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									      “IT’S A NEW DAY: Recent
    Developments In Employment
   Law Impacting EPLI Carriers And
    The Practical Implications For
            Your Insureds”
         Professional Lines Attorneys Network
          New York City Regional Workshop
                    June 16, 2009
Michael Kaufman, Esq. – Kaufman Dolowich Voluck & Gonzo, LLP
    Steven D. Leach, Esq. – Jones, Skelton & Hochuli, P.L.C.
     Howard Fishbein, Esq. – Freedom Specialty Insurance
            Jeanette Lee-Sam, Esq. – AIU Holdings
Special thanks to Charles G. Meyer, III, Esq. – LeClairRyan, P.C.
Family and Medical Leave Act
  Family and Medical Leave
  – National Defense Authorization
    Act ("NDAA") signed into law on
    January 28, 2008; applicable late
    November 2008.
  – Tucked into NDAA are
    modifications to FMLA.
  – Employers with 50 or more
    employees must now provide two
    additional types of ―military
    family leave.‖
   Family and Medical Leave
1. “Qualifying Exigency" Leave
    – Employee with spouse, son, daughter, or parent on active duty
      in the National Guard or Reserves is entitled to 12 weeks of
      FMLA leave to address ―qualifying exigencies.―
   Qualifying Exigencies include:
    – Attending Military Events and Related Activities
    – Arranging Childcare and Attending School Activities
    – Addressing Financial and Legal Arrangements
    – Attending Counseling Sessions
    – Spending time with covered military member on short-term
      temporary rest and recuperation
    – Attending Post Deployment Activities
    – Addressing issues arising from Short Notice Deployment
   Family and Medical Leave
2. “Military Caregiver Leave”
   – An employee who is the spouse,
     daughter, parent, or next of kin of a
     covered service member with a
     serious injury or illness may take up
     to 26 weeks of leave in a single 12-
     month period to care for the
     covered service member.
   – This is more than double the normal
     amount of leave available under
    Family and Medical Leave
Final Department of Labor Regulations
  – Serious health condition – must involve inpatient care or
    continuing treatment by a health care provider, which
    includes a period of incapacity combined with medical
    treatment (definition is clarified).
  – Employee Notice of FMLA Eligibility – employer has 5
    business days to provide notice (increased from 2
  – Medical certification – if an employee provides
    incomplete or insufficient medical certification, employer
    must provide 7 days to cure deficiency.
  – Substitution of paid leave – permit an employer and
    employee to agree to substitution of paid leave during
    FMLA leave if employee would not otherwise receive a
    regular salary.

 Genetic Information
Nondiscrimination Act
     Genetic Information
    Nondiscrimination Act
 – Purpose: Employees can participate in genetic testing
   without fear of losing health care or jobs
 – Prohibit workplace discrimination on the basis of
   genetic information through the establishment of
   new law and amendment of existing statutes,
   including Title VII of the Civil Rights Act.
 – Add provisions applying to health insurance issuers
   and health plans concerning genetic information.
 – Passed by Congress November 2008; becomes
   effective November 21, 2009.
 – ―A solution in search of a problem‖
      Genetic Information
     Nondiscrimination Act
Genetic Information Defined
  – Includes information concerning an
    individual's or family member's genetic
      ―An analysis of human DNA, RNA,
       chromosomes, proteins, or
       metabolites, that detects genotypes,
       mutations or chromosomal changes.‖
     Genetic Information
    Nondiscrimination Act
Rights and Remedies
  – GINA = unfair employment
    practice for employer to
    discriminate based on "genetic
    information" in hiring, firing, and
    other terms and conditions of
  – Attorney fees and costs are
    recoverable by prevailing party at
    court's discretion.
    Genetic Information
   Nondiscrimination Act
Rights and Remedies
  – May be a prohibition against back pay
  – May be an upper limit on
    compensatory and punitive damages,
    depending on the number of
    individuals employed by employer
    (e.g., damages for employer with more
    than 500 employees is capped at
    Genetic Information
   Nondiscrimination Act
  – Inadvertently requesting or requiring family
    medical history.
  – Requesting or requiring family medical
    history for purposes of complying with
    certification for FMLA.
  – Genetic monitoring of the biological effects
    of toxic substances in workplace (when
    required to do so by law).
  – DNA analysis for law enforcement (e.g. CSI)
     Genetic Information
    Nondiscrimination Act
  – Employers offering health or genetic
    services (e.g., wellness programs)
      Employees must authorize any request for
       genetic information in writing.
      Results can only be released to the
       employee and a licensed health care
      Note: employers can receive aggregate
       data that does not disclose employees'
     Genetic Information
    Nondiscrimination Act
  – Employers required to keep records
    containing genetic information on
    separate forms and medical files
    (similar to ADA).
  – Information covered by GINA should
    be treated as confidential medical
  – Records can only be released in
    certain clearly defined circumstances,
    such as upon an employee request or
    court order.
 Lilly Ledbetter Fair Pay Act

 – Effective January 29, 2009.
 – Amends Title VII of the Civil Rights Act of 1964,
   the Age Discrimination Act in Employment Act of
   1967, the Americans with Disabilities Act of
   1990, and the Rehabilitation Act of 1973 to
   clarify that discriminatory compensation occurs
   each time compensation is paid.
 – Recognizes a ―Continuous Violation‖ Theory of
   Discrimination that effectively circumvents the
   Statute of Limitations.
 Lilly Ledbetter Fair Pay Act

Lilly Ledbetter v. Goodyear Tire (2007)
  – Facts:
        Production supervisor at Alabama Goodyear plant. After 19
         years on the job, took early retirement in 1988 after being
         involuntarily transferred to a less-desirable job on production
         floor. First filed charge with EEOC 6 mos. prior to retirement.
        Salary was determined annually based on performance
         reviews by supervisors. Her reviews placed her near bottom
         of rankings with coworker, so she received small salary
        By end of 1997, Ledbetter was only woman working as area
         manager, and the pay discrepancy was stark. Ledbetter was
         paid $3727/month; lowest paid male area manager was paid
         $4,286/month; highest was paid $5,236/month.
 Lilly Ledbetter Fair Pay Act

Lilly Ledbetter v. Goodyear Tire (2007)
  – Facts continued:
        She alleged she received discriminatory evaluations based
         on her gender that affected her eligibility for pay
  – Holding:
        The statute of limitations on pay discrimination claims
         runs from the date of the alleged discriminatory pay-
         setting decisions, not the dates on which the employee
         received checks from her employer.
        The Act rejects this holding and reverses this case to
         allow the statute of limitations to reset on receipt of each
    Lilly Ledbetter Fair Pay Act

   The Proposed Paycheck "Trigger"
    – An employee is affected by a discriminatory compensation practice
      each time the employee receives payment of wages or benefits.
    – The 180- or 300-day time period for filing an EEOC charge would
      begin to run anew with the receipt of each paycheck or benefit
    – Damages, however, are limited to two years of back pay.
   Adds provision to Title VII, which provides:
    – ―unlawful employment practice occurs, with respect to discrimination
      in compensation in violation of this title, when a discriminatory
      compensation decision or other practice is adopted, when an
      individual is affected by application of a discriminatory compensation
      decision or other practice, including, each time wages, benefits, or
      other compensation is paid, resulting in whole or in part from such a
      decision or other practice.‖
 Lilly Ledbetter Fair Pay Act

The New Definition of Compensation
  – The definition of ―discriminatory compensation
    decision or other practice‖ will be heavily
    litigated and could be stretched to cover almost any
    employment decision (e.g., transfers, failure-to-
    promote, or demotion decision).
  – The Act conceivably applies to any employment
    decision that tangentially involves or impacts any
    type of compensation (e.g. pensions, bonuses,
    severance pay).
 Lilly Ledbetter Fair Pay Act

Broad Definition of Coverage
  – A ―person‖ affected by the decision is not defined
    and the broad language could include charges filed
    by non-employees, such as spouses of deceased
        In fact, House expressly rejected amendment
         restricting application to employees only
Retroactive Application
  – Applies retroactively as of May 28, 2007, the day
    before the Supreme Court decision in Ledbetter v.
    Goodyear Tire.
  – The legislation would apply to all suits pending on
    that date and all discrimination suits brought after
    that date.
 Lilly Ledbetter Fair Pay Act

What it could mean for
  – Plaintiffs could have an easier time
    litigating stale discrimination claims.
  – The "compensation" definition could be
    stretched to cover almost any
    employment decision (e.g., a transfer,
    failure-to-promote, or demotion
  – Employers could be exposed to liability
    for allegedly discriminatory acts that
    occurred years, and even decades,
    The ADA Amendments Act of
   The ADA Amendments Act of 2008
     – Went into effect on January 1, 2009.
     – Significantly broadens scope of the
       ADA, expanding definition of
       ―disabled‖ and expanding
       employers‘ obligations.
                      The ADAAA

   How has the ADAAA broadened the Definition of
    – Changes way in which the definition of ―disability‖ should be
      interpreted. Although the statutory definition remains
      unchanged that for an individual to be ―disabled‖ he or she
      must be ―substantially limited‖ in a major life activity, the
      statute directs the EEOC to revise its regulations pertaining to
      the meaning of ―substantially limits‖ to impose a less stringent
           Congress believed the standard set forth in Toyota Motor
            Manufacturing, Kentucky, inc. v. Williams was too stringent.
           By contract, in Williams the Supreme Court had stated:
            ―…[A]n individual must have an impairment that prevents or
            severely restricts the individual from doing activities that are
            of central importance to most people‘s daily lives. The
            impairment‘s impact must also be permanent or long-term.‖
                    The ADAAA

   How has the ADAAA broadened the Definition of
    – Clarifies that ―substantially limited‖ only need apply to a single
      life activity.
    – Broadens the definition of major life activity to include
      concentrating, bending, reading, working, learning, and
      ―major bodily functions,‖ such as ―functions of the immune
      system,‖ ―normal cell growth,‖ and ―reproductive functions.‖
    – Considers temporary or episodic illnesses to be disabilities if
      they substantially limit a major life activity when they are
    – Does not allow for consideration of mitigating measures when
      evaluating whether someone is disabled (even if the disability
      is treatable, the Act considers the person‘s condition in its
      untreated form) with the exception of corrective lenses.
                    The ADAAA

   Expansion of ―Regarded As‖ Disability
    – ADA Amendments Act broadens the ―regarded as‖
      provision of the ADA to include a larger class of people.
    – ADAAA now states: ―An individual meets the
      requirement of ‗being regarded as having such an
      impairment‘ if the individual establishes that he has
      been subjected to an action prohibited under this Act
      because of an actual or perceived physical or mental
      impairment whether or not the impairment limits or is
      perceived to limit a major life activity.‖
         Example: An individual who has sleep apnea may
          have a ―disability‖ under the Act if she is perceived
          to have an impairment and is not hired as a result,
          whether or not she mitigates the effects of the sleep
          apnea and has no trouble sleeping.
                 The ADAAA

   What can we expect as a result of the ADAAA?
    – An Increase in:
        Impairments Categorized as Disabilities,
        Demands for Accommodations,

        The Number of Cases Brought by Individuals With
        The Success Rate of Lawsuits Brought Under the ADA,

        Easing the Burden for Establishing Disabilities Based
         on the EEOC‘s Redefinition of ―Substantially Limits,‖
        Litigation Over Undue Hardship Defense.
     Proposed Legislation

I. Arbitration Fairness Act of 2004
II. Civil Rights Act of 2008
III. New Supreme Court Decision
     New Trends in EPLI Claims:
     What New EPLI Claims Will
             You See?
1.   Retaliation
2.   Associational Discrimination
3.   Caregiver responsibility
     claims—new EEOC Caregiver
4.   ADEA & ADA Claims
5.   Defamation claims arising from
     layoffs & new technology in
     the workplace
6.   Wage and Hour Claims
 New Trends: The Rise of
Associational Discrimination
   Rise of Retaliation Claims Post Burlington
    – CBOCS West, Inc. v. Humphries, 474 F.3d
      387 (7th Cir. 2007)
        Retaliation Case
        § 1981 Includes Retaliation Claims
           – Employees may now bring retaliation claims not only
             under Title VII, but also under Section 1981.
           – Important because Section 1981…
                Longer statute of limitations than Title VII
                No cap on damages, as opposed to Title VII
                Applies to all employers, regardless of size
     New Trends: The Rise of
    Associational Discrimination
   Retaliation continued
    – Thompson v. N. American Stainless, 2008 U.S. App.
      LEXIS 16075 (6th Cir. 2008).
        Employee was terminated shortly after his fiancé
         filed an EEOC claim against the employer.
        The appellate court found that there was no
         doubt that an employer‘s retaliation against a
         family member after an employee files an EEOC
         charge would dissuade ―reasonable workers‖ from
         such an action.
        Appellate court reversed the district court and
         held the anti-retaliation provision of Title VII
         prohibits an employer from terminating an
         employee based on the protected activity of his
      New Trends: The Rise of
    Associational Discrimination
   Race
    – Holcomb v. Iona College, Case No. 06-3815-cv (2nd Cir.
        In this case, former Iona College assistant
         basketball coach Craig Holcomb, a white man,
         claimed he was fired for being married to a black
        The Court held, for the first time, that a Title VII
         claim may exist for discrimination based on
         interracial association.
        ―Where an employee is subjected to adverse action
         because an employer disapproves of interracial
         association, the employee suffers discrimination
         because of the employee‘s own race.‖
     New Trends: The Rise of
    Associational Discrimination
   Expenses
    – Dewitt v. Proctor Hospital, et al., 517 F.3d 944 (7th
      Cir. 2008).
          Plaintiff contended that she was fired because of her
           husband‘s high medical bills.
          Evidence showed the company was self-insured for the
           first $250,000 of annual costs, and the medical bills for
           plaintiff‘s husband had been over $316,000 in the
           three years prior to termination. A manager asked
           plaintiff about her husband‘s condition twice in the five
           months prior to her termination. She was terminated
           for non performance reasons, but labeled as ineligible
           for rehire.
          Court found the timing of the employee‘s termination
           suggested the ―financial albatross‖ of the husband‘s
           continued cancer treatment was a factor in the
           employer‘s decision.
     New Trends: The Rise of
    Associational Discrimination
   Protection against Sexual Stereotyping
    – Enriquez v. West Jersey Health Systems, 342 N.J.
      Super. 501 (App. Div. 2001).
        Held that New Jersey Law Against Discrimination
         (L.A.D.) prohibits discrimination based on an
         individual‘s gender ―dysphoria‖ or transsexualism.
        June 17, 2007—N.J. LAD will be amended to prohibit
         discrimination based on ―gender identity or
    – Other states have similar laws:
          CA, CO, HI, IL, ME, MN, NM, OR, RI, VT, and UT
    – Price Waterhouse v. Hopkins, 490 U.S. 228 (1989).
          Prohibited sex stereotyping
  New Trends in EPLI Claims:
Caregiver Responsibility Claims
   Representative Case: Lettieri v. Equant, 478 F.3d 640 (4th
    Cir. 2007)
    – Lettieri: Manager in NY—Sought promotion to an office in N. VA
    – During interview: supervisor asked about her child care
      responsibilities. (e.g. ―How do you take care of your kids when
      away from home?‖)
    – Supervisor denied promotion to female employee because he
      believed she, as a mother, should not be away from home during
      the week.
    – After Lettieri filed a complaint of sex discrimination against
      supervisor Taylor, Equant stripped her of her duties and
      eventually fired her.
    – Summary judgment for Equant reversed, because Lettieri
      established a prima facie case of sex discrimination and
      produced evidence of discriminatory attitude against
      working mothers.
      New Trends: Impact of
    Recession & Layoffs on EPLI
   Age Discrimination Plaintiffs
   ADA Discrimination Plaintiffs
   In 2008, the median discrimination
    verdict rose approximately 70% to
    $252,000 from $147,000 in 2006.
    New Trends in EPLI Claims:
    Impact of Recession on Age
      and Disability Claims
   Assumption that Lay
    Offs Disproportionately
    Impact Older Workers
     – According to the
       EEOC, age-
       allegations jumped
       29% from 2007 to
      New Trends: Impact of
    Recession & Layoffs on EPLI
   National Verdict Statistics
    – Employers won only 38% of
      discrimination cases in 2007.
        Prevailingmost often in race
         discrimination cases (43%)
        Losing most frequently in sex
         discrimination cases (30%)
    – Employers in the manufacturing &
      industrial sectors suffered the largest
      verdicts, followed by government,
      transportation & service sectors.
New Trends in EPLI Claims: Defamation
  Claims Arising from Layoffs & New
     Technology in the Workplace
     Defamation lawsuits are on the rise.
     Employees fighting for reputation
      – Suing over being labeled damaged goods after losing their jobs
     Employers facing mounting pressure
      – How to treat departing employees
      – How to explain departures
     Technology is Making it Easier to Unwittingly
      Disseminate Harmful Information about
      –   E-mail
      –   Twitter
      –   Facebook
      –   Blogs
New Trends in EPLI Claims: Defamation
  Claims Arising from Layoffs & New
     Technology in the Workplace
    E-mail Example: Noonan v. Staples,
     539 F.3d 1 (1st Cir. 2008)
     – Staples manager claimed he was
       humiliated after the company sent a
       mass e-mail to approximately 1,500
       employees, stating the manager had
       been fired for violating company travel
       and expense policies
     – Holding: E-mail was meant to single out
       manager and humiliate him. Staples
       should not have identified the manager
       by name.
    New Trends: Technology
      and the Workplace
   Evolving technology and using technology in the
    workplace, such as internet searching, email
    communication, and social networking sites, create new
    exposure for employers in litigation such as defamation,
    tortious interference with a prospective business
    relationship, discrimination claims, etc.
   E-mail
     – Improper E-mail Use
          31.6% fired employees in the past year.
          52.4% disciplined employees.
          At least 14,000,000 employees‘ internet use and
           e-mail is under continuous surveillance
    New Trends: Technology
      and the Workplace
   Employer Use of New
    – Background
      investigation during the
      hiring process
    – Defending employee
         Emails

         Comments on
    – What about privacy?
New Trends: Technology and
      the Workplace
   It‘s All About the Policy
    – Employers can protect themselves with
      effective electronic device policies.
        No  expectation of privacy
        All data is our data
        Right to inspect
        Protect confidential information
        Scope of use limitations—mean what you say

    – Pre-hire investigation policies
    New Trends: Technology
      and the Workplace
   How can Twitter and Blogging cause trouble
    in the workplace?
    – Security may be compromised if the ―tweets‖ are
      running through employer‘s servers.
    – Difficult to monitor disclosure of confidential
      information and trade secrets in the tweets.
    – Inability to maintain record of the
    – Tweets can be used to make harassing or
      discriminatory statements for which employers
      may be held liable.
Wage and Hour Claims
              FY 2001        FY 2002        FY 2003        FY 2004        FY 2005        FY 2006        FY 2007        FY 2008
- All Acts

Back Wages
              $131,954,657   $175,640,492   $212,537,554   $196,664,146   $166,005,014   $171,955,533   $220,613,703   $185,287,827

Receiving     216,647        263,593        342,358        288,296        241,379        246,874        341,624        228,645
Back Wages

              29,085         31,413         31,123         31,786         30,375         26,256         24,950         23,845

              998,937        1,070,600      1,032,879      1,000,739      969,776        951,971        899,406        882,419

Days to
              139            129            108            92             85             93             97             97

              38,051         40,264         39,425         37,842         34,858         31,987         30,467         28,242
Low-Wage Industries Statistics   Cases    Back Wages    Employees

                                 1,600    $2,116,712    5,397

Day Care
                                 746      $1,058,579    3,070

                                 3,942    $18,917,992   23,433

Garment Manufacturing
                                 385      $2,596,986    2,278

Guard Services
                                 633      $13,595,350   13,138

Health Care
                                 1,302    $11,403,813   15,768

Hotels and Motels
                                 875      $2,445,094    5,034

Janitorial Services
                                 507      $3,469,956    5,417

Temporary Help
                                 309      $1,945163     3,368

Total Low-Wage Industries
                                 10,299   $57,549,645   76,903

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