A number of federal agencies recently issued guidance in response to the United States Supreme Court’s ruling in Windsor, which held that Section 3 of DOMA is unconstitutional.  On September 18, 2013, the Department of Labor (“DOL”) Employee Benefits Security Administration (“EBSA”) issued Technical Release 2013-04, and adopted the same rule previously outlined in IRS Revenue Ruling 2013-17 (and discussed more fully here) to apply to same-sex marriages for purposes of ERISA.

Same-sex couples will be treated as married for all purposes under ERISA if they were legally married in a state that recognizes same-sex marriage, regardless of where they live now.  The term “marriage” now includes same-sex marriages that are legally recognized as a marriage under the law of any state, territory or possession of the United States or any foreign jurisdiction that has the legal authority to sanction marriages.  This is the case regardless of where the couple resides, even if they reside in a state that does not recognize same-sex marriage.  It is important to be aware, however, that like the IRS position, the EBSA definition of “spouse” and “marriage” do not include individuals (of the same or opposite sex) who are in recognized formal relationships under state law, such as domestic partnerships or civil unions, even if, under state law, those individuals would be afforded the same rights and responsibilities as married persons.

In August 2013, the DOL issued less clear revisions to its definition of “spouse” for purposes of FMLA.  In an internal memorandum, the DOL Secretary instructed agencies within the Department “to look for every opportunity to ensure that we are implementing [the Windsor] decision in a way that provides the maximum level of protection for workers and their families.” Publicly, however, the DOL revised a fact sheet (Fact Sheet #28F: Qualifying Reasons for Leave Under the Family and Medical Leave Act) that redefined the term “spouse” to include some same-sex spouses.  This revision, however, created something of a caveat in the law.  At least for current FMLA purposes, it seems that an employee is only entitled to take FMLA leave to care for a same-sex spouse with a serious health condition if the employee resides in a state that recognizes same-sex marriage.  This leaves open questions of whether FMLA leave is available to care for a same-sex spouse if the employee works in a state that recognizes same-sex marriage, but lives in a state that does not; or if the employer is located in a state that does not recognize same-sex marriages, but has an office in a state that does.  These questions will likely be addressed in later DOL guidance.

For FMLA purposes, employers should be aware that providing leave to an employee who does not reside in a state that recognizes same-sex marriage in order to care for a same-sex spouse may lead to the employee receiving more than 12 weeks of leave.  Leave is only properly designated as FMLA leave if it is taken for a qualifying reasons.  It is unclear under the guidance offered if caring for a same-sex spouse when the employee does not reside in a state recognizing same sex marriage is a “qualifying” purpose.  Therefore, providing leave to an employee who is not a resident of a state that recognizes same-sex marriage to take care of a same-sex spouse technically may not exhaust his or her 12 week FMLA allotment.

In light of these changes, employers should take steps to ensure they are complying with the law and following the guidance offered to date.  This includes informing managers and human resources professionals of the changes in the law, updating relevant policies and documents, and monitoring future guidance on this topic.

Employers frequently access and review data created or stored by employees on company-owned electronic devices, such as computers, laptops, tablets (iPad), and cellphones (iPhone, Droid and Blackberry).  Well-crafted technology and social media policies specifically authorize employers to do so.  But, if not careful, employers can step over the line between permissible conduct and conduct that violates the federal Stored Communications Act (SCA).  The line between permitted and unlawful conduct is not always apparent, so employers need to be aware of the SCA and seek counsel before accessing or reviewing an employee’s electronic communications.

Company-owned electronic devices are treasure troves of evidence of employee misconduct, particularly where employees use the devices to access personal email (Gmail, Yahoo!, etc.) or social media (Facebook, Google+, Twitter, Flickr, etc.).  Employers feel justifiably entitled to access and review data created and stored on such devices, particularly where employees are instructed that the company owns the devices and has the right to monitor the data, and that employees have no right to privacy.  As a general rule, the law supports employers here.

But the SCA imposes some limits on employers.  And, as few recent cases demonstrate, it is all too easy for employers to step over the line and violate the federal law.

In Deborah Ehling v. Monmouth-Ocean Hospital Service Corp., the employer terminated the employee based (in part) on posts she made on Facebook.  The court underwent a rigorous analysis to determine that the SCA protects Facebook posts, as long as the posts are limited to friends and not on the person’s public Facebook pages.  As the court explained,

“when it comes to privacy protection, the critical inquiry is whether Facebook users took steps to limit access to the information on their Facebook walls” and the “privacy protection provided by the SCA does not depend on the number of Facebook friend that a user has.”

Although the employee’s Facebook posts were protected, the employer did not violated the SCA because it received the posts through a person authorized to access them: one of the employee’s co-workers, who was her Facebook friend, gave them to the employer.  However, as this court and others have recognized, an employer violates the SCA if it obtains an employee’s private Facebook posts by other means, such as (1) using a password retrieved from the hard drive of the employee’s company-owned electronic device or from a keystroke logger installed on the device, (2) accessing the account by using the employee’s company-owned device where the password populates automatically, (3) creating a fictitious person on Facebook to friend the employee, and (4) pressuring co-workers to divulge the employee’s Facebook posts.  In those circumstances, access to the Facebook posts would not be authorized under the SCA.

In another case, Sandi Lazette v. Verizon Wireless, the employee returned her company-owned Blackberry to her employer, but did not properly disconnect her Gmail account from it before doing so.  Over the next 18 months, her supervisor read 48,000 emails sent to that account, some of which were quite personal.  The court in that case (like many other courts) found that email stored in webmail accounts (like Gmail) is protected by the SCA, at least while the email resides unread on the servers of the service provider.

The employer made several unsuccessful arguments to avoid liability.  For example, the court rejected the argument that the supervisor was accessing only the company-owned Blackberry, recognizing that he was actually using that device to access an account on the Gmail servers.  However, an employer does not violate the SCA if it recovers an employee’s personal emails that are stored on a company-owned device, such as when the data is in a backup file or recovered from the “residual” space of a hard drive.  The court also rejected the employer’s argument that the employee had impliedly consented to the employer’s review of her Gmail by not properly disconnecting the account.  While consent need not be explicit, the court recognized that,

“Negligence is … not the same as approval, much less authorization.  There is a difference between someone who fails to leave the door locked when going out and one who leaves it open knowing someone will be stopping by.”

Technology presents legitimate opportunities for employers to monitor their employees.  It also presents potential pitfalls, some of which are not apparent.  Employers should continue to harvest valuable information from company-owned electronic devices, but also need to become aware of the SCA and seek counsel before accessing or reviewing employee electronic communications.

While uncertainty still lingers in some areas of federal law regarding how the recent overturning of DOMA will affect same-sex couples’ abilities to obtain federal benefits, on August 29, 2013, the IRS clarified this ambiguity with regard to federal tax law.  The IRS published Revenue Ruling 2013-17 and a news release, IR-2013-72, announcing that it will recognize “all legal same-sex marriages … for federal tax purposes.”  This means that all same-sex couples legally married in any state are married, so far as the IRS is concerned, no matter where they now live.

The IRS ruling marks the first big first step toward a general federal recognition of same-sex marriages.  The IRS could have decided that married same-sex couples file their taxes on a “place of residence” basis, that is, if their state recognizes same-sex marriage, they can file as a married couple; if not, they must file individual returns.  Instead, the IRS opted for a “place of celebration” rule, which means that once a couple is married in one of the 13 states that recognize same-sex marriage (14, including Washington D.C.), the IRS considers them married for all purposes going forward, even if they move to a state where same-sex marriage is not recognized.

In doing so, the IRS concluded that gender-specific terms in the tax code such as “husband” and “wife” must be construed in a gender-neutral way.  The IRS also concluded, however, that other types of formal relationships, such as civil unions and registered domestic partnerships, are not equivalent to marriage, and persons in such relationships are not married for federal tax purposes.

The IRS ruling takes effect on September 16, 2013, though taxpayers may rely upon the ruling retroactively.  Taxpayers may amend their previously filed tax returns back to 2010 to change their filing status and recalculate their federal income tax.  Employers too are permitted to rely upon the ruling retroactively claim a refund of, or make an adjustment for, any excess Social Security and Medicare taxes paid.  The IRS will issue a special administrative procedure for employers on this point in the future.  Employers, however, cannot make claims for refunds of overwithheld income tax for prior years, but may make adjustments for income tax withholdings that were overwithheld in the current year, provided the employer has repaid and reimbursed the employee for the overwithheld income tax before the end of the calendar year.

 

 

 

 

With its mandatory treble damages, recovery of attorney’s fees and personal liability of corporate principals, the Massachusetts Wage Act is a boon to employees who claim that they are owed wages.  But, with its relatively short, three-year statute-of-limitations, the Wage Act favors the diligent plaintiff.   A decision issued by the SJC yesterday, holding that the Wage Act does not preempt other common law claims, gives a helping hand to plaintiffs who cannot bring a claim under the Wage Act, for example because they waited more than three years to bring suit, or who, for some other reason cannot, or do not want to, seek relief under the Wage Act.

In Lipsitt v. Plaud, SJC-11285 (Aug. 12, 2013), the plaintiff was hired in 2004 to be the director of the Franklin D. Roosevelt American Heritage Center, a museum established to house a collection of FDR memorabilia.  From the outset, the Center had financial difficulties, and the plaintiff was never paid the full salary he was promised.  However, based on his desire to see the Center succeed, and his reliance on the defendant’s promises that he would eventually be paid all of his back salary, the plaintiff continued to work for less than he was owed.  By about July 2007, however, the Center closed when its landlord did not renew the lease and a planned move to a new location never materialized.

In 2008, the plaintiff filed a wage complaint with the Attorney General, who undertook an investigation which ended in 2010 with the plaintiff getting a share of a group settlement and a right-to-sue letter.  A few months later, the plaintiff brought suit asserting claims for breach of contract, quantum meruit, fraud and deceit, and violations of the Wage Act.

The trial court dismissed the plaintiff’s common-law claims on grounds that they were preempted by the Wage Act, and dismissed his Wage Act claim to the extent that it sought to recover wages earned outside the statute’s three-year limitations period.  On appeal, however, the SJC reinstated the common-law claims, holding that the Wage Act does not preempt other claims, such as those for breach of contract or quasi-contract theory, arising out of the non-payment of wages.

As the SJC has observed on many occasions, the Wage Act’s purpose is “to prevent the unreasonable detention of wages.”  And since its enactment in 1886, it has been amended to expand its applicability to more and more workers and types of compensation.  Where a statute is intended to enhance certain rights, the SJC held that it will not read that statute as abrogating common law actions aimed at protecting those same rights unless preemption is required by the statute’s express language or necessary implication.

The SJC also rejected the assertion that allowing common-law clams to be asserted alongside Wage Act claims will frustrate the statute’s purposes.  The SJC predicted that allowing plaintiffs to pursue common-law claims in addition to statutory claims will not have any appreciable effect on the reporting of Wage Act claims or enforcement efforts since, given the mandatory treble damages and attorney’s fees available under the Wage Act, “it would be foolhardy for an employee to forego” this relief if it were available to him.  Rather, the SJC observed that employees would likely only seek common law remedies in cases where a claim is barred by the Wage Act’s three-year statute of limitations, but where some relief may still be obtained under a longer common law statute of limitations, like the six-year limitations period on a breach of contract claim.  The SJC held that under such circumstances, it could find “no good reason why, given the strong presumption against implied abrogation of the common law, that [an] employee cannot seek to recover [] unpaid wages by bringing a contract or quasi-contract claim.”

Lipsitt, makes it clear that employers may continue to be on the hook for unpaid wages beyond the Wage Act’s three-year statute of limitations, although the remedies available to employees are not as robust—no mandatory treble damage or attorney’s fees.  And plaintiffs seeking to hold corporate principals personally liable under a common-law breach of contract or quasi-contract theory will have a harder time, since they must overcome the relatively high burden for piercing the corporate veil, rather than relying on the Wage Act’s strict liability for corporate principals.

The Massachusetts Supreme Judicial Court (SJC) has held an employer is prohibited from discriminating against its non-disabled employee based on that employee’s association with an immediate family member with a disability or handicap under Chapter 151B, the state’s antidiscrimination law.  This decision expands the scope of employer liability.

In Flagg v. Alimed, Inc (July 19, 2013),  Mark Flagg alleged that he was terminated from his employment because of his wife’s disability.  In 2007, Flagg’s wife underwent surgery for a brain tumor.  Flagg became responsible for caring for the couple’s children, which included his periodically leaving work for a short period of time to pick up his daughter and then returning to work to finish the day.  During those times he left, Flagg did not punch out, which he claims his manager knew.  Shortly after his wife’s recurrence of the brain tumor, Flagg was terminated for failure to punch out.  Flagg alleged the company really terminated him because it did not want to pay for his wife’s costly medical treatment.

Chapter 151B prohibits employment discrimination in Massachusetts and section 4(16) specifically prohibits discrimination based on handicap.   G.L. c. 151B, sec. 4(16).  At issue before the SJC was whether the statute extended to include “associational discrimination,” which does not specifically appear in its text.  The SJC explained that the term “associational discrimination” refers to a plaintiff who, “although not a member of a protected class himself or herself, is the victim of discriminatory animus directed toward a third person who is a member of the protected class and with whom the plaintiff associates.”

Answering in the affirmative, the SJC determined that a broad reading of the statutory language to include associational discrimination furthered the state’s general purpose to eliminate workplace barriers based on discrimination.  It noted that the definition of “handicap” includes (1) persons with a physical or mental impairment that substantially limits one or more major life activities or (2) persons with a record of impairment, as well as covers those (3) persons “being regarded as having such impairment.”  G.L. c. 151B, sec. 1(17).  It reasoned that this third prong protects those who are not actually impaired but who may be the victim of “stereotypic assumptions, myths, and fears regarding such limitations.”  For this reason, “[w]hen an employer takes adverse action against its employee because of his spouse’s impairment, it is targeting the employee as the direct victim of its animus, inflicting punishment for exactly the same reason and in exactly the same way as if the employee were handicapped himself.”

In its holding, the SJC afforded substantial deference to the Massachusetts Commission Against Discrimination (MCAD), which has adopted associational discrimination under c. 151B.   It also looked to analogous federal law under Title VII and the Rehabilitation Act to support the ruling.  In a footnote, the SJC noted that it was limiting claims for associational discrimination to immediate family members only.  It should also be noted that the Americans with Disabilities Act (ADA) prohibits “excluding or otherwise denying equal jobs or benefits” because of the known disability of an individual with whom the employee is “known to have a relationship or association.”

Employers should  train all managers, supervisors, and employees on this protected status and other anti-discrimination laws.  Companies should also review and update their policies.

The Supreme Court, in U.S. v. Windsor, a case involving a refund of federal estate tax, ruled that Section 3 of the federal Defense of Marriage Act (“DOMA”) is unconstitutional.  Section 3 of DOMA provided that only persons of the opposite sex could be recognized as “spouses” and “married” for purposes of federal law.  According to the Supreme Court’s opinion, DOMA’s definitions of “marriage” and “spouse” impact more than 1,000 federal laws, including the Internal Revenue Code and the Employee Retirement Income Security Act of 1974 (“ERISA”), which regulates employer sponsored retirement and health and welfare benefit plans.  Because DOMA limited the definition of “marriage” and “spouse” under the Tax Code and ERISA to only opposite‐sex couples, same‐sex couples that were legally married under the laws of their state were subject to different legal protections and tax treatment of certain benefits.

Although the Court’s decision means that the complexities associated with the different treatment of opposite sex and same‐sex couples under the Tax Code, ERISA, and other federal laws such as COBRA, and HIPAA will end in states like New Hampshire that allow and recognize same‐sex marriages, the decision raises numerous transition issues, retroactivity issues and recognition issues.

Health and Welfare Plans

Under DOMA, employers that allowed employees to cover same-sex spouses on their health insurance plan were required to impute income to the employee for federal tax purposes equal to the fair market value of the health insurance provided to the same-sex spouse.  Employers will no longer be required to impute income to employees so that previously taxable benefits will no longer be taxable.  Self-insured plans in New Hampshire that previously were not required to provide continuation coverage under COBRA to same-sex qualified beneficiaries will now be required to do so.

The Internal Revenue Service has indicated that it will issue guidance on DOMA issues. Since employers have already imputed income for 2013 benefits, hopefully, the IRS will provide guidance on the retroactive treatment of imputed income for 2013 and possibly prior years. It is hoped that the IRS will also promptly issue guidance on the ability of employees to utilize pre-tax dollars in flexible spending accounts, health savings accounts and dependent care accounts for same-sex spouses and dependents along with health reimbursement accounts.

Retirement Plans

There will also be significant changes for retirement plans.  Same-sex spouses will be entitled to survivor annuity protection in pension plans, automatic 100% of account balance death benefits in 401(k) and 403(b) plans and will have direct rollover treatment on a spouse’s death.  Same-sex ex-spouses will now be entitled to receive a portion of a retirement plan account at divorce on a tax-free basis through a qualified domestic relations order (QDRO).

Is the Decision Retroactive?

The Supreme Court did not state whether the decision was retroactive and whether employers that had complied with DOMA in the past will now be required to make corrections on a retroactive basis. For certain issues, the Tax Code provides limits on the amount of time for which a refund may be sought that limits the potential retroactive impact. There are plan and common law limits under ERISA for how long participants can make claims for ERISA benefits.  As these time limits are normally at least 3 years, it is important for the IRS and Department of Labor to clarify if employers have any retroactive liability for administering their retirement and other plans in conformity with DOMA.  Any such retroactive treatment could prove potentially costly to employers who have paid out benefits based on applicable law at the time benefits were due and payable.

How to Treat Employees living in States that do not Recognize Same Sex Marriage

For employers that have same-sex married employees that currently reside in states that do not recognize same-sex marriage, the decision raises the question of which state’s marriage law will control: a couple’s state of residency or the state in which the same-sex marriage was performed. Although the Internal Revenue Service generally recognizes the law of the state of residency for tax purposes, the IRS could adopt a “state of celebration” rule to ensure consistent implementation nationwide regardless of the state in which the employer is located or the state in which the employee currently resides.  That would not be unexpected given that the current Administration did not actively defend DOMA in Windsor.  It has also been speculated that the President could issue an executive order requiring employers to recognize same-sex marriages irrespective of whether or not the employee and spouse reside in a state that has legalized same- sex marriage. Until guidance is issued, it would  be reasonable for employers to continue to treat employees in states that do not recognize same-sex marriage as not entitled to the favorable tax and benefits treatment described above. As guidance is issued, employers will need to review the definitions contained in all employee benefit plans and their administration to verify compliance.

What the Decision does not Change

It is important to briefly mention what the ruling in Windsor did not do. The Supreme Court did not address states that allow civil unions or domestic partnerships in lieu of marriage. Additional guidance will be necessary as some states afford same-sex couples in civil unions the same rights as married couples. In addition, any benefit plan that does not currently offer spousal coverage or spousal benefits, will not be required to offer spousal benefits as a result of the Windsor decision.

This post was originally published on April 12, 2013.  In light of the recent Supreme Court Decision on DOMA, McLane wanted to share this post again.

For at least the next few months, DOMA is the law of the land, and the United States government will continue to define “marriage” as a “legal union between one man and one woman as husband and wife,” and “spouse” as a “person of the opposite sex who is a husband or a wife.” DOMA, however, appears to be on its last leg. The demise of DOMA will likely trigger significant policy and benefit changes for employers. Here is a list of four potential issues to keep in mind in the coming months as DOMA’s fate continues to unfold.

  1. Health Insurance – Many employers provide health insurance benefits to their employees, and their employees’ federally-recognized spouses and children. These benefits are considered a non-taxable fringe benefit under the Internal Revenue Code and exempt from income tax liability. Health insurance benefits for an employee’s domestic partner or same-sex spouse, however, while still a fringe benefit, is not exempt from income tax liability, and instead imputed to the employee as income. If DOMA is overturned, insurance benefits provided to same-sex spouses will no longer be imputed as income, and will instead be exempt from income tax liability.
  2. Title VII of the Civil Rights Act – While New Hampshire and Massachusetts recognize sexual orientation as a protected class and therefore afford some protections to employees against discrimination based on sexual orientation, the Civil Rights Act does not. It does, however, prohibit discrimination based on gender. If the DOMA-definitions of “marriage” and “spouse” are overturned, some experts argue that employers could potentially be held liable for gender discrimination if they deny benefits to an employee simply because he or she is in a same-sex marriage. Employers should therefore take active steps to ensure that all existing policies and procedures provide equal treatment, benefits, and opportunities to employees regardless of the gender of their spouse.
  3. FMLA – Employers are not presently required to provide employees twelve weeks of unpaid leave in order to care for a sick same-sex spouse. In fact, should employers elect to provide employees with such leave, it does not count toward that employee’s twelve weeks. If DOMA is struck down, all employees will be allowed to take leave under FMLA to care for a same-sex spouse.
  4. 401(k) and 403(b) Plans – Employees with same-sex spouses participating in 401(k) and 403(b) plans that require spousal consent to name a non-spousal beneficiary are currently free to name anyone other than their spouse as the beneficiary. If DOMA is overturned, employees with same-sex spouses will gain the same spousal protects provided to all other employees. This raises questions regarding the status of non-spousal beneficiaries designated before DOMA was overturned. Will these designations stand? Will the newly-recognized same-sex-spouse automatically undo the prior designation and become the new beneficiary? Employers should therefore encourage employees with same-sex spouses to revisit their beneficiary designations to ensure their beneficiary designations are as they intended.

 

On the heels of narrowing the definition of “supervisor” for purposes of liability under Title VII of the Civil Rights Act of 1964, a divided U.S. Supreme Court dealt a second major blow to employees this week by making it harder for them to prove retaliation claims under that same statute.

University of Texas Southwestern Medical Center v. Nassar dealt with the issue of defining the proper standard of causation for claims of retaliation under Title VII. Like basic tort claims, “causation” is a required element of successfully proving a case of discrimination or retaliation under Title VII:  the employee’s injury must be caused by the employer’s discriminatory animus or a desire to retaliate.

In this case, there were two options at the Court’s disposal: (i) the easier-to-satisfy “motivating factor” test; or (ii) the more-difficult-to-satisfy “but-for” standard. Under the motivating factor test, an employee could prove retaliation by showing that their decision to report or notify the employer of possible discrimination was a motivating factor in the employer’s decision to terminate them or take some other adverse employment action. On the other hand, under the but-for causation standard, the employee would have to prove that they would have retained their job or avoided some other adverse employment action in the absence of the employer’s retaliatory intent.

The plaintiff in Nassar – a physician of Middle Eastern descent at the University of Texas Southwestern Medical Center – had relied on the motivating factor test in prevailing against the hospital at the trial court level, and argued for its application before the Supreme Court. The U.S. Government also urged the Court to adopt the motivating factor test as the proper causation standard.  Unfortunately for this plaintiff, and employees bringing retaliation claims in the future, a narrow majority of the Court disagreed and found that the stricter but-for test applied.

In finding that but-for was the proper causation standard, the Court relied upon both the text of Title VII and the structure of how the statute is written.  The Court emphasized that Congress was deliberate in placing the “motivating factor” standard in the section of the statute that deals with discrimination – separate from the section that addresses retaliation.  Had Congress intended to apply the motivating factor standard to retaliation claims, it could have and would have written the statute that way, as it has in other discrimination statutes.  The Court also elected to disregard the Equal Employment Opportunity Commission’s interpretation and guidance on the proper standard.

The result of Nassar is that employees must prove claims of Title VII discrimination and retaliation under two different causation standards, the new standard for retaliation being much more difficult to satisfy.  Heightening the causation standard for retaliation claims may also curb the increasing influx of retaliation lawsuits filed in recent years, which the majority recognized as a problem that was impacting the “fair and responsible allocation of resources in the judicial and litigation systems.”  For employers, the decision is a major victory.  From a litigation perspective, it will significantly limit an employee’s ability to successfully prove that they were retaliated against.  From a practical standpoint, if an employee complains about workplace harassment or discrimination, and is later terminated for legitimate reasons unrelated to his or her complaint, employers can find some comfort in the fact that this termination is now more likely to hold up in court against a retaliation suit.  Clearly, employers should still remain cautious when making employment decisions about employees that have arguably blown the whistle about their working conditions, but this decision gives employer’s more flexibility.  Moreover, employers must still be diligent in documenting and communicating legitimate personnel issues to employees, so those employees will understand why certain adverse action is taken against them.

The US Supreme Court in the case of Vance v. Ball State University issued on June 24, 2013 decided the question of who qualifies as a “supervisor” in a Title VII claim of harassment based on race.  The decision has been anxiously awaited because it impacts the standard by which an employer’s liability will be measured.

Under Title VII, a company is strictly liable for the actions of a supervisor which result in a “tangible employment action.” Such actions include hiring, firing, failing to promote, discipline, demotion or effecting significant changes in working conditions or benefits. Companies can also be held liable for harassment by a supervisor when a tangible employment action does not result if the supervisor has created a hostile work environment and the employer is unable to establish an affirmative defense. An employer establishes such a defense by showing 1) that it exercised reasonable care to prevent and promptly correct any harassing behavior or 2) that the plaintiff unreasonably failed to take advantage of any preventative or corrective opportunities provided by the company.

Where the alleged harasser is simply a coworker, however, the employer is liable only if it was negligent in controlling the employee’s working conditions.  If, for example, an employer failed to respond appropriately to a complaint of harassment by a co-worker, liability might result.

In hearing the Vance case the Court took the opportunity to resolve a conflict  among the circuit courts of appeals as to the definition of “supervisor.”   In a 5-4 decision authored by Justice Alito, the Court adopted the more conservative of the approaches and held that an employer is vicariously liable for an employee’s harassment  “only when the employer has empowered that employee to take tangible employment actions against the victim.”  In doing so, the court rejected the definition promoted by the Equal Employment Opportunity Commission (“EEOC”) which definition had previously been relied on by several circuit courts.

The matter originated with the claim by Maetta Vance, an African-American employee of Ball State University, alleging that she was the victim of discrimination by a fellow food service worker, Saundra Davis.  The parties agreed that Davis did not have the power to hire, fire, demote, promote, transfer or discipline Vance although they largely disagreed about the extent of power Davis otherwise had over Vance.  Under the definition adopted by the Court, Davis was not a supervisor, and Vance’s action against her employer was dismissed.

The practical impact of this decision is quite favorable to employers for two reasons.  First, it adopts a more limited definition of supervisor narrowing the scope of employees for whose conduct a company might be liable even if it is unaware of their specific actions.  Second, it increases the opportunity for lawsuits to be decided early on by summary judgment since there is far less subjectivity in the determination.  Employers in the First Circuit (i.e. New Hampshire and Massachusetts) will see less impact from this decision since this circuit has long been in the camp now joined by the Supreme Court.  Cases like this, however, are always a reminder to employers about the need to train supervisors and managers (and indeed all employees) about anti-discrimination and anti-harassment laws and appropriate workplace behavior.  Adequate training and clear policies are by far the best shield from liability.

Many dog lovers think their job, and their job performance, would be better if they could bring their pet to work. And there are studies that show that allowing dogs in the workplace reduces stress – resulting in happier and even more productiveDogs at Work and efficient employees – and even increased teamwork.

So every office should open its doors to Fido, right? Well, don’t throw open the doggie-door quite yet. While it might be tempting, employers have a few issues to consider from a legal, business and office culture perspective before offering a blanket policy allowing dogs.

There are certainly reasons to allow pooches in the workplace, and as a dog lover, I often wonder what my day would look like if I could bring my dog with me to the office. Then I realize that my wonderful, loving, but rambunctious dog is probably not office appropriate.

Canine Culture

Dog-friendly workplaces indicate that the employer is relaxed and forward thinking about office culture generally, and that type of environment is appealing to employees.

Even so, employers have to weight the positives with the potential negatives. For example, what do you do about aggressive dogs? While dog owners will tell you, “Don’t worry my dog wont bite,” it’s not always true. Even the most mild-mannered pup may get aggressive when put into an uncomfortable situation, perhaps including eight to 10 hours in an office building with many new faces and possible several unfamiliar dogs.

Employers should decide whether they are willing to face the possibility that an employee-owned dog becomes aggressive with an employee, customer or visitor. If so, employers should be sure that they have appropriate insurance for that possibility. And while you’re at it, check your building’s lease to ensure dogs are allowed.

Petaphobes

Employers also have to take into consideration the reaction of non-dog lovers before implementing a dog-friendly policy, and even further how to address employees with allergies. As hard as it is for dog lovers to understand, some people just do not like dogs and do not want to spend 40 (or more) hours each week with “those animals.”

How do you justify to an employee with a serious dog allergy that he or she might have to buy stock in Zyrtec in order to continue working? And might you be required to accommodate and employee’s allergies under the Americans with Disabilities Act? While the specific facts and circumstances would dictate whether an allergy would be a disability under the ADA, the possibility may be enough for some employers to choose not to implement a pet-friendly policy.

For those who still feel strongly about dogs in the workplace, they should remember they may be required to provide ADA separate pet-friendly and no-pet areas, requiring dogs on leashes, and making sure pet owners focus on pet hygiene.

Are You Really Dog-Friendly?

Finally, is being a dog-friendly workplace representative of the employer’s actual office culture? Take a close look at whether your workplace is appropriate for animals. If an employer is going to feel uncomfortable with the idea of customers and clients coming into the office where they will be greeted by a four-legged friend, then there is no reason for the employer to try to force a culture that does not fit with his or her business needs.

In a manufacturing business, it would be unsafe for animals to be allowed in the workplace. No matter how badly a company’s employees love the idea of having Rex sit at their feet during the workday, and employer should not acquiesce to their desire if it is directly opposed to the culture the employer wants to instill or the business in which it is engaged.

Pooch Policy

If you decide your office culture can include dogs, managing such issues can be (and should be) addressed by implementing a detailed policy. The policy should include, among others, an animal background check (assuring the dog has not been aggressive previously), allowing only housebroken and vaccinated dogs, requiring certain cleaning and hygiene requirements, requiring the use of a leash in certain parts of the office (if not all), creating a no-dog area for those who are not themselves dog-friendly or allergic, and implementing a zero-tolerance policy.

While dogs in the workplace may fit into the business and office culture of certain workplaces, employers should be cautious of the potential pitfalls and make sure they have a policy that addresses these possibilities.