Category Archives: Court Decisions & Legislation

Wisconsin Supreme Court Rules that Municipalities May Implement Prospective Reductions in Employee Benefits

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December 29, 2014

By:  Alan M. Levy

On December 19, 2014, the Wisconsin Supreme Court issued its decision in Stoker v. Milwaukee County and Milwaukee County Pension Board.  In 2011, the County had amended its previous ordinance to reduce the multiplier used to calculate the amount of a person’s pension payments from 2% to 1.6% for years of service which began after January 1, 2012.  The employees challenged this on the theory that they had a vested right to contributions at the higher multiplier because of state law and County ordinances which, they argued, gave them vested rights to benefits when they were hired, and that these vested rights could “not be diminished or impaired” thereafter.

By a 5-2 majority, the Court reversed the decisions of both lower courts and ruled that the employees’ vested benefit was what had been earned prior to the effective date of the amendment.  Because subsequent benefits were earned by the performance of subsequent service, the prospective change could be made.  This position relied on Loth v. City of Milwaukee and several other decisions in which Lindner & Marsack represented the municipal employer.  While not overruling the earlier cases (Welter v. City of Milwaukee and Rehrauer v. City of Milwaukee), the Court limited them to disability benefits, distinguishing them from benefits based on periods of service, such as pensions, paid sick leave, and retiree health insurance.  In short, a benefit based on years of service can be modified and reduced in regard to service not yet performed.

Should there be any questions about these rules and the impact of the Stoker decision, please contact Alan Levy, who is the Lindner & Marsack attorney who represented the employers in these cases.

SUPREME COURT RULING FORCES EMPLOYERS TO RECONSIDER BENEFITS FOR SAME-SEX COUPLES

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By: John E. Murray and Samantha J. Wood

In June 2013, the United States Supreme Court invalidated the federal law defining marriage as the union of one man and one woman. That decision complicates the administration of FMLA leave for multi-state employers and employers in states (like Wisconsin) which have not recognized same-sex marriages. For more information on the impact of this decision, please read the article by Attorneys John E. Murray and Samantha J Wood at: http://www.biztimes.com/article/20131014/MAGAZINE03/310109977/-1/MAGAZINE/Supreme-Court-ruling-forces-employers–to-reconsider-benefits-for-same-sex-couples

If you have questions about this material, please contact John E. Murray or Samantha J. Wood by email at jmurray@lindner-marsack.com or swood@lindner-marsack.com, or any other attorney you have been working with here at Lindner & Marsack, S.C.

WI COURT OF APPEALS HOLDS MUNICIPAL EMPLOYERS MAY MODIFY RETIREE HEALTH INSURANCE BENEFITS

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By: Alan M. Levy

On October 1, 2013 the Wisconsin Court of Appeals held that Milwaukee County could eliminate the reimbursement of Medicare Part B premiums for employees who had not retired before that modification took effect on April 1, 2011. Reversing the decision below, the Court held that the Supreme Court’s decision in Loth v. City of Milwaukee, which was “at odds” with two earlier Court of Appeals decisions, supported the County’s application of a less generous retiree benefit to those who were still actively employed. Although the Courts of Appeal in Welter v. City of Milwaukee and Rehrauer v. City of Milwaukee, had ruled that a city employee had a vested right immediately upon being hired to the highest level of retiree benefit in effect at any time during his/her active career, Loth held that a benefit due upon retirement for employees who already met age and service requirements did not vest until actual retirement. In turn, that benefit could be reduced for an employee who had achieved the necessary age and service, but not yet retired and become vested. As a result, Milwaukee County could eliminate the premium reimbursement benefit for “retired members of the County Retirement System” who were still active employees on the effective date of the new rule.

This rejection of Welter and Rehrauer suggests that retiree benefits for public employees whose benefits have not yet vested are open to modification by the municipal employer, an important option in this time of severe limits on revenue and ever increasing retirement costs. The majority opinion in the Milwaukee County case also said that collective bargaining agreements which had provided the same retiree benefits as in the County’s ordinances, did not bar these modifications if those agreements had expired before the amendment was applied to the bargaining unit.

There are a number of cases pending at all levels of the Wisconsin courts which involve reductions in retiree benefits. This decision will undoubtedly be an important precedent favoring the employer in similar litigation. The case is Wisconsin Federation of Nurses and Health Professionals, Local 5001, AFT, AFL-CIO, et al. v. Milwaukee County; Court of Appeals Case No. 2012AP002490; Milwaukee County Circuit Court Case No. 2012CV001528.

Lindner & Marsack attorney Alan Levy represented Milwaukee County in Wisconsin Federation of Nurses and the City of Milwaukee in Loth. Please contact him directly if you have any questions about these matters.

WORKPLACE SOCIAL MEDIA LEGISLATION INTRODUCED IN THE WISCONSIN SENATE AND ASSEMBLY

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By: Daniel Finerty

Wisconsin legislation was recently introduced in the State Senate and Assembly, Senate Bill 223 and Assembly Bill 218 (generally, “legislation”), respectively, limiting employer access to, and observation of, an employee’s social media accounts. Because Wisconsin does not currently have any law expressly regulating employers in this area, the legislation was introduced in a bipartisan effort to do so.

The legislation, both of which are identical bills, prohibits an employer from requesting that an employee or applicant for employment grant access to, allow observation of, or disclose information that allows such access and observation of “personal Internet accounts” of the applicant or employee. Additionally, the legislation prohibits an employer from retaliating against an employee or applicant, including by discharging, suspending, disciplining, or otherwise subjecting to discrimination, for exercising the right to refuse such a request, opposing such a practice, filing a complaint or attempting to enforce that right, or testifying or assisting in a proceeding to enforce that right.

While the legislation primarily offers protection to employees and applicants, it does contain multiple provisions aimed at balancing and safeguarding the interests of employers. The bill explicitly states that the

prohibitions do not apply to the following:

  •   Information available from the public domain;
  •   Information contained on electronic communication devices paid in whole, or in part by the employer;
  •   Accounts or services provided by the employer that the employee obtained by virtue of the employment relationship or that are used for business purposes; or,

 Electronic data that is traveling through or stored on the employer’s network.

Finally, the prohibitions only apply to accounts “created and used exclusively for personal purposes.” Accordingly, an employee that utilizes a personal account for business-related purposes is not necessarily within the protections afforded by the legislation.

Despite the prohibitions contained in the legislation, employers retain the ability to discharge or discipline employees for transferring the employer’s proprietary or confidential information to the employee’s personal account. Furthermore, when conducting an investigation into such

transfer, or any other alleged employment-related misconduct or violation of the law, employers may still require the cooperation of employees if the employer has reasonable cause to believe that such transfer, misconduct or violation has occurred. The legislation, if passed, would apply to employees affected by a collective bargaining agreement that contains provisions inconsistent with the legislation on the day the agreement expires, or is extended, modified or renewed, whichever comes first.

The proposed prohibitions would be enforced by the Wisconsin Department of Workforce Development’s Equal Rights Division and processed in the same manner as employment discrimination complaints under the Wisconsin Fair Employment Act. Unlike some employment laws, the bill applies to all employers, both public and private, and regardless of size. Employers found in violation of the proposed law could face the remedies afforded by the Wisconsin Fair Employment Act, a possible $1,000 fine and any other action authorized by the Wisconsin Fair Employment Act, as may be deemed necessary to remedy the violation.

If you have questions about the legislation or social media in the workplace, feel free to call Daniel Finerty at 414-226-4807, or any other Lindner & Marsack attorney at 414-273-3910.

CLEAR VICTORIES FOR EMPLOYERS IN RECENT SUPREME COURT DECISIONS ON TITLE VII CLAIMS

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By: Oyvind Wistrom

Last week, the United States Supreme Court decided two highly anticipated Title VII employment cases, with both coming as significant victories for employers. Both decided by narrow 5-4 majorities, the first case distinguish between supervisors and coworkers for the purpose of vicarious liability under Title VII harassment claims. The Court held that for an employer to be vicariously liable for harassment by a supervisor, the supervisor must have the power to take tangible employment actions. The second case, which determined the appropriate standard of causation for Title VII retaliation claims, found that plaintiffs must show “but for” causation.

While both decisions were significant victories for employers, they should not drastically alter business decisions by Wisconsin employers, particularly because both decisions upheld the legal approaches currently applied within the Seventh Circuit.

“Supervisor” Status Requires The Power To Hire, Fire, Demote, Promote, or Discipline

In Vance v. Ball State University, the Court found that for the purposes of vicarious liability under a Title VII harassment claim, an employee is a “supervisor” only if he or she is empowered by the employer to take tangible employment actions against the plaintiff.

Under Title VII, an employer’s liability for workplace harassment is closely related to the status of the harasser. If the harassment is from a plaintiff’s coworker, the employer is only liable if it was negligent in controlling the work conditions. However, if the harassment is perpetrated by a supervisor the employer may be vicariously liable for the supervisor’s actions – therefore making it much easier for the plaintiff to prove liability.

In the case, Maetta Vance, an African-American substitute banquet server, claimed to have experienced racial harassment by Saundra Davis, a white catering specialist. While Davis had some authority to direct actions

within the facility, she did not have the power to hire, fire, demote, promote, transfer, or discipline Vance. Vance, attempting to gain vicarious liability, argued in favor of a broader definition of “supervisor” proposed by the EEOC’s Enforcement Guidance, which tied supervisor status to the ability to exercise significant discretion over the employee’s daily work.

The Court, upholding a decision by the Seventh Circuit, rejected Vance’s argument calling it “simply wrong.” Instead, the Court turned to previous decisions in Ellerth and Faragher where the term “supervisor” was adopted to describe a class of employees who “could bring the official power of the enterprise to bear on subordinates.” With the new holding, the Court explained that the reduction in ambiguity would allow all parties to be better positioned to know as a matter of law before a lawsuit began, the strength of their case – something not possible under the ambiguous EEOC guidance.

This decision should not however, be viewed as eliminating employer liability for coworker harassment. A plaintiff can still prevail by simply showing that the employer was negligent in permitting the harassment to occur. Evidence that an employer did not monitor the workplace, failed to respond to complaints, failed to provide a system for registering complaints, or effectively discouraged complaints from being filed is all still relevant to employer liability.

Furthermore, the Court quashed any concern that this holding may be used by employers to insulate themselves from liability by empowering only a handful of individuals to take tangible employment actions. The Court explained that realistically, those individuals would have a limited ability to exercise independent discretion when making decisions, and would likely be forced to rely on other workers who actually interact with

the affected employee. In doing so, the employer would likely be held to have effectively delegated the power to take tangible employment action to the employees on whose recommendations it relies and therefore would retain similar liability.

Title VII Retaliation Claims Require “But for” Causation

In University of Texas Southwestern Medical Center v. Nassar, the Court held that Title VII retaliation claims must be proved by showing that “but for” the retaliatory motive, the adverse employment action would not have occurred – rather than the reduced “motivating factor” standard associated with status-based discrimination claims.

Under Title VII, an employer is prohibited from retaliating “because [an employee] has opposed . . . an unlawful employment practice . . . or . . . made a [Title VII] charge.” Prior to this case, there was a split between circuits on whether an employee had to show “but for” causation, or simply that the protected activity was a motivating factor, among other factors, for the employment decision.

In the case, Dr. Naiel Nassar, a physician of Middle Eastern descent, claimed his supervisor discriminated against him based on his background. Following the discrimination Nassar sought, and received, a transfer within the hospital system, at which time he sent a letter to the medical school’s chair explaining his transfer was because of the claimed discrimination. The chair, upset over the claims and because the university and hospital had an agreement that prevented the transfer Nassar received, caused the transfer offer to be withdrawn. Nassar then sued claiming status-based discrimination and retaliation under Title VII. Because the decision to withdraw the offer was based both on Nassar’s discrimination claim in the letter, and on the agreement between the University and the hospital, Nassar argued that he only needed to show retaliation was a motivating factor.

Mirroring its prior decision in Gross v. FBL Financial (deciding causation under the ADEA), the Court found the language from the Civil Rights Act of 1991 that the plaintiff relied on to support his motivating factor argument, did not apply to retaliation claims under Title VII. The Court explained that neither the textual nor structural choices of the language could support lowering the standard of causation. Rather, Court found the term “because” implied a “but for” standard, meaning the plaintiff must establish that the unlawful action would not have occurred in the absence of the unlawful retaliation.

The holding was a significant victory for employers because it increases the burden on the employee and the likelihood of dismissal at the summary judgment stage. In coming to its conclusions, the Court explained the higher standard of causation was essential to the fair and responsible allocation of resources within the litigation system. It acknowledged that employers are experiencing an ever increasing frequency of retaliation claims and that lessening the standard could lead to more frivolous claims, ultimately diverting funds away from efforts by employers to combat workplace harassment.

If you have questions about the recent Title VII decisions, or any other issue, feel free to call Oyvind Wistrom at 414-226-4811, or any other Lindner & Marsack attorney at 414-273-3910.

D.C. CIRCUIT INVALIDATES NLRB POSTING RULE

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By: Thomas W. Mackenzie

The Court of Appeals for the District of Columbia issued a decision on May 7, 2013 which invalidated a rule issued by the National Labor Relations Board (NLRB) requiring employers to notify workers of a right to unionize. The rule was originally promulgated in 2011, but was never implemented. The NLRB suspended the obligation to post the rule indefinitely pending multiple court challenges.

The language of the poster, which was crafted by the NLRB, was viewed as exceedingly “pro-union” by management groups, including the National Association of Manufacturers, one of the parties which brought the initial action in federal district court seeking to block enforcement of the rule. The poster specifically advised employees that they had the right to form and join unions, collectively bargain with representation, discuss the terms of their employment, and to take action to improve working conditions. Under the rule, employers who failed to post the notice would be deemed to have committed an unfair labor practice. In addition, the applicable six month statute of limitations under the National Labor Relations Act (Act) to file unfair labor practice charges would have been tolled so long as the notice was not posted.

In invalidating the rule, the D.C. Circuit relied primarily on the First Amendment, as well as Section 8(c) of the Act, holding that the Constitution protects “the decision of both what to say and what not to say.” The court found that the mandated language required in the posting constituted an infringement on freedom of speech that
prohibits the government from telling people what they must say. Section 8(c) of the Act specifically guarantees the right of employers to oppose unions through speech and writing so long as the message is not coercive.

The dust is by no means settled on this issue. Further appeals are likely. However, at this juncture, employers are reminded that there is no requirement that the so-called “employee rights” notice from the NLRB be posted. The decision will not affect an employer’s obligation to post a notice of union election or a posting required after a finding that the employer violated the Act.

If you have questions about anything in this e-alert, feel free to call Tom Mackenzie at 414-226-4813, or any other Lindner & Marsack attorney at 414-273-3910.

– See more at: http://www.lindner-marsack.com/e-alerts/d-c-circuit-invalidates-nlrb-posting-rule/#sthash.c8JDI295.dpuf

FEDERAL COURT OF APPEALS DECISION MAY VOID ALL NLRB DECISIONS ISSUED AFTER JANUARY 4, 2012 DUE TO THE LACK OF QUORUM

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By: Daniel Finerty

After President Obama’s re-election, many employers assumed they would be faced with an aggressive and re-invigorated National Labor Relations Board (“Board”). However, last Friday’s decision from the District of Columbia Court of Appeals may slow the Board, at least in the short term. Noel Canning Div. of Noel Corp. v. National Labor Relations Board, App. No. 12-1115 and 12-1153 (D.C. Cir.) (Jan. 25, 2013).

In Noel Canning, the court ruled that the Board did not have a valid quorum to issue a February 8, 2012 decision finding that the Company committed unfair labor practices. As you may recall from the Supreme Court’s decision in the New Process Steel case, for the Board to have a valid quorum, it must have at least three members. If the Board does not have a quorum in order to lawfully take action, any action it takes is void; in addition, a lack of quorum precludes the Board from adopting any new regulations.

The Noel Canning court’s ruling that the Board did not have a valid quorum was based on its review of the President’s January 4, 2012 “recess appointments” of three new Board members, Sharon Block, Terrence F. Flynn and Richard F. Griffin. The U.S. Constitution provides that “[t]he President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.”

The court ruled that, on January 4, 2012, the Senate was not in recess. Rather, the Senate was operating pursuant to a unanimous consent agreement, which provided for pro forma sessions every three business days from December 20, 2011 through January 23, 2012. Further, the three appointments to the Board on January 4, 2012 were made after the start of the 112th Congress on January 3, 2012. The second session of the 112th Congress continued the following day when the President attempted to make the recess appointments.

Because the Senate was not in recess, the court determined that the President’s three January 4, 2012 recess appointments to the Board were invalid from their inception. “Because the Board lacked a quorum of three members when it issued its decision in this case on February 8, 2012, its decision must be vacated.” Noel Canning, slip op. at 30.

The court’s decision could void all Board decisions and actions going back to January 4, 2012. The Board is arguing against this result. Board Chairman Pearce has stated the Board’s position that the Noel Canning decision applies only and noted that the Board will continue to perform its statutory duties and issue decisions. An appeal of the Noel Canning decision to the Supreme Court appears likely. The Supreme Court will likely be asked to decide if the Noel Canning ruling is correct and, if so, what the decision means in terms of Board decisions taken in the past year.

If you have questions about the Board, social media or any other issue, feel free to call Daniel Finerty at 414-226-4807, or any other Lindner & Marsack attorney at 414-273-3910.

STATE LAW PLACES ELECTION RESTRICTIONS ON PRIVATE EMPLOYERS

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By: John E. Murray

Many employers believe the upcoming election could have a significant impact on their business. This belief has led some employers to share these opinions with their employees. Normally there is nothing wrong with political discussions in the workplace. However, Wisconsin prohibits political discussions which unfairly influence how employees will vote. Wisconsin places the following restrictions on political discussions in the workplace:

  • Employers cannot predict or threaten that the outcome of an election will directly cause layoffs, reduced benefits or wages, or other negative changes to working conditions. The Wisconsin legislature believes such a prediction could unfairly influence how an employee votes. Wisconsin places no limitation on employer’s ability to share their opinions about how a candidate’s election might impact the overall economy, foreign policy, or the general business climate.
  • Employers cannot coerce or encourage employees to make contributions or provide services to any candidate.

Wisconsin also guarantees that employees will have an opportunity to participate in an election. Employees have the right to be absent, up to three hours, for the purpose of voting. This leave is unpaid. This leave cannot be the basis for any unfavorable review or negative job decision.

Employees also have the right to serve as election officials at polling places. Employers cannot encourage or discourage any employee from serving as an election official.

It is normal to talk about any exciting or contentious election. Employers should not feel like mute observers to these discussions. So long as employers avoid explicitly or implicitly linking the outcome of an election to specific changes in the workplace, they are free to engage in candid political discussions with their employees.

If you have questions about anything in this e-alert, feel free to call John Murray at 414-226-4818, or any other Lindner & Marsack attorney at 414-273-3910.

SEVENTH CURCUIT INCREASES DTY OF EMPLOYERS TO REASSIGN DISABLED WORKERS

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By: John E. Murray

Under the American’s with Disabilities Act, and most state discrimination laws, employers must make reasonable accommodations for qualified disabled workers. When no accommodation would allow the employee to remain in his or her current position, employers must consider reassignment to a vacant position for which the employee is qualified. In a decision it issued last week, the Seventh Circuit Court of Appeals (covering Illinois, Indiana and Wisconsin) clarified the obligation to reassign disabled workers.

On September 7, 2012, the Seventh Circuit issued its decision in EEOC v. United Airlines, Inc. For the first time, the court ruled that employers may be required to place a qualified disabled worker in a vacant position over a more qualified candidate. If a disabled employee is qualified for the position, and it would be reasonable to transfer her into it, the employer must give her that position unless that reassignment would create an undue hardship. A reassignment that would violate a collective bargaining agreement, or a seniority system, is likely to meet this standard. The court ruled that a policy of hiring the most qualified applicant is not enough.

The United Airlines decision overruled the Seventh Circuit’s prior decisions on this issue. In the past, the Seventh Circuit viewed policies favoring the most qualified applicant to be no different from collective bargaining agreements or seniority policies. An employer who consistently followed such a practice could refuse to reassign a qualified disabled employee if another candidate was more qualified. That is no longer the case.

If you have questions about your accommodation/reassignment practices, feel free to call John Murray at 414-226-4818, or any other Lindner & Marsack attorney at 414-273-3910.

SUPREME COURT FINDS OBAMACARE UNCONSTITUTIONAL

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By:  Alan M. Levy

In what was probably the most eagerly-awaited Supreme Court decision since Bush v. Gore, a majority of Chief Justice John Roberts and the Court’s four liberals have held that the “individual mandate” in the Patient Protection and Affordable Care Act (often called “Obamacare”) is constitutional under Congress’s taxing authority.  National Federation of Independent Business, et al. v. Sebelius, et al., 567 U.S. ____, Case No. 11-393 (6/28/12). The law’s supporters have consistently argued that the mandate is necessary so that healthy people share in the costs of the risk pool, and people do not delay their enrollment until already sick because the law prohibits exclusion of preexisting conditions.

In reaching this result, Chief Justice Roberts said that the Anti-Injunction Act (which prevents restraint of a tax law until the tax is collected) does not apply because Congress labeled the mandate as a “penalty,” not a “tax”.  The Commerce Clause was also held inapplicable because this law compels individuals to become active in commerce by purchasing a product rather than regulates how commerce is conducted.

Because the Court is required, if at all possible, to interpret every Congressional action in a way that makes it constitutional, the Chief Justice then went on to rule that the mandate “may be reasonably characterized as a tax,” noting that it is “not so high that there is really no choice but to buy health insurance,” is collected by IRS, and is not a punishment, but an alternative.  This “tax on going without health insurance” was found permissible.

Finally, the Chief Justice and two of the liberals joined the dissenters in ruling that the expansion of Medicaid by each state is unconstitutional insofar as it takes away federal support for other parts of the state’s Medicaid program if the state declines such expansion.  That is, a state cannot be threatened with loss of support for part of its current Medicaid program because it declined to expand that program to include all adults with income of less than 133% of the federal poverty level.

The transition from “penalty” to “tax” in two different contexts will probably raise questions and incite criticism from the opponents of the law.  Further, this finding of constitutionality does not prevent a future Congressional action to modify or eliminate the statute.  However, some popular aspects of the law are already in place, (e.g., dependent care until age 26, elimination of caps on lifetime maximum benefits, phase out of pre-existing conditions) while the mandate itself is not due to take effect until 2014.  Further debate and possible amendment are inevitable.

Lindner & Marsack will continue to monitor the evolution of this statute and other decisions, and will report developments to you as they occur.  If you have any questions, please contact Alan Levy.