Recent Developments in Employment Law: CAHR 2010 Annual Conference June 4, 2010 Erin Dougherty Foley

Recent Developments in Employment Law: Recent Developments in Employment Law: CAHR 2010 Annual ConferenceCAHR 2010 Annual Conference

June 4, 2010

Erin Dougherty Foley

2 | © 2010 Seyfarth Shaw LLP

Recent Legislation and Regulation

• Patient Protection And Affordable Care Act

• Genetic Information Nondiscrimination Act

• ADA Amendments Act

• E-Verify Laws – Federal and State


Patient Protection and Affordable Care Act

• The Patient Protection and Affordable Care Act, H.R. 3590, was enacted on March 23, 2010.

• Implementation on a timeline

• Critical Dates:►Six months after enactment►January 1, 2011►January 1, 2013►January 1, 2014



• Six Months After Enactment

►Individual and group health plans may not place lifetime limits on the dollar value of coverage.

►Insurers providing dependent coverage under both individual and group policies must cover adult children up to age 26.

►All health plans are prohibited from excluding children on the basis of a preexisting condition.

►Insurers are prohibited from rescinding coverage, except in cases of fraud or intentional misrepresentation of material fact.



• January 1, 2011

►Cost of over-the-counter medication may not be reimbursed through a Flexible Spending/Health Spending or similar account.

• January 1, 2013

►Contributions to Flexible Spending Accounts will be capped at $2,500 annually.

►Deduction for subsidy for employers who provide prescription drug coverage to employees eligible for Medicare Part D (retiree drug subsidy payment) will be eliminated.



• January 1, 2014

►An Employer Coverage Mandate (“Pay or Play”) will require employers with more than 50 full-time employees to make “qualified coverage” available to all employees or pay a per-employee penalty.

►Employers with more than 200 employees must automatically enroll all new employees in health care coverage.

►Insurers may not exclude any individual on the basis of a preexisting condition.

►Employers may offer increased incentives (in the form of rewards or premium reductions) of up to 30% (currently, it is 20%) of the cost of coverage for employees participating in wellness programs.


Genetic Information Nondiscrimination Act

• Purpose: To “fully protect the public from discrimination and allay their concerns about the potential for discrimination, thereby allowing individuals to take advantage of genetic testing. . .”

• Employers are prohibited from firing, refusing to hire, or otherwise discriminating against employees based on their genetic information.

• The law also imposes confidentiality obligations on employers, employment agencies, unions, and training programs that have access to a worker’s genetic information.

• EEOC’s federal EEO poster amended to include GINA information.►http://www.eeoc.gov/employers/upload/eeoc_gina_supplement.pdf

• EEOC expected to issue final regulations before end of 2010.


ADA Amendments Act of 2008

• Went into effect on January 1, 2009.

• Increased the number of applicants and employees covered by the ADA by expanding the definitions of “disability,” “major life activity,” “substantially limits,” and “regarded as.”

• Focus of EEOC investigations and ADA litigation has since shifted from determining whether an individual is “disabled” to determining whether an employer has met its legal obligations to accommodate or attempted to do so.

• EEOC’s most recent regulatory agenda projects a final rule in July 2010; however, Victoria Lipnic, EEOC Commissioner, has said that “it may be some time” before the ADA final regulations come out.


Significance For Employers

• Much broader universe of covered individuals (i.e., FMLA – serious health conditions, now likely covered)

• More requests for accommodations• Interactive process is KEY – (train managers so that

accommodation requests are not rejected out of hand) • Litigation focus shifts from “disability” to “qualifications” and

“reasonable accommodation.” • More EEOC charges and federal court lawsuits

More ADA suites filed by EEOC (pattern or practice).


Proactive Steps – to be taken NOW!

• Review and revise job descriptions and other documents showing essential functions

• Review and revise documents showing qualifications standards (advertisements, requisitions, internal postings)

• Have in place a formalized accommodation policy and process

• Train supervisors and managers to recognize accommodation requests and handle those appropriately


Federal E-Verify Program

• E-Verify is the federal government’s online verification system that uses Social Security Administration and Department of Homeland Security databases to verify that an employee is authorized to work in the United States.

• Voluntary for private employers.

• Mandatory participants include federal contractors and subcontractors and employers in certain states with more stringent regulations.


E-Verify in Illinois

• E-Verify has never been required in Illinois.

• Illinois is the only state that has ever tried to block the use of E-Verify by private employers.

►In 2007, the “Illinois Act” made it unlawful for Illinois employers to enroll in the federal E-Verify program until the databases supporting the program reached a heightened level of accuracy.

• United States v. Illinois, No. 07-3621 (C.D. Ill. Mar. 12, 2009).

►Illinois Act invalidated by the Supremacy Clause.

►Act conflicted with the federal Illegal Immigration Reform and Immigrant Responsibility Act, which provides that any employer may enroll in the federal program.


New Illinois E-Verify Law

• A new Illinois E-Verify Law, effective January 1, 2010, places new state-level obligations on employers who use E-Verify.

►Employers must complete a sworn attestation either upon initial enrollment in E-Verify or by January 31, 2010, if already enrolled.

►The law details a number of prohibited actions and assess significant fines and petty offense charges for knowing and willful violations.

►The law provides injured employees with a private right of action in state court if they first seek redress with the Illinois Department of Labor.


Looking Back: 2009-2010

• Recent Litigation in Illinois Federal Courts:

►Increased wage & hour collective and class action activity

►Cases involving the healthcare profession

►Cases addressing hiring issues affecting the healthcare profession


Increased Wage & Hour Collective And Class Action Activity

• Since 2000, the number of FLSA suits filed has more than quadrupled.

• Staggeringly large verdicts and settlements

• In the first two months of 2010, four FLSA suits filed in the Illinois District Courts:

►Primary issue: the 30-minute “automatic” meal period deduction:

Plaintiffs claim they did not take meal periods due to (1) critical patient care needs and (2) staffing shortages.

Plaintiffs also claim their meal periods were interrupted.


Cases Involving The Healthcare Profession

• Reed v. Advocate Healthcare, No. 06-cv-3337 (N.D. Ill. 2009) ►Nurses sued four Chicago hospitals under antitrust laws, claiming that the

hospitals exchanged detailed and nonpublic information about how much they paid, and planned to pay in the future, their registered nurses.

►Class certification denied because nurses failed to establish predominance. Economist’s expert testimony regarding calculation of damages was unreliable to

the point of being inadmissible.

• Stratton v. Carle Clinic Assoc., No. 09-cv-1381 (C.D. Ill. 2009)►Stratton, former VP for Research, filed whistleblower suit, alleging that she

was fired in retaliation for her repeated warnings that the clinic violated federal regulations intended to protect cancer patients enrolled in clinical trials.

►Litigation is ongoing; motion to dismiss pending.


Cases Addressing Hiring Issues

• Fischer v. Vance Pub. Corp., 2010 WL 51441 (N.D. Ill. Feb. 12, 2010)►Where Plaintiff lost her job due to restructuring, only alleged a failure to hire or

transfer her to a different position, and admitted that her job was not absorbed by other positions, case was properly characterized as a failure-to-hire – not discriminatory discharge – case.

►Though the employer strongly encouraged Plaintiff to apply to vacant position, the fact that Plaintiff failed to do so doomed her failure-to-hire claims.

• Scruggs v. Garst Seed Co., 587 F.3d 832 (7th Cir. 2009).►Employer’s failure to re-hire Plaintiff for a vacant position after her job was

eliminated in company-wide restructuring was not retaliatory, even though Plaintiff filed internal complaints and an EEOC charge prior to her job elimination.


Failure to Hire Claims: A Real World Example

• Xodus v. The Wackenhut Corp., 626 F. Supp. 2d 861 (N.D. Ill. 2009), appeal pending 7th Cir. Court of Appeals

• Religious discrimination case

• Serial Plaintiff

• Never asked for accommodation

• To be determined


Looking Forward: 2010 and Beyond

• Legislative Agenda: Restrictions on Use of Credit Information in Employment Decisions

• EEOC Agenda: ►Eradicating Racism and Colorism from Employment

(E-RACE) Initiative ►EEOC Systemic Discrimination Initiative ►EEOC Regulatory Plate Full


Legislative Agenda: Restrictions on Use of Credit Information in Employment Decisions

• “Equal Employment for All Act,” H.R. 3149, introduced in the House of Representatives in July 2009, seeks to amend the Fair Credit Reporting Act.

►Bill is currently in committee.

• Seeks to prohibit the use of consumer credit checks against prospective and current employees for the purpose of making adverse employment decisions.

• EEOC: “It seems likely that in most cases credit check policies will be legally problematic” in Title VII cases where adverse impact is shown.


EEOC E-RACE Initiative

• EEOC to identify “issues, criteria and barriers” that contribute to race and color discrimination in the workplace.

• EEOC to collect data regarding background screening policies and procedures that may disparately impact minorities

• EEOC has determined that employer policies of excluding individuals from employment based on criminal history may have an adverse impact on certain minority populations.


EEOC E-RACE Initiative

• EEOC has filed two pattern and practice cases to advance its disparate impact theory regarding background screening.

►EEOC v. Freeman d/b/a TFC Holdings Co. (D. Md. Sept. 30, 2009). Alleging race and sex discrimination due to Company’s use of credit

histories and certain types of arrests/convictions as selection criteria.

►EEOC v. Peoplemark (W.D. Mich. Sept. 29, 2008). Alleging that Company’s alleged policy to deny employment to any person

with a criminal record has a disparate impact on African-Americans.

• Consequence: Uptick in EEOC requests for nationwide information regarding background screening procedures.


EEOC Systemic Discrimination Initiative

• Systemic Discrimination: ►Discrimination having a broad impact on an industry, profession,

company, or geographic location arising out of a pattern or practice of discrimination, a policy with discriminatory intent or effect, or discrimination against a class of individuals.

• EEOC’s Systemic Discrimination Initiative: ►EEOC to identify, investigate, and litigate cases of widespread

discrimination.

►Congress approved a $23 million budget increase for EEOC’s fiscal year 2010 budget to facilitate the initiative.


EEOC Systemic Discrimination Initiative: Strategies For Systemic Charges

• EEOC Information Requests – EEOC has begun to serve enhanced information and document requests on employers

►Employer Goal: to work cooperatively with the EEOC to narrow the scope of the information request so the parties can mutually agree on an approach that will be responsive to the EEOC’s investigative needs and reasonably protect the company’s concerns.

►Range of possible objections to expansive EEOC requests: Information sought is attorney work product, protected by privilege

Information sought is not relevant to the charge; not reasonably calculated to lead to the discovery of admissible evidence

Information sought not properly limited in time or limited geographically


EEOC Systemic Discrimination Initiative: Strategies For Systemic Charges

• EEOC Subpoenas – Aggressive tool, used primarily in the face of employer resistance

►Employer Goal: to walk a fine line between producing information and data which may be relevant to the individual charging party and objecting to producing information and data which an employer asserts to be both burdensome and irrelevant.

►Range of possible objections to overbroad EEOC subpoenas: Nationwide requests – to the extent they have little/nothing to do with

charging party’s allegations – are improper

Request is burdensome; probative value outweighed by burden/cost

Requests regarding other employees raise privacy concerns


EEOC’s Regulatory Plate is Brimming

• EEOC experiencing “an unprecedented amount of regulatory activity,” says EEOC Commissioner Victoria Lipnic.

►ADA Regulations will not be published for “some time.”►GINA Regulations on the agenda.

• Three recess appointments by President Obama restored the EEOC to its full, five-member strength for the first time since August 2008.

►EEOC is “operating under a window of time” that will close when Congress adjourns at the end of 2011, unless the Senate confirms them to full terms before then.


Thank you for joining us.

Questions?

Erin Dougherty Foley

Seyfarth Shaw

312-460-5504

[email protected]

Documents

Recent Developments in Employment Law: CAHR 2010 Annual Conference June 4, 2010 Erin Dougherty Foley