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Inside This Issue
1. Warning: Use of Terms in Want Ads Such as “Recent Graduate” Can Violate ADEA
2. Supreme Court Provides Employers Certainty Regarding The Use of Employment Related Arbitration Agreements
3. Extreme Obesity May Not Qualify As a Disability Under The ADA
4. Illinois Courts Scrutinizing Non-Competes
5. Update to Our February 2018 Newsletter Due to Law Change
Warning: Use of Terms in Want Ads Such as “Recent Graduate” Can Violate ADEA
The Age Discrimination in Employment Act (ADEA) prohibits employment practices that have a disparate impact on qualified applicants over the age of 40. For example, the term “Recent Graduate” raises a flag as to whether the employer’s hiring program has a disparate impact on applicants over 40 years of age.
Similarly, it is risky to advertise for employees with 3 to 7 years’ experience. The term can be construed to eliminate all applicants over 40 years of age who are qualified, but have more than 7 years’ experience.
The 7th Circuit Court of Appeals is particularly sensitive to such disparate treatment claim. But there is a split among the federal Circuit Courts of Appeal. The U.S. Supreme Court may have to decide.
Supreme Court Provides Employers Certainty Regarding The Use of Employment Related Arbitration Agreements
By way of background, the National Labor Relations Board (NLRB) first ruled in 2012 that employers’ use of arbitration agreements to resolve federal workplace laws were unenforceable since the arbitration agreements violated Section 7 rights of employees to engage in “concerted activities.” The arbitration agreements are many times referred to as class-action waiver agreements.
On May 21, 2018, the Supreme Court dealt a blow to the NLRB when the Court ruled that workers do not have an absolute right to sue over alleged violations of federal workplace laws and that an employer’s arbitration rules may require employees to bring their complaints as individuals and not as a part of a group or class. See Epic Systems Corp. v. Lewis.
The decision protects businesses from endless costly litigation and opting for arbitration for such matters as FSLA claims, sexual harassment, pay, pregnancy and racial discrimination claims, as well as other federal employment laws.
Arbitration may be a useful tool for an employer’s risk management assessment of its policies. Employers would be prudent to assess the pros and cons of submitting various types of federal employment claims to binding arbitration taking into consideration whether asking an employee to sign a binding arbitration agreement is unconscionable or as a result of fraud or duress. Stated another way, “one size does not fit all.”
The Epic System’s decision only applies to non-union employees. However, employers and unions are free to negotiate language in collective bargaining agreements which would require union employees to resolve all federal statutory claims through the grievance-arbitration procedure.
Extreme Obesity May Not Qualify As a Disability Under The ADA
In Richardson v. Chicago Transit Authority, the federal district court was confronted with a 594-pound driver who was fired from his job as a bus driver. The court noted:
“It is important to distinguish between conditions that are impairments and physical,
psychological, environmental, cultural and economic characteristics that are not impairments.
The definition of the term ‘impairment’ does not include physical characteristics
such as eye color, hair color, left-handedness or height, weight or muscle tone
that are within ‘normal’ range and are not the result of a
Plaintiff bus driver argued that weight outside the normal range qualifies as an impairment even if it was “not the result of any physiological disorder.” The American with Disabilities Act’s (ADA) definition of an impairment is: “(A) a physical or mental impairment that substantially limits one or more major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment.” 42 U.S.C. Section 12102(1)(A-C).
The federal judge concluded:
“that severe obesity, by itself, fails to constitute a disability under the ADA. Rather, to qualify as a protected physical impairment, claimants under the ADA must show that their severe obesity is caused by an underlying physiological disorder or condition.”
Among other things, the ADA provides that no “covered entity shall discriminate against a qualified individual on the basis of disability.” Plaintiff bus driver alleged the CTA refused to let him return to work because the CTA regarded plaintiff as too obese to work as a bus driver. To win on a “regarded as” claim, a plaintiff must establish that he was discriminated against “because of an actual or perceived physical or mental impairment.” To qualify as “protected physical impairment” under the ADA, claimants must show that their severe obesity is caused by an underlying physiological disorder or condition. Here plaintiff failed to offer any such evidence.
Plaintiff next argued that even if the severe obesity does not qualify by itself, he is entitled to succeed because the CTA perceived him as having a physical impairment on the basis of obesity.
The Equal Employment Opportunity Commission (EEOC) regulations limit the definition of physical impairment to a “physiological disorder and condition” that affects “one or more body systems.”
The court concluded plaintiff has not established a key element of his “regarded as claim” since he has not shown that the CTA regarded him as having a qualifying physical impairment because there is no allegation of a physical impairment within the meaning of the ADA.
Illinois Courts Scrutinizing Non-Competes
It is common for employers to use non-compete agreements in an attempt to keep senior employees from competing against their former employer. In a recent case decided in federal court for the Northern District of Illinois in Medix Staffing Solutions, the court refused to enforce a non-compete agreement against a former director who was responsible for medical sales and recruiting strategies. The former director went to work for a direct competitor of Medix.
The non-compete agreement prohibited the director from being employed or connected in any manner with the operation or business which competes with Medix either directly or indirectly within a 50-mile radius of any office in which the director worked for Medix. The former director successfully argued that the non-compete violated the so-called “janitor rule” since it would preclude him from even performing janitorial services for a competitor.
In an unusual move, the judge dismissed the case at the pleading stage and found the restrictive covenant as a matter of law was patently unreasonable because an employer cannot prevent a former employee from working for a competitor in a non-competitive capacity.
Illinois law permits courts to strike non-competitive provisions of a non-compete agreement called “blue penciling.” The court refused to “blue pencil” some overly broad restrictions in order to save the covenant not to compete.
This case illustrates that non-compete agreements should be narrowly tailored to protect only legitimate business interests of an employer.
You are reminded that there is an Illinois Right To Work Act which prohibits private employers from entering into non-compete agreements with low-wage employees.
Update to Our February 2018 Newsletter Due to Law Change
We reported in the February 2018 Newsletter that the National Labor Relations Board (NLRB) returned to its old standard to determine who is a joint or single employer. On technical grounds (which board members were eligible to vote) the NLRB vacated its December 2017 decision.
In May 2018 the NLRB Chairman, John Ring, stated:
“Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today. The current uncertainty over the standard to be applied in determining joint-employer status under the Act undermines employers’ willingness to create jobs and expand business opportunities. In my view, notice-and-comment rulemaking offers the best vehicle to fully consider all views on what the standard ought to be. I am committed to working with my colleagues to issue a proposed rule as soon as possible, and I look forward to hearing from all interested parties on this important issue that affects millions of Americans in virtually every sector of the economy.”
The 2015 rule on joint employer remains in effect which states if an employer reserves the right to exercise control over another employer, the two entities will be treated as joint employers. The NLRB may find a pending case in which it can go back to its December 2017 decision.
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