By: Bill Pilchak – 9/11/14
Attending high school in a blue collar community, I learned that bookworms and nerds could expect swirlies and wedgies delivered by students who were invariably not in the honor society. In dozens of ways in hallways, bathrooms and gym classes, smart kids were bullied and marginalized while the greasers and jocks who tormented them stood at the social apex.
Years later, I would come to realize that Gary Libon (pseudo), a small, studious kid with thick glasses, a talent for math and chemistry and a mother with an apparent penchant for corduroy pants had actually been the toughest kid in school. John Gadonski (pseudo), a talented student cartoonist produced a surprisingly good series of comic books premised upon Libon’s intellectual superiority but presenting his physical features and unfortunate wardrobe in caricature. With only slight exaggeration, superhero “Libby Piggy,” looked like the Creature from the Black Lagoon in cords. Libon’s “toughness” was displayed by the grace with which he endured silent ridicule as volumes were passed from student to student month after month. Once you recognize that brainpower is the currency within a school, you see that the swirlies, wedgies and comics were a way for have-nots to bring down the haves.
When majoring in political science in college in the 1970’s, I studied the French and Russian revolutions and Marxism, more prominent conflicts between haves and have-nots. In both revolutions, the (intellectual and economic) haves were executed and society was turned over to the have-nots. While a revolution against an uncaring monarch is understandable, anyone who has ascended in economic or social class should always remember the executions didn’t stop with the Romanoff family or Louis XVI and Marie Antoinette. Nearly 42,000 people were guillotined or otherwise executed during France’s “Reign of Terror,” and 10,000-15,000 “representatives of overthrown classes” in Russia were executed in September-October, 1918 alone.
When I began representing management in employment litigation, I found myself in the middle of another have vs have-not battleground. Lawsuits are one of the ways economic classes brawl in a civilized world. It’s easy to recognize the Marxist implications of our legal scuffles. Drawing conclusions about why people are in each camp is more difficult. But, the more I consider the issue, the more I believe that one of the main differences is knowledge and information.
The common denominator of those who do truly succeed is their constant collection and then application of information. Conversely, one seldom sees an extremely knowledgeable person in a subservient role or in poverty. Especially given my own path from the Parkside Projects in Detroit, to Warren, CMU and my current role, I often wonder why the critical importance of education is not loudly stressed by leaders of the underclass. It’s hard to escape the conclusion that powerful forces are invested in keeping their constituencies ignorant. Let me offer these examples:
- I have always been mystified as to why a concerted message about the importance of education has not been streamed to urban elementary, middle and high school students by prominent minority leaders to stem the astronomic drop-out rates in core cities. (Detroit’s graduation rate, recently 50%, has climbed to 64.7%). The phenomenon of studious black students being accused of “acting white” is undeniable and must be overcome. Until President Obama briefly mentioned it on July 24 (Google: “Obama Acting White”) I’ve never heard any black leader address this important issue. Neither education nor illiteracy are among the six major “issues” found on Operation Push’s website; none of Jesse Jackson’s weekly blogs since 2009 address education and none of his blogs since President Obama’s “acting white” comment even mention that specific issue though it is precisely in his wheelhouse. Could it be that education is not stressed because an educated black community becomes increasingly politically diverse and less likely to look to Jackson or the Democratic party for leadership? Is there a motivation to assure that fewer conservative figures like Dr. Ben Carson, Clarence Thomas, Condoleezza Rice, Herman Cain, Alan Keyes, Congressman J.C. Watts, Republican National Committee Chair Michael Steele, Congressman (& Lt. Col.) Adam West, Thomas Sowell, NFL Hall-of-Famer and Pennsylvania gubernatorial candidate, Lynn Swann, Francesca Chambers, (editor, Red Alert Politics),Conservative African American blogger, Crystal Wright (http://conservativeblackchick.com/), Michigan Supreme Court Justice Robert Young, Republican National Committee Member, Keith Butler, Colin Powel or Dr. Bill Cosby emerge after gaining an education?
- I have written previously on the absence of educated leaders and staffers in unions. See http://mi-worklaw.com/a-chance-to-bring-labor-relations-into-the-information-age-silently-slips-away/ That post went on to wonder “why the UAW didn’t spend some of its estimated $260 Million in annual revenue to hire MBAs to provide them with a game plan for the future,” so they would not be working from a 1930’s business model. One reason is obvious: Unions can only take the positions they take by playing ostrich to the real facts and pressures facing business today. No one with any business knowledge would support many of the positions taken by unions. Only naïve individuals would follow their lead. Undoubtedly, the increasingly-educated population is one of the reasons unions have declined to represent only 11.3 percent of the work force.
- Plaintiffs in litigation are likewise invested in remaining ignorant of the truth. With very rare exception (i.e. those A+ attorneys who receive so many referrals that the cases they take involve actual discrimination or retaliation), plaintiffs seldom chase after facts in the discovery phase of litigation. Why chase down the actual facts when one knows that those facts will support the defense? In the same way that criminal defense attorneys almost never ask their clients if they actually committed the crime, most of our plaintiffs are not interested in the real facts underlying separation decisions. Criminal attorneys don’t ask if their clients are guilty because they would then have to deal with that reality, both ethically and personally, such as losing sleep when their efforts free the guilty rapist. Some plaintiff-side attorneys similarly don’t want to know the truth. Some don’t even take depositions. They hope to simply present the plaintiff’s suspicions to a jury in a sensational manner, appeal to the anti-corporation sentiment and hope that results in a verdict.
So, in politics and in our avocation, we strive to illuminate facts… and the truth. The more a decision-maker knows, we feel, the better our chances in politics and in court. It would be hard to be on the other side. Ignorance is a force to be reckoned with, but to use it, one must cultivate and preserve it.
By Dan Cohen – 09/09/14
On September 2, 2014, Administrative Law Judge Julia Stern of the Michigan Employment Relations Commission (“MERC”) struck down the MEA’s August Window resignation provision. The provision, set forth in the MEA By-laws, limited the time union members could resign their membership from the MEA to the month of August. The case reached MERC when four teachers filed complaints against their union because they were advised their resignations were untimely. The teachers attempted to resign from the MEA in September and October of 2013, not having been informed that they could only resign during August, according to the MEA By-laws. The Union then threatened to hire a debt collector and/or sue the teachers to collect the alleged debt.
The MEA’s August Window provision has been in effect since 1973. Pursuant to the provision, the MEA does not accept a member’s resignation unless it is made in the month of August. The MEA website includes a link to the bylaws, and a google search for the MEA’s bylaws directs one to the website. The website, however, does not include a specific link for resignations or window period. Nor is there any mention of the window period in any of the MEA’s many publications, including its member magazine, the Voice. According to Administrative Law Judge Stein, recent amendments to State law gave employees the right to resign their union memberships at will and prohibited unions from restricting that right by rule or policy. In this case, ALJ Stein concluded that the four teachers had the right to resign from the union outside the August window because none of them had clearly and explicitly waived that right merely by joining the MEA or continuing their memberships at a time a by-law provision was in existence to the contrary.
The MEA is expected to appeal the decision to the full Commission. So, we will have to wait and see how this decision plays out. If it stands, however, teachers will be able to resign their MEA and other union memberships at any time. The Mackinaw Center Legal Foundation represented the teachers and filed the charges on their behalf. You can obtain more information on the case at www.mackinaw.org.
By Bill Pilchak – 9/4/14
Most businesses are aware of the dangers of designating workers under the direction and control of an employer as independent contractors. The federal government, in need of revenue since the economic decline of 2008, has staffed up to ferret out abuses, levy fines and collect taxes. And, the individuals who sign independent contractor agreements at the commencement of the relationship can disavow their independent contractor status and claim that they were employees all along, because the agreement is “not determinative.” So, both individuals and the government have reason to dispute independent contractor status.
Accordingly a mischaracterization can come back to haunt an employer in a variety of ways, such:
- The supposed independent contractor’s claim to employee benefits, and possible plan qualification and disqualification issues;
- Fines for not having I-9 forms for individuals who are employees, fines or criminal prosecution for having illegals on the workforce, or God-forbid fines assessed against one’s customer for its use of your illegal workers on its premises;
- IRS or other agency assessments against the employer for all items not withheld, such as federal and state income tax, social security contributions, Medicare deductions, unemployment contributions, etc. (You didn’t think the government would actually chase the individuals, when they can get all the revenue from you, did you?)
- Pursuit of employment litigation under statutes designed for employees only.
However, another interesting wrinkle became apparent recently. In fact, this wrinkle applies to legitimate corporations and LLCs that serve a variety of businesses and are legitimately independent contractors, if they are so small that the owner is the primary or only service provider for the business. Let’s call that business “One-Man-Show, LLC.”
As most employers know, workers’ compensation is both a blessing and a curse. It’s a curse because those injured on a worksite get compensated for their injuries even if the injury is caused by their own negligence. It’s a blessing because at least the individual cannot sue for pain and suffering and mental distress damages, which make up most huge courtroom verdicts.
Workers’ compensation coverage for extremely small businesses is unique in two respects. First, the business owner can opt out of having coverage for him/herself. Second, because there is usually no one in the business with a motive to discern fraudulent claims by the owner, workers’ comp coverage for owners is priced quite high. The combination of these two unique features means that even legitimate businesses such as One-Man-Show forgo workers compensation coverage for the owner.
Under Michigan law, improperly designated independent contractors are still “employees” for workers’ compensation purposes. The relevant statutory provision says:
“As used in this act, “employee” means:
(n) Every person performing service in the course of the trade, business, profession, or occupation of an employer at the time of the injury, if the person in relation to this service does not maintain a separate business, does not hold himself or herself out to and render service to the public, and is not an employer subject to this act.”
So, any person “performing services” is within the coverage of the act, even if they are designated as independent contractors. But, is the key to assure that only those who maintain a separate business, hold themselves out to and render service to the public should be retained as independent contractors? That’s a good practice, generally, because that helps assure independent contractor status in other respects. However, as it turns out, it does not get the customer of the independent contractor out of the workers compensation dilemma if One-Man-Show is injured and does not have coverage. That is because another part of the workers’ compensation act, MCL 418.171, states:
(1) If any employer subject to the provisions of this act, in this section referred to as the principal[ e.g., the customer], contracts with any other person, in this section referred to as the contractor [One-Man-Show LLC], who is not subject to this act or who has not complied with the provisions of section 611 [requiring employers to secure coverage]…prior to the date of the injury or death for which claim is made…the principal shall be liable to pay to any person employed in the execution of the work any compensation under this act which he or she would have been liable to pay if that person had been immediately employed by the principal.
So, unless One-Man-Show has purchased the expensive coverage for himself, if he gets injured on the customer’s premises, he has a workers compensation claim against the customer.
What’s the final lesson? First, don’t mischaracterize individuals as independent contractors when they are really employees for this and a dozen other reasons, some of which appear above. Second, when retaining very small businesses as independent contractors where the owner performs the services, ask to see proof of their workers comp coverage for the owner. If they do not have the coverage, you carry the risk of comp claims.
By: Dan Cohen – 9/2/14
One of the most difficult things we do as labor and employment attorneys is determine at what point a business can discharge an employee who has been on an extended leave of absence due to a disability. Although the courts have grappled with this question for years, the answer seems simple enough: “until continued leave becomes an undue hardship.” EEOC Policy Guidance on Reasonable Accommodation under the ADA (March 4, 1999). If you are a small employer with fewer than 15 employees, lucky you: you are not covered by the ADA. You smaller employers must look to state law for guidance. In Michigan, small employers will reach the point of no return immediately because employees are not entitled to a leave of absence under the Michigan Persons with Disabilities Act (See e.g. Lamoria v. Health Care & Retirement Corp., 233 Mich. App. 560 (1999).For you larger employers, however, the path to the point of no return requires an “individualized inquiry,” which all but assures you of an uncertain outcome.
Now that I have narrowed it down for you, how do we know when it is appropriate to discharge an employee because his/her continued leave is an undue hardship? I will answer this question with a series of questions:
- What is the job and how important is the job to the organization?
- Has the employee exhausted all other paid/unpaid leaves of absence, including FMLA?
- Have other employees been provided longer leaves?
- Has the employee provided an imminent return to work date?
- Has the employee extended the leave and how many times?
I think you are probably starting to get the picture: there is no definitive answer. There is simply no magical number of weeks of months where an employer automatically reaches the point of no return. All we know for sure is that a disabled employee is not entitled to an “indefinite” leave of absence. So, what is an employer to do?
I would start with a leave of absence policy similar to the one endorsed by the Sixth Circuit in Cash v. Siegel-Report, 2013 U.S. App. LEXIS 24246 (6th Cir 2013). In that case, the employer’s policy stated:
“If an employee is unable to perform, with or without reasonable accommodations, the essential functions of his or her position, or another position that the Company may offer, for a period of 6 months within any 12 month period his/her employment will be automatically terminated, unless prohibited by law.
Any employee subject to termination under this policy may apply for an extension of his/her leave. Requests for extensions will not be considered unless they (a) are received by the Company before termination would otherwise take effect and (b) include medical documentation demonstrating that the employee will be able to return to work, with or without accommodations, on a date certain within a reasonable time after termination would otherwise take effect.”
Mr. Cash was granted a six month leave under the above policy when he injured his back. Just prior to the expiration of the six month period, Cash sought assistance from the HR department on how to apply for LTD benefits. This caused HR to believe Cash would not be returning within six months. Three days before the six month period expired, Cash made application for LTD benefits. He then re-scheduled his follow-up doctor’s appointment so that his examination occurred after the expiration of the six month period. He was released to return to work with lifting restrictions. Cash immediately took his doctor’s restrictions to HR. The HR manager looked at the note, gave it back to Cash and told him he had been discharged three days earlier in accordance with the policy.
The Sixth Circuit affirmed the dismissal of Cash’s ADA case. The Court clarified that the policy was not an “inflexible blanket policy” which provided for automatic discharge after a certain date. Thus, the policy itself was not contrary to the ADA’s “individualized” inquiry requirement. The Sixth Circuit then distinguished the facts from those in Cehrs v. Northeast Ohio Alzheimer’s Research Ctr., 155 F3d 775 (6th Cir 1998) where the employee had requested an extension of leave before the leave expired. Cehrs is the case which said in dicta that there is no per se rule that a very lengthy leave such as one year could never constitute a reasonable accommodation under the ADA. With a policy similar to the one endorsed by the Sixth Circuit in Cash v. Siegel-Report, you can establish a general “point of no return” as long as you are prepared to make limited exceptions depending on the individualized circumstances. Remember, your approach must be flexible. Otherwise, you risk a ruling that you have failed to provide a reasonable accommodation as a matter of law.