Consider this scenario: an employee was going through a very messy divorce and, as a result, started taking several medications to deal with the stress. The medications had severe side effects, including mood swings, which had been noticed by coworkers for weeks. On a particularly bad day, the employee snapped and threatened several coworkers with violence. The employee was sent home for two weeks, but came back after the absence assuring everyone that he was fine. He had a note from a doctor stating that he could return to work, but everyone, including the employer, was leery of putting him back in the office environment. Can the employer ask for more than the doctor’s note?

The Americans with Disabilities Act provides that after an employee has been hired, an employer may make disability-related inquiries and require medical examinations only if they are “job-related” and “consistent with business necessity.” A medical examination is job-related and a business necessity if an employer has a “reasonable belief” that the employee’s ability to perform essential job functions will be impaired by a medical condition or that he will pose a direct threat due to a medical condition.

In the scenario given above, the employer would have a reasonable belief that employee posed a direct threat to other employees.  It is the employer’s right to ask that the returning employee submit himself to a medical exam.

Of course, such a request may be met with resistance. Employers should document the basis for their reasonable belief that an exam is needed. It would be easy for a disgruntled employee to claim a medical exam request is retaliatory in nature. As is the case anytime when dealing with an employee’s health, conversations should be confidential in nature. Employee medical exams after leaves are possible, but must be approached with care.

Preston Clark Worley is an associate with McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Worley concentrates his practice in employment law, land development, telecommunications, real estate and affordable housing. He is located in the firm’s Lexington office and can be reached atpworley@mmlk.com or at (859) 231-8780.

This article is intended as a summary of  state and federal law and does not constitute legal advice.

Because the plaintiffs’ claims were brought under the Fair Labor Standards Act, the IRS determination letters were not dispositive of the issue. In fact, the FLSA has its own test, commonly referred to as the Economic Realities Test, which determines workers’ classification. The FLSA test considers the following factors:

(1) The permanency of the relationship between the parties;

(2) The degree of skill required for the rendering of the services;

(3) The extent of the worker’s investment in equipment or materials for the task;

(4) The worker’s opportunity for profit or loss, depending upon his skill;

(5) The degree of the alleged employer’s right to control the manner in which work is performed; and

(6) Whether the service rendered is an integral part of the alleged employer’s business.

At trial, the plaintiffs testified their working relationship with defendants was of a permanent nature, they had worked hundreds of hours of uncompensated time, and the defendants exercised strict control of their daily schedules while on the road.

Defendants counter-argued the plaintiffs worked on a job-by-job basis, the plaintiffs had great autonomy in how the work was completed, and there was no credible evidence supporting plaintiffs’ alleged overtime work. Additionally, defendants pointed out that even if the IRS classification applied for FLSA purposes, the Internal Revenue Code includes a safe harbor provision, which allows an employer to show that classification of certain workers as independent contractors is consistent with “industry standards.” To support their safe harbor defense, defendants presented evidence that the entertainment industry routinely hires similarly situated workers as independent contractors.

The jury returned a verdict in favor of the employers, finding that the plaintiffs were properly classified as independent contractors for purposes of the FLSA. Plaintiffs subsequently filed a motion for a new trial arguing that the verdict was unsupported by the evidence. The district court denied the motion. On appeal, the U.S. Court of Appeals for the 6th Circuit (which encompasses Kentucky, Michigan, Ohio, and Tennessee) affirmed the district court’s decision.

The Troyer decision illustrates that the distinction between independent contractor and employee is never clear-cut. Even if an agency provides workers with a certain status, another agency may reach a different  conclusion. An employer should always be aware that their workers’ classifications arise from the relationship to the employer as opposed to the titles employers give them.

If you have questions regarding worker statuses or would like to know more about the obligations owed to workers based on their classification, contact the labor and employment attorneys at McBrayer, McGinnis, Leslie & Kirkland, PLLC.

Special thanks to Amanda Stubblefield and Matthew Finley, Law Clerks for McBrayer, for contributions to this blog post. If you have any questions regarding the content found in this blog post please contact McBrayer employment law attorney, W. Chapman Hopkins at chopkins@mmlk.com or (859) 231-8780.

This article is intended as a summary of newly enacted federal law and does not constitute legal advice.

The Troyer case involved a group of plaintiffs, led by Casey Troyer, who sought compensation from their former employers, T.John.E Productions, Inc., Think Fast Inc., X-Treme Entertainment, and certain operating members (herein “Defendants”). The defendants ran a business which created and booked an assortment of variety acts and game-show like productions for college markets. Plaintiffs alleged they were owed overtime pay and benefits under the FLSA. The FLSA’s protections are only afforded to workers who are “employees” – meaning that the plaintiffs’ classification was critical to their case.

During trial, plaintiffs introduced a very interesting piece of evidence: T.John.E’s SS-8 determination letters from the IRS, wherein the IRS determined that the plaintiffs were, in fact, “employees” under the 20-factor IRS guidelines and should be classified as such.

The IRS classifies workers to determine whether an employer must withhold taxes from the worker’s salary, and make certain contributions on a worker’s behalf. So, if the IRS already ruled that plaintiffs were employees, shouldn’t this be a clear win for them in the court action? The answer may surprise you; check back on Wednesday for the court’s ruling.

Originally, the employer notification was to occur by March 1, 2013, but the deadline was delayed. On May 8, 2013, the U.S. Department of Labor (“DOL”) issued Technical Release No. 2013-02, which announced the long-awaited instruction and contained a Model Notice to Employees of Coverage Options.

Employers subject to FLSA must distribute the notice to current employees no later than October 1, 2013.  New employees must be given the notice at the time of hire beginning October 1, 2013.  For 2014, the DOL will consider a notice to be provided at the time of hire if it is provided within 14 days of an employee’s start date. The notice is applicable to all employees, regardless of their plan enrollment or part/full-time status. It must be provided automatically, free of charge, and may be provided by first-class mail or electronically, so long as it meets the requirements of the DOL’s electronic disclosure policies.

The DOL provided specific details for such notice, as follows:

“[T]he notice to inform employees of coverage options must include information regarding the existence of a new Marketplace [state exchange] as well as contact information and description of the services provided by a Marketplace.  The notice must also inform the employee that the employee may be eligible for a premium tax credit under section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and a statement informing the employee that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.”

The Technical Release also provides an updated model election notice for the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to reflect alternatives offered through the exchanges for comparative purposes.

The model notices should serve as a reminder that employers must determine their obligations under the ACA, and must do so soon. If you have questions about your options in offering health care coverage to employees, contact the employment law attorneys at McBrayer, McGinnis, Leslie & Kirkland, PLLC.

Brittany Blackburn Koch, Esq., is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a native of Pikeville, Kentucky, and a graduate of Centre College and the University of Kentucky College of Law. Ms. Koch’s practice focuses primarily on family law, employment law, criminal law and civil litigation. Ms. Koch has served in numerous public service roles, including representation for Fayette County Bar Association Domestic Violence Pro Bono Advocacy Program. She is actively involved in various organizations and committees, including the Board of Directors for Court Appointed Special Advocates (CASA), Young Professional Committee of Lexington Public Library Foundation, Fayette County and Kentucky Bar Associations, and Centre College Alumni Association.

She may be reached at bkoch@mmlk.com or at (859) 231-8780, ext. 300

This article is intended as a summary of  federal law and does not constitute legal advice.

The requirement was scheduled to become effective in April 2012, but the D.C. Circuit Court delayed any employer action until it decided whether the law was enforceable. Under the rule, an employer’s failure to display the poster would be considered an “unfair labor practice” under the NLRA.

After considering the issue, the U.S. Court of Appeals for the D.C. Circuit found the NLRB rule to be a violation of the NLRA’s “free speech” provision. This provision provides employers with the right to communicate with employees about unions as long as the communication is non-threatening or coercive. In the same token, however, an employer is also free to not communicate with employees about unions.  By forcing employers to display the poster or face charges of unfair labor practice, the Court held that the requirement violated the NLRA’s protection of silence guaranteed to employers. The NLRB does have the right to appeal the Court’s decision, but it is unknown at this time if they will choose to do so.

The Court’s ruling is consistent with a 2012 ruling from the U.S. District Court for the District of South Carolina holding that the NLRB had no authority to mandate such a poster. The NLRB appealed to the U.S. Court of Appeals for the Fourth Circuit in that case. It is important for employees to stay abreast of how these cases play out.

W. Chapman Hopkins is an associate with McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Hopkins concentrates his practice in litigation, with a focus on employment, business, and equine law. He is located in the firm’s Lexington office and can be reached at chopkins@mmlk.com or at (859) 231-8780.

This article is intended as a summary of newly enacted federal law and does not constitute legal advice.

The memo, written by enforcement director Thomas Galassi, says OSHA has received “a series of reports of temporary workers suffering fatal injuries during the first days on a job. In some cases, the employer failed to provide safety training, or if some instruction was given, it inadequately addressed the hazard, and this failure contributed to their death.”

OSHA field inspectors will be using a newly created code in their information system to denote when temporary workers are exposed to safety and health violations. Further, the inspectors will be assessing whether the workers received required training in a language and vocabulary understandable to them. Recently, OSHA teamed with the American Staffing Association and employers that use staffing agencies to promote the use of best practices in relation to the safety of temporary workers.

In Kentucky, employers in the equine and agricultural industry rely heavily on temporary workers to carry out their business.  The new focus on these employees should cause employers to pay special attention to their training practices and compliance with workplace safety standards. If you are an employer and would like more information on OSHA regulations and compliance, contact the labor and employment attorneys at McBrayer, McGinnis, Leslie & Kirkland, PLLC.

Brandon K. Johnson is an Associate in the Louisville, KY office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Johnson practices primarily in the areas of insurance defense, employment law, and general litigation. He can be reached at bjohnson@mmlk.com or at (502) 327-5400.

This article is intended as a summary of state and federal law and does not constitute legal advice.

Since the cuts took effect on March 1, 2013, media attention on the issue has waned. While the political noise has died down, local, state, and federal agencies are still very much entrenched in the topic. Officials at all levels are figuring out how to continue operations as normal when their resources are being reeled in by the government. Agencies have no choice but to tighten their belts by issuing mandatory unpaid days off (“furloughs”), hiring freezes, and other extreme measures to compensate for cuts to their department.

In light of the monetary deductions, the National Labor Relations Board (“NLRB”) has announced that its employees may be required to take up to twenty-two furlough days. Equal Employment Opportunity Commission (“EEOC”) employees may be forced to take 8.5 furlough days. The Occupational Safety & Health Administration (“OSHA”) froze new hires and bonuses. Department of Labor (“DOL”) agencies will reduce travel and training expenses.

The sequester not only imposes real consequences to employees who work for these federal agencies, but also serious impediments to labor law rights and regulations. Employers who are involved in agency charges, administrative hearings, or lawsuits before any of the above-named tribunals will likely feel the effects. At minimum, delays in processing and investigations of claims can be expected. More serious consequences are possible. OSHA chief David Michaels has stated that over 1,000 fewer compliance consultations will be made in wake of their funding cuts. An increasing number of EEOC cases may find their way into court, as a claim that goes unheard by the agency for more than 180 days must receive a “right to sue” status.

Although the sequester is in its infancy stages and the full extent of its accompanying problems is unknown, it is clear that there will be real effects on employers and employees everywhere. As workplace agencies and employers are finding out in a most unpleasant manner, everything—even budget cuts—comes at a price.

Brandon K. Johnson is an Associate in the Louisville, KY office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Johnson practices primarily in the areas of insurance defense, employment law, and general litigation. He can be reached at bjohnson@mmlk.com or at (502) 327-5400.

This article is intended as a summary of state and federal law and does not constitute legal advice.

Determine the employee’s status

If someone is an “at-will” employee, he or she can be terminated any time, for any reason. Yes, you can fire someone simply because you do not like them. Review any existing employment agreements or contracts that could be deemed to negate the at-will status. If an employee is not at will, then they usually have a set period for employment and a termination is governed by an employment contract that likely includes a provision requiring termination “for cause.”  In such an instance, you must remember to review the contract and follow its terms before terminating that employee.

It should be noted that even if  all of your employees are at-will, you are still not out of the proverbial woods. At-will employees can file post-employment lawsuits for a variety of reasons. Any employee, no matter the status, can claim that he was terminated, at least in part, because of a legally protected category (such as gender, religion, disability or age). An employee can also always allege he was terminated for exercising a legal right, such as taking a leave as permitted under the Family and Medical Leave Act, or for refusing to engage in illegal activity.  The term “at-will” is not an insulator for liability but there are steps an employer can take to protect itself against claims of wrongful discharge.

Documentation

The key to avoiding termination lawsuits is documentation.  All instances of substandard performance or misconduct should be documented (even for at-will employees). The recording of these things can provide support for the termination.  Check records to see if an employee has received a previous warning or has been written up—evidence of past problems can go a long way in justifying a termination decision which negates against wrongful termination.

On the other hand, if an employee recently received a raise or earned a stellar performance review, then a sudden discharge may raise suspicion if other factors are present.  A positive paper trail can indicate termination was predicated upon illegitimate (and perhaps unlawful) reasons.

Review company policies and procedures

Take time to review the company policies and procedures to make sure the punishment fits the crime. For example, if you are considering firing an employee who violated the company dress code, but the employee manual says that such an offense first requires a warning, you may be left to explain why you did not abide by your own rules.

If the employee manual is silent, consider whether treatment of this employee is consistent with the treatment of others similarly-situated. Consistency is crucial. An experienced HR employee can help you determine if uniformity in management decisions is present.

Calm down and investigate

Never, ever (ever!) explode on an employee and end the outburst by telling him he is fired. Acting out of anger or frustration can just cause more problems. An employee whose termination is preceded with yelling or other emotion-driven acts is much more likely to become disgruntled. There may be times when a sudden discharge seems warranted, however, best practices dictate that you should suspend an employee first and conduct an investigation. This will give you time to cool off and collect evidence of the wrongful act.

More often, though, a decision to terminate may not be so clearly defensible. If an investigation is required, act promptly. Document your findings, and remain neutral in your treatment of the suspect employee (and the accuser employee, if there is one) until the facts are uncovered.

Cut the cord face-to-face

When it is time to let the person go, do not take the easy way out by writing an email or letter. Not only is this impersonal, but things in writing can be misinterpreted. Likely, if you do put something in writing, the employee will read it, think it over, and then confront you about the decision. It is better for all involved to handle the issue head-on and with a witness present.

If you are nervous about how the employee will handle the news, then take time to “script” how you would like it to go. By planning the encounter, you will be less likely to deviate from the objective or make the meeting more excruciating than it has to be. Termination is like pulling off a Band-Aid—it hurts less if you do it in one sweeping motion. Before the meeting, remember to:

• Arm yourself with any documentation you may need to back up your reason for the decision.
• Decide who else you would like to be present in the room; it is always a good idea to have an unbiased party privy to the meeting.
• Be stern in what in what company items or information must be handed over before departure and review with the employee any non-compete or confidentiality clauses that have been signed.
• State exactly how long the employee has to remove his belongings and self from the premises. If you do not want it to disrupt the office environment, consider letting the employee gather his things during off-hours with the accompaniment of security or personnel.
• If there is any chance of violent retaliation, have a procedure in place beforehand for removing the employee from the premises and consider having company security personnel on-hand.

Before you sit down with the employee, you should contemplate the issue of severance pay. Any time an employee is fired, there is possibility that legal action will follow. To avoid this, a severance agreement can be negotiated with the employee. The employee will sign a release foregoing their right to sue in exchange for something of value. Keep in mind that the exchange does not have to be money, but can be something intangible, such as an agreement to provide positive job references or to not contest unemployment benefits.

To ensure that your agreement will hold up if challenged in court, make sure any agreement is in writing, signed by the employee, and states that the waiver of right to sue is knowing and voluntary. You will also want to allow the employee some time to consider signing it and in certain circumstances, the law sometimes requires a twenty-one day consideration period.  Also always allow the employee to review the document with an attorney if he so chooses.

The wrap-up

Once the employee is out the door, you can breathe a sigh of relief. But know there is still work to be done. A terminated employee may be legally entitled to benefits, such as COBRA or vested 401(k) or pension benefits. You will want to check with your HR staff or an attorney about the necessary procedures for compliance with these. You will also have to issue the employee’s final paycheck, which may have to include payment for accrued or unused vacation days.

Letting go of an employee is rarely as easy as Mr. Trump makes it look, but with some planning and forethought, you can traverse the legal landmine safely.

Cynthia L. Effinger, an Associate of the firm, joined McBrayer, McGinnis, Leslie & Kirkland, PLLC in 2012. Ms. Effinger has a broad range of legal experience gained through 13 years of practice throughout the Commonwealth of Kentucky where her clients conduct business. Ms. Effinger’s practice is concentrated in the areas of employment law and commercial litigation. She also has experience with First Amendment litigation, securities litigation and complex litigation. Ms. Effinger can be reached at ceffinger@mmlk.com or at (502) 327-5400, ext. 316.

This article is intended as a summary of state and federal law and does not constitute legal advice.

In a nutshell, ERISA requires that an association be considered an “employer” to sponsor a group health plan at the association level.  In order to qualify as an “employer”, an association must meet bona fide association requirements, including like-industry and participant control requirements.  By sponsoring a group health insurance plan at the association (rather than the individual employer) level, associations are able to pass along to their employer members reduced coverage premiums available under large group plans.

Important health reform changes are applicable to insurance plan renewals occurring on or after January 1, 2014.  Trade associations should act now to confirm that they are structured to be eligible to purchase group insurance coverage, if their member benefits include health care coverage.  If you need help restructuring your association for this purpose or have questions, contact Clay Wortham in the Lexington office. He can be reached at cwortham@mmlk.com or at (859) 231-8780.

Clay B. Wortham is an Associate of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Mr. Wortham concentrates his practice in healthcare law and is located in the firm’s Lexington office.  He can be reached at cwortham@mmlk.com or at (859) 231-8780.

This article is intended as a summary of state law and does not constitute legal advice.

Watch out for strange emails

Twitter will never ask you to provide your password via email, a direct message, or @reply. Twitter will never ask you to download something or sign-in to a non-Twitter website. So, if you get an email or message prompting you to do any of these things, don’t. If you receive a suspicious email, delete it (preferably without opening) and immediately visit https://Twitter.com to change your password. Emails like this are “phishing” for personal, online information that they can use to hack into your accounts. If the folks at Twitter believe your account has been phished or hacked, they may reset your password to prevent access. In this event, they will email you a link to where you can reset the password on your own. The password reset link is always available on the Twitter website, so you can visit it directly.

In addition to watching out for strange emails, be sure to use caution when sending your own. It is good practice to verbally communicate the log-in information with those who have user-access. If your name and password are in an email, the email may be sent to the wrong person internally or may be accessed externally via hackers.

Keep your computer up-to-date

Company browsers and operating systems should always be updated with the most current versions. All computers should have some kind of program which protects against viruses, spyware, and adware. By keeping your software in good overall health, you make the chance of a Twitter hack less likely.

Be on the lookout for two-factor authentication

There are online accounts (Facebook, for example) which require or offer users the option of two-factor authentication. With the slew of recent Twitter hackings, Twitter will no doubt soon be offering two-factor authentication to increase its security. This two-factor authentication should be used by all businesses, if not also for personal accounts. Two-factor authentication is a process in which a user is sent a randomly generated code to enter along with their user name and password when logging in. This code can be sent via text message to users’ mobile phones. Thus, even if a hijacker discovers your password, access will be denied without the random code. Think of it as another lock on your company’s social media door.

_______________

If an errant tweet does make it onto your company’s Twitter feed, swift action is necessary. You should have a social media crisis plan in place so that the problem can be handled immediately and effectively. The plan may involve steps such as changing passwords, sending an email to clients and customers explaining your account has been compromised, or tweeting out an apology to followers.

A 140-character message can do a lot of damage to your business. Take preventive steps to curb the likelihood of this happening. Just like every company should have a lock on the front door, every social media account should be bolted with security to keep out evil-doers.

Amy D. Cubbage is Of Counsel in the Louisville office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She concentrates her practice in litigation in the areas of employment, complex tort and commercial litigation, including class actions, toxic torts and mass torts. Ms. Cubbage may be reached at (502) 327-5400, ext. 308 or acubbage@mmlk.com.

This article is intended as a summary of  state and federal law and does not constitute legal advice.