentages of plan assets in the form of employer securities. The law gives the department authority, however, to grant exemptions that protect the interests of plan participants and beneficiaries.

On May 31, 2009, a United States bankruptcy court issued a decision allowing old Chrysler to sell substantially all of its assets to New Chrysler. New Chrysler is headquartered in Auburn Hills, Mich., and employs 55,000 employees. New Chrysler is owned by the Canadian Government, the U.S. Treasury, Fiat and the VEBA plan.

The exemption would allow the securities transfer, permit New Chrysler and its health plans to reimburse each other for benefit payments mistakenly paid by the wrong entity during the transition to the new plan, and permit the automaker to recover mistaken deposits to the plan.

The assets of the VEBA plan will be held by the same trust that holds the assets of the plans established by Ford and General Motors for their respective retirees. There will be separate accounting for each plan maintained by the three companies that are now funded through a single trust.

The primary condition of the proposal is the appointment of an independent fiduciary to represent the plan with regard to New Chrysler securities transactions. The independent fiduciary will determine in advance of taking any action regarding the securities that the action is in the interests of the plan and its participants and beneficiaries. The proposed exemption also requires the review of benefit payments by an independent third party administrator and auditor for each of the plans and an objective dispute resolution process. In addition, the proposal sets time limits for the return of mistaken deposits and an objective dispute resolution process.

The 2010 National Defense Authorization Act and FMLA

The 2010 National Defense Authorization Act was signed into law by President Obama on October 28, 2009. Among other things, the bill amends the Family and Medical Leave Act (“FMLA”) by expanding its leave provisions relating to "qualifying
exigency leave" and "military caregiver leave." The FMLA-related amendments extend qualifying exigency leave" protections to families of active duty servicemembers deployed abroad so that the families can have time to manage certain personal affairs of the servicemember while he or she is on active duty. Such leave was not available to employees whose family member (spouse, child, or parent) was in the regular Armed Forces in the past but, rather, was available only to employees whose family member was in the Reserves or National Guard and who was ordered to active duty as part of a "contingency operation." As amended, FMLA now provides that leave is available to covered employees whose spouse, child or parent is in the Armed Forces on active duty and who is deployed overseas.

White House Supports Paid Sick Leave Bill

The H1N1 pandemic is raising concerns about employees reporting to work sick and spreading the new flu strain. The pandemic has given momentum to efforts to enact federal legislation that would guarantee paid sick days to tens of millions of workers. Those legislative efforts received added momentum on Tuesday when the Obama administration backed the Healthy Families Act, which would guarantee seven sick days a year to workers in companies with 15 or more employees.

Cheesecake Factory Settles EEOC Lawsuit for $345,000

The Cheesecake Factory Inc. will pay $345,000 to settle a sexual harassment lawsuit stemming from actions at the restaurant chain’s location in Chandler, Ariz. The suit was filed by the U.S. Equal Employment Opportunity Commission ("EEOC"), which alleged that six male employees were subjected to repeated sexual harassment at the company’s Chandler Mall location. The suit also charged that Cheesecake Factory knew about and tolerated repeated sexual assaults against the employees by a group of male kitchen staffers. According to the EEOC, the evidence showed the alleged abusers directly touched victims’ genitals, made sexually charged remarks and forced victims into repeated episodes of simulated rape. The EEOC also alleged that complaints to virtually every manager at the restaurant were made, but they never put a stop to it. In addition to the monetary relief for the six victims, the parties agreed upon a two year consent decree that calls for the company to specifically train its employees and managers about sexual harassment and institute an ombudsman to field and address sexual harassment complaints by employees.

This case highlights the importance of putting into place, and regularly training employees with regard to, anti-harassment policies and procedures. Many employers fail to conduct diversity and harassment training seminars for their employees and management. Many others merely note during new employee orientations that they have policies in place to address harassment. The best (i.e., safest) approach is to conduct regular trainings for employees and management that make clear the employer's anti-harassment policies and procedures.

Congress Proposes Pension Funding Relief for Employers

A new bill, the Preserve Benefits and Job Act, that would extend the time allotted plan sponsors to fund defined-benefit retirement plans was recently introduced in the United States House of Representatives. The proposed legislation would provide employers with pension funding relief by allowing them to spread out required contributions to defined benefit pension plans plans over nine years, instead of the current seven. Further, Congress would allow employers up to 15 years to fully fund their defined benefit plans if they promised not to freeze the benefits. The proposed legislation also grants the Pension Benefit Guaranty Corporation more leeway in assisting defined benefit plans that are in endangered and critical status regarding their funding levels.