Mandatory Vaccination and Testing Requirements for Private Employers with Over 100 Employees

• OSHA issued its Emergency Temporary Standard (ETS) regarding Covid-19 vaccination and testing requirements on November 4, 2021. 

• The OSHA ETS will take effect immediately, but most requirements do not kick in until January 4, 2022, or thirty (60) days after the date the ETS was published in the Federal Register.  By January 4, 2022, employers will be required to comply with the vaccination requirements. 

• After sixty (60) days, employers must comply with all testing requirements for those employees who have not become fully vaccinated.   

• This new vaccination and testing mandate will apply to all employers with more than 100 employees, and to all federal contractors. 

• It will not apply to employees who either work at home or work outdoors. 

• Covered employers will have two options, the first being to mandate that all employees not working at home or outdoors must be fully vaccinated by January 4, 2022. 

• There is an exemption to the vaccination requirement for those employees who are entitled to a reasonable accommodation due to a sincerely held religious belief, i.e., active practice of a recognized religion and a valid religious objection. 

• An exemption will also be provided for any employee who has valid medical certification from a licensed healthcare provider that the employee should not receive the vaccination either because of a specific medical condition or disability.   

• Under the vaccination requirement, employees must provide proof of vaccination either through a CDC Vaccination Record Card, or other medical records of immunizations received, documentation from a certified pharmacy, or other source. 

• The vaccination must be one of the FDA approved vaccinations, i.e., Pfizer, Moderna or Johnson & Johnson. 

• Any employee who refuses to be vaccinated will have an alternative method of compliance with the mandate by wearing a mask at all times when they are not either in a personal office with the door closed, or eating or drinking, in combination with providing proof of a valid negative SARS test for Covid every seven (7) days. 

• There is no requirement that employers pay for the regular testing. 

• The OSHA ETS requires that all employers provide up to four (4) hours of paid time off for employees to get vaccinated, including travel time, as well as provision of reasonable paid time off to recover from any illness or side effects as a result of receiving the vaccination.   

• Any employee who has tested positive for Covid-19 in a SARS test or otherwise diagnosed with Covid by a licensed health practitioner will not be subject to testing for a period of ninety (90) days following any such positive diagnosis, due to the high incidence of false positives for ninety (90) days after a Covid infection. 

• All employers are required to establish a written policy concerning the mandatory vaccination requirement, and an alternative policy outlining the only exemptions the Mandatory Vaccination Requirement which allows employees to avoid the vaccination mandate by wearing a mask at all times in the workplace, unless in a private office with the door closed or eating, drinking, etc., and provision of proof of regular negative tests for Covid-19 every seven (7) days. 

• Covered employers found to be in violation may be fined up to $13,653 for each violation, and any covered employer found to have willfully or repetitively violate the standards may be fined up to $136,532.

 Our labor and employment law experts at Erickson | Sederstrom, P.C., LLO, can assist you with development of the required policies and on-going compliance with this new OSHA ETS Mandate.

OSHA Releases COVID-19 Vaccine ETS Requiring Vaccination for Employers with 100 or More Employees

On November 4, OSHA released its COVID-19 vaccine ETS (Emergency Temporary Standard), requiring many employers to implement COVID-19 mandates for vaccination and testing.  While legal challenges are expected, it is critical for employers to understand the requirements, develop polices, and be prepared to comply. 

The ETS applies to all private employers with 100 or more employees, but does not apply to employees who work from home, work in a location where no other individuals are present, or who work exclusively outdoors.  Covered employers will have until January 4 to ensure that their work forces are vaccinated.  But most other requirements of the ETS must be implemented by December 5.  Employees who are not vaccinated must submit to weekly coronavirus testing and mask wearing while in the workplace.  It is up to employers to decide whether employees can opt out of vaccination through the weekly testing.  However, employers are not required to provide or pay for testing, unless required by a union contract or other local law.  Employers are also required to provide up to four hours of paid time off to be vaccinated, as well as sick leave to recover from vaccine side effects. 

Employers will need to plan for employees claiming religious and medical exemptions. 

 When an employer is on notice that an employee holds a sincere religious belief, practice, or observance preventing the employee from obtaining a COVID-19 vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship.  This includes accommodation requests from employees preferring an alternative version or specific brand of COVID-19 vaccine available to the employee.   

A medical exemption would require a note from the employee’s doctor. 

 Erickson | Sederstrom’s experienced employment and labor law attorneys are ready to help manage these COVID-19 vaccination issues in the workplace.  Please do not hesitate to contact one of our attorneys.  Erickson|Sederstrom’s employment law attorneys can be reached at (402)397-2200.

Long-Haul COVID-19 Illness May Qualify as a Disability Under the Americans with Disabilities Act

Although most people with COVID-19 recover within weeks, some continue to experience symptoms months or longer following initial infection or may experience new or recurring symptoms at a later time. This condition is referred to as “long COVID” and those who suffer from this condition are often referred to as “long-haulers.” 

Due to the rise of long COVID as a significant health issue, the Office for Civil Rights of the Department of Health and Human Services (“HHS”) and the Civil Rights Division of the Department of Justice (“DOJ”) collaborated to develop guidance about whether individuals suffering from long COVID are considered to have a disability entitling them to protection under Titles II and III of the Americans with Disabilities Act (“ADA”) (which apply to governments and public accommodations), the Rehabilitation Act, and the Patient Protection and Affordable Care Act (“ACA”), all of which protect individuals with disabilities from discrimination. While the guidance is not directly applicable under Title I of the ADA, which governs private employers, it is nonetheless instructive and provides best practices for private employers. 

According to the Centers for Disease Control and Prevention (“CDC”), people with long COVID have a range of new or ongoing symptoms that can last weeks or months after infection with the virus that causes COVID-19 and that can worsen with physical or mental activity. Examples of symptoms of long COVID include but are not limited to: 

·  Difficulty breathing or shortness of breath

·  Tiredness or fatigue

·  Difficulty thinking or concentrating (sometimes referred to as “brain fog”)

·  Cough

·  Chest or stomach pain

·  Headache

·  Fast-beating or pounding heart (also known as heart palpitations)

·  Joint or muscle pain

·  Sleep problems

·  Fever

·  Dizziness on standing (lightheadedness)

·  Mood changes

·  Change in smell or taste 

Long COVID may qualify as a disability under the ADA, the Rehabilitation Act, and the ACA if the symptoms or condition constitute a “physical or mental” impairment that “substantially limits” one or more major life activities. 

Major life activities are a broad category, including things such as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, writing, communicating, interacting with others, and working. The term also includes the operation of a major bodily function, such as the functions of the immune system, cardiovascular system, neurological system, circulatory system, or the operation of an organ. The impairment does not need to prevent or significantly restrict an individual from performing a major life activity to “substantially limit” the major life activity and the limitations do not need to be severe, permanent, or long-term to qualify as a disability. Indeed, in a joint statement issued July 26, 2021, the DOJ and HHS said “substantially limits” should be interpreted broadly and should not demand extensive analysis, and provided the following examples of situations in which a COVID-19 long-hauler might be substantially limited in a major life activity: 

·         A person with long COVID who has lung damage that causes shortness of breath, fatigue, and related effects is substantially limited in respiratory function, among other major life activities. 

• A person with long COVID who has symptoms of intestinal pain, vomiting, and nausea that have lingered for months is substantially limited in gastrointestinal function, among other major life activities.

• A person with long COVID who experiences memory lapses and “brain fog” is substantially limited in brain function, concentrating, and/or thinking. 

However, long COVID is not always a disability. An individualized assessment is necessary to determine whether a person’s long COVID condition or any of its symptoms substantially limits a major life activity. When long COVID does qualify as a disability, those suffering from long COVID are entitled to protections and certain accommodations under the above laws, which may include leave, part-time work and/or job restructuring. People with severe COVID-19 symptoms that last for months may also be covered by the Family and Medical Leave Act (“FMLA”) in addition to the ADA, while those who recover quickly may not be covered by the ADA but might be protected by the FMLA. 

If you are an employee or employer seeking guidance on whether long COVID qualifies as a disability, and the scope of the laws’ coverage and application, the employment attorneys at Erickson | Sederstrom can assist you.

Late Paycheck or Unpaid or Withheld Wages? Nebraska Laws Might Be on Your Side

Nebraska Revised Statute §§ 48-1228 to 48-1234 constitute the Nebraska Wage Payment and Collection Act. The Act applies to employees and a broad range of employers, including the state or any individual or entity that employs anyone in Nebraska as an employee. It defines wages as compensation for labor or services, including fringe benefits, when previously agreed to and conditions stipulated have been met by the employee, whether such wages are on a time, task, fee, commission, or other basis. Wages include earned but unused vacation leave. And wages include commissions on all orders delivered or on file with the employer at the time of an employee’s separation, unless the employer and employee agreed otherwise in an employment contract.

Fringe benefits include sick and vacation leave plans, disability income protection plans, retirement, pension or profit-sharing plans, health and accident benefit plans, and any other employee benefit plans or benefit programs regardless of whether the employee participates in such plans or programs.

The substance of the Act is its requirement that an employer designate and timely pay employees on regular paydays, and that an employer must pay a terminated employee all unpaid wages on the next regular payday or within two weeks of termination, whichever is sooner. See § 48-1230. If the wages consist of commissions, the employer must pay the employee any earned commissions on the next regular payday following receipt of payment for the goods or services on which the commissions were based. See § 48-1230.01.

The enforcement mechanism in the Act is it authorization of employee lawsuits for unpaid wages in § 48-1231. As an incentive to bring wage claims, which may consist of only a couple of week’s wages in some instances, the Nebraska Legislature has authorized awards of attorney’s fees to employees who prevail in court. If the employee prevails and he or she has employed an attorney to do so, the must award attorney’s fees in an amount not less than 25% of the unpaid wages. Courts can award more if they determine a higher fee is justified; 25% is the minimum required by the statute. In addition, if the case is appealed, and the employee wins on appeal, the employee can recover a 25% attorney’s fee for the appeal, as well. An employee cannot recover fees if the employer had tendered the unpaid wages within thirty days of the regular payday when they were due. 

If the employee prevails in the lawsuit, damages are equal to the wages owed. If nonpayment of wages is found to have been willful, then an employer may be held liable for twice the amount of unpaid wages (though the employee only recovers the amount of wages and the "doubled" amount is remitted to the Nebraska State Treasurer because it amounts to punitive damages, which may not be retained by private parties under the Nebraska constitution). 

The potential for the "double" damages and attorney’s fees can transform a wage claim seeking a couple weeks of unpaid wages into a much larger liability for employers who do not tread carefully. 

Whether you are an employee who is owed wages by his or her employer, or an employer dealing with wage issues, attorneys at Erickson | Sederstrom can assist you. Attorneys Bonnie Boryca or Paul Heimann can be reached (402) 397-2200.

Eighth Circuit Denies Relief for Female Employee Who Was Paid Less for Doing More

In Perry v. Zoetis, the United States Court of Appeals for the Eighth Circuit upheld the United States District Court for the District of Nebraska’s decision finding that a female employee was not discriminated against for receiving less compensation than her male co-workers when she voluntarily chose to complete tasks that were not required of her. See Perry v. Zoetis, LLC, No. 20-2232, 2021 WL 3435535 (8th Cir. Aug. 6, 2021).

Barbara Perry, a former employee of Zoetis, LLC, became upset upon discovering she was making less money than her male co-workers. Perry met with the company’s human resource manager and requested a raise, arguing she was performing more job duties and receiving less compensation than her male co-workers. Soon after her requests were denied, Perry quit her job and brought suit against Zoetis under the Nebraska Equal Pay Act (“NEPA”) and the Nebraska Fair Employment Practices Act (“NFEPA”), alleging she was discriminated against because she received less compensation for performing more duties than her male peers.

When bringing a claim under NEPA, a plaintiff must establish that they completed equal work on jobs requiring equal skill, effort, and responsibility. When comparing Perry’s position to those of her higher-paid, male co-workers, the facts revealed that the male co-workers’ positions required different skills and responsibilities than Perry’s. Perry argued she completed the same duties as her male co-workers, but the record showed such duties were not required of her; rather, she volunteered to take on those extra tasks.

The court stated that “[w]hile Perry’s work ethic is laudable, the fact that she was not paid more for the extra tasks, or for her skill in completing them, is not proof of sex discrimination.” Perry needed to provide evidence that showed she was doing equal work requiring equal responsibility, which she failed to do since her position did not require her to take on the additional duties of her co-workers.

For similar reasons, Perry’s claim under the NFEPA was also rejected. Perry could not meet her burden to prove that she was treated differently than male employees who were “similarly situated” because the male co-workers had different duties and responsibilities.

The Eighth Circuit further relied on facts showing that one male co-worker earned more than Perry because new employee rates were based on differing levels of responsibility, education, and related experience. Another male co-worker earned more than Perry because Zoetis has an internal policy to keep an employee’s pay rate the same when transferring the employee from a different department. Ultimately, Perry failed to provide evidence that Zoetis “offered a phony excuse” for the disparate treatment in pay, and she was denied relief.

Bonnie Boryca is an employment and litigation attorney with Erickson & Sederstrom, PC in Omaha, Nebraska. She was assisted in the above article by law clerk Alison Clark, who will be joining the firm in 2022 as an associate. Bonnie can be reached at 402-397-2200 or boryca@eslaw.com.

No Recovery for Alleged Demotion of Military Servicemember Upon Return from Deployment

A former Union Pacific employee wasn’t entitled to judgment as a matter of law (i.e., a ruling in his favor) or attorneys’ fees after a job change following his return from military deployment, the U.S. 8th Circuit Court of Appeals (which covers Nebraska employers) recently decided, reversing the lower court’s opinion.

Facts

Rodolfo Quiles began working for Union Pacific as a general manager of safety analysis in 2014. He supervised other employees and received “D-band” level compensation. With A-band pay being the lowest, his salary slotted him just below E-band (or executive-level) compensation.

Quiles served in the U.S. Marine Corps Reserve and left Union Pacific in 2015 for voluntary deployment. While deployed, the company underwent a reduction in force (RIF), which eliminated all general manager titles, reclassifying many of them as directors instead. In addition, the company:

·         Adjusted the general director position to require five years of field experience; and

·         Hired a new employee for the position of general director of safety analysis, who Quiles believed was intended to be his replacement.

After the deployment, Quiles returned to work at Union Pacific under a new role as director of safety analysis. Although he received the same benefits and his compensation remained at the D-band level, he viewed the new job as a demotion. He claimed he was given less responsibility and status than in his previous position as general manager.

Quiles didn’t qualify for the general director job because he lacked the five years of field experience necessary to meet the new requirement for the position.

Unhappy with the new job title, Quiles became insubordinate, and his work performance declined, leading to his termination from Union Pacific in 2016. He then sued the company claiming it violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by effectively demoting him during his military leave.

How USERRA works

Under USERRA, military servicemembers are entitled to reemployment when they return from service that doesn’t exceed five years. Upon returning to work, they’re entitled to return to a job based on the “escalator position” principle, which places them in the job they “would have attained with reasonable certainty if not for the absence due to uniformed service.” The principle covers pay, benefits, seniority, and other job perks they would have attained if not for the period of service.

There are exceptions to the rule. You don’t have to reemploy a servicemember if:

·         The company’s circumstances “have so changed as to make such reemployment impossible or unreasonable”;

·         Employment would “impose an undue hardship” on your company; or

·         The servicemember’s previous employment was “for a brief, nonrecurrent period” with no reasonable expectation it would continue for a significant length of time.

The district court ruled in Quiles’ favor, finding Union Pacific demoted him upon his return in violation of USERRA and awarding attorneys’ fees. The case proceeded to trial on the remaining claims, and the jury returned a verdict in the employer’s favor, concluding Quiles was fired for cause and not entitled to any damages.

8th Circuit’s ruling

After the favorable jury verdict, Union Pacific appealed the district court’s grant of judgment as a matter of law and award of attorneys’ fees to Quiles. In reversing the lower court’s decision, the 8th Circuit held it was impossible to reemploy him to his previous position because:

·         It had been eliminated; and

·         A reasonable jury could find “Union Pacific attempted to fit Quiles into an appropriate job within the corporation’s reorganized structure upon his return from deployment” in accordance with the escalator-position principle and for which he was qualified.

Because Quiles wasn’t entitled to judgment as a matter of law, the court further held he didn’t qualify as a prevailing party for purposes of attorneys’ fees. Quiles v. Union Pac. R.R. Co., Inc., No. 19-3489 (8th Cir., July 6, 2021).

Bottom line

You should take care in responding to servicemembers’ requests for leave and be aware of USERRA’s strict requirements. When in doubt, call your employment law attorney.

Bonnie Boryca is one of Erickson Sederstrom’s employment attorneys and can be reached at boryca@eslaw.com or 402-397-2200. This article was written with assistance of law clerk Ali Clark, who will be joining the firm as an associate in the fall of 2022.

Duty to Bargain on Residency of Officer in CBA between Police Union and City of York?

In Fraternal Order of Police v. City of York, the Nebraska Supreme Court considered whether the City of York’s failure to reach an agreement with the Fraternal Order of Police (FOP) regarding a requirement of residency in York County to obtain a promotion at the York Police Department was a prohibited labor practice.  309 Neb. 359 (2021).  The Court found that although it was not specifically mentioned in the collective bargaining agreement, the residency requirement was within the ‘compass’ of the agreement, and therefore no further bargaining on the issue was needed. Id. at 374.

The FOP is a labor organization/union that serves the purpose of dealing with public employers (here, the City of York Police Department) concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.  Id. at 361.  On January 9, 2019, the FOP entered a collective bargaining agreement with the City of York that gave the York Police Department the right to determine, establish, and implement policies for employee promotions.  Id. at 362.  The agreement made no specific mention of the Department’s right to require officers to reside in York County to be promoted.  Id.

After the Department directed an officer to sign an agreement requiring him to obtain residency in York County upon being promoted to sergeant, the FOP claimed such a requirement was not bargained for in their agreement with the City of York.  Id. at 364. The union then demanded bargaining of the residency requirement, alleging that it was a mandatory subject of bargaining under the Industrial Relations Act (IRA).  Id.  The City declined to bargain, and the FOP filed their petition before Nebraska’s Commission of Industrial Relations (CIR).  Id. at 366. 

At trial, the parties stipulated that the residency requirement for promotion was a mandatory subject of bargaining.  Id. at 363.  However, the CIR dismissed the claim holding that the matter was addressed by the collective bargaining agreement between the City of York and the FOP, and therefore the parties had no further obligation to bargain the issue.  Id. at 369.

The Nebraska Supreme Court affirmed the CIR’s decision, further noting that while broad and vague statements that employers “may do whatever they please” are insufficient to establish that all topics are covered by a collective bargaining agreement, such an agreement does not need to specifically mention every subject in order for it to be covered by the agreement.  Id. at 373.

This article was drafted by Erickson Sederstrom’s law clerk, Joe Johnson, with assistance and supervision of our employment law attorney Bonnie M. Boryca. She can be reached at 402-397-2200 or boryca@eslaw.com.

New Nebraska Law Protects Culture-Specific Hairstyles

Recently enacted into law, Legislative Bill (LB) 451 amends the Nebraska Fair Employment Practices Act (NFEPA) to expand the definition of “race” to include protection against discrimination for characteristics such as skin color, hair texture, and protective hairstyles. Governor Pete Ricketts signed the legislation on May 5, and it will take effect 90 days after the current legislative session adjourns. Let’s examine the new amendment.

What new legislation covers

LB 451, introduced by Senator Terrell McKinney of Omaha, passed the legislature by a 40-4 vote (with five senators not voting) on April 29. The intent was to protect individuals against race discrimination based on characteristics associated with race, culture, and personhood, including natural and protective hairstyles. The law defines “protective hairstyles” to include braids, locks, and twists.

In legislative hearings and floor debate, the bill’s supporters claimed employers have forced some employees to straighten or trim their hair or cut off braids and dreadlocks to maintain their employment. Under the new law, employers can’t discriminate or base employment decisions on an individual’s culture-specific hair texture or hairstyle.

You’ll still be able to maintain bona fide health and safety standards that regulate characteristics associated with race and culture-specific hairstyles, however, if you can show:

·         A safety policy or grooming standard is necessary to guarantee employees’ health or safety;

·         You adopted the standard for nondiscriminatory reasons;

·         It’s applied equally; and

·         You’ve engaged in good-faith efforts to reasonably accommodate a particular applicant or employee with regard to the required standard.

For employers in most industries, however, it will likely be very difficult to establish a need for an exception to the standard.

Finally, the new law contains an exception for the Nebraska State Patrol, county sheriff’s departments, and various other law enforcement agencies as well as the Nebraska National Guard, which may continue to impose their own dress and grooming standards.

What happens next

The Nebraska Legislature is expected to end its session in very late May or early June. Therefore, the new law will go into effect sometime around September 1, 2021.

It’s too early to project the law’s full impact or the number of new employment discrimination claims it will likely generate. We may have to wait a few years to see how the claims are processed and interpreted by the Nebraska Equal Opportunity Commission and the courts. Of course, we’ll provide updates as necessary.

Attorneys Mark Schorr, Bonnie Boryca, and Heather Veik lead Erickson Sederstrom’s labor and employment group and can be reached at (402) 397-2200.

‘Patient Safety Near Miss’ Justifies Termination Without Age or Disability Discrimination Liability

After a university dismissed a member of its medical residency program, she sued for wrongful termination and alleged she had been a victim of age discrimination under the Age Discrimination in Employment Act (ADEA) and the Nebraska Fair Employment Practices Act (NFEPA) as well as disability discrimination and retaliation under both under the Americans with Disabilities Act (ADA) and the NFEPA. The U.S. 8th Circuit Court of Appeals (which covers Nebraska employers) recently upheld the dismissal of her claims without a trial, however, affirming a U.S. District Court for the District of Nebraska ruling.

Facts

Dr. Mary E. Canning, age 57, became an internal medicine resident at Creighton University in July 2015. During the first year of residency, she scored in the lowest 15 percent in the country on an in-service examination. Several doctors expressed concerns about her basic skills and level of competence, including memory issues.

After reviewing each resident's progress, a committee determined Canning hadn’t evolved in several areas, making it necessary for her to repeat the first year of residency. The panel let her know she was being placed on a leave of absence with pay until a fitness-for-duty evaluation could be conducted proving she was safe for patient care. She also was told her residency contract wouldn’t be renewed regardless of the evaluation’s results.

Canning retained counsel who sent the committee members a letter outlining their alleged acts of unlawful discrimination and objecting to her participation in the fitness-for-duty evaluation. Creighton's counsel in turn offered a firm resolve that she could repeat the first year of residency so long as she agreed to the evaluation and was cleared for duty.

A neuropsychologist evaluated Canning and found her to be in good mental health. The fitness-for-duty evaluation’s results also gave no indications of medical or psychiatric conditions that would preclude her from performing her duties. Therefore, she was permitted to repeat the residency intern year.

Canning continued to struggle academically, showing an inability to complete assessments or improve to the level of what would be expected from a first-year resident. After taking the in-service exam for the second time and scoring in the lowest seven percent in the country, she was placed on probation.

While on probation, Canning made an error that could have affected a patient’s safety. She discharged a patient admitted for a pulmonary embolism without providing a prescription for an anticoagulant. Her supervisors had previously reviewed the discharge plan with her and instructed her to prescribe the anticoagulant.

Canning admitted the error was “extremely serious.” The committee let her know she had been dismissed from the residency program, pointing to the “significant patient safety near miss” as its reason.

Resident’s claims and lawsuit

After Canning sued for age and disability discrimination and retaliation, Creighton offered nondiscriminatory reasons for terminating her from the residency program by thoroughly documenting her:

·         Lack of medical knowledge;

·         Substandard clinical skills; and

·         Inability to perform a first-year internal medicine resident's duties in a timely fashion.

The documentation showed Canning’s performance in the residency program lacked progression and was at the minimum standards expected of a first-year resident. Creighton argued it “had a right—if not an obligation—to respond to an act or omission affecting patient safety with termination of the responsible individual.”

Creighton asked for summary judgment (dismissal without a trial), and the district court agreed, concluding there wasn’t enough evidence for a jury ever to rule in Canning’s favor. She appealed.

On appeal, Canning argued the district court erred when it concluded no rational fact-finder ever could conclude her termination was motivated by age, but the 8th Circuit affirmed the ruling. It pointed out Creighton produced a legitimate, nondiscriminatory reason for the termination by explaining she had made an “egregious” error affecting patient safety in spite of “supervisor and attending efforts.”

Thus, Creighton satisfied its burden. To rebut the reason, Canning needed to show it was pretextual (or a cover-up for illegal discrimination). But, the 8th Circuit agreed with the district court that her proof had fallen short.

Bottom line

Sensitivity to an employee’s potential or actual disabilities is a good practice and required by the law in terms of considering accommodations. Often, older employees’ age may lead to the question of disabilities. But safety concerns, particularly in the medical arena, will often be paramount and provide justification for dealing with an employee’s errors that threaten the safety of a patient (or coworker, client, customer, or the public).

Bonnie M. Boryca is an attorney with Erickson│Sederstrom, P.C., in Omaha, Nebraska. You can reach her at 402-397-2200 or boryca@eslaw.com.

Nebraska: A Second Amendment Sanctuary State

The Second Amendment of the Untied State’s Constitution reads, “A well regulated Militia, being necessary to the security of a free State, the right of the people to bear Arms, shall not be infringed.” According to the Pew Research Center, over 72 million Americans own a gun and approximately three-quarters of Americans consider their right to own a gun essential to their freedom.

Many gun owning Americans were concerned with President Biden’s April 07, 2021 announcement that his administration would not “wait for Congress” to draft new legislation regarding gun ownership. The Biden administration advised that it will order the Department of Justice to issue new proposed rules to stop the proliferation of guns assembled from kits, provide a clear definition for stabilizing devices used in target shooting pistols, and publish model “red flag” legislation for states.

In the wake of the presidential announcement, Nebraska Governor Pete Ricketts, issued a signed proclamation designating Nebraska as a “Second Amendment Sanctuary State.” That proclamation read:

WHEREAS, The Second Amendment to the U.S. Constitution Protects the right to keep and bear arms; and

WHEREAS, Article 1-1 of the Nebraska State Constitution guarantees “the right to keep and bear arms for security or defense of self, family, home, and others, and for lawful common defense, hunting, recreational use, and all other lawful purposes” and states that this right “shall not be denied or infringed by the state or any subdivision thereof;” and

WHEREAS, The State of Nebraska has protected the right of Nebraskans to open carry and conceal carry; and

WHEREAS, Nebraska will stand up against federal overreach and attempts to regulate gun ownership and use in the Good Life; and

WHEREAS, The White House and U.S. Congress have announced their intention to pursue measures that would infringe on the right to keep and bear arms; and

WHEREAS, A growing number of counties in Nebraska have declared themselves as “Second Amendment Sanctuary” counties; and

WHEREAS, Nebraska will continue to take any necessary step to defend our right to keep and bear arms.

NOW, THEREFORE, I Pete Ricketts, Governor of the State of Nebraska DO HERBY PROCLAIM the State of Nebraska is a

SECOND AMENDMENT SANCTUARY STATE

and I do hereby urge all citizens to take due note of the designation.

IN WITNESS WHEREOF, I have hereunto set my hand and cause the Great Seal of the State of Nebraska to be affixed this Thirteenth day of April, in the year of our Lord Two Thousand Twenty-One.

With so much attention on firearms and the importance of the Second Amendment to the United States Constitution, responsible gun owners and prospective gun owners need to be informed regarding their rights and the laws surrounding gun ownership and possession. There are currently an array of confusing and rapidly changing legal authorities affecting gun owners. For example, there are many hurdles that a hopeful gun owner must clear before becoming an actual gun owner such as background checks. Gun owners must also be familiar with the many laws setting forth restrictions on the ownership of both handguns and long guns, the laws related to when and how guns can be carried concealed, when and how guns can be carried in the open, and where guns are and are not permitted. Not being familiar with these laws can have severe consequences for gun owners. Those consequences can include criminal repercussions and loss of a gun owner’s right to own or possess a firearm in the future. Some prospective gun owners may have already lost their rights to own a gun and wish to regain that right through the proper channels but do not know how. And, finally, current gun owners may wish to protect the ownership of their firearms with devices known as “gun trusts” but do not know where to get started.

Many of these answers can be found in Nebraska Revised Statute Chapters 69 and Chapter 28. Those interested in purchasing a firearm, or having questions about firearm ownership or possession should not hesitate to review the legislative materials in these statutes or contact an attorney familiar with the subject. Erickson | Sederstrom has several attorneys with significant expertise regarding this area of the law.

No Age Bias in Demoting 51-Year-Old Employee for Lack of Accounting Experience

Former employees alleging age discrimination have the burden to prove the employment decision in question hinged on their age. In a recent case arising in Nebraska, the U.S. 8th Circuit Court of Appeals (which has jurisdiction over employment claims arising in the state) found the federal trial court in Omaha had properly dismissed the age claims raised by a 51-year-old woman. While restructuring its financial department, the employer demoted the employee because she lacked accounting experience, after which she ultimately resigned.

Facts

Lana Starkey worked for Amber Pharmacy from September 2001 until August 2015. In 2014, her position changed from enrollment director to financial services director. The change coincided with the acquisition of Amber by Hy-Vee, a supermarket chain.

After the acquisition, Amber’s accounting and financial department was found to be “in complete disarray,” a situation exacerbated when the pharmacy implemented a new operating system in February 2015. The company retained a “third-party implementation consultant” for the new operating system, who reported the biggest obstacle to implementing the system was because the financial team was “understaffed” and “potentially not the right skill level” and lacked “management in the financial area.” The consultant recommended restructuring the team.

At about the same time the consultant delivered the report, Starkey reported to others that Amber was being overpaid by Texas Medicaid, incorrect billing codes were being used for the payments, and some employees were engaged in e-mail practices that raised concerns about violating the Health Insurance Portability and Accountability Act (HIPAA).

The company considered various plans for restructuring the financial department, ultimately determining Starkey’s position would be eliminated. According to the company, the decision was based on accounting expertise, which Starkey lacked, and her struggles in adapting to the new operating system.

Starkey was told her job was being eliminated and was offered a choice of two new positions, both of which were demotions with a pay cut. In June 2015, she reluctantly accepted one of the positions but questioned whether the demotion was caused by her report of the Medicaid and HIPAA issues.

In August 2015, Starkey resigned, after which she didn’t receive a timely COBRA notice about her right to elect temporary continuation of health insurance coverage.

Legal Action

Starkey filed suit in Nebraska state court, claiming her resignation was caused by discrimination, retaliation, the demotion, and a hostile work environment, asserting various federal and state claims against Amber, Hy-Vee, and Mike Agostino, Amber’s president. The defending parties moved the case to federal court and promptly asked for summary judgment (dismissal without a trial), asserting no material facts were in dispute and that they were entitled to judgment as a matter of law.

The federal court granted summary judgment on each of Starkey’s federal charges, including her Age Discrimination in Employment Act (ADEA) claims. It also dismissed all state claims except for a particular portion of her claim under the Nebraska Fair Employment Practices Act (NFEPA). It remanded the retaliation claim based on her reporting of the Medicaid discrepancies to state court.

The federal court also found Hy-Vee and Agostino weren’t proper parties and dismissed all claims against them.

8th Circuit’s Decision

Starkey appealed the trial court’s decision on all claims except for one filed under Title VII of the Civil Rights Act of 1964, which she abandoned on appeal. Amber appealed the district court’s partial denial of summary judgment on the NFEPA claim.

Age bias claims tossed. The 8th Circuit upheld the trial court’s summary dismissal of Starkey’s age discrimination claims. After noting there was no direct evidence of age bias and assuming she could establish an initial prima facie (or minimally sufficient) case, it found Amber articulated a legitimate, nondiscriminatory reason for eliminating her position in the newly restructured financial department and demoting her, specifically the need to put a stronger emphasis on accounting and more effectively implement the new operating system.

In addition to the fact the company needed to prioritize accounting skills and experience to operate the new system, Starkey had candidly admitted “(a)ccounting is not for [her].” The court noted it would not second-guess the employer’s business judgment, particularly when it was based, at least in part, on the third-party consultant’s recommendations.

Therefore, to prevail on the age claim, Starkey would’ve had to show the stated reasons were a mere pretext (or cover-up) for age discrimination, i.e., “but for” her age, she would not have been demoted. The court quickly rejected her assertion that since other employees over the age of 40 were terminated and younger employees absorbed her job duties, she was a victim of age bias. The court found all the accused parties were entitled to summary judgment on her age-based claims.

COBRA claim fails. The 8th Circuit likewise upheld the dismissal of Starkey’s COBRA claim since she hadn’t pointed to any facts showing an interference with her attainment of benefits or that she was harmed in any way by any lack of notice. Starkey admitted she (1) knew about her COBRA rights, (2) wouldn’t have elected the coverage anyway, and (3) had enrolled in her husband’s less expensive employer plan in which she had no out-of-pocket medical expenses.

Hostile environment, emotional distress charges also thrown out. Finally, the 8th Circuit found the trial court had properly dismissed Starkey’s claims for hostile environment and intentional infliction of emotional distress based on the demotion. She hadn’t alleged sufficient facts to establish outrageous conduct and severe emotional distress, as Nebraska law requires.

Retaliation claims survive. The 8th Circuit found all of Starkey’s retaliation claims under the NFEPA should be remanded (or sent back) to state district court to analyze and determine whether her activity was “protected conduct” and whether it would apply the “manager rule” in the context of a retaliation claim under the state statute. The manager rule has become an emerging trend in many courts. It provides that a management employee who, in the course of her normal job performance, disagrees with or opposes her employer’s actions doesn’t engage in protected activity. Lana L. Starkey v. Amber Enterprises, Inc., et al., Case No. 19-3688 (8th Circuit, 2021).

Lesson for Employers

Starkey’s case underscores the importance of developing a well-reasoned plan for any company or department restructuring that will involve the elimination of certain positions. You should develop and apply clear criteria for executing the restructuring.

Mark Schorr is the editor of the Nebraska Employment Law Letter and a frequent contributing author to HR Daily Advisor today, which goes out to more than 200K employers, HR pros, GC, etc., across the country

SCOTUS Holds that Homosexual and Transgender Persons are Protected from Adverse Employment Actions Under Title VII

The United States Supreme Court has handed down a landmark case solidifying the rights of homosexual and transgender individuals within the workplace in Bostock v. Clayton Cty. The Court held that all three of the employers in the underlying cases violated Title VII of the Civil Rights Act of 1964 when each of the employers fired employees shortly after those employee revealed that he or she were either homosexual or transgender. Proceeding on the assumption that the term “sex” as it is used in Title VII refers only to the biological distinction between male and female, the Court turned its focus to analyzing what Title VII says about “sex.”

Title VII says it is “unlawful . . . for an employer to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” 42 U. S. C. §2000e-2(a)(1) (emphasis added). The Court stated that, “[i]n Title VII, Congress adopted broad language making it illegal for an employer to rely on an employee’s sex when deciding to fire that employee.” As such, the Court determined that it is a necessary consequence of Title VII of the Civil Rights Act that an employer who fires an individual merely for being gay or transgender defies the law.

Additional Funding Enacted for Coronavirus Relief Programs

Last week, Congress passed and the President signed the latest legislation to provide additional funding for Coronavirus relief programs, the Paycheck Protection Program and Health Care Enhancement Act.
This legislation is now commonly known as “Phase 3.5” of legislative coronavirus stimulus and relief packages.

First, Phase 3.5 adds an additional $310 billion to the Paycheck Protection Program (“PPP”). Low interest, forgivable loans available through the PPP were quickly exhausted when first made available.

Phase 3.5 also adds an additional $50 billion for Economic Injury Disaster Loans (“EIDLs”) and expands the scope of eligible businesses. EIDLs are now available to certain agricultural entities with less than 500 employees.

$75 billion is provided to support health care facilities to help offset additional costs and expenses due to the coronavirus. Finally, $25 billion is provided to support increased testing.

FAMILIES FIRST CORONAVIRUS RESPONSE ACT AND WHAT IT MEANS FOR EMPLOYEES AND EMPLOYERS IN NEBRASKA

On March 18, 2020, in response to the novel coronavirus pandemic, Congress enacted the Families First Coronavirus Response Act to provide Americans paid leave, free testing, and access to certain health benefits in order to protect public health. The Act contains two divisions that specifically detail the responsibilities of the employee and employer:

• Division C –Emergency Paid Leave Act of 2020

• Division D – Emergency Unemployment Insurance Stabilization and Access Act of 2020

DIVISION C –EMERGENCY PAID LEAVE ACT OF 2020

Division C provides benefits to employees and employers when an employee is unable to work due to COVID-19.

Qualification Criteria

Employee:
• The employee has a current diagnosis of COVID-19
• The employee is quarantined (including self-imposed quarantine), at the instruction of a health care provider, employer, or government official, to prevent the spread of COVID-19.
• The employee is caring for another person who has COVID-19 or who is under a quarantine related to COVID-19.
• The employee is caring for a child or other individual who is unable to care for themselves due to the COVID-19 related closing of their school, childcare facility, or other program.

Employer:
• Government employer
• Companies with 50 – 500 employees
Employers with greater than 500 employees are required to pay the employee during the 80 hours of emergency leave, but are eligible for reimbursement through tax credit.
These benefits are active from January 19, 2020 to January 19, 2021. The benefits can be paid retroactively with applications until July 19, 2020.

The Benefits:
• Regular to two-thirds of the individual’s average monthly earnings (based on the most recent year of wages or self-employment) up to a cap of $4,000.
• Applicants can apply online, by phone, or by mail. In most cases, payments will be issued electronically.
• The beneficiary is responsible for applying.

Summary:
Employees will be compensated for up to weeks (80 hours) of regular pay if they are quarantined or self-quarantined. Employees who are quarantined in order to care for another person who has COVID-19 or for a child is entitled to two-thirds their regular rate of pay for two weeks (80 hours). Covered employers are eligible for dollar-to-dollar reimbursement through tax-credits for all qualifying workers.

DIVISION D – EMERGENCY UNEMPLOYMENT INSURANCE STABILIZATION AND ACCESS ACT OF 2020

Division D provides benefits to individuals who are unemployed due to COVID-19.

In order to slow the rate of novel coronavirus (flatten the curve), many businesses have temporarily or permanently closed which has resulted in massive layoffs. Division D of the Act expands existing Unemployment Insurance to address the current employment environment for many Americans. If an employer cannot retain their current number of employees or must reduce employees’ hours have the follow responsibilities.

Duties and Responsibilities

Employer:
• Must provide notification of potential unemployment insurance eligibility to laid-off employees
• Must ensure that employees have at least two ways to apply for benefits
• Must notify applicants (the laid-off employee) when an application is received and being processed and if the application cannot be processed, provide information to the applicant about how to ensure successful processing. Employee
• Must apply for unemployment insurance
• Not obligated to seek employment between March 22, 2020 and May 2, 2020.

Benefits:
In general, the unemployed worker in Nebraska will receive half their regular weekly wage up to $440 each week and an additional $600 provided by the Act in effort to mitigate the economic impact of the novel coronavirus pandemic. Short Term Compensation may be available to employees whose hours have been cut due to the pandemic. Benefits should be sought through NEworks.nebraska.gov.

Qualifications:
• Unemployed worker has had one unpaid week
• Unemployed worker whose job loss is due to no fault of their own
• Self-employed worker whose earnings have been impacted by the pandemic

Summary:
Employees who are laid off or face reduced hours due to COVID-19 may apply for unemployment benefits or short term compensation and are not required to seek new employment between March 22, 2020 and May 2, 2020. The turn around time for receipt of benefits is not currently known.

UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT Rights for Employees and Obligations for Employers

The United States Court of Appeals for the Eighth Circuit recently affirmed the ruling of the United States District Court for the District of Nebraska on claims under the Uniformed Services Employment and Reemployment Rights Act (USERRA). These claims were filed by a former military service member against his employer for allegedly discriminating and retaliating against him due to his prior service in the military and his decision to exercise certain statutory rights. Neither claim withstood a motion for summary judgment.

Facts of the Case

David McConnell began serving on active duty in the United States Army in 1999 and retired in 2008. Prior to his retirement, McConnell sustained two long-term disabilities: (1) post-traumatic stress disorder, and (2) a back injury which prevented him from lifting more than forty pounds.

In November 2012—four years after his retirement—McConnell interviewed for the position of service center manager for Anixter, Inc.’s Grand Island, Nebraska facility. McConnell informed the hiring supervisor of his service-related disabilities. Anixter replied it would have no problem accommodating his disabilities. The hiring supervisor told McConnell that his military experience was viewed positively by Anixter because the skillset gained through his service would be needed for McConnell’s new supervisory position.

McConnell obtained the position of service center manager, in which he directly supervised several Anixter employees. During his time in this supervisory position McConnell had two separate altercations with subordinates. The first altercation occurred in May 2013, involving McConnell’s use of vulgarity with the employee under him. McConnell’s supervisor issued him an oral warning not to use such language toward a subordinate. The second occurred in August 2013, involving the same behavior. Following the second altercation, McConnell’s supervisor issued a written warning to McConnell notifying him that if he did not refrain from using vulgar language and learn to control his temper, further disciplinary action, including termination, might become necessary.

Following the written warning, McConnell maintained his position without incident until December 2014. At this time, McConnell and his supervisor had a strong disagreement during a phone conversation. This disagreement surrounded changes the supervisor wanted to implement regarding McConnell’s supervisees’ work schedules. By the end of the phone conversation the dispute had escalated to the point that McConnell requested a break to allow him to manage his PTSD. Following this request, his supervisor sent McConnell home. McConnell was fired from Anixter four days later.

Employee’s Claims and Suit

McConnell filed suit against Anixter in federal district court in January 2017. Filed under the Uniformed Services Employment and Reemployment Rights Act (USERRA), McConnell alleged that Anixter discriminated and retaliated against him because of his prior service in the military and his decision to exercise certain statutory rights. The district court entered summary judgment on all issues for the employer.

The issue on appeal involved whether the motivating factor in Anixter’s decision to terminate McConnell was in violation of USERRA. That federal law precludes an employer from allowing an individual’s military status or an individual’s decision to exercise rights set forth under USERRA to motivate an employer’s adverse employment action against an employee.

To establish that military status was a motivating factor, the party invoking protection under USERRA may use three factors. The first factor is “the employer’s expressed hostility towards members protected by the statute together with knowledge of the employee’s military activity.” The second factor is “the proximity in time between the employee’s military activity and the adverse employment action.” The third factor considers “any inconsistencies between the proffered reason and other actions of the employer.”

McConnell was unable to establish the first factor due to the fact that McConnell’s hiring supervisor expressed a positive outlook on McConnell’s military experience during the interview process. McConnell was unable to establish the second factor due to the fact that four years had passed between the time McConnell was on active duty and the time he was hired by Anixter. Because of this extended period, the inference that his participation in the military motivated Anixter’s decision to terminate McConnell was highly unsupported.

Lastly, McConnell was unable to establish the third factor because both parties agreed the altercation between McConnell and his supervisor left McConnell extremely frustrated. It was also undisputed that McConnell’s frustration at this event required him to take a break from the situation in order to manage his stress. Because this undisputed altercation occurred after McConnell received written notice that he could face termination if he failed to learn to control his temper, there are no inconsistencies between the proffered reason and other actions of the employer. In sum, McConnell failed to establish any of the three factors, and as such, he failed to establish that his military status was a motivating factor in the termination of his employment. Therefore, he could not proceed to trial on his USERRA claim.

Bottom Line for Employers

USERRA offers strong protection for service member employees. Prevailing in court on such a claim can be a challenge. If faced with a thorny issue involving a service member employee, or any employee, you are encouraged to consult with an experienced attorney to avoid any issue that could land you in court. Bonnie M. Boryca, attorney at Erickson | Sederstrom, PC, in Omaha, Nebraska, was assisted by second-year law student and E|S law clerk Chelsey L. Gilinsky in writing this article. Ms. Boryca works with employers, executives, and employees and can be reached at 402.397.2200 or boryca@eslaw.com.

Managing Employee Arrests and Convictions

Question: One of our employees has been arrested but not convicted. It doesn’t appear he’s going to be released in the new future. Is it better to put him in an unpaid “leave” status or fire him?

The answer to this question depends on a number of factors. The law generally prevents employers from taking action, or refusing to hire employees, based solely on arrest records, as opposed to actual convictions. However, if you have additional evidence or information which corroborates the reasons for the actual arrest, which independent evidence would tend to establish that the employee is guilty of a crime which is job related and which would render him unsuitable for the position in which he is employed, you would be on solid ground in terminating the employee based upon the totality of the available evidence and information. Additionally, to the extent he will be absent for an extended period, if you have strict attendance policies, or no-fault attendance policies, you will have grounds to terminate the employee based upon violation of your attendance policies, as incarceration is not a legitimate excuse for an employee’s failure to show up for work in compliance with your attendance policies. If you determine that you will not terminate the employee, at the very least you should place the employee on unpaid leave pending resolution of his criminal case.

New Year’s Resolutions for HR Professionals – 2020 Checklist

The start of a new year is an excellent time for HR professionals to focus on key New Year’s resolutions in terms of proper Human Resources management. Although none of us typically follow through on every New Year’s resolution we make, the following provides a thoughtful checklist of resolutions and actions that should pay great dividends in the coming year, and potentially save costly resources down the road through avoidance of employment claims and litigation. Let’s get right to the checklist.

Employee Handbook & Policy Review: Conduct a thorough review of your employee handbook and other written policies to determine if revisions are necessary due to changes in employment laws at the state or federal level. Do your employee handbook and other policies sufficiently preserve your right to exercise management discretion to determine when employees can be terminated at will? Do you have an appropriate acknowledgement form on file for every employee to whom your employee handbook has been issued, which confirms receipt of the handbook and acknowledges that, absent a formal contract, employment is at will? Do you have an appropriate sexual harassment/workplace harassment policy? Has it been provided to all employees, and does it clearly articulate an internal mechanism to register complaints? If you are covered by the Family and Medical Leave Act (FMLA), are your FMLA policies up-to-date?

Review Employment Applications: Your employment application should be carefully reviewed on an annual basis, to ensure that you are only requesting valid job-related information, and not requesting any information about an applicant’s age, previous injuries, worker’s compensation claims or disabilities? Your application is critical, as the application itself can become the subject of an employment discrimination charge or legal action.

FMLA and ADA FORMS: Review your form library to ensure that you have all of the proper forms in place for utilization whenever an employee requests medical leave or accommodation for a disability. Are you possibility using outdated forms or handling requests on an inconsistent basis? This is simply a good time to review your policies and procedures in this area.

Wage & Hour Audit – Exempt Classification Review: Conduct a thorough audit of your exempt and non-exempt classifications, to ensure that your salaried employees who are deemed exempt from overtime truly meet all aspects of one of the recognized exemptions, and do all such employees who are “exempt” meet the “salary basis” test? Are your hourly employees subject to overtime properly recording all hours worked? Do you have sufficient procedures in place to ensure compliance with overtime requirements and regulations? Are you properly including non-discretionary bonuses in the regular rate for hourly employees for overtime calculation purposes?

Review Job Descriptions: Job descriptions are not a luxury, but rather a necessity. Accurate, up-to-date job descriptions are critical, not only with respect to establishing employee expectations and performance parameters, but also when it comes to complying with the Americans with Disabilities Act (ADA) and its various requirements.

Supervisory Training: When was the last time you conducted training for all supervisors on the basics of diversity and harassment in the workplace, wage and hour administration, FMLA and ADA requirements, etc.? If it has been more than 18 months to 2 years ago, now would be an excellent time to conduct supervisory training early in the new year.

Review Employee Evaluation Policies and Procedures: You should thoroughly review and examine how you are evaluating employees and grading performance. Employee evaluations can be an excellent management tool, but they can also become a major problem if not properly and effectively administered., e.g. we are often called upon to defend a disciplinary or termination decision, and although it is apparent that performance problems existed, the problems and issues were never accurately reflected on a recent performance evaluation. It is imperative that employee evaluations are performed on a timely and accurate basis to reflect the employee’s actual performance and any identified shortcomings.

The above checklist presents a few suggested New Year’s resolutions. No such checklist is ever complete, and everyone will undoubtedly want to expand on this list. Taking some time at the start of the year to focus on these issues will provide continuous benefits going forward.

Nebraska Supreme Court emphasizes statute of limitations and uniformity of policies in employment discrimination and retaliation claims

The Nebraska Supreme Court recently ruled on claims for disability discrimination and alleged retaliation against an employee for her filing of a worker’s compensation claim. Neither claim withstood a motion for summary judgment. The case is a helpful reminder of the importance of adhering to your policies in every instance and also shows how strictly courts will apply statutes of limitations, to an employer’s benefit here.

Facts of the Case

            Regional West Medical Center in Scottsbluff employed Melinda Brown as a customer service representative in its financial services department. She fell in the parking lot on August 16, 2011, injuring her hand and wrist. Ms. Brown filed a worker’s compensation claim with the medical center. She took twelve weeks of leave under the Family Medical Leave Act.

            Following the FMLA leave, Ms. Brown was granted another eight weeks of director-approved leave, consistent with the medical center’s policies. Also consistent with such policy, the eight week leave was granted but the medical center did not guarantee her position would be held for her at its expiration, and informed her she should apply for open positions during the leave. This leave was to expire on January 7, 2012.

            While on leave, Ms. Brown submitted a request for a reasonable accommodation to perform her customer service job. Her alleged impairment was limited use of her injured hand. The accommodation requested was simply to have a job to come back to after she was cleared of restrictions by her physician. Ms. Brown never returned to work after the accident or after her periods of approved leave.

            Instead, she was placed on furlough status on January 8, 2012, in further accord with Regional West Medical Center’s policies. The policy was to place an employee who does not return from leave on furlough status for up to one year from the date of the initial absence, during which she continued to receive employee benefits, was not paid salary, and in which her job was not held for her. To return during the one-year furlough, Ms. Brown would have to apply and be approved for an open position at the medical center. Ms. Brown received a letter January 12, 2012 informing her of this.

            Ms. Brown’s furlough expired on August 15, 2012; one year after her work-related injury absences began. She applied for no jobs at the medical center during furlough. On that same date, the medical center sent Ms. Brown a termination letter, citing the expiration of the furlough as the reason for “administratively ending your employment.”

Employee’s Claims and Suit

            Ms. Brown filed a charge of disability discrimination under the Americans with Disabilities Act and the Nebraska Fair Employment Practice Act on December 20, 2012. She claimed that she was denied a reasonable accommodation and terminated because of her disability. The Nebraska Equal Opportunity Commission ultimately issued a right to sue notice.

            The ADA and NFEPA claims were brought in the District Court of Scottsbluff County along with a common claim of retaliation for filing a worker’s compensation claim. That court entered summary judgment on all claims, and the employee appealed to the Nebraska Supreme Court.

            The issue on appeal with regard to the ADA and NFEPA claims of discrimination involved the statute of limitations for filing those charges with the NEOC. There was no genuine dispute of material fact that Ms. Brown was sent the letter notifying her of the expiration of her furlough’s expiration date and that she would be terminated upon that occurrence. The date of the letter was January 8, 2012, and she acknowledged receiving it soon after within her NEOC charge of discrimination.

            It was that letter that constituted the adverse act by the medical center against Ms. Brown. The letter was clear that she was going to be terminated on August 15, 2012 unless she applied and obtained another position during her furlough. She never even applied for another position during that time. Thus, the medical center’s decision was known to Ms. Brown in January 2012.

            A charge of discrimination under Nebraska and federal law must be filed with the NEOC within 300 days of the adverse action against the employee. The Court found that date was in January 2012 here, yet Ms. Brown did not file her charge until December 20, 2012, more than 300 days after the letter was sent to her. As a result, the Court affirmed the lower court’s dismissal of the claims because of the expired statute of limitations.

            The claim of retaliation for filing a worker’s compensation claim did not have to be submitted first to the NEOC or any agency. It was appropriately brought in court and within the requisite time period. However, that claim failed because the undisputed material facts showed it could not be proven to any reasonable jury at a trial.

            To establish retaliation in this context, a plaintiff must establish that she filed a worker’s compensation claim, that she was terminated from employment, and that a causal link exists between the termination and filing the claim. A retaliatory motive may be shown by proximity in time between filing the worker’s compensation claim and the termination, coupled with satisfactory prior work performance and good supervisor evaluations.

            In Ms. Brown’s case, the evidence indisputably showed that there were 20 weeks between the time of filing for worker’s compensation benefits and her administrative furlough. It was even longer until she was administratively terminated (which occurred one year after her first absence for the work-related injury). Most significant, Regional West Medical Center’s human resource officers had testified in depositions that they followed the absence, leave, and furlough policies to the letter and in the same manner as with employees similarly situated to Ms. Brown. Thus, there was no evidence of a retaliatory motive and the time between the worker’s compensation claim and the termination was not proximate.

Brown vs. Regional West Med. Ctr. 300 Neb. 937 (2018).

Takeaway for employers

            This case shows two important principles that repeat in employment claims. First, the statute of limitations can be powerful. Second, clear policies for human resources and supervisors to execute can be equally powerful. Applying those policies similarly in each instance can go a long way to negate any claim of improper motive or unfairness in the policy’s effects. If you have questions about how to craft a clear and easy to execute policy, keep your attorneys just a phone call or email away.

Tortious interference among set of valuable tools for employers to protect their information from misuse by former employees

Recently, the Eighth Circuit Court of Appeals reviewed an appeal out of the District of Nebraska. The multiple claims against former employees, including a claim for tortious interference with business relationships, a claim not often considered by employees and employers, but which can make a wide array of damages available to a plaintiff. The claim often arises alongside claims that former employees have taken trade secrets or used confidential information to solicit clients or other employees. Read on to learn more!

Factual Background

            Bryce Wells (“Wells”) was the president and shareholder of West Plains Company. Wells sold West Plains Company to West Plains, L.L.C. (West Plains), in February 2012. West Plains operated a freight brokerage operation called CT Freight. When Wells sold West Plains Company, the employee defendants and Jodi May (“May”) all continued to work for West Plains in the same positions they held prior to the sale. The employee defendants signed the West Plains Employee Handbook, “which prohibited employees from engaging in conflicts of interest and disclosing confidential information to a competitor.”

            In October of 2012, Wells began forming Retzlaff Grain Company, a freight brokerage company. Retzlaff Grain Company did business as RFG Logistics. Wells recruited four of the employee defendants who “signed confidentiality and consulting agreements with Wells.” Wells provided them each with $5,000 as a consulting fee.

            These four employee defendants worked with Wells in creating RFG Logistics and recruited the remaining employee defendants to join RFG Logistics by the end of January, 2012. The employee defendants then submitted their resignations from CT Freight.

Procedural History

            In February 2012, West Plains brought suit, alleging “(1) misappropriation of trade secrets against all defendants; (2) tortious interference with business relationships against all defendants; (3) tortious interference with employment relationships against Wells and RFG Logistics; (4) breach of the duty of loyalty against the employee defendants; (5) civil conspiracy against all defendants; and (6) a violation of the Computer Fraud and Abuse Act . . . against [one of the employee defendants].”

            The district court granted a temporary restraining order against the defendants “prohibiting them from contacting and providing freight brokerage services for the customer and carriers of CT Freight” until the court ordered and to return all documents taken from West Plains. The temporary restraining order was extended to April 5, 2013. The district court ruled in favor of the defendants regarding the claims for tortious interference with employment relationships and the claim under the Computer Fraud and Abuse Act.

            At trial, the jury found in favor of West Plains on the tortious interference with business relationships claim as to all defendants except for three. The jury also found a breach of the duty of loyalty by all employee defendants. Finally, the jury found that all defendants, except May, entered into a civil conspiracy. According to these findings, the jury awarded West Plains $1,513,000 in damages and required forfeiture of compensation of all employee defendants. The defendants appealed.

Tortious interference with business relationships

            In order to prove tortious interference with a business relationship in Nebraska, the following must be shown: 1) “the existence of a valid business relationship or expectancy”, 2) that the person interfering had knowledge of the business relationship or expectancy, 3) “an unjustified intentional act” by the interferer, 4) a showing that the interference caused the harm, and 5) damage to the party whose business relationship or expectancy was interfered with. The defendants alleged that that their conduct did not amount to unjustified interference and that West Plains did not prove their conduct caused that damages sustained by West Plains after the temporary injunction expired.

Acts of Unjust Interference

            Often the key question in a tortious interference claim is whether the acts that interfered were justified and proper. In this case, the Eighth Circuit Court of Appeals determined that “a jury could find Wells unjustly interfered with West Plains’ business relationship by knowingly paying, recruiting, and seizing CT Freight’s workforce, infrastructure, and customer relationships.”

            The court reasoned that Wells knew that by recruiting freight brokers away from CT Freight that he could essentially own CT Freight without having to pay for it. Although Wells instructed the employee defendants not to take any customers from CT Freight, he recruited the leaders of CT Freight and began a plan “that effectively would remove CT Freight’s business to RFG Logistics.” The group resignation resulted in an inability by CT Freight to “broker large quantities of freight.”

            The court also found that “the employee defendants took it upon themselves to take CT Freight’s customer lists, documents, and confidential information.” There were messages between some of the employee defendants discussing how to send the customer information to their personal emails. During the process of their departure, the defendants took steps to not “disrupt their business with their existing customers, whom they admittedly planned to bring with them the moment they left CT Freight.” The court held that “[w]hile there was nothing unjust about the employee defendants’ choice to leave at-will employment with West Plains, there was evidence the employee defendants knew and understood their group resignation would decimate CT Freight.”

Damages after April 5, 2013

            The defendants argued that there was not enough evidence to prove that the defendants’ resignations caused the losses suffered by CT Freight. The Eight Circuit determined that “[the defendant’s] concerted action . . . resulted in tortious interference that caused damage to West Plains.”

            West Plains went from a profit of over $800,000 in 2012 to a net loss of $150,000. West Plains tried to preserve the business by recruiting employees but could not find employees for the business. The court reasoned that even though West Plains did hire new employees, these employees did not have sufficient experience or a customer base in the industry. The Eighth Circuit concluded that “the evidence was sufficient to show the defendants’ actions caused a loss of profits to West Plains, and that loss continued after the expiration of the temporary injunction.”

Breach of Duty of Loyalty

            The Eight Circuit determined that the employee defendants breached their duty of loyalty, as well. The employee defendants, while employed by West Plains, “intended to hinder CT Freight’s business” by giving CT Freight information to Wells and resigning together in order to make sure customers followed. The employee defendants signed an agreement prohibiting them from partaking in conflicts of interests and distributing company information. Seven of the employee defendants signed the confidentiality and consulting agreements with Wells, violating their employment agreement with West Plains. Also, four of the employee defendants received the compensation from the consultation with Wells.

            The employee defendants also argued that the forfeiture of their pay was excessive. The Eighth Circuit determined that there was “adequate support for each award” based on the extent of involvement with RFG Logistics.

Civil Conspiracy

            A civil conspiracy can arise when two or more people accomplish, by concerted action, an unlawful object. A finding that the defendants committed unjustified interference with West Plains’ business or breached their duty of loyalty “would support the conspiracy claim.” The Eighth Circuit determined that “[t]here was abundant evidence showing the defendants entered into an agreement tortuously to interfere with West Plains’ business or to breach their duty of loyalty.”

Mitigation

            The defendants argued that West Plains did not show that it mitigated its damages upon the resignation of the employee defendants. The Eighth Circuit determined that West Plains immediately transferred employees from another division to CT Freight and contacted its customers that left with the employee defendants in an attempt to retain their business. CT Freight even expanded its business into other sectors of the industry. This all satisfied its duty to mitigate damages.

West Plains, L.L.C. v. Retzlaff Grain Co., 870 F.2d 774 (8th Cir. Aug. 30, 2017).

Takeaway for employers

            If you suspect former employees are appropriating your confidential information to consult with your clients or employees or may be planning to appropriate your information to form a competing venture, it is best to get your attorney involved right away. You may have rights to assert through a cease and desist letter, and could ultimately be vindicated in a court of law.

Nebraska Supreme Court defines “restore” and “suitable employment” for vocational rehabilitation plans

Nebraska law permits the Nebraska Workers’ Compensation Court to approve vocational rehabilitation plans for certain injured workers to facilitate their return to gainful employment. Read on to learn about the Nebraska Supreme Court’s recent consideration of what the law means to “restore” an employee to work and in “suitable employment.”

Factual Background

            Charles Anderson injured his arm while working as a millwright with EMCOR Group, Inc. When Anderson was injured, he was making $26.50 an hour and $1060 per week. When Anderson reached maximum medical improvement, the workers’ compensation court determined that he was entitled to a vocational rehabilitation evaluation. Anderson and EMCOR agreed on a vocational rehabilitation counselor, Lisa Porter.

            Porter prepared a “Vocational Rehabilitation Plan Justification for Formal Training Proposal.” Under Nebraska statute, there are five priorities that must be used in developing and evaluating a vocational rehabilitation plan. A higher priority may not be used “unless all priorities below it are unlikely to result in suitable employment.” For Anderson, the three lowest priorities were inadequate as they involve a plan to work for the same employer. EMCOR did not have any suitable employment available for Anderson. Porter decided that the next highest priority would be unavailable to Anderson as well, which involved employment with a new employer. Porter’s research showed that available jobs for Anderson paid $9 to $11 an hour; not suitable in light of his earnings at EMCOR of $26.50 per hour. Porter also contacted other employers but they did not have suitable employment for Anderson.

            As a result, Porter decided the only option for Anderson was under the highest priority plans. This priority involved “formal training that will lead to employment in another career field.” Anderson had grown county-fair award winning vegetables in the past. Anderson also had an interest in this area. Therefore, Porter felt the career field best suited for Anderson would be in horticulture or agriculture.

            Upon making this finding, Porter prepared the plan for Anderson. Under her plan, Anderson “would obtain a 2-year associate’s degree of applied science in agriculture business and management with a focus in horticulture at Southeast Community College in Beatrice, Nebraska.” Anderson’s hourly wage would be $13.20 after completing his education.

            After the plan was created by Porter, it was evaluated by a vocational rehabilitation specialist appointed by the compensation court. The vocational rehabilitation specialist denied Porter’s plan. Based on information the court’s specialist learned from the community college’s placement services director, formal training was unnecessary for the job goals of the plan. The specialist also stated that the job search done by Porter showed six jobs that did not require training and that paid between $9 and $14 per hour. The specialist ultimately decided that Porter’s formal training plan was “not reasonable or necessary” as one of the plan goals (employment as a vegetable farmer) was something that Anderson was already performing so he had no need for further training.

            After the specialist denied the plan, EMCOR petitioned to modify the award of vocational rehabilitation benefits and services. EMCOR alleged that Anderson’s “condition and circumstances no longer support an award of such services.” EMCOR claimed these services were no longer necessary because Anderson was already partaking in the practice of gardening and Anderson admitted “his inability to earn a similar or increased wage performing the work for which he seeks vocational rehabilitating retraining, and consent to earning such a lower wage.” Anderson responded by filing a motion requesting the implementation of Porter’s plan.

Anderson’s Testimony

            The court heard evidence on Anderson’s motion. Anderson testified that he had earned his GED and received a diploma in computer-aided drafting in 1998. Due to changes in technology, this education was no longer useful. Anderson testified that there were few jobs available in his area, and he was unwilling to work more than 25 miles away from his hometown. Anderson did not seek employment in the previous year but did earn $150 a week for five months from selling vegetables that he grew in his garden. Collectively, Anderson and his wife made $8,000 per year. Anderson testified that his “ultimate career employment goal was to be self-employed.” Anderson wanted to expand his greenhouse. Formal education would qualify him for jobs in selling chemicals, farm management, or as a golf course manager. In learning these potential jobs, he could then build a greenhouse and become self-employed.

Compensation Court’s Opinion

            The compensation court dismissed EMCOR’s petition to modify the award of vocational rehabilitation benefits and services and declared that Anderson was “entitled to participate in the proposed plan” because his current job of farming was not “suitable employment.” The court then determined that it was “unable to conclude that [Porter’s] plan will not lead to a suitable job.” EMCOR then appealed.

Nebraska Supreme Court Ruling

            In considering the appeal, the Nebraska Supreme Court noted one of the primary purposes of the Nebraska Workers’ Compensation Act is “restoration of an injured employee to gainful employment” and that if an employee is “unable to perform suitable work for which he or she has previous training or experience, the employee is entitled to vocational rehabilitation services as may be reasonably necessary to restore him or her to suitable employment.” The central focus of EMCOR’s appeal was on whether the vocational rehabilitation plan set forth by Porter would restore Anderson to “suitable employment.”

            The court explicitly adopted definitions of “restore” and “suitable employment.” “Restore” was defined to mean “to put back.” The court defined “suitable employment” to mean “employment which is compatible with the employee’s pre-injury occupation, age, education, and aptitude.”

            The compensation court determined that income of less than $8,000 per year was not “suitable employment” for Anderson. In order for him to gain employment in the relevant field of horticulture, additional education would be required. The compensation court had also taken into consideration the fact that job opportunities were limited in the area where Anderson lived. The Supreme Court held there was sufficient evidence to support the lower court’s findings in this regard.

            Porter’s plan involved Anderson working full-time as a supervisor or manager and the median annual wage in the area of farming, fishing, and forestry was $49,100. The Court held that Porter’s plan would place Anderson into employment making similar wages prior to the injury and “in a field that would be compatible with his age, education, and aptitude.”

            Since the plan “was reasonably necessary to restore Anderson to suitable employment, the [compensation] court did not err in ordering that Anderson was entitled to participate in it.”

For employers

            When you have an employee claiming a workplace injury or are facing issues with regarding an employee’s claim to benefits following an injury, engaging an experienced workers’ compensation attorney is vital.