The Age Discrimination in Employment Act (ADEA) contains various protective provisions governing the binding nature of a settlement or waiver of a potential age discrimination claim. The ADEA is somewhat unique in setting forth additional requirements that are not necessary for a settlement or waiver to be binding in any other discrimination claims, such as race or sex discrimination, etc. The ADEA provides that individual waivers must be "knowing and voluntary" and they must meet certain requirements, including that they be written so the employee can understand it. Employees given individual waivers must have 21 days to consider the agreement, but for waivers arising from "group" terminations, the law gives employees 45 days to consider whether to sign the waiver, and a number of other requirements must be contained in the waiver. Among other things, for a "group" waiver to be valid, specific information must be included in a release, including:
- The "decisional unit" or class, unit or group of employees from which the employer chose the employees who were and who were not selected for layoff;
- Eligibility factors for any exit incentive program;
- The time limits applicable to the exit incentive program;
- The job titles and ages of all individuals who are eligible or who were selected for the program (the use of age bands broader than one year does not satisfy this requirement) and the ages of all individuals in the same job classifications or organizational unit who are not eligible or who were not selected.
Employers do not like the group waivers because they are much more complicated and legalistic to prepare, require a longer period for acceptance, and require giving a lot of information to those offered the waiver that some employers find invite controversy. Indeed, Congress passed the revisions just for that purpose, so that employees over 40 could have various information about an employer's employment practices so as to make an intelligent decision whether to accept the group waiver and severance, or to reject it and potentially sue for age discrimination.
The real problem for employers occurs when several persons 40 or over are terminated in a relatively short period of time, for similar reasons, and the issue comes up whether this is an "individual" situation entitled to one type of ADEA wavier, or a "group" situation in which a more complicated waiver must be used. A recent case addresses some of these distinctions. Barnes v. Hershey Co., No. 12-1334, 2015 WL 4129573 (N.D. Cal. July 9, 2015). In Hershey, seven former managers who were terminated over the course of several months between 2009 and 2010, sued the company alleging that the terminations were part of an effort to eliminate older workers. The plaintiffs alleged their terminations resulted from a 2010 career-planning meeting during which workers were rated on their likelihood to advance. While the plaintiffs acknowledge signing their severance and waiver agreements, they claimed they believed they had to sign such agreements in order to receive severance, and that the waivers were invalid because they were terminated as part of a group-termination program.
A federal district court judge granted Hershey summary judgment on five of the seven plaintiffs, finding that they were terminated individually and so their waivers were valid. The judge found there was a lack of evidence of a group termination, as the plaintiffs were all terminated alone over the course of several months, had different supervisors, and worked in different states. The judge did allow one of the plaintiff’s claims to proceed, finding a factual question or whether he was terminated as part of a group or individually. Although the company cited the plaintiff's individual performance as the reason for his termination, it occurred around the same time as the restructuring of his work group, under circumstances where a jury could conclude that he was let go with the other members of the group.
Editor's Note: This case illustrates how the decision of whether to use an "individual" ADEA waiver/severance agreement or a "group" waiver is a difficult one. The advice of counsel is critically necessary because it is damaging to a company to make a substantial severance payment as part of an individual waiver, and then have that same employee turn around and sue the employer for age discrimination, with the company thinking those issues were resolved by the severance and waiver agreement.
In celebration of Labor Day, President Obama on September 7, 2015 announced an Executive Order requiring federal contractors to provide minimum amounts of paid sick leave to their employees. This rule follows others, such as the $10.10 mandatory minimum wage, that make a broad statement but apply only to employers who do business with the federal government, and whose employment relationships the White House can affect directly, without having to go through Congress.
When the rule takes effect January 1, 2017, covered employers will have to provide seven (7) days or more of paid sick leave annually, including paid leave allowing for family care. The rules are quite specific and provide, among other things, that:
- Employees shall earn not less than 1 hour of paid sick leave for every 30 hours worked;
- A contractor may not set a limit on the total accrual of paid sick leave per year at less than 56 hours;
- Paid sick leave may be used by an employee for an absence resulting from physical or mental illness, injury, or medical condition; obtaining diagnostic or preventative care; caring for a child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship; or is a victim of domestic violence, sexual assault, or stalking, including seeking assistance from a victim services organization or taking related legal action;
- Accrued paid sick leave must carry over from one year to the next;
- An employer is not required to pay an employee for unused leave upon separation, but any balance must be reinstated for employees rehired within 12 months after a job separation; and
- An employer may only require certification of the need for leave if it is for a period of more than 3 days.
The Secretary of Labor will be responsible for enforcing the law, including issuing regulations and prosecuting any retaliation claims. It remains to be seen whether the regulations will permit employers who offer paid time off (PTO) in lieu of separate sick or vacation leave to continue that practice, so long as the leave may be used in a manner consistent with the Presidential directive.
The benefits available to federal employees under this Executive Order are somewhat more generous and the employee responsibilities more relaxed than those available under the Family and Medical Leave Act (FMLA) or any other federal law – for example, it would cover going to court to apply for a protective order against an abusive domestic partner.
The effective date of January 1, 2017 is just weeks before the inauguration of our next President, and he or she will have the right unilaterally to rescind this Executive Order.
The blows seem to keep coming from the National Labor Relations Board (NLRB) attacking common employer personnel policies. The NLRB's philosophy is that any policy that could be read by an employee to prohibit legitimate union or other concerted activities is unlawful because it "chills" such union or other concerted activities. Further, the NLRB does not appear to give weight to the use of "disclaimers" indicating that such policies do not apply to the union or other lawful employee concerted activities. Although such disclaimers are relevant, the NLRB suggests so many restrictions on them they appear almost useless. That is, the NLRB suggests that such disclaimers would have to closely follow the language that could be broadly construed, and go to some detail describing union and concerted employee activities would still be allowed, and be written in a place close to the potentially overbroad terminology.
About the only presumption helpful to employers in the current NLRB doctrine is the NLRB suggestion that the context in which the statement is made may validate the policy, and/or certain examples may be used to validate the policy. For example, a prohibition against "harassment" is more likely to be ok if placed in the context of employer equal employment and anti-sexual harassment policies, and a policy requiring "confidentiality" is more likely to be lawful if placed in the context of an employer's trade secrets or other proprietary information policy.
Further, certain specific rulings have come down recently that are particularly disturbing. One of them, Purple Communications, 361 NLRB No. 126, deals with employer email systems, and the other, Sodexo America, 358 NLRB No. 79, modified 361 NLRB No. 97, deals with so-called no-access policy for off-duty employees.
Let us take a current NLRB case, UPMC, 362 NLRB No. 191 (August 27, 2015), which illustrates some of these problems. Here, the employer had a policy limiting the use of its information technology resources (emails, etc.) for business uses, but had an exception of permitting de minimis personal use of the resources. The policy further prohibited electronic communications to be used for unauthorized solicitation or distribution which were defined to include, but not be limited to, solicitation for raffles, charity drives, sale of goods, proposing or procuring membership in any organization, or canvassing.
In spite of the fact that the employer, which was a patient-care hospital, had tried to set forth its policy on a non-discriminatory basis, the NLRB found such policies to be unlawful. The policies were deemed unlawful because under the NLRB Purple Communications ruling, employees are now considered by the NLRB majority to have a presumptive statutory right to use the employer's email system for Section 7 related communications during non-working time. It made no difference to the NLRB that especially in a healthcare setting, hospital employees might be distracted by union or other Section 7 related solicitation emails that arrive in their inbox while they are working.
Other aspects of the employer's electronic mail and messaging policy were also found to be overbroad and illegal, including language in the policy stating that electronic messaging systems may not be used "to promote illegal activity or used in any way that may be disruptive, offensive to others or harmful to morale. . . ." The Board majority found such broad language could be construed to apply to legitimate union or other protected concerted activity, and thus had a tendency to unlawfully "chill" such union or other protected activities. A dissenting opinion argued that employees would reasonably understand that the rule was designed to reach serious misconduct that they engage in while using the employer's email, not their union or other protected activity.
Other provisions in the employer's social media policy were found to be unlawful, including those prohibiting disparaging or misrepresenting the employer, and making false or misleading statements regarding the employer. Even the dissenting NLRB member found the latter policy to be overbroad and therefore unlawful, particularly since they were not limited to use of the employer's property, including its electronic communication system. The dissenting member noted that an employer policy could probably prohibit libel or slander in a policy, but here the statements were simply too broad.
Some of the distinctions drawn by the current NLRB majority are hard to understand. For example, the NLRB in its various General Counsel reports have found rules prohibiting being "disrespectful" of others to be unlawful, and also rules saying "do not send unwarranted, offensive or inappropriate emails" to be unlawful. On the other hand, the NLRB has approved rules prohibiting "threatening, intimidating, coercing or otherwise interfering with the job performance of fellow employees or visitors." Further, the NLRB has upheld rules prohibiting "malicious" defamation and rules prohibiting "knowingly" false statements, but they continue to find rules prohibiting employees from making "disparaging or defamatory" comments to be unlawful.
A new NLRB case discussing no-access policies to off-duty employees is also disturbing. While traditionally non-employees have no right of access to the employer's property, employees are allowed by long-standing NLRB rules limited access to the employer's property while off duty. Under the rule of law applied by the NLRB for a number of years, a non-access rule is valid if three conditions are met. The rule must: (1) offer limited access solely with respect to the interior of the employer's premises and other working areas; (2) be clearly disseminated to all employees; and (3) apply to off-duty employees seeking access to the facility for any purpose and not just to those engaging in union activity. However, even under these policies that have been applied for a number of years, it was generally thought that employers could allow off-duty employees access to the interior of the facility for employment-related business, such as picking up their vacation checks, etc. However, the recent ruling in Sodexo America, indicates that use of any such exceptions for employer-related business in the case of off-duty employees returning to the interior of the premises, renders the no-access policy unlawfully broad because such an exception provides management with unfettered discretion to decide access in a discriminatory manner.
These issues are important to industry. Employers like to know that their policies are lawful rather than be faced with almost an impossible burden writing or reviewing such policies. Employers have legitimate concerns about the use of the employer's electronic communications and other property that are inconsistent with legitimate business uses, as well as safety and other concerns about access to the interior of the premises by off-duty employees. What is a responsible employer to do in these circumstances?
General Comments and Suggestions on the Situation - One consideration of great importance is to know the consequences of overbroad rules. The first question is whether an employee can be lawfully disciplined for violating an overbroad rule. The answer is often "yes" provided the violation actually interferes with the employer's operations, and the employee is not otherwise engaged in protected conduct. However, employers found to be in violation can be ordered to rescind any unlawful rules, and to rescind and remedy any disciplinary action based on the rules except for the exception just noted. An unlawful rule can also be grounds for the NLRB to set aside a vote against union representation and direct a re-run election, giving the union a second chance to win.
Each employer, preferably under advice of counsel, will have to analyze these issues before planning appropriate policy reviews. In doing so, employers should consider the fact that prior to the current Obama Administration, the NLRB would previously have allowed most of the terminology that is currently considered overbroad. Second, it is likely that, if an administration is elected from a different political party, many of these interpretations will be reversed and these policies will again be deemed lawful. Further, some of these policies pronouncements by the NLRB may not be upheld in court. Finally, the company may view such policies as so important that it is simply willing to run the risk of the contrary NLRB interpretations.