Thursday, May 17, 2018

A Major Win for “Employees” in California


For years, companies have had to make the choice of classifying workers as employees or independent contractors.  As a historical example – and to oversimplify things – an assembly-line factory worker would likely be classified as an employee if he punches a clock on a regular schedule, uses the company’s tools, and takes direction from his supervisor.  In contrast, a plumber would be classified as an independent contractor if she gets a project-based and time-limited job, sets her own hours of work and rates of pay, uses her own tools, and largely decides on her own how the work is accomplished.  For many types of jobs, however, the distinctions are not so clear. 

Unfortunately, we have seen a recent trend in which many companies improperly classify workers in a way that denies them numerous workplace benefits and protections, specifically by labeling them as independent contractors.  If you are confused, you’re not alone.  Courts, government agencies, and advocates for businesses and workers have grappled for years with how to define these terms.  Why?  The resulting label has significant implications.  If a worker is classified as an employee, the employing business bears the responsibility of paying federal and states taxes (including Social Security and unemployment insurance), providing worker’s compensation insurance, and it must comply with numerous state and federal statutes and regulations governing wages, hours, and working conditions.  On the other hand, if a worker is classified as an independent contractor, the business typically does not bear any of those costs and responsibilities.  Moreover, in most circumstances, the independent contractor has none of the numerous labor law benefits and protections. 

As David Weil, former Wage and Hour Administrator at the U.S. Department of Labor, described, while independent contracting relationships can be advantageous for workers and businesses in some circumstances, “some employees may be intentionally misclassified as a means to cut costs and avoid compliance with labor laws.”  Unfortunately, as Dr. Weil found, “the misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States.”

Most recently, the subject of worker classification has gained notoriety with the surge in what has been termed “the gig economy.”  For instance, are the drivers who work for Uber and Lyft employees or independent contractors?  The companies say they are independent contractors, and perhaps for unsurprising reasons.  According to one calculation, just one of these companies is able to save approximately $4.1 billion a year by classifying its drivers as independent contractors.  As mentioned above, such a label requires the worker to pay additional taxes, and they may be denied labor-related protections, like minimum wages, maximum hours, and certain working conditions (like minimally required meal and rest breaks).

 

To help clarify things, the Supreme Court of California recently issued a decision that will hopefully limit future misclassification.  The case, Dynamex Operations West, Inc., involves a lawsuit brought by two delivery drivers against a nationwide package and document delivery company.  The drivers alleged that the company misclassified them as independent contractors, which improperly denied them protections under certain California wage laws.  In a decision widely seen as favoring workers, the court adopted the so-called “ABC” test as the appropriate method for determining whether a worker is an employee or an independent contractor.  More specifically, the test requires a business that wants to classify a worker as an independent contractor to prove each of the following:

A.      that the worker is free from control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;

B.      that the worker performs work that is outside the usual course of the hiring entity’s business; and

C.      that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

The court further explained that “this standard, whose objective is to create a simpler, clearer test for determining whether the worker is an employee or an independent contractor, presumes a worker hired by an entity is an employee and places the burden on the hirer to establish that the worker is an independent contractor.”

Putting the burden on the employer to demonstrate each factor is a major win for workers in California who might otherwise be misclassified and denied an array of workplace protections.  But the struggle continues in numerous states.  As Lydia DePillis describes, legal outcomes around the country have been mixed, with courts and legislatures providing different views on the matter.  Additionally, last summer, the U.S. Department of Labor withdrew Dr. Weil’s Administrative Interpretation, described above, that helped clarify and define the distinction between employees and independent contractors.  While the federal government has moved in a questionable direction, California appears to be taking a positive step forward on this important issue.   

If you believe that you are misclassified and want legal advice or assistance, call our Washington DC office at 202.331.9260 or complete our online form here.  Kalijarvi, Chuzi, Newman and Fitch may be able to help.

Written by Zachary R. Henige


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Thursday, May 3, 2018

You’ve come a long way, baby…But how about Mom?

How long does it take for caselaw to make its way into the mainstream of society and truly become the rubric by which individuals (and hence corporations and governmental agencies) conduct themselves? Too long--fatally too long, in some cases. Eradicating firmly held–but politically incorrect, morally incorrect, and legally incorrect–notions, standards, and practices is, to say the least, a challenge. This is certainly true of women who have been fighting against sex-based pregnancy discrimination.

In 1978, Congress passed the Pregnancy Discrimination Act (“PDA”), which amended Title VII of the Civil Rights Act of 1964 and prohibited sex discrimination on the basis of pregnancy. The PDA specifically prohibits sex discrimination on the basis of pregnancy, and requires that “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes…as other persons not so affected but similar in their ability or inability to work.” In 2015, the U.S Supreme Court decided the seminal pregnancy discrimination case of Young v. UPS. In Young, the plaintiff was a part-time driver for the United Parcel Service. When she became pregnant, her doctor advised her that she should not lift more than 20 pounds. However, UPS required drivers like Young to lift 70 pounds, and told Young that she could not work while under the lifting restriction. UPS, though, provided accommodations in terms of lifting restrictions to workers who had been injured on the job.

Young brought a lawsuit against UPS under the PDA. The Court held that a plaintiff who alleges that the denial of a reasonable accommodation constituted disparate treatment under the Pregnancy Discrimination Act may prevail by showing that the “employer’s policies impose a significant burden on pregnant workers, and that the employer’s ‘legitimate, nondiscriminatory’ reasons are not sufficiently strong to justify the burden.”  A plaintiff may show that a significant burden exists by “providing evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers.” For example, a significant burden may exist when an employer (like UPS) accommodates nonpregnant, injured employees with lifting limitations, but fails to accommodate pregnant employees with lifting limitations. An employer’s asserted nondiscriminatory reason for failing to accommodate pregnant workers is not “sufficiently strong” if it is based solely on a claim that it is “more expensive or less convenient to add pregnant women to the category of those (‘similar in their ability or inability to work’) whom the employer accommodates.”

In response to the Court’s decision in Young, the EEOC revised its enforcement guidance concerning pregnancy discrimination and stated that, “[a]n employer is required under Title VII to treat an employee temporarily unable to perform the functions of her job because of her pregnancy-related condition in the same manner as it treats other employees similar in their ability or inability to work, whether by providing modified tasks, alternative assignments, or fringe benefits such as disability.” For example, an employer may not restrict light-duty assignments to only those persons who areinjured on the job, the EEOC explained. Nor may an employer compel a pregnant employee to take leave because she is pregnant—as long as she is able to perform her job. This applies, even if an employer believes (albeit paternalistically) that it is acting in the pregnant employee’s best interest.
In an ideal world where employers abide by nondiscrimination laws, the Supreme Court’s ruling and the EEOC’s guidance would mean that pregnant workers now have equal footing with nonpregnant workers when it comes to accommodations. Think again. Simplicity Ground Services, P.C., an airline-ramp and cargo-handling company based in Detroit, forced a pregnant employee (Bishop) onto unpaid leave because of her pregnancy. Bishop was a tow team driver with no lifting requirements in her job description. When Bishop informed Simplicity that she was pregnant and had a 20-pound lifting restriction, Simplicity directed Bishop to have her physician remove the lifting restriction, and attempted to force Bishop to sign an amended job description which imposed a 70-pound lifting requirement. Bishop refused to do either. In response, Simplicity forced Bishop to take unpaid leave for the duration of her pregnancy. Simplicity had also forced other pregnant employees to take unpaid leave because of their pregnancies and refused to accommodate their lifting restrictions with light-duty work. Simplicity, had, however, granted light-duty work to non-pregnant employees. On March 27,2018, the EEOC brought suit against Simplicity alleging violations of the PDA.

Simplicity is not the only company which flagrantly violates the PDA. PruittHealth, a Raleigh, North Carolina, Nursing and Rehabilitation Center, refused to accommodate a 20-pound lifting restriction for a pregnant Certified Nursing Assistant (“CNA”), though it routinely accommodated the temporary restrictions of nonpregnant CNAs who were injured at work. Rather than granting the accommodation, the company’s assistant director gave the CNA the Hobson’s Choice to either retire or be fired. This certainly was not a situation where the employer had a “sufficiently strong” legitimate reason for not granting the accommodation to the pregnant CNA. In fact, “the company had lifting devices and transfer belts available to help lift patients and did not prohibit CNAs from seeking the assistance of co-workers to lift patients manually.” On April 18, 2018, the EEOC brought suit against PruittHealth alleging violations of the PDA.

Refusing to accommodate pregnant employees often results in devastating consequences. Sarah Coogle was a correction officer with the California Department of Corrections & Rehabilitation. After becoming pregnant in December 2016 and being concerned that she may lose her child if she had to forcibly subdue a prisoner, she asked the Corrections’ Department for the reasonable accommodation of working in a less strenuous position with limited inmate contact where she would not have to run. In response, the Corrections’ Department told Coogle that she would either have to accept a demotion with a two-thirds cut in pay (with an associated loss of her seniority and benefits), or take leave as an accommodation. When Coogle was seven months pregnant, she ran to intervene an inmate fight and fell down. She was taken by ambulance to a hospital for abdominal pain and directed not to work for the duration of her pregnancy. However, just a few days before her due date, she lost her child from a placental rupture—which is commonly caused by a trauma such as a fall. Coogle sued the Corrections’ Department in the Superior Court of Kern County, California, alleging violations of California’s Fair Employment & Housing Act, which makes it unlawful for employers to fail to provide reasonable accommodations for the known physical and mental disabilities of employees. Depending on their condition, pregnant women may have temporary disability status and thus come under the protections of laws protecting the rights of disabled persons, such as the Americans with Disabilities Act (“ADA”). As Coogle’s attorney so aptly stated,“No man has to make the choice offered to Plaintiff of choosing between family and career. No man has to give up his pay to ensure the safety of his children.Working in a correctional facility is an inherently dangerous job and no care or attention was given to protect the life of her child.”

Each of these three cases offers the possibility of rulings that will add to the growing body of caselaw protecting the rights of pregnant employees—and their unborn children. To those pregnant employees who need workplace accommodations, do not assume your employer will either know or abide by the PDA and/or the ADA. Instead, you may wish to seek the assistance of a lawyer who is able to firmly remind your employer of his or her obligations under those Acts and take suitable action if your employer fails to do so. Kalijarvi, Chuzi, Newman & Fitch has significant experience handling pregnancy discrimination cases. As these cases demonstrate, there is too much at stake to not do so.

Written by Valerie A. LeFevere

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.


            

Wednesday, May 2, 2018

General Contractors in Maryland are on the hook for unpaid wages owed by subcontractors

As the legislative session came to a close in April, the Maryland General Assembly passed Senate Bill 853, which expands the liability of a general contractor on a project for construction services under the Maryland Wage Payment and Collection Law. The bill became law without Governor Hogan’s signature and will go into effect on October 1, 2018.

Generally, the Maryland Wage Payment and Collection Law requires that an employer set regular pay periods and pay employees at least once every two weeks or twice each month. In addition to setting requirements for the notice an employer must provide to an employee regarding deductions, pay dates, leave benefits, and rate of pay, among other things, the law requires an employer to pay an employee all wages due for work he or she performed before his or her termination on or before the day on which an employee would have been paid the wages had the employment not been terminated. The Law provides both an administrative mechanism for enforcement of the law, as well as a private right of action to an employee who has not been paid in a timely manner. As long as the wages were not withheld as a result of a bona fide dispute, if a violation is found, the law authorizes an award to the employee of up to three times the amount of the wages, attorney’s fees, and costs.

The enacted change to the Law amends the private right of action for employers and employees in the construction services industry and provides that a general contractor on a project for construction services shall be jointly and severally liable for a violation of the Law that is committed by a subcontractor “regardless of whether the subcontractor is in a direct contractual relationship with the general contractor.”

In principle, the new law is designed to ensure that construction industry employees are paid their wages for work they performed, even if the employee has only directly performed work for a second-, third-, or fourth-tier subcontractor, as is often the case in the construction industry. The law now allows an employee who is owed wages to make a claim for them against the general contractor in addition to his or her direct employer—the subcontractor.

The effects of this expansion may be far reaching. Before the enactment of SB 853, the enforcement of the Wage Payment Collection Act was limited to the employer with whom an employee had a direct relationship. By expressly holding a general contractor on a construction services project jointly and severally liable, the law expands a general contractor’s liability for unpaid wages to far more than the subcontractors with which it is directly contracted. It is possible that as a result of this new law, general contractors will require subcontractors and any subcontractors of their own to carry insurance or a bond to protect against the possibility of wage payment collection actions.

The new law also adds that “[a] subcontractor shall indemnify a general contractor for any wages, damages, interest, penalties, or attorney’s fees owed as a result of the subcontractor’s violation” with two exceptions. The subcontractor need not indemnify the general contractor if indemnification is provided for in a contract between the general contractor and the subcontractor, or if the violation of the Maryland Wage Payment and Collection Law arose due to the lack of prompt payment in accordance with the terms of the contract between the general contractor and the subcontractor.”

To the extent the reason the subcontractor has not paid wages owed to its own employees is because it is cash strapped, general contractors relying on the law’s requirement that the subcontractor indemnify it for the wages, damages, interest, penalties, or attorneys’ fees it can now be compelled to pay on the subcontractor’s behalf may find themselves unable to enforce or collect from such a subcontractor. But to the extent an employee is paid by the general contractor for unpaid wages owed by the construction services subcontractor with whom he or she was employed, the indemnification provision is of no concern.

On balance, the law benefits employees in the construction industry who often perform work and suffer delayed payment of wages either as a result of untimely payments from the general contractor or subcontractor(s) a tier or more above their own employer or of disputes about the performance of work sometimes unrelated to their own trade. This law gives construction industry workers the additional security of collecting unpaid wages they are owed, up to treble damages, and attorney’s fees and costs directly from the general contractor on the construction services project for which they were employed.

Written by Puja Gupta

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.


Wednesday, April 25, 2018

Do Salaries Speak Louder than Words?

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So, you’re looking to move on from your current position and your friend, who happens to be of the opposite sex, encourages you to apply for a position with her/his employer.  Your friend finds the work to be rewarding and discloses that s/he is paid an impressive salary.  You clear the first hurdle and get an interview, and one of the first questions you are asked concerns your current salary.  You then get an offer, and the quoted salary is only marginally higher than your current one.  It may be time to Google “find a lawyer near me.”

In a nutshell, the Equal Pay Act prohibits an employer from paying employees of one sex less than it pays employees of the opposite sex for “equal work” performed with the same skill, effort, and responsibility, and under the same conditions.  The Act provides for exceptions, however, where disparities are due to a (1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) a differential based on any other factor other than sex.  The prevailing view – adopted by the EEOC and several federal courts – is that consideration of prior salary is permissible under the Equal Pay Act as long as it is not the only factor in the decision to offer a particular salary to a new employee.

The 9th Circuit recently split from the majority rule that prior salary can be “a factor other than sex” in certain circumstances and held that the Act forbids any consideration of prior salary when setting initial wages.  If you live in the 9th Circuit, this means no longer having to worry about your current income holding you back if you look for other employment—at least for the time being.    

The strongly worded decision, authored by the late Judge Reinhardt, unapologetically acknowledged its departure from the more widely agreed upon interpretation that prior salary may be considered so long as it is not the only factor.  The decision was issued just in time for Equal Pay Day—the day which symbolically marks the additional time women must work in order to make the same salary as male workers based on wage disparities from the prior year.  Notably, this date does not reflect the wider wage gap for women of color. 

Relying on legislative history and statutory interpretation, the majority opinion unpacked the fourth exception and explained that it found it to be intended strictly related to “job related” factors (specifically distinguishing “job related” from “business related”) and that “[p]rior salary, whether considered alone or with other factors, is not job related and thus does not fall within an exception to the Act that allows employers to pay disparate wages.” (emphasis added)  The court did include a disclaimer that the use of prior salary in “individualized salary negotiation” after the initial salary was set would not be a violation of the Act, noting that it “prefer[ed] to reserve all questions relating to individualized negotiations for decision in subsequent cases.” 

Yet, although it was in agreement on the outcome, the court was divided.  The decision includes three separate concurring opinions which point to decisions in the Second, Eighth, Tenth, and Eleventh Circuit, as well as a statement by the EEOC in its amicus brief, in support of the prevailing position that prior salary may be relied upon when considered as “part of a mix of factors.” The concurring judges objected that the employer in this case relied solely on prior salary, so consideration of the prevailing view was unnecessary.  “Not only does [the plaintiff’s] case not present this issue,” opined Judge McKeown, “but this approach is unsupported by the statute, is unrealistic, and may work to women’s disadvantage.”  When federal appeals courts reach different conclusions on an issue, the Supreme Court is likely to become the final decision.  The divide on this issue does not bode well for the future of the 9th Circuit’s decision. 

What are the practical implications in the meantime?  It depends.  At the moment, job-seekers in states under the purview of the 9th Circuit are protected from an employer relying on their prior salary in determining an initial salary offer.  Yet employees outside of the 9th Circuit are not completely without recourse when an employer utilizes prior salary with other factors and relies on the “other factor other than sex” defense.  Additional protections may be available under state law as states such as California and Massachusetts take it upon themselves to limit an employer’s ability even to ask about salary history.  And, as with every case, the answer is dependent on each set of specific facts.  

There are also key aspects of the Act that remain true for everyone under its purview: (1) although the Act was a response to systemic underpayment of women, both men and women are protected under the Act; (2) the Act does not require that a plaintiff show that the employer had a discriminatory intent; and (3) candidates still retain the right to use their prior salaries to negotiate a higher salary once the initial offer is made. 

As for the significance of the court’s decision, Judge Reinhardt wrote:

Unfortunately, over fifty years after the passage of the Equal Pay Act, the wage gap between men and women is not some inert historical relic of bygone assumptions and sex-based oppression. Although it may have improved since the passage of the Equal Pay Act, the gap persists today: women continue to receive lower earnings than men “across industries, occupations, and education levels.” “Collectively, the gender wage gap costs women in the U.S. over $840 billion a year.” If money talks, the message to women costs more than “just” billions: women are told they are not worth as much as men. Allowing prior salary to justify a wage differential perpetuates this message, entrenching in salary systems an obvious means of discrimination—the very discrimination that the Act was designed to prohibit and rectify.
If you have questions about the Equal Pay Act or appropriate salary considerations in your area and would like to speak with an attorney, call our Washington, D.C. office at 202.331.9260 or complete our online form here.  We represent federal and private sector clients across the country and abroad.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.


Wednesday, April 18, 2018

Federal Sector Union Officials Have Another Weapon to Challenge Retaliation


One of the realities for effective union officials is that they often become targets for employer retaliation.  In the federal workforce, union officials who have been targeted have traditionally challenged that retaliation by filing an Unfair Labor Practice (“ULP”) charge with the Federal Labor Relations Authority (“FLRA”) pursuant to 5 U.S.C. § 7116(a).  As the FLRA’s makeup and priorities change, however, union officials may be uncertain about pursuing their traditional remedy for retaliation.  Fortunately, they have a little-known but meaningful alternative.

The Whistleblower Protection Act of 1989 (“WPA”) defines “prohibited personnel practices” and prohibits retaliating against employees for engaging in certain types of activity.  The most well-known of these activities is whistleblowing, i.e., making a protected disclosure.  In its current form, 5 U.S.C. § 2302(b)(9)(B) also makes it unlawful for federal officials to take, fail to take, or threaten to take or fail to take a personnel action because an employee is “testifying for or otherwise lawfully assisting any individual” in the exercise of any appeal, complaint, or grievance right granted by any law, rule, or regulation.  In short, the WPA extends protection to many types of union-related duties such as filing grievances, testifying, and representing other employees in the grievance process. 


Under the original WPA, however, it was hard to justify pursuing a complaint of union-related retaliation with the U.S. Office of Special Counsel (“OSC”).  OSC has meaningful teeth to remedy retaliation, but they are also notoriously understaffed and are only able to take a fraction of the cases filed with their office.  Historically, union officials seeking OSC’s intervention would have had to roll the dice and hope that OSC would take their cases. 

TheWhistleblower Protection Enhancement Act of 2012 (“WPEA”) changed this when it extended Individual Right of Action (“IRA”) rights to employees who were retaliated against for participating in the grievances and certain disclosures made by other employees.  See 5 U.S.C. § 1221(a) (including IRA rights for complaints under 5U.S.C. § 2302(b)(9)(B)).  Now, these employees and union officials have gained a remedy if OSC isn’t able to pursue their cases.  When that happens, employees can request a hearing before the U.S. Merit Systems Protection Board (“MSPB”) to get their “day in court.”

The MSPB has upheld this understanding of the WPEA.  In Carney v. VA, 121 M.S.P.R. 446, 449 (MSPB 2014), the MSPB confirmed that the WPEA covers reprisal against an employee who aids another employee in the grievance process:

Prior to the enactment of the WPEA, the Board lacked jurisdiction over an allegation, such as the one in the instant case, of retaliation for representing a coworker in a grievance proceeding. See Wooten v.Department of Health & Human Services, 54 M.S.P.R. 143, 146 (1992); see also Rubendall v. Department of Health& Human Services, 101 M.S.P.R. 599, ¶ 9 (2006). However, the WPEA expanded the Board's jurisdiction in IRA appeals to include claims that a personnel action was proposed or taken as a result of a prohibited personnel practice described at 5 U.S.C. § 2302(b)(9)(B).

Similarly, in Alarid v. Dep’t of the Army, 122 M.S.P.R. 600 (MSPB 2015), the MSPB addressed the question of an employee who was fired after he filed numerous grievances against the agency in his role as a union vice president.  The MSPB confirmed that reprisal for engaging in this union activity was covered by 5 U.S.C. §2302(b)(9), and sent the case back to the Administrative Judge with instructions that the employee’s claims of retaliation should be analyzed under the standards set forth by the WPEA.   

In addition to providing an alternative to retaliation-related Unfair Labor Practice charges, there are other benefits to pursuing prohibited personnel practice claims under the WPEA.  Federal employees who prevail in a prohibited personnel practice retaliation case can recover “make whole” remedies including compensatory damages and attorney’s fees.  They can also seek corrective action to address any unlawful practices.

Similarly, Agency managers who commit ULPs rarely face any personal consequences.  However, if OSC or the MSPB determines that a manager committed a prohibited personnel practice, OSC can ask the MSPB to discipline the responsible officials.  The penalties for committing prohibited personnel practices include removal, demotion, debarment from federal employment for up to 5 years, suspension, reprimand, a fine of up to $1,000, or some combination of these penalties.  If a ULP charge won’t get an Agency’s attention, perhaps these remedies will.

In an uncertain climate for federal employees, we are thinking creatively to develop better legal strategies for our clients.  If you have a question about a retaliation issue, please call 202-331-9260 to begin our intake process, or submit your legal issue here.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue athttp://www.kcnlaw.com/Contact.shtml.



Thursday, April 12, 2018

USDA Quietly Modifies Policies on Approval of Settlement Agreements

On December 21, 2017, the U.S. Department of Agriculture released a recorded message from Secretary Sonny Perdue in which he set out “a broad new vision” called OneUSDA.  Secretary Perdue announced various policy changes under OneUSDA “to make USDA the most effective, the most efficient, the most customer-focused department in the entire federal government.”

When the Department rolled-out Phase One of OneUSDA on January 4, 2018, the policy change that got the most attention was the Secretary’s decision to cut back the maximum number of telework days for employees to two per pay period. This understandably caused tremendous confusion and anger for employees throughout the USDA – including those in its sub-agencies, like Forest Service and Rural Development – who only occasionally worked from an official office. However, tucked away in the roll-out was another policy change that is important to anyone pursuing an administrative personnel action, like an EEO complaint or MSPB appeal, against the USDA or one of its sub-agencies.

Going forward, settlements in these administrative personnel actions will be handled differently than in the past. Previously, USDA’s Office of General Counsel only needed to get involved in EEO cases where the action involved a political appointee or any payout totaling $200,000 or more (including back pay, compensatory damages, and attorneys’ fees).

Under the new regulations implemented in January, the General Counsel must investigate and sign off on a deal in a much wider set of circumstances: if the case is at the Equal Employment Opportunity Commission, Office of Special Counsel, or Merit Systems Protection Board and involves a political appointee or a payout of more than $50,000 – a quarter of the previous triggering amount. The new regulations also call for the Office of General Counsel to be more involved in providing litigation advice and counsel to the sub-agencies in cases before the EEOC or MSPB.

USDA asserts that it is making these policy changes to ensure “all personnel complaints… are resolved expeditiously, cost efficiently, and at the lowest possible level.” However, at this point, it is unclear what impact these changes will have on employees involved in an administrative personnel action against USDA.  For example, it is logical that USDA has mandated that a Resolving Official (“RO”) assigned to a particular administrative personnel action should not be the matter’s Responsible Management Official (“RMO”) – that is, the manager involved with the facts and allegations of the case (i.e., a bullying manager should not decide how much money his aggrieved employee gets for emotional distress).  It is frustrating that something this obvious needs to be codified, but clearly formalizing this logic is a step that helps employees.

These new directives further take power and discretion out of the hands of RO’s within the USDA’s sub-agencies and moves it to the centralized USDA General Counsel.  For example, if the settlement is under $5,000, inclusive all compensatory damages and attorney fees’, the RO does not need to seek any outside advice or counsel to approve the agreement.  If the amount is more than $5,000, but less than $50,000, the Agency head (such as the Chief of the Forest Service or Administrator of the Farm Service Agency) must approve the agreement. However, settlement agreements over $50,000 now require approval by a USDA Under Secretary and concurrence by the General Counsel, as explained above. The centralization of this review could mean that settlements come to be more equitably distributed throughout USDA or it may simply create a bottleneck that makes settlement processing take longer. 

Also found in the OneUSDA instructions is a positive – if obvious – step to encourage settlements: an official necessary to settlement (like the Agency head or Under Secretary), must be immediately accessible during any settlement efforts.  It is a pragmatic requirement that more agencies should adopt.


Time will tell if these OneUSDA changes actually speed administrative personnel actions as intended or if the centralization of approval will cause an unbearable bottleneck. If you have an EEOC, MSPB, or OSC case against USDA and would like to speak to an attorney about how these regulations affect your ability to settle your case, please call 202-331-9260 to begin our intake process, or submit your legal issue here.



This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, April 11, 2018

Limiting How Long You Have To File a Claim


Contractually-Restricted Statute of Limitations

Employment agreements often are lengthy, complicated documents which are routinely presented to the employee on a “take it or leave it” basis.  Sound familiar?  Indeed, it is increasingly common for employment relationships to begin or end with agreements, often with terms that are decidedly pro-employer.

For instance, provisions compelling arbitration have been the focus of much recent discussion focused on the lack of fairness in employment agreements.   Or consider, a recent potential client living locally and working remotely, who was shocked to learn that her employment agreement required that any breach of contract lawsuit had to be filed in Illinois. 

Typically, employment agreements run for several pages and to non-lawyers, appear to consist of nothing more than meaningless boiler-plate.  Critically, however, the terms buried in the legal language can have far-reaching and binding consequences and cannot be overlooked. 
For example, some agreements restrict the time allowed for an employee or former employee to challenge rights or obligations under the agreement.  This is called a “statute of limitations.”  A reduced statute of limitations can mean that an employee may lose the right to file a claim against the employer if they wait too long.  Increasingly, we are seeing a contractual reduction of the statute of limitation in employment contracts. 

This blog looks at the validity of such a provision in Maryland, and future blogs will review the status in Virginia and the District of Columbia.

The Maryland Court of Appeals recently permitted such a limitation on time to file that was agreed upon by the parties.  In Ceccone v. Carroll Home Services, LLC, 454 Md. 680, 165 A.3d 475(2017), the Court of Appeals reviewed the validity of a contract between the parties that reduced the limitations period for a breach of contract from three years to one year.  In remanding the case to the trial court to consider reasonableness and evidence of misrepresentation and/or fraud, the Court of Appeals held that a contractual provision that shortens limitations period is enforceable only if there is no controlling statute to the contrary, the provision is reasonable, and the provision is not subject to other defenses such as fraud and is not a product of fraud, duress or misrepresentation.  Ceccone v. Carroll Home Services, LLC,454 Md. at 693-94, 165 A.3d at 482-83.   

Focusing on the issue of reasonableness, the Court of Appeals provided guidance that among the factors to be considered in assessing reasonableness are “the subject matter of the contract, the duration of the shortened limitations period compared to the period that would otherwise govern, the relative bargaining power of the parties to the contract and whether the shortened limitations period is a one-sided provision that applies to one party but not the other.”   Id. at 694, 165 A.3d at 483.  Recognizing the principle of freedom of contract, the Court still noted that many of the cases it cited upholding shortened limitations period involved sophisticated contracts between parties with roughly similar bargaining power.  Id. at 695, 165 A.3d at 484.  This equal bargaining power often is missing in the employer-employee relationship.

Even though Ceccone was not a dispute between an employer and employee, its analysis should be used as authority for employment agreement disputes.

A contractual reduction in the statute of limitations was at issue in an employer-employee dispute in Client Network Services, Inc. v. Smith, 2017 WL 3968471 (D. Md. September 8, 2017).  In Smith, the unambiguous clause referenced only the responsibilities of the employee, and Judge Grimm found that the statute of limitations provisions were intended to apply unilaterally to the employee.  Though referring to the Ceccone analysis and factors assessing reasonableness, Judge Grimm analyzed the provision in the same manner as an arbitration provision, ruled that unilateral statute of limitations provisions in a contract “are permissible under Maryland law when supported by a ‘valid justification’” and cited Walther v. Sovereign Bank, 386 Md. 412, 872 A.2d 735 (2005) (unilateral arbitration clause is enforceable when supported by a valid justification).  Without any justification, the Court ruled that a one-sided term “may be substantively unconscionable and, if also procedurally unconscionable, void.  Smith, 2017 WL 3968471 at *3 (Emphasis supplied). 

This decision appears to add hurdles for employees to overcome and weaken employee protections against one-sided contractual provisions set forth in Ceccone.  We will have to watch cases coming up in the next year to see if the Maryland courts will allow the one-sided terms seen in Client Network Services.   If you want help understanding an employment agreement, Kalijarvi, Chuzi, Newman & Fitch’s attorneys would be happy to advise you.    

By MarcPasekoff   

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Friday, March 30, 2018

So, You’ve Decided to Hire a Lawyer: Where Does Your Spouse Fit In?

So, you are having issues at work and want to consult a lawyer.  Because hiring a lawyer is a new experience for many, it can be difficult explaining to a stranger what is going on, and the commitment to hire a lawyer can be expensive.  Certainly, it can be comforting to have your spouse, your life partner, in that consultation with you for moral and other support.  It is important to understand, however, that a spouse’s presence in that meeting can waive the attorney-client privilege, making everything you and your spouse tell the lawyer potentially discoverable.  Is the comfort worth the risk?

To foster the harmony and sanctity of the marriage relationship, the Supreme Court has recognized two types of spousal privileges (also referred to as marital privileges):  the communications privilege and the testimonial privilege1.  The communications privilege protects private communications between spouses, which are generally assumed to have been intended to be confidential.  This privilege, however, only applies to confidential communications.  If the communication, because of its nature or the circumstances under which it was made, was obviously not intended to be confidential, it is not privileged.  Similarly, communications between spouses made in the presence of a third party are usually not privileged because they were not made in confidence, i.e., kept between the spouses.  For example, communications between spouses made in the presence of their children, who are old enough to understand, or other family members are not privileged.  In fact, the Supreme Court held in Wolfle v.United States  that a letter written by a husband to his wife was not protected by the spousal privilege because the husband had dictated the letter to a stenographer, who then transcribed it.  Because the husband voluntarily disclosed the communication to the stenographer—a third party—its confidentiality was lost

The attorney-client privilege is this country’s oldest confidential communications privilege.  This privilege protects confidential communications between a client and his or her attorney made for the purpose of obtaining legal representation.  The purpose of this privilege  is to encourage clients to make full disclosure to their attorney (or prospective attorney)—free from any concerns of possible consequences resulting from the disclosure.  Thus, this privilege is for the personal benefit and protection of the client, and no one else.

Does the presence of your spouse or attorney during a communication affect the privilege?  Whether a communication made by a client in the presence of the attorney and the client’s spouse is privileged depends on which state you are in.  Specifically, courts in Pennsylvania and Colorado have protected both privileges when they intersect, while New York courts have held that both privileges are waived.  In other jurisdictions, this question remains unresolved.  Courts do agree, however, that if disclosure to a third party is reasonably necessary to accomplish an attorney’s scope of work, the attorney-client privilege is not waived.  For example, the presence of an outside party with relevant expertise, e.g., an accountant or an interpreter to further the client’s legal representation, does not waive this privilege.  In determining whether the attorney-client privilege applies to communications involving a third party, courts will consider 1) whether the client intended the communications to remain confidential and 2) the precise role of the third party.

Although the attorney-client privilege may protect certain third party communications, it is not an absolute privilege.  Specifically, a party may waive—intentionally or by mistake—the protection of the privilege.  Whether the disclosure of a single communication waives the privilege for all communications regarding the same subject matter, e.g., the client’s termination, or only with respect to the communication actually disclosed depends on the facts of the case and the particular court’s approach to the scope of the waiver.

As Colorado’s highest court aptly observed, “the effect of a spouse’s presence on acommunication between attorney and client is not entirely clear.”   Thus, the safest course of action for clients is to keep attorney-client communications truly confidential—that means excusing a spouse from any sensitive discussion with an attorney to ensure that the attorney-client privilege is preserved.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.




1 In a criminal case, the spousal privilege protects the defendant’s spouse from being forced to testify against him.  For this immunity to apply, the defendant and the spouse witness must be currently married at the time of the prosecution.  This privilege, however, may be waived by the witness spouse if he or she chooses to testify.

Friday, March 16, 2018

Sexual Harassment within the U.S. Forest Service

Recent news reports have exposed an insidious culture of harassment and retaliation within the U.S. Forest Service, an agency within the U.S. Department of Agriculture. Female firefighters have had to deal with everything from rape while on duty, to constant exposure in the field to explicit pornography, to derogatory comments on their appearance and personal lives, all while managers either committed the abuse, or looked the other way.  Shockingly, these discriminatory behaviors are not isolated incidents, but are endemic within the Agency.

Stories relayed by women demonstrate that the culture of discrimination extends beyond sexual harassment to a general gender bias within the Agency. For example, one of the women, Abby Bolt, realized that she was being treated differently than her male coworkers in terms of work hours and duties after she became a single parent in 2014.  She filed an EEO complaint alleging gender discrimination and, almost immediately, the retaliation and hostile work environment intensified. Her managers took away the duties critical to her career advancement and switched her office location to one that doubled her commute. Her supervisors also started disciplining her for minor infractions – incidents that would not incur a similar rebuke if committed by a male coworker. This past fall, anonymous, disparaging notes were left in her office mailbox and someone scrawled “QUIT” on the windshield of her car parked in a Forest Service lot.

We represent Ms. Bolt and, as I told the Washington Post, she, like many other women throughout the Agency, did exactly what she was supposed to – she took her issues up the chain-of-command, she got the union involved, and she contacted the EEO office.  Yet, at every single stage, both the Forest Service (and its parent Agency, Department of Agriculture) dropped the ball and refused to rectify the situation.

After these stories surfaced, attention turned to the Chief of the Forest Service, Tony Tooke.  It was soon discovered that prior to his appointment as Chief, Mr. Tooke had been under investigation for having inappropriate relationships with subordinates while working in Forest Service leadership.  This conduct did not affect his appointment.  However, in the aftermath of these reports, Mr. Tooke resigned within a week. The Forest Service quickly replaced Mr. Took with a female veteran of the Agency, Victoria Christiansen, but it is not yet clear what lasting changes will be made to improve the working environment of Ms. Bolt and the other women whose careers have been darkened by this despicable behavior.

Abby Bolt is represented by Kalijarvi, Chuzi, Newman, and Fitch. If you have concerns about workplace sexual harassment or gender discrimination and would like to speak to one of our attorneys, please call 202-331-9260 to begin our intake process, or submit your legal issue here.

By Sarah Martin

This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.