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By
Eleanor J. Tschugunov
 The
United States Citizenship & Immigration Services (“USCIS”)
has revised its I-9 Form as of June 5, 2007. This is
the form that all employers, regardless of their size,
are required to complete and maintain to document that
each employee is authorized to work in the United
States. The new form eliminates certain List A
documents for employment eligibility verification, among
other changes and can be obtained from the USCIS website
located at
http://www.uscis.gov. Employers should begin using
the new form for any employees hired on or after
November 7, 2007. The form must be completed for all
new employees within three days of hire and should be
utilized for any re-verifications necessitated due to
the expiration of prior employment eligibility
documentation. It is not required, however, to complete
the new I-9 form for existing employees unless
re-verification is required. A grace period has been
provided for employers to transition to the new form;
however, failure to use the new form as of December 26,
2007 could subject the employer to penalties.
In
a related matter, on October 10, 2007, the United States
District Court for the Northern District of California
issued a preliminary injunction to stop the government
from enforcing its new rule aimed at using Social
Security records for immigration enforcement. The rule
was promulgated by the United States Department of
Homeland Security Immigration & Customs Enforcement
(“ICE”) and was to take effect on September 29, 2007.
The Court Order prevents any implementation until the
Court makes a final ruling after trial. On November 22,
2007, in response to the injunction, ICE asked the Court
to put the court action on hold until March 2008,
pending a revised rule planned for publication in
December 2007. ICE claims that the proposed revised
rule will pass legal muster.
The
U.S. District Court, Judge Charles R. Breyer, had found
that “the government’s proposal to disseminate no-match
letters affecting more than 8 million workers will,
under the mandated timeline, result in the termination
of employment of lawfully employed workers ….” The
judge also found that “if allowed to proceed, the
mailing of no-match letters, accompanied by the DHS’
guidance letter, would result in irreparable harm to
innocent workers and employers.” The American
Federation of Labor and Congress of Industrial
Organizations (“AFL-CIO”), along with several other
organizations, brought the lawsuit. The suit claimed
that the rule violates the law and workers’ rights,
imposes burdens and obligations on employers, and will
cause discrimination against workers who are perceived
to be immigrants.
The
rule was promulgated to address the problem faced by
employers who receive notification from the Social
Security Administration (“SSA”) that the employee names
and Social Security numbers provided do not match the
information contained in the SSA databases. Employers
questioned whether the receipt of such information was
sufficient to put them on notice that the worker was
ineligible for work and, thus, whether continuing to
employ the worker would subject them to sanctions.
Employers also feared the potential for a discrimination
claim if they inquired further or terminated the worker
upon failure to produce additional evidence of
employment eligibility.
Under the rule, if the employer wants to protect itself
from a potential violation, the employer must take
specific steps set forth in the rule and complete the
investigation processes within 90 days of receipt of the
no-match letter. The employer must check records for
clerical errors and correct them with the SSA; if there
is no clerical error, the employer must contact the
employee and give the employee an opportunity to correct
any error in the number. If the employee cannot correct
the error, the employer and employee must go to the SSA
and resolve the issue within 90 days. If the matter is
not resolved, the employer must complete a new I-9 form
and the employer is prohibited from accepting documents
that contain the disputed Social Security number. If
the discrepancy is not resolved and if the employer
cannot verify the employee’s work eligibility through
completion of a new I-9 form, the employer must decide
whether to terminate the employee, or face the risk of
any potential DHS enforcement action for having
constructive knowledge of employment of an unauthorized
alien. A determination of whether an employer does have
constructive knowledge depends on the “totality of the
circumstances.” The purpose of the rule is to apply a
safe harbor for employees and employers whose account
numbers or work authorization documents are challenged
by the SSA and where the employer complies, it should
not be subject to liability for document abuse and/or
unlawful discrimination on the basis of national origin
and citizenship status.
_______________________________
Ellie Tschugunov
is a Shareholder in the Employment & Workers'
Compensation Practice Group. She can be reached at
etschugunov@bdblaw.com
or
330.258.6490.
By
Thomas R. Himmelspach
 Federal
law requires that businesses employing more than 20
people provide COBRA benefits (benefits under the
Consolidated Omnibus Reconciliation Act) to their
employees, while businesses with fewer employees are
exempt from the requirement. (See 29 U.S.C. § 1161(b).)
COBRA requires that a business with a group health plan
offer temporary continuing health insurance coverage to
employees who would otherwise lose their benefits due to
termination, layoff, or other change in employment
status. The Sixth Circuit Federal Court of Appeals in
Cincinnati held recently that the 20-employee threshold
is not an absolute requirement to the application of
COBRA, however, and that businesses with fewer employees
can, in some cases, be required to offer those
benefits.
The case is
Thomas v. Elmwood Cemetery (C.A. 6, 2007), 489
F.3d 293, decided June 27, 2007. The plaintiff was
Silvia Thomas, who was fired from her job at Elmwood
Cemetery. Thomas sought continuing health care
benefits from Elmwood Cemetery under COBRA. Elmwood
determined it did not have to offer Thomas COBRA
benefits because it had fewer than 20 employees.
After she was
terminated, Thomas developed serious health problems
and incurred substantial medical expenses. She sued
Elmwood, alleging that it owed her continuing health
insurance coverage under COBRA. Elmwood asked the
court to dismiss the case on the ground that it had
fewer than 20 employees and, therefore, was exempt
from COBRA. Thomas argued, however, that the court
should require Elmwood to provide COBRA benefits
because it had caused her to believe she had those
benefits. Thomas claimed that during the time of her
employment, Elmwood had offered COBRA benefits to
another employee. The legal term for Thomas’s theory
of recovery is “equitable estoppel.”
The trial court
rejected Thomas’s argument and granted summary
judgment to Elmwood. Thomas appealed. The Sixth
Circuit agreed with Thomas that Elmwood could be
required to offer COBRA based on its prior conduct
even though it had fewer than 20 employees. It noted
that COBRA was an amendment to ERISA (Employee
Retirement Income Security Act), and it cited to an
earlier ruling where it held that equitable estoppel
can apply in ERISA cases. See Armistead v.
Venitron Corp., 944 F.2d 1287, 1298-300 (C.A.6,
1991). The court wrote:
Accordingly, we hold
that, in appropriate cases, courts may exercise
their equitable powers to estop defendants from
arguing that they fall below a statute’s numerical
threshold.
Thomas won the
battle on her equitable estoppel argument, but lost
the war. The Sixth Circuit agreed with her that a
small employer can be required to provide COBRA
benefits under the doctrine of equitable estoppel,
even though the law says that the requirements apply
only to businesses that employ more than 20
employees. It found, however, that Thomas failed to
show that the doctrine applied to the facts in her
case. While she presented evidence that she had
overheard conversations in the work area that
Elmwood provided COBRA benefits to another employee,
the court concluded that her evidence fell short of
a representation of such coverage by the employer.
The court wrote:
Nothing in the
record indicates, however, that Miller’s discussion
of Winn’s [the other employee’s] COBRA benefits
amounted to a representation to Thomas that she
would receive COBRA benefits…. Without more,
inferences drawn by a party from overheard
conversations about another employee do not amount
to representations to or about the overhearing party
In summary,
businesses employing fewer than 20 employees need to
be aware that they can be required to provide COBRA
benefits if, by their conduct or representations,
they lead their employees to believe they are
covered by those benefits.
_______________________________
Tom Himmelspach
is a Partner in the Health & Medicine
Practice Group. He can be contacted at
thimmelspach@bdblaw.com or
330.491.5284.
By
Gerald B. Chattman
 Employers in Ohio worry that providing a potentially negative job
performance reference about a less than stellar current
or former employee in response to a request from a
prospective employer will subject them to a risk of suit
for defamation or invasion of privacy. Therefore,
although they really want to give colleagues fair and
accurate appraisals of former employees, they refrain
from doing so out of caution. Ohio employers can put
their fear to a qualified rest, given the protections
afforded under Ohio’s Job Performance
Initiative/Qualified Immunity statute. The statute
became effective on July 3, 1996. This statute does not
shield references or disclosures provided prior to July
3, 1996. For some reason, this statute has not been
well publicized and is not well known to Ohio employers.
When asked for a reference, the reference must be made in response to an
actual request. Unsolicited references are not
protected for a current or former employee. An employer
is immune from civil liability when it responds to the
request in good faith, meaning it provides only truthful
information.
Under Ohio law, to overcome the presumption of good faith, the former
employee must clearly prove one of the following:
1.
That the
employer knew the information provided was false and
deliberately intended to mislead the prospective
employer, or had a malicious purpose in disclosing the
information; OR
2.
That the
employer’s release of information constitutes and
unlawful discriminatory practice as defined in other
sections of the Ohio Revised Code.
The law benefits employers by putting the burden of proof on the employee
and by protecting the employer from a good faith
mistake.
Recently, there has been a nationwide trend in protecting employers who
disclose information, and Ohio’s immunity statute
follows that trend; however, the Ohio statute limits
immunity disclosures to “job performance” information.
Although there is protection for disclosures made in
good faith, employers should engage in a prudent course
of action by limiting reference responses to dates of
employment, last position held, and salary at the time
of termination, unless additional information is
specifically requested, e.g. attendance, reason for
separation, etc.
The following suggested guidelines should help ensure responses to
information requests are conducted in good faith, and
therefore immune from any liability.
1) Act in good
faith. Never submit comments in a reference
maliciously or with ill will.
2) Be accurate.
If unsure about information, exercise due diligence. If
an employee was fired for a valid reason, explain it.
3) Maintain
records. Documentary material on an ex-employee is
always beneficial. Businesses should maintain hard
evidence of incidents knowing that an unsubstantiated
allegation could lead to a lawsuit.
4) Obtain consent.
In some states, consent of the former employee is
required to release basic information such as work
duration, duties and reports of violence or drug abuse.
Even where not required, such a practice creates a presumption of good
faith. Some companies avoid continued contact with a
problematic ex-employee by requiring the prospective
employer to obtain the consent from the employee.
5) Be Uniform.
Provide the same type of information about all
employees. A company should create a pattern of
consistent information disclosures.
6) Use Waivers.
Inserting a waiver in a departing employee’s severance
package releasing the business for all claims based on
the voluntary disclosure of information about the
employee to a third party can avoid liability.
Finally, and on a related note, since Ohio provides protection for good
faith disclosures, there is room for concern when a
company fails to make a disclosure that could expose an
employer receiving a request to harm. Specifically, if
a company discharges an employee for violent activity
and then fails to reveal that fact when a subsequent
employer requests a reference, the failure has triggered
liability in some jurisdictions. The protection,
although a shield, could turn into a sword in the wrong
hands.
_______________________________
Jerry Chattman
is a Shareholder in the Employment & Workers'
Compensation, Business, and Nonprofit
Practice Groups. He can be contacted at
gchattman@bdblaw.com or
216.615.7354.
By
Janice E. Casanova
 For
the first time in seven years, the Ohio Supreme Court
reversed one of its major rulings. On September 27,
2007, in a 5-2 decision, the Court ruled in State ex
rel. Gross v. Indus. Comm.,115 Ohio St. 3d 249 that
a fast-food employee who was injured while violating a
written workplace rule is still entitled to workers’
compensation benefits.
David Gross, a 16-year
old fast-food worker was seriously injured when he
ignored directions on cleaning a pressure cooker. Gross
had been warned several times, both verbally and in
writing, not to boil water in the pressure cooker to
clean it. Gross ignored these warnings and on the night
of the incident, he opened the lid and severely burned
himself and two other employees.
A few months after the
incident, after an extensive investigation, the employer
fired Gross for violating a written work rule that
stated employees were not to put water in the pressure
cooker. In December 2006, the Ohio Supreme Court in
Gross I refused to award Gross temporary total
disability compensation because the Court felt that
Gross effectively quit his job by willfully disobeying
written safety instructions.
The Gross I
decision met fierce criticism from injured workers’
attorneys. The attorneys argued that the Gross I
decision upset the workers’ compensation balance by
injecting fault into a no-fault system. On September
27, 2007 in Gross II, the Supreme Court reversed
its decision in Gross I, rendered just
nine months earlier. The Supreme Court stated that it
was not its intention to expand the voluntary
abandonment doctrine by applying the doctrine to
pre-injury conduct or conduct contemporaneous with the
injury. The Court further emphasized that it was not its
intention in Gross I to inject fault in the
voluntary abandonment analysis or to otherwise undermine
the no-fault nature of the workers’ compensation system.
Employers obviously have
reason to be cautious about the effect of this Court’s
decision. Although the Court limited its decision to
the narrow facts of the Gross case, it now
appears that employers may be prohibited from denying
TTD benefits to an employee who is injured in the course
of his misconduct.
_______________________________
Janice Casanova
is an Associate in the Employment & Workers'
Compensation
Practice Group. She can be contacted at
jcasanova@bdblaw.com or
614.227.4298.
By
Barbara A. Knapic
The Ohio Bureau of
Workers’ Compensation, under newly appointed
Administrator, Marsha Ryan, has been considering
potentially sweeping changes to Group Rating and its
method of reserving claims.
Group rating has come
under considerable scrutiny in the last year or more due
to the perceived inequities in the system. Group rating
is a system by which certain employers can “group” or
pool together according to their workers’ compensation
loss experience and use that positive experience to save
money on premiums. Governor Strickland committed to
look at this program when he was elected.
Presently, the maximum
discount an employer can receive in a group rating –
where it is grouped with other employers of the same or
similar “experience” – is 90 percent. Many complain
that this allows those employers to pay only a portion
of their share of the costs while other employers are
left to bear costs far greater than their share. On the
other hand, proponents of the current group rating
system and the present discounts point out that those
employers with the maximum discounts have no claims and
therefore should not be paying more into the
system.
Some employers
experience extreme difficulties when they are in a
highly discounted group and have one claim, or more,
that then “kicks” them out of group, resulting in
skyrocketing premiums. According to several employers
who testified recently at a public hearing in Columbus
on group rating, such scenarios have caused some,
particularly smaller employers, to either drastically
cut back their businesses or go out of business all
together. This has a negative impact on economic
development in Ohio.
After Administrator Ryan
took her position in early summer of this year, she
reviewed the group rating program and subsequently
recommended to the BWC Board of Directors that the
maximum discount be reduced from 90 percent to 80
percent with additional reductions to be implemented in
the upcoming years. This drew objections from some
employer groups, such as the Ohio Chamber of Commerce
and group sponsors, such as third party administrators.
Following the public
hearing on November 14, 2007, a compromise was proposed
for presentation to the BWC Board of Directors. Rather
than the current 90 percent discount or the originally
proposed 80 percent discount, the Board met and adopted
an 85 percent maximum premium discount.
The new 85 percent maximum
discount goes into effect July 1, 2008.
Administrator
Ryan indicated the BWC’s intention to continue to reduce
the maximum discounts in the future.
House Bill 100 mandates
the BWC to adopt a “more transparent” form of reserving
claims by June of 2008. To that end, the BWC formed a
focus group and is considering a new program, developed
by the company who developed the current system.
Presently, the BWC reserves claims through a system
referred to as MIRA.
Under MIRA, multiple
factors are given consideration and these factors are
somehow weighted to ultimately establish the reserve on
a claim. However, under the current system, it is
unclear exactly what those factors are and how they are
weighted. As a result, there is no predictability,
something that frustrates state-funded employers.
By having no
predictability to its reserves and therefore its
premiums, an employer is unable to adjust or plan for
potential increases or decreases in workers’
compensation costs. Again, one claim can result in a
reserve so high that it kicks the employer out of group
rating and there is no way, with any certainty, to
predict this reserving increase until it happens.
Another complaint with
the current reserving system is that the reserves bear
no realistic relationship to the actual facts of the
claim. For example, a claim allowed for a lumbar strain
with no compensable lost time might be reserved at
$35,000 while a claim allowed for a herniated disc with
surgery and lost time might be reserved at $10,000. Not
only does this result in unequal and unfair costs to
employers, it also causes small claims with high
reserves to be settled in excess of their actual worth
(in order to settle the claim under the reserve.) While
the settlement may ultimately save that specific
employer money, those inflated settlements adversely
impact the state fund overall.
The BWC focus group and
the BWC are looking at a new program, created by the
same company who created MIRA, called MIRA II. While
little is known about MIRA II at this point, according
to BWC sources, there will be fewer factors (i.e. age of
claimant, diagnosis, geographic location of claimant,
lost time, etc.) considered and employers should be
advised of the factors used when setting the reserve on
a claim. The question remains as to whether the
employers will be apprised of all the factors and, more
importantly, how those factors will be weighted in
coming to a reserving decision.
There will be true
transparency, accountability and predictability in the
reserving system when employers know what considerations
are factored in and what weight those factors are given
when establishing a claim reserve. At that point,
employers can use the reserving system as a tool for
business planning.
_______________________________
Barb Knapic
is a Partner in the Employment & Workers' Compensation
Practice Group. She can be contacted at
bknapic@bdblaw.com or
330.491.5237.
Ohio's Minimum Wage Set to
Increase Again
Under Ohio’s minimum wage constitutional amendment that
was passed into law by voters in November of 2006, the
state’s minimum wage increases on January 1 of each
calendar year according to increases in the Consumer
Price Index. Accordingly, the Ohio Department of
Commerce recently issued guidance stating that the
minimum wage will rise to $7.00 per hour beginning
January 1, 2008. Likewise, the minimum wage for
tipped employees will rise to $3.50 per hour. As the
Ohio minimum wage remains higher than the newly updated
federal minimum wage, Ohio employers should plan to
increase wages in compliance with these new rates as of
January 1, 2008, unless your organization qualifies for
one of the few exemptions from the Ohio law.
____________________________________
Interest Groups Lobbying for
Mandatory Paid Sick Leave for All Ohio Employers
Recently, a coalition of interest groups kicked off a
campaign to initiate a law requiring all Ohio employers
with 25 or more employees to provide a minimum of seven
days paid sick leave to full-time employees. Under the
proposed bill, part-time workers would also be entitled
to a pro-rated amount of paid sick time depending on the
number of hours they work. This campaign is being led
by the Coalition for Healthy Families.
www.sickdaysohio.org
Procedurally, the group aims to
gather enough petition signatures to require the General
Assembly to consider and debate the proposed bill during
the early months of 2008. If the General Assembly fails
to enact the proposed legislation, or some version
thereof, the Coalition for Healthy Families will then
seek to obtain additional petition signatures to include
the proposed law as a referendum on the November 2008
general election ballots.
To the extent that providing
mandatory paid sick time would be detrimental to your
organization, you are encouraged to get involved by
contacting your state representative or participating in
business interest groups who are working to oppose the
proposed law.
____________________________________
Update on Ohio
Civil Rights Commission's New Pregnancy Discrimination
Rules
On November 7, 2007, the Ohio Civil Rights Commission (OCRC)
voted 4 to 1 to approve amendments to the administrative
rules implementing Ohio’s pregnancy discrimination
statute. Specifically, the new rules mandate that
employers offer pregnant employees the same type of
light-duty or modified work options that are available
to workers who are injured on the job. In addition, the
rules require employers to provide at least 12 weeks of
unpaid leave for medical reasons related to pregnancy or
childbirth, as certified by a doctor. These rules apply
to all Ohio employers with four or more employees.
The rules are now under review by a
legislative committee called the Joint Committee on
Agency Rule Review (JCARR). JCARR has the authority to
approve or suspend the new rules adopted by the OCRC.
If JCARR finds that the rules are inconsistent with Ohio
statutes, it can suspend them and recommend that the
full General Assembly revoke the new rules. If JCARR
approves the new rules, they will become effective.
JCARR is comprised of members of
the General Assembly. You are encouraged to contact
these elected officials to express your opinions in
support of or in opposition to these new pregnancy
discrimination rules. A list of current members is
available at
http://www.jcarr.state.oh.us/index.cfm#down. In the
meantime, you are encouraged to begin evaluating your
organization’s leave of absence and light duty policies
to ensure your ability to quickly comply if and when the
rules become effective.
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Employment & Workers'
Compensation
Practice Group,
Associate
SM
Mr. Nilges assists and manages
the defense of employers in various employment
related lawsuits and administrative proceedings
regarding alleged illegal discrimination, breach of
employment contracts and non-compete agreements,
FMLA violations, claims for unemployment
compensation benefits, and trade secret
misappropriation. He counsels employers
regarding compliance with various employment laws
including the FMLA, FLSA, ADA, ADEA, Title VII,
USERRA, COBRA, and WARN. In addition, Mr.
Nilges drafts employment agreements, consulting
agreements, separation agreements, and affirmative
action plans for employers and counsels executives
regarding the same and counsels employers regarding
best practices for termination procedures. He
is recognized as one of Ohio’s Super Lawyers- Rising
Stars™, in the 2007 Cincinnati Magazine, as
voted by his peers.
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Kudos
Susan C. Rodgers
(Akron) has joined
the Board of Trustees of the Stark County District
Library. Ms. Rodgers was appointed by the County
Commissioners of Stark County, and will serve the
remainder of the seven-year term to which Taryn Heath
was originally appointed; Heath resigned when she was
appointed to the Court of Common Pleas.
The following Boca Raton attorneys were
listed as Top Lawyers in the 2008 Edition of South
Florida Legal Guide, a publication of CEO
Publishing Group, Inc.
I. Jeffrey Pheterson
(Boca Raton)
Employment & Workers' Compensation
Save the Date for
These
Upcoming Presentations:
December 3 -
Barbara A. Knapic (Canton)
will be speaking at a
Lorman Education Services Advanced Workers' Compensation
Seminar in Westlake, Ohio. She has also been asked to
chair a two-day statewide Ohio Worker's Compensation
Conference in April.
December 19 -
Denise J. Bleau
(Boca Raton) will be giving a seminar to the
staff of Daszkal Bolton, LLP on the “Pitfalls of
E-mails” and the “Do's and Don'ts of Discharge.”
On January 11, 2008, the Palm Beach County Bar
Association Labor and Employment CLE Committee is
putting on a seminar, which will include a panel
discussion with seven area judges. Ms. Bleau, a member
of the Employment CLE Committee, will be one of four
speakers at the event. She will provide a Case Law
Update, and a review of relevant local opinions and
administrative orders. Finally, on January 23, 2008,
the South Palm Beach County Bar Association, Labor and
Employment Committee and Immigration Committee will be
offering a seminar entitled, Caught in the Legal
Crossfire: Employer Strategies for Immigration and
Employment Law in 2008. Ms. Bleau, Co-Chair of the
SPBC Labor and Employment Committee, will be serving on
the panel of experts, along with one other employment
attorney and two immigration attorneys.
Out and About - Recent Presentations:
Hans A. Nilges
(Canton) was invited to speak at the
Association of Water Technologies’ 2007 Annual
Convention and Exposition which was held November 7-10
in Colorado Springs, Co. Due to increasing legionella
lawsuits, Hans chose the topic of “Legionella
Litigation: An Overview and Case Law Update.” Further,
he was invited to participate in the
Legislative/Regulatory Committee panel discussion, of
which he is a member.
Susan C. Rodgers
(Akron) presented
to the Boca Raton Chamber of Commerce Successful Women
in Business in Boca Raton, Florida. Her presentation was
entitled, “Sexual Harassment: How to Protect Your
Company.”
In October, BDB sponsored its Annual
Employment & Workers’ Compensation Seminar in Akron,
Canton and Columbus, Ohio. This year, the practice group
presented a mock mediation dealing with pregnancy
discrimination, workers’ compensation, FMLA, ADA and
settlement of claims. There were also legislative
updates for employment law and workers’ compensation.
BDB South Florida sponsored its first
annual Employment Law Seminar in October at the
Renaissance Hotel in Boca Raton, Florida. Topics of
discussion included: “Update and Overview of
Employment Law,” “Do's and Dont's of Discipline and
Discharge,” “Overtime Law - Who is and Who Is Not
Exempt?” and “E-Mails - Avoiding the Pitfalls.”
Denise J. Bleau,
I. Jeffrey Pheterson
and
Sally
Still
(Boca Raton) all participated in the event.
If you are interested in obtaining
information on upcoming seminars or would be interested
in having speakers from Buckingham, Doolittle &
Burroughs, LLP make a presentation to your organization,
please contact: Lorna Henderson, Client Relations
Administrator
lhenderson@bdblaw.com or 800.686.2825 ext.
86473. |
