Archive for category: In The News

By: Jonathan R. Mook and Colete Fontenot
DiMuroGinsberg, PC

Title I – Employment Provisions

Is Plaintiff Actually Disabled Under ADA?
In order to have an actual disability cognizable under the Americans with Disabilities Act, an individual must be able to demonstrate that he or she has a physical or mental impairment that substantially limits a major life activity.  Merely having an impairment, even a permanent one, is not sufficient, as the Eleventh Circuit Court of Appeals explained in Lewis v. City of Union City, 934 F.3d 1169 (11^th Cir. 2019).  In that case, the court considered whether a police officer who had suffered a heart attack that left her with a permanent injury to her heart was disabled under the ADA.  The court concluded that she was not because the only limitation resulting from the officer’s heart impairment was a periodic shortness of breath.

Broad Construction of Disability
In passing the ADA Amendments Act in 2008, Congress sought to broaden the interpretation of the definition of disability and to increase the number of individuals protected by the statute.  Thus, in Morrissey v. Laurel Health Care Co., 943 F.3d 1032 (6^th Cir. 2019), the Sixth Circuit Court of Appeals held that an employee had presented sufficient evidence to raise a fact question for the jury as to whether she was disabled under the amended ADA.  The employee suffered from a number of back impairments, and after working an eight to twelve-hour shift, she had difficulty walking, standing, lifting and bending and experienced pain constantly.  The employee testimony was supported by that of the employee’s daughter, who reaffirmed her mother’s limitations.  The Sixth Circuit said that because the ADA Amendments Act requires that coverage under the statute is to be construed broadly, the employee had presented sufficient evidence for her case to be heard by the jury.

Regarded as Disabled
Even if an individual does not come within the definition of having an actual disability under the ADA, the person still may be protected by the statute if the employer regards the person as disabled.  That was the case in Lewis v. City of Union City, 934 F.3d 1169 (11^th Cir. 2019) in which the Eleventh Circuit Court of Appeals held that a police officer who had suffered a heart attack had raised a jury issue as to whether her employer had regarded her as disabled by placing her on leave without pay due to concerns about her heart condition.

Qualified Individual with a Disability
Not every person who has an ADA disability is entitled to the statute’s protections.  The individual must be a qualified individual with a disability, that is a person who, with or without reasonable accommodation, can perform the essential functions of the job.  What constitutes a job’s essential functions was the subject of the Fifth Circuit Court of Appeals’ decision in Clark v. Champion Nat’l Sec., 947 F.3d 275 (5^th Cir. 2020).  The case involved a diabetic employee, who would fall asleep at his desk during the work day.  Since the employee’s job was to perform uniformed security services, the court held that the employee was not qualified because maintaining consciousness is a basic element of any job.

Retaliation
It is unlawful to retaliate against a disabled employee for seeking a reasonable accommodation.  That principle was reaffirmed by the Sixth Circuit in Morrissey v. Laurel Health Care Co., 943 F.3d 1032 (6^th Cir. 2019), where a former employee claimed that her employer had targeted her to work a twelve-hour shift even though she had been medically restricted from doing so because the employee had requested a reasonable accommodation consistent with her medical restrictions.  The circuit court said that the employee’s requests for an accommodation constituted protected activity, and the employer’s refusal to adhere to the employee’s medical restrictions was retaliatory and unlawful.

Reasonable Accommodation
An employee need not use any magic words such as “ADA” or “reasonable accommodation” to trigger the ADA reasonable accommodation interactive process with the employer.  That principle was highlighted by the Eighth Circuit in Garrison v. Dolgencorp., 939 F.3d 937 (8^th Cir. 2019), where the court held that an employee had made a sufficient request for a reasonable accommodation when the employee informed her employer that she suffered from depression and anxiety and made it clear that she was seeking a leave of absence due to her medical condition.

Title III – Public Accommodations and Commercial Facilities

What is a Disability Under Title III?
Learning disabilities are covered under Title III of the ADA.  That is the case even though an individual diagnosed with a learning disability is able to achieve academic success.  That was the situation in Ramsay v. Nat’l Bd. of Med. Examiners, 2019 U.S. Dist. LEXIS 222782 (E.D. Pa. Dec. 31, 2019)where the federal district court for the Eastern District of Pennsylvania held that a medical student who had been diagnosed with ADHD was disabled despite her prior academic successes and her performance on standardized tests.

Are Websites Covered by Title III?
In Thurston v. Midvale Corp., 2019 Cal. App. LEXIS 830 (Cal. App. Sept. 3, 2019), the California Court of Appeals ruled that Title III of the ADA applies to a restaurant’s website and that the restaurant was obligated to make its website compliant with the Web Content Accessibility Guidelines under both Title III of the ADA and California state law.

Service Animals

As an accommodation under Title III of the ADA, a public accommodation may need to alter a no dogs allowed policy to allow an individual with a disability to be accompanied by a service animal.  In Matheis v. CSL Plasma, Inc., 936 F.3d 171 (3^rd Cir. 2019), the Third Circuit Court of Appeals held that it would be for a jury to determine whether a plasma donation center was obligated to alter its no animals policy to allow a patient who suffered from anxiety to be accompanied by her service animal.

Franchisor/Franchisee Liability
If a franchisee is sued for its failure to remove architectural barriers, can the franchisor be sued too?  In most cases the answer is no because the franchisor had no specific control over the franchisee’s accessibility to the disabled.  This was the outcome in Sullivan v. Doctor’s Assocs. LLC, 2020 U.S. Dist. LEXIS 11562 (S.D.N.Y. Jan. 17, 2020), where the federal district court for the Southern District of New York dismissed a franchisor as a defendant in a Title III lawsuit alleging that the franchisee had failed to remove architectural barriers.  In doing so, the district court reasoned that the plaintiff merely alleged that the franchisor exerted “general control” over the franchisee’s restaurant, but had failed to allege any facts to show that the franchisor specifically controlled the restaurant’s accessibility.

Mr. Mook is a nationally recognized practitioner in employment law and has written two treatises : Americans with Disabilities Act: Employee Rights and Employer Obligations and Americans with Disabilities Act: Public Accommodations and Commercial Facilities, both published by LexisNexis. He represents employers and businesses on matters relating to employment law, business torts and business disputes.

Mr. Mook frequently counsels employers on issues involving compliance with the ADA and accommodating disabled employees, as well as other employment related matters. Mr. Mook is a co-editor of the Mid-Atlantic Employment Law Letter and is a regular contributor to several legal publications, including Bender’s Labor & Employment Bulletin. He is included in Best Lawyers in America (2019 ed.) for employment law.

Mr. Mook is a member of the Virginia and District of Columbia Bars, and is a member of the Labor & Employment Law Section of the District of Columbia Bar and has been a member of the Alexandria Commission on Persons with Disabilities. He earned his Juris Doctor from Yale Law School.

By: Jonathan R. Mook and Colete Fontenot
DiMuroGinsberg, PC

When the Virginia General Assembly convened in January, ratification of the Equal Rights Amendment (ERA) to the U.S. Constitution was at the top of the agenda. As stated in Section 1, the ERA guarantees: “Equality of rights under the law shall not be denied or abridged by the United States or by any state on account of sex.” Section 2 provides the enforcement mechanism by which “Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.”

Since both the Virginia Senate and the House of Delegates now have a Democrat majority, there is little doubt the ERA will be ratified before the legislative session closes in March. At that point, Virginia will become not only the 38th state to ratify the ERA but also the final state to satisfy the required two-thirds majority needed to amend the U.S. Constitution.

Additional hurdles
Importantly, the General Assembly’s anticipated ratification of the ERA doesn’t necessarily mean we’ll have a new constitutional amendment this year. There are at least two key hurdles to overcome:

Deadline. When a super majority of Congress passed the ERA in 1972, the legislation included a seven-year deadline for two-thirds of the states to ratify the amendment. By 1977, however, only 35 of the necessary 38 states had endorsed ratification.

At that point, many observers thought the ERA was dead as a doornail. Yet, in 2017, 42 years after the last state ratified, Nevada became the 36th state to sign on to the amendment. In 2018, Illinois became teachers, nurses, support staff, and other jobs often held by women are just as valuable to an organization’s bottom line and should be paid in a comparable fashion to disproportionately male-held positions such as doctors, administrators, and other highly compensated professionals.

Bottom line
Section 3 of the ERA states: “This amendment shall take effect two years after the date of ratification.” The lead time will give you some breathing room to review your company’s policies and procedures to ensure all employees are treated equally. Your review should include not only employee pay but also nonmonetary benefits, perks, insurance, profit sharing, time off, disciplinary policies, and even peripheral issues like office size, dress code, and flexibility of hours worked.

As always, the best way to know how a new law affects your business is to consult with an experienced employment law attorney. It’s always a good idea to designate one person in your HR office to stay up to date on all changes affecting employment law, including the ERA. The individual also can be the point person to hear employee complaints if there is an incident of alleged discrimination. Have a workable procedure in place so you aren’t caught off guard and can handle all employee concerns or complaints in a prompt and thorough fashion.

Rescissions. The second obstacle arises because five states (Idaho, Kentucky, Nebraska, South Dakota, and Tennessee) that initially ratified the ERA have voted to rescind ratification. The issue of whether the rescissions have legal effect has yet to be determined.

Consequently, Virginia’s ratification of the ERA will not be the end of the story. Instead, ratification will likely spawn a host of lawsuits addressing those knotty constitutional issues, so stay tuned for further developments on the legal front.

What ERA means for you
What the ERA’s ratification means for employers not only in Virginia, but nationwide cannot be predicted with certainty. But, without question, an amendment to the U.S. Constitution guaranteeing women’s equal rights will be a watershed event with repercussions for years to come.

As a practical matter, regardless of whether the ERA actually makes it into the U.S. Constitution, the very vocal political movement supporting the amendment will certainly have an impact on a variety of efforts to ensure women’s equality, especially in the workplace. Proponents are focusing on the influence the amendment will have on pay equity legislation. That isn’t just about “equal pay for equal work” but also about pay differences between lower-paid jobs traditionally held by women versus jobs usually held by males, which have a higher pay level.

Consequently, we’re likely to hear more about ensuring the comparable worth of jobs traditionally performed by women versus male-dominated jobs. Thus, expect to see a public debate on whether the 37th. Even with Virginia bringing the number to 38, the question remains, “Is it too late?”

By:  Jayna Genti

Companies misclassifying their employees as independent continues to be a hot-button issue throughout the country, and Virginia is no exception. In the last year alone, legislation related to independent contractor misclassification was introduced at the federal level and in at least 20 states. New Jersey and California recently enacted employee misclassification laws, and other states including New York are considering similar legislation.

Virginia Acts to Prevent Misclassification

In 2019, Virginia Governor Northam issued an executive order calling for an inter-agency task force to make recommendations on how to address the issue.  The study results issued last November found that about 214,000 Virginia workers are misclassified as contractors, costing the Commonwealth some $28 million in tax revenues each year.

In response to the task force’s recommendations, the Virginia General Assembly passed legislation this term that seeks to prevent misclassification and to penalize those employers who misclassify their workers.  Governor Northam recently signed the legislation into law, which will take effect January 1, 2021.

Classification of Employees

Under the new law, the Virginia Department of Taxation will determine whether a worker is an employee or independent contractor by applying Internal Revenue Service guidelines.  The IRS guidelines involve a multi-factor analysis, with the most important being the level of control exercised by a company.  In making the requisite assessment, the presumption will be that a worker who performs a service for an employer for pay will be considered an employee unless the individual or his or her employer demonstrates that she is an independent contractor.

Penalties and Enforcement

The new Virginia misclassification law has some real teeth.  Businesses that improperly treat their employees as independent contractors will be subject to a fine of up to $1,000 per worker for a first offense.  Maximum fines will increase to $2,500 per misclassified individual for a second offense, and up to $5,000 per misclassified individual for a third or subsequent offense.

The new legislation also prohibits the awarding of public contracts to employers that misclassify workers.  Debarment will last for up to one year for a second offense and up to two years for a third offense.  The legislation further requires the Virginia Department of Taxation to share information to help with enforcement.

Further Efforts to Halt Misclassification

The new Virginia law imposing penalties for employee misclassification will not be the end of the story.  Further efforts are likely to be forthcoming to crack down on employers who misclassify their workers, and deny tax revenues to both states and the federal government.  The impetus for the Commonwealth to move quickly against employee misclassification has arisen as a result of the recent federal legislation extending unemployment insurance to gig workers and other independent contractors who do not traditionally receive unemployment when they cannot work.  Unemployment benefits are funded by specific payroll taxes on employee pay.  Companies, however, do not pay unemployment insurance for independent contractors, even though they will now be able to receive unemployment benefits courtesy of the federal government.

Thus, we can expect heightened scrutiny on companies that misclassify employees as independent contractors and, thereby, evade their obligation to pay unemployment taxes.  As it stands, misclassification already has reportedly denied the Commonwealth substantial revenue, and this concern will only be heightened by the current COVID-19 pandemic and the stay-at-home orders shuttering many businesses.

Bottom Line

Going forward, you can expect greater attention by Virginia enforcement and investigative agencies to claims of worker misclassification.  Those agencies are on high alert for violations of the law and undoubtedly will use the full spectrum of available enforcement mechanisms to crack down and penalize those employers that evade the law.  The stakes of losing at the agency level are high and can lead to fines, legal expenditures, and litigation.

Given the continuing evolution of these and other related employment law matters, you are well advised to undertake a thorough assessment of the appropriateness and defensibility of classifying any members of your workforce as independent contractors.  Such an evaluation should be undertaken under the direction of an employment law attorney who is well versed in these matters and can review your policies and present workforce classifications to ensure legal compliance.  Misclassification no longer will result in simply a slap on the wrist.  Real penalties will now be imposed.

By: Billy B. Ruhling II

Virginia has always allowed employers to impose reasonable restrictions on their employees’ ability to compete after the termination of the employment relationship. While this right was not unfettered, employers could take steps to protect their business by preventing a former employee from taking client relationships with them upon their departure. Such agreements were permitted so long as the restrictions were for a reasonable time and scope. But all of that is about to change for certain employees!

Effective July 1, 2020, Virginia has adopted a new scheme to protect certain workers’ right to work – even when doing so in direct competition with their former employer. The new legislation prohibits an employer from entering into, enforcing, or threatening to enforce a covenant not to compete with any “low-wage employee.” While the new statute does not limit an employer’s ability to require workers to sign agreements prohibiting the taking, misappropriating, or sharing of trade secrets or other proprietary/confidential information, it does alter the landscape significantly.

The new legislation defines a “covenant not to compete” as any agreement, including a provision in an employment contract, between an employer and an employee that restrains, prohibits, or otherwise restricts an individual’s ability to compete with his former employer following the termination of the individual’s employment. It further provides that such a covenant “shall not restrict an employee from providing a service to a customer or client of the employer, if the employee does not initiate contact with or solicit the customer or client.”

As with all laws, the devil is in the details here. First, “low-wage” probably does not mean what most employers would think it means!  Covered employees are those whose average weekly earnings are less than the average weekly wage in the Commonwealth as determined pursuant to subsection B of Va. Code § 65.2-500 (As of December 2019, the average weekly earnings amount was $1,113 or roughly $50,000 per year). The law also protects independent contractors if they are paid at an hourly rate that is less than the median hourly wage for the Commonwealth for all occupations as reported for the preceding year by the Bureau of Labor Statistics of the U.S. Department of Labor. It excludes, though, sales persons who derive their earnings, “in whole or in predominant part, from sales commission, incentives, or bonuses….” Second, the law provides a private right of action for covered individuals to sue their former employer or any other person who attempts to enforce a prohibited covenant.

These changes are significant. Employers who have or seek to enforce restrictive covenants should review their existing agreements to ensure they comply with the new legislation. If you have questions or concerns about whether your agreements comply with the new standards, the attorneys at DiMuroGinsberg, P.C. stand ready to assist you!

By:  Jonathan R. Mook and Colete Fontenot

The Virginia General Assembly for the first time in ten years has increased the state’s minimum wage and has established a mechanism to raise the minimum wage in the coming years.  Minimum wage workers in Virginia will now see a substantial raise next year, and in the years that follow – potentially more than doubling to $15 an hour by 2026.

What Are the Increases?

The new Virginia law is fairly complicated in terms of its provisions increasing the minimum wage over time.  Here’s the rundown:

Beginning May 1, 2021, employees paid at the current federal minimum wage of $7.25 would need to be paid $9.50 an hour – an increase of $2.25 per hour.  After that, the minimum wage will increase automatically on the first day of the year by $1.50 every year until 2023.  In 2023, the minimum wage will be increased by only $1.00; and in 2024, there will be no increase at all.

Under the measure as passed, the minimum wage also will not increase in 2025 and 2026 unless there is a new vote in the General Assembly to authorize the increases, which would be at the rate of $1.50 per hour.  If the legislature does not enact authorization for a wage increase, however, that does not mean the minimum wage will not rise.  Instead, beginning in 2027, a yearly adjusted minimum wage will be imposed, with increases based on the yearly increase in the Consumer Price Index (CPI). Even if the CPI falls, the adjustment cannot be less than zero.

Who Is Covered?

At the present time, if you have four or more employees, you must pay the state minimum wage.  Importantly, the new legislation also removes any limitation on the number of employees you must have in order to comply.  One is enough.  The only exclusions are for farm workers, work study students, and students under the age of 18 who work less than 20 hours per week.

For Now, No Regional Differentials

Many Virginia legislators fought hard for regional differentials, which would have allowed for variations of the minimum wage based on the economics of the particular area.   Members in rural areas, where the cost of living is lower than the more populous parts of the state, expressed concerns about imposing what they termed a “Northern Virginia rate” on the rest of the Commonwealth.  In the end, the new legislation does not include any regional distinctions.

Starting in 2022, however, the Virginia Department of Housing and Community Development, the Economic Development Partnership Authority, and the Employment Commission will “conduct a joint review of the feasibility and potential impact of instituting a regional minimum wage in the Commonwealth.”  A working group formed by these agencies will study and evaluate influential factors, including linking the minimum wage to the cost of living in the area served, the impact on employers and the fringe benefits they offer, the impact on workers with a focus on income inequality, and the experience of other states with a regional wage.  Approving a regional variation in the minimum wage will require another vote in the General Assembly before July 1, 2024.

Getting Ready for the Increase

The General Assembly’s increase in the minimum wage moves Virginia from having one of the lowest state minimum wages to one of the highest.  Undoubtedly this increase will have an impact on virtually all businesses in the Commonwealth – even those that now pay their employees more than the minimum wage.  That’s because minimum wage increases usually have the real world effect of boosting the wages of all hourly employees.

What should you be doing to prepare for the increase that kicks in on May 1, 2021?  Here are some suggestions:

• Make sure your payroll department or payroll service is aware of the minimum wage increase and is prepared and stays in compliance with the new law.
• Check and double check your cash flow to make sure you will have funds available for the increased wages you will be paying to your minimum wage employees.
• If you are planning to hire minimum wage workers, create a hiring plan you can afford given the upcoming wage increase. In some cases, you may find that hiring temporary workers, as needed, is less expensive than taking on full-time regular employees.

Finally, in four years if not before, the General Assembly will be addressing the minimum wage again.  Get involved in the legislative process and let your state representatives know about the real world impact the increase in the minimum wage is having on your business operations.  Are you needing to lay off employees or having to reduce hiring as a result of the minimum wage increase?  This is critical information that you and only you can provide to those legislators who will be making the decisions about the economic future of your business.

Jonathan Mook is a partner in the office of DiMuroGinsberg, P.C.  He can be reached at jmook@dimuro.com.  Colete Fontenot is a legal assistant who provided much valued research assistance in preparing this article.