Wyatt Employment Law Report

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Sixth Circuit to Weigh In on Religious Protection and Transgender Rights

By Amanda Warford Edge

Last week, a Detroit funeral home filed a brief with the Sixth Circuit arguing that it could fire a transgender employee who refused to follow its sex-specific dress code. According to the funeral home, allowing the employee (who was transitioning from male to female) to wear women’s clothes at work — namely, a skirt suit — would violate the religious beliefs of the home’s owner.

Last year, at the district court level, the Court said that the Religious Freedom Restoration Act (“RFRA”) shielded the funeral home from liability because the termination stemmed from its owner’s devout Christian worldview. In other words, the Court held that the funeral home was entitled to a religious exemption under RFRA and, therefore, did not violate federal employment discrimination law. In making its ruling, the Court reasoned, in part, that transgender people are not protected by federal anti-bias law.

The EEOC appealed this ruling and filed its brief in February. The funeral home has now asked the Court to affirm the holding that Title VII does not protect transgender people because the meaning of “sex” when Title VII was passed did not include the concept of gender identity. The funeral home also remains adamant that RFRA provides a legal defense for its enforcement of its sex-specific dress code.

The case is EEOC v. RG & GR Harris Funeral Homes, Case No. 16-2424.

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Sixth Circuit denies request to reconsider Hardin County’s “right to work” ordinance

By Courtney Samford

Last week, the Sixth Circuit denied a request by several collective bargaining organizations to rehear a challenge to Hardin County, Kentucky’s “right to work” ordinance.  The union challengers, including the ALF-CIO, argued that the county ordinance was preempted by the National Labor Relations Act (“NLRA”).  More specifically, they claimed that Hardin County’s ordinance was preempted by the NLRA, which only permits “State or Territorial” laws prohibiting security agreements between employers and unions.  The County, on the other hand, took the position that its ordinance was valid because it was a political subdivision of the Commonwealth of Kentucky.  The lower court found in favor of the union plaintiffs and struck down the ordinance.

Hardin County appealed to the Sixth Circuit, and a three-judge panel reversed the lower court’s ruling, finding that “State or Territorial” laws include ordinances passed by Continue reading

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To Aggregate or Not to Aggregate, Under the WARN Act, That Is the Question

By Michael D. Hornback

GavelOn January 5, 2016, the Sixth Circuit answered that question with a “No” under the facts and circumstances presented in Morton v. The Vanderbilt University, 2016 WL 52439 (6th Cir. 2016).

The Sixth Circuit began its opinion by noting the unusual circumstances presented.  The plaintiffs in the case consisted of 194 employees (the “Plaintiffs”) who were terminated by Vanderbilt and who were claiming violations of the Worker Adjustment and Retraining Notification Act (the “WARN Act”), 29 U.S.C. §2101 et seq.  However, whether these 194 terminated employees actually had a claim under the WARN Act was wholly dependent upon how Vanderbilt treated 279 other employees (the “Second Group”) who were not plaintiffs in the lawsuit and who had not protested Vanderbilt’s treatment of them.

Under the WARN Act, an employer of 100 or more employees is generally required to provide at least 60 days’ written notice to affected employees before a mass layoff may occur.  A “mass layoff” is defined as “an employment loss at the single site of employment during any 30-day period for . . . at least 500 employees.”  However, the WARN Act permits Continue reading

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Stellar Performance Record Does Not Prove Pretext in Age Discrimination Lawsuit

By Michael D. Hornback

Past performance is usually a decent indicator of future performance . . . but not always. Employees who were once excellent performers have periods of time when, for various reasons, their work product takes a dip. It happens to everyone. However, when a good employee admittedly violates numerous policies of the employer, termination may be warranted, as the Sixth Circuit Court of Appeals recently held in Hughey v. CVS Caremark Corp., 2015 WL 6123550.

clinic-doctor-health-hospitalIn Hughey, the plaintiff was hired by CVS as a Pharmacist in Charge about one month prior to his 40th birthday. For over a decade, the plaintiff was a star performer, receiving “Exceeds Expectations” marks on his annual performance reviews. He was also named the Pharmacist of the Year in his district on two occasions.

As a pharmacist with CVS, the plaintiff was expected to comply with the policies contained in the CVS Operations Manual. Of import in this case were Continue reading

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Sixth Circuit Reversed in Union Benefits Health Case: Supreme Court Rules Against Retired Workers

By Amanda Warford Edge

On Monday, in M&G Polymers USA, LLC v. Tackett, No. 13-1010, the U.S. Supreme Court ruled that ambiguous provisions in union contracts should not be automatically interpreted in favor of a company’s retired workers. The case concerned a union contract from the 1990s that provided free health care benefits to the retirees of a chemical plant in Apple Grove, West Virginia who received pensions. In 2000, M&G bought the plant, and in 2006, it sought to make its retirees contribute to the health care costs. The retirees sued, alleging that they had been promised free benefits for life. The contract, of course, did not directly state whether the parties intended lifetime investiture.

Medical Records & StethoscopeThe district court found for M&G—but according to the Sixth Circuit, the retirees’ benefits had, in fact, vested for life. The Sixth Circuit relied on a long line of precedent, dating back to 1983, in support of this holding. Essentially, this precedent presumed the existence of lifetime benefits, even when the contracts at issue did not specify them. In Tackett, the Sixth Circuit expanded upon this presumption, holding that Continue reading

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Sixth Circuit Holds that Casino Security Guards Will Not Receive Overtime for Monitoring Radios During Lunch Breaks

By Amanda Warford Edge

On Wednesday, January 7, 2015, the Sixth Circuit issued a published opinion in Ruffin v. MotorCity Casino, affirming the district court’s decision that security guards at MotorCity Casino were not entitled to overtime payments under the Fair Labor Standards Act, 29 U.S.C. 207(a). In doing so, the Sixth Circuit held that the guards’ meal breaks were not compensable under the FLSA, even though MotorCity required them to stay on casino property, monitor their two-way radios, and respond in case of an emergency. Although the proposition that compensable work requires more than simple radio monitoring is not novel, the Sixth Circuit’s rationale—as well as the standards set forth in the opinion—are nonetheless important for employers and employees alike.

The security guards filed suit against MotorCity in 2012, claiming that they were entitled to overtime pay because MotorCity required them to “work” during their paid lunch breaks. OLYMPUS DIGITAL CAMERAAccording to the guards, who were regularly scheduled to work weekly 40-hour shifts, mandatory 15-minute meetings prior to each shift were compensable, entitling them to overtime pay on the additional 1.25 hours under the FLSA. The crux of this claim was that the guards’ 30-minute paid meal breaks actually constituted “work” since MotorCity restricted their actions during the breaks. The guards highlighted that during their meal breaks, they could not leave casino property, have food delivered to the casino, or receive visitors. Further, they were required to Continue reading

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Supreme Court to Decide if Severance Pay is Subject to FICA Tax

By James A. Nitsche

The Supreme Court has announced that it will review a decision of the Sixth Circuit Court of Appeals that payments made by a company to employees pursuant to a severance plan were not “wages” subject to Federal Insurance Contribution Act (“FICA”) taxes.

In the Sixth Circuit case, In Re Quality Stores, Inc., 693 F2d 605 (6th Cir. 2012), an employer made severance payments to employees whose employment was terminated involuntarily when the employer closed its stores and discontinued business.  The employer withheld income and FICA taxes from payments made to the terminated employees, and paid the employer’s share of FICA taxes with respect to such payments, but subsequently filed claims requesting refunds of all such FICA taxes.  When the IRS denied the refund claims, the employer filed a suit for refund as part of a bankruptcy proceeding.  The bankruptcy court ordered a full refund, holding that the payments made by the employer to its terminated employees constituted supplemental unemployment compensation benefits that are not treated as wages for FICA tax purposes.  The Sixth Circuit affirmed the bankruptcy court’s decision.

The Quality Stores decision hinged on the courts’ analysis of the relationship between the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), that require withholding of income and FICA taxes on “wages” paid to employees.  In general, Code Section 3402(a) requires an employer to withhold income taxes on “wages,” as defined by Code Section 3401(a), paid to employees.  Meanwhile, Code Section 3102(a) requires that FICA taxes be withheld from “wages,” as defined by Code Section 3121(a), paid to employees.  While the definition of wages under Code Section 3401(a) may be substantially similar to the definition of wages under Code Section 3121(a), the two are not identical.  Nevertheless, in Rowan Cos. v. United States, 452 U.S. 247 (1981), the Supreme Court examined the language and legislative history of Code Sections 3401(a) and 3121(a) to conclude that Congress intended the term “ wages” to carry the same meaning for purposes of income tax and FICA tax withholding. Continue reading