Connecticut Labor and Employment Law Journal - Representing Employers - A reputation for excellence

According to a recent Los Angeles Times article, a California jury recently awarded a hospital employee $168 million, including $125 million in punitive damages, to a female physician assistant who endured two years of sexually inappropriate behavior and then was fired for reporting the harassment as well as patient care violations.  The perpetrators included cardiac surgeons.  The plaintiff claimed the hospital tolerated their behavior because of the large revenues they generated. 

The verdict, one of the largest ever recorded in a sexual harassment case, highlights the need to conduct regular training and education, to take seriously and investigate complaints, and to think long and hard about terminating or taking other action against an employee who has filed a sexual harassment complaint. 

The paid sick leave law (Senate Bill 913, Public Act 11-52) is set to become effective on January 1, 2012.  The law will make Connecticut the first state to mandate paid sick leave for employees.  Employers are well advised to become familiar with the law even if they already provide greater paid time off than required by the law, as there are other aspect of the law that apply more broadly.  The provisions of the law are detailed below: 

Who the Law Applies To

    Employers

    The law applies to employers with 50 or more employees in any one quarter of the prior year, determined on Jan. 1, annually.  The term “employer” includes “any person, firm, business, educational institution, nonprofit agency, corporation, LLC, or other entity . . .” but exempts all manufacturing businesses (as classified in sectors 31, 32, and 33 of the North American Industrial Classification System) and any “nationally chartered organization nonprofit tax exempt organization” that provides recreation, child care and education.  The second exemption appears to apply only to the YMCA.

    Employees

    Only “service workers” are covered.  Service worker means any employee primarily engaged in an occupation within one of the 68 federal Standard Occupational Classification Systems titles named in the Bill.  The classifications identified include various food service positions (e.g. bartender, cook, waiter), various healthcare positions (e.g. RNs, home health aides, social workers, dental assistants), office/administrative positions (e.g. office clerk, administrative support, data entry) and retail jobs (e.g. cashier, receptionist), among many others.  Perhaps most applicable to our clients, the classifications include individuals that could be employed by a BOE (e.g. librarians, crossing guards, security guards, office and administrative support, bus drivers), as well as private healthcare facilities. 

    Significantly, to be covered, the service worker must be paid on an hourly basis or non-exempt from the FLSA.  Additionally, the law exempts temporary and day workers, defined as those performing work for the employer on a per diem basis or an occasional or irregular basis, whether paid by the employer or an employment agency.

What Benefits Must Be Provided

    Accrual

    Commencing Jan. 1, 2012 (or the employee’s date of hire if hired after Jan. 1, 2012) covered employers must provide to eligible service workers paid sick leave accruing at the rate of 1 hour for every 40 hours worked, up to 5 days total in a calendar year. 

     Employees do not become eligible to take accrued time until they have worked 680 hours and have averaged at least 10 hours per week during the most recently completed calendar quarter.

      Carryover of Unused Time

      Up to 40 hours of accrued time may be carried over for a single calendar year, but employers are not required to allow workers to use more than 40 hours of leave in any year. 

      Pay

      Compensation for use of paid sick leave must be the greater of either the worker’s “normal hourly wage” or the minimum wage.  If the normal wage varies, it is calculated as the average hourly wage in the pay period prior to leave. 

      Benefit Flexibility and Donation of Benefits

      The law allows, but does not require, employers to permit workers to switch shifts and/or work extra hours in lieu of using accrued sick leave.  The different shifts/extra hours must be agreed to by the employer and employee and during the same or following pay period as the sick leave. Employers can allow workers to donate any unused time to their co-workers.

      Separation from Service

      Unused leave does not have to be paid out to the employee upon separation (unless otherwise required by the employer’s policy).  Where an employee is rehired after a break in service, whether voluntary or involuntary, the employee is not entitled to use any sick leave accrued before the separation and begins accruing leave time anew in accordance with the law.

Use of Accrued Time

      Permitted Uses

      Employees must be allowed to use the time for his/her or a spouse’s or child’s:

• Injury, illness, or health condition;
• Medical diagnosis, care or treatment of a mental or physical illness, injury or health condition;
• Preventative medical care;
• For a variety of reasons related to where the worker is a victim of family violence or sexual assault.

       An employer does not have to permit the use of accrued time for any reasons not specified in the law.  The law expressly states that it does not prohibit an employer from taking disciplinary actions against a service worker who uses paid sick leave provided under the law for purposes other than those specified.

       Notice & Documentation

       Where the need to use paid sick leave is foreseeable, employers may require advanced notice up to 7 days prior to the date leave is to begin.  If the need is not foreseeable, employers may require notice as soon as practicable.  If leave is for 3 or more consecutive days, the employer can require reasonable documentation verifying the purpose of the leave.

Employers Already Providing Equal or Greater Paid Leave Benefits

       Employers that already provide at least 5 days of paid leave, whether for vacation, sick days, or personal days, that can be used for the same purposes and that accrues at least as quickly will be deemed to comply with the law.  The law does not preempt the terms of any union contract or diminish the rights of any employee pursuant to a union contract.

Employee Notice

       The law requires each covered employer to provide notice to employees at the time of hiring that:

• The employee is entitled to paid sick leave, the amount provided, and the terms under which it can be used;
• The employer cannot retaliate against him/her for requesting or using sick leave; and
• The employee can file a complaint with the labor commissioner for any violation.

       Notably, an employer can comply with this notice requirement by displaying a poster with the required information in English and Spanish in a conspicuous place, accessible to employees, at the employer’s place of business.  The labor commissioner is authorized to adopt regulations establishing additional notice requirement.

Retaliation Provision

       The law prohibits employers from taking adverse employment actions against an employee because the employee: (1) requested or used paid sick leave as provided by the law or in accordance with the employer’s policy; or (2) filed a complaint with the labor commissioner alleging the employer violated the law.

       Significantly, the retaliation provision is broader than the leave provisions and applies to all employees, rather than just the enumerated service workers. 

Enforcement

       There is no independent cause of action for violation.  Rather, employee complaints must be directed to the Connecticut Department of Labor.  The commissioner may hold a hearing and, upon a finding by a preponderance of the evidence that the employer violated the law, may issue civil penalties.  Ordinary violations will subject the employer to a $100 civil penalty and violations of the retaliation ban will result in a $500 penalty. 

       Additionally, the commissioner can order other appropriate relief, such as rehiring, payment of back wages, or reinstatement of benefits.  Aggrieved parties can appeal the commissioner’s decisions to the Superior Court.

What to do Next  

       Covered employers are encouraged to review and assess their job descriptions to determine what jobs, if any, are impacted (i.e., what employees are “service workers”) and to ensure that employees are properly classified as exempt or non-exempt.  Similarly, covered employers should review and modify their leave policy to allow service workers who are already provided at least 5 paid leave days to use such leave for all permitted purposes under the law and to be certain that the leave they provide accrues at least as quickly as provided for by the law.  Further, to the extent an employer is covered and employs service employees, the employer should consider determining how it wishes to handle the non-mandatory aspects contained within the law, such as flexible use of benefits and donation of time. 

It is no secret that most employers attempt to manage the risk of litigation through the use of employee separation agreements.  A recent Second Circuit decision serves as a valuable reminder of the importance of drafting separation agreements which will stand up to attack.

Earlier this month, in Ridinger v. Dow Jones & Co., the Second Circuit Court of Appeals found in favor of an employer in enforcing a waiver of age discrimination claims under the Age Discrimination in Employment Act (“ADEA”).  The Older Workers Benefit Protection Act (“OWBPA”), which modifies the ADEA, among other very stringent and specific prerequisites, requires that a waiver and release of claims be written in a manner calculated to be understood by the employee.  If it fails to meet this requirement, it is not considered knowing and voluntary. 

The employee argued that the agreement was unenforceable because it did not comply with this requirement.  The Second Circuit held that when there is no evidence that the individual employee's comprehension level was below that of the average eligible employee, the employer carries its burden of proving that a waiver was sufficiently clear to meet the requirements of the OWBPA if the language is calculated to be understood by the average employee.  The Court concluded that the district court correctly found that the agreement did not use or combine the terms “waiver,” “release,” and “covenant not to sue” in a manner that was found to be confusing in other cases.  Accordingly, it reasoned that the employee could not have been misled by an error in the boilerplate language of the agreement giving him the right to challenge the validity of the agreement itself because this right was expressly stated.  The court also pointed out that the agreement specifically provided that the employee waived his right to sue only with respect to claims “through the date of this Agreement,” consistent with the OWBPA, and contained his acknowledgment that he was advised to consult an attorney before signing it.  Concluding that the employee had not pointed out anything in the agreement that could have led him to believe that he retained the right to bring an action for violation of the ADEA, rather than simply an action challenging the validity of the agreement, the court ruled that the agreement was a valid waiver of his right to bring an ADEA action against his former employer.

The take away lesson from this case is just the reminder that the OWBPA imposes strict requirements on the waiver of ADEA claims, which employers simply must be aware of and take the time to comply with.  Accordingly, employers should periodically review their separation agreements, especially if they include provisions related to age discrimination

On Monday, the United States Supreme Court issued its much anticipated decision in Wal-Mart v. Dukes.  As expected, the decision was a victory for the retail giant.  The Court denied the plaintiffs the right to proceed as a class on the grounds that the class failed to meet the commonality requirement, since the action was based on literally thousands of individual employment decisions made over a number of years at various locations throughout the country, rather than upon a single, unifying policy.  As such, the decision is likely to have somewhat of a chilling effect on class action discrimination litigation—no doubt a victory for employers. 

The paid sick leave bill before the Connecticut legislature passed the House on Saturday.  It will now reach Governor Malloy’s desk for signature.  As he is expected to sign, the bill will become law on January 1, 2012. 

On Wednesday, the State Senate narrowly (18-17) passed the bill requiring employers of fifty or more to provide paid sick leave to employees.  This puts the act one step closer to passage.  It heads to the House of Representatives next.   However, the bill has been amended.  In its current form, it applies only to “service workers,” exempts manufacturers, allows for up to five paid sick days per year which can be carried over for a single year, and allows the days to be used for one’s own illness or that of a family member.  Most notably, however, the amended bill provides that employers who provide at least five days of leave, whether for vacation, sick days, or personal days, will be deemed in compliance.  While this legislation has been hotly debated by unions, employee advocacy groups, and business lobbies alike, and has received a great deal of press given that Connecticut would be the first state to pass such legislation, its real impact, if passed, remains to be seen, given that most employers already provide such time to employees. 

The Americans with Disabilities Act was amended in 2008 (“ADAAA”) and imposed a number of significant changes, particularly as to the determination of who has a “disability” under the ADA.  The ADAAA overturned several major Supreme Court cases and caused concern amongst employers attempting to figure out how the changes would impact their obligations under the ADA. 

Employers now have additional guidance because while the ADAAA was effective January 1, 2009, the Equal Employment Opportunity Commission’s (EEOC) final regulations implementing the ADAAA were released and effective March 25, 2011. 

Available on the Federal Register website, the regulations do not change the definition of the term “disability,” but, instead, put into practice the significant changes in how the definition is to be interpreted. 

The EEOC has stated that the regulations adopted “rules of construction” to use when determining if an individual has a disability.  These principles include the following:

• The term “substantially limits” or requires a lower degree of functional limitation than the standard previously applied by the court and is to be construed broadly, in favor of expansive coverage;
• With one exception (ordinary eyeglasses or contact lenses), the determination of whether an impairment substantially limits a major life activity shall be made without regard to effects of mitigating measures to improve the impairment, such as medication or hearing aids;
• An impairment that is episodic or in remission is still a disability, if it would substantially limit a major life activity when active.

In addition, the regulations clarify that the term “major life activities” includes “major body functions,” such as functions of the immune system, and provides examples of impairments that should virtually always constitute a disability (including cancer, epilepsy, and bipolar disorder).

Employers should become familiar with the EEOC’s final regulations and must be careful in applying the new law as it is now easier for individuals to establish coverage under the ADA.