A recent decision by the Employment Appeal Tribunal (Norman & Others v National Audit Office [2014] UKEAT 0276/14/1512) has emphasised the need for employers to ensure that “flexibility clauses” are drafted unambiguously and have contractual effect if they are to be effective.
European employers should exercise caution in the event of the dismissal of an obese employee. The European Court of Justice (ECJ) determined that obesity may qualify as severe disability if it significantly restricts participation in working life (ECJ, judgment of December 18, 2014 in Case C-354/13). This decision may be relevant not only for dismissals but also in hiring decisions. In order to avoid undue discrimination, an employment rejection letter should in no way whatsoever refer to the applicant’s weight. The plaintiff in the present case was an obese nursery teacher who filed a suit against his employer, the Danish community Billund, because of his dismissal. The employer argued that the dismissal was due to declining numbers of children being registered. The nursery teacher argued that the reason for his dismissal, after 15 years of employment, was his obesity, which constituted undue discrimination due to disability.
The ECJ clarified that European Union law does not contain a general prohibition with respect to obesity discrimination in employment. Nevertheless, obesity may qualify as severe disability if it significantly interferes with full and equal participation in working life. This can happen in cases of a particularly serious obesity of long duration, which causes physical, intellectual and mental impairment. According to this definition, the cause of the obesity is irrelevant. Now, following the decision of the ECJ, the Danish trial court has to decide if the nursery teacher’s obesity significantly interferes with full and equal participation in working life.
The decision of the ECJ may have significant impact on German employment law. Up until now, only conditions resulting from obesity (e.g., diabetes or chronic back pain) qualified as a severe disability. Following the decision of the ECJ, obesity itself may qualify as severe disability. It remains to be seen whether – and, if so, at which level –the ECJ will establish thresholds under which a dismissal or a rejection of an applicant is considered discriminatory due to obesity. Until then, the decision of the ECJ gives rise to considerable legal uncertainty.
Employee Benefits for Same-Sex Partners
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In this interactive webinar, attorney Todd Solomon—who literally wrote the book on domestic partner benefits—discusses the impact of these rulings and the steps employers should take now to ensure that they are in compliance with all applicable laws for same-sex partners.
In 2015, I predict an increased focus on employees’ rights regarding their personal social media accounts. Since 2012, individual states have enacted laws prohibiting employers from requesting access to their employees’ (or job applicants’) personal social media accounts. In 2014 alone, six states enacted such laws, bringing the total number of states with this type of legislation to 18. (Click here for additional analysis of the impact of these laws on employers.)
In addition to individual states’ laws, I expect clarification on a national level regarding employer policies and actions related to employees’ personal social media accounts. In the past year, the National Labor Relations Board (NLRB) has started to focus on whether employer policies regarding employee social media accounts are consistent with the National Labor Relations Act (“Act”). The Act prohibits employers from interfering with employees who come together to discuss their employment for the purpose of collective bargaining or other mutual aid or protection. According to the NLRB, employees’ comments on their personal social media accounts can constitute protected activity under the Act. One recent NLRB case involved two employees who posted on their Facebook accounts about the employers’ alleged failure to correctly withhold taxes from their paychecks. The employer terminated the employees because of their comments on their personal social media accounts. The NLRB found that the employee’s comments were protected under the Act, ordered the employer to reinstate the employees, and ordered the employer to clarify its social media policy. The employer is now appealing the NLRB’s determination in court.
I predict not only that more states will enact employee social media account legislation, but also that the NLRB and the courts will provide more guidance on employer restrictions or sanctions related to employee social media use.
Since 2001, the French Court of Cassation has made a continuous effort to refine and, in some circumstances, narrow the scope of the right to privacy in the workplace with a view to reaching a fair and balanced approach. The January 6, 2015 declaration of the French Data Protection Authority (CNIL) further highlights this trend towards the standardization of information collection at work, and serves to clarify and expand the right of employers to listen in on employees’ phone calls at work.
Background
In the landmark 2001 “Nikon Case,” the Court of Cassation ruled that “an employee has the right to the respect of his private life – including the right to the secrecy of correspondence – on the work premises and during working hours.” This announcement was qualified, however, and the court further refined that unless marked by the employee as “private,” the documents and files created by an employee on a company-computer for work purposes are presumed to be professional, which means that the company can access those documents and files without the employee’s presence. This can lead to an employer using such emails against an employee in the case of employment termination. Nonetheless, employers have an obligation under privacy and labor laws to inform employees about the collection and use of their personal data.
Building off of this decision, in October 2014, the French Social Supreme Court held that evidence gathered against an employee from data that had not previously been declared to and registered with CNIL was de facto illegal.
The French Labor Code and the French Data Protection Act both stipulate rules for the use of monitoring software by employers in the event that an employer wishes to establish such mechanisms. In particular, the employer must submit information to and engage in consultation with the works council, provide information to employees impacted by the software and make a formal declaration of the proposed monitoring activities to CNIL.
CNIL Declaration: Movement Toward a Simplified Norm
Continuing this trend, the declaration issued by the CNIL on January 6, 2015, further demonstrates not only how important the CNIL is, but also how the area of data protection is evolving and become more standardized in France.
This recent declaration established that employers wishing to record their employee’s telephone communications must first declare such information by filling out a simplified declaration form in lieu of a normal declaration form. After effectuating this simplified declaration, an employer will have the ability to listen to and record employee conversations for the purpose of employee training, evaluation and betterment of the quality of service.
While this declaration serves to grant employers permission to monitor employees, it also imposes upon them a number of restrictions: (i) the employee must be notified and informed of his or her right to refuse such recordings and (ii) the employee may only keep recordings for a period of six months. The information gathered from such recordings, however, may be kept for a reasonable period of time.
The issuance [...]
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The Supreme Court of the United States announced on January 16, 2015, that it would review four cases challenging the constitutionality of state laws banning same-sex marriage in Kentucky, Michigan, Ohio and Tennessee. The U.S. Court of Appeals for the Sixth Circuit ruled in November 2014 that the same-sex marriage bans in these states were constitutional, thereby creating a split of opinion among the federal circuit courts.
As of January 30, 2015, same-sex marriage is legal in 36 states and the District of Columbia. In addition, Michigan is expected to soon begin recognizing 323 marriages that were performed there in March 2014 (during the one-day period after a district court found the state’s ban on same-sex marriage unconstitutional and before an appellate court issued a stay of the district court ruling).
A ruling by the Supreme Court is expected in June 2015. If the Supreme Court rules that state laws banning same-sex marriage are unconstitutional, the ruling will create precedent that will lead to the legalization of same-sex marriage in all 50 states. Same-sex couples would then be able to marry in any state and would be entitled to all of the rights, benefits and obligations that are extended to opposite-sex spouses under both federal and state laws.
Federal Law
In 2013, the Supreme Court ruled in U.S. v. Windsor that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional (for more information, see McDermott’s On the Subject “Supreme Court Rules on DOMA and California’s Proposition 8”). Section 3 of DOMA had provided that, for purposes of all federal laws, the word “marriage” means “only a legal union between one man and one woman as husband and wife,” and the word “spouse” refers “only to a person of the opposite-sex who is a husband or wife.” Subsequent Internal Revenue Service (IRS) and U.S. Department of Labor guidance clarified that, as a result of Windsor, favorable federal tax treatment of spousal benefit coverage would extend to all same-sex couples legally married in any jurisdiction with laws authorizing same-sex marriage, regardless of whether the couple currently resides in a state where same-sex marriage is recognized (see McDermott’s On the Subject“IRS Guidance Clarifies Retroactive Retirement Plan Impact of Supreme Court’s Windsor Ruling” for more information). The most recent IRS guidance clarifies that, effective as of June 26, 2013, retirement plans must be administered in a manner that reflects the Windsorruling.
Next Steps for Employers
All employers should continue to monitor developments in this case and in state same-sex marriage laws. The Supreme Court’s ruling could have significant consequences for employers in states where same-sex marriage has not been legalized or that have not otherwise extended spousal benefit coverage to same-sex spouses. An employer that currently extends benefit coverage to unmarried same-sex partners would need to consider whether to continue offering such benefits if all employees can marry and thereby receive spousal coverage under the employer’s benefit plans.
Now that we have eased into 2015, it’s time to think about the key employment law issues we’ll be facing in the year ahead.
Tuesday, February 10, 2015
12:30 – 1:30 pm EST
Please join McDermott Will & Emery for a complimentary webinar discussing key issues retirement plan sponsors should take into account when establishing and maintaining internal controls based on the compliance requirements Internal Revenue Service (IRS) and U.S. Department of Labor (DOL) agents review when they conduct retirement plan audits.
Specific topics will include the following:
McDermott Speakers
Nancy S. Gerrie, Partner, McDermott Will & Emery
Jeffrey M. Holdvogt, Partner, McDermott Will & Emery
To register, please click here.
The Internal Revenue Service (IRS) has released the 2014 version of Form 8839 (Qualified Adoption Expenses), as well as updated instructions. Taxpayers use Form 8839 to claim the adoption credit, an exclusion for employer-provided adoption benefits, or both. Changes to the 2014 form and instructions include the following:
Cost containment evaluation and strategies relating to overall management of human capital costs remain a continual struggle for many organizations. Labor costs, far and away, continue to be the largest cost for many organizations. Consequently, this has resulted in an organizational focus on ways to create efficiencies within their existing benefits programs. Interestingly, it appears that paid time off (PTO) is one area where organizations have an opportunity to create efficiencies, as well as mitigate long-term financial risk and compliance risk.
Historically, many organizations provided their employees with separate holidays, vacation days, personal days, and sick time. Over time, however, many of these organizations have redesigned these programs to incorporate a “total” combined time off (CTO) approach where all of these different categories of personal time are included in one overall pool of days. A CTO approach simplifies administration of these arrangements and, in general, when compared to the traditional separate days approach, results in organizations overall providing fewer days of total time off. Changing to a CTO methodology did provide many of these organizations with initial cost savings, but other potential opportunities may exist as well as new challenges that have arisen.
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