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LABOR & CONSTRUCTION LAW UPDATES

These Newsletters are not intended as legal advice since each situation depends specifically on the facts presented.  Persons reading these Newsletters should seek competent legal advice with regard to the subjects contained herein before making any employment or other decisions.
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OCTOBER 2017

Inside This Issue

1.    Federal Appellate Court Rules that Extended Medical Leave Is Not A Reasonable Accommodation under ADA

​2.    What Is The Scope of Insurance Coverage for Defective Construction Work?

​3.    Illinois Enacts Law That Bans Non-Disparagement Clauses in Contracts

​4.    Court Holds There is No Mechanic Lien Right in Removable Trade Fixtures No Matter How Large

​5.    National Labor Relations Board Targets Dress Codes and Already Rescinded Policies

6.    Recent Amendments to the Illinois Human Rights Act

Federal Appellate Court Rules that Extended Medical Leave Is Not A Reasonable Accommodation under ADA

​The Equal Employment Opportunity Commission (EEOC) has had a standing position that long term leaves must be considered a form of reasonable accommodation under the Americans with Disabilities Act (ADA). 

On September 20,2017, the U.S. 7th Circuit Court of Appeals held that employees who need long-term medical leaves cannot work and, thus, are not a “qualified individual” as defined by the ADA.

In this case the plaintiff Raymond was employed as a fabricator of retail display fixtures from 2006 until 2013.  Raymond  complained about back pain since 2005 but it did not stop him from doing his work.  Because of poor work performance Raymond was demoted from operations manager to a second shift lead in June of 2013.  Raymond never worked in this new position because he wrenched his back at home and thereafter he requested, and was granted, 12 weeks of leave under the FMLA.  On the last day of the approved leave, Raymond underwent back surgery which required a typical recovery time of at least two months.  Raymond’s request for an extension of his medical leave was denied by his employer and the employer terminated Raymond at the end of his approved leave.  Later Raymond received a doctor’s clearance for light duty with lifting restrictions.  However, Raymond never re-applied for his position.

The court reviewed the ADA’s definition of reasonable accommodation which uses the permissive term “may include.”  The court went on to state that the base line requirement found in the definition of a qualified individual is concrete:  “A reasonable accommodation is one that allows the disabled employee to ‘perform the essential functions of the employment.”   Section 42 U.S.C. Section 12111(8).

If the proposed accommodation does not make it possible for an employee to perform his/her job, then the employee is not a “qualified individual” as the term is defined.  The court found that long term leave of absence cannot be a reasonable accommodation. “Simply put, an extended leave of absence does not give a disabled individual the means to work; it excuses his not working.”

The court clarified that intermittent time off or short-term leave of absence, even up to a couple weeks may be an appropriate accommodation, similar to a part-time or modified work schedule.

This decision clearly rejected EEOC’s standing position that long-term leave must be considered as a reasonable accommodation.  Employers are cautioned not to fire all persons requesting extended FMLA leave without careful consideration of the facts and review with competent labor counsel.

​What Is The Scope of Insurance Coverage for Defective Construction Work?

​The  U.S. 7th Circuit Court of Appeals, construing Illinois law, held that an insurer had coverage obligation resulting from the insured’s faulty work in applying a waterproof sealant that resulted to damage to condominium property.

The amended complaints alleged interior water damage to common elements of the building and to furniture within individual condo units which was caused by the sealant contractor’s defective work.

The first finding by the court was that the condo association lacked standing to recover on behalf of the unit owners.  As to the association property, an allegation in the amended  complaints was that the sealant contractor failed to properly coat the exterior of the building and such a defect could be “an accident or an occurrence” under a commercial general liability policy and gave rise to a duty to defend since “occurrence” was further defined “continuous or repeated exposure to conditions.” 

The court went on to say that there was coverage for the contractor’s work on the building because the underlying amended complaints alleged damage caused by the contractor went beyond the contractor’s own work or product.  The court concluded there was coverage and a duty to defend as a result of allegations of negligence and lack of any allegation seeking damages stemming from the sealant contractor’s work.Stated differently, the duty to defend is triggered by allegations that the defective work performed by the sealant contractor caused damage beyond the scope of the named insured’s work.

Illinois Enacts Law That Bans Non-Disparagement Clauses in Contracts

​The law states:

Non-Disparagement clauses in consumer contracts.

        (a)  A contract or a proposed contract for the sale or lease of consumer merchandise or services may not include a provision waiving the    consumer’s right to make any statement regarding the seller or lessor or the employees or agents of the seller or lessor or concerning the     merchandise or services.

        (b)  It is an unlawful practice to threaten or to seek to enforce a provision made unlawful under this Section or to otherwise penalize a consumer for making any statement protected under this Section.

        (c)  Any waiver of the provisions of this Section is contrary to public policy and is void and unenforceable.

        (d)  This Section may not be construed to prohibit or limit a person or business that hosts online consumer reviews or comments from removing a statement that is otherwise unlawful to remove.

 The law is effective on January 1, 2018.

Court Holds There is No Mechanic Lien Right in Removable Trade Fixtures No Matter How Large

The Illinois Mechanic’s Lien Act generally permits liens on property where the owner receives a benefit and where the furnishing of labor and materials increases the condition or value of the property. 

In a recent case, the owners of the property entered into a wind park easement with GSG, a developer of wind energy.  The easement allowed GSG to develop a wind energy conversion system on the owner’s property and in exchange GSG paid the owner $7500.00 a month rent.  The recorded easement provided that all the property installed by GSG would remain the property of GSG and GSG property could be removed upon three months’ notice to the owner.  GSG could also terminate the easement upon the same notice and could dismantle and remove all of GSG’s improvements, fixtures and property. 

GSG subcontracted for the construction of the tower and foundation with AUI.  AUI was unpaid and filed a Mechanic’s Lien.  The question for the court was whether AUI’s work was lienable or was it a removable trade fixture. 

The court considered three factors:  the nature of the equipment’s attachment to the property; the equipment’s adaptation to and necessity for the purpose to which the property is devoted; and whether it was intended that the equipment should be considered part of the property.  Intent became the preeminent factor based on the language in the easement.  Despite a $600,000.00 cost to remove the tower, the court ruled the tower was a removable fixture and AUI was left without any lien rights.

National Labor Relations Board Targets Dress Codes and Already Rescinded Policies

​A car dealership had a dress code that banned “pins, insignias and message clothing” which, in itself, is an unfair labor practice since employees might interpret this rule as infringing on their right to unionize or engage in other concerted activities.   The National Labor Relations Board (NLRB) ordered the employer to issue a notice that the policies were found to be unlawful and advise employees of their Section 7 rights (right to organize and engage in other activities for mutual aid).  A federal court of appeals agreed with the NLRB ruling.

The NLRB found a second violation since the dealership failed to properly repudiate the overly restrictive policies in the earlier version of the handbook.  The car dealership worked with the NLRB to revise its handbook so it was compliant.  Despite the cooperation, the NLRB ruled that an employer should have repudiated the policy in writing to all the employees which it did not do. 

Due to the NLRB’s aggressive approach, employers are again reminded to review handbooks and employment policies.

Recent Amendments to the Illinois Human Rights Act

When a charge of discrimination is filed with the Department of Human Rights, there is no longer a requirement to file a response to the charge unless the Department makes a request that the “respondent shall file a response” to the charge.  The respondent (the employer) may, however, file a response to the charge, if it elects to do so, within 30 days of receipt of the charge of discrimination.  This change was effective September 8, 2017.

The Human Rights Act was also amended to make religious discrimination unlawful.  It states:

Religious Discrimination.  For any employer to impose upon a person as a condition of obtaining or retaining employment, including opportunities for promotion, advancement, or transfer, any terms or conditions that would require such person to violate or forgo a sincerely held practice of his or her religion including, but not limited to, the wearing of any attire, clothing, or facial hair in accordance with the requirements of his or her religion, unless, after engaging in a bona fide effort, the employer demonstrates that it is unable to reasonably accommodate the employee’s or prospective employee’s sincerely held religious belief, practice, or observance without undue hardship on the conduct of the employer’s business.

Nothing in this Section prohibits an employer from enacting a dress code or grooming policy that may include restrictions on attire, clothing, or facial hair to maintain workplace safety or food sanitation.

The law became effective on August 11, 2017.

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Law Offices of Stanley E. Niew, P.C.