Setnor Byer's Risky Business

Interracial Marriage Discrimination

One of my employees, a white man, has been harassed and threatened with termination by his supervisor because he is married to an African-American woman. Should I be concerned about potential liability under Title VII of the Civil Rights Act?

Yes. Title VII of the Civil Rights Act of 1964 (Title VII), which generally applies to employers with 15 or more employees, makes it unlawful to discriminate against an individual because of such individual's race. Some courts have held that in cases involving interracial marriages, Title VII does not provide any protection because the alleged discrimination is not based on the individual's own race but on the race of such individual's spouse. However, other courts have rejected such a restrictive reading of Title VII, reasoning that, in such cases, the employee suffers discrimination because of the employee's own race. Had the employee been of the same race as his or her spouse, the reasoning continues, his or her marriage would not have been interracial, and, presumably, the employee would not have been subject to discrimination based on race. Noting that Title VII generally proscribes race-conscious discriminatory practices, one federal appellate court stated that "where a plaintiff claims discrimination based upon an interracial marriage or association, he alleges, by definition, that he has been discriminated against because of his race."

Although not all jurisdictions have adopted this position, it would be prudent for every employer to prohibit discrimination against employees for involvement in interracial relationships. Also, given the disparities among jurisdictions on this issue, employers should seek the advice of their local counsel should the matter arise.

Co-Worker Retaliation under Title VII

One of my employees, after alleging that a popular supervisor sexually harassed her, has also claimed to have been repeatedly harassed by several coworkers angry at her for filing a complaint against this supervisor, with whom they are friends. Could the coworkers' actions lead to a claim of retaliation under Title VII of the Civil Rights Act?

Yes. In addition to prohibiting sexual harassment in the workplace, Title VII of the Civil Rights Act (Title VII) makes it illegal to retaliate against an employee for making a claim of sexual harassment. Title VII's anti-retaliation provision protects employees from conduct that would have "dissuaded a reasonable worker from making or supporting a charge of discrimination" under Title VII. The fact that an employer can be held liable for the retaliatory actions of a supervisor is well settled. However, the process for determining whether or not Title VII liability exists for the retaliatory actions of a coworker (i.e., someone without supervisory authority) is not as clear. Noting the inconsistent manner in which this issue has been handled by the federal courts, the Sixth Circuit Court of Appeals recently joined the majority of federal circuit courts that have determined that Title VII does, in fact, protect against coworker retaliatory harassment that is known to, but not restrained by, the employer.

Specifically, the Sixth Circuit agreed that there was "no reason 'why a different form of retaliation - namely, retaliating against a complainant by permitting her fellow employees to punish her for invoking her rights under Title VII - does not fall within [Title VII's protection].'" Thus, employers in the majority of jurisdictions must protect their employees against retaliation by coworkers. However, each federal circuit requires a different standard of behavior for determining whether to impose liability on employers for coworkers' retaliatory acts. Accordingly, employers should consult a licensed professional to learn the applicable standard followed in a specific jurisdiction.

Calculating Overtime Pay When Holiday Pay is Included

During a recent pay period, a non-exempt employee, because she worked on a paid holiday within that workweek, became entitled to 40 hours of regular pay plus eight hours of holiday pay. Since she is technically being compensated for 48 hours in a single workweek, am I required to pay her time and one-half for the additional eight hours?

No. The Fair Labor Standards Act (FLSA) is the federal law requiring that covered, non-exempt workers be paid not less than time and one-half the employee's regular rate for time worked over 40 hours in a workweek. The FLSA does not, however, require employers to give their employees time off for holidays, either with or without pay. If an employer allows an employee to take paid time off for a holiday, the time off is not considered "hours worked" and need not be included in the "hours worked" total used to calculate overtime pay. This is because, under the regulations interpreting the FLSA, certain payments made to an employee for periods during which he or she performs no work because of a holiday are not regarded as compensation for working.

Under this framework, an employer, when determining whether or not overtime compensation is due, need only consider the hours actually worked by an employee. In this situation, although the employee is being paid for the eight hours of holiday time, she did not actually work those hours; she actually worked only a total of 40 hours during the workweek. Accordingly, she is not entitled to any compensation at the overtime rate.

Swapping Shifts to Accommodate Religion

Some of my employees have voluntarily "swapped" shifts with their coworkers because of religious commitments. Can such voluntary "swaps" be considered reasonable accommodations in response to employees' requests for religious accommodations under Title VII of the Civil Rights Act?

Yes. Title VII of the Civil Rights Act of 1964 (Title VII), which generally applies to employers with 15 or more employees, makes it an unlawful employment practice for an employer to discriminate against an employee (or prospective employee) on the basis of such employee's religion. Unless the accommodation places an undue hardship on the employer, Title VII requires that an employer provide an employee with a reasonable accommodation for the employee's religious observances. Unfortunately, as the Supreme Court has observed, Title VII provides no guidance for determining the degree of accommodation that is required of an employer because, although an employer's obligation to make a reasonable accommodation is clear, the precise reach of that obligation has never been spelled out by Congress.

Such imprecision may be even more problematic in the context of religious accommodation since, as one court has noted, "this is not an area for absolutes [because] religion does not exist in a vacuum in the workplace." Nevertheless, employers seeking guidance in this area may look to the regulations interpreting Title VII, which provide that the use of "voluntary swaps" may constitute a reasonable accommodation for an employee's religious observances. In addition to merely allowing voluntary swaps, the Equal Employment Opportunity Commission suggests that employers: publicize policies regarding accommodation and voluntary swaps; promote an atmosphere in which such swaps are favorably regarded; and provide a central file (e.g., a bulletin board) for employees seeking voluntary swaps with other employees. However, given the uncertainty surrounding an employer's responsibilities to provide reasonable accommodations, employers facing such issues should seriously consider consulting a licensed professional.

Family & Medical Leave Act - Armed Forces

In light of recent military-related amendments to the Family and Medical Leave Act (FMLA), should I update the FMLA notice currently posted in my employees' break room?

Yes. The Family and Medical Leave Act (FMLA), which generally applies to employers with 50 or more employees, was enacted to balance the demands of the workplace with the needs of families by allowing covered employees to take reasonable leave for medical, health, or family reasons. On January 28, 2008, President Bush signed into law the National Defense Authorization Act (NDAA), which includes a provision that allows eligible employees to take up to 26 workweeks of leave during a 12-month period to provide needed care for a family member who suffers a serious illness or injury while on active duty in the Armed Forces. The NDAA also provides that eligible employees are entitled to a total of 12 workweeks of leave "because of any qualifying exigency (as the Secretary shall, by regulation, determine)" arising out of a family member's active duty in the Armed Forces.

The regulations interpreting the FMLA, as originally enacted, require that every covered employer "post and keep posted on its premises, in conspicuous places where employees are employed...a notice explaining" the FMLA's provisions and providing information concerning the procedures for filing complaints of violations of the FMLA. Even though the Department of Labor (DOL) has yet to address the NDAA in its regulations, the DOL did create the "FMLA Poster Insert for Military Leave Amendments," which generally describes the recent military-related amendments to the FMLA. Until the DOL amends the general FMLA Poster to include the NDAA amendments, covered employers would be wise to post both the original poster and the insert in a conspicuous place on their premises.

Professional Liability for Lawyers

Is lawyers' professional liability insurance necessary for a small law firm?

Professional liability insurance is vital for all law firms, no matter the size or the nature of the law firm’s practice. Lawyers’ professional liability insurance covers direct loss and expense to a lawyer or law firm arising from claims for alleged neglect, error or omission in the performance of services in a professional legal capacity. 

Law firms are increasingly the target of client claims and lawsuits.  Oftentimes this is the result of unreasonable client expectations.  Sometimes this can be the result of real error on the part of a lawyer or firm.  Even if a claim or suit is frivolous, a law firm needs professional liability insurance in order to protect itself.

One product that is available for small law firms is Travelers 1st Choice for Small Law Firms.  This is an insurance product that offers protection for the professional liability exposures faced by law firms with 10 or fewer attorneys.  Covered professional legal services include services by lawyers, arbitrators, mediators, notary publics and real estate title insurance agents.  Key features include coverage for current and former partners and associates, personal injury coverage, deductibles as low as $1,000, loss only and aggregate deductibles available, duty to defend provision, expense reimbursement up to $10,000 and extended reporting provisions. 

For more information regarding this or other lawyers’ professional liability programs or for general information regarding professional liability insurance for lawyers, please don't hesitate to inquire.

Counting Employees for COBRA

If an employer has 13 full-time employees, each of whom works 40 hours per week, and 10 part-time employees, each of whom works 20 hours per week, can this employer qualify as a “small-employer plan” under the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

Yes.  After a qualifying event, COBRA gives certain former employees the right to elect temporary continuation of health care coverage at the employer’s group rates.  COBRA’s continuation of coverage requirement does not apply to a small-employer plan, which is a group health plan maintained by an employer who normally has employed fewer than 20 employees during the preceding calendar year.  Although all full-time and part-time employees are taken into account when determining whether an employer had fewer than 20 employees, each group of employees is counted differently.  A full-time employee counts as one employee.  However, each part-time employee counts as a fraction of an employee, with the numerator (the top number) of the fraction equal to the number of hours worked by the part-time employee, and the denominator (the bottom number) equal to the number of hours that must be worked on a typical business day to be considered a full-time employee.

Though this formula may sound complicated, it’s fairly easy to apply.
In the situation at hand, the employer’s 10 part-time employees work 20 hours per week out of the 40 hours per week ordinarily worked by full-time employees, thus producing a fraction of 20/40, or ½.  Therefore, each part-time employee is counted as ½ of an employee.  Ten employees counted as “half” an employee equals 5 “whole” employees, which, when added to the number of full-time employees, 13, total 18 employees.  Since this number is fewer than 20, this employer may qualify as a small-employer plan.

Age Discrimination in Employment Act

Does an aggrieved employee havt to wait a specific period of time before filing a lawsuit against my organization under the Age Discrimination in Employment Act?

Yes.  The Age Discrimination in Employment Act of 1967 (ADEA) protects individuals who are 40 years of age or older from employment discrimination based on age.  Under the ADEA, it is unlawful for an employer with 20 or more employees to discriminate against a person because of his/her age with respect to any term, condition, or privilege of employment.  However, before filing a lawsuit against his or her employer, an aggrieved employee must first file a charge with the Equal Employment Opportunity Commission (EEOC).  Specifically, the ADEA provides that “no civil action may be commenced by an individual under [the ADEA] until 60 days after a charge alleging unlawful discrimination has been filed with the EEOC.”  Under this provision, an aggrieved employee must file a charge with the EEOC and wait at least 60 days before filing a lawsuit against the employer.  The purpose of this 60-day waiting period is to give the EEOC time to work with prospective defendants (employers) to “promptly seek to eliminate any alleged unlawful practice by informal methods of conciliation, conference, and persuasion.”

Although there has been some confusion as to what constitutes the filing of a “charge” with the EEOC alleging discrimination under the ADEA, the United States Supreme Court recently ruled that, so long as the regulatory requirements have been met (i.e., an allegation has been made that includes the name of the charged party), a filing by an aggrieved employee will be deemed a “charge” if it can be reasonably construed as a request for the EEOC to take remedial action to protect the employee’s rights or otherwise settle a dispute between the employer and the employee.  According to the Supreme Court, whether or not the EEOC takes any action in response to the “charge” is generally inconsequential and does not affect the employee’s right to file a lawsuit against his or her employer.

Martin Salcedo joins the Setnor Byer Blog as its newest Risk Management Generalist

Martin Salcedo, Corporate Counsel for Setnor Byer Insurance & Risk, is now available for feedback on a broad range of risk management topics, ranging from employment practices to indemnification agreements.  Keep your eyes open for interesting news from Martin.

Employment Practices

If one of your male employees complains about being sexually harassed by several male co-workers, should you take this seriously?