Multi-Month Medical Leave Not A Reasonable Accommodation Under the ADA

Published by Meg Vergeront, Elizabeth C. Stephens on | Permalink

The Court of Appeals for the Seventh Circuit recently held in Severson v. Heartland Woodcraft, Inc., 2017 U.S. App. LEXIS 181197*, 872 F.3d 476 (7th Cir. 2017) that a leave for medical purposes of two months or more is not a reasonable accommodation under the federal Americans with Disabilities Act (ADA).  In so doing, however, the Court left open the possibility that shorter or intermittent leaves might be, under appropriate circumstances.    

In Severson, the plaintiff took the full 12-week allotment of medical leave under the federal Family and Medical Leave Act (FMLA) due to back pain.  During his leave, he scheduled back surgery for day his FMLA leave expired.  Severson told the employer that he would not be able to work for two-to-three months after the surgery and requested non-FMLA medical leave for the recovery time.  The employer denied the request, given that Severson would be unable to perform any part of his job for several months.    

The court held that the employer’s decision did not violate the ADA.  The ADA, the court explained, is an anti-discrimination statute, not a medical-leave entitlement.  Id. at *3.  According to the court, the ADA is designed to prevent discrimination against a “qualified” individual, defined as a person who, “with or without reasonable accommodation, can perform the essential functions of the employment position.”  Id.  Thus, protection under the ADA is “expressly limited to those measures that will enable the employee to work.  An employee who needs long-term medical leave cannot work and thus is not a ‘qualified individual’ under the ADA.”  Id. (citing Byrne v. Avon Prods., Inc., 328 F.3d 379, 381 (7th Cir. 2003)).  Based on these considerations, the court determined that Severson was not a qualified individual under the ADA because the requested accommodation—a leave of two-to-three months—would not allow him to perform the essential duties of his job and thus was not reasonable.   

Employer Takeaway

Severson provides definitive guidance to employers in the Seventh Circuit with respect to employee requests for medical leave for two or more months, but only if the leave is not mandated by a medical leave statute like the federal FMLA or any state law counterparts.  While Severson also suggests that even a leave of more than a couple of weeks may not be a reasonable accommodation, employers should still proceed with caution in responding to requests for leave of less than two months because the reasonableness of the leave will turn on the particular circumstances of each request.  Employers also should keep in mind that Severson does not permit employers to deny extended leave mandated by another statute.  In such cases, of course, employers must provide the leave whether or not it would be considered a reasonable accommodation under the ADA. 

For additional guidance or questions related to employers’ responsibilities under the ADA, contact Meg Vergeront at (608) 256-0226.    

Seventh Circuit Expands Title VII Coverage to Include Sexual Orientation Claims

Published by Meg Vergeront on | Permalink

The Court of Appeals for the Seventh Circuit recently held in Hively v. Ivy Tech Community College, 853 F.3d 339 (7th Cir. 2017), that Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of sexual orientation. In doing so, it overruled its own longstanding precedent and put itself in conflict with most other circuits.

The plaintiff in Hively was a former part-time professor at Ivy Tech Community College. She filed a suit under Title VII, claiming that Ivy Tech denied her application for full-time employment, and ultimately declined to renew her part-time contract, because she was openly gay. Title VII makes it unlawful for private sector and state and local government employers with at least 15 employees to discriminate on the basis of, among other things, a person’s sex. 42 U.S.C. § 2000e-2(a). Title VII does not list sexual orientation as a protected classification.

At the time Hively filed her suit, the Equal Employment Opportunity Commission (EEOC) and a majority of the federal appellate circuits were at odds as to whether Title VII’s prohibition on sex discrimination should be expended to reach sexual orientation discrimination. The EEOC took—and still takes—the position that Title VII should be read to include sexual orientation as a protected classification. At the time of the suit, however, 10 of the 12 federal appellate geographic circuits, including the Seventh Circuit, had ruled to the contrary. Relying on Seventh Circuit precedent, the district court granted Ivy Tech’s motion to dismiss Hively’s sexual orientation discrimination claim. Hively appealed.

A three-judge panel of the Seventh Circuit noted that the line between a gender non-conformity claim—a claim that is covered by Title VII—and a sexual orientation claim is hard to discern. Hively v. Ivy Tech Cmty. Coll., 830 F.3d 698 (7th Cir. 2016). Ultimately, however, the court followed precedent. It upheld the district court’s dismissal on the ground that Title VII does not apply to sexual orientation discrimination claims. Id. at 718.

The panel’s ruling, however, was not the final word. The Seventh Circuit elected to rehear the case en banc, meaning that all eleven judges on the court would rehear it. After consideration, the court rejected its prior rulings. Hively, 853 F.3d 339. Specifically, the court concluded that Hively’s claim was no different from successful gender non-conformity claims brought by women  who alleged discrimination resulted from their “failure to conform to the female stereotype (at least as understood in a place such as modern America, which views heterosexuality as the norm and other forms of sexuality as exceptional).” It explained that the line between a gender nonconformity claim and one based on sexual orientation “does not exist at all.” Thus, the court concluded that Title VII’s prohibition on sex discrimination included discrimination claims based on sexual orientation. The court, however, did not determine the merits of Hively’s claim, but sent the case back to the district court for further proceedings consistent with its ruling.

Given the split among circuits, it is likely that Congress or the Supreme Court will step in to address the issue. Stay tuned.

If you have questions on this case or on other employment related matters, contact Meg Vergeront at (608) 256-0226.

Seventh Circuit: Self-Serving Statements Best Served with a Side of Factual Support

Published by Meg Vergeront, Kyle Engelke on | Permalink

Whitaker v. Wisconsin Department of Health Services, 849 F.3d 681 (7th Cir. 2017), recently served up a refresher on the role of self-serving affidavits in summary judgment proceedings. In Whitaker, the plaintiff alleged that she was fired by a state agency as a result of intentional discrimination based upon her disability. Whitaker suffered from chronic back pain and was granted repeated and consecutive leaves over the course of several months. After the third consecutive request for leave, her employer granted another leave, provided a date to return to work, and informed the plaintiff her leave was otherwise exhausted for the year. After Whitaker failed to return to work on the designated date, the agency fired her.

Whitaker brought suit under the federal Rehabilitation Act, claiming she was illegally terminated due to her disability. The Wisconsin Department of Health Services sought summary judgment on multiple, independent grounds. The district court granted summary judgment for the agency, finding that Whitaker failed to provide evidence that she could perform the essential functions of her position, a pre-requisite of a valid claim.

On appeal, the Seventh Circuit affirmed.  The court explained that while Whitaker was disabled within the meaning of the statute, regular attendance was an “essential function” of her employment and she failed to provide evidence regarding the effectiveness of her course of treatment or the medical likelihood of her recovery. Because the medical notes provided by Whitaker stated nothing other than “medical leave,” Whitaker needed to rely upon her own affidavit to survive summary judgment on this issue.

Here, the Seventh Circuit reiterated that “self-serving” statements like a party affidavit can and will be used as “perfectly admissible evidence through which a party tries to present its side of the story at summary judgment.” Id. at 686. Thus, Whitaker’s affidavit declaring she would have been able to return to work if only granted additional leave before her termination could have been a “legitimate method” to challenge summary judgment. Id. at 685. However, the Seventh Circuit found Whitaker’s affidavit failed to provide a sufficient evidentiary foundation for this statement—namely, evidence that medication improved her condition, or the medical likelihood that she would be able to return to work on a regular basis.

The take-away?  Self-serving assertions on the ultimate issue in a case can be acceptable, but must include an evidentiary basis for those assertions.

Seventh Circuit Weighs In on Church Plan Exemption Under ERISA

Published by Paul W. Schwarzenbart on | Permalink

Just how broad is the “church plan” exemption from the Employee Retirement Income Security Act of 1974 (“ERISA”)? Not broad enough to exempt a retirement plan established by church-affiliated hospital, according to the United States Court of Appeals in Stapleton v. Advocate Health Care Network, No. 15-1368, 2016 WL 1055784 (7th Cir. Mar. 17, 2016), in affirming the district court’s decision addressing the issue.

In reaching that conclusion, the Seventh Circuit relied solely on principles of statutory construction in determining the meaning of a “church plan,” as defined by Subsection (33)(A) of ERISA, 29 U.S.C. § 1002(33). The court did not reach constitutional arguments raised by the parties. The court read paragraph (A) of the statutory definition as requiring, for the statutory exemption to apply, that a church (or a convention of association of churches): (1) create or establish a plan and (2) maintain the plan. The court noted that Advocate Health Care Network plainly was not a church, although it was the successor by merger of two church-affiliated health systems—Lutheran General HealthSystem and Evangelical Health Systems—and is presently affiliated with both the Metropolitan Chicago Synod of the Evangelical Lutheran Church in America and the Illinois Conference of the United Church of Christ.

The court rejected Advocate’s argument that paragraph (C) of subsection 33 enlarged the definition of a church plan, concluding that paragraph (C) only enlarged the statute to permit church-affiliated organizations to “maintain” the plan, but did not erase the predicate requirement under paragraph (A) that a church create or establish the plan. In rejecting Advocate’s argument, the Seventh Circuit adopted the reasoning of the Third Circuit in Kaplan v. St. Peter’s Healthcare System, 810 F.3d 175 (3d Cir. 2015). The court also noted that, although its reliance on the plain meaning of the statutory text made resort to statutory history unnecessary, legislative history supported its narrow interpretation of the church-plan exemption. That Advocate and amici presented numerous examples of Internal Revenue Service private letter rulings stating that church-affiliated hospitals were exempt from ERISA compliance also did not alter the court’s conclusion.

It appears Stapleton and Kaplan may represent the tip of an emerging iceberg of litigation addressing this issue. The Seventh Circuit noted that the Fourth Circuit, in Lown v. Continental Casualty Co., 238 F.3d 543, 547 (4th Cir. 2001), had stated that “a plan established by a corporation associated with a church can still qualify as a church plan ... but did so based solely on the language of subsection (33)(C)(i) without any explanation for the discrepancy with subsection (33)(C)(A) [sic.] requiring that the plan be established by a church.” Stapleton, 2016 WL 1055784, at *7. The court also noted older district court authority from other circuits broadly construing the exemption. Presently, there are at least two district court decisions addressing the issue pending on appeal before other circuits. See Rollins v. Dignity Health, 59 F. Supp. 3d 965 (N.D. Cal. 2014) (concluding church plan exemption did not apply), oral argument held, No. 15-15351 (9th Cir. Feb. 8, 2016); Medina v. Catholic Health Initiatives, --- F. Supp. 3d ---, No. 13-CV-01249-REB-KLM, 2015 WL 8144956 (D. Colo. Dec. 8, 2015) (concluding that church-plan exemption did apply and granting defendants’ motion for summary judgment), appeal docketed, No. 16-1005 (10th Cir. Jan. 7, 2016). The outcomes of these appeals, together with the Third Circuit’s decision in Kaplan and the Seventh Circuit’s decision in Stapleton, may well set the stage for United States Supreme Court review. 

Eligibility for Health Insurance Can Be Tied to Participation in a Wellness Plan

Published by Meg Vergeront on | Permalink

A federal district court judge sitting in the Western District of Wisconsin recently held that an employer that conditioned eligibility for health benefits on participation in its wellness plan did not violate the Americans With Disabilities Act (ADA) because the terms of its health plan brought it within the Act’s “safe-harbor” provision.  See Equal Employment Opportunities Commission v. Flambeau, Inc., 2015 WL 9593632 (W.D. Wis. 2015).  This is a case of first impression in the Seventh Circuit. 

In Flambeau, the employer offered its employees health benefits provided by a self-funded, self-insured plan administered by a third party.  Participation in the plan was voluntary.  Those who elected to participate, however, were also required to participate in Flambeau’s wellness plan.  Participation in the wellness plan obligated employees to complete a health risk assessment and a biometric screening test.  Flambeau used the assessment and test results to classify plan participants’ health risks and calculate Flambeau’s projected insurance costs for the benefit year.  This information was then used to calculate how much the plan should charge plan participants for maintenance medications and preventive care, as well as the amount of premiums.  After identifying these risks based on information from the wellness plan participation, Flambeau decided to purchase stop-loss insurance to protect against the possibility of large claims. 

The Equal Employment Opportunities Commission (EEOC) sued, claiming that tying the eligibility for insurance to participation in the wellness plan violated the ADA.  Specifically, the EEOC claimed that Flambeau’s practice violated the ADA’s prohibition on requiring employees to submit to medical exams that are not job-related and consistent with a business necessity.  See 42 U.S.C. § 12112(d)(4)(A).  Flambeau, however, argued that its wellness plan fell within the safe-harbor provision in 42 U.S.C. § 12201(c)(2).

The court sided with Flambeau.  Subsection (c)(2) of the ADA safe-harbor provision, among other things, permits employers to establish, sponsor or administrate a bona fide benefit plan that is based on underwriting risks, classifying risks or administering such risks, as long as the employer’s actions are not designed to evade the reach of the ADA.  The court held that Flambeau’s wellness program was a “term” of its plan and that the term was included in the plan for the purpose of underwriting, classifying and administering health insurance risks.  It therefore fell squarely within the safe-harbor, unless it appeared that requiring participation in the wellness plan was designed to evade the ADA’s provisions.  The court determined that it was not because the terms of the plan did not involve a disability-based distinction used to discriminate.

At a glance, Flambeau offers needed guidance on the lawfulness of wellness programs.  It is too soon to say whether employers will be able to continue to rely on Flambeau in the future, however, because the EEOC filed an appeal on February 25, 2016.  Stay tuned to see what happens next. 

Time for a FMLA Practice and Policy Self-Audit

Published by Meg Vergeront on | Permalink

In recent years, the federal Department of Labor (DOL) has been focusing significant investigative efforts on employer’s system-wide practices regarding the Family and Medical Leave Act (FMLA).  System-wide practices are those that affect at least several employees or multiple employer locations.  Such practices include:

  • How an employer handles the administration of medical certification forms.  For example, the DOL may look at whether the employer has a practice of requesting recertification of the need for leave more frequently than the FMLA permits.
  • Whether an employer is timely providing employees who may be entitled to leave with the required Rights and Responsibilities, Eligibility and Designation Notices.  
  • Whether the employer properly exercises the right to require a fitness-for-duty note from employees’ health care providers.
  • Whether front line supervisors and managers are adequately trained so that they can recognize whether an employee’s absences are possible due to a serious health condition or other FMLA-qualifying circumstance and timely start the notice procedures.

The DOL’s increased efforts should provide employers with the incentive to review and, if necessary, revise their FMLA policies and practices, paying particular care to the practices identified above.  

Regulations That Will Increase Overtime Costs Moving Forward

Published by Meg Vergeront on | Permalink

By now, employers are familiar with the proposed Wage and Hour regulations governing federal overtime exemption.  These regulations, as proposed, would, among other things, increase the minimum salary necessary (but not sufficient) to retain overtime exemptions.  The regulations would also change the rules with respect to the “highly compensated” exemption.  If you have employees that are classified as highly compensated, you should consult legal counsel for advice.

It is likely that the regulations will be finalized by the end of the year and will be effective in Spring or Summer of 2016.  Once in place, employees must be paid at least $50,440 to be exempt, assuming all of the other, current factors are met.  This means that employers will face tough decisions, such as determining whether to raise salaries and maintain the exemption or to classify positions as non-exempt and figure the hourly wage rate given the number of hours regularly worked to keep employees at the wages currently paid.

Given the timetable for implementing the regulations, now is a good time for employers to be proactive and determine the best approach.  Best practices to achieve this goal are:

  • Review existing exempt positions to determine if they are properly classified under current regulations.  Job duties change over time and what was once exempt may now not be exempt.  This will put you in a position to focus solely on the minimum salary requirement in determining whether positions that are exempt under current regulations should be or can be classified as exempt given wages paid.
  • For positions that would meet the exempt classification criteria given the current minimum salary level, review current salaries for those positions.
  • Consider which salaries you want to raise to retain exempt status and which cannot be raised due to budget constraints. 
  • Figure out the number of hours currently worked by each exempt employee to determine what wages would be if converted to an hourly rate. 
  • Consider whether to lower the hourly rate for those positions which will be reclassified from exempt to non-exempt to control costs so that total wage remain the same.
  • Consider whether you will reduce hours to avoid overtime.
  • Consider whether you will hire more employees to avoid overtime.
  • Consider how any changes to classifications and/or wages will be communicated to employees.  These kinds of changes can affect morale.  For example, many employees see a change from being salaried to earning an hourly wage as a demotion or reflection on performance.  Having a coherent strategy should help reduce the impact the changes.

Employers Should Consider Periodic Review of FMLA Policies and Practices to Prepare for Audit

Published by Meg Vergeront on | Permalink

The federal Department of Labor (DOL) will likely be increasing on-site audits of employer Family and Medical Leave Act (FMLA) practices in an effort to increase compliance with that law.  To keep FMLA policies and practices audit-ready, employers should periodically conduct their own internal audit.  The audit should include:

  • A review of policies, notices and other communications to make sure they are in compliance with current regulations.
  • Review of employment law postings to ensure that the FMLA general notice is properly posted.  
  • Review of FMLA training content for HR and managers.
  • Review paperwork retention policies to make sure that they comply with the law.

Keep in mind that Wisconsin also has a family and medical leave statute (WFMLA).  While the Wisconsin Labor Standards Bureau has not announced plans to audit employers, it is still a good idea to review FMLA policies and practices as set forth above with an eye towards ensuring compliance with state FMLA law as well the federal FMLA.  

If you have questions about FMLA policies and practices or other employment law questions, please contact a member of Stafford's Employment Law Team

Proposed Rule Will Dramatically Increase The Number of Employees Eligible For Overtime

Published by Meg Vergeront on | Permalink

Currently, employers cannot classify positions as exempt from federal overtime rules unless they pay workers in those positions a minimum annual salary of at least $23,660.[1]  President Obama has directed the federal Department of Labor to change that.  On June 29, 2015, President Obama announced a proposed rule that would expand the number of employees eligible for overtime by requiring employers to more than double the current minimum annual salary requirement to $50,440.  If an employer pays a lesser annual salary, an otherwise overtime-exempt position would no longer be exempt.   

Democrats have hailed the proposed rule as providing fair wages to hard-working employees.  Republicans and business groups contend that it will cost jobs.

The rule is expected to be completed in 2016, although implementation of the rule is not a certainty.  Congress can act to block the rule, and it is likely that opponents to the rule will challenge it in court.  Many economists expect that the rule, if implemented, would induce employers to reduce the work hours of employees who lose the overtime exemption and it is likely result in more employers paying a lower base wage to ensure that they do not end up paying more than paid in salary prior to an employee losing the exemption. 

Check this blog regularly for updates on the progress of the rule and timing of implementation if it is adopted. 

[1]           Note:  the minimum salary requirement is only one of many factors that go into determining whether a position is exempt from overtime.  The minimum salary is a necessary, but not sufficient, requirement.

Hiring Teens This Summer?  Make Sure to Do It Right!

Published by Meg Vergeront on | Permalink

It has already started--high school students are blanketing employers in their area with applications for summer employment. Are you ready? Most employers know that special rules apply to teenage employees, but it never hurts to review the basics.

The most basic rule is that both federal and Wisconsin have laws and regulations addressing teen employment and Wisconsin employers must comply with whichever law--state or federal--provides the most protection to the teen. Be sure to review both state and federal rules and/or consult with a wage and hour attorney to make sure you get it right.

Employers should also be aware that Wisconsin law requires that teen employees have work permits in most circumstances. The employer generally distributes the permits to the prospective employee to complete and return.

While there is no cap on the number of hours most teens may work during summer while school is out of session, they cannot work more than 6 days in a row and are prohibited from working in certain industries. Be sure to check both state and federal rules to make sure that teen employment is not forbidden in your industry.

Finally, keep in mind that Wisconsin employers may pay youth under 20 years of age a sub-minimum wage of $5.90 per hour for up to the first 90 days of employment. At the end of the 90 days, the youth must be paid the regular minimum wage. The 90-day period will generally cover the majority of the employment of those teens hired solely for summer work. This can add up to significant savings for an employer. Keep in mind that there are rules designed to prevent abuse of this exception, such as a prohibition against displacing a full minimum wage (or higher) employee with a teen being paid sub-minimum wage.

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