Pennsylvania Employment Lawyer & Attorney : Russell Krafft & Gruber Law Firm : Lancaster, York, Harrisburg

The Family and Medical Leave Act (FMLA) turns 15 this year and workers’ rights advocates, the Bush Administration and the Labor Department are weighing in on proposed changes to the law. According to an April 24 article in the Washington Post,

“...workers would have to tell their bosses in advance when they take nonemergency leave, instead of being able to wait until two days after they left. They would have to undergo "fitness-for-duty" evaluations if they took intermittent leave for medical reasons and wanted to return to physically demanding jobs. To prove that they had a "serious health condition," they would have to visit a health-care provider at least twice within a month of falling ill. What's more, employers would have the right to contact health-care providers who authorized leave.”

As I reviewed these proposals it occured to me that some of these changes may serve to blur the distinction between the FMLA and the Americans with Disabilities Act of 1990 (ADA). It is not uncommon for employees to bring claims under both the FMLA and ADA. Avoid getting tripped up in the similarities of FMLA and ADA by understanding the distinctions between the two laws.

• Print
• Comments
• Trackbacks

Employment Practices Liability Insurance (EPLI) may be a relative bargain in the continued “soft” insurance market and employers should consider adding or increasing insurance coverage to protect against employment claims. EPLI insurance is somewhat quirky and the following are some considerations when evaluating policies:

1. Coverage:  EPLI policies typically cover claims of wrongful discharge, workplace harassment and discrimination. Many offer a more comprehensive list of covered acts, including negligent hiring/supervision/evaluations, invasion of privacy, defamation and intentional infliction of emotional distress.  Coverage typically applies to claims made by full time employees so as to exclude those by part-timers, temporary, seasonal and independent contractors.  In comparing policies, look for one that has the most expansive coverage. 
2. Exclusions.  EPLI policies exclude many claims based on the statute that creates the legal right or the activity that gives rise to the claim. Exclusions apply to the Fair Labor Standards Acts; the National Labor Relations Act; the Worker Adjustment and Retraining Notification Act (WARN); the Consolidated Omnibus Budget Reconciliation Act (COBRA); the Employee Retirement Income Security Act (ERISA); the Occupational Safety and Health Act (OSHA); the costs associated with providing "reasonable accommodation" under the Americans with Disabilities Act (ADA); as well as  claims arising out of downsizing, layoffs, workforce restructurings, plant closures or strikes. Punitive damages are always excluded. Carefully evaluate the excluded claims in light of your business practices. In the case of multi-state operations, be aware that some state laws create substantial employment rights that must also be evaluated under the policy language.
3. Policy Limits and Deductibles: Policy limits and deductibles usually apply on a per claim and aggregate basis. For example, coverage may be limited to $250,000 for each separate claim with an overall aggregate cap of $1 million for all claims. Employers must formulate their insurance goals in setting the appropriate deductibles and limits. Some employers view EPLI insurance as catastrophic coverage and are willing to accept a high deductible that allows them to handle smaller claims themselves.  However, other employers are looking for more blanket coverage.
4. Defense Costs, Selection of Counsel and Settlement: Defense costs are usually included within the EPLI policy’s limits, which has good and bad points. Many times, the legal expense is the largest cost to an employer in dealing with merit less claims. However, including defense costs means that every dollar an employer spends defending a claim reduces the amount available for settlement or to pay a judgment.  Since the existence of insurance coverage must be disclosed as part of discovery in most law suits, a plaintiff’s attorney will factor insurance coverage into his or her case evaluation. The defense cost feature may influence plaintiffs’ counsel to try to settle early, rather than force an employer to incur litigation costs that will only erode the insurance dollars available for potential settlement.  Employment claims often have significant employee relations ramifications making settlement a particularly important issue. Insurers view employment claims the same as any other insurance matter by evaluating only the potential for liability and the amount of damages. The employer and insurer may be at odds over settling a case. EPLI policies address this stalemate by either giving the insurer the right to settle without the employer’s approval or, more frequently, giving  an employer control over settlement, but adding a “hammer clause”. These clauses are designed to limit the insurer’s potential exposure if the policyholder passes up an opportunity to settle a claim recommended by the insurer.  Hammer clauses provide that if there is an offer to settle a claim that the policyholder refuses accept, then the insurer will not be liable for a subsequent settlement or judgment in excess of a rejected settlement amount.  
5. Policy Types and Insurance Company Notification: EPLI policies are typically written on a “claims  made” basis meaning that the claim must be incurred during the coverage period and reported to the insurer during an extended reporting period. Since employment actions may take years to turn into a claims, an employer may be left with no coverage if the policy is dropped or tail coverage isn’t purchased.  Untimely notice to an insurance carrier can void coverage for and employment claim.

* Not intended to be Exhaustive.

• Print
• Comments (1)
• Trackbacks (2)

The Department of Labor released the new proposed FMLA regulations on Monday, February 11, 2008. I am in the process of digesting the new regs and will post a summary shortly. Thanks to Michael Fox at Jottings By An Employer’s Lawyer for the early release tip.

• Print
• Comments
• Trackbacks

Obtaining a release from an employee that waives the myriad of federal and state employment law claims is an art and not a science. It requires balancing contradictory government regulations, harmonizing competing employee relations goals, and cajoling, a more than likely, disgruntled employee.

When a business pays money to a departing employee, it wants the matter over. However, the patchwork of government regulations and varying court decisions interpreting them make it difficult to obtain that degree of certainty. Sometimes employees challenge the validity of a release and try to pursue their claims. In some cases, regulations even allow an employee to keep the money while suing the employer.

The legal standard for obtaining a valid release generally involves assessing whether the employee's waiver of claims was "knowing and voluntary". In the case of claims under the Age Discrimination in Employment Act (ADEA), the U.S. Department of Labor used 9 pages of regulations to define when a waiver is knowing and voluntary. In other cases, Pennsylvania courts assess the knowing and voluntary release of discrimination claims based on the following factors:

• The clarity and specificity of the release language
• The employee's educational and business experience
• The time given the employee to deliberate before signing the release
• Whether the employee knew or should have known what rights he or she was giving up
• Whether the employee was encouraged to seek or sought legal counsel
• Whether there was an opportunity to negotiate over the terms
• Whether the employee was given consideration exceeding the benefits he was already entitled to receive.

• Print
• Comments (1)
• Trackbacks

Staffing is a critical and time consuming function for human resource professionals. To expedite the process, many employers turn to staffing agencies to assist in or even take over the staffing function. Relationships with staffing agencies can take a variety of forms including temporary placements, temp to hire arrangements, and employee leasing with a professional employer organization (PEO).

 Many employers are surprised to learn that their company may have legal responsibility and even liability for temporary and leased employees. Liability arises when a company has the right to control the manner of the performance of the worker's activities.   When such a right to control is present, a company may be a joint employer with the temporary agency or PEO. Most common temporary agency relationships create joint employment because the temporary worker performs services at the company's business location under the direction and supervision of the company.

 The prime example of the joint employment principal in Pennsylvania is found in the case of JFC Temps, Inc. v. WCAB (Lindsay and G&B Packing), 680 A. 2d 862 (Pa. 1996). In JFC Temps, a worker was hired by a temporary agency, and was assigned to work for a trucking company. The worker performed his services at the trucking company, and the trucking company manager informed him of his work hours, the equipment he would be using, and the locations to which he was to drive. No representative of the temporary agency was ever at the trucking facility. The worker was injured in the course of the performance of the services for the trucking company. The injured worker sought workers' compensation benefits from the temporary agency.

Under these circumstances, the Pennsylvania Supreme Court held that the trucking company (not the temporary agency) was the injured worker's employer for worker's compensation purposes because the trucking company possessed the right to control the manner of the performance of the claimant's work. In fact, the Court noted, the temporary agency had no substantial contact with the claimant other than processing his paycheck, and, as such, could not be said to have controlled the manner of performance of the work. The Court so held despite the fact that the temporary agency had the authority to terminate the injured worker's employment.

The obvious problem for the trucking company was that the workers' compensation claim was likely uninsured since it did not consider the temporary worker to be one of its employees. This type of unexpected liability translates into other areas of the employment relationship like pension and medical benefits, payroll taxes, and discrimination laws. 

• Print
• Comments
• Trackbacks

Who's an Employer?  In the past week, I've had occasion to talk to several HR professionals about how the number of employees can define whether various employment laws apply, and that just a few employees either way can make a big difference, particularly for small employers.  Pay attention to the following shortlist, particularly if you have turnover and frequent changes in the number in your workforce.  Remember that how part time employees are counted also changes from statute to statute.  There may also be exemptions from coverage for certain industries like agriculture.    

      Total Number of Employees:                          Subject to the following employment laws:

• All employers regardless of size . . . . . . OSHA, Equal Pay Act (EPA), Immigration Reform and Control Act (IRCA)
• You have 4 or more employees . . . . . .  Pennsylvania Human Relations Act, Lancaster County Human Relations Ordinance
• You have 15 or more employees . . . . . . Title VII,   Americans with Disabilities Act (ADA)
• You have 20 or more employees . . . . . .  Age Discrimination in Employment Act, COBRA  
• You have 50 or more employees . . . . . . Family and Medical Leave Act (FMLA)
• You have 100 or more employees . . . . . . Worker Adjustment and Retraining Notification Act

The above is a partial list of statutes and law that apply to employers in Pennsylvania. For more information federal discrimination laws, consult the EEOC website.

• Print
• Comments
• Trackbacks