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HR and Tax Newsletter - December 2005

FLSA : Worker Walking Related to Donning & Doffing Safety Gear Is Compensable

The U.S. Supreme Court has ruled that time spent on the walk between the locker room of meat and chicken processing plants--where employees were required to dress in protective and safety gear--and the plant floor should be compensated. The Court concluded that the locker room where the special safety gear was donned and doffed was a 'place of performance' of the principal activity that the employee was employed to perform. Because applying and removing protective gear was a "principal activity" related to working in a meat processing plant, the walking that occurred after dressing and before undressing should be compensated as an integral part of that principal activity. The Court concluded more broadly that during a continuous workday, any walking time that occurs after the beginning of the employee's first principal activity and before the end of the employee's last principal activity is covered by the FLSA.

On the other hand, the Court held that the time waiting to change into safety gear was not covered by the FSLA. The employees argued that they were often forced to wait before obtaining their first piece of safety gear and that the time spent waiting in line before actually dressing should be compensated. However the Court concluded that this waiting was two steps removed from the productive activity on the assembly line and was not integral to a 'principal activity' that identifies the time when the continuous workday begins. IBP Inc. v. Alvarez

Arbitration: Agreements Need Not be Signed

Discrimination, overtime violations, and retaliation claims are subject to arbitration even in the absence of a signed agreement. It was enough that the arbitration process was in writing. The Eleventh Circuit also rejected the employees' call for a heightened standard of review of their waiver of their right to trial pointing out that it's conclusion was consistent with decisions by four other circuits.

Gulfstream adopted its dispute resolution process as the exclusive method for resolving specific employment-related disputes. Gulfstream notified its employees of the new policy by mailing all workers a copy of the dispute resolution process, an explanatory cover letter, and a question-and-answer form by first-class mail; placing the dispute resolution process and accompanying documents on its company intranet; distributing the dispute resolution process electronically to about 1,000 employees; and posting notices relating to the dispute resolution process's implementation on 13 bulletin boards throughout the facility. The explanatory cover letter indicated that the dispute resolution process would become effective Aug. 1, 2002, and was a condition of continued employment. The dispute resolution process expressly provided that no signature was required and that an employee's continuation of employment would constitute acceptance of its terms.

The dispute resolution process established a four-step process for addressing disputes. Step one called for human resources review; step two, management panel review; step three, mediation; and step four, arbitration. It provided that an employee's failure to submit a covered claim to the next step within 30 days of a final determination at the prior level would waive the employee's claim. It did not contain a similar provision for Gulfstream, and the company could elect to bypass one or more steps prior to arbitration for claims brought by job applicants, former employees, or the company itself. The dispute resolution process also stated that both sides waived their right to a jury trial.

Gulfstream retained the right to modify or terminate the dispute resolution process on 30 days' written notice, and the policy in effect when a claim was received would control the process for that claim. It later modified the dispute resolution process, providing that covered claims could not be brought as class or collective actions, and again stating that continued employment would constitute acceptance.

In concluding that the disputed resolution process did not have to be signed to be enforceable the court noted that the language of Section 2 of the Federal Arbitration Act (FAA) requires an arbitration provision to be "written" but does not require it to be signed by either party, and that "the overwhelming weight of authority supports the view that no signature is required to meet the FAA's "written requirement." The court rejected the employees' contention that the dispute resolution process did not waive their rights to a jury trial because it was not knowing and voluntary. In so concluding, it noted that the U.S. Supreme Court has held that enforcement of an arbitration agreement under the FAA may only be declined under principles of state contract law and that parties do not necessarily forego any substantive statutory rights by agreeing to arbitrate. It pointed out that the Constitution does not confer the right to a trial, but only the right to have a jury hear the case once it is determined that the litigation should proceed before a court. If the claims are properly before a forum pursuant to an arbitration agreement, the jury trial right vanishes.

The court concluded that the dispute resolution process was enforceable under Georgia contract law. That Gulfstream could unilaterally modify it did not make the company's promise to be bound illusory because it still was bound by whatever terms were controlling at the time a claim was received. Moreover, the dispute resolution process expressly established that the proper manner of accepting its terms was continued employment, and continued employment was more than just a continuation of the status quo since it was in the face of changed circumstances.

The court concluded that there was no basis for finding the dispute resolution process procedurally or substantively unconscionable given that it was presented in a cover letter reflecting its importance, its terms were clear and unoppressive, and its "prohibition of class actions and discovery limitations was consistent with the goals of 'simplicity, informality, and expedition' touted by the Supreme Court. It concluded that because the dispute resolution process's confidentiality provision might be in both sides' interests that while [it] might be more favorable to employers (as 'repeat players') than to individual employees, it is not so offensive as to be invalid." It concluded that provisions requiring only employees to exhaust the dispute resolution process's steps, comply with appeal deadlines, and forego counsel during the first two steps were "asymmetrical" but consistent with arbitration's goal of providing quick and efficient resolutions. Caley v. Gulfstream Aerospace Corp.

Failure to Tell Employer of Facts Showing Serious Heath Conditions Precludes FMLA Leave

An employee's request for leave to help her daughter during childbirth did not give the employer notice of any condition that could qualify the employee for Family and Medical Leave Act protection when the employee failed to make employer aware of any complications arising from the pregnancy.

Pregnancy is not a "serious health condition" for FMLA purposes unless complications occur. The employee presented a physician letter when she asked for FMLA leave but the letter did not mention any complications for the pregnancy.

The FMLA entitles eligible employees to unpaid leave to care for close family relatives, including a son or daughter, who have a "serious health condition." The employee must give the employer advance notice of the intent to take such leave. When the need for leave is unforeseeable, "the employee need only provide her employer with notice sufficient to make the employer aware that her absence is due to a potentially FMLA-qualifying reason."

Because pregnancy, "as opposed to being incapacitated because of pregnancy," is not a "serious health condition" for FMLA purposes, an employee is not entitled to FMLA leave simply to take care of an adult child who is pregnant. An employee needs to show that the child is "incapable of self-care because of a mental or physical disability."

The Eleventh Circuit concluded that the employee did not deliberately mislead her employer. However, it decided she admittedly withheld critical information regarding the reason for her request "by not presenting any information about her daughter's alleged complications." Voicing her wish to help her daughter during childbirth was not enough because the FMLA does not cover that situation. Cruz v. Publix Super Markets Inc.