United States: Recent Developments in Employment Law

Newly Issued Guidance for Employers from the Equal Employment Opportunity Commission and the Department of Labor

Also Included: Trade Secret and State Law Developments

Title I of the Americans with Disabilities Act of 1990 ("ADA") prohibits discrimination against qualified individuals with disabilities in job application procedures, hiring, firing and other terms, conditions and privileges of employment. Job applicants and employees who believe their employment rights have been violated because they have cancer are entitled to file a charge with the United States Equal Employment Opportunity Commission ("EEOC"), which enforces the employment provisions of the ADA. The EEOC has published guidelines explaining how the ADA might apply to job applicants and employees who have or had cancer to help prevent further harassment, discrimination and retaliation claims.

Cancer is a disability under the ADA when it or its side effects substantially limits one or more of a person's major life activities. Cancer's effect on an individual depends on many factors, including the primary site and stage of the disease, the age and health of the individual and the type of treatments. Some indicia of cancer include fatigue, nutrition and weight management problems, nausea, vomiting, loss of hair, low blood counts, loss of concentration and memory, depression, and respiratory ailments. Under the ADA, the determination of whether an individual currently has, has a record of, or is regarded as having a disability due to cancer must be made on a case-by-case basis. Where the condition lasts long enough (i.e., for more than several months) and substantially limits a major life activity (e.g., caring for oneself, interacting with others, reproduction, sleeping or eating), it is a disability within the meaning of the ADA.

Before an offer of employment is made, an employer may not ask a job applicant questions about whether she has or had cancer, or about treatments related to cancer, including medical or sick leave requested for any treatment. An employer can only ask a job applicant questions pertaining to job performance, such as questions related to strength requirements, travel requirements or scheduling flexibility. However, if the job applicant voluntarily discloses that she has cancer, and the employer reasonably believes that an accommodation will be required to perform the job, an employer may ask the job applicant whether an accommodation will be needed, and if so what type. Any information disclosed by a job applicant must be kept confidential.

After an employment offer is made, an employer is permitted to inquire about a job applicant's health and may require a medical examination, so long as all applicants for the same type of position are required to undergo medical examination. If it is discovered that the applicant has or had cancer, the job offer may not be withdrawn if the applicant can perform the essential functions of the job, with or without reasonable accommodation, and without posing a direct threat to safety. In order to evaluate the applicant's ability to perform the job, the employer may ask medically related follow-up questions about the applicant's cancer.

Because the ADA does not require voluntary disclosure of an applicant's cancer or other disability, unless an accommodation is required, employers usually discover the condition after the individual has become an employee. An employer may ask a current employee whether she has cancer or some other medical condition only if the employer has a legitimate reason to believe that the cancer or medical condition may be affecting the employee's ability to do her job, or to do so safely. Absent an obvious condition, an employer may only ask for medical information about an individual's cancer when the employer has observed symptoms or received reliable information indicating that the employee has cancer or some medical condition that is causing performance problems.

If an employee has cancer, an employer is entitled to ask for information explaining the need for any requested reasonable accommodation. The employer can also ask for medical information that is part of any voluntary wellness program. An employer may require medical verification for the use of sick leave, so long as all employees are required to provide medical verification. Additionally, an employer can require updates on an employee's medical condition, where the employee's date of return is unspecified, or the employee requests an extension of her medical leave.

With limited exceptions, all medical information that an employer learns about the job applicant or an employee must be kept confidential. An employer must not disclose to co-workers that an employee has cancer or is receiving a reasonable accommodation because of cancer. Nevertheless, an employer may disclose that an employee has cancer to supervisors and managers if necessary to provide a reasonable accommodation or to meet an employee's work restrictions. The employer may also disclose that an employee has cancer to aid paramedics and safety personnel in an emergency situation. An employer can also disclose that an employee has cancer when necessary to comply with the ADA and other laws, or as needed for worker's compensation or insurance purposes.

Accommodations vary depending on the needs of the individual. Examples include: (1) leave for doctors' appointments and/or treatments; (2) periodic breaks for adjustments to work schedule; (3) permission to work at home; (4) modification of work space, including area to take medication; (5) reallocation of central functions to another employee; and (6) reassignment to another job. The employer must discuss with the employee her particular limitations and whether there is anything the employer can do to enable her to work and enjoy equal employment opportunities, unless doing so would be an undue hardship. An employer is not required to provide the reasonable accommodation that an individual wants. If the requested accommodation is too difficult or expensive, an employer should determine whether there is another easier or less costly accommodation that would meet the employee's needs. An employer is entitled to choose among reasonable accommodations so long as the chosen accommodation is effective.

The duty to provide a reasonable accommodation is ongoing, and the employer must consider each request independently. Furthermore, an employer may only exclude an individual with cancer from a job when there is a significant risk of substantial harm to the individual or others that cannot be eliminated or reduced through reasonable accommodation. The employer must evaluate the individual's present ability to safely perform the job, considering the following factors: (1) the duration of the risk; (2) the nature and severity of the potential harm; (3) the likelihood that the potential harm will occur; and (4) the imminence of the potential harm. The harm must be serious and likely to occur, not remote and speculative.

An employer who adopts and follows these EEOC guidelines should be able to reduce or eliminate its exposure to disability discrimination claims under the ADA by job applicants and employees who have been diagnosed with cancer. Our lawyers at Duane Morris are available to you for further advice and counsel in this area. Please feel free to contact us.

On December 19, 2005, the Veterans Employment and Training Service ("VETS") of the Department of Labor ("DOL") published final rules to implement the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"). USERRA provides employment and reemployment rights and continuation of benefits for members of the uniformed services who leave civilian jobs voluntarily or involuntarily to serve in the military, including the Reserves and the National Guard. Generally, returning service members must receive the same seniority, status and rate of pay they would have attained if they had remained continuously employed. Under USERRA, employers are prohibited from discriminating against employees because of their uniformed services.

These rules, which became effective January 18, 2006, apply to all private employers and state and local governments. The rules are designed to be easy to understand and are written in a question and answer format.

Among their provisions, the new rules:

• Set out the criteria that must be met in order for a service member to be eligible for reemployment: (1) the employee was in uniformed service during the absence from civilian employment; (2) the employer received advance notice of the employee's service; (3) the employee had five years or less of cumulative service in the uniformed services while employed by the same employer; (4) the employee timely returned to work or applied for reemployment according to the timetables and procedures set out in the rules; and (5) the employee did not receive a disqualifying discharge;
• Require employers to reinstate returning service members within two weeks after they apply for reemployment, unless there are unusual circumstances;
• Provide that an employee is not required to obtain an employer's permission before departing for military service in order to protect her reemployment rights;
• State that a service member's disability incurred during military service does not impede the right to reinstatement and employers must make reasonable efforts to accommodate a disability if it limits the service member's ability to perform the job;
• Clarify how a service member may prove that she was discriminated against;
• Address USERRA's definition of employer, which includes supervisors and managers in certain situations;
• Identify the three statutory defenses to claims under USERRA: (1) the employer establishes that its circumstances have so changed as to make reemployment impossible or unreasonable; (2) assisting the employee to become qualified for employment would constitute an undue hardship; or (3) the position the employee vacated was for a brief, nonrecurrent period and there was no reasonable expectation that the employment would continue indefinitely or for a significant period, therefore reinstatement is not required;
• Provide that service members have specific rights for continued coverage under their employer's healthcare and pension plans; and
• Remind employers that they are obligated to notify employees of their rights, benefits and obligations under USERRA.

At the same time as the DOL published the aforementioned rules, the DOL published a final version of the notice that employers are required to post to inform employees of their rights, benefits and obligations under USERRA.

Employers should be fully informed of their obligations under the USERRA, and formulate and implement policies so they will be in compliance with the new rules. USERRA, like most federal employment laws, does not preempt state laws that provide greater protections to employees who serve in uniformed services, and employers must comply with all applicable state laws.

In two recent opinion letters, the DOL made clear that employers may make full-day deductions from a Fair Labor Standards Act ("FLSA") exempt employee's salary for weather-related absences when the employer is open for business and the employee chooses not to come to work, even if that decision is based upon adverse weather conditions and/or transportation difficulties. In such a case, the absence is considered to be one occasioned by personal reasons under the DOL's regulations, pursuant to which a deduction can be made from a leave bank or from the employee's salary.

Alternatively, if the employer is not open for business due to weather-related circumstances, the employer is obligated to ensure that the exempt employee is paid for the missed day in any week in which work is performed. This is consistent with the salary basis requirement that an exempt employee be paid a guaranteed salary. The employer can require that a deduction be made from a paid leave bank. However, if the employee has no available leave time, including situations where an employee has a negative leave balance in a paid leave account, no deductions can be made for any time missed as a result of the employer's closing if the employee performed any work that week.

Employers can jeopardize their exempt employees' status with a policy that violates salary basis rules. Therefore, employers should ensure that all deductions from the wages of exempt employees meet salary basis requirements.

Confirming the regulations it published in August 2004, the DOL recently underscored that paralegals and legal assistants do not meet the requirements for the "learned professionals" exemption to the overtime requirements of the FLSA. The DOL explained in an opinion letter that paralegals with four-year college degrees are not exempt. Further, even paralegals holding masters degrees in business administration and who passed accounting certification examinations are not exempt unless they perform tasks specifically related to business or accounting. The learned professional exemption is available when a paralegal who possesses an advanced specialized degree in a professional field applies advanced knowledge in that field to the performance of her primary duties (e.g., a paralegal with an engineering degree applying technical knowledge to a patent case).

Law firms and companies employing paralegals in-house should understand that paralegals are not exempt from the FLSA's overtime requirement under the learned professional exemption unless the paralegal both has a degree in an area of higher learning and uses the knowledge and skills obtained from that degree in the performance of her job duties.

Most employers probably believe that their customer lists and customer information are protected because they have their employees sign employment agreements that contain confidentiality and noncompetition clauses. These employment agreements may not be enough, however, to properly protect employers from terminated employees who divulge this information to their new employers. A New York trial court recently held in ENV Services, Inc. v. Alesia that customer lists and information maintained in unlocked file cabinets, contained on the Internet and maintained in non-password protected computer files are not considered trade secrets under New York law and not protected from disclosure by employees, even with an employment agreement.

In ENV Services, a biomedical research support company (the "Company" or "ENV") brought an action against five former employees of the Company's predecessor, Medical Repair Laboratories, Inc. ("MRL"), a smaller company of which ENV purchased all of the stock, asserting claims for, inter alia, violation of restrictive covenants prohibiting disclosure of confidential information. The Company alleged that the five former employees who went to work for a competitor after the Company purchased the stock of MRL disclosed trade secrets, including customer lists, customer contact information, customer relationships, service schedules, salary information and information about employee morale and qualifications.

The Court dismissed the claims against the employees, finding that the information they disclosed to their new employer did not constitute trade secrets. Specifically, the Court held that trade secret protection is not accorded to customer lists where the names and addresses of the customers are readily ascertainable or where client information is scattered throughout the office in unlocked files, and that an employee's recollection of information pertaining to specific needs of particular customers is not confidential. The Court found that ENV's customer lists and contact information were readily ascertainable because ENV published its client list, in part, on its Web site, and further information regarding its customers was easily ascertainable through Internet sites, trade publications or the would-be customers themselves. The other allegedly confidential information was also readily ascertainable from computer files that could be accessed without use of a password by any ENV employee. Therefore, the Court held that the information disclosed by the former employees was not protected as trade secrets and could not form a basis for violation of their restrictive covenants.

The Court found that there were further problems with the restrictive covenants at issue, including that the geographic restriction contained therein was too broad, and the covenants were contained in employment agreements with MRL and not ENV. The Court also dismissed ENV's claims against the new employer for tortious interference because there was no confidential relationship between the employees and ENV, and no evidence of fraud or threats on the part of the new employer. The remaining claims were dismissed against the employees and their new employer for reasons similar to those discussed above.

While this case was decided under New York law, the lesson here should be considered by employers in all jurisdictions: If employers are concerned about protecting certain confidential information, they should be careful to protect such information in the workplace as well as consider prohibiting disclosure of such information in properly drafted employment agreements, which should be drafted and/or reviewed by counsel. Any employer, wherever situated, who wants to protect confidential information should consider establishing a trade secret protection policy both to guard its confidential information on a daily basis and to maximize its likelihood of prevailing in any action to prevent a former employee from using such information to its detriment. Duane Morris lawyers can assist you in the development of an enforceable trade secret policy in you jurisdiction.

California law now requires that employers with 50 or more employees provide at least two hours of classroom or interactive sexual harassment training and education to all supervisory employees. The definition of employer is interpreted broadly. The law requires that new supervisors be trained within six months of assuming supervisory positions, and the training must be repeated once every two years. If you or your company employ personnel in California, you should consider completing the requisite training as soon as possible.

Harassment and discrimination trainings are a good idea for all companies, regardless of size or location. They go a long way toward preventing discrimination and harassment claims from arising. They also serve as an invaluable tool to educate personnel about recognizing problems and responding appropriately when problems arise.

Duane Morris LLP employment lawyers provide these and other trainings, and can help your company meet its obligations at a reasonable cost.

The Illinois Human Rights Law now prohibits discrimination on the basis of sexual orientation and gender identity, both of which have been added as protected classifications.

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