Employment Law Update - Fall 2005

EEOC Restructuring to Take Effect October 1

For the past three years, the U.S. Equal Employment Opportunity Commission (EEOC) has undertaken a comprehensive review of its organizational structure and operations. According to the EEOC, its structure had become outdated, top-heavy and inefficient over the past 25 years and change was needed. This process led to approval of a field office reorganization plan to cut the level of management employees, increase front-line jobs and improve the enforcement efforts and efficiency of the EEOC. This will result in the downsizing of a number of EEOC District Offices into smaller Field and Area Offices with fewer management staffers, but with no layoffs of employees or office closures.

The reorganization plan will take effect October 1, 2005. The final plan is an outgrowth of a February 2003 report by the National Academy of Public Administration which called for major restructuring of the Commission and recommended the reduction in field offices, reorganization of headquarters, provision for electronic filing of complaints and the establishment of a National Call Center. A National Contact Center was previously established on a pilot basis, and the EEOC plans to streamline its Washington Headquarters following implementation of its Field Repositioning Plan. For more details, visit the EEOC official website at www.eeoc.gov.


Local Impact

Former Area Director of the Norfolk EEOC Office, John Di Dio, was contacted regarding the local impact of the October 1st restructuring. Mr. Di Dio indicated the Norfolk Area Office is slotted to become a Field Office and will now report to Charlotte as its District Office because its prior District Office (Baltimore) has been downgraded. According to Mr. Di Dio, the net result for Virginia employers will be no real change in how charges are processed. However, the new reporting structure may lead to some delays in charge processing as the EEOC adapts to its new reporting structure.


Discharged Volunteer Cannot Bring Age Claim

This past June, a federal judge determined that a 63-year old former Auxiliary Deputy Sheriff in Portsmouth, Virginia had no claim for age discrimination when he was removed from the Criminal Apprehension Unit due to his age. In Blankenship v. Portsmouth, Judge Rebecca Smith determined that the plaintiff was not an employee as defined under the Federal Age Discrimination law. Therefore, he could not take advantage of a law protecting employees over 40 who are discriminated against due to their age.

Mr. Blankenship worked in the Portsmouth Sheriff’s office as an Auxiliary Deputy Sheriff for several years. He received a uniform, equipment, and reimbursement for expenses incurred on the job, but otherwise received no pay or benefits as an Auxiliary Officer. The fact that he received no compensation was key in the Court determining that Mr. Blankenship was a volunteer and not an employee covered by federal laws prohibiting discrimination.


Federal Case Makes Employee FMLA Waivers Problematic

On July 20, 2005, the Federal Appeals Court for this region ruled in Tayler v. Progress Energy, Inc., that employees cannot waive their Family and Medical Leave Act (FMLA) rights without court or administrative approval. This case was not good news for employers which, from time-to-time may want employees to verify in writing that they have no claims (including FMLA claims) against their employer.

The Court pointed to explicit language in the statute and its implementing regulations that any waiver by an employee of FMLA rights would require approval of either the federal Department of Labor or a court. When an employer seeks a release or waiver from an employee, obtaining court or government agency participation is more trouble and expense than most employers expect. This added trouble and expense may cause employers to refrain from seeking waivers or releases even when they would otherwise like to resolve such claims with an employee. The Fourth Circuit Court of Appeals may reconsider this ruling, but for the time being, the ruling has created a practical headache for employers.

Practical Pointer

This case points out the need to carefully deal with any situation where an employer wants a release of any and all claims from an employee. Such releases may appear to be unduly defensive in some cases, but when they are received, can be very valuable. However, it now appears that release of FMLA claims may require additional effort. However, this is not a new issue because courts have previously ruled that release of wage claims under the Federal Wage Hour laws may also require approval of the federal Department of Labor or a court. Throw in additional legal requirements applicable when anyone over 40 is requested to release an age discrimination claim, and employers are well-advised to carefully craft any document where a release of claims from an employee is the desired result.


Virginia Employers Can Prepare for Emergencies On-line

With hurricane season upon us, Virginia employers should be aware that there is now an on-line resource to help businesses prepare for and recover from disasters. A new website, www.vaemergency.com/business, was recently activated. This website, otherwise known as the Virginia Business Emergency Survival Tool Kit, features information and resources to help businesses prevent and reduce disaster-related losses. As Governor Mark Warner stated, Floyd, Isabel, and Gaston have taught Virginians that it pays to be prepared. Governor Warner went on to say Whether you have one or one thousand employees, it makes good business sense to plan for emergencies.

The on-line Tool Kit outlines simple measures businesses can take to prepare for emergencies. It covers all areas of business emergency planning, including identifying hazards and threats, preparing employees, developing disaster plans, covering insurance needs, responding to an emergency, and arranging recovery assistance.

According to the U.S. Bureau of Labor, only 25% of U.S. companies plan for disasters, and most companies that experience a major disaster go out of business within five years. By creating and establishing policies and procedures before an emergency arises, employers will be able to return to normal operations more quickly. Even if a company already has an emergency plan, the Emergency Survival Tool Kit can serve as a resource to review that plan to ensure that it is up to date.


The FairPay Regs: A Year Later

When the Federal FairPay Regs went into effect on August 23, 2004, many employers were concerned about what impact these new rules would have on their operations. After all, this was the first attempt to revise the rules governing when employees can be treated as exempt from overtime in decades. Now that a year has gone by with the new rules in effect, their impact on employers can be assessed.

The most obvious major change was increasing the salary that certain white-collar employees must receive to be exempt from overtime to $455 per week. Perhaps because this change was a long time coming, most employers were already paying exempt employees weekly salaries equal to or in excess of $455. However, some employers increased salaries of exempt employees and made sure that the salaries were guaranteed to ensure employees meet this requirement to be exempt from overtime.

Many employers have also conducted audits of their workers’ duties to determine which individuals are now eligible for overtime pay under the new rules. In conducting such audits, employers have compared the duties and responsibilities of employees treated as exempt with the new rules applicable to executive, administrator, and professional employees. According to published reports, this has resulted in more employees being classified as eligible for overtime as opposed to an increase in employees being treated as exempt from overtime. In the process of reviewing pay practices to ensure compliance, prudent employers have also taken a close look at documentation of exempt, salaried employees’ duties. Job descriptions are important in this regard, but employers have found that it is also important to document what duties an employee actually performs. Performance reviews and documentation of what role a supervisor plays in disciplining and discharging employees are important indicators in this regard. Ultimately, the documentation should reinforce that an exempt employee’s primary duty is consistent with what is required in the new FairPay Regs.

Since the FairPay Regs went into effect, employers are also taking advantage of new flexibility they have in certain areas. For example, the new FairPay rules allow employers to suspend exempt employees without pay for one or more full days for serious misconduct. This can now be done without jeopardizing the exempt status of employees, but disciplinary-deduction policies need to be in writing, so many employers have modified their disciplinary policies accordingly. Another area that has lead to modified policies for employers is the new Safe Harbor protection afforded to employers who have written policies prohibiting improper deductions and complaint mechanisms in place to protect employees from any wrongful deductions. Employers who have such policies now have an enhanced protection against inadvertent violations of the salary basis requirement for various overtime exemptions.

While the effect of the FairPay Regs may not have been as severe as many employers feared, the Regs have certainly enhanced employer sensitivity as to when an employee may be treated as exempt from overtime pay. This increased sensitivity is also important in light of the marked increase in litigation involving wage-hour claims. For the first time in history, collective action FLSA lawsuits outnumber federal discrimination class action cases. So even though some of the new regulations may be complicated, employers are well advised to make sure their pay practices are in compliance.


The Department of Labor has a new website specifically created to help employers understand and implement the new regulations. It includes a number of videos and PowerPoint presentations that can be downloaded and used in the workplace. This website can be found at www.dol.gov/esa/regs/compliance/whd/fairpay. Any employer in need of further help with a wage-hour self-audit can also call any member of the K&C Employment Team.


Top Ten Outrageous Cases Unveiled

All the votes are in, and this past year’s Top Ten Outrageous cases were announced at the July 21st showing of the 21st Annual Employment Law Update. Anyone interested in the humorous or unusual side of employment law can view this list by clicking here.


22nd Annual Employment Law Update: Rules of the Game

On November 3rd, the K&C Employment Law Team will host the premiere showing of the 22nd Annual Employment Law Update - Rules of the Game, at the Chesapeake Conference Center. This year’s program is designed to provide employers with the rules to reduce risk in the ever-changing legal environment.

Topics to be featured include Employee Handbooks, Workers’ Compensation, Dealing with the Problem Absentee Employee, Workplace Harassment & Misconduct Investigations and more.

For more information, please contact Nicole Naidyhorski at (757) 624-3232.

This program has been approved for 5 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI homepage at www.hrci.org.

The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances.

The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2018.

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