EEOC Issues Final Regulations Implementing the ADA Amendment Act

April 1, 2011 by Hinshaw & Culbertson LLP

On March 24, 2011, the U.S. Equal Employment Opportunity Commission (EEOC) released long-awaited final regulations implementing the ADA Amendments Act (ADAAA). The ADAAA became effective on January 1, 2009. The final regulations implement the legislative intent of the ADAAA to make it easier for individuals with disabilities to obtain protection under the Americans with Disabilities Act (ADA). The ADAAA emphasizes that the primary focus in ADA cases should be on whether employers complied with their obligations under the statute and whether discrimination occurred, not whether individuals are disabled under the law. The regulations maintain this focus by retaining the broad definition of “disability.” More ›

Forum-Selection Clause in Employment Agreement Enforced in Title VII Case

April 1, 2011 by Hinshaw & Culbertson LLP

An employee signed an employment agreement with her employer. The agreement set the terms and conditions of the employee’s employment and included the following forum-selection clause: “The parties agree that all claims or causes of action relating to or arising from this Agreement shall be brought in a court in the City of Richmond, Virginia.” The agreement also included a choice of law provision designating Virginia law as controlling. Subsequently, the employee was terminated and she sued in Florida. The employee alleged that the employer unlawfully terminated her after she announced that she was pregnant, and that she was fired in retaliation for objecting to her employer’s unlawful conduct. The U.S. Court of Appeals for the Eleventh Circuit dismissed the employee’s claims because they were brought in an improper venue. The court held that all claims arising directly or indirectly from the employee’s employment relationship with the employer had to be brought in a court in Richmond due to the forum-selection clause in the employment agreement. This case exemplifies how forum-selection clauses allow employers to defend against potential lawsuits in the state they prefer.

Employee’s Leave in Order to go on “Faith Healing” trip not Protected Under FMLA

March 4, 2011 by Hinshaw & Culbertson LLP

An employer approved intermittent Family and Medical Leave Act (FMLA) leave for an employee to take care of her husband, who suffered from serious medical conditions. After three years of taking intermittent leave, the employee submitted a request to take a seven-week leave to travel with her husband on a faith-healing pilgrimage to the Philippines. The employer denied the leave based on an FMLA certification from the husband’s doctor stating that he was “presently . . . not incapacitated,” despite also receiving a doctor’s note indicating that the employee’s leave was needed so that she could physically assist her husband on the pilgrimage. When the employee failed to respond to the employer’s requests for her to return to work, the employer terminated her. The employee sued, asserting that the faith-healing pilgrimage constituted medical care under the FMLA, and that the employer’s actions constituted interference with her right to leave and retaliation in violation of the FMLA. The U.S. Court of Appeals for the First Circuit rejected the employee’s claims because: (1) no conventional medical treatment was provided to the employee’s husband during the trip; (2) the employee’s husband saw no doctors on the trip; and (3) during the trip, the employee and her husband prayed, went to Mass, spoke with others on the pilgrimage, and visited other churches and family. The court concluded that FMLA leave to care for an immediate family member does not extend to vacations during which no medical care is provided. The fact that the employee provided physical and psychological care to her husband was incidental to the vacation. This case serves as reminder that FMLA leave is meant for employees with serious health conditions or who care for a family member with a serious health condition. Accordingly, employers need not grant FMLA leave requests where the leave sought is actually a vacation.

Sick Leave Buy-Back must be Included in Calculation of “Regular Rate” for Overtime

March 4, 2011 by Hinshaw & Culbertson LLP

A city allowed employees who had accumulated a minimum amount of unused sick leave to sell it back to the city. The city did not, however, include buy-back payments when determining the regular rate of pay for purposes of calculating overtime pay. Under the Fair Labor Standards Act (FLSA), overtime hours must be compensated at a rate not less than 1.5 times the “regular rate” at which an employee is paid. The term “regular rate” includes “all remuneration paid” to an employee, with a few exceptions. The U.S. Courts of Appeals for the Sixth and Eighth Circuits are split on whether a sick leave buy-back payment must be included within an employee’s regular rate for overtime purposes. Noting the split, the U.S. Court of Appeals for the Tenth Circuit agreed with the Eighth Circuit and the U.S. Department of Labor in holding that such a payment must be included within the regular rate calculation. In so doing, the court stated that sick leave buy-backs represent compensation for additional service or value received by the employer and are analogous to attendance bonuses. Consequently, such payments must be included within the regular rate calculation. Interestingly, in the same opinion, the court held that vacation buy-backs do not need to be included within the regular rate calculation. Ultimately, this case demonstrates the complexities inherent in complying with wage and hour laws and that employers must carefully consider how the payment of bonuses and other forms of additional compensation impact the calculation of overtime payments to employees.

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