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Labor and Employment Law Reporter: Summer 2011

In This Issue:


The Sixth Circuit Court of Appeals granted an interlocutory appeal to address the scope of the Americans with Disabilities Act (“ADA”). Bates, et. al. v Dura Automotive Systems, Inc., No. 09-6351 (6th Cir. 2010). The plaintiffs are individuals who worked at Dura Automotive’s Lawrenceburg, Tennessee manufacturing facility. Dura Automotive became concerned when its Lawrenceburg facility had a higher rate of workplace accidents than at comparable plants. Dura suspected that the higher rate might be caused by legal or illegal drug use. Dura implemented a policy to prohibit employees from using legal prescription drugs, if those drugs contained substances that had an adverse effect on safety, company property, or job performance. Dura developed a procedure to screen employees for all substances believed to be dangerous in the workplace, even if they are in prescription medications.

Each of the plaintiffs tested positive for one of the prohibited substances. However, each employee had a legal prescription for those medications. Dura gave the employees an opportunity to transition to different medication without the prohibited substances and refused to consider letters from doctors saying that the employees’ work performance would not be affected by the drug. Dura terminated the employees when they continued taking the medication with the prohibited substances. The employees sued, claiming that Dura’s drug testing policy violated the ADA. The trial court denied Dura Automotive’s motion to dismiss, citing a difference of opinion on the issue of whether an individual must be disabled in order to assert a claim under Section 12112(b)(6) of the ADA, but certified the question for an immediate appeal to obtain guidance from the Sixth Circuit.

The ADA prohibits discrimination against a “qualified individual with a disability because of the disability.” Discrimination is defined to include “…using qualification standards, employment tests or other selection criteria that screen out or tend to screen out an individual with a disability…” The ADA does allow non-disabled individuals to bring some claims under some provisions of the Act, but that does not apply to employee screenings. The plain language of subsection (b)(6) only protects individuals with disabilities. The court adopted a straightforward reading of this section of the ADA, and concluded that only a “qualified individual with a disability” is protected from the prohibited form of discrimination described in subsection (b)(6) – the use of qualification standards and tests tending to screen out disabled individuals. Here, the plaintiffs had no disabilities. Thus, the Sixth Circuit reversed the trial court’s denial of Dura’s motion to dismiss, and ordered that the claims of non-disabled plaintiffs be dismissed.

As this decision makes clear, it is permissible to establish screening procedures which target the use of medications containing certain substances which affect performance. While that may help employers control use of certain medications in some cases, the possibility remains that if a disabled individual is caught in the net, there may still be some ADA exposure.

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In Merkel v Lincoln Consolidated Schools, Mich. App. No. 292795 (unpublished, 10/19/10), the court addressed the scope of an arbitrator’s authority to determine the question of arbitrability. Lincoln Consolidated Schools and the Lincoln Education Associates Organization (“LEAO”) were parties to a collective bargaining agreement. A grievance was filed against the school district, in which it was asserted that a bargaining unit member was entitled to additional healthcare benefits. The grievance procedure contained five steps, and step five provided that if the LEAO was not satisfied with the disposition of the grievance at step four, the grievance could be submitted to arbitration “within fifteen (15) working days.” The step four decision denied the grievance, so the union filed a demand for arbitration. However, it did so eighteen (18) working days after the step four decision.

The collective bargaining agreement also contained a provision explaining that if the parties disputed the arbitrability of the grievance, the arbitrator “shall first render a decision as to the arbitrability thereof.” The contract also stated that the time limits were to be strictly observed, but could be extended by written agreement of the parties. Ultimately, an arbitration hearing was held and, following the filing of post-hearing briefs, the arbitrator concluded he did not have jurisdiction to resolve the merits of the dispute because the union failed to timely advance the grievance to arbitration. The union then filed suit to vacate the arbitration award and order the arbitrator to issue a decision on the merits.

Both parties filed motions for summary disposition. The trial court denied the union’s motion, granted the employer’s motion, and dismissed the complaint. The court explained that while the union had an opportunity to present evidence to the arbitrator, the arbitrator first had to assess whether the dispute was arbitrable. The Court of Appeals confirmed that procedural matters arising relating to an arbitrable dispute are for the arbitrator, and not the court, to determine. As such, the timeliness of bringing an arbitration proceeding was a procedural issue to be determined by the arbitrator. The Court of Appeals confirmed the trial court’s dismissal of the union’s complaint. Because the arbitrator had the authority to address the initial issue of arbitrability, and did so based upon evidence and arguments presented to him, his refusal to reach the merits of the case was appropriate.

This case reminds us of the importance of deadlines in collective bargaining agreements. Sometimes the familiarity of the parties results in a less than strict adherence to contractual deadlines. It is the best practice to strictly follow contractual deadlines and obtain any necessary extensions in writing. We encourage all managers and administrators to be familiar with and mindful of contractual deadlines, particularly in the grievance process.

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Stanley Williams worked for the University of Michigan Medical Center as an anesthesia technician. Plaintiff took an approved leave of absence from his employment due to severe obstructive sleep apnea. His sleep apnea resulted in tiredness at work, difficulties with concentration and attention, falling asleep while driving, and decreased sleep at night. Plaintiff’s treating physician eventually released him to return to work, but the medical center referred him to a sleep medicine specialist for a fitness for duty evaluation. The specialist concluded that plaintiff could return to work provided that he work part-time, with a later starting time, and with the assistance of a colleague to work along side him to monitor his work and correct any mistakes that he might make. The hospital determined that it could not authorize plaintiff’s return to work with the “work-buddy” restriction. Williams was subsequently reevaluated and allowed to return to work without the work-buddy arrangement. Williams responded by filing a lawsuit alleging that he was discriminated against on the basis of a disability and that he was retaliated against for seeking certain accommodations. Williams v University of Michigan, Mich. App. No. 291323 (unpublished, 12/16/10).
Plaintiff’s complaint alleged that he was discriminated against on the basis of disability in violation of the Michigan Persons With Disabilities Civil Rights Act (PWDCRA). MCL 37.1101, et. seq. The allegedly discriminatory conduct occurred when the hospital would not allow him to return when first released under the conditions established by the sleep medicine specialist. The hospital moved for summary disposition and the trial court dismissed the case. The Court of Appeals agreed.

The court restated the general principle that the Act prohibits discrimination against individuals because of their disability status. The Act protects against discrimination based on physical and mental disabilities that substantially limit major life activities, but that, with or without accommodation, do not prevent the disabled individual from performing the duties of a particular job. The purpose of the Act is to ensure employment of the disabled to the fullest extent possible. In other words, employers are prohibited from taking any adverse employment action against an employee because of a disability unrelated to the individual’s ability to perform the duties of a particular job.

The trial court specifically found that plaintiff’s disability prevented him from performing the duties required of an anesthesia technician, even with reasonable accommodation, because of the risk posed to patient safety as a consequence of plaintiff’s disability. An anesthesia technician is required to place arterial lines, central lines, epidural catheters, airway devices, echo monitoring devices, and devices necessary for cardiac and vascular cases. The technician also assists in the administration of anesthesia to patients, at staff requests. Further, the technician is responsible for ensuring that the equipment used for anesthesia is working properly. The court concluded that precision was very important and any failure in doing his job properly could be life threatening to patients. A number of other hospital staff members confirmed that failure to do the job properly could pose a very serious risk of injury to patients. The very fact that the proposed accommodation, having a co-worker monitor his performance, confirmed that if he did something wrong it could harm the patients. As a result, it was determined that even with accommodation he was not be able to perform the essential functions of the job, so he was not protected by the PWDCRA.

The court also held that he had not been retaliated against for seeking reasonable accommodations to return to work. After his return he did receive some criticism from his supervisor, but he also received a positive evaluation, a pay raise, and his compensation was comparable to other employees. Further, his employment was ultimately restored to what it was previously. Therefore, Plaintiff failed to show any adverse employment action at all, let alone for seeking accommodations.

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Effective December 21, 2010, the Michigan Legislature amended the Payment of Wages and Fringe Benefits Act to make it easier to encourage direct deposit. As a cost saving measure, many employers would prefer that employees receive pay through direct deposit. Prior to the amendment, employers could not mandate that employees’ wages be direct deposited. An employee was required to give full, free, and written consent to being paid through direct deposit, obtained without intimidation, coercion, or fear of discharge or reprisal. Under the amendment, an employer may now require an employee who refuses direct deposit to accept a debit card, so long as each employee received notification and a form giving him or her the option to receive wages either through direct deposit or debit card. The employer must also notify the employee that failure to return the form within thirty (30) days will be presumed to indicate consent to receiving wages through a payroll debit card.

Paying wages via direct deposit or debit cards reduce the costs associated with issuing or distributing paper checks. It also eliminates bank processing and check handling fees, as well as postage to send the checks to employees. Before the amendment, there was no way an employer could compel payment of wages by something other than a paper check. This amendment, should employers choose to take advantage of it, may yield some cost savings. It is critical, however, that the requisite notices be provided. Please note that there is also some question whether unionized employers are required to negotiate this method of payment. Accordingly, we recommend you contact legal counsel before implementing such a program with your unionized staff.

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In Wajer v Outdoor Adventures, Inc., Mich. App. No. 294985 (unpublished, 1/25/11), the Michigan Court of Appeals upheld the dismissal of a complaint alleging a violation of the Michigan Whistleblowers Protection Act (“WPA”). There, the Plaintiff was terminated from his employment on October 24, 2008, allegedly in violation of the WPA. However, the lawsuit was not filed until February 17, 2009. That is more than the ninety (90) day period allowed by the WPA. Accordingly, the claim was untimely and, thus, properly dismissed.

Moreover, the court reiterated that the “continuing violation doctrine” cannot serve to revitalize an otherwise time barred lawsuit. The Wajer court relied on a previous Michigan Supreme Court decision which made the general statement that “the [continuing violations] doctrine has no continued place in the jurisprudence of this state.” Even though the economic harm associated with being terminated from employment continued long after the discharge, that alone was insufficient to toll the statute of limitations. There must be some allegedly inappropriate action taken within the limitation period, for the doctrine to apply. That was absent, so the case was properly dismissed by the trial court.

This case exemplifies the need to check the applicable statute of limitations in every WPA case. Because the statute of limitations is so short, it is not inconceivable that a plaintiff failed to file a complaint in a timely fashion. Failure to recognize and address the issue early on may constitute a waiver of that particular defense, so timelines must be studied as early as possible.

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Plaintiff Nazeeh Younis appealed from an order granting summary judgment to Pinnacle Airlines in this action for disparate treatment discrimination and retaliation under Title VII of the Civil Rights Act of 1964. Younis v Pinnacle Airlines, No. 08-6112 (6th Cir. 2010). Younis was a pilot for Pinnacle Airlines and promoted to captain in 2004. Eventually, Younis was discharged for failing to successfully pass both the oral and written portions of a proficiency test. Younis claimed that the tests were unreasonably complicated, consisted of unrealistic scenarios, and the results were, in some cases, inaccurate. So, naturally, he sued under Title VII alleging national origin discrimination.

In an issue of first impression, the Sixth Circuit clarified the administration prerequisites at the Equal Employment Opportunity Commission (“EEOC”) before one may file a Title VII lawsuit. In this case, Younis did file a disparate treatment claim with the EEOC. He identified three or four isolated and allegedly discriminatory comments by his peers that occurred over a three year period to support his charge. The EEOC failed to find merit to his charge and issued a “right to sue” letter. When he filed his suit, he included a hostile work environment claim, too. In order to establish a claim of hostile work environment, a plaintiff must present evidence of harassment that unreasonably interferes with work performance and creates an objectively intimidating, hostile, or offensive work environment.

The court held that the facts plaintiff noted in the EEOC charge were limited to his claim of disparate treatment and did not support the subsequent, uncharged claim of hostile work environment. In other words, one must include all claims at the EEOC, as part of the duty to exhaust administrative remedies, before filling a lawsuit. Previously, the courts were somewhat lax in allowing uncharged claims to proceed if the facts seemed to be close to raising such issue. Here, the court ultimately held that the allegations of hostile work environment in the complaint clearly exceeded the scope of the EEOC charge. The facts alleged in the charge before the EEOC could not reasonably be inferred to extend to a hostile work environment claim. Accordingly, the plaintiff failed to satisfy the duty to exhaust administrative remedies, and the trial court properly dismissed the complaint.

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In Franklin v Kellogg Company, No. 09-5880 (6th Cir. 2010), Alice Franklin filed suit on behalf of herself and all similarly situated employees to recover unpaid wages allegedly owed under the Fair Labor Standards Act (“FLSA”). Plaintiff’s claim that the time spent “donning and doffing” Kellogg’s mandatory food safety uniforms and protective equipment should be paid. The claim also sought to recover wages for time spent walking to and from the changing area to the time clock. The trial court issued summary judgment in favor of Kellogg, concluding that donning and doffing equipment is excluded from hours worked under the FLSA. However, the Court of Appeals reversed, in part, and remanded for further consideration.

Under the FLSA, employers must pay their employees time and a half for hours worked in excess of 40 hours per week. Section 203(o) of the Act excludes changing clothes from the measured working time, if it has been excluded by custom or practice under a collective bargaining agreement (“CBA”). In this particular case, Kellogg relied on an interpretive opinion letter from the Department of Labor concluding that “clothes” include clothes worn on the body for covering, protection, or sanitation. Based on this ruling, the hairnets, pants, snap front shirts with Kellogg logo and employee name, and slip resistant shoes were concluded to be “clothes” covered by the exception. Additionally, it had long been the practice that the period of time spent “donning and doffing” this clothing was not paid to employees covered by a CBA. Accordingly, the court affirmed the trial court’s decision that the period of time spent “donning and doffing” does not count toward the hours worked under the FLSA.

However, the court remanded the case for further proceedings as pertains to the time spent walking from the locker room to the time clock, where the employees are required to clock in. Franklin argued that the time spent walking between the locker room and time clock was a “principal activity,” and thus must be counted towards overtime. Under the continuous work day rule, a work day is generally defined as the period between the commencement and the completion, on the same work day, of an employee’s principal activity or activities. During a continuous work day, any walking time that occurs after the beginning of the employee’s principal activity and before the end of the employee’s last principal activity is covered by the FLSA and must be compensated. Principal activities are those that are an integral and indispensable part of the activity which the employee is employed to perform. Therefore, the plaintiff argued that after changing into the uniform, the time walking to the time clock was actually part of the work day and needed to be compensated. The court adopted a broad interpretation of the term “integral and indispensable,” particularly because the activity was required by Kellogg, and ruled that the time spent walking from the locker room to the time clock could potentially be compensable. However, there were questions of fact as to the length of time it took to walk from the changing area to the time clock. Minimal walking time would not be compensable. Accordingly, the case was sent back to the trial court for further development of this factual question.

For those employers who do have uniform requirements, this case may affect their overtime obligations. We will continue to monitor the case to see if there is any clarification as to whether the length of time spent walking between the locker room and the time clock must be compensated.

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In Beaty v Ganges Township, Mich App. No. 290347 (unpublished, 6/29/10) the Michigan Court of Appeals reversed the trial court's decision granting the Defendants' summary disposition motion. The Court of Appeals disagreed with this trial court’s conclusion that the information requested by Plaintiffs was exempt from disclosure pursuant to the Freedom of Information Act (FOIA).

Plaintiffs James Keag and Jean Beaty filed an application for a planned unit development (PUD) to be built on property they owned in Ganges Township. The Planning Commission found the site plan to be consistent with the intent and purpose of the Ordinance, and compatible with adjacent land usage and the natural environment. However, when Keag and Beaty submitted their final site plan, the Planning Commission denied the application. After denial of their PUD application, Keag and Beaty filed suit against Ganges Township seeking an order of superintending control compelling the defendants to approve the site plan and asserting a claim of appeal from an administrative agency.

After filing suit, Keag initially filed four requests for information under FOIA, requesting certain tape recordings, copies of proposed zoning and PUD ordinance changes, and correspondence and e-mails exchanged by planning commission members related to the changes. He later filed three more requests, including a copy of a site plan submitted by a non-party and approved by the Planning Commission, information related to another non-party's special use permit application, and all communications between the Planning Commission and a company dealing with reports and ordinance changes, dating back to when the company was retained.

Under FOIA, a public body must disclose any public record that is not specifically exempted from disclosure. MCL 15.233(1). A public body must respond to a FOIA request within five business days by granting the request, denying the request, or granting the request in part and denying it in part. MCL 15.235(2). Pertinent to this case, MCL 15.243(1)(v) states that a public body may deny in whole or in part a request for "records or information relating to a civil action in which the requesting party and the public body are parties."

The trial court concluded the materials requested by Keag "related" to the underlying case, because Keag might be able to use them in some way for comparison purposes in pursuing his appeal of the Planning Commission's decision. However, the Court of Appeals concluded the trial court erred in making a general conclusion that all the information Keag requested was exempt from disclosure. Keag requested a wide variety of information - e-mails, tape recordings, drafts and final copies of ordinances, applications and plans submitted by other persons "and the trial court simply made a blanket determination that all the information was exempt under MCL 15.243(1)(v)." The court held the "trial court was required to sort through the requests and make a particularized determination regarding each piece of information sought under the requests." As such the case was remanded for further proceedings.

Obviously, this clarifies that all public bodies must take particular care when attempting to invoke an exclusion to the FOIA disclosure requirements, especially when those requested are quite broad. We recommend that each individual item requested be separately analyzed under each possible exemption.

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In Denney v Dow Chemical Co., Mich. App. No. 294278 (unpublished, 1/11/11) the Michigan Court of Appeals affirmed the trial court’s grant of summary disposition to Dow Chemical Company on Priscilla Denney’s employment claims for (1) violating the Whistleblowers Protection Act (WPA), (2) breach of implied contract, and (3) sex discrimination. Notably the Court of Appeals concluded that the WPA’s statutory definition of “public body” does not include a private body whose implementation, action, or reporting is directed by the government.

Before Dow hired Ms. Denney, she signed an employment application that acknowledged, if hired, she could be terminated by Dow at any time with or without cause and that her employment was at will. She also signed an employment agreement when she was hired that stated Dow could terminate her employment at will. Dow's "Code of Business Conduct" provided that nothing "in this document constitutes a contract of employment with any individual."

During her employment, Ms. Denney, a civil and environmental engineer, reported to Dow’s "compliance officer" her concerns about a contractor's failure to validate data regarding contamination of pollutants in a local river. She contended that reporting to the "compliance officer" was equivalent to reporting to a public body under the WPA. Ms. Denney claims that she was “demoted” for reporting these concerns and she eventually resigned from her position with Dow.

The Court of Appeals noted that to establish Ms. Denney engaged in protected activity, she had to "prove she reported or was about to report a violation or suspected violation of a law or regulation to a public body." Ms. Denney, relying on case law, argued that the WPA covers reports to a private body when the government sets forth directions as to the private body's implementation, action, or reporting. The Court of Appeals disagreed and held that Ms. Denney “did not report her concerns to any public body as defined in the Act; nor did she claim that she was about to make a report to any public body.” Additionally, the Court concluded that Ms. Denney did "not explain how the plain language of [a public body] extends to employees of private companies, even if the company has a duty to report certain matters to the government."

The Court of Appeals further determined that Ms. Denney could not establish a breach of implied contract based on Dow’s non-retaliation policy stated in its “Code of Business Conduct,” because Ms. Denney signed an employment application that stated that “any other Dow documents are not contracts of employment” and because Dow’s “Code of Business Conduct” disclaimed the intent to form a contract with the employee. Finally, the Court of Appeals agreed with the trial court’s conclusion that Ms. Denney’s change in job duties did not arise to the level of adverse employment action. The Court of Appeals stated that even if it were to assume that Ms. Denney suffered an adverse employment action, it could not conclude that the circumstances in this case create an inference that Dow’s actions were motivated by gender animus.

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This client newsletter is intended to provide helpful information on topics relating to labor and employment law and is not intended to constitute legal advice or opinion relative to specific facts, matters, situations, or issues. Legal counsel should be consulted concerning the application of this information to specific circumstances or situations. ©The Williams Firm, P.C., Summer, 2011

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