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Significant Employment Law Changes in 2009

The year 2009 was one of the most active years in recent memory for significant employment law changes. Unfortunately, most of the new developments are not employer friendly, and have only negative implications from a management perspective. The new laws and regulations include:

The Lilly Ledbetter Fair Pay Act

The Lilly Ledbetter Fair Pay Act (the “Ledbetter Act”) – the very first legislation signed by newly-elected President Obama – was arguably the most dramatic change of 2009. Signed on January 29, 2009, this law is designed to protect an employee’s right to challenge historical pay inequities caused by unlawful discrimination.

Lilly Ledbetter was an employee of Goodyear from 1979 until 1998. Because of what were eventually deemed discriminatory performance evaluations in her early employment years, Ledbetter received smaller wage increases. As a result, by the end of her employment, Ledbetter’s earnings were between 70 and 85 percent of her male colleagues’ salaries, an inequity she did not discover until near the end of her career.

The United States Supreme Court held that Ledbetter had waited too long after the discriminatory pay decisions to assert her claim. Ledbetter v. Goodyear Tire & Rubber Co, 550 U.S. 618 (2007). More specifically, the Court found that the typical 300 day statute of limitations for challenging alleged discriminatory practices starts with the “discrete act” of the original challenged decision, much like the limitations period for challenging a discharge begins with the actual termination. (The limitations period in most states is 300 days, but is only 180 days in states that do not have a civil rights agency.) Since Ledbetter’s claims were raised decades after the original “discrete acts” of the discriminatory evaluations, the Court ruled her claim untimely.

The Ledbetter Act specifically rejects the Supreme Court’s reasoning, and provides that the charge-filing period for compensation challenges commences anew whenever an individual is “impacted” by the application of the challenged decision or practice. In other words, employees can now challenge decades-old compensation decisions, since the potential “impact” of the challenged decision continues with each new payroll cycle. So long as the employee remains employed, the statute of limitations for compensation challenges never tolls – since it starts over with each new paycheck.

As a practical matter, this means that employers may be required to recreate historical context that long ago disappeared with fading memories and manager attrition. Imagine, for example, trying to identify and produce evidence to justify and fully explain compensation decisions from the 1980s (or even from the early 2000s), and you begin to get a sense of the nightmare scenarios employers may confront when responding to the newly authorized compensation claims under the Ledbetter Act.

The Americans With Disabilities Amendments Act

The ADA Amendments Act (“ADAAA”) was actually enacted by President Bush shortly before he left office, but its effective date was January 1, 2009. The ADAAA is intended to overturn a series of Supreme Court decisions that interpreted the Americans with Disabilities Act of 1990 in a way that made it difficult to prove that an impairment qualifies as a “disability.”

The ADAAA retains the basic definition of “disability” as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment. However, the ADAAA broadens the definition of “disability” by:

  • expanding the number of “major life activities,” which in turn will increase the number of individuals who qualify as disabled;
  • modifying the regulatory definition of “substantially limits” from “prevents or substantially limits” to a new, broader definition the EEOC is currently developing;
  • specifying that “disability” includes any impairment that is episodic or in remission if it would substantially limit a major life activity when active; and
  • prohibiting consideration of “mitigating measures,” such as medication or prosthetics devices, when assessing whether an impairment substantially limits a person’s major life activities, with the exception of ordinary eyeglasses.

Under the ADAAA, more employees will be deemed “disabled,” and therefore entitled to protected status. In addition, the determinative legal issue in most ADAAA claims will shift from whether an individual is in fact disabled, to whether the individual suffered unlawful discrimination or is entitled to an accommodation. Expect disability claims to steadily increase under this more expansive and employee-friendly legislation.

The Genetic Information Nondiscrimination Act (“GINA”)

Designed to prohibit the improper use of “genetic information” in health insurance and employment, GINA was also enacted by former President Bush. GINA’s employment provisions did not become effective until November 2009. GINA prohibits group health plans and health insurers from denying coverage to a healthy individual or charging that person higher premiums based solely on a genetic predisposition to developing a disease in the future. GINA also bars employers from using an individual’s genetic information when making hiring, firing, job placement, or promotion decisions, and strictly limits the disclosure of genetic information.

While most employers automatically assume they do not collect, and have no access to “genetic information,” that term is defined by GINA to include information about any disease, disorder, or condition of an individual’s family members (i.e., an individual’s family medical history). Family medical history is included in the definition of “genetic information” because it can be used to determine whether someone has an increased risk of contracting or developing a disease, disorder, or condition in the future.

Under GINA, it is also illegal to harass employees because of their genetic information. Such harassment may include making offensive or derogatory remarks about an employee’s genetic information, or about the genetic information of an employee’s relatives. Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not serious, genetic information harassment is illegal when it is so severe or pervasive that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being discharged).

In addition, employers are required to post GINA information along with the other Equal Employment Opportunity postings.

This particular legislation remains somewhat of a mystery to most employers, in part because the final regulations interpreting the statute have yet to be issued. The Equal Employment Opportunity Commission is responsible for enforcing GINA’s employment provisions, and must approve the final regulations before they are published.

Electronic Verification of Employment Eligibility

Federal contractors and subcontractors are required, as of September 8, 2009, to utilize an internet system known as E-Verify to determine the eligibility of new employees to work in the United States. The E-Verify system is operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA), and compares information from an employee’s I-9 form with DHS and SSA databases to verify eligibility.

Newly Revised FMLA Regulations

On November 17, 2008, the Department of Labor issued its long-awaited revised regulations under the Family and Medical Leave Act (FMLA). The newly revised regulations include expansions to cover military leave, and became effective on January 16, 2009.

Among the most significant changes under the newly revised regulations are seven brand new or revised “model” forms that are designed to assist covered employers when announcing FMLA leave rights to applicants and employees, and when administering the FMLA. The sheer number of regulatory changes are far too numerous to quickly summarize, but it is fair to say that many of the new regulations are employer friendly. For example, employers now have:

  • the ability to track FMLA leave in increments of one hour;
  • more time to determine and announce whether employees are eligible, or qualify, for FMLA leave;
  • the ability to consider FMLA leave when administering perfect attendance bonuses;
  • newly clarified rights to reject incomplete or insufficient medical certifications;
  • a new and easier method to administer rights to authenticate medical certifications;
  • the right to enforce customary rules and procedures for reporting absences and using paid time-off benefits, so long as those rules are not more restrictive than the FMLA allows; and
  • newly created and more definitive standards for determining whether an employee has timely visited a health care provider in connection with acute conditions and for follow-up treatment.

The bad news for employers is that unscrupulous employees can still periodically “self diagnose” their serious health conditions, and misuse intermittent leave. In that regard, the Department of Labor largely ignored employers pleas for reform.

New Military Leave Under The FMLA

On October 28, 2009, President Obama enacted the 2010 National Defense Authorization Act, which expands the recently-enacted “exigency” and “caregiver” leave provisions for military families under the FMLA. The military leave provisions of the FMLA were originally enacted by President Bush in 2008 to provide “exigency leave” of up to 12 weeks for family members of reservists for urgent needs related to a reservist’s call to active service, and up to 26 weeks to care for an injured reservist or active duty service member. The 2009 amendments:

  • expand exigency leave to include active duty service members who have been deployed to a foreign country. Previously, exigency leave was limited to reservists.
  • expand caregiver leave to include veterans who undergo medical treatment, recuperation, or therapy for a qualifying injury or illness within five years of the end of their military service. Previously, caregiver leave was not available to most veterans.

Pro-Labor Executive Orders

In the first month after taking office, President Obama made good on a campaign promise to organized labor to “play some offense” by utilizing executive orders. In three separate, rapid succession, and sparsely reported orders, President Obama:

  • required federal contractors to post a notice informing employees of their right to be represented by labor unions; and revoked a Bush-era executive order requiring the posting of an explanation that employees can object to the use of their contractually required dues for purposes unrelated to collective bargaining, contract administration, and grievance adjustments.
  • prohibited federal contractors from using federal funds to persuade employees not to join a union, such as preparing written materials, hiring legal counsel for advice on persuader activities, or paying employee wages during persuader-activity meetings.
  • required contractors that assume a federal contract previously performed by another contractor to offer employment to the predecessor’s employees, unless doing so would cause the successor contractor to layoff or discharge its existing workforce.

Human resource professionals and employment attorneys have been predicting for years that employee rights, and employer obligations, would likely increase in the foreseeable future. This past year was certainly illustrative of that point.