In what should be viewed as a victory for employers, the United States Circuit Court of Appeals for the Eleventh Circuit recently issued a decision limiting the scope of OSHA inspections. United States v. Mar-Jac Poultry, Inc., No. 16-17745 (11th Cir. 2018).

In February 2016, an employee at Mar-Jac’s poultry processing facility was severely burned and hospitalized after attempting to repair an electrical panel.  Within days of Mar-Jac reporting the injury to OSHA, OSHA compliance officers visited Mar-Jac’s facility.  OSHA sought to inspect not only the accident site, but Mar-Jac’s entire facility.  Mar-Jac gave limited consent to inspection of the electrical accident site, but refused to permit inspection of any additional areas.

OSHA’s limited inspection revealed additional potential violations of electrical safety, personal protective equipment, machine guarding and other standards. OSHA also determined that the injuries reported on Mar-Jac’s OSHA 300 logs suggested additional possible violations covered by an OSHA Regional Emphasis Program (“REP”) that permits random “programmed” inspection of such facilities based on neutral criteria.

OSHA sought an administrative warrant from a federal magistrate judge to expand its inspection, arguing that it had probable cause to conduct a top-to-bottom inspection on three grounds: 1) the OSHA compliance officers had personally observed additional hazards during its limited inspection, (2) the OSHA 300 logs revealed additional potential hazards, and 3) probable cause existed to conduct a programmed inspection based on OSHA’s Poultry REP.  The District Court quashed the warrant, and OSHA appealed.

On appeal, OSHA argued that the District Court erred by applying a more stringent standard which purports to require OSHA to show that employees had been injured as a result of suspected violations.  OSHA also argued that the District Court conflated the terms “hazard” and “violation” and that OSHA had presented reasonable suspicion of additional violations based on Mar-Jac’s OSHA 300 logs.

The 11th Circuit affirmed the District Court’s ruling.  First, the Court held that the District Court correctly applied the reasonable suspicion standard and simply found that OSHA did not establish reasonable suspicion to inspect for the additional suspected hazards. Second, the Court rejected OSHA’s argument that “because there was an injury, there must have been a hazard, and because there was a hazard, there is likely a violation to be found.”  Rather, the Court affirmed that “the existence of a ‘hazard’ does not necessarily establish the existence of a ‘violation,’” and that OSHA must, when applying for a warrant, demonstrate reasonable suspicion that a violation (not simply a hazard) exists.”  Finally, after reviewing Mar-Jac’s OSHA 300 logs, the Court determined that the injury descriptions were vague and showed no common thread sufficient to justify a comprehensive inspection.

Mar-Jac (1) reinforces the notion that there are limits on OSHA’s inspection authority and (2) confirms the right of employers to limit consent to inspect or to challenge a warrant. OSHA cannot expand an accident-based inspection simply because of an emphasis program, injuries recorded on an OSHA 300 log, or the mere existence of a hazard. So, if faced with a request by OSHA to expand the scope of an accident-based inspection, employers should contact counsel immediately to determine an appropriate response.

One of the strongest trends in human resource management is the dramatic increase in the use of mandatory employment arbitration agreements. In late 2017, a study by the Survey Research Institute at Cornell University determined that the number of private sector, non-union employees subject to mandatory arbitration agreements had dramatically increased in recent years. The study was conducted on a national level and secured responses from more than seven hundred employers. Between 1992 and the early 2000’s, the percentage of employees subject to mandatory arbitration agreements had risen from just over two percent to almost one quarter of the U.S. work force. The study concluded that as of the fall of 2017, the percentage of private sector, non-union employees subject to mandatory arbitration had more than doubled and now exceeded fifty-five percent. Thus, over sixty million American employees are now likely subject to mandatory employment arbitration agreements.

This dramatic growth preceded the landmark decision handed down in May, 2018 by the U.S. Supreme Court in Epic Systems Corp. v. Lewis. In this decision, the Supreme Court held that under the Federal Arbitration Act, an arbitration agreement that provides that an employee waives the right to bring a class action in court must be enforced. This decision is widely expected to increase even further the use of mandatory arbitration agreements by private sector employers. The decision put to rest a potential stumbling block to the enforcement of class action waivers in arbitration agreements that had been created by a decision of the National Labor Relations Board during the Obama administration and by the decisions of several federal Courts of Appeals. Thus, the Supreme Court has made the use of such agreements even more desirable by employers who now can generally be assured that their employees cannot bring class action arbitration or court cases against them. In other words, such agreements are now an even more effective means for employers to cope with the rapid increase in recent years in the numbers, costs and risks posed by employment-related lawsuits.

The advantages that the use of mandatory arbitration agreements offer private sector employers are several and are quite substantial:

  • Generally speaking, these agreements can be used to prohibit covered employees from bringing class actions against their employers
  • These agreements can require employees to waive their right to a jury trial; indeed, this has long been the principal advantage of the use of mandatory arbitration agreements
  • Instead, these agreements typically establish a procedure that permits employers and employees to select a decision maker from a panel of experienced former judges and/or licensed attorneys or other respected neutrals to hear and decide their cases, rather than juries
  • Because these procedures remove the risk of runaway jury awards and reduce the cost of litigation, employers are much more likely to be in a position of declining to agree to unreasonable settlement demands in cases that they believe involve meritless claims
  • Indeed, some studies indicate that employers are somewhat more likely to prevail in arbitration than in court proceedings
  • At the very least, and as alluded to above, the use of arbitration agreements will enable employers and employees to resolve their claims in a less costly manner than in courts; typically such agreements involve limited amounts of discovery and fewer procedural disputes
  • Claims are typically more quickly resolved in arbitration than in courts; faster resolutions benefit both employers and employees – they both avoid the years of discovery and delay that often characterize court proceedings
  • Conventional wisdom and some anecdotal evidence indicate that some plaintiffs’ attorneys are deterred from even pursuing employment-related claims once they become aware that doing so will involve arbitration rather than a potential jury trial
  • As opposed to court trials that are matters of public record and sometimes involve considerable publicity, arbitration procedures are private processes and are not as likely to result in the damage to goodwill, reputation and brand as may public trials
  • While arbitration agreements are indeed contracts, these contracts typically provide that the employees who sign them remain employees at will
The very real and apparent advantages to employers of the use of arbitration agreements is confirmed by the opposition to their use, especially since Epic Systems. Recent writings and publicity have often cast these agreements as vehicles designed to “destroy workers’ rights”. Arbitration agreements are strongly opposed by plaintiffs lawyers groups, civil rights organizations, and some politicians. Some plaintiffs law firms now espouse the filing of hundreds of individual arbitration demands on behalf of employees of an employer in order to pressure such employers to settle rather than having to absorb the costs of defending against large numbers of such claims. Opponents of arbitration agreements have recently argued that claims of sexual discrimination and sexual harassment should not be subject to arbitration. Significant political pressure not to utilize arbitration agreements has been applied against law firms, law schools and some private sector employers. The American Bar Association has adopted a resolution urging legal employers not to require mandatory arbitration of claims of sexual harassment. The State of New York has recently passed legislation that would prohibit private sector employers from requiring arbitration of sexual harassment claims. California will soon follow suit, and other states are considering similar legislation. Such state laws may well be found to be preempted by the Federal Arbitration Act and, thus, unenforceable.

Some courts will find arbitration agreements to be unenforceable if they are both “procedurally and substantively unconscionable”. But the bottom line is that well drafted and carefully implemented arbitration agreements will be enforced, and will provide employers with a much improved context in which to defend against claims. [1] Thus, the surge in the use of arbitration agreements documented by the 2017 Cornell study is likely to continue and indeed to expand rapidly.


[1] For example, well drafted agreements should place most if not all the costs of arbitration fees on employers; the obligation to settle disputes by arbitration should apply to employers as well as employees; the process for selecting an arbitrator must be fair; the waiver of the right to a jury trial must be clear and unambiguous; and so forth. The implementation of an arbitration agreement must be preceded by adequate notice, the ramifications of such agreements must be clearly summarized for employees in some appropriate fashion; the method utilized to secure employee consent to an agreement must be considered; and analysis must be accomplished as to what form of consideration is necessary to render such consent binding.

A federal court of appeals recently ruled that, standing alone, full-time presence at the workplace is not an essential function of a job. In the case, an HR Generalist returned to work part-time while suffering from postpartum depression and separation anxiety. Initially, the employer accommodated the employee by allowing her to work five half-days per week and perform some work from home. However, after the employee sought to extend her part-time work, the employer determined it could no longer accommodate her and discharged the HR Generalist. In response, the former employee filed a lawsuit under the Americans with Disabilities Act (“ADA”).

To prove a disability discrimination case, a plaintiff first must show that he/she is an individual with a disability and is otherwise qualified for him/her job. A plaintiff can demonstrate he/she is otherwise qualified for a job if he/she can perform the position’s essential functions with or without an accommodation. Essential job functions are core job duties which, if removed, would fundamentally alter the position. For most jobs, courts have found that “regular, in-person attendance is an essential function.” However, determining a job’s essential functions is a fact-intensive analysis which may include a review of: the time spent on a function; the employer’s judgment; written job descriptions; and the consequences of not performing a particular function.

Here, the Court concluded that “full-time presence at work” is not an essential job function on its own. According to the Court, the HR Generalist presented sufficient evidence that she could perform the core tasks of her position in a part-time role. In particular: the HR Generalist testified she completed all her work on time; a former colleague confirmed she was effective on a half-time schedule, and she received a “very positive” performance evaluation while working part-time (which made no reference to full-time work). Furthermore, the HR Generalist had not received discipline, written criticism, a performance improvement plan, or complaints about her work. For all these reasons, the Court ruled that an employer must show why an employee needs to work on a full-time schedule.

This case substantively impacts and provides a useful lesson for many employers. Issued by the Sixth Circuit Court of Appeals, the decision directly applies to employers with a presence in Kentucky, Michigan, Ohio, and Tennessee. In addition, the case offers several takeaways. First, documentation is key. An employer should include all of a job’s essential functions in the job description. Employers also should document the need for those functions and an employee’s ability (or inability) to meet them.  Here, the Court placed significant weight on the HR Generalist’s positive performance evaluation.  In another case, the employer documented specific duties that could not be performed remotely and an employee’s failure to complete work in other telework situations. Furthermore, employers should be consistent with providing accommodations. Here, the Court also considered the employer’s decision to initially accommodate the HR Generalist’s part-time work before later changing course. For all these reasons, employers should be prepared to explain why a job function is essential, remain consistent in their decision-making, and contact counsel with questions.

When an employee leaves an organization, one issue the employer often confronts is whether to pay the employee for unused vacation time or other paid time off (PTO). The employer may seek to withhold PTO for myriad reasons: from encouraging employees to use their PTO during employment, to offsetting an employee debt, to encouraging compliance with an obligation (e.g., providing advanced notice of a resignation). But regardless of the reason, the extent of the employer’s ability to withhold PTO  (at least in Ohio) depends on the terms of its PTO policy. This lesson comes harder to some employers than others, as a recent case from the Ohio Court of Appeals for the Seventh District confirms.

In this case, 48 employees sued their employer, an area non-profit Company, after the Company declined to pay out their accrued PTO when their employment ended. The Company’s Handbook contained the following provision:

Any employee with PTO hours to a maximum of 200 hours remaining at December 31, 2011 under the former PTO policy shall have those hours “grandfathered” and banked going forward. The banked PTO hours will be available to those employees for any use that would have been allowable under the old PTO policy. Program and operation requirements will continue to override any request for leave, and the rules for using those banked hours remain the same. At the end of employment with [the Company] unused PTO balance hours will be paid out according to the schedule.

In defense of its position, the Company rightly argued (among other things) that its Handbook contained a disclaimer expressly stating that the Handbook was not a contract; thus, the Company asserted, the PTO policy was not enforceable. Nevertheless, the Court granted summary judgment in favor of the employees.  The Court noted that “although employee handbooks and policy manuals are not in and of themselves contracts of employment, they may define the terms and conditions of an at-will employment relationship if the employer and employee manifest an intention to be bound by them.”  The Court then concluded that by placing the above PTO policy in its Handbook and disseminating that policy to employees with the expectation that they would rely on it, the Company manifested an intent to be bound by it. Therefore, the Court held that the employees had a right to enforce the policy’s terms.

Key Takeaways

This case serves as a good reminder that when it comes to PTO policies, Ohio employers have a lot of flexibility in determining (1) whether to offer PTO; (2) the manner in which PTO time is earned and accrued; (3) the extent to which PTO carries over from year to year; and (4) whether PTO is paid out on termination, and if so, the terms of eligibility for or forfeiture of the payout.  However, employers must practice what they preach by ensuring that the policy accurately conveys its intent.

Multi-state employers should also know that some states are less flexible than Ohio. In California, for example, vacation and other paid time off that can be used for any purpose (as opposed to sick leave) is considered wages, and generally, this time must be paid out upon termination regardless of the employer’s policy. Therefore, it is important to comply with the PTO laws of each state in which the employer operates

In one of the most significant labor decisions in decades, the Supreme Court today held in Janus v. AFSCME that public sector workers cannot be forced, over their first amendment objections, to pay dues or fees to a union as a condition of employment. The implications for organized labor, in both the public sector and private sector, are significant. For example, the HR Policy Association reported that a recent survey by AFSCME of its 1.6 million members found that only 35% of those members would definitely pay dues if not required to do so. There is little question that union treasuries will be negatively impacted by this decision. This, in turn, may impact the ability of unions to continue to organize and represent employees in both the public and private sector.

Public sector union dues and agency fees are currently a major source of political contributions to candidates who favor union positions. If Janus forces unions to spend their funds on representation activities instead of political donations, the power of unions in Washington, state capitals and city halls will be diminished.

Several international unions, including the Service Employees International Union and AFSCME, have been active in both their public and private sector negotiations in trying to plan for a future that would involve the decision rendered by the Supreme Court today. The SEIU, for example, has proposed in numerous negotiations that work previously done on-site by paid union representatives would now be coordinated and centralized out of the International Union’s offices to eliminate the need for SEIU representation to attend meetings on site at each of their organized facilities. Both unions also have preemptively sought “recommitments” from their membership related to their financial support for their union.

The Janus decision could allow for an estimated 5 million government workers in twenty-two states to stop paying agency fees, the portion of union revenue that funds collective bargaining. Twenty-eight states previously passed “right to work” laws, which allow workers to avoid paying even the agency fees. It is certainly possible that the Janus decision will further embolden efforts in the non-right to work states to propose legislation to further limit the ability of unions to require union security provisions that would provide for the payment of dues or agency fees.

While implications of the decision will play out over the next several years, it is certainly a body blow to organized labor that will impact not only the public sector but private sector as well.  Employers should expect immediate complications in all negotiations, as unions seek to deal with a significant loss of revenues.

Ten months after his election, President Trump has sent nominations to the Senate for a number of key positions, including four with significant importance in the employment area. David Zatezalo, the former Chief Executive Officer of coal mining company, Rhino Resources, is the nominee for the position of Assistant Secretary of Labor for Mine Safety and Health. In that role, he will manage the Mine Safety and Health Administration, which regulates safety and health in all types of mines in the US. He has extensive background as an underground coal miner and a coal executive, but no previous government experience. Mr. Zatezalo has criticized the Obama Administration’s approach to mine safety as being disconnected from working America. Since Rhino Resources had been cited by MSHA for violations, that history will likely be raised in Mr. Zatezelo’s confirmation hearings. Not surprisingly, the mining industry was supportive of the pick, expecting that it will herald an era of more cooperative and effective safety regulation, as contrasted with the punitive approach of the most recent administration, while labor interests have a more skeptical attitude. For more information, click here.

President Trump nominated Cheryl Stanton as Wage and Hour Administrator. If confirmed, she will head the Department of Labor’s Wage & Hour Division. This part of the DOL has responsibility for, among other things, overtime and minimum wage enforcement. A significant portion of this relates to the issue of whether workers are employees or independent contractors. Ms. Stanton is the Executive Director of the South Carolina Department of Employment and Workforce, and had worked in the George W. Bush White House as its liaison to the DOL, NLRB and EEOC. She practiced law with a management-side law firm before working for South Carolina.

A third DOL nominee is Katherine McGuire to serve as the DOL’s Assistant Secretary of Labor for Congressional and Intergovernmental Affairs. She is a veteran congressional aide, having worked for Sen. Mike Enzi and most recently for Rep. Randy Holtgren, and also spent several years in government relations with the Business Software Alliance. In her new role, she will support Secretary of Labor Acosta’s agenda in Congress and with state and local governments.

The fourth nomination may set a new tone for the federal government’s employment policy. The President has nominated the current Chief Human Resources and Strategy Officer at the Society for Human Resource Management (SHRM) to head the Office of Personnel Management. Jeff Tien Han Pon has experience with Booz Allen Hamilton as a consultant and has worked in the Federal Government as the Department of Energy’s Chief Human Capital Officer. Federal employment practices have come under increasing scrutiny as being outmoded, overly costly and impervious to improvements, so Mr. Pon’s position has the potential to be extremely important. He is the second nominee for the position. The first withdrew from consideration after the Senate received a letter of opposition from a coalition of federal employee unions. The new nominee is unlikely to be deterred by opposition from the unions that are benefitting from the current system.

The Trump administration withdrew a proposed requirement to screen all truck, train and bus operators for sleep apnea – a condition that, if untreated, can cause poor performance in everyday activities as well as severely impaired driving. A few high-profile incidents had called into question the issue of this emerging sleep disorder. The most notable one was when a conductor crashed a train into a crowded train station in Hoboken, New Jersey, killing one and injuring over 100 people. Last March, the Obama administration issued a proposed rulemaking notice that would’ve required screening train engineers and truck drivers for sleep apnea. The Trump administration announced that the proposed requirement was withdrawn, consistent with its continued efforts to eliminate regulations in an attempt to promote economic growth.

Currently, Federal Motor Carrier Safety Administration regulations provide for medical examinations that probe sleep apnea and sleep disorders in drivers. Thus, some were critical of the proposed regulation because they viewed the extra testing as unnecessary. Additionally, the proposal invited scrutiny to drivers of a certain age, body mass index and neck size.

To the contrary, a spokesperson for the National Transportation Safety Board, which has advocated for screening truckers for the sleep disorders for years, told Bloomberg that the agency is “disappointed” that the Department of Transportation withdrew the “much-needed rule.”