By Jeffrey R. Schmitt
On Wednesday, January 11, 2012, the United States Supreme Court granted victory to religious organizations across the nation by confirming that their First Amendment freedoms insulate churches and schools from certain employment discrimination claims. Some will consider this a landmark decision, and it may be the Court’s most significant church-state ruling in decades. The decision in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC confirmed churches’ and schools’ autonomy to make decisions about whom to hire and fire, when those employees have job duties related to the ministry of the organization.
The Court ruled against an elementary school teacher in her employment discrimination claim against Hosanna-Tabor Evangelical Lutheran Church and School, of Redford, Michigan, holding that the First Amendment protects the school from the reach of anti-discrimination laws, when the claims involve certain employees. The ruling was in line with many lower federal court rulings, but the issue had not previously been presented to the United States Supreme Court.
In the decision, written by Chief Justice John Roberts, the Court confirmed the “ministerial exception” to certain anti-discrimination laws, concluding that the courts could not force the school to reinstate the teacher, Cheryl Perich. Perich claimed she was fired because she pursued a claim under the Americans with Disabilities Act, alleging she suffered from narcolepsy.
While the Supreme Court confirmed the ministerial exception for religious organizations, such as churches and schools, it did not provide a strict test for determining exactly who was considered a “minister” for purposes of the exception. However, the Court’s ruling is clear that the exception applies to a class of employees broader than merely clergy. Perich was an educator, and was responsible for teaching secular courses, in addition to religion class, and she attended chapel with students. However, she had formal religious training and had recently been designated as a “called” teacher of the school, as opposed to a lay or contract employee. Chief Justice Roberts’ opinion is clear that her duties with respect to religious instruction at the school were sufficient for her to fall under the umbrella of the ministerial exception. The Court was further not persuaded that the small amount of time spent by the teacher teaching religion class during her work day was a significant factor, stating “the issue before us, however, is not one that can be resolved with a stopwatch.”
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01/12/12 12:10 PM
Employment Law, Litigation | Comment (0) |
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Supreme Court Ruling Protects Religious Organizations from Employment Discrimination Claims
By Christopher D. Vanderbeek
In September 2011, Missouri’s Western District Court of Appeals rendered its opinion in State ex rel. KCP & L Greater Missouri Operations Co. v. Cook. The Court ruled that Missouri employees may sue their employers in civil court where they have allegedly suffered an “occupational disease” as a result of their employment. It is important to note that the Court did not bar employees from filing workers’ compensation claims based on occupational diseases. Rather, the Court essentially gave employees with occupational diseases the option of either filing a workers’ compensation claim or filing a civil lawsuit.
Prior to KCP & L, the general understanding among employers, employees, the State of Missouri, and workers’ compensation legal practitioners was that the Missouri workers’ compensation system was the exclusive remedial forum for any claim involving a work-related injury, whether it be a broken arm or lung cancer. This general understanding was derived from Section 287.120 of the Missouri statutory code. Section 287.120 (the “exclusivity provision”) states as follows:
- Every employer subject to the provisions of this chapter shall be liable, irrespective of negligence, to furnish compensation under the provisions of this chapter for personal injury or death of the employee by accident arising out of and in the course of the employee’s employment, and shall be released from all other liability therefor whatsoever, whether to the employee or any other person.
- The rights and remedies herein granted to an employee shall exclude all other rights and remedies of the employee, his wife, her husband, parents, personal representatives, dependents, heirs or next kin, at common law or otherwise, on account of such accidental injury or death, except such rights and remedies as are not provided for by this chapter.
The intent behind the exclusivity provisions was that Chapter 287 of the Missouri statutory code would provide the exclusive remedy for all claims based on work injuries. However, the Court in KCP & L exploited an oversight in legislative wording – the legislature only made the workers’ compensation system the exclusive forum for claims based on injuries (or deaths) caused by accidents.
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12/20/11 12:30 PM
Business Law, Employment Law, Workers' Compensation | Comment (0) |
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Employees Can Now Sue for Occupational Diseases: Understanding Breeds a Solution to the Problem
By Christopher D. Vanderbeek
Missouri Appeals Court Says Employees Can Sue Employers in Civil Court for Occupational Disease Claims
Missouri’s Western District Court of Appeals recently decided that an employee can sue his employer in civil court for an “occupational disease” claim. In KCP & L Greater Missouri Operations Co. v. Cook, the employee claimed that he contracted mesothelioma as a result of his employment. The court ruled that Gunter was allowed to file suit in civil court because, under Missouri law, the workers’ compensation forum is not the exclusive forum for a claim premised on an “occupational disease” injury, such as mesothelioma, even if the injury is allegedly work-related. (Note the distinction between an “occupational disease,” which develops over a period of time, versus an injury that happens instantaneously or acutely as a result of a single accident.)
This is a major change from prior law. Historically, the exclusive remedy for every employment-related injury was a workers’ compensation claim. And workers’ compensation is a system that clearly benefits employers (as well as third-party workers’ compensation insurance carriers). Relative to the civil realm, the workers’ compensation system places a dramatically lower ceiling employer and insurer liability vis a vis employee benefits.
There are generally two types of “occupational disease” injuries. The first type is an actual disease, such as mesothelioma, that results from an employment condition. The second type is a “repetitive use” injury, which results from the employee overusing the injured body part. Although it is yet to be seen whether or not Missouri courts will allow pursuit of repetitive use claims in the civil forum as well, a plain-language reading of the court’s opinion in KCP & L suggests that they will.
What This Means for Missouri Employers
This does not necessarily mean that a large number of employees will pursue injury claims in civil court. Repetitive use injuries like carpal tunnel syndrome are caused by repetitive use of the injured body part, plain and simple. It would be difficult for an employee to prove that his employer’s negligence cause this sort of injury. To prove negligence, an employee must prove that the employer knew or should have known that a harmful condition existed and that its employees were at risk as a result. If the employee cannot prove negligence, it would be foolish for his attorney to file a civil lawsuit rather than a workers’ compensation claim.
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11/23/11 10:59 AM
Business Law, Employment Law, Litigation | Comment (0) |
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Occupational Disease Claims: Civil Court an Option for Employees
By Marcia Swihart Orgill
Substantial Risks Exist for Misclassifying an Overseas Consultant as an Independent Contractor
Part of a series on issues related to Manufacturers, Distributors and International Trade
With both the IRS and the Department of Labor targeting the misclassification of U.S. employees as independent contractors, many companies are re-examining their worker classifications. While most U.S. companies are aware of the costly consequences of such misclassification, they may not be cognizant of the considerable dangers of misclassifying foreign workers as independent contractors.
Frequently, U.S. companies choose to engage local representatives in their overseas markets as independent contractors rather than employees in order to avoid compliance with foreign employment laws, withholding tax requirements and social welfare/insurance contributions. In many countries, these obligations may be considerably more onerous than they are in the United States.
However, the consequences of misclassifying a foreign worker as an independent contractor are frequently more costly as well.
For example, in Germany an employer is obligated to remit social security type payments for its employees that are equal to about twenty percent of the employee’s compensation to German social welfare and insurance agencies. The employer is also required to withhold from the employee’s compensation the employee’s social security obligations which are also equal to about twenty percent of his/her compensation.
If an employer fails to withhold the requisite amount from the employee’s wages, the employer becomes liable for the employee’s social security obligations. The employer many not seek reimbursement for this amount from the employee, regardless of any contractual agreement that provides for such reimbursement. The look back period for collection of these social security payments is thirty years in some cases.
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11/14/11 4:41 PM
Business Law, Employment Law, International, Manufacturing and Distribution | Comment (0) |
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Beware: It’s Risky to Misclassify an Overseas Consultant
By Ruth A. Binger
To add to the woes and stress of business owners, supervisors and managers, public and private decision makers who act directly or indirectly in the interest of the employer can be sued in their individual capacity under the Family and Medical Leave Act (“FMLA”).
Most of us forget it, but the same rules that apply to actions under the Fair Labor Standards Act also apply to actions brought under the FMLA (29 C.F.R. Section 825.104(d) (2009)). A July 11, 2011 decision by the Eastern District of Virginia Court, Eastern Division, titled Weth v. O’Leary (U.S. District Court of E.D. Virginia, Alexandria Division) provides important lessons regarding this issue with respect to terminating employees returning from Family Medical and Leave Act, especially if the decision makers are public officials and have sovereign immunity.
In Weth, the Court refused to grant summary judgment and allowed a FMLA case to proceed to trial because of a highly suspicious timeline, prior raises and highly positive reviews, and the lack of write ups or written documentation bolstering the performance reason defense.
Plaintiff Weth initially sued O’Leary, both individually and in his official capacity as Arlington County Treasurer. The Court granted Summary Judgment in favor of O’Leary with respect to the official capacity claim because as a state constitutional officer, O’Leary was entitled to sovereign immunity. The Court refused to dismiss the individual claim because sovereign immunity does not apply to individuals sued in their purely personal and individual capacity. The Court cited favorable decisions from various Circuit Courts (Darby v. Bratch, 287 F.3d 673, 681 (8th Cir. 2002)) where courts found that there was no reason to distinguish liability between individual corporate officers and individual public officials.
Weth was employed as a Deputy Treasurer for Litigation for the Arlington County Treasurer for six years. As late as 2009, Weth had received highly positive reviews regarding her job performance and approved salary increases.
Weth was diagnosed with cancer in September of 2009 and advised O’Leary. In December, Weth initially sent emails to O’Leary advising him that she would need surgery in January, but then advised that the surgery would be in December. Weth worked until the 21st of December, underwent surgery on the 22nd of December and returned to work on the 16th of February.
On her return date O’Leary advised her that she needed to begin looking for a new job immediately, that she was being demoted and almost all of her job duties were being removed and that her sole responsibility was to find a job. One month later, O’Leary suspended her, sent her home with the directive that she was being relieved of all of her job duties and her sole responsibility was to find other employment.
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10/27/11 2:40 PM
Business Law, Employment Law | Comments Off |
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Terminate an Employee Returning from FMLA Leave and You Could Be Sued in Your “Individual Capacity”
By Marcia Swihart Orgill
Both the IRS and the Department of Labor have indicated their intent to target misclassification of workers as independent contractors rather than employees. In the proposed budget for fiscal year 2012, $240 million is allocated for initiatives specifically related to enforcing this misclassification.
Employers who have misclassified workers in the past may want to consider taking part in a new program that will allow them to voluntarily correct their misclassification of workers at a relatively low cost. As part of its “fresh start initiative”, the IRS recently announced a new Voluntarily Classification Settlement Program (VCSP).
Under this program, eligible employers will only pay an amount that equals just over one percent of the wages paid to the misclassified workers in the past year, if they prospectively treat these workers as employees. The IRS will not audit employers on payroll taxes related to these workers for past years, and employers will not be subject to interest or penalties for past misclassifications.
In order to be eligible for the program the employer must:
- consistently have treated the workers in the past as non-employees,
- have filed all required Forms 1099 for the workers for the previous three years, and
- not currently be under audit by the IRS, the Department of Labor, or a state agency concerning the classification of these workers.
To apply for the program, an employer must file Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before it wants to commence treating the workers as employees.
Employers participating in the program will be subject to a six-year statute of limitations for the first three years under the program, rather than the three-year statute of limitations that generally applies to payroll taxes.
Information about the VCSP is contained in IRS Announcement 2011-64.
Posted by Attorney Marcia S. Orgill. Orgill concentrates her practice in the area of business and personal taxation—especially complex domestic and international tax strategies.
10/14/11 6:00 AM
Business Law, Emerging Business, Employment Law, Manufacturing and Distribution | Comments Off |
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Misclassification of Workers as Independent Contractors: How to Take Advantage of IRS’s New Voluntary Classification Settlement Program
By Christopher D. Vanderbeek
The United States Department of Labor has initiated a crackdown on enforcement of federal wage laws. The Labor Department has signed agreements with twelve states, as well as the I.R.S., to share information about wage violations. Missouri is one of the states that has signed on to assist in the effort. Illinois reportedly plans to become involved in the near future.
The hope is that the shared information will help the Labor Department target businesses that improperly classify employees in order to pay employees less.
The most prevalent violations across the country involve employers classifying employees as “independent contractors.” This allows employers to avoid paying employees overtime pay and avoid complying with minimum wage requirements. Employers also do not pay for workers’ compensation and unemployment insurance for these misclassified workers. Employers also skip out on federal payroll taxes for the workers, which is why the I.R.S. is involved in the effort.
The practice of misclassifying workers is illegal, but U.S. businesses have been employing it as a cost-cutting measure for years. Misclassification for the purpose of depriving workers of overtime pay and minimum wage – known as “wage-theft” – is most prevalent and wide-spread in the hotel, restaurant, janitorial, health care, and daycare industries. The Labor Department has recently intensified efforts to curb the practice of misclassification, including getting states like Missouri involved, due in large part to the practice growing across corporate industries in recent years.
Thus far, the Labor Department’s crackdown has been an overwhelming success. From 2008 to 2010, collection of back wages for misclassified workers increased by 400 percent. The Labor Department expects even better results now that states like Missouri are involved in the effort.
Missouri businesses looking to ensure compliance with employer classification legal requirements, as well as other employment-related legal requirements, can find more information here.
Posted by Attorney Christopher D. Vanderbeek. Vanderbeek is involved in the evaluation and defense of workers’ compensation and other insurance claims, protecting the interests of employers and insurers.
10/10/11 8:56 AM
Business Law, Emerging Business, Employment Law | Comments Off |
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Federal Crackdown on Misclassifying Employees Includes Missouri and the I.R.S.
By Christopher D. Vanderbeek
When a Missouri business is faced with a workers’ compensation case, what can its supervisory employees do to assist in the defense of the business?
There are six essential tips to follow that apply in all workers’ compensation cases. These apply regardless of whether (a) an employee suffered a work injury that is indisputable and the injury is of the severity that the employee alleges; or (b) there is a dispute regarding an injury, such as conflicting accounts of how, when, and/or where an injury occurred.
Following these tips will result in a stronger defense for the employer and insurer. Conversely, ignoring them could irrevocably weaken the defense.
1. Be Proactive and Diligent.
- As soon as you find out that an injury has allegedly occurred, first write down all the facts you know.
- Next, speak to the injured employee and any witnesses. Witnesses would be any employees/vendors/visitors that were in the injured employee’s vicinity at the time of injury, even if they didn’t necessarily see the alleged incident.
- Note the conditions where the injury allegedly occurred and how it allegedly occurred.
In some cases, this is easier said than done. In cases where the injured employee does not immediately notify the employer of the alleged injury, it will not be possible to go to the scene of the alleged injury and speak to those present.
- In these cases, as soon as you become apprised of the alleged injury, write down the details as quickly as possible.
- Compile your witness list. Be sure to include any vendors and visitors who were in the vicinity at the time of the alleged injury.
- Figure out what employees were supposed to be working with the injured employee when the injury allegedly occurred. Find out if these employees were working with the injured employee at the time. Speak with the ones who were, with regard to the circumstances surrounding the alleged incident.
And part of being diligent is making sure to…
2. Pay Attention. Don’t just let the issue rest after the initial investigation.
- Take note of conversations in the days following the incident, as other employees might discuss the incident and pertinent information could arise out of their conversations.
- When the injured employee returns to work, note his or her interactions with other employees and take stock of the body part alleged to be injured.
- If you notice that there is or are one or two specific employees with whom the injured employee seems to talk to a lot and spend a lot of time around, seek out those employees, as they may have pertinent information.
- If possible, evaluate the injured employee’s behavior when he or she believes no one is watching.
And when being diligent and paying attention…
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09/11/11 6:00 AM
Business Law, Employment Law, Litigation | Comments Off |
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Six Must-Follow Tips for Employers with Workers’ Comp Cases
By Christopher D. Vanderbeek
Did you know that when a Missouri worker injures (or claims to have injured) himself during the course and scope of his employment, the worker’s employer automatically has a statutory duty to get the ball rolling to ensure that the worker receives workers’ compensation benefits? In Missouri, it starts with the employer filing a “First Report of Injury” with the state.
From this moment forward, the company will play a substantial and vital role in the defense of its interests, as well as the interests of its workers’ compensation insurance carrier. Other employees of the company, such as human resources personnel and the injured employee’s supervisors, are also in an invaluable position to assist in this defense.
For example, consider an employee who claims that a work-related injury has rendered him unable to use his dominant shoulder. If that same employee were to come into work one morning and brag to his co-workers that he caught a giant fish during the previous weekend, it would cast doubt on the severity, or even existence, of the shoulder injury. But without vigilance in reporting from other employees, it is likely that defense counsel would never come to know this information.
Missouri businesses must remember that when a worker allegedly suffers a work-related injury, defense counsel acts on behalf of the company’s workers’ compensation insurer as well as the company itself. This is because in every workers’ compensation claim filed in Missouri, both the insurer and the employer are named as defendants.
Furthermore, the more a company aids in the defense of a workers’ compensation claim, the lower the liability exposure likely will be. This in turn keeps the company’s insurance premiums lower than they would be otherwise.
Naturally, then, it is in the employer’s interest to assist in the defense of the claim.
Next up: Six must-follow tips when dealing with workers’ compensation cases.
Posted by Attorney Christopher D. Vanderbeek. Vanderbeek is involved in the evaluation and defense of workers’ compensation and other insurance claims, protecting the interests of employers and insurers.
09/6/11 10:00 AM
Business Law, Employment Law, Litigation | Comments Off |
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Workers’ Compensation Claims: What Comes First for the Best Defense
By Ruth A. Binger
Have you ever caught your employees publicly griping about your company, or maybe even about you personally, on Facebook? If you have, your first instinct might have been to discipline or even fire them.
But according to several recent decisions from the National Labor Relations Board, if colleagues discuss compensation, working conditions or other issues related to their employment over Facebook, their conduct may be protected by the National Labor Relations Act (NLRA).
A conversation that either plans for group action or brings group complaints to management’s attention is considered “concerted activity” under Section 8(a)(1) of the Act.
So if you see negative posts about your company on Facebook, think carefully before you react.
For a more in-depth look at Employee Social Media Griping read my recent article on social media posts and see what may and may not be protected by the NLRA.
Posted by Attorney Ruth A. Binger. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations, are what distinguish Binger’s practice.
09/2/11 1:12 PM
Business Law, Employment Law | Comments Off |
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Your Employees Are Griping About You on Facebook: Can You Fire Them?
