U.S. Department of Labor FMLA Analysis

The U.S. DOL sought comments on its FMLA regulations last fall and winter. They have come out with a thorough report. It's so thorough, the executive summary alone is 12 pages. Originally, they were seeking these comments in contemplation of possible revisions. But the report does not mention what if any revisions are under consideration. For now, you may wish to read the report to confirm what you already know: intermittent leave and medical certification are the most difficult parts of FMLA to administer. Most employers are fine with bona fide leave for birth and adoption and for truly serious health conditions. See? It took me only two lines to give you this blinding glimpse of the obvious.

Court of Appeal Upholds Summary Judgment Against Disability Discrimination Claim

UPS has very strict policies enforcing the U.S. Department of Transportation's hours of work standards. King was a supervisor, responsible for ensuring employees logged hours properly, and managing the employees so they did not exceed DOT guidelines. After several warnings, King apparently persuaded an employee to revise a time card so it would appear she was not in violation of the DOT standard. After an investigation, UPS fired King. He had over 30 years of service. UPS thought highly of him. But they found his conduct to be an integrity violation and discharged him.
King sued for disability discrimination, failure to make reasonable accommodation, and breach of contract. The court of appeal in a strongly worded opinion, King v. UPS, held that King failed to raise a triable issue of fact. King did not deny what he did. The court swept aside King's efforts to argue that he had just returned from a medical leave of absence, that the employee with the false time card was not really at risk of going over hours, and that his managers conspired against him because he did not introduce evidence that UPS's stated reason for firing him - King's conduct - was untrue and was instead a mask for discrimination. The court detailed the summary judgment standard in discrimination cases, synthesizing a number of principles developed over time. The court's main point is that if the employer has a good faith belief that a manager engaged in misconduct, the plaintiff must do more than speculate about hidden reasons.


"No-Hire" Agreement Is Unenforceable in California

Consultant firms often assign consultants to work closely with clients. Sometimes consultant companies include "no hire" agreements, under which the customer is precluded from hiring consultant's employees for a period of time. In VL Systems, Inc. v. Unisen, Inc., the court of appeal held that such a no-hire agreement was unenforceable in California as an illegal non-compete. The court left open the possibility that a more narrow agreement might be enforceable. However, the fact that the consultant company's agreement made it illegal to hire any of the consultant's employees - even ones never assigned to work for the customer - rendered the agreement overly broad and unenforceable.


Happy Birthday to Shaw Valenza LLP!

We started our Firm a year ago today, on June 19, 2006. We are proud of what we have accomplished during our first year. And we look forward to more self-congratulatory posts in the years to come!

Thank you for reading the blog over the past year. We posted about 90 items. We tried to catch everything, but probably fell short. So let's say we tried to catch the important developments. We hope we have succeeded in becoming a valuable resource for our readers.

Best wishes,


California Administrative Exemption Inapplicable

Eicher v. ABI contains a thorough analysis of the administrative exemption to overtime law.

Here are the facts from the opinion:
ABI owns the rights to ABI MasterMind software . . . ABI’s primary business is
to sell the software . . . , implement the software for the customer, train the
customer, and provide additional support. During the implementation phase, ABI typically sends its employees to the customer’s site to install and train the customer, based on the specific needs of that customer. . . . Hired as a consultant, Eicher eventually became a senior consultant. His college degree was in sociology, not computer science. He spent half of his time in the office and the other half on-site
at customers’ venues. Eicher primarily provided customer service and training on the ABI MasterMind software. He did not hire or fire employees, negotiate contracts with customers, or consult with ABI or its customers about business policies and practices. . . . Concerning Eicher’s duties as an employee of ABI, the trial court found that Eicher “devoted the majority of his work time in training customer employees on MasterMind and troubleshooting the software when he was engaged in implementation on the customer’s site. [Eicher] also spent time gathering information about the customers’ employment practices and entering data into the appropriate fields of the MasterMind program. [Eicher] testified that he spent the
majority of his time, when in [ABI’s] office, performing customer service work. The remainder of his time was spent on individual training and administrative duties.
So, Eicher was exempt, right? Wrong. The court noted that he was a "production" employee, involved in implementing ABI's core business. He did not affect policy at the customer or his employer. He simply customized the ABI software for the customer's use.

The court did not entertain ABI's argument that Eicher qualified under the administrative exemption because he “carr[ies] out major assignments in conducting the operations of the business, or whose work affects business operations to a substantial degree.” ABI did not make that argument at the trial court and did not support it with evidence, the court of appeal said.

The moral: The administrative exemption is not a catch all for all office-based work. Also, if the employee is generating revenue for the business, chances are the administrative exemption will not apply. Where does this decision leave lower level consultants assigned to work on customers' projects? (Watch your backs consultant firms. There be sharks in these waters).


Article: Sexual Harassment Training Not a How-to-Sue

Professor Caren Goldberg of American University concluded a study of 234 white-collar professionals in which she concludes sexual harassment training does not encourage employees to file lawsuits. The study's findings are reported in this article, published in the Insurance Journal on June 7. In California and Connecticut, training is the law anyway. But we have always believed the benefits of anti-harassment training outweigh the potential risks. This study backs up that conclusion.