Author Archives: Mary Gemeinhardt

SUPREME COURT LIMITS USE OF CLASS ACTION ARBITRATIONS

By:  Alan M. Levy

On April 24, 2019 the United States Supreme Court held that an employee cannot expand an individual claim to a class action arbitration unless both parties have explicitly agreed to that process.  Arbitration is created by contract; the parties must agree to waive their statutory right to have a court determine whether their employment contract or other relationship terms were breached.

In recent years the courts have held that an employee who is not subject to a union contract can be required to arbitrate a personal dispute pursuant to an employment contract, acceptance of a company rule, or other form of agreement instead of taking their claim to a court or to an agency such as the EEOC.  At the same time, some employee claims have been presented on a class-wide basis, the complainant arguing that a significant number of fellow employees all had the same issue, such as the method for calculating overtime or obtaining a promotion.  These complainants often argued that individual arbitrations were not economically viable for employees, and that the same remedy should apply to all similarly situated employees.  What had been described as a speedy, inexpensive dispute-resolution process through arbitration for individuals could become a full-scale class action lawsuit if the single employee could expand the potential remedy this way.

In Lamps Plus, Inc. v. Varela, the United States Supreme Court held 5-4 that claims by individual employees could not be expanded into class arbitrations unless the arbitration agreement (typically in the person’s employment contract) specifically provided that the larger process was permissible.  The Court found that the shift from individual to class arbitration was such a “fundamental change” that it “sacrifices the principal advantage of arbitration” and “greatly increases risks to defendants.”

The employee had argued that the parties’ agreement to arbitrate was ambiguous and any choice of process possible under that ambiguity should be interpreted against its author – the party that had drafted the (employment) agreement requiring arbitration to the exclusion of court or agency actions.  Chief Justice Roberts stated for the majority that “Arbitration is strictly a matter of consent,” and an affirmative agreement to both the subject-matter and the procedure for arbitration is necessary to require use of that process.  A class arbitration is fundamentally different from the individualized form envisioned in the Federal Arbitration Act; class arbitration “sacrifices the principal advantage of arbitration—its informality—and makes the process slower, more costly, and more likely to generate procedural morass than final judgment.”  Use of this process requires an affirmative “contractual basis for concluding that the party agreed to do so,” and silence or ambiguity in the language of the underlying agreement to arbitrate cannot be taken as that affirmative consent to this expanded process.

This decision reiterates the contractual basis and limits of arbitration.  Waiving the right to court or agency decision-making and accepting the determination of a private arbitrator require the affirmative consent of a clear contract to do so.

Should you have any questions about the elements of a binding arbitration agreement, its implementation, and its scope, please contact one of the attorneys here at Lindner & Marsack, S.C.

A CLEARLY WRITTEN PLAN DOCUMENT PROTECTS THE PLAN’S ADMINISTRATOR FROM A FIDUCIARY BREACH

By:  Alan M. Levy

What happens when employee benefit plan participants are not accurately informed of their rights?  Who is liable for an error or a failure to inform a participant or beneficiary about their eligibility for benefits?  The best protection for a plan fiduciary is often a clear, well-written current plan document.

Employers sponsor employee benefit plans and typically appoint an owner or management official to be the plan’s official administrator.  Insofar as that party controls collection, investment, or disbursal of a plan asset, he/she is a fiduciary.  Third party administrators (“TPAs”) who perform day-to-day plan operations dealing with participants typically insist on administrative agreements which state that the plan sponsor – not the TPA – is the fiduciary who must act “with an eye single for the interest of the participants and beneficiaries.”  Donovan v. Bierwirth, 680 F.2d 263, 271 (2nd Cir. 1962); ERISA, § 404(A)(1).  A fiduciary risks personal liability if he/she causes a loss to a participant or beneficiary by failing to act “in accordance with the documents and instruments governing the plan.”  ERISA, § 404(a)(1)(D).  Two recent appellate decisions relied on adherence to those plan documents in dismissing breach of fiduciary duty allegations that participants and beneficiaries were not adequately informed of their benefit rights.

In Vest v. Resolute FP US Inc., 905 F.3d 985 (6th Cir. 2018) the United States Court of Appeals for the Sixth Circuit explained that a fiduciary may breach his/her duty to disclose plan benefits and rules if “(1) an early retiree asks a plan provider about the possibility of the plan changing and receives a misleading or inaccurate answer or (2) a plan provider on its own initiative provides misleading or inaccurate information about the future of the plan or (3) ERISA or its implementing regulations required the employer to forecast the future and the employer failed to do so.”  Id. at 987.  The surviving beneficiary in that case alleged a fiduciary breach because neither the TPA nor the fiduciary informed the deceased employee that he had a right to convert his group life insurance coverage to an individual policy when he ceased employment.  The case was dismissed, in part, because the plan’s summary plan description gave sufficiently clear information to satisfy any notification obligation.

In DeRogatis v. Bd. of Trustees of the Welfare Fund of the IUOE Local 15, 904 F.3d 174 (2nd Cir. 2018), the Second Circuit reached a similar conclusion.  The widow of a deceased employee alleged that two “non-fiduciary, ministerial employees” on the plan staff had given her husband incorrect information, causing her to receive less than maximum survivor benefits.  Therefore, she claimed, the individual trustees should be held liable for a breach of their fiduciary duty because they failed to adequately supervise the plan employees’ work.  The court rejected the trustees’ defense that they could not be liable for any unintentional misrepresentations made by the non-fiduciary administrative staff, but went on to rule against the widow because the:

“summary plan description (“SPD”) clearly communicated the eligibility requirements for the various pension and survivor benefits available . . . thereby satisfying the . . . fiduciary duty to provide complete and accurate information.”

Id. at 179.

These cases demonstrate the importance of clear, accurate, and timely plan documents.  Whether or not the TPA or the office staff fail to explain rules and procedures fully and correctly, the participants and beneficiaries may and must rely on the information in the plan documents.  So long as the documents received by the participants are clear and correct, the fiduciaries have satisfied their obligation and should not be personally liable for any misunderstanding about the documents’ statement of rights.

Should you have any questions about the obligations, duties, and protections of a plan fiduciary, or should your employee benefit plan documents need an update or a review, please contact me or another attorney here at Lindner & Marsack, S.C.

LINDNER & MARSACK, S.C. ANNOUNCES NEW PRESIDENT AS TWO NEW ASSOCIATES JOIN THE TEAM

Lindner & Marsack, S.C. announced today that Oyvind Wistrom will take over duties as the Firm’s President. Wistrom has been with the Firm since 1994, has been a shareholder since 2005 and has served on the board of directors since 2014. At the same time, Lindner & Marsack has added two new associates to their team: James Panther and Christopher Saugstad.

Wistrom is pleased to be taking over leadership of the Firm at a time of continued growth. “We’ve built our reputation as a trusted advisor and partner over more than 100 years of helping clients solve their toughest legal challenges,” he says. “I’m honored to have been entrusted with that legacy and look forward to continuing to advance the work we do to help employers minimize risk and implement practical, cost-effective, and legally-sound business solutions.”

Panther joins Lindner & Marsack’s widely-recognized worker’s compensation defense team. He received his JD from Marquette University Law School in 2014 and has been practicing law in Wisconsin since. He is a member of the Wisconsin Association of Worker’s Compensation Attorneys (WAWCA) and the State Bar of Wisconsin.

A 2018 graduate of Marquette University Law School, Saugstad was a Thomas More Law Scholar, a member of the Marquette Business Law Society and had the opportunity to intern for the U.S. Law Library of Congress. He will focus primarily in the areas of employment counseling, litigation and employee benefits. He is a member of the State Bar of Wisconsin, the American Bar Association and the Milwaukee Bar, as well as the Young Lawyers Divisions of those organizations. He is currently admitted to practice in all Wisconsin state courts, in federal court in the Eastern District of Wisconsin, and in the United States Circuit Court of Appeals for the 7th Circuit.

“I’m pleased that one of my first official duties is to welcome James and Christopher to Lindner & Marsack,” says Wistrom. “They will both be great assets to their colleagues and our clients as we continue to provide top quality labor and employment representation and work injury defense to employers in Wisconsin and around the country.”

Updated EEO-1 Reporting Requirements

On March 5, 2019, a Federal Judge reinstated the EEO-1 pay data reporting requirement for all covered employers. Covered employers include employers with over 100 employees or federal contractors with 50 or more employees and a government contract worth $50,000 or more.

The EEO-1, otherwise known as The Employer Information Report, is a compliance survey which is to be submitted to the U.S. Equal Employment Opportunity Commission (the “EEOC”) and the Department of Labor’s Office of Federal Contract Compliance Programs annually.

For employers already required to submit an EEO-1 report, the March 5th reinstatement now requires EEO-1 Component 2 (the pay data reporting requirement) to also be submitted. On April 3, 2019, the EEOC filed a proposal extending the deadline to complete EEO-1 Component 2 to September 30, 2019. The Federal Judge will now assess the EEOC’s proposal and issue an order regarding the proposal and extended deadline. It is recommended employers start taking the necessary steps to gather relevant pay data and prepare for the obligation to file EEO-1 Component 2 in 2019.

Importantly, the Federal Judge’s reinstatement of EEO-1 Component 2 reporting does not in any way alter the deadline to file an employer’s annual EEO-1 report. This deadline is still May 31, 2019.

If you have any questions regarding the updated EEOC reporting requirements and how they may impact your business, please contact me by email at csaugstad@lindner-marsack.com or another attorney with whom you have been working at Lindner & Marsack, S.C.

REGISTER NOW! 2019 COMPLIANCE/BEST PRACTICES SEMINAR

WHEN: May 8, 2019 – 8:00 a.m. – 12:00 p.m.

375 South Moorland Road, Brookfield, WI

WHERE: Sheraton Milwaukee Brookfield Hotel

Registration and a continental breakfast will be served beginning at 7:30 a.m. Click here to register.

This COMPLIMENTARY half-day seminar will address the latest labor and employment topics impacting employers today, including:

2019 Legal Updates for Labor, Employment and Worker’s Compensation

Is Your Company Protected? Legal Challenges in a Tight Labor Market

Mental Health, Alcohol & Opioids in the Workplace: Recognizing an Employee in Crisis and the Impact on Employment Policies and Worker’s Compensation Claims

Trump-Era DOL Proposes New Overtime Rule

By: David Keating

On March 7, 2019, the U.S. Department of Labor (DOL) published an updated proposed rule which would raise the annual minimum salary requirements related to “white collar” overtime exemptions of the Fair Labor Standards Act (FLSA).  The DOL proposes increasing the standard salary level to $679 per week, $35,308 annually.  The current standard salary level is $455 per week, $23,660 annually.  All employees not paid the new standard salary level will be deemed non-exempt under the FLSA.

The new proposed standard salary level represents a significant departure from the final rule issued by the DOL in 2016, which was enjoined by a Texas district court, which sought to increase the exempt salary threshold to $913 per week, $47,476 annually. 

Under the new proposed rule, the annual compensation to qualify for FLSA’s “highly compensated employee” (HCE) exemption would increase to $147,414, of which $679 must be paid weekly.  Today, to qualify for the HCE exemption, an employee must be paid at least $100,000, of which $455 must be paid weekly.

The proposed rule allows employers to include non-discretionary bonuses, incentive payments and commissions to satisfy up to 10% of the standard salary threshold.  The 10% may be paid annually.

The DOL’s proposal does not include automatic future increases.  It does suggest a commitment to a periodic review every four years subject to the notice-and-comment rulemaking process.

The DOL does not propose any changes to the duties test.

The proposed rule is pending publication in the Federal Register.  Following publication, the public will have 60 days to submit comments to the DOL.

If you have any questions regarding the proposed rule and how it may impact your business, please contact me or another attorney at Lindner & Marsack, S.C.

LINDNER & MARSACK, S.C., ANNOUNCES 2018 SUPER LAWYER AND BEST LAWYER DESIGNATIONS

Lindner & Marsack, S.C. today announced seven attorneys acknowledged by Super Lawyers magazine. Honorees include Douglas M. Feldman, Daniel J. Finerty, Thomas W. Mackenzie, Gary A. Marsack, Chelsie D. Springstead, Jonathan T. Swain and Oyvind Wistrom. Feldman, Finerty, Mackenzie, Marsack and Swain were also recognized as Best Lawyers by U.S. News & World Report.

“Year after year, we have had several of our team members honored with Super Lawyers and Best Lawyers designations, and it is a recognition we greatly value and appreciate,” said Mackenzie, President of Lindner & Marsack. He added, “This recognition not only highlights the accomplishments of our individual attorneys but speaks volumes about the quality of work provided by the entire firm as we help employers in Wisconsin and across the country minimize risks and navigate their toughest legal challenges.”

Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. Attorneys are selected using a rigorous, multi-phase rating process in which peer nominations and evaluations are combined with third party research. The objective of the program is to create a credible, comprehensive, and diverse listing of outstanding attorneys that can be used as a resource for attorneys and consumers searching for legal counsel.

Similarly, Best Lawyers rankings are based on a rigorous process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process.

LINDNER & MARSACK, S.C. WELCOMES LAUREN MATTHIESEN TO TEAM  

 Lindner & Marsack, S.C., one of the region’s most respected and long-standing management-side labor and employment law firms, today announced Lauren Matthiesen has joined the firm as an Associate. Ms. Matthiesen will focus on defending worker’s compensation claims across a variety of industries. Prior to joining Lindner & Marsack, Ms. Matthiesen was a worker’s compensation defense attorney at Husch Blackwell and an associate attorney at Matthiesen, Wickert & Lehrer, S.C., where she focused on insurance defense and subrogation.

“Our worker’s compensation team has grown steadily in recent years, and Lauren will be a great asset to our clients in delivering efficient and effective representation for employers in all aspects of worker’s compensation defense,” said Thomas Mackenzie, Firm President.

Ms. Matthiesen received her law degree from Marquette University Law School in 2012. While in law school, she did pro bono work for LAMP (the Legal and Medical Partnership) and served as in intern in the Office of the Chief at the Milwaukee Police Department. She completed her undergraduate studies at the University of Wisconsin-Madison, after which she spent a year studying abroad at the National University of Ireland, Maynooth.

Licensed in both the Eastern and Western District courts in Wisconsin, Ms. Matthiesen is a member of CLM (Claims + Litigation Management). In addition to judging Wisconsin’s high school mock trial competition, she volunteers her time at Milwaukee area events including Germanfest and the Wauwatosa’s Farmer’s Market.

EMPLOYEE NOT ENTITLED TO FURTHER WORKER’S COMPENSATION BENEFITS BECAUSE HER DISABILITY-CAUSING SURGERY WAS NOT RELATED TO A COMPENSABLE WORK INJURY

By:      Daniel M. Pedriana and Claudia R. Harke

On August 28, 2018, District I of the Wisconsin Court of Appeals held that the Plaintiff was not entitled to further worker’s compensation benefits because her disability-causing surgery was not related to a compensable work injury.

In Theresa Payton-Myrick v. LIRC, Theresa Payton-Myrick was diagnosed with arthritic changes and degenerative disc disease in her spine. Payton-Myrick was employed as an administrative assistant at the University of Wisconsin-Milwaukee. On July 21, 2009, she fell out of her desk chair and sustained several muscle strains. She subsequently received opinions from several doctors, one of whom recommended a spinal fusion surgery.

Despite conflicting medical opinions, Payton-Myrick underwent surgery, which resulted in multiple procedures and left her “arguably disabled.” Payton-Myrick applied for worker’s compensation benefits. The UW System denied her benefits, which caused Payton-Myrick to file a worker’s compensation claim.

An administrative law judge concluded that Payton-Myrick had “suffered a work-related injury that aggravated Payton-Myrick’s back condition beyond its normal progression” and that “the treatment, including surgery, was necessary and reasonable.”

The Labor and Industry Review Commission (“LIRC”) reversed the ALJ and found that Payton-Myrick’s muscle strains were from a compensable work injury, however, the work injury had healed and did not aggravate her pre-existing condition enough to necessitate surgery. LIRC also made several factual findings including that Payton-Myrick’s disability causing surgeries treated her pre-existing condition, not her compensable work injury.

The Court of Appeals upheld LIRC’s denial of further benefits based on a holding from the Wisconsin Supreme Court in Flug v. LIRC. In Flug, the Supreme Court ruled that Wis. Stat. § 102.42(1m), which states that if an employee who has sustained a compensable injury undertakes treatment in good faith that is medically acceptable, but unnecessary, the employer shall pay for all disability incurred as a result, only applies if the unnecessary, but acceptable surgery is to address the workplace injury.

Since LIRC made a factual finding that Payton-Myrick’s two spinal surgeries were focused on her pre-existing disc problems, not the workplace injury, the Court of Appeals upheld LIRC’s denial of further benefits.

This Decision does not drastically change the law surrounding whether an employee is entitled to further worker’s compensation benefits, however, it reinforces that Wis. Stat. § 102.42(1m) only applies if the unnecessary-but-acceptable surgery was done to address the workplace injury. However, it will be important to have treating and independent doctors specifically note the reason for an employee undergoing an unnecessary-but-acceptable surgery, as that will determine whether they are owed additional benefits.

The time to appeal this decision has passed and the decision remains unpublished.

If you have questions about this decision, please contact Daniel M. Pedriana by email at dpedriana@lindner-marsack.com or Claudia R. Harke by email at charke@lindner-marsack.com or any other attorney with whom you have been working with at Lindner & Marsack, S.C.

THE DEPARTMENT OF LABOR ISSUES TWO NEW ADVISORY OPINION LETTERS ON THE FMLA

By: Oyvind Wistrom

On August 28, 2018, for the first time in almost ten years,  the U.S. Department of Labor’s Wage and Hour Division (DOL) issued two new advisory opinion letters providing employers with guidance on the application of the Family Medical Leave Act (FMLA) to organ donors and a no-fault attendance policy.  While the advisory opinion letters are not binding authority or legal precedent, they signal DOL’s interpretation of the law and provide helpful guidance for employers in handing some interesting nuances of the law.

FMLA Protects Organ Donors

In one of the advisory letters, the DOL concluded that organ-donation surgery can qualify as a “serious health condition” under the FMLA, thus entitling an employee with up to 12 weeks of protected leave.  This is the case even if the employee was in good health before the donation and voluntarily elected to undergo the surgery.  The DOL reasoned that organ-donation surgery may require both “inpatient care” or “continuing treatment” and, therefore, meets the regulatory definitions of a serious health condition.  A serious health condition is defined as an illness or physical condition that requires inpatient care at a hospital.  Since the typical hospital stay after organ donation surgery is four to seven days, organ donation qualifies as a serious health condition.

No-Fault Attendance Policy under the FMLA

In another letter, the DOL addressed a company’s no-fault attendance policy and found that it did not violate the FMLA.  Under the company’s policy, employees accrued points for tardiness and absences, except for certain absences, including FMLA-protected leave.  The points remained on an employee’s record for 12 months, and the employer would extend that period for any time the employee was not in “active service,” such as during an FMLA leave.

The DOL concluded that “freezing” an employee’s attendance points while on FMLA leave did not violate the Act by denying a benefit to the employee who took FMLA leave.  The DOL reasoned that the FMLA does not entitle an employee to superior benefits because of FMLA leave, and the attendance policy placed the employee in the same position as if he or she had never taken leave.  The DOL cautioned, however, that employers must not treat FMLA leave different from other forms of leave.  Thus, the employer must “freeze” an employee’s attendance points for all similar types of leave.

This opinion letter highlights, first, that absences necessitated by an FMLA leave cannot be counted under a company’s no-fault attendance policy.  Additionally, an employer is not required to remove attendance points from an employee on FMLA leave where the employer has an “active service” component to their policy – as long as the company treats other employees on leave for other reasons the same (i.e., vacation, W.C. leave, etc.).