On January 27, a campaign to amend the Ohio Constitution and raise Ohio’s minimum wage – led by Ohioans for Raising the Wage – took an important step forward when Ohio Attorney General Dave Yost certified that the campaign’s summary of its proposed constitutional amendment was “fair and truthful.” To summarize, the proposed amendment would:

  • Increase the state minimum wage rate from $8.70 per hour to $9.60 per hour on January 1, 2021
  • Increase the state minimum wage rate in equal increments annually for four years to reach $13.00 per hour on January 1, 2025
  • Annually adjust the state minimum wage rate for inflation after January 1, 2025, consistent with existing constitutional language
  • Increase the state minimum wage rate to match the federal minimum wage rate if the federal minimum wage rate is higher than the state minimum wage rate at any time

The Ohio Attorney General’s certification is important because it moves the proposed amendment one step closer to being voted on by Ohioans in November of this year. The proposed amendment still, however, needs the Ballot Board’s approval and 442,958 valid signatures before July 1, 2020 in order to be placed on the November ballot.

Even though the steps above must be completed before this proposed amendment is put to a vote, employers should continue to monitor its progress as the impact of such minimum wage rate increase would be substantial – equaling almost a 50% increase to the minimum wage rate over the next five years.

Recently, an Ohio federal court rejected an individual’s claim of entitlement to FMLA leave to care for his sister’s children. In Brede v. Apple Comput. Inc., N.D. Ohio No. 1:19-cv-2130, 2020 U.S. Dist. LEXIS 11275 (Jan. 23, 2020), the plaintiff argued that his former employer interfered with and retaliated against him for using FMLA leave. In particular, the plaintiff asserted he was entitled to FMLA leave to either: a) care for his seriously ill sister; or b) due to his role in loco parentis for his sister’s minor children.

The FMLA permits eligible employees to take a total of 12 work weeks of leave during a 12-month period for certain specified reasons. FMLA-qualifying reasons include caring for one’s own serious health condition or caring for the serious health condition of a spouse, son, daughter, or parent. The statute defines “son or daughter” as a biological, adopted, or foster child, a stepchild, legal ward, or the child of a person standing in loco parentis.

The Brieda court found two significant flaws in the plaintiff’s FMLA claims. First, caring for his sister’s children was not an FMLA-qualifying reason because, even if he stood in loco parentis, the minor children did not have the serious health condition. Rather, his sister did. Second, although the plaintiff attempted to argue that caring for the children equated to caring for his sister, that argument likewise failed. The FMLA does not provide leave to care for a sibling with a serious health condition.

The Brieda decision highlights the importance of reviewing and considering FMLA claims on an individualized basis.

A New Jersey appellate court has ruled that a former employee’s medical cannabis must be reimbursed by his former employer. Vincent Hager was an employee of M+K Construction when he suffered a job-site injury in 2001. The injury resulted in several surgeries and chronic pain. Hager was prescribed medical cannabis in 2016, which resulted in a monthly bill of $616.  Medical cannabis is legal in New Jersey. In a workers’ compensation proceeding, Hager sought to be reimbursed for his monthly cannabis bill because his physician testified, he would need medical cannabis to manage his pain for the rest of his life. A workers’ compensation judge ordered M+K to reimburse Hager for the costs of his medical cannabis. M+K appealed, arguing the use of cannabis still constituted a federal crime and that reimbursement of these expenses would aid and abet Hager’s commission of a crime. The appellate court rejected this argument and held there was no evidence that merely reimbursing Hager for his medical cannabis would aid and abet in a crime or require the employer to commit a crime. This appears to be the first ruling of this kind.

New Jersey’s employment laws are somewhat unique and this case is fact-specific. Yet, the case arguably expands the rights of cannabis patients at work at least in New Jersey. Thus, employers are likely to see more examples of these situations in states where medical cannabis is legal and should be aware of the laws applicable to cannabis usage in the jurisdictions where they operate as well whether internal policies address these issues.

A few weeks ago, we explained how the DOL clarified the regular overtime rate for the first time in 50 years. This month, the DOL issued its first significant update to the joint employer rule under the FLSA in more than 60 years.

On January 12, 2020 the DOL issued a Final Rule narrowing the definition of joint employer. The final rule provides updated guidance for determining joint employer status when an employee performs work for his or her employer that simultaneously benefits another individual or entity, including guidance on the identification of certain factors that are not relevant when determining joint employer status.

Significantly, the Final Rule adopts a four-factor balancing test to determine whether the potential joint employer is directly or indirectly controlling the employee. This new balancing test looks at whether the potential joint employer:

  • hires or fires the employee
  • supervises and controls the employee’s work schedule or conditions of employment to a substantial degree
  • determines the employee’s rate and method of payment
  • maintains the employee’s employment records

The final rule also clarifies when additional factors may be relevant to a determination of FLSA joint employer status and identifies certain business models, contractual agreements with the employer, and business practices that do not make joint employer status more or less likely.

As we previously reported, this new rule aims to determine, as a matter of economic reality, whether a company actually exercises sufficient control over an employee to qualify as a joint employer. The new test, which appears to be less expansive, should limit the situations under which employers can be found to have sufficient control over an employee, and therefore be considered a joint employer under the FLSA.

The Cleveland City Council has recently proposed an ordinance to decriminalize marijuana possession. If passed by the Council, the ordinance will eliminate any monetary fine or jail time for possessing up to 200 grams of marijuana. Per the proposed ordinance, a misdemeanor marijuana conviction in the city of Cleveland will no longer be considered a criminal record such that the individual will need to report the conviction to potential employers.

Cleveland’s proposed ordinance follows in the footsteps of several states and other major cities that have loosened marijuana use and possession laws in recent years. While the patchwork of adult-use and medical marijuana legislation across the country has caused headaches for employers, especially those with a multi-state presence, the addition of the proposed Cleveland ordinance should not add any additional burden to employers.

When Ohio enacted its medical marijuana program (Ohio Revised Code Chapter 3796) approximately one year ago, the Ohio General Assembly included several protections for employers, none of which should be impacted by Cleveland’s proposed ordinance.

Although Ohio law allows registered patients to use medical marijuana for certain qualifying conditions, employers may continue to enforce a drug-free workplace policy and continue to test employees and applicants for marijuana and other illegal substances.  Specifically, Ohio law does not require employers to permit or accommodate employee use, possession, or distribution of medical marijuana. Going even further, employers are able to discipline, terminate, refuse to hire, or take other adverse action against individuals based upon use, possession, or distribution of medical marijuana. Ohio has not legalized adult-use marijuana.

If Cleveland’s proposed ordinance passes, it will join other Ohio cities such as Cincinnati, Columbus, Toledo, and Dayton in decriminalizing possession of small amounts of marijuana. However, while the proposed ordinance is a positive criminal law reform, this development in local law is not likely to impact Ohio employers who wish to maintain drug-free workplaces.

 

To the surprise of few, Judge Kimberly Mueller has enjoined California from beginning enforcement of its law (Assembly Bill 51) prohibiting employers from requiring employees to waive their right to jury trials in favor of arbitration. In her three page order. Judge Mueller noted that the plaintiffs (which included the U.S. Chamber of Commerce, the National Retail Federation, the National Association of Security Companies, and the Home Care Association of America) had satisfied their burden of showing that the law raised serious questions as to preemption under U.S. Supreme Court precedent, that even a brief effective period for the Act would cause disruption, and that other factors, including the fact that the law provides criminal penalties for its violation, mitigate in favor of preventing it from taking effect.

Also finding that no harm would come to the defendants (California’s Attorney General, Labor Commissioner, and Director of the Department of Fair employment and Housing), the Court declined to require any security bond. While this decision is preliminary, it bodes well for employers’ ability to continue to use arbitration as a means to obtain prompt, objective resolutions to workplace disputes. A preliminary injunction hearing is scheduled for January 10, 2020.

Frantz Ward will stay on top of this litigation. If California succeeds in making criminals of employers who maintain arbitration programs, several other states are likely to follow suit, creating a confusing patchwork of regulations.

The National Labor Relations Board has issued a new rule that significantly changes its union election procedures, reversing controversial Obama-era rules that had expedited the election process.

The last revision was implemented in 2015, when the Obama Board revised the union election process to implement what were referred to by many as “ambush” or “quickie” elections. Under these rules, an election could take place in as few as 13 days following the initial petition. This left the employer with little time to prepare for the election and ensure that employees were fully informed about their rights and the important facts and issues that could affect their decision.

The new rule takes several steps to slow things back down, and restores a more balanced election procedure. Below are some of the more notable changes:

  • Election-Notice Posting: The prior or “quickie” rule required employers to post a Notice of Election within two business days of receiving a Notice of Hearing from the NLRB, while the new rule increases that time period to five business days. This gives employers more time to prepare before formally notifying employees of the pending election.
  • Pre-Election Hearing Timing: Under the prior rule, pre-election hearings (in which disputes related to the election details are resolved) were scheduled within eight calendar days of the Notice of the Hearing. That period is now extended to at least 14 business days from the Notice of Hearing, giving employers more time to identify potential issues and begin preparing for the election.
  • Statements of Position: The prior rule required employers to submit Statements of Position within seven calendar days of the Notice of Hearing, i.e., one day before the pre-election hearing was to occur, and the union was not required to formally respond to the employer’s position until the actual hearing. Under the new rule, employers now have eight business days to identify issues (e.g., regarding unit scope, voting eligibility, and election logistics), and the union must respond to the employer’s statement in writing at least three business days before the hearing.
  • Resolution of Voter Eligibility and Unit Scope Issues at the Hearing:Under the prior rule, pre-election hearings were confined to issues relating to whether a valid question concerning representation existed. Such issues included the petitioning union’s status as a labor organization and whether the petitioned-for unit was appropriate for the purposes of bargaining. Important challenges to issues like voter eligibility and unit scope were postponed until after the election. The new rule gives the employer the option to have those issues resolved before the election occurs. The rule also gives employers the right to appeal a Regional Director’s adverse determination to the full Board and to have the appeal resolved prior to the election or, if not resolved, to have disputed ballots impounded pending the outcome of the appeal.
  • Election Timing: One of the most significant revisions of the prior rule was the scheduling of the election at the “earliest date practicable,” which resulted in elections being held on average just 23 calendar days after the filing of the petition (and potentially as few as 13 days). The new rule uses the same general mandate—“the earliest date practicable”—but also clarifies that, absent waiver by the parties, the election normally will not be scheduled before the 20th business day after the date of the Direction of Election, i.e., 20 full business days after the regional office issues its decision on the issues presented in the pre-election hearing. As a result, the total time from petition-filing to election in such situations can more than double the average time under the prior Rule.
  • Certification of Election Results: The quickie rule required Regional Directors to certify the results of an election that the union had won, even if the employer was appealing the results seeking to have the election overturned. The new rule dictates that appeals be resolved before certification, which makes clear that no bargaining obligation will attach unless and until the appeal is denied and the election is upheld.

The new rule is a welcome change for the business community. It provides employers with more time to educate employees and prepare for the election, restoring a more balanced and fair election process. All of this in turn gives employees a better opportunity to make an informed decision about whether union representation is right for them.

Absent legal challenge, the new rule will likely become effective in April of 2020 (120 days after posting of the rule in the Federal Register, which is expected to occur on December 18, 2019).

For the first time in 50 years the Department of Labor has issued a Final Rule attempting to clarify the overtime regular rate. The Final Rule focuses primarily on clarifying whether certain kinds of benefits or “perks,” and other miscellaneous items must be included in the regular rate. Since the DOL’s last overtime regular rate revision, the workplace has changed significantly, with compensation practices being one of those areas leading the way. For years employers have been left to their own interpretation in determining whether newer “perks”, like wellness benefits, fitness classes, cell phone reimbursements or snacks must be included in the overtime rate. The DOL’s final rule issued on December 12, 2019 seeks to clarify those issues.

Significantly, the Final Rule makes clear that employers may exclude certain “perks” from the regular rate. Perks such as wellness benefits, parking benefits, certain sign on bonuses, cell phone reimbursements and coffee or snacks provided to employees do not need to be included in the overtime base rate. The Final Rule will publish on December 16, 2019, in the Federal Register, with an effective date of January 15, 2020.

Employers should review their employee benefit packages to see whether any “perks” they provide employees may be excluded from the overtime regular rate.

For Ohio employers who pay into the state fund for their workers’ compensation coverage, enrollment in the Bureau of Workers’ Compensation’s (BWC) Drug-Free Safety Program (DFSP) can provide significant savings by way of premium rebates, provided that all the requirements of the program are met. These requirements include developing a written DFSP policy, providing employee education, offering supervisor training and employee assistance, and conducting drug and alcohol testing. Regarding drug testing, the BWC requires participating employers to utilize, at a minimum, a 5-panel drug test protocol, which includes cocaine, meth/amphetamines, PCP, opiates, and marijuana.

Naturally, with the legalization of medical marijuana in Ohio, employers may be questioning whether they are still required to test for marijuana to maintain their rebates under the DFSP. Well, with respect to the DFSP, nothing has changed… so far, at least. In order to enjoy the rebates afforded by DFSP enrollment, employers must still include marijuana in their drug testing protocol, regardless of a prescription. Not only that, but the BWC still does not cover medical marijuana as a prescription medication regardless of whether  the employee’s recommendation is related to allowed conditions in a workers’ compensation claim; the BWC only covers prescriptions that are filled by registered pharmacists, not recommendations supplied by dispensaries, and further only covers medications that have been approved by the U.S. Food and Drug Administration, which is not currently the case for medical marijuana. Finally, the statutory rebuttable presumption that intoxication was the cause of a work injury upon a positive drug test following said injury also still applies with respect to marijuana, again even despite an authorized medical marijuana recommendation.

As such, while some may feel pressure to change with the times, Ohio employers should practice caution in any efforts to accommodate the use of medical marijuana, as they risk losing their DSFP premium rebates if they stop testing for marijuana and may even be missing out on a viable defense to workers’ compensation claims when marijuana is involved, even if the injured worker has a valid recommendation. This, of course, may change along with any changes in the legal status of marijuana in both federal and state law, but until the BWC officially states otherwise, it remains business as usual in Ohio when it comes to marijuana and workers’ compensation claims.

Section 7 of the National Labor Relations Act (“NLRA”) protects employees who engage in concerted activity. Since the Atlantic Steel case in 1979, the National Labor Relations Board (“NLRB” or the “Board”) has applied a four-part test to determine whether that protection extends to offensive language, often times finding offensive speech to be protected on the basis that Section 7 permits a wide range of oral and written communication in order to promote the open debate between labor and management in the collective bargaining process. Atlantic Steel Co., 245 NLRB 814. For example, during the Obama administration, the Board protected speech by employees who had engaged in profanity-laced outbursts during a meeting with a supervisor (Plaza Auto Center, 360 NLRB No. 117 (2014)), posted on Facebook a profane attack against a supervisor (Pier Sixty, LLC, 362 NLRB No. 505, enforced 855 F.3d 115 (2d Cir. 2017), and directed racist insults at replacement workers during a strike. Cooper Tire, 363 NLRB No. 194 (2016), enforced 866 F.3d 885 (8th Cir. 2017).

The problem with protecting offensive speech under Section 7 of the NLRA is that sometimes that same speech may violate the protections afforded to other employees under the civil rights laws, which protect employees from being subjected to a hostile work environment and severe and pervasive racist, sexist and other rude comments regarding protected classifications. Thus, there may be a conflict and an employer may be caught in a Catch-22 when it terminates an employee for creating a hostile work environment and the employee files an unfair labor practice charge under the NLRA and is reinstated by the NLRB.

In General Motors LLC, Case Nos. 14-CA-197985 and 208242, that is exactly what happened when an administrative law judge held that GM unlawfully disciplined an employee who had directed a profane outburst at a supervisor during a discussion regarding overtime and then later played profane and racially charged music when the supervisor entered the room. Hence, on September 5, 2019, the Board invited briefing on the issue of whether “profane outbursts and offensive statements of a racial or sexual nature, made in the course of otherwise protected activity,” should lose their Section 7 protection; see also, extension of briefing schedule.

Briefs have been filed by the U.S. Equal Employment Opportunity Commission (“EEOC”) and several management and labor groups. EEOC and management groups are citing the conflict between the NLRA and civil rights laws and how they affect diversity and inclusion efforts, as well as arguing that employees do not need to use offensive statements in order to exercise their Section 7 rights and that employers need to be able to take corrective action to stop harassing conduct in the workplace. Labor groups argue that the alleged offensive comments are only offensive to members of management and not the offending employees’ co-workers, and that the comments are sporadic and not pervasive.

A decision is not expected until later next year. In the meantime, employers should be careful when considering disciplinary action against an employee for the use of profane or offensive language where the employee has arguably engaged in concerted activity while doing so.