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In a Rare ADA Case Involving Bipolar Disorder, Worker Is Awarded $56K

April 5, 2012 – 2:46 pm | By Kathryn McGovern | 1 comment

A worker with bipolar disorder was awarded more than $56,000 after a federal district court found that his employer fired him because of his disability, in violation of the Americans With Disabilities Act (ADA). The case is one of the first bipolar disorder suits the U.S. Equal Employment Opportunity Commission (EEOC) has brought to trial. The plaintiff, Sean Reilly, managed a payday loan store for The Cash Store. After stopping his bipolar medication, he experienced a manic episode. His family explained the situation to his employer and requested that he receive one to two weeks’ leave to rebalance his medication. Reilly’s supervisor denied this request and insisted that he return to work. While at work that week, Reilly used an obscenity in a work document and was fired. The EEOC filed suit on his behalf, alleging that The Cash Store failed to accommodate his bipolar disorder when it denied him leave and terminated him based on his disability. In considering a motion for summary judgment by The Cash Store, a The U.S. District Court for the Eastern District of Washington determined that Reilly did not have a disability but was regarded as having one. Because he met only the law’s “regarded as” prong of the definition of disability, Reilly could not allege that he was entitled to an accommodation. He was permitted to continue, however, with his wrongful termination claim. (This case was evaluated under original ADA and relied on case law that is now invalid; Reilly may well have succeeded with his “actual disability” claim had the actions in question occurred after the ADA Amendments Act’s effective date.) At trial, the EEOC succeeded in showing that Reilly was regarded as disabled and fired on that basis. The court awarded him $6,500 in back wages and $50,000 for emotional pain and suffering. The Cash Store also must train its managers and human resources personnel on anti-discrimination and anti-retaliation laws, according to the EEOC. “The court sent an important message today that employers can’t substitute fiction for facts when making employment decisions about disabled workers,” said William Tamayo, the EEOC’s regional attorney in San Francisco. “Employers acting on outdated myths and fears about disabilities need to know that the EEOC will not shy away from taking ADA cases to trial to bring them into the 21st century.” (EEOC v. Cottonwood Financial, Ltd., No. CV-09-5073-EFS (E. D. Wash.))

Posted in ADA compliance, Equal Employment Opportunity, Equal Employment Opportunity Commission (EEOC) | Tagged , , ,

Successful Wellness Programs Require Ongoing Commitment, Tailoring to Employees

April 5, 2012 – 2:08 pm | By David Slaughter | No comments yet

Getting good results from an employee wellness program requires a continuing organizational commitment and understanding of what motivates individual employees, wellness expert Brad Cooper told a recent Thompson Interactive webinar. He warned of some common wellness program pitfalls. One is a “check-the box” approach — such as setting up a biometric screening and distributing a health risk assessment (HRA) without adequate follow-up. “You can get it off your plate” that way, but “by themselves they’re not a wellness program,” said Cooper, the CEO of US Corporate Wellness, Inc. Research shows that “effective coaching is essential”; without it an HRA is “a good screening tool but not a wellness program,” any more than annual standardized testing is an education, he said. Cooper also warned against a “scarlet letter” approach that focuses on the least healthy employees, which can not only misallocate resources but also elicit resistance rather than engagement. Singling out those “on the wrong track” for health coaching “takes the most valuable component to your wellness program and turns it into a negative,” he said. You want productive coaching relationships to become part of the culture, and that can’t happen if people are embarrassed to admit they even have a coach. A third common mistake is to over-rely on technological tools such as computer-generated messaging and educational modules. They can be “really cool,” but they don’t account for human nature, Cooper said. This approach “assumes if we put good data in, good information leads directly to application,” but unhealthy lifestyles can’t be chalked up to sheer ignorance, he said. “We know the basics” about diet, exercise, drinking and smoking, but few of us actually follow them all. The psychology behind this is complex, but a wellness program can improve its odds by accounting for differing personality types and by forming relationships, Cooper said. The message should be repeated and reframed to fit the individual, he added, the way Facebook has succeeded by making it “all about you.” Cooper spoke in a March 28 webinar presented by Thompson Interactive.

Posted in Employee Benefits, Wellness programs | Tagged ,

GSA Chastened Over ‘Lavish’ Conference Expenses

April 5, 2012 – 1:52 pm | By Dan Macy | No comments yet

Las Vegas Strip

Federal offices have to follow federal travel guidelines, and federal rates form the basis of tax treatment of private sector business travel reimbursements as well. But what happens when the federal government agency that develops travel policy goes astray from its own guidelines? The report by GSA Inspector General (IG) Brian D. Miller said that the expenses came to $822,751 for 300 attendees. It accused the GSA of not following its own travel policies, including exceeding per diem limits. The report — noting that “the PBS Commissioner hosted an essentially celebratory party in his loft suite for GSA senior officials, at a cost of $1,960 —  is chock full of other details of the expenses the agency incurred at the M Resort of Henderson, Nev., and even includes photographs of luxury suites there. According to its website, the resort is 10 minutes south of Las Vegas McCarran International Airport, on the Las Vegas Strip. The IG’s report, which called the GSA’s expenses “excessive, wasteful and in some cases impermissible,” is an embarrassment for the agency, which has been under orders by President Obama to tighten travel, entertainment and commuting policy across the federal government to save money and reduce pollution. The Obama administration, for its part, has been under political attack over the size of government in general, and over government waste. To make matters worse, luxury travel and entertainment became taboo in both the public and private sectors after the onset of the recession in late 2008. That’s when some financial giants were discovered to have thrown lavish parties at luxury resorts even as the federal government was bailing them out with taxpayer money. Carmaker executives made a similar spectacle. Congress excoriated them for flying their private jets to the nation’s capital in order to ask for bailout funds. The next time the executives showed up on Capitol Hill, they drove from Detroit. Miller said the GSA, “as the agency Congress has entrusted with developing the rules followed by other federal agencies for conferences, GSA has a special responsibility to set an example, and that did not occur here.” So, what happened to the GSA for allegedly engaging in the same type of behavior that earned private companies a public lashing? GSA Chief Martha Johnson on April 2 wrote an official response to the IG’s report, outlining reforms the agency would take. In it, she said, “The excessive spending and other misconduct described in the report would be absolutely unacceptable under any circumstances. But it is especially egregious at a time when the fiscal constraints facing our nation demand that every dollar deliver the greatest value to the American taxpayer.” But the affair cost Johnson and at least two others their jobs. Later that day, the Washington Post reported that Johnson had resigned and that “two of her top deputies were fired and four managers were placed on leave Monday.” What This Means The GSA is in charge of developing and administering travel policy, including per diems — daily rates for lodging, meals and incidental expenses related to travel, which may not be exceeded — for the entire federal government workforce. Managers in federal offices need to keep in mind that they still must comply with all rules governing business-related travel by federal employees. The rules still hold for private-sector employers, as well — applying federal per diems is voluntary, but they form the basis of the tax treatment for reimbursement of qualified business-related travel expenses employees incur. The abuses at the GSA do not change the rules. But they do provide an illustration of what can happen if the rules are not correctly applied.

Posted in Commuting, Employee Benefits | Tagged , ,

6th Circuit: Failure to Pay Employee Salary Removed his ‘Exempt’ Status

April 5, 2012 – 1:39 pm | By Khristine Scholtz | No comments yet

An exempt employee must actually be paid in order to retain that exempt status, the 6th U.S. Circuit Court of Appeals recently held. The case, Orton v. Johnny’s Lunch Franchise, involved a salaried employee who sued his employer for wages and overtime when, after beginning to experience cash flow problems, the employer stopped paying his annual salary. The company argued that as an exempt employee, Orton was not covered by the Fair Labor Standards Act (FLSA) and therefore was ineligible for hourly pay as a non-exempt “administrative” employee. The appeals court, however, disagreed. To qualify for the FLSA’s “administrative” exemption, three tests must be satisfied: the duties test (that is, the duties must be sufficient for the administrative exemption); the salary level test (payment must be at least $455/week) and the salary basis test (payment must be “on a salary basis”). Orton argued that the company’s failure to pay a salary converted his position to non-exempt. The 6th Circuit agreed. In reaching its conclusion, the 6th Circuit focused on an FLSA regulation issued in 2004 that clarified two parts of the analysis used to determine whether an employee qualifies as “exempt” and whether a deduction is proper. First, it focuses the exemption decision onto the payment the employee actually received (rather than the employment agreement terms). Second, it explains the effect of an improper deduction on an employee’s “exempt” status. Before the 2004 regulation, employers could cite the employment agreement terms to avoid liability for things like overtime. However, the 2004 regulation recognized that employment agreements should not shield employers from liability and permit them to ignore the agreement. Without FLSA protection, the employment agreement would be meaningless for the employee, particularly in a case like Orton, where Orton was not even receiving payment. Additionally, the regulation states that an improper deduction alone does not necessarily render an employee non-exempt. Improper deductions that are either isolated or inadvertent will not result in loss of the exemption for any employees subject to such improper deductions, so long as the employer reimburses the employees for those deductions. In Orton’s case, however, several months of deducted salary and failure to pay him for the hours worked rendered his employer liable. The bottom line for employers: Even if an employee is a highly paid executive (and normally considered FLSA-exempt), an employer cannot use that exempt status to avoid paying that employee for work performed. Even Orton, who earned a $125,000 salary under the terms of his employment agreement, was converted to a non-exempt employee once he stopped receiving his agreed-upon salary.

Posted in Employment Law, Exempted employees, Fair Labor Standards Act | Tagged

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