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Friday, October 31, 2014

Urine Drug Testing Latest ADA Battleground


By Tommy Eden



Laura Jones completed an application for employment at the Wal-Mart store in Cockeysville, Maryland and was told that she would have to take a drug test if offered a sales position. She told an assistant store manager that she had end stage renal cancer that prevented her from taking a typical urine test. Jones then went to the drug testing collection center and requested that an alternative specimen test be performed; which the center said could be done. She then took that information back to the store manager who refused to allow for the alternative specimen test and her application was closed for failing to submit to the urine drug test; according to the allegations of the lawsuit as reported in the EEOC Press Release.

On October 21 the Cockeysville Wal-Mart store entered into a consent decree with the EEOC, who had earlier allegedly in a federal court lawsuit brought on behalf of Jones, that the store had breached the Americans with Disabilities Act by failing to reasonably accommodate her disability by refusing to accept an alternative specimen test. Wal-Mart agreed to pay Jones $72,500 plus entered into a consent decree that provides for notice to applicants of alternative specimen testing for those persons "whose physical condition prevents them from producing urine" and who request some accommodation in the pre-employment drug screening process. The consent decree provided for a blood test as the alternative specimen that is rarely used in workplace drug testing.

Wal-Mart also agreed to provide 90 minutes of hiring manager training on the accommodation process and to post a mandated notice to all store employees. The case is the EEOC v. Wal-Mart Stores East, LP in the Baltimore United States District Court. The EEOC also has a pending case against Kmart involving an almost identical issue in Hyattsville, Maryland.

Common Sense Counsel: since 2001 the United States Department of Transportation has followed a shy bladder procedure found at 49 CFR Parts 193 & 195 of the DOT drug and alcohol testing regulations. This process is meant to differentiate a legitimate medical explanation for not being able to produce a urine specimen from those trying to beat a drug test.

The smart course of action for an employer faced with any drug testing issue is to use a well-qualified Medical Review Officer (MRO) to guide your decision-making. MROs are medical doctors educated on the DOT regulations; alternative specimen testing and can make the medical call for you. With this new ADA wrinkle the EEOC has thrown into the process by this consent decree, employers would be wise to develop a notice, written procedure and training for situations when an applicant like Laura Jones hands you an application and says, “sorry I can’t go.”

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3

Friday, October 24, 2014

Worker Misclassification: AL Department of Labor Tag Teams with Feds

By: Tommy Eden

Earlier this month the U.S. Department of Labor’s Wage and Hour Division and the Alabama Department of Labor signed a memorandum of understanding covering misclassification as something other than employees, such as independent contractors. The agencies committed to work together to cross report possible violations when discovered.

This Misclassification Initiative, with the stated goal of preventing, detecting and remedying employee misclassification, has already been signed with state agencies in California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.

The DOL Wage and Hour Division reports on its website that in Fiscal Year 2013, investigations resulted in more than $83,051,159 in back wages for more than 108,050 workers in industries, such as janitorial, food, construction, day care, hospitality and garment.

Common Sense Counsel: Next time you are trying to decide how to properly classify someone, as an employee or an independent contractor, understand that the right to control the means and manner of performance is a key factor-with about 20 other factors to boot.  So ask yourself the following questions before you hire that person as a 1099 contractor and not an employee.

Does the business want to hire this individual as an employee to provide the same or similar services following a “test period” as an Independent Contractor?
Will the individual be required to devote essentially full-time hours to perform services for the business, making the individual unable to perform services for other customers during the performance period?
Will the individual be expected or required to perform essentially full-time work hours at the business or at facilities operated by the business?
Will the individual be required to comply with instructions from a business supervisor, as to where, how, and when the work is to be performed?
Will the business be responsible for hiring, supervising, and paying workers who will substantially assist the individual in performing the requested services?
Will the individual be paid on a recurring basis for a fixed amount?  (For example, will the individual be paid every month for several months for a fixed amount, instead of on a per project basis?)
Will the individual work as part of a team of regular employees and will the individual’s day-to-day participation be essential to the successful performance of the employee team?
Is the individual expected/required to perform work during hours that are set by a business supervisor?
Will the individual perform services for which the business is concerned with the methods used to obtain the results (and not just with the results)?
Will the business provide a significant amount of tools, equipment, or other materials needed by the individual to perform the agreed-upon work?

(Click here for an expanded checklist.)

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901 and follow on twitter tommyeden3

Friday, October 17, 2014

Most Dangerous Specimen of Employee Wins Again

By Tommy Eden



In September 2006, Edward Lane accepted a probationary position as Director of Central Alabama Community College’s Community Intensive Training for Youth Program, a program for at-risk youth in Alexander City, Alabama. Lane promptly audited the program’s finances and discovered that then state representative Suzanne Schmitz was listed on the payroll but was not reporting for work and not otherwise performed tangible work for the program. Schmitz lived in Madison County but refused to report for work at the Huntsville campus.

When Lane raised his concerns about Schmitz internally, College President Steve Franks warned him that terminating Schmitz’s employment could have negative repercussions for both Lane and the College. Despite these warnings, Lane terminated Schmitz’s employment for refusing to report to work.
Schmitz was eventually convicted of federal mail fraud and sentenced to 30 months imprisonment; 36 months of supervised release, 360 community service hours and pay back the $177,251.80 she received in public funds.

Within 90 days after Lane testified at Schmitz's first federal court trial, he was fired by College President Franks. Lane then filed a lawsuit claiming that his termination was in retaliation for his testimony given in the Schmitz case, in violation of his Free Speech First Amendment right.

On June 19, the United States Supreme Court held in a unanimous decision that Edward Lane should not have been denied First Amendment protection, and fired, for his subpoenaed testimony that was a matter of public concern. The high court then sent the case back to the 11th Circuit Court of Appeals on the equitable relief and damages issues.

On October 10, the 11th Circuit held that Lane may seek the equitable relief of reinstatement to his former position at Central Alabama Community College for the First Amendment violation. However, the Court did find that the 11th Amendment to the Constitution precludes an award of damages against the State of Alabama and the College President.

Common Sense Counsel: Edward Lane is a profile in courage whose 8 years of perseverance has been rewarded by the United States Supreme Court and now the 11th Circuit of Appeals. The Lane case deals with the most dangerous specimen of employee – the sacred (someone who engages in protected conduct then is retaliated against). Lane was a whistleblower and employers across America are playing millions in fines and verdicts every month to the Edward Lanes of this world. OSHA enforces 22 different whistleblower anti-retaliation federal laws from truck drivers to healthcare workers. Taking these 5 steps will help you avoid being the target of a whistleblower claim:

1) Prevent the whistle from being blown by putting in place ethics, no retaliation and harassment prevention policies in your handbook;

2) Regular training on your policies with documentation of attendance;

3) Conduct routine audits to tests compliance with polices;

4) Put in place a defensible reporting, investigative and response plan if allegations of wrongdoing surface; and

5) Praise the internal whistleblower instead of firing them.


Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Thursday, October 9, 2014

ACA Shoes Start to Drop for Part Timers

By: Tommy Eden



Wal-Mart, who once embracing the Affordable Care Act (ACA) exchange system, earlier this week notified its 30,000 part time associates, those working less than 30 hours a week, that it will be ending their group coverage January 1, 2015. It also began opening up enrollment kiosks staffed by licensed brokers of DirectHealth.com in 2,700 of its stores as a heath care shopping alternative.

With this move, Wal-Mart manages to cut the cost of insuring 30,000 of their employees by forcing them to either a subsidized ACA policy, or in some states that expanded coverage, on to Medicaid. Alabama chose not to expand Medicare coverage.

Target Corporation, Home Depot and Walgreens have already announced that they are dropping coverage for part time employees.

Wal-Mart also said insurance premiums for its other employees will be increasing in 2015 by $3.50 for a total of $21.90 per pay period.

Beginning in 2015, the ACA will require businesses with 100 or more employees to offer affordable healthcare coverage to employees who work at least 30 hours a week or pay a penalty. The same requirement will be extended in 2016 to businesses with 50 or more workers. No reprieve is on the current political horizon.

Another significant ACA issue for those who use staffing company employees, is recent ACA IRS interpretations that a Client employer must be able to prove that its staffing company employees were offered affordable health care coverage. For purposes of the pay-or-play mandate, when the Client is the common law employer, an offer of coverage made by the temporary staffing firm "on behalf of" the Client employer will be considered to be an offer of coverage by the Client employer. For an offer of coverage to meet the IRS test, the Client employer must pay a higher fee to the temporary staffing firm for those employees who enroll in the temporary staffing firm's group health care plan. For example, if the staffing contract provides for a flat fee per employee placement irrespective of whether the employee enrolls in the staffing company's coverage, the employer will not be considered by the IRS to have made an offer of coverage. This could lead to a Client employer penalty under the pay-or-play mandate's $2,000 per full-time employee "no coverage offered" if more than 5% of its full-time employees (30% in 2015) are employed through the staffing agency.

Common Sense Counsel: Take these better late than never steps to protect your business from the looming ACA tsunami:
Step 1: “Strategically” decide to “Go or Stay Small”
Step 2: Count the Cost of non-compliance
Step 3: Update your employee handbook
Step 4: Give your employees a 2015 HSA
Step 5: Adopt a wellness plan
Step 6: Contractually Protect your Business
Step 7: Vote

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with expanded Common Sense Counsel and follow on twitter tommyeden3

ObamaCare: Top 5 steps every employer should consider now

By Tommy Eden, Constangy, Brooks & Smith, LLP





1) Step 1: “Strategically” decide to “Go or Stay Small”
Applicable Large Employers who have 50 FTEs must offer health coverage to all full-time employees or face fine.
Must correctly identify the "employer group" to correctly apply the rules (i.e., "who is the Employer" - IRS controlled group rules apply)
Go small by:
ü      contracting out distinct business functions (SWOT analyses)
ü      use Staffing Service
ü      break-up controlled group (within IRS Attribution Rules)
ü      reduce size of workforce
ü      sell your business
ü      sell parts of your business
ü      use part-time and variable hourly employees (still may be Applicable Larger Employer but no fines)

ü      solicit wise counsel so what you do will truly make a difference


2) Step 2: Count the Cost
show NFIB online calculator
http://www.nfib.com/advocacy/healthcare/credit-calculator
explain with example
what is your number?
then evaluate whether to play or pay - nondeductible $2,000 penalty for all FTE's -30 vs. anticipated cost of providing plan (make reasonable assumptions about who will take the plan if offered and how much cost will increase -- i.e., will a significant number really take the plan if offered, or will participation stay relatively stable).


3) Step 3: Update your employee handbook
full-time for ObamaCare mandate is 30 hours a week
coverage not mandated for part-time, temporary, seasonal and variable hourly employees so must obtain handbook in job classification information in the new hire packets (look-back measurement periods)
carefully review leased employee arrangements
confirm that independent contractors are really IC's and not EE's as improper classification can lead to big problems
providing other benefits not mandated for traditional classification of full-time but must specify such in your handbook and also benefit proration
benefit disclaimer language critical to allow quick pivots on benefit related issues
move benefits to separate explanation of benefits booklet and out of handbook
sole authority to interpret benefits eligibility and “bad boy” disqualification language can be most helpful
Plan Design Choices for Groups Under 50

o                   Keep everything “as is”. Cover issues like “grandfather rules” and notices that still apply in ACA.
o                   Purchase group insurance through the SHOP Exchange to qualify for the company tax credit.
o                   Change to a self insured group plan to avoid taxes (can go down to 10 participants).
o                   Terminate group plan but replace with a defined contribution amount for health expenses so employees qualify for Federal subsidies through the Federal exchange.


4) Step 4: Give your employees a 2015 HSA
moving to consumer driven healthcare
health savings account highly favored as best way to keep loyal employees
Example HSABank information http://www.hsabank.com/hsabank/employers
use Q&A materials from website
monthly payroll contributions
IRS has over 40 medically accepted expense categories
use a visa charge card or pay with a check


5) Step 5: Adopt wellness plan
start with a smoke-free campus, store or shop
individual health risk assessments
individualized wellness plans
rewards can be participatory v. contingent
Challenge goals with reasonable design
carrot and stick approach with incentives and penalties; can be up to 30% of total cost and 50% for smokers with measurable ROI
App-based wellness tracking www.wellworksforyou.com
written wellness plan covering privacy and compliance
know your alphabet: HIPAA, ADA, EEOC, GINA, DOL, IRS


6) Step 6: Contractually Protect your Business Another significant ACA issue for those who use staffing company employees, are recent ACA IRS interpretations that a Client employer must be able to prove that the staffing company employees were offered affordable health care coverage. For purposes of the pay-or-play mandate, when the client is the common law employer, an offer of coverage made by the temporary staffing firm "on behalf of" the client employer will be considered to be an offer of coverage by the client employer. For an offer of coverage to be "on behalf of" the client employer, the client employer must pay a higher fee to the temporary staffing firm for those employees who enroll in the temporary staffing firm's plan. For example, if the staffing contract provides for a flat fee per employee placement irrespective of whether the employee enrolls in the staffing company's coverage, the employer will not be considered to have made an offer of coverage. This could lead to exposure to the Client employer under the pay-or-play mandate's $2,000 per full-time employee "no coverage offered" penalty if more than 5% of its full-time employees (30% in 2015) are employed through the staffing agency.



Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with expanded Common Sense Counsel and follow on twitter tommyeden3

Friday, October 3, 2014

DOT Reminder to Medical Review Officers (MROs) Verifying an Employee’s Prescription

As a reminder, when a donor provides a prescription for a non-negative laboratory test result, as the MRO, you are responsible for determining whether the medical explanation is legitimate.   

In your role as the “gatekeeper” in this process, you must review and take all reasonable and necessary steps to verify the authenticity of all medical records the employee provides (see 49 CFR Section 40.141(b)).  For example:

    Call the pharmacy to verify the legitimacy of the prescription; and
    Call the donor’s treating physician if you have suspicions or questions

In accordance with 49 CFR Sections 40.137(c), 40.139(b), and 40.145(e), the donor has the burden of proof that a legitimate medical explanation exists.  The donor must present information meeting this burden at the time of the verification interview.  You may extend the time available for the donor to present the information for up to 5 days.  If the donor fails to provide information you have requested (e.g., does not produce a prescription or does not facilitate the treating physician’s contact with you), you may proceed in making your determination.

Any time you make the determination to verify a laboratory positive result negative because of a legitimate medical explanation, you may have a responsibility to raise fitness-for-duty considerations in accordance with 49 CFR Section 40.137(e)(4) and 40.327.  In raising these concerns, you are only authorized to provide information learned through your verification interview with the employee’s employer, a physician or health care provider responsible for determining the employee’s medical qualifications under a DOT agency’s safety regulations, a SAP evaluating the employee as part of the return to duty process, a DOT agency, or with the National Transportation Safety Board during the course of an accident investigation.


DOL Signs Employee Misclassification Agreement with Alabama Labor Department



Officials of the U.S. Department of Labor’s Wage and Hour Division and the Alabama Department of Labor yesterday signed a memorandum of understanding to protect the rights of employees by preventing their misclassification as something other than employees, such as independent contractors. The memorandum of understanding represents a new effort on the part of the agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification.

The Alabama Department of Labor is the latest state agency to partner with the U.S. Labor Department.    In Fiscal Year 2013, WHD investigations resulted in more than $83,051,159 in back wages for more than 108,050 workers in industries, such as janitorial, food, construction, day care, hospitality and garment. WHD regularly finds large concentrations of misclassified workers in low-wage industries.    “Misclassification deprives workers of rightfully-earned wages and undercuts law-abiding businesses,” said Dr. David Weil, administrator of the Wage and Hour Division. “This memorandum of understanding sends a clear message that we are standing together with the state of Alabama to protect workers and responsible employers and ensure everyone has the opportunity to succeed.”   “Working with the states is an important tool in ending misclassification,” said Wayne Kotowski, the Wage and Hour Division’s regional administrator for the southeast. “These collaborations allow us to better coordinate compliance with both federal and state laws alike.”

“We are pleased to be able to partner with the U.S. Department of Labor in order to better serve all employers and employees in Alabama,” said Alabama Department of Labor Commissioner Fitzgerald Washington. “This sharing of information between agencies can lead to better benefits for and a better understanding of the law by employees, as well as serving to level the playing field for employers who are legitimately reporting their employees’ classifications.”  

Business models that attempt to change or obscure the employment relationship through the use of independent contractors are not inherently illegal, but they may not be used to evade compliance with federal labor law. Although legitimate independent contractors are an important part of our economy, the misclassification of employees presents a serious problem. Independent contractors are often denied access to critical benefits and protections, such as family and medical leave, overtime compensation, minimum wage pay and unemployment insurance, to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law.  

Memoranda of understanding with state government agencies arose as part of the department’s Misclassification Initiative, with the goal of preventing, detecting and remedying employee misclassification. California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington state agencies have signed similar agreements. More information is available on the Department of Labor’s misclassification website at

https://urldefense.proofpoint.com/v2/url?u=http-3A__www.dol.gov_misclassification_&d=AAIGaQ&c=N-Mzp04sWREArlpZB5_L_Q&r=ZEuZR48vjp9Tl8Q-4go2YtOhZKqFsh9DeOFZnjD6q84&m=IW4lc-O7oPSe4iezVXyuILlcafP2fOOzGoUenqyxIw8&s=-yOjGb2sN-gn2qFMqROO_UEkbsDh94o-b2rMxCXJOI8&e= .

The Constangy offices in Alabama have work extensively with the General Counsel for the Alabama Department of Labor and you may direct any inquires you have about this new MOU to Tommy Eden at teden@constangy.com or 334-246-2901.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter @tommyeden3 

Wednesday, October 1, 2014

Colorado Supreme Court Gets Rocky Mountain High Issue

By: Tommy Eden



Brandon Coats was partially paralyzed in a car crash as a teenager, using a wheelchair, and has been a medical marijuana patient since 2010 when he discovered that using pot helped calm violent seizures and muscle spasms. Coats was a telephone call-center operator with Dish Network for three years before he failed a cheek-swab random drug test in 2010 and was fired. Dish Network has a zero-tolerance policy against using illegal drugs.

On Tuesday, the Colorado Supreme Court heard oral arguments in Brandon Coats’ case that may have major impact on marijuana and the workplace. Colorado voters first approved a constitutional amendment authorizing the use of medical marijuana in 2000. Marijuana for recreational use was approved by voters in 2012 and started being sold in retail shops in Colorado on April 1, 2014.

Twenty-three states and the District of Columbia now have medical marijuana laws. Washington and Colorado laws specifically state that employers do not  have to accommodate employees’ marijuana use. But other states such as Arizona, Nevada, New York, Minnesota, and Delaware grant various levels of protections to medical marijuana card holders from discrimination.

Additionally, the Supreme Courts for the states of California, Washington, and Montana have all ruled that an employer has no duty to accommodate the use of an “illegal drug” such as marijuana. The fact that marijuana remains a schedule one “illegal drug” under federal law has been critical in each ruling for the employer.

Coats brought his lawsuit against Dish under Colorado’s lawful off-duty activities law, which specifically says employers cannot fire people for doing something legal on their own time. Originally the law was enacted to protect cigarette smokers and multiple states have similar laws. Both the trial judge and Colorado Court of Appeals have already ruled against Coats “legal use” argument holding that as long as marijuana is illegal under federal law the state law does not apply.

During the Tuesday Colorado Supreme Court hearing the justices did little to telegraph how they may vote. Only six of seven justices will decide the case as one recused himself because his father sits on the Colorado Court of Approval. Each side was asked to draft a proposal opinion for the justices to consider. A ruling may be months away. A tie means that the Court of Appeals ruling for Dish stands.

Common Sense Counsel: So what should an employer who has employees assigned to work in a medical marijuana state do? Consider these 5 Steps an employer can take to successfully walk the workplace marijuana tightrope:

1. Understand the laws on Medical Marijuana that are specific to states where employees report for duty;
2. Adopt a legally vetted pre-duty prescription medication and impairing effects substances safety policy;
3. Update employee job descriptions to cover critical safety sensitive issues;
4. Adopt an ADA complaint handbook policy on reasonable accommodations in those more difficult states;
5. Let employees know your stance on Medical and Recreational Marijuana use;
6. Update your drug-free workplace policy and forms; and
7. Stay tuned as this issue continues to create new employer challenges almost monthly.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter @tommyeden3