JUNE 2002

I. LEGISLATIVE/REGULATORY UPDATE
Pending Legislation

New Employer/Employee Tax for Paid Family Leave Obtains Senate Approval

The California Senate narrowly approved a bill that would use the state's disability insurance (SDI) program to provide partial wage replacement for employee leave to care for a seriously ill child, spouse, parent, or domestic partner, or to bond with a new child ˆ birth, adoption, or foster care placement. SB 1661 (Kuehl) would require employees to contribute to a fund that would pay up to 12 weeks of benefits for employees who take family leave. Annual contributions to the fund would range from $14 to $38 per employee (in addition to the regular SDI deduction), depending on the employee's pay level. Employers could opt to match their employee's contributions or take out separate disability insurance to provide the paid family leave benefit.

Under the bill, an employee who requested paid family leave would need to file a certificate to establish medical eligibility for the leave but would not need to disclose the serious health condition involved. The employee would be required to disclose the probable duration of the condition, an estimate of the time needed to care for the ill family member, and a statement that the condition warrants participation of the employee to provide care. SB 1661 will now be considered by the state Assembly.

Bill Inhibiting Arbitration for Employment Disputes Given Approval by Assembly Committee

Both the California and U.S. Supreme Courts have recognized that arbitration is advantageous to both plaintiffs and defendants because it is cheaper, faster, and more flexible than litigation. Nevertheless, the Assembly Judiciary Committee approved a bill that, in effect, prohibits the use of pre-dispute mandatory arbitration for employment disputes. SB 1538 (Burton) prohibits mandatory, binding agreements to use arbitration as the method of resolving claims of discrimination under the Fair Employment and Housing Act (FEHA). SB 1538 has already been approved by the state Senate.

Pending Federal Legislation

Legislation that would increase the federal minimum wage has been reintroduced by Senator Edward Kennedy (D-Massachusetts) and Representative David Bonior (D-Michigan). The identical bills would increase the minimum wage across the country from the current $5.15 to $6.65 an hour in three steps. These measures would not affect most California employers, however, since the state minimum wage is already $6.75 an hour.

While a measure that would prohibit employment discrimination based on sexual orientation could come to the floor for a vote in the Senate any day, a similar measure in the House is unlikely to be considered this year. The Senate's Health, Education, Labor, and Pensions Committee approved its version of the bill. In the House of Representatives, however, the legislation is still in committee. Currently, 12 states (including California) and the District of Columbia bar sexual orientation discrimination in the employment context.

II. JUDICIAL UPDATE

Disabled Employees Have No Right to Potentially Health-Endangering Jobs

Disabled employees cannot demand jobs that would threaten their lives or health so ruled the U.S. Supreme Court in a victory for employers who argued they could be forced to hire people who could turn around and sue over workplace injuries. The unanimous decision makes it clear that employers can turn away people who want a job even if they would be risking their lives to work. The ruling also makes it easier for employers to terminate the employment of disabled employees who already have jobs that put their health in jeopardy.

"If Typhoid Mary had come under the ADA, would a meat packer have been defenseless if Mary had sued after being turned away?" Justice David H. Souter asked rhetorically in his opinion for the Court. The case is the latest in a line of rulings that limit employee rights under the Americans with Disabilities Act.

Chevron v. Echazabal involved a former Chevron refinery worker with liver disease who wanted his job back, regardless of the fact that exposure to chemicals at his workplace could have exacerbated his condition. Mario Echazabal said he had no symptoms, could physically do the job, and should be able to decide for himself. The justices reversed a lower court ruling in favor of Echazabal and sent the case back for further review.

The Court opined that the Equal Employment Opportunity Commission struck the right balance between protections for employees and employers when it wrote regulations that applied in Echazabal's case. The ADA requires employers to accommodate qualified disabled applicants and employees, but makes an exception for those who may be a threat to the safety or health of others on the job. The EEOC, which can enforce the ADA, has interpreted the exception as also applying to employees who may only be a risk to themselves.

The Court, however, did not give employers carte blanche to claim that a disabled employee is unable to do a job for health reasons. Each case must be independently evaluated, using the latest medical guidelines. Only time will tell if California will follow the Supreme Court's lead, or if ˆ as it has done in the past ˆ it will opt to set a higher standard than federal law.

Work Harassment Constitutes Continuing Violation

In National Railroad Passenger Corp. v. Morgan, the U.S. Supreme Court ruled that on-the-job harassment is part of a pattern of behavior. As a result, a jury can look at incidents that occurred outside of a statutory time period. At the same time, the high court found the opposite is true for acts of discrimination and retaliation.

At issue in National is the continuing violations doctrine, which allows a jury to consider all of the evidence involving a prolonged case of harassment or discrimination, instead of evidence relating solely to a specific event. In National, Abner Morgan sued his employer for discrimination, retaliation, and a hostile work environment. Many of the alleged incidents occurred outside of the 300-day window prescribed under Equal Employment Opportunity Commission rules.

The Court struck down the concept of continuing violations in discrimination and retaliation claims holding that as discrete acts, they are easily identifiable, single occurrences. The Court saw it differently for hostile environment claims. "Their very nature involves repeated conduct," wrote Justice Clarence Thomas, for the majority. "It occurs over a series of days or perhaps years and, in direct contrast to discrete acts, a single act of harassment may not be actionable on its own."

The ruling will make it much more difficult for employers to defend themselves against hostile workplace suits.

Religious Rites and Reason

As workplaces grow more diverse, reasonable religious accommodation has become a burgeoning area of employment law. With employees observing a wider variety of religions, determining what is reasonable has become complicated.

In Silo v. CHW Medical Foundation, the California Supreme Court recently held that a religious organization cannot be held liable for discharging an employee for using objectionable religious speech in the workplace. In dismissing the suit, the court ruled that both the U.S. and California Constitutions "permit religious organizations to define themselves and their religious message."

Terrence Silo ("the Employee") was employed as a file clerk by Catholic Healthcare West ("the Employer"). The Employee became a born-again Christian and began sharing his religious experiences with co-workers. After receiving several complaints, the Employer met with the Employee to discuss his behavior. He was told not to use the word "God . . . unless it was off the clock." Five months later, the Employee was terminated for poor performance and continuing to "preach" and "soul save" despite repeated warnings.

A trial jury found that the Employer unlawfully discriminated against him. A California appellate court affirmed, finding that although the state's Fair Employment and Housing Act contained a religious exemption, the medical foundation was still considered an employer under the law.

In overturning the lower court, the Supreme Court wrote, "[i]n the present case, restricting the ability of a religiously affiliated employer to control religious speech at the workplace would not only potentially interfere with its mission, but could excessively entangle the courts in determining what kind of religious speech is appropriate in a religious organization's workplace."

This is a very limited ruling because religious organizations are generally exempt from anti-discrimination laws. Private-sector employers are reminded that both state and federal law prohibit discrimination against employees based on their religious beliefs. Employers should recognize their obligations in this area and provide reasonable accommodations when necessary.

FMLA Leave for Psychological Support of Family Member

When an employee requests time off to assist an ailing parent, an employer should immediately consider implications of the federal Family and Medical Leave Act (FMLA). FMLA provides up to 12 weeks of unpaid leave to care for, among other reasons, a parent suffering from a serious health condition. The Ninth Circuit Court of Appeals recently considered a request for leave to provide psychological care and comfort under FMLA.

In Scamihorn v. Gen. Truck Drivers, Local 952, Joseph Sr.'s daughter had been murdered. Joseph Sr. had also recently undergone heart surgery and suffered depression and other physical ailments. Joseph Jr., employed by Albertson's, temporarily relocated to Reno, as recommended by his father's psychologist. He was granted one month unpaid leave on the condition that he not work for any other employer while he was gone. Needing additional time and income, Joseph Jr. resigned from Albertson's, believing that he would be rehired if he returned within six months. Albertson's never advised him of his FMLA rights.

After six months, Joseph Jr. applied for reinstatement with Albertson's. Albertson's would only rehire him as a probationary employee without seniority. He sued Albertson's seeking reinstatement with seniority. The district court ruled in Albertson's favor, finding that Joseph Jr. had not provided care to Joseph Sr. covered under the meaning of FMLA. The Ninth Circuit disagreed, saying that FMLA defines a "serious health condition" to include a mental condition that involves continuing treatment by a health care provider. The Ninth Circuit sent the case back to the trial court, where Joseph Jr. must establish that depression incapacitated his father for more than three consecutive days and required treatment by a healthcare provider.

FMLA regulations describe "care for" as including the provision of psychological comfort and reassurance. Joseph Jr. participated in his father's treatment through his daily conversations and constant presence. At times his father required Joseph Jr.'s assistance to complete daily tasks and comfort him, and doctors believed this aided Joseph Sr.'s recovery. If Joseph Jr. can prove that his activities and presence were needed for his father's recovery, he is covered by FMLA.

To prevent similar liability, employers should request that employees seeking leave to care for a family member to document the need with certification from the family member's health care provider.

Harassment Claims Can Be Based on More than Sex

Two recent federal court decisions remind employers that sexual harassment is not the only kind of unlawful harassing activity. While the judicial opinions do not directly apply to employers in California, they do remind employers to train managers and supervisors that harassment is attributable to all protected classes and to discuss all prohibited types of harassment during new employee orientation and periodic re-training of employees and supervisors.

In Alexander v. CIT Technology Financing Services, Inc., Deborah Alexander received consistently satisfactory performance evaluations. She was subjected to a manager's comments about her age, as well as sexual innuendos. After she was terminated, she claimed she was harassed based on age and sex. The company argued that a hostile work environment claim cannot be brought under the Age Discrimination in Employment Act (ADEA). The district court disagreed and ruled that an employer could be held liable for age-based harassment under the ADEA.

In Cerros v. Steel Technologies, Inc., Tony Cerros ("the Employee") was one of few Hispanic employees working for Steel Technologies, Inc. Co-workers and supervisors made derogatory comments alluding to his national origin. His tires were slashed while he was at work, and he claimed he was refused training to improve his work performance. He sought assistance from company management to no avail. The Employee sued the company for both discrimination and harassment. The court could not find an adverse employment action to support employment discrimination. However, the court found sufficient evidence that the Employee had been subjected to a hostile work environment based on his national origin in violation of Title VII.

If you would like to discuss these or any other employment law matters, please do not hesitate to contact any member of Klinedinst's Employment Law Department.