SLF LABOR AND EMPLOYMENT ALERT November 2009

EEOC Releases New Poster

The U.S. Equal Employment Opportunity Commission recently released a revised “Equal Employment Opportunity is the Law” poster that must be displayed by all employers.  The poster reflects current federal laws pertaining to employment discrimination as well as information related to the Genetic Information Nondiscrimination Act of 2008.

The EEOC offers several ways for employers to obtain the revised “EEO is the Law” poster, including the following:

• Print a supplement from the EEOC’s website and post it next to the September 2002 “EEO is the Law” poster or the OFCCP’s August 2008 “EEO is the Law” poster (http://www1.eeoc.gov/employers/poster.cfm); or

• Print and post the newly revised “EEO is the Law” poster (http://www1.eeoc.gov/employers/poster.cfm); or

• Order a new poster from the EEOC Clearinghouse.  Directions on how to order a new poster through the EEOC Clearinghouse are available at the following link: http://www1.eeoc.gov/employers/poster.cfm.

Proposed Bill Changes Standard of Proof in Age Discrimination Cases

On October 6, 2009, the U.S. House of Representatives and the U.S. Senate introduced a bill that clarifies the standard of proof in age discrimination cases (H.R. 3721, S. 1756).  The bill is titled “Protecting Older Workers Against Discrimination Act” and is being launched in response to the U.S. Supreme Court’s decision in Gross v. FBL Financial Services, Inc. (2009).  In Gross, the U.S. Supreme Court held that employees in ADEA cases carry the burden of establishing that age was the “but for” cause of an adverse employment action and not simply a motivating factor.  The burden does not shift to employers in mixed-motive cases.

The proposed Protecting Older Workers Against Discrimination Act provides that once an employee establishes that age was a motivating factor in an adverse employment decision, the employer must show that it complied with the law.  The Protecting Older Workers Against Discrimination Act models Title VII’s burden shifting framework.

The U.S. Supreme Court’s opinion in Gross v. FBL Financial Services, Inc. is available at the following link: http://www.supremecourtus.gov/opinions/08pdf/08-441.pdf

To access more information related to H.R. 3721, including the text of the legislation, please access The Library of Congress’ website (http://thomas.loc.gov/) and search for Bill Number H.R. 3721.

COBRA Premium Subsidy Reimbursement Clarification

As employers are aware, the American Recovery and Reinvestment Act of 2009 allows eligible individuals to pay a reduced COBRA premium.  Eligible individuals receiving COBRA coverage under federal law pay 35% of the applicable premium, and the employer pays the remaining 65%.  The federal government then reimburses the employer by providing a payroll tax credit.  The IRS recently released an informational letter that addresses situations when an employer does not have sufficient payroll taxes from which to recover its 65% payment.  Specifically, the IRS explained that if an employer’s 65% premium payment exceeds its payroll tax liability, the IRS would treat the payment as an “overpayment” and would refund it to the employer.  Therefore, the employer would still be reimbursed for the 65% of the premium payment.

The IRS’ information letter is available at the following link: http://www.irs.gov/pub/irs-wd/09-0173.pdf

Case Law Update: First District Court of Appeal Reverses Circuit Court’s Judgment Vacating and Declining to Enforce an Arbitration Award

On November 13, 2009, the First District Court of Appeal issued an opinion in AFSCME Florida Council 79 v. State reversing a circuit court’s judgment “vacating and declining to enforce an arbitration award (itself a clarification of the arbitrator’s original award) that brought to an end arbitration to which the parties resorted after they failed to agree on how to resolve [a] grievance.”  In AFSCME, an employee was dismissed for inability to perform job duties while his application for disability retirement was pending.  Thereafter, with the support of his union, the employee filed a grievance.  The employee alleged that his discharge was “not for just cause” and further demanded, among other things, that he be returned to work and given back pay.  During the pendency of the grievance, the employee’s disability retirement application was approved; however, the parties continued to arbitration because not all issues set forth in the grievance were resolved.

The arbitrator entered an award providing the employee with, among other things, retroactive reinstatement, back pay, and health, life and group insurance benefits.  The union filed a complaint with the circuit court asking that the circuit court confirm and enforce the award.  The circuit court then remanded to the arbitrator for a clarification of issues pertaining to the employee’s health insurance.  Subsequently, the arbitrator entered a “clarification award,” holding that the employee was entitled to retroactive health insurance coverage and that the premiums would be deducted from the employee’s monthly disability retirement checks (not to exceed $50.00 per month) until all retroactive premiums were paid.  The Department of Corrections and Department of Management Services filed a motion to vacate, and the union filed a motion to enforce the new award.  The circuit court granted the motion to vacate filed by DOC and DMS.

The union appealed and argued that “the circuit court erred in concluding that the final arbitration award exceeded the scope of the grievance (and the scope of the initial award) and in concluding that the award contravened ‘powers, duties and responsibilities of the State under applicable law or rules’; in concluding that DMS suffered some procedural unfairness; and in concluding that AFSCME or [the employee] had a duty to exhaust administrative remedies before pursuing the grievance.”

The First District Court of Appeal reversed the circuit court’s judgment vacating and refusing to enforce the arbitration award.  Chief Judge Paul M. Hawkes dissented, asserting that “the trial court correctly concluded the 2007 ‘clarification’ was invalid. In awarding the [employee] the right to have his long expired health insurance reinstated, without requiring him to pay past premiums, the arbitrator exceeded his authority and entered an order beyond the scope of the arbitration.”

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