The Minnesota Supreme Court recently issued what could turn out to be a significant opinion on the legal standard governing sexual harassment cases under the Minnesota Human Rights Act (MHRA).   At issue in Kenneh v. Homeward Bound, Inc. (Minn. 6/3/2020) was whether the requirement that workplace harassment be “severe or pervasive,” adopted from federal case law under Title VII, should continue to be applied under the MHRA.     The plaintiff argued the Minnesota High Court should abandon “severe or pervasive” because it is “notorious for its inconsistent application and lack of clarity.”   Supporters of the plaintiff’s position submitted a brief arguing the standard should be changed because federal courts tend to interpret the severe or pervasive standard “archaically.”  What they mean is that courts judge what is or is not severe or pervasive based upon acceptable workplace conduct 30 years ago when the standard was adopted.   What may have been tolerable then, however, may not be tolerable today.  As a result, plaintiffs contend, employers unfairly escape legal liability for offensive conduct that is harmful to employees and has an adverse impact on the work environment.

Generally, the severe or pervasive standard has been helpful to employers defending claims of sexual harassment.    Precedent in almost every federal circuit imposes a high bar for a plaintiff to satisfy the severe or pervasive standard.   There are countless examples in which courts characterize offensive words or acts of sexual nature, directed at other employees, as “well beyond the bounds of respectful and appropriate behavior,” “improper,” or “obnoxious and disgusting,” and even “reprehensible.”   Still, courts often find, as a matter of law, such conduct is insufficiently severe or pervasive to violate Title VII.    Courts are reluctant to transform the laws prohibiting discrimination into “civility codes,” or to act as “super personnel departments” that police the minutiae of employee behavior.    Even though severe or pervasive as applied in federal courts may not impose legal liability on all intolerable behavior, there are good reasons to maintain the standard. 

In the end, the Minnesota Supreme Court decided to keep “severe or pervasive” as the standard for sexual harassment cases, stating that, the plaintiff “has not presented us with a compelling reason to abandon our precedent.”   But, after stating the precedent would be maintained, the Court went on to state that “severe and pervasive” would not necessarily mean now what it meant in the past.  The Court wrote: “For the severe or pervasive standard to remain useful in Minnesota, the standard must evolve to reflect changes in societal attitudes towards what is acceptable in the workplace…[t]oday, reasonable people would likely not tolerate the type of workplace behavior that courts previously brushed aside….”

What are the practical implications for employers of a ruling that with one hand maintains the status quo, but with the other changes the meaning of the status quo?    One likely consequence is plaintiffs will try to avoid whenever possible suing in federal court.   In the federal courts, judges have traditionally played a gatekeeper role, determining the boundaries of what does and does not create a hostile work environment, and dismissing many cases that fall out its prescribed boundaries.    But the Kenneh opinion specifically warned against courts “usurping the role of a jury when evaluating a claim on summary judgment…[s]ummary judgment is a ‘blunt instrument’ that is ‘inappropriate when reasonable persons might draw different conclusions from the evidence presented.’”  In Minnesota state courts more harassment claims will survive summary judgment, which means employers will have to try or settle more of these claims.

Why is Kenneh important outside Minnesota?  Most states, including Iowa, have also adopted the federal severe or pervasive standard to evaluate harassment claims under their own anti-discrimination laws.    There is little doubt plaintiffs in other states will urge their High Courts to follow the “evolving” standard the Minnesota Supreme Court adopted in Kenneh.  Over time, federal courts may even follow suit.   Unfortunately for employers, changing from what once a fairly predictable standard to one that is allowed to “evolve” one jury at a time is essentially the same as having no standard at all.  The result is less clarity and less predictability for employers and litigants.

Fortunately, many employers are ahead of the curve and are already prepared to deal with the evolving standard the Minnesota Supreme Court adopted.   In the last few years, more and more employers have as matter of policy or practice become less tolerant of bad behavior that may have been overlooked in the past.    An anti-harassment policy consistent with best practices will almost always be stricter than the traditional severe or pervasive standard.   An employer that wants to avoid claims must make sure its policies are up to date, its training regular and effective, and its HR personnel responsive.

One of the first employment lawsuits related to COVID-19 was filed in Iowa last week.  A former Dallas County Jail employee alleges he was fired because he called a Department of Corrections “hotline” to report concerns about working with a colleague infected with the virus.   Jail employees were informed one of their co-employees tested positive for COVID.   But the infected employee was not symptomatic and would be allowed to work with precautions.   After the plaintiff’s call to the hotline, employees were notified the infected employee would not be returning to work after all.

The plaintiff claims the Sheriff became angry when he learned about the call to the hotline, accusing the plaintiff of disloyalty and going outside the chain of command.  Plaintiff alleges he was suspended and ultimately fired.   The Sheriff’s stated reason for the termination was a violation of the “no call-no show” policy.

The lawsuit alleges a violation of Iowa’s public sector whistleblower law, and wrongful discharge in violation of public policy.    It is the public policy claim, depending upon how the court treats it, that could have the most impact on COVID related employment litigation.   The whistleblower statute applies only to public sector employees and is fairly narrow in its application, and thus is not as significant.

Wrongful discharge in violation of public policy is a common law claim that is supposed to be a “narrow” exception to the general rule of at-will employment.    To prevail on a public policy claim, the plaintiff must prove he was fired for engaging in activity protected by “public policy.”    Unfortunately for employers, what constitutes protected public policy activity is somewhat amorphous and has been growing ever since the Iowa Supreme Court recognized this cause of action in 1988.  Generally, to be protected, the employee must be exercising a right guaranteed by law (e.g., a workers’ compensation claim), fulfilling a legal requirement (e.g., jury duty), or exercising a professional obligation required by law or regulation (e.g., teacher reporting suspected child abuse).

Based upon current law, it is doubtful this plaintiff’s call to the Department of Corrections hotline qualifies as activity protected by public policy.    There is no allegation the Dallas County Jail was violating any rules, regulations, or guidelines concerning its COVID mitigation efforts or the presence of a COVID-19 employee in the workplace.   There is no allegation the workplace was unsafe.   There is no allegation the plaintiff or a member of his household was susceptible to severe illness if he contracted COVID-19.     The plaintiff alleged he called because he feared the infected co-worker would create a health hazard for jail employees and inmates.

It may have been unwise for the Dallas County jail to allow a COVID infected employee to work.   The plaintiff’s fear of COVID-19 spread may have been reasonable.  The presence of a hotline to report concerns to the Department of Corrections may be a good idea.  But, does public policy extend employment protection to an employee’s expression of complaint or concern about working with a colleague who is sick with an infectious virus, even one like COVID-19?    If this plaintiff’s activity is protected by public policy, it will open the door to legal protection of all manner of employee expression of complaint or concern.

By the time this question reaches the Iowa Supreme Court, the COVID-19 pandemic will be long gone (hopefully).   Until then, this lawsuit against the Dallas County Sheriff may be the first of a deluge of lawsuits claiming a wrongful employment action connected to COVID.

We have discussed (here and here) the problem of the reluctant employee.    That is, a furloughed employee who resists the call to return to the workplace because of fear (or at least a perceived or claimed fear) of COVID exposure.

This post tackles the opposite problem: the reluctant employer.    A furloughed employee wants to return to work.  Work is available.   But, the employer is reluctant to bring the employee back because an underlying health condition makes the employee at higher risk of severe illness if they contract COVID-19.    The CDC has identified several such conditions, including chronic lung disease, severe asthma, serious heart conditions, people who are immunocompromised, severe obesity, diabetes, liver disease, and chronic kidney disease undergoing dialysis.     The CDC also states that a person’s age alone (over 65) presents an elevated risk, even without underlying health conditions.

Does an employer have the right to refuse an employee entry into the workplace under these circumstances?

EEOC addressed this question recently in an updated its Guidance about complying with the ADA in light of COVID-19.

If the employee does not disclose the health condition, or does not request a reasonable accommodation for it, the ADA does not require the employer to do anything.    For its part, the employer should not inquire about underlying medical conditions or make assumptions about the employee’s health based upon information from others.    But, what if the employee discloses they have an underlying condition on the CDC list that makes them vulnerable?   The employer may naturally be concerned about exposing the employee to the risk of COVID exposure  (as well as any consequent legal liability to the employer).    Despite these concerns, the employee may not be excluded from the workplace in these circumstances unless there is evidence  the condition presents a “direct threat” to the employee’s health that cannot be eliminated or reduced by reasonable accommodation.

Proving “direct threat” is not easy.   It requires showing the employee has a disability that poses a “significant risk or substantial harm” to the employee’s own health.   The fact that the employee has a condition on the CDC’s threat list is not enough in and of itself.    The employer cannot exclude the employee because of a health condition that “generally” presents an elevated risk with COVID-19 exposure.  According to the EEOC Guidance, the determination must be an individualized assessment, based upon a reasonable medical judgment about the employee’s disability in particular, using the most current medical knowledge and/or the best available objective evidence.

What if the employee’s condition really does present a direct threat if the employee contracts COVID-19?   Before excluding the employee, the employer must first determine there is no way to provide a reasonable accommodation that would still permit the employee to perform the essential functions of the job.   Reasonable accommodations might include additional enhanced protective gowns, masks, gloves or other extra gear; separating the employee from others by moving the work area or erecting barriers; or modifying work schedules.  If there really is no reasonable accommodation that will allow the employee to return to the workplace safely, the employer must consider other options, such as telework, leave, or reassignment to a different job in a place where the employee has less contact with other employees.

In short, the EEOC Guidance makes clear it will be rare the circumstance in which a employer may refuse a COVID-19 vulnerable employee from returning to the workplace entirely.   Whatever other legal liability might exist, compliance with the ADA means the employer should err on the side of letting the employee come back to work.

March 27 saw the Iowa Supreme Court grant further review in not one but two important drug-testing cases.  Besides deciding to hear Dix v. Casey’s General Stores, Inc. (covered here), the Court also granted review in Woods v. Charles Gabus Ford, Inc. (19-0002).  Charles Gabus challenges the Court of Appeals’ ruling that it failed to substantially comply with the drug-testing statute’s post-test notice requirement.

Woods was fired after he failed a drug test.  Iowa’s drug-testing statute requires an employer like Charles Gabus to send the employee notice of the positive test along with specified contents, including the employee’s right to seek a confirmatory drug test.  Woods undisputedly received the notice.  Even so, he sued, asserting that the notice failed to recite the cost of the confirmatory drug test, as required under the statute.

Charles Gabus conceded that its notice didn’t feature that cost.  Instead, Charles Gabus argued it didn’t violate the statute because its notice “substantially complied” with the notice provision.  The Supreme Court has held that substantial compliance with the notice provision will do “if the employer’s actions falling ‘short of strict compliance . . . nonetheless accomplish the important objective of providing notice to the employee of the positive test result and a meaningful opportunity to consider whether to undertake a confirmatory test.’”

The Iowa Court of Appeals agreed with Woods, reversing the District Court.  The lower court had reasoned that the notice said that if the confirmatory test were negative for drugs, Woods would be reimbursed for its cost, making the cost zero and thus essentially immaterial to the post-test notice.  Indeed, Woods testified merely that he “might” have gotten the confirmatory test had he known its cost.  Yet the Court of Appeals rejected this analysis, concluding that Woods could not make an informed decision without the test’s cost.  It thus found that Woods was deprived of a meaningful opportunity to consider whether to take the confirmatory test.  So no substantial compliance.

Charles Gabus doesn’t challenge the substantial-compliance standard, only its application in the case.  The notice Charles Gabus sent met the notice provision’s other requirements; it notified Woods of the positive test and his right to seek a confirmatory test.  It also notified Woods that he’d be reimbursed for the confirmatory test’s cost if it returned negative.  It is in this context that the Supreme Court will determine with the notice, despite featuring the cost, substantially complied with the drug-testing statute.

We’ll follow up when the Court issues its opinion.

Although the timetable allowing businesses to reopen is different in every state, most businesses are starting to plan for the inevitable day when employees will be allowed to return to the workplace and resume business operations at least in some form.    In Iowa, the Governor’s April 27 proclamation loosened restrictions in 77 Iowa counties.   Although restrictions remain in the other 22 counties, the Governor promised to review the conditions again on May 15, setting the stage for the potential reopening in the entire state.

Whether your employees have been able to work remotely, are furloughed, or some combination thereof, restarting and ramping up operations presents a host of unprecedent logistical challenges and legal dangers to businesses.   We have identified ten of the most pressing questions employers are likely to face in the coming weeks and months as they undertake the task of getting their employees back to work.

Question No. 1:  I want to make sure the employees returning to work do not have COVID-19; What kind of health information is an employer entitled to obtain before allowing an employee to return to work?

In normal circumstances,  the ADA prohibits an employer from conducting a medical exam or otherwise asking about employee’s health, except under limited circumstances.   But, the COVID-19 pandemic has caused EEOC to relax its normal strictures against employee testing.   EEOC has published a Technical Assistance Guidance in which it has opined that taking an employee’s temperature before entering the workplace is permissible. You may also ask returning employees to complete a health questionnaire that inquires about facts relevant to COVID-19 (e.g., has the employee had a positive test, been exposed to someone with a positive test, has COVID-19 symptoms such as fever, cough, chills, or shortness of breath, or where the employee has recently traveled). Finally, you may ask whether the employee has or is working somewhere else, such as in a health care field that could present a higher risk of exposure. All medical information obtained a result of these efforts must be kept confidential.

Question No. 2:  What about testing?  Does an employer have the right to compel an employee who has no COVID-19 symptoms to take a test?

As a practical matter, there are not at the present time sufficient tests available, so widespread testing is probably not feasible.    But, what about when more testing becomes available? Because of evidence that a person with no symptoms may nonetheless have contracted the COVID-19 virus, it may be reasonable for an employer to require testing as a condition to allowing the employee to return to work.   EEOC recently updated its Technical Assistance Guidance to clarify that employers may require COVID-19 testing as a condition of returning to work.

Two cautionary notes for employers who decide to test. First, employers should consult with public health authorities or medical professionals before implementing a testing program, to ensure the tests are safe and accurate. Second, the testing EEOC permits is testing that detects whether the employee is currently infected with the virus.   There is no reliable guidance whether testing for the presence of antibodies using serology tests is permissible.   As such, serology testing should be avoided until more guidance is available.

Question No. 3: Does the employer have to pay employees for the time it takes for COVID-19 testing?

If testing is a requirement to return to work, the employer should pay employees for the time spent waiting for and undergoing a test.

Question No. 4: If an employee has an active case of COVID-19, when should that employee be permitted to return? 

An employer may require the employee to get medical clearance that they can no longer spread the virus.   However, in some communities physicians have not been available to provide return to work certifications.   In that case, employers should follow the CDC Guidelines, which require an employee to isolate for at least seven days from the onset of symptoms,  be fever free without fever reducing medications for at least 72 hours, and have seen an improvement in respiratory symptoms.

Question No. 5: Some employees don’t want to come back to the workplace right now; does an employer have the right to insist they return? 

You should discuss with the employee the reason they don’t want to come back to work right now.   In some cases, the employee may have a legal right not to come back, but not in every case.  For example,  if the employee has contracted the COVID-19 virus, is quarantined because of medical advice, or is caring for a relative who is sick, the employee may be entitled to leave under the FFCRA or otherwise be entitled to an accommodation.   The employee may also be entitled to leave if caring for a child because the child’s school or daycare is close because of COVID-19.

If the employee is not sick now but is afraid coming into the workplace will expose them to the virus, you should explore where the fear is coming from.   If the employee is at high risk because of a medical condition or lives with someone who is, you should advise the employee the precautions you have made to prevent the spread of COVID-19 in the workplace (which should, at a minimum, follow the CDC mitigation strategies).   You should also explore reasonable accommodations, such as continued telework for a period of time or a leave of absence.  If attendance at work is an essential function and there is no reasonable accommodation, you may require the employee to come to work or suffer the consequences for refusing to report.

If the employee’s fear is not rational or there is evidence of other motives (such as continuing to receive the $600 enhanced unemployment benefit), an employer has the right to notify the unemployment authorities that the employee is refusing to return to work, which may jeopardize the unemployment benefits.

Question No. 6: If an employee believes they contracted COVID at work, is it covered by workers’ compensation?

A disease is compensable under the workers’ compensation laws only if it arose out of and in the course of employment.   The employee must be able to prove that exposure to the COVID-19 virus in the workplace caused the employee to contract it.   It may be more or less difficult to prove, depending upon the nature of the work and evidence of exposure in the workplace compared to other places the employee may have been exposed

It is important to note that benefits under the workers’ compensation law include lost time from work caused by the work-related illness, medical expenses, and permanent disability, if any, resulting from the illness.   If an employee dies, the employee’s dependents are entitled to death benefits.   Even in those cases where COVID-19 is proven to be work related, very few cases are likely to result in permanent disability or death.

Question No. 7: Does an employer have legal exposure if an employee contracts the virus while working?

Iowa Workers’ Compensation law in most cases is the only legal remedy for employees who have an injury or contract a disease on the job.   The only way to get around the workers’ compensation law is if a supervisor was grossly negligent, that is the person knew there that an injury was probable and a consciously failed to avoid the peril.   If the employer implements reasonable policies and procedures to limit exposure to COVID-19 it should eliminate any liability outside of workers’ compensation. (See Question 6, above).

Question No. 8: Do we have to tell our employees someone tested positive?

Employers should tell employees if someone in the workplace has tested positive for COVID-19, but should not disclose the employee’s identity, and take reasonable steps to prevent the identity from being disclosed.

Question No. 9: What if another outbreak in the fall causes schools to close again?

Paid leave for employees who cannot work because a child’s school is closed because of COVID-19 is effective until December 31, 2020.     It is important to note that an employee has a total of 12 weeks of leave available for this reason.  Whatever leave the employee has already used will reduce any future leave that is available.

Question No. 10: If a vaccine becomes available, can we compel employees to get the vaccine?

Maybe.   Employers in certain industries, particularly healthcare, have the right to insist their employees get a flu vaccine every year.   The same principle would probably apply to a COVID-19 vaccine.

As if the massive disruption resulting from the Coronavirus is not enough, mid-size employers must remain alert to union efforts to organize your workforce and petition for an election in the midst of the ongoing crisis.

Two recent events give rise to the concern that unions will be aggressive in their organizing efforts in this sector, not only during the COVID-19 related business interruption, but also in its aftermath.  First, on March 19, the NLRB suspended Board-conducted elections for two weeks, through April 3, because the developing COVID-19 situation made it impossible to ensure the safety or our employees or the public.   Then, on April 1, even though the COVID-19 situation has significantly deteriorated compared to two weeks ago, with more shelter-in-place orders, the closing of non-essential business on a wide scale, and a crisis in many hospitals and health care facilities, the Board announced that elections would resume on April 6. No word on how the logistics are supposed to work or how elections will be conducted in a way that keeps employees safe while maintaining fair election procedures. Even though many businesses have to shut down, apparently union elections must continue.

Second, the resumption of union elections is occurring at the same time the federal government is making loans available to businesses in financial distress under the recently enacted CARES Act. What’s the connection between the government loans and a union election? Like many government programs that are intended to help, the loans have strings attached that could make them less helpful than appears on the surface. For employers between 500-10,000 employees, one of the conditions of accepting a loan is that, until it is paid back, “the recipient will remain neutral in any union organizing effort.”    Many businesses are not aware of this condition because it’s buried on page 524 of an 883 page law.

What does it mean to “remain neutral?” Ordinarily, an employer that opposes a union has the right to engage in a campaign to counter the union’s organizing effort.   An employer is not allowed to say or do anything that might threaten employees who favor a union or coerce them into voting against it. But, employers are allowed to communicate to employees their desire to remain union free, to provide truthful information about employee’s rights to vote against the union, to explain potential disadvantages of becoming a union member, and how a union would change the relationship between employees and management.  To remain neutral means to give up all those rights, and allow the union to run its campaign completely unopposed.

Even though you may be giving up our rights only during the term of the loan, if your employees vote to be represented by a union, the union will still be there long after the loan has been repaid. Once your workforce is organized, it’s very difficult to become union free again.   You will be obligated to bargain in good faith with the union to try and reach agreement on contract terms. There are only limited circumstances that would allow an employer to withdraw recognition from the union, and even then it is legally risky. Even if employees decide they don’t want the union to represent them anymore, it is difficult to decertify a union as the bargaining representative.  It requires a majority vote of employees, and the employer is not permitted to support a decertification campaign.

Of course, it is possible this part of loan provision is not enforceable, and it might be unconstitutional.     The NLRB is the agency with jurisdiction over the labor laws, but the loan program is administered by the Treasury Department, which has no authority over, or experience with, the National Labor Relations Act.   But, until a court rules the this part of the law cannot be enforced, an employer who accepts a loan and tries to oppose a union will have lots of legal trouble on its hands.    Businesses will have to decide if the short term financial protection the loan program offers is worth the potential long-term cost.

Photo attribution: Labor Union by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Last week, the Supreme Court granted further review in Dix v. Casey’s General Stores, Inc. (18-1464), a case under Iowa’s drug-testing statute (which covers alcohol testing too).  In Dix, the Iowa Court of Appeals held among other things that two-light duty workers weren’t in “safety-sensitive positions” and that the statute’s immunity protects employers only against claims based on third-party conduct.  Casey’s seeks further review of both rulings (plus one more).

In Dix, Casey’s randomly drug tested workers from a pool of employees it had determined were in “safety-sensitive positions”—a statutorily-defined term parroted in Casey’s policy.  Before testing, Casey’s determined that all warehouse employees were in safety-sensitive positions, even those who performed “light-duty assignments” in an area cordoned off by a chain-link fence.  It then used a third party to randomly select employees to test, administer the tests, and conduct a required medical review.

Three plaintiffs tested positive for drugs, two of whom had light-duty jobs.  The third’s duties included operating a forklift and building pallets—“heavy-duty tasks.”  All three were fired, and they sued (along with one other employee).

The Court of Appeals ruled that the two light-duty workers weren’t in safety-sensitive positions and thus had been improperly tested.  Under the statute, a safety-sensitive position is as relevant “a job wherein an accident could cause loss of human life, serious bodily injury, or significant property or environmental damage.”  Casey’s raised a few arguments on this point, among them that all warehouse workers fit this definition because forklifts “zip[ped] around” and boxes were stacked to the ceiling, so an accident could result in harm to any warehouse worker, duties no matter.

But the appeals court, like the district court, read the definition to focus on a worker’s duties.  And because the light-duty employees, unlike their heavy-duty coworker, did not have “tasks where an accident could risk” loss of life, injury, or damage, they did not come within the definition.  In other words, the employees were not in safety-sensitive positions even if the “general warehouse environment is dangerous.”

In its further-review application, Casey’s points out that amicus curiae Iowa Association of Business and Industry had pressed for an application of the business-judgment rule.  But Casey’s argues primarily that the Court of Appeals misread the definition of “safety-sensitive position” by ignoring the work environment.

Nothing about the statute’s terms compels an exclusive focus on job duties.   If someone asked, “What do you do for a job?” it would not be unusual to respond, “I work in a factory.”  Or grocery store, or restaurant, and on and on.  In other words, an ordinary speaker would deem it acceptable to identify the type of place where she works—a component of job environment—instead of her job’s duties.  The circumstances in which one performs her work are often no less a part of how she conceives of her job than are its tasks.

Finally, it’s not at all impossible to imagine a light-duty employee under the influence of drugs or alcohol carelessly contributing to an accident with one of those zipping forklifts.  Alcohol and drugs after all alter judgment and slow responses.  In a generally dangerous environment, like the Casey’s warehouse, even those whose duties aren’t dangerous may be at risk of causing an accident.  Casey’s illustrates this point by suggesting that the Court of Appeals’ reading of the statute would seemingly exclude the janitor at a nuclear power plant from the definition’s coverage.

Casey’s also seeks further review of the Court of Appeals’ holding that the drug-testing statute’s immunity provision as protects “employers only from suit arising from third-party conduct.”  As Casey’s reads the immunity provision, it applies where an employer has (1) established a drug-testing policy; (2) initiated a testing program in accordance with the statute; and (3) tested or taken action in good faith.  So Casey’s argues that the immunity is broader than the Court of Appeals allowed.

Besides the provision’s plain terms, Casey’s emphasizes the Supreme Court’s general instruction to read immunity provisions broadly.  And a broad reading of the drug-testing statute’s immunity provision is also consistent, Casey’s argues, with a legislative intent to protect an employer’s right to a drug-free workplace.

In light of these factors, Casey’s reading of the statute is reasonable.  The drug-testing statute contains many “safeguards” for employees.  By immunizing all employers with policies who comply with these safeguards except those acting in bad faith, the legislature encourages the adoption and use of drug and alcohol testing procedures.  And this in turn encourages reductions in drug and alcohol use generally.  Immunity reduces the risk of drug and alcohol testing.

The Supreme Court has discretion to decide one, both, or neither of these issues.  It may have granted further review to address the third issue on which Casey’s sought review.  But if the Supreme Court does address either of these two issues, it will have important consequences for Iowa’s workplaces.  We’ll follow up when the Court issues its opinion.

Lawyers and law firms have done a great job providing information and analysis about the Families First Coronavirus Relief Act (FFCRA).  I’m especially proud of our team at Fredrikson & Byron for their heroic efforts putting  together the firm’s Coronavirus Resource Center.    Despite the flood of information, however,  many practical questions about day-to-day compliance and implementation remain.  While the Department of Labor Guidance and other publications have addressed most of the “big” questions, clients have asked many others for which there is not much published guidance, and in some cases no easy answer.  In this post we give our best answers, based upon what we know today, to ten of those questions:

  1. How much notice does an employee have to give about a request for emergency paid sick or family leave?

The law tells employers they have to post a notice of rights in the workplace but says nothing about what notice an employee who is eligible for paid sick or family leave must give to the employer.   We think employers should rely on the regular FMLA regulations, which require employees to follow the employer’s regular call-in procedure to report an absence if it is unforeseeable.   If foreseeable, the employee should tell the employer as soon as they can once the need for leave is known.

  1. Do I have the right to ask an employee requesting paid leave for documentation about the reason for the leave?

Yes. While full-blown FMLA certification may not be necessary, you are entitled to some evidence the employee qualifies for the paid leave, such as a doctor’s note or note from a daycare that is closed. If information about school closures is widely publicized (which it probably is), that is adequate.   If you are inclined to give employees the benefit of the doubt and don’t ask for documentation right away, you will still need it to claim the tax credits.

  1. My employee wants paid leave because her child’s school is closed, but she has a stay-at-home spouse.   Can I deny paid leave because someone else is available to care for the child?

That’s a tough one.   We think the employer is entitled to ask questions about whether leave is truly essential to care for their children home from school.   That said, we advise caution about delving too deeply into the family’s personal situation and limit the questions to whether there are alternatives for child-care, or whether the employee can telework while at home. Whether an employee whose child’s school or daycare has closed is really “unable to work” involves subjective judgments, and it is generally  better to give the employee the benefit of the doubt that to risk invading their privacy too much.

  1. Some employees claim they are afraid coming to work will expose them to COVID-19, but I think the real reason is they want to get unemployment because it will pay more than they earn working.  Can I successfully contest their unemployment? What can I do to get my employees to show up?

In Iowa and many other states, the agencies that run the unemployment system will not delve into whether an employee’s expressed fear of contagion is legitimate or driven by ulterior motives. Thus, it is likely such an employee will qualify for unemployment benefits.

One potential solution is to pay employees who show up to work during this crisis premium pay, such as a temporary wage increase or a bonus for attendance at the end of a certain period. This is a costly cure, but maybe better than a temporary shutdown.

Even in an at-will state like Iowa, be careful about terminating employees who don’t show up for work during this crisis because of potential workplace exposure to COVID-19.  Iowa recognizes a claim for wrongful discharge if the employee is terminated for seeking unemployment compensation, as well as for employees who complain about unsafe workplaces.

  1. If everyone who is eligible for paid emergency family leave takes it, I won’t have enough employees left to run my business; is there any relief in this situation?

There might be, if you have fewer than 50 employees. Small employers are exempt from FFCRA expanded paid family leave requirements if you satisfy one of the following conditions:

  • Providing paid sick and expanded family leave would cause expenses to exceed revenues and result in the business ceasing to operate;
  • The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
  • There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
  1. What if an employee has already used some FMLA leave; are they still entitled to 12 weeks of emergency family leave?

No.   Although FFRCA changed some of the eligibility requirements for FMLA leave (e.g., number of employees, amount of time worked), it did not add more covered weeks to the twelve already available. As such, if an employee eligible for paid sick or paid emergency family leave has already used FMLA leave during the last year, they will have fewer hours available for paid leave under FFCRA.

  1. How does paid sick or emergency family leave work with exempt employees?

Employers typically must pay an exempt employee their entire weekly salary, even if the employee does not work all scheduled hours during the week.   One exception is FMLA leave, which can be unpaid even for exempt employees, and even when used intermittently.   We believe the principle that exempt employees are not entitled to be paid for FMLA hours applies to emergency paid sick and family leave under FFCRA. The only difference is that, instead of FMLA hours being unpaid, they are paid at 2/3 the employee’s regular rate.  An exempt employee’s salary can be converted to an hourly rate for this purpose.

  1. My employee needs to care for a child whose school has closed because of COVID-19, but still wants to work because she needs to earn more than 2/3 of her pay; is that allowed?

Yes.   Emergency paid sick and family leave may be used intermittently. Work hours are paid at the regular rate, and emergency paid sick or family leave is paid at 2/3 the regular rate. To make up the difference between 2/3 pay for emergency paid sick or family leave and regular pay, the employee may use accrued vacation, sick, or other paid time off.

  1. If I must wait for the tax-credits I won’t have the cash flow to pay for the leave; what am I supposed to do?

The IRS and DOL announced a plan that allows employers to immediately obtain the credit by retaining the payroll taxes withheld from employee’s checks, and the employer’s share of Social Security and Medicare, instead of remitting the taxes to the government. Details are here.

  1. What if I make a mistake in administering the paid leave?

The DOL announced it will not bring enforcement actions against an employer for violations of the FFCRA that occur within the first 30 days.    To avoid such an enforcement action, the violation cannot be willful, and the employer must have acted reasonably and in good faith, including remedying any violations by making affected employees whole, and committing in writing to not violate the Act in the future.

Note that the DOL measures 30 days from the date the law was enacted (March 18), not the date it is effective (April 1).    So, employers have until April 17 to take advantage of this safe-harbor.

“Mistakes happen. Including in the context of employment decisions. But not every mistake amounts to actionable employment discrimination.”   Smith v. Towne Properties Management Co., Inc. (6th Cir. 3-4-2020).

So stated the Sixth Circuit in affirming the grant of summary judgment to the employer in a FMLA and disability discrimination lawsuit. The plaintiff, Robyn Smith, was the manager of an apartment complex for a property management company.   Smith was diagnosed with pseudotumor cerebri, a condition caused by spinal fluid pressure on the brain. The symptoms of the condition mimic a brain tumor, including migraines, blurred vision, vertigo, and short-term memory loss.   This condition sometimes made it difficult for Smith to perform her job, and she took several FMLA covered absences.

Part of Smith’s compensation included free rent at the complex she managed.  Sometime after the diagnosis and use of FMLA leave, another company employee alleged to its management that Smith was also charging her gas, electric, and water bills to the apartment complex.   The company investigated, learned the allegations were true, and fired Smith.   The company learned after the termination that the prior owners of the complex, Jack and Cynthia Brauer, for whom Smith worked before the company acquired the property, provided her free utilities in addition to rent.   Despite learning this information, the company did not reconsider its decision to terminate Smith.

The issue on summary judgment was whether the company’s stated reason for the termination, that Smith engaged in theft by charging her utilities to the complex, was pretext for disability and FMLA discrimination.   In ruling for the employer, the Court relied upon the so-called “honest belief” defense.   That means, if the decision maker honestly holds a belief and acts on it in good faith, it does not matter whether the facts upon which the belief is based are true.   Incorrect facts honestly believed are not evidence of pretext.

The evidence showed the company investigated multiple sources to confirm the truth of the theft allegation.   A supervisor reviewed the utility bills to confirm they were charged to the complex and not to Smith personally. When the company called Mr. Brauer to ask whether utilities were included in Smith’s compensation when she worked for them, he was “very surprised,” and said he had “no idea” Smith was not paying utilities.   The company looked for documentation showing Smith was authorized to received free utilities and found nothing. But it did find a letter itemizing Smith’s compensation, which listed an apartment allowance, but did not mention utilities.

Smith objected that the honest belief defense requires the employer to make a reasonably informed and considered decision, and should not apply if the factual error was “too obvious to be unintentional.”   In other words, the employer can’t hide behind an honest belief in facts that were uncovered during a shoddy or incomplete investigation.   For example, Smith pointed out that Mr. Brauer had Alzheimer’s, and therefore did not remember that utilities were included as part of her compensation package.  The company found out the truth from Mrs. Brauer after the termination.  The Court rejected Smith’s argument however, because at the time the decision was made, the company did not know Mr. Brauer had Alzheimer’s and thus did not know its facts were wrong.


The honest belief defense is an important tool in the defense lawyer’s toolbox.  It can be very effective to win on summary judgment, so long as the employer has evidence it relied in good faith on facts reasonably available to it at the time. To take advantage of the defense, employers should endeavor to do the following:

  • The investigation of the employee’s offense should be reasonably thorough, examining if possible multiple potential sources of evidence;
  • The evidence relied upon to support the honest belief should be objective (e.g. documents, e-mails, statements that are corroborated by others);
  • While it is not essential to interview the employee to get her side of the story (the company did not interview Smith), it is nonetheless recommended so you have the employee’s version of the fact;
  • If the employee requests her job back or reapplies after you know you were mistaken, you should seriously consider the request, even if you don’t grant it.     The Smith Court implied that if Smith had asked for her job back, there may have been a different result.

Many employers use job applications that ask applicants to disclose their salary or wages at prior jobs.   Sometimes the question comes up in an interview. Employers have many potential motives for asking the question: perhaps to determine what compensation the applicant will expect if hired; to determine whether the applicant would fit within the position’s existing compensation structure, or to ensure the salary offered is not too little, or too much.

But, it may be time to stop asking questions about prior pay.  Thirteen states and many municipalities have enacted laws barring or limiting an employer’s right to inquire about an applicant’s past wage or salary history, or relying upon such information in determining the salary to offer a new employee. The premise underlying these laws is that is women have generally lower pay than men for similar jobs because of historic pay discrimination. Therefore, allowing reliance on prior pay in setting a new salary has the effect of perpetuating the gender pay gap. Although such laws have faced legal challenges on First Amendment grounds, the U.S. Court of Appeals for the Third Circuit ruled in a recent high-profile opinion, that Philadelphia’s ordinance barring inquiry into applicant’s prior wage history does not violate the First Amendment. See Greater Philadelphia Chamber of Commerce v. City of Philadelphia (3rd Cir. 2-6-2020).  In the wake of the Third Circuit’s ruling, it would not be surprising to see more states and localities enact these kinds of laws.

Even in those states where the law does not expressly prohibit an employer from asking about an applicant’s wage history, employers who ask about prior wages should re-consider whether continuing the practice is worth the legal risk. A recent opinion from the U.S. Court of Appeals for the Ninth Circuit highlights the potential legal liability employers face when asking about or relying upon an applicant’s prior pay history.

The case is Rizo v. Yovino, (9th Cir. 2-27-2020). it involved a challenge to a pay disparity between a female math teacher and male math teachers under the federal Equal Pay Act (EPA).  The EPA prohibits an employer from paying female employees less than male employees (and vice versa) for substantially similar work, which means work that requires equal skill, effort, and responsibility, and which is performed under similar working conditions.   The Iowa Civil Rights Act has similar provisions concerning equal pay for equal work.

The EPA allows wage disparities between men and women for substantially equal work under four circumstances. The exceptions apply where the disparity is based on, 1) a seniority system; 2) a merit system; 3) quantity or quality of production; and 4) any other factor other than sex.   It is the fourth exception that has resulted in the most litigation, and was at issue in the Rizo case.

The Fresno County Office of Education hired Rizo as a math consultant. She had thirteen years experience as a middle and high school math teacher, and a master’s degree.   Fresno County set new employee salaries based upon a pay schedule that had 12 salary levels that corresponded to a job classification. Each salary level had up to 10 steps.   To determine a new employee’s pay, the County started with the employee’s prior salary, added 5 %, and placed the employee at the step on its pay schedule that was closest to that number. Rizo was placed on Step 1, level 1 when she started, at a salary of $62,133.   In 2012, after working at Fresno County for three years, Rizo learned that a newly hired male math consultant was hired at Step 1, level 9, with a starting salary of $79,088.   That was more than Rizo’s salary after working there for three years.   She also learned all male math consultants were paid more than she was, even though she had more education and experience.   Rizo did not obtain any relief when she complained to HR, and ended up filing suit against Fresno County, alleging that its decision to pay her less than her male colleagues who did the same work violated the EPA.

The legal issue was whether Fresno County’s reliance on Rizo’s salary at a prior job to justify paying her less than male colleagues who did the same work qualified as “any other factor other than sex.”   Fresno County’s defense was that it applied its pay scale to all new employees regardless of sex; therefore, by definition, its decision was based upon a factor “other than sex.”

But, the court did not interpret the language so broadly.   The court concluded that the fourth exception, “any other factor other than sex,” must be interpreted in the context of the first three exceptions, all of which relate to the job being performed. The court held that Fresno County’s reliance on Rizo’s pay at a prior job to determine her salary was not a factor that related to Rizo’s current job.   Even if factors in addition to prior pay are considered, the court ruled, relying upon prior pay even as one factor violates the EPA.

In the Ninth Circuit, therefore, pay disparities between men and women in substantially similar jobs that are based, all or in part, on the employee’s pay at a prior job, are impermissible under the EPA.  No other circuit has yet adopted the Ninth Circuit’s strict approach, so this decision is not binding elsewhere.  But, the ruling could set up a Supreme Court challenge to resolve the differing approaches in the Circuits.   In addition, Plaintiff’s lawyers are likely to rely upon the Ninth Circuit’s ruling to challenge pay disparities under State equal pay act statutes, regardless whether other federal circuits follow the Ninth’s lead.

Given the unsettled legal landscape, employers should consider whether asking about prior pay is really essential in their hiring practices.   Sometimes the question about prior pay is asked just because the employer has not updated its application, or uses a form purchased from an office-supply store.    There remain many other factors other than sex that an employer can permissibly rely upon in setting a new salary, such as years of experience, education, and skills.   Even if prior pay is sometimes a proxy for those items, they can also be evaluated without reference to prior pay.    if pay disparities between men and women in similar jobs exist, having merely asked the question about prior pay sets you up for potential legal challenge.   If you don’t ask about prior pay, you won’t know, and can’t be accused of relying on it.