Employment Law Blog

Part II: What Is A “Micro-Unit” – and Why Does It Matter?

Earlier this week, the standard established by the NLRB in Specialty Healthcare was discussed. As a quick review, the Specialty Healthcare decision made it easier for small collective bargaining groups known as “micro-units” to form in the workplace. These micro-units are easier to unionize, and the employer is left with the burden of showing why excluded employees of the proposed unit should be included. Specialty Healthcare was decided by the NLRB in 2011 and affirmed by the Sixth Circuit in 2013, but it was not until this summer that employers learned how the NLRB would apply this decision to other industries. More >

What Is A “Micro-Unit” – and Why Does It Matter?

Employment law attorneys are abuzz with talk of “micro-units.” This term first surfaced in 2011, and has garnered attention once again in the wake of two recent decisions from the National Labor Relations Board (“NLRB”). So, what is a micro-unit, exactly, and why should employers care about this legal catchphrase? More >

Job Descriptions & Performance Reviews – a Recap of the McBrayer & Business First Seminar

Just yesterday, Business First and McBrayer sponsored the second part of a two-part seminar entitled “Lessons in Workplace Liability.” Amy D. Cubbage and Cynthia L. Effinger, McBrayer Employment Law attorneys, explained to attendees how job descriptions and performance evaluations can be used as powerful legal tools to limit liability for discrimination-based claims. If you were not able to attend the seminar, but would still like a copy of the materials, contact McBrayer’s Marketing Department at bpowers@mcbrayerfirm.com or 859-231-8780. We have also summarized some of the information shared by the presenters below. More >

Employer Wellness Plan Under Attack by the EEOC

The U.S. Equal Employment Opportunity Commission (“EEOC”) has filed its first lawsuit directly challenging a wellness program under the Americans with Disability Act (“ADA”). The case, EEOC v. Orion Energy Systems, was filed in the U.S. District Court for the Eastern District of Wisconsin.

The EEOC is alleging that Orion penalized an employee in 2009 after she declined to participate in the company’s wellness program by requiring her to pay her entire health care insurance premium, in addition to a $50-a-month nonparticipation penalty. Shortly thereafter, the employee was fired – a move that the EEOC believes was retaliatory. Further, the agency contends, Orion required medical examinations and made disability-related inquiries that were not job-related or consistent with business necessity.

The ADA limits the circumstances under which an employer may require physical examinations or answers to medical inquiries. Examinations and inquiries are permissible, but only if participation in an employee wellness program plan is voluntary. Orion’s program, according to the EEOC, was not voluntary because it penalized the employee when she declined to participate.

Employers who want to implement an employee wellness plan must ensure that the plan is compliant not only with ADA requirements, but also with the Affordable Care Act (“ACA”). See more on the ACA’s requirements, which are relatively new, here and here. 

The EEOC’s press release announcing the suit states that 94% of employers with over 200 workers offer some sort of wellness plan, as do 63% of smaller employers. That means that there is a lot of potential for liability when it comes to wellness plans. If you have questions about yours or would like to consult with legal counsel before implementing a program, contact McBrayer’s Employment Law attorneys today.

Preston Clark Worley is an associate with McBrayer law. Mr. Worley concentrates his practice in employment law, land development, telecommunications, real estate and affordable housing. He is located in the firm’s Lexington office and can be reached at pworley@mcbrayerfirm.com or at (859) 231-8780, ext. 1201.

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This article does not constitute legal advice.

“Do You Want Liability With That?” The NLRB McDonald’s Decision that could undermine the Franchise Business Model (Part II)

Monday’s post discussed the decision of NLRB’s General Counsel to hold McDonald’s Corp. jointly responsible with its franchise owners for workers’ labor complaints. The decision, if allowed to stand, could shake up the decades-old fast-food franchise system, but it does not stop there. The joint employer doctrine can be applied not only to fast food franchises and franchise arrangements in other industries, but also to other employment arrangements, such as subcontracting or outsourcing.

This decision could also impact the pricing of goods and services, as franchisors would likely need to up costs to offset the new potential liability. Everything from taxes to Affordable Care Act requirements could be affected if the decision stands.

If you are a franchisor and are currently in what could be determined to be a joint employer relationship, consider taking steps to further separate and distinguish your role from that of your franchisee. While franchisors should always take reasonable measures to ensure that franchisees are in compliance with applicable federal and state employment laws, they should take care to not wield such force over them to give the appearance of a joint-employer relationship.

We will be following the NLRB decision and keep you updated as the issue progresses.

Luke A. Wingfield is an associate with McBrayer law. Mr. Wingfield concentrates his practice in employment law, insurance defense, litigation and administrative law. He is located in the firm’s Lexington office and can be reached at lwingfield@mcbrayerfirm.com or at (859) 231-8780, ext. 1265. 

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This article does not constitute legal advice.

“Do You Want Liability With That?” The NLRB McDonald’s Decision that could undermine the Franchise Business Model

On July 29, the National Labor Relations Board (“NLRB”) General Counsel authorized NLRB Regional Directors to name McDonald’s Corp. as a joint employer in several complaints regarding worker rights at franchise-owned restaurants. Joint employer liability means that the non-employer (McDonald’s Corp.) can be held responsible for labor violations to the same extent as the worker’s “W-2” employer.

In the U.S., the overwhelming majority of the 14,000 McDonald's restaurants are owned and operated by franchisees (as is the case with most other fast-food chains). The franchise model is predicated on the assumption that the franchisee is an independent contractor – not an employee of the franchisor. Generally, the franchisor owns a system for operating a business and agrees to license a bundle of intellectual property to the franchisee so long as on the franchisee adheres to prescribed operating standards and pays franchise fees. Franchisees have the freedom to make personnel decisions and control their operating costs.

Many third parties and pro-union advocates have long sought to hold franchisors responsible for the acts or omissions of franchisees – arguing that franchisors maintain strict control on day-to-day operations and regulate almost all aspects of a franchisee's operations, from employee training to store design. Their argument is that the franchise model allows the corporations to control the parts of the business it cares about at its franchises, while escaping liability for labor and wage violations.

The NLRB has investigated 181 cases of unlawful labor practices at McDonald’s franchise restaurants since 2012. The NLRB has found sufficient merit in at least 43 cases. Heather Smedstad, senior vice president of human resources for McDonald’s USA, called the NLRB’s decision a “radical departure” and something that “should be a concern to businessmen and women across the country.” Indeed it is, but it is important to note that General Counsel's decision is not the same as a binding NLRB ruling and that it will be a long time before this issue is resolved, as McDonald’s Corp. will no doubt appeal any rulings.

For more about the potential effects of this decision, check back on Wednesday.

Luke A. Wingfield is an associate with McBrayer law. Mr. Wingfield concentrates his practice in employment law, insurance defense, litigation and administrative law. He is located in the firm’s Lexington office and can be reached at lwingfield@mcbrayerfirm.com or at (859) 231-8780, ext. 1265. 

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This article does not constitute legal advice.

“STOP”: Four Tips For Document Preservation When Facing Potential Litigation

In today’s digital environment, it is crucial that employers act fast when faced with a suit (or the threat of suit) by an employee or ex-employee. When potential litigation is on the horizon, the first step should always be to contact legal counsel. The next step should protecting documentation that might be relevant to the dispute. Keep in mind this acronym to make sure you are following that right steps for documentation preservation:

Search for employees that might possess information pertaining to the dispute. This might include supervisors, managers, or people who shared a workspace with the claimant, but it might also include others not under the direct supervision of the company, such as independent contractors or consultants that worked with the claimant.

Think about all sources of information – smart phones, tablets, cloud-based servers, thumb drives, work email accounts, etc. Once the sources are identified, consider whether you have and can maintain access to them. In some cases, it may require notifying the claimant that he must turn over password information or relinquish his work-issued devices, but it is highly suggested you contact legal counsel before proceeding with this step.

Order a litigation hold on relevant information. Instruct employees to not destruct, forward or edit the relevant documentation in any way. In-house destruction procedures (such as shredding or the automatic email deletion) should be cancelled until further notice from counsel. Litigation hold instructions should be made in writing and provide explicit instructions. The instructions should identify the type of materials and date ranges that are subject to the hold. A litigation hold should also identify to whom questions or concerns about the hold can be directed.

Present all information to counsel. He or she will then determine exactly what information needs to be preserved and for how long. Do not think that you, as an employer, know what information is important. By getting rid of documentation, even without ill intent, you may be hurting your ability to present a defense to the claims.

No employer likes facing employee-related litigation, but it is important to “STOP” and take time to ensure document preservation in the wake or threat of a suit.

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This article does not constitute legal advice.

Keeping Off-The-Clock Work On Your Radar

There are lots of things that an employer must be mindful of on an ongoing basis, but near the top of that list should be the prohibition of non-exempt employees’ off-the-clock work. This common problem can easily escape an employer’s attention, but it can have an incredibly negative and costly impact if an employee (or, employees) brings a wage and hour suit. Just ask LinkedIn. More >

McBrayer & Blackstone Media Present 8 Do's & Don'ts of Social Media!

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Are Your Workplace Policies Too Upbeat for the NLRB?

Many employers know that keeping an upbeat and positive workforce is crucial to any successful business; however, recent NLRB rulings penalize certain policies that encourage such an environment, including policies that encourage or promote workplace civility. More >