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Employment Law Analyzing current trends in law and benefits law EVIEW

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January, 2000—Issue 3 RWORKPLACE VIOLENCE: HOW EMPLOYERS In This Issue. . . CAN PROTECT THEMSELVES WHILE Concerted Activity in the Health Care Industry—When, PROTECTING THEIR EMPLOYEES If Ever, May Protected Status Be Lost—Page 4 With the recent shooting rampages at in Honolulu, Hawaii and Spokane, Washington, violence has become a very real concern What is Sauce for the Goose is Not Sauce for the Gander: for all employers throughout the country. The fact that these latest The NLRB Creates a Double massacres took place at a photocopy company and a shipyard , one Standard for Employer and by the hands of an employee described as “one of the nicest workers on Union Pre-election Conduct— the staff,” proves that no workplace is immune from violent incidents. Page 5

United States Supreme Court Is On The Rise Watch: Coverage of Americans According to a survey released earlier this month by the Society of Human with Disabilities Act—Page 7 Resource Management, reports of workplace violence filed by human Year 2000 Plan resource professionals have increased in the past three years. Of those who Changes—Page 8 responded to the Society’s 1999 Workplace Violence Survey, 57% reported : The Wave of that a violent incident occurred in their workplace between January 1996 the Next Century—Page 10 and July 1999. This represents an increase from the 48% who reported Get More workplace violence in the 1996 study. Protection in Pennsylvania— Yet despite the media focus on workplace shootings, this study indicates Page 13 that shootings and stabbings account for only 2% of violent incidents Not Protected in the workplace. Much more common are verbal threats, pushing in Virginia—Page 15 and shoving. Personality conflicts account for more than half Reed Smith and Hazel & of such workplace violence, with domestic problems and work-related Thomas Merge—Page 16 stress also proving to be strong motivators for such violent behavior. Speakers Forum—Page 17 Employer Liability While there are no absolute predictors available to completely prevent workplace violence, employers must take proactive measures to reduce their risk of liability should an incident happen at their workplace. Several legal statutes and common law theories impose obligations on employers to provide a safe working environment. A few of the more common theories are as follows: OSHA liability: Under the Occupational Safety and Health Act (“OSHA”), employers have a duty to furnish a safe and healthful working environment for their employees. If some basis exists to suspect a problem and no action is taken, OSHA could argue that a breach of the duty to

Continued on page 2 Workplace Violence: How provide a safe environment has Likewise, negligent retention and Employers Can Protect occurred. An employer who fails to supervision focuses on whether an Themselves While Protecting comply with this duty may be fined employer had notice that an Their Employees up to $70,000 for each infraction, employee posed a threat to the safety continued from page 1 based on the gravity of the violation. of others and failed to protect them. Criminal penalties may also be To protect themselves from these imposed against individual types of claims, employers must take under this federal statute. proactive measures to investigate Employers should also keep in mind reports or observations of violent that many states have occupational propensities and to follow through safety and health statutes which with discipline, termination, and impose a duty to provide a safe and notices to potential victims as the healthful working environment. investigations deem warranted. Again, monetary fines and criminal Employers may also be held liable penalties may be imposed for as landowners by failing to provide violations. adequate security on workplace premises. As a landowner (or While there are no absolute predictors available to possessor of land), an employer completely prevent workplace violence, employers must is under a legal duty to exercise take proactive measures to reduce their risk of liability reasonable care under the should an incident happen at their workplace. circumstances to maintain the property in a safe condition. This Negligence: Under the theory of duty includes taking precautions negligence, employers may be liable to protect others from reasonably to others where they have breached a foreseeable harmful acts of third duty to use reasonable care to prevent parties and to warn of known a foreseeable risk of injury to those concealed dangers. This duty parties. With regard to workplace includes providing reasonable violence, employers have a duty to protection to prevent violent provide a safe working environment; conduct by third parties whom the warn of dangerous conditions; hire, landowner knows, or should realize, retain, and supervise non-violent are dangerous. Thus, as landowners, personnel; and provide adequate employers must implement adequate security. physical security measures (i.e., keyed entries) and warn the An employer may be held liable employees of any known dangers. to employees and third parties for negligent hiring, retention, and Balancing Rights of Potential supervision. Negligent hiring occurs Victims with Rights of Employees with a Mental when an employer knew, or should Disability Under the ADA have known, of an applicant’s While employers need to take violent propensities but hired the proactive action against potentially applicant nonetheless. To avoid violent employees, they must be such liability, employers must careful to avoid taking any action make adequate pre-employment which might be perceived as background investigations. discriminating against employees

2 with a mental disability. The checks, however, employers must outsider can enter the premises to Americans with Disabilities Act balance the need to know with the commit an act of violence. A proper (“ADA”) and related state statutes applicant’s and anti- security plan might include keyed prohibit employers from discrimination laws. The most access, guards, and cameras, as well discriminating against employees prudent solution is to ask the as notification and evacuation with a physical or mental disability. applicants to sign an authorization procedures in case an intrusion Employers must also provide a and release, authorizing former arises. reasonable accommodation to employers to disclose all information Zero Tolerance Policy qualified individuals with a disability in their personnel files. Perhaps most importantly, employers as long as the individuals can should create and enforce a “zero perform the essential functions of After the employees are hired, the tolerance” policy against workplace the and the accommodation does employers should provide mandatory violence. Most effectively modeled not impose an undue hardship on training on workplace violence. At after a sexual policy, a the employer. Thus, if an employer the minimum, supervisory employees workplace violence policy should takes adverse action against an should be trained to recognize the prohibit harassment, threats of employee because an emotional early warning signs of a potentially violence and , and disorder makes that employee violent employee, to resolve disputes weapon possession on the premises. violent or likely to be violent, through effective communications/ The policy should also create a the employer risks that employee negotiations, to handle terminations response of human resources, claiming that his/her disorder is or labor disputes, and to respond to legal professionals, and other chosen a protected disability. and defuse a violent incident. personnel to receive, investigate, Courts have held that employers and respond to reports of threats or EAPs may discipline or terminate an conduct. In addition, the policy Employee assistance programs employee with an emotional disorder should include a plan detailing how (EAPs) are immensely popular when the disorder causes the to recognize warning signs, to report confidential counseling programs employee to engage in violent a violent incident, to ensure the that employers can effectively utilize conduct. However, the mere safety of the workforce during a to assist potentially violent possibility of future harm is not violent incident, and to provide employees before an incident enough. According to the EEOC post-incident counseling. Technical Assistance Manual, the occurs. Employers can send risk must be supported by objective potentially problematic employees Conclusion evidence that is significant, specific, for counseling through the EAPs. While every employer hopes that its and current. Effective counseling would be a workplace is safe from the violent win-win for the employer, since the atrocities that are headlined in the Steps for Reducing Exposure to employee would be “rehabilitated” media, the unfortunate statistics Workplace Violence Liability and the employer would reduce its show that no place of employment Thorough Hiring Processes risk of liability by acting reasonably is immune. In light of this harsh The first step that employers can under the circumstances. As an reality, employers should take take to reduce their exposure to added benefit, employers may also be proactive steps to implement policies liability is to perform thorough pre- creating a defense against later ADA and procedures to protect their most hiring investigations and background suits by providing reasonable valuable resource, their employees, checks. By conducting complete accommodation. from harm and themselves from applicant reference and background Physical Security resulting liability. checks, employers can discern By preventing unauthorized access to Lisa A. Schworm significant information and create a the workplace, employers can reduce Philadelphia Office valid defense to a claim of negligent the risk that a former employee or hiring. When conducting the

Employment Law Review 3 CONCERTED ACTIVITY IN THE HEALTH CARE INDUSTRY—WHEN, IF EVER, MAY PROTECTED STATUS BE LOST?

As a general rule, concerted activity On the hospital’s notice claim, by unrepresented employees is that Board pointed out that the protected under the National Labor requirements of Section 8(g)1 of the Relations Act unless it is violent, Act apply only to labor unlawful, in breach of contract, or and therefore the walkout was not otherwise indefensible. NLRB v. unlawful. As to the indefensible Washington Aluminum Co., 370 US conduct claim, the Board disagreed 9, 17 (1962). The Board (Truesdale, on the basis of the facts that (1) at Fox and Liebman) has recently held the time of the walkout no patients that in the health care industry, “the were in the laboratory, and only five test of whether the . . . employees’ routine procedures were scheduled; (2) the patients were taken care of To lose protected status, the test in the health care adequately in any event; (3) delays industry, is whether employees “failed to prevent such of routine procedures were common imminent danger as foreseeably would result from their occurrences and policies had been sudden cessation of work.” established and applied when delays happened; and (4) when the work stoppage lost the protection of walkout occurred, no emergencies the Act (because it is indefensible) requiring immediate treatment is not whether their action resulted awaited.2 In addition, the Board in actual injury [to patients], but found that the brief 15 minute whether they failed to prevent such that preceded the imminent danger as foreseeably walkout did not make it indefensible would result from their sudden because routine and emergency cessation of work.” Bethany Medical procedures were frequently delayed Center, 328 NLRB No. 161, 1999 or rescheduled without endangering WL 596222 (August 3, 1999). patients’ lives, and that was successfully done in the instant case. In Bethany, catheterization laboratory employees walked out for The hospital also argued two hours to protest certain terms unsuccessfully, that when an and conditions of employment. The emergency did arise, the strikers employees gave only 15 minutes should have immediately returned notice of their walkout prior to the and, by refusing to do so, lost their first catheterization procedure. protected status. In rejecting this There was no claim that the walkout argument, the Board, citing earlier was violent or in breach of contract. precedent, emphasized that there is The hospital argued that the no legal requirement that legally employees did not give adequate striking employees must end their notice and that their conduct was strike: indefensible because they refused to Nothing in the Act requires perform an emergency procedure. pickets or those responsible for

4 the picketing to act as an terminate their work stoppage health care institution and the Federal insurer, that is, to take steps to to perform an emergency Mediation and Conciliation Service before engaging in a strike or picketing at that insure that customers, patients catheterization procedure did health care institution. or others obtain the affected not foreseeably create such a 2To be sure, one patient had been admitted services or products elsewhere. risk of harm to patients to to the hospital and was experiencing chest [Montifiore Hospital & Medical justify depriving these pain. Based on a consult, it was concluded Center, 243 NLRB 681, 683 employees of the Act’s that she needed immediate catheterization. (1979).] protection. The Board rationalized its finding in this regard by noting that the need to do the The Board thus held: William Bevan procedure on the patient did not become Pittsburgh Office apparent until after the walkout occurred Under these circumstances, we and that she was taken to another hospital find that the catheterization 129 U.S.C. §158(g). Section 8(g) of the 15 minutes away by ambulance. laboratory employees’ work NLRA requires labor organizations to stoppage and refusal to provide a ten-day notice in writing to a

WHAT IS SAUCE FOR THE GOOSE IS NOT SAUCE FOR THE GANDER: THE NLRB CREATES A DOUBLE STANDARD FOR EMPLOYER AND UNION PRE-ELECTION CONDUCT

In Randell Warehouse of Arizona, 328 employees could reasonably support the union, to attempt to NLRB No. 153, 1999 WL 554239 believe that the Union was persuade employees to sign petitions (July 27, 1999), the Board revisited contemplating some future in support of representation, and to the issue of union videotaping or reprisals against them. record the employees’ responses.” photographing of employees during Id. at p. 2 of sl. op. In Randell, the Board (Truesdale, election campaigns. Until now, Fox, Liebman, Brame, concurring in There are, according to the Board there has been a general prohibition the result, and Hurtgen, dissenting) majority, many legitimate reasons against a union making a visual reviewed its prior decisions and has why a union would photograph record of employees’ reactions to concluded that the standard for employees in the course of an proffered union campaign literature, union photographing of employees organizing campaign, including based on the principles stated in in a pre-election setting established aiding in the direction and Pepsi-Cola Bottling Co. of Los by Pepsi-Cola Bottling is inconsistent deployment of union staff, Angeles, 289 NLRB 736 (1988). with the Board’s decisions involving developing campaign literature, and In Pepsi-Cola, the Board held that union inquiry into employees’ identifying potential supporters not union videotaping or photographing sentiments respecting known by name to the union. In of employees: representation. According to sum, “photographing employees intruded on the employees’ the Board, “Pepsi-Cola’s general during an organizational campaign Section 7 right to refrain from prohibition against making a visual is one means by which unions can any or all union activities, record of employees’ reactions to determine the identity and leanings including the union rally then proffered union literature cannot be of employees and carry out their in progress. Absent any reconciled with Board and court legitimate explanation from cases permitting unions to ask the Union, we find that employees directly whether they Continued on page 6

Employment Law Review 5 What is Sauce for the Goose is legitimate objective of attaining Member Brame concurred in the Not Sauce for the Gander: majority support.” Id. at p. 3 of result and in overturning Pepsi-Cola, The NLRB Creates a Double sl. op. but would not impose such a diametrically opposed constraint Standard for Employer and The Board majority found “no upon employers. He states that: Union Pre-election Conduct objective or principled basis for continued from page 5 distinguishing between asking an In short, neither reality, law, employee to sign an authorization nor logic can support the view card and recording the employee’s that a union is “merely an response in documentary form, on outsider seeking entrance to the one hand, and making a visual the plant,” which, in contrast record of the employee’s response to the employer, lacks the through videotaping or photography ability to coerce employees and on the other.” It, therefore, hinder their exercise of rights overruled Pepsi-Cola and “rejected its protected by the Act. Both premise that union photographing or parties possess the potential for videotaping of employees engaged in exercising some degree of power over employees, albeit in There are, according to the Board majority, many different forms. The majority, however, has articulated no legitimate reasons why a union would photograph reasoned basis for creating a employees in the course of an organizing campaign… “double standard” that presumptively condemns protected activities during an photographing of employees election campaign, without more, taking part in protected necessarily interferes with employee concerted activity by an free choice.” Id. employer, but not the same conduct undertaken by a Nonetheless, the Board expressly union. retained its different and harsher rule for employer photographing 323 NLRB No. 193, at p. 12 of sl. or videotaping, analogizing to the op. [Footnote omitted.] Board’s different treatment of certain In , Member Hurtgen would types of employer and union conduct retain the Pepsi-Cola test and require during election campaigns such as the union to provide an adequate polling and home visits. In essence, explanation for its actions. He because employers have absolute believes, like member Brame, that access to employees, they whether pre-election photography is presumably do not have to engage in objectionable should be judged by a these activities which would appear uniform standard applicable to the to be coercive. See F.W. Woolworth employers and unions, and such Co., 310 NLRB 1197 (1993) standard should not be a per se one. (requiring an employer to have “proper justification” for William Bevan Pittsburgh Office videotaping).

6 UNITED STATES SUPREME COURT WATCH: COVERAGE OF AMERICANS WITH DISABILITIES ACT

In our first issue, we reported that Similarly, in Murphy v. United Parcel The Third Circuit, which the United States Supreme Court Service Inc., the Court held that the encompasses Pennsylvania and granted certiorari in a trio of cases plaintiff’s high blood pressure was New Jersey, has already had an interpreting the Americans with not a disability under the ADA opportunity to apply the recent Disabilities Act (“ADA”) in order because it was controlled with corrective measures decisions. In to clarify whether disability status medication to a level that did not Taylor v. Phoenixville School District, should be determined with or substantially limit the plaintiff’s 174 F.3d 142 (3d Cir. 1999), vacated, without corrective measures. major life activities. 184 F.3d 296 (3d Cir. 1999), Taylor, This summer, the Supreme Court a secretary for twenty-six years in In Albertsons, Inc. v. Kirkingburg, provided guidance on this issue. the Phoenixville School District, the Court addressed a slight suddenly developed bipolar disorder Simply put, the Court held that variation on this theme. The in 1993. After being hospitalized for when assessing disability status under the disorder, Taylor went on lithium the ADA, employee conditions The Taylor decision provides medication and returned to her job. should be analyzed in their mitigated some practical guidance. Over the next few months, she was or corrected state. These rulings reprimanded by her for reject the EEOC’s regulations which several work-related mistakes and state that an individual must be plaintiff in Albertson did not take ultimately was terminated. Taylor analyzed, for the purpose of medication or use corrective devices then filed suit under the ADA. determining disability under the to control his visual impairment, but ADA, in an unmedicated or rather had “developed subconscious In its first hearing on appeal in April uncorrected state. mechanisms for coping with [his] 1999, the Court of Appeals for the visual impairment.” The Court held Third Circuit initially held that In Sutton v. United Air Lines, the that they saw “no principled basis for Taylor was “disabled” within the Supreme Court held that the distinguishing between measures meaning of the ADA. Notably, in plaintiffs’ severe myopia, which with undertaken with artificial aids, like determining whether Taylor’s illness corrective lenses could be corrected medications and devices, and substantially limited a major life to 20/20, did not constitute a measures undertaken, whether activity, the Third Circuit held that disability under the ADA. In consciously or not, with the her condition should be considered reaching that result, Justice body’s own systems.” As such, in its unmedicated state. However, O’Connor speaking for the Court the Court held that the plaintiff’s in light of the Supreme Court’s held that the “determination of “subconscious mechanisms” should decisions—which effectively whether an individual is disabled be considered in determining overruled the Third Circuit’s should be made with reference to disability status. disability analysis premised upon measures that mitigate the Taylor’s unmedicated state—the individual’s impairment.” The The Court in these cases cautioned Court granted a rehearing on Court reasoned that when the that the use of a corrective device or August 18, 1999, to reassess whether plaintiffs in Sutton used their glasses measure does not, in and of itself, a jury could still find that Taylor or contact lenses, they were not mean that the employee is not remained substantially limited in a substantially limited in any major disabled. Rather an individual is major life activity while on lithium. life activity and, therefore, not disabled under the ADA, even if disabled under the ADA. that individual uses a corrective The Court held that the evidence device or measure, if that individual indicated that the lithium failed to is substantially limited in a major life perfectly control Taylor’s symptoms activity notwithstanding his/her use of that device or measure. Continued on page 8

Employment Law Review 7 United States Supreme Court and that she still had periodic bouts of that medication. Furthermore, a Watch: Coverage of Americans of . Furthermore, she disabled person need not experience with Disabilities Act experienced side effects from the difficulties on a daily basis. In its continued from page 7 lithium such as nausea, impaired review, the Third Circuit noted that concentration and memory “[c]hronic, episodic conditions can problems. Taylor also needed to easily limit how well a person make frequent visits to a psychiatrist. performs an activity as compared to As such, the Court determined that the rest of the population: repeated a jury could conclude that Taylor is flare-ups of poor health can have a disabled notwithstanding her use cumulative weight that wears down of corrective measures. a person’s resolve and continually breaks apart longer-term projects.” The Taylor decision provides some practical guidance. For example, While the Supreme Court cases when assessing whether an employee appear to be favorable to employers, has a disability, courts will consider it remains to be seen how these cases the side effects of medications being will be interpreted in other used. In addition, courts may jurisdictions. compare an employee’s work Lisa Schworm performance before the onset of the Philadelphia Office medical condition with his/her Joshua Verdi performance after receiving Cathy Bissoon treatment to determine the impact Pittsburgh Office

YEAR 2000 PENSION PLAN CHANGES In recent years there have been • The Internal Revenue Service numerous changes in the laws Restructuring and Reform Act applicable to tax-qualified of 1998. and savings plans. A plan is required to operate in The recent legislation containing accordance with the legislative changes affecting such plans changes that are currently in effect. includes: In general, however, (and after • The Retirement Protection Act taking into account the various of 1994, enacted as part of the deadline extensions) a plan General Agreement on Tariffs and document is not required to be Trade (commonly referred to as amended to incorporate these “GATT”); changes until the last day of the 2000 plan year. For example, a plan • The Uniformed Services maintained on a calendar year basis Employment and Reemployment must be amended to incorporate Rights Act of 1994; these changes no later than • The Small Business Job Protection December 31, 2000. Act of 1996 (“SBJPA”); Although the written amendment • The Taxpayer Relief Act of 1997 is not required until the end of the (“TRA 97”); and 2000 plan year, the amendment

8 process should be started early in • employees, but once this election provisions, a plan is permitted to the year to ensure that the plan is made, the ability to change it is delay the distribution of benefits document is properly amended both limited. for most participants until they to incorporate the recent legislative actually retire. Additionally, a • In addition, the recent legislative changes and to reflect its actual plan may also elect to suspend the changes include safe harbors for administration. In addition, there distributions currently made to the ADP and ACP tests which an are various elections that must be participants who have attained employer may wish to consider. made before a plan can incorporate age 70 and have not yet retired. In general, the safe harbors may certain changes. Among the A plan is not required to be implemented by making a changes that may be incorporated incorporate these changes. certain level of non-elective and elections to consider are the The above only briefly describes following: In recent years there have some of the recent legislative • GATT Amendments: Under been numerous changes changes, including optional GATT, defined benefit plans are in the laws applicable to provisions, and the elections related required to replace the plan’s tax-qualified retirement to these changes. There are current interest rate and mortality and savings plans. numerous other required changes assumptions used for calculating which a plan must incorporate by lump sum distributions with the contributions on behalf of each the end of the 2000 plan year in interest rate and mortality eligible employee or providing a order to maintain its qualified status assumptions prescribed by the certain level of matching (e.g., the “highly compensated Internal Revenue Service. To contributions. employee” and “compensation” incorporate this change, certain definitions have changed and the • Involuntary Cashouts: In elections must be made with family aggregation rules and general, prior to TRA 97, if the regard to the determination combined plan limits have been current value of a participant’s of the interest rate. repealed). With respect to any benefit at termination of optional provision that has already • Nondiscrimination Tests: Under employment was less than $3,500 been implemented, the date that the SBJPA, the actual deferral it could be immediately such provision became effective will percentage (“ADP”) and actual distributed without the need to be added to the plan to contribution percentage (“ACP”) participant’s consent. Under the ensure that the document accurately tests are based on the prior year new provisions, a plan may elect reflects how the plan has been data for the non-highly to increase the threshold amount administered. compensated employees and the of $3,500 to $5,000. Although current year data for the highly this change is optional, it is one To start the amendment process or compensated employees. This which most plans will want to for further information on these change adds predictability to the incorporate in order to reduce the changes or any other Employee nondiscrimination tests as the burden and expense of accounting Benefits issue, please contact the maximum contribution rate for for small benefits for former Reed Smith benefits attorney with the highly compensated employees employees. whom you regularly work. is determined before the start of • Required Distributions: Prior to Anthony T. Cicchino the plan year, rather than at the the enactment of the SBJPA, Pittsburgh Office end. An election may be made to distributions which could not be use the current year data for the cashed out were required to non-highly compensated commence after a participant attained age 70. Under the new

Employment Law Review 9 TELECOMMUTING: THE WAVE OF THE NEXT CENTURY

Out of the technological advances of indicates that companies save two the last decade, a new kind of worker dollars for every one dollar invested has emerged in the global in telecommuting.6 This is so for marketplace: the “telecommuter” several reasons. First, telecommuting or “teleworker.” Telecommuters are saves money because it reduces the employees who work at home or at need for office space, thereby a satellite location which is linked reducing expensive rent payments. electronically to a central office. Lexis-Nexis, which employs The International Telework approximately 1,400 teleworkers Association and Council (“ITAC”) throughout the country, reports that reports that telecommuting has risen because of its telecommuting program, the company has not had …it is estimated that by the year 2002, the number of to expand its facilities, resulting in reduced lease expenses of more than employees telecommuting may be as high as 15 million. $5 million annually.7 Additionally, telecommuting 30% since 1995.1 Additionally, it is improves and estimated that by the year 2002, the results in a higher return for the number of employees telecommuting employer.8 Studies show that because may be as high as 15 million.2 telecommuting employees are Telecommuting is such a growing afforded more flexibility in trend in the United States that the and domicile, and because they face House of Representatives’ reduced costs in commuting, clothing and the Workforce Subcommittee on and parking, these employees are Oversight and Investigations held more productive, happier, have a hearing recently to investigate better job longevity, and experience telecommuting and the adequacy less stress.9 For example, AT&T, of public policy in addressing the which has a large teleworking changes U.S. workers are program, claims that participants experiencing as they adjust to in its program report an enhanced technological progress and quality of life, and that 71% of demographic shifts.3 Witnesses at the employees who telework report being hearing told the House panel that more satisfied with their job than teleworking saves employers money, they were prior to the arrangement.10 provides workers with increased Additionally, telecommuting reduces flexibility, and helps the the rate of because environment by reducing pollution employees feel more comfortable resulting from long commutes.4 working at home, even when they Telecommuting has proven are “not feeling 100%.” A national financially beneficial to employers. ITAC survey released on October 28, AT&T, for example, estimates that 1999, stated that employers with its implementation of teleworking teleworking programs save an has resulted in an average savings of equivalent of $2,086 per year in $25 million annually.5 One estimate employee absenteeism costs.11

10 Further, telecommuting supervisory oversight. Because Such a policy should be drawn arrangements can help employers of these drawbacks, employers broadly to cover all eligible workers, better recruit and retain employees in must be cautious when creating and should be applied to all eligible a competitive market. Lexis-Nexis telecommuting programs in their workers equally. The policy should claims that they have been able to company. include a definition of what is meant retain more highly skilled employees by “telecommuting” or “teleworking” Developing a who otherwise might have left the and the definition should explain Telecommuting Program company to relocate.12 which workers are eligible for Telecommuting provides companies Telecommuting is not without telecommuting. The policy should with enhanced recruiting certain labor and employment law set forth all the employer’s opportunities through access to issues. In fact, the House Education requirements and expectations. It broader labor markets. and Workforce Committee is should state that telecommuting is Telecommuting can serve to diversify planning to hold hearings in the not a formal employee benefit but an the potential labor pool by increasing upcoming Congress to focus on the alternative method of working made employment opportunities for lower array of federal laws that may cover available at the sole discretion of the 16 participation groups such as the the telecommuting workforce. employer, which may be terminated disabled. Further, telecommuting Issues that arise in implementing a at the sole discretion of the employer can provide a company with a global program include how to apply at any time. Additionally, the policy labor force. Through the growing use teleworking to the Americans with should set forth all the employer’s of “electronic immigration,” citizens Disabilities Act, / procedures, regulations, and from virtually all nations can work requirements, prohibitions in regards to on projects through telecommuting.13 insurance and liability requirements, telecommuting. Occupational Safety and Health Act Despite all the benefits a compliance, workers compensation After the employer has a telecommuting program can provide laws, and and hour laws. telecommuting policy in place, to an employer, there are potential Recently, the Occupational Safety the employer needs to enter into a drawbacks inherent in such programs. and Health Administration has come telecommuting agreement with each For example, all workers are not under criticism for the release and eligible employee wishing to avail suited to telecommuting and initial subsequent withdrawal of a job safety themselves of the telecommuting expenditures may be high because compliance letter that suggested policy. It is essential that the the employer will need to purchase employers could be held responsible telecommuting agreement entered equipment and supplies for the for the safety and health of into between the employer and various home or satellite offices. telecommuting and other employees employee be a formal, written, Lexis-Nexis spends about $10,000 per who work from their houses. detailed agreement. Each telecommuter to provide each worker telecommuting agreement should set with automation equipment and Therefore, employers must draw forth the specifics of the teleworker’s telephonic and data connectivity.14 telecommuting policies, practices, arrangement. For example, the Also, working at home may weaken procedures and forms carefully in agreement should include the address employee relations and foster a lack order to recognize and minimize of the alternative work site and a 17 of camaraderie. Moreover, employing potential difficulties. The first specific list of all hardware, software, “electronic immigrants” may make essential requirement of any supplies, and furniture that will be American workers fearful of telecommuting program is the provided by the employer to the competition, and labor unions may development of a comprehensive teleworker. Additionally, the oppose use of these foreign workers.15 telecommuting policy and a agreement must detail the allocation Finally, and perhaps most critically, telecommuting agreement. of costs and responsibilities between at-home offices may be more An employer wishing to implement a the employer and the employee in vulnerable to corporate telecommuting program must first regards to the teleworking and suffer from a lack of hands-on prepare a telecommuting policy. Continued on page 12

Employment Law Review 11 Telecommuting: The Wave of arrangement. Every teleworking 1Mike Tonsing, Telecommuting and the The Next Century agreement should set forth that Americans with Disabilities Act: A Tree in continued from page 11 telecommuting is voluntary and may the Cyberian Forest, 45 Fed. Law. 20, 21 be terminated at any time by either (June 1998). the employer or the employee, with 2Jennifer C. Dombrow, Note, Electronic or without cause, and that the Communications and the Law: Help or Hindrance to Telecommuting?, 50 Fed. agreement is not a contract of Com. L.J. 685, 690 (1998). employment and should not be 3Telecommuting, Employers Cite Benefits, construed as such. Further, each Cost Savings of Increased ‘Teleworking’ agreement should include an Arrangements, 209 DLR (BNA) affirmation by the employee that 10/29/99. he/she has read the agreement and 4Id. understands the subject matter, and 5Id. has had the opportunity to have the 6Dombrow, supra, 690. agreement reviewed by counsel prior 7Telecommuting, Employers Cite Benefits, to signing. Cost Savings of Increased ‘Teleworking’ Arrangements, 209 DLR (BNA) In addition to the creation of a 10/29/99. telecommuting policy and 8Tonsing, supra, 21. telecommuting agreement, many 9Society for Human Resource Management, other issues must be considered and Trends in Technology, addressed when implementing a http://www.shrm.org/issues/visions/ 1198d.htm (visited Jul. 21, 1999). telecommuting program. For 10Telecommuting, Employers Cite Benefits, example, employers should Cost Savings of Increased ‘Teleworking’ consider the development and Arrangements, 209 DLR (BNA) implementation of an employee 10/29/99. training and/or orientation program 11Id. designed for telecommuters. Also, 12Id. an employer implementing a 13Thomas Earl Geu, Article, Chaos, telecommuting program must Complexity, and Coevolution: The Web of recognize the possibility of OSHA Law, Management Theory, and Law Related Services at the Millennium, 65 standards applying to an at-home Tenn. L. Rev. 925, 950 (1998). work-site, and implications under 14Telecommuting, Employers Cite Benefits, the Americans with Disabilities Cost Savings of Increased ‘Teleworking’ Act regarding requirements for Arrangements, 209 DLR (BNA) “reasonable accommodation” 10/29/99. of disabled employees. 15Society for Human Resource Management, Trends in Technology, The foregoing provides a very limited http://www.shrm.org/issues/visions/ description of what should be very 1198d.htm (visited Jul. 21, 1999). detailed policies and agreements. If 16Safety of Health, Employer Duty to At- you think that your employer may Home Workers Outlined: OSHA Vows wish to implement a telecommuting No Change In Inspection Policy, 03 DLR (BNA) 1/05/00. program, contact the Reed Smith 17This section is meant to provide general attorney with whom you normally information only. You should contact an work, or contact Amanda Fugazy at attorney before implementing a (212) 521-5434. telecommuting program. Reed Smith’s attorneys can assist you in developing a David L. Weissman telecommuting program. Amanda M. Fugazy New York Office 12 WHISTLEBLOWERS GET MORE PROTECTION IN PENNSYLVANIA

Pennsylvania’s Superior Court has that makes things a bit murky. Denton opinion and two other recent recently given whistleblowing Over the 100-plus years since opinions, one federal and one state, employees in the private sector a bit Pennsylvania’s Supreme Court reflect just how narrowly the public more protection from discharge. In formally adopted the at-will policy exception is construed in Denton v. Silver Stream Nursing and doctrine, one general exception has Pennsylvania. In the federal case, Rehabilitation Center, et al., the been carved out. An at-will McDaniel v. American Red Cross, the Superior Court held that a private employee cannot be discharged if court upheld the discharge of two entity that receives Medicaid funds the discharge would threaten a supervisory employees who, from the Commonwealth is a public “clear mandate of public policy.” honoring the victims’ request to entity covered under Pennsylvania’s remain silent, violated a Red Cross “whistleblower law.” The court policy requiring that any incidents of To paraphrase George upheld a terminated employee’s be reported. In Orwell, although most states claims under both the whistleblower the state case, Spierling v. First law itself and a public policy are “at-will” states, some, American Home Health Services, Inc., exception to at-will discharge. like Pennsylvania, are the discharge of an employee who In doing so, the Superior Court more “at-will” than others. reported suspected Medicare distinguished an opinion it had also was upheld, prompting a dissent issued little more than a month This basically means that an by Judge Schiller, incensed by such earlier in which it had rejected employer cannot discharge an an “unconscionable” result “on the a wrongful discharge claim by a employee for refusing to commit a eve of the twenty-first century.” private sector employee who had crime or for doing what the law Perhaps recoiling from the practical reported . The net requires him or her to do or when effect of that decision, the Superior result: an employer’s right to the employer is specifically Court promptly reached a different terminate an at-will employee prohibited by statute from conclusion in Denton. remains strong, but is a bit narrower discharging the employee. Thus, In McDaniel, Judge Smith found now when the facts involve a for example, an employer may not that, however noble the managers’ whistleblowing employee of a private discharge an employee for refusing intent, there was “no legal right or company that receives funds from to serve alcohol to an intoxicated obligation” for the managers to the Commonwealth. customer; for filing a workers’ keep the confidences of their compensation or “Good cause, bad cause or no cause subordinates. Nor was freedom of compensation claim; for refusing to at all.” These words, critically speech implicated. Relying on take a polygraph test; for complying important to any employer, reflect Supreme Court precedent (Connick with a jury duty obligation; or, now, the great latitude typically given an v. Myers, 461 U.S. 138 (1983)), for reporting Medicaid fraud. But in employer in making termination Judge Smith noted that the Pennsylvania, these types of public decisions. Absent a contract for a managers remained silent on a policy exceptions have been few and specific term, employment in “purely internal, workplace matter,” far between. Pennsylvania and in most states is not a matter of political, social or “at-will,” meaning that an employee To paraphrase George Orwell, other concern to the community. can lose his job at any time for although most states are “at-will” And where no such public concerns almost any reason (or even no states, some, like Pennsylvania, are reason). It is the “almost” aspect more “at-will” than others. The Continued on page 14

Employment Law Review 13 Whistleblowers Get More are at issue, employers “should enjoy Cross could be held vicariously liable Protection In Pennsylvania wide latitude in managing their for any workplace sexual harassment, continued from page 13 offices, without intrusive oversight it had to be permitted to implement by the judiciary in the name of the a policy mandating reporting: “[I]n First Amendment.” By contrast, the final analysis, it is the employer where the sexual harassment which winds up liable if an employee involves a public official it is a is treated unlawfully. Because of matter of public concern, as the that, the employer must have the report would be relevant to the latitude to set its own workplace process of self-government. rules, consistent with applicable law.” Judge Smith also rejected the employees’ argument that upholding The Superior Court reached a their discharge would undermine the similar result in Spierling, upholding goals and policies of the laws the termination of an employee who prohibiting sex discrimination reported suspected Medicare fraud to and harassment. The employees the government, after being given contended that frivolous claims an “800” number by federal would skyrocket if every comment investigators. The Superior Court had to be reported and that those accepted as true the employee’s who had truly suffered claim that she had been told by both discrimination would be reluctant the investigators and her employer to come forward if they knew their to report any fraud but also found confidences would be revealed. that the law would have imposed no Judge Smith disagreed, observing duties or threats of penalties on that skilled HR administrators, with Spierling had she not reported the good advice, would be able to cull fraud. Her employer was “well the frivolous from the meritorious within” its rights in discharging and that most victims stepped Spierling as there was no duty for forward for the purpose of having her to report; her employer had not their problem addressed, “and it told her to commit a crime and takes management to do that.” there was no specific statutory Indeed, observed the Judge, had the prohibition against Spierling’s managers followed Red Cross policy, discharge. Judge Schiller took strong the problem could have been dealt exception, arguing that “employees with months sooner. should not be sacrificed on the altar of the employee at-will doctrine for Judge Smith took care to point out reporting suspected Medicare fraud that the plaintiff managers had through proper channels….” exposed Red Cross to liability by violating the policy. The law does The Superior Court may have taken not require an employer to trust its Judge Schiller’s comments to heart, employees’ discretion and judgment because in Denton it all but about whether an incident amounts abandoned its just-published opinion to sexual harassment or should be in Spierling. In Denton, the Superior formally reported. Given that Red Court held for the first time that a

14 private nursing home which receives employment into a contract for a refrain from making any promises or Medicaid funds is a public body as specific period of time. statements which could be construed defined in Pennsylvania’s as some type of employment for a Some practical steps: on the whistleblower law. Denton had specific period of time. But employment application, clearly been fired after, among other things, remember that even if you take such state in bold print that the reporting alleged Medicaid fraud to steps, you should be very careful employment is at-will; have federal authorities. She brought a about firing an at-will employee employees sign a separate document whistleblower claim as well as a if that person will claim to be a at the time they are hired which claim for wrongful discharge. The whistleblower and if your company explicitly describes the employment whistleblower law prohibits a public receives funds from the as at-will; include a similar employer from discharging a Commonwealth. Your company statement, prominently displayed, in whistleblower. And as noted above, might find itself facing a viable any employment handbooks, being one of the public policy exceptions wrongful discharge claim which just certain to state that nothing in the to at-will employment is where a a few months ago would not have handbook creates a contract other statute prohibits discharge. The passed muster. than a standard at-will relationship; Superior Court found that Denton and train any of your employees Joseph P. McHugh was a whistleblowing employee of a involved in the hiring process to Pittsburgh Office public entity and thus, by invoking the whistleblower law, had stated a claim for wrongful discharge in Whistleblower Not Protected in Virginia violation of the public policy exception to at-will employment. In a ruling that will make it harder for employees in Virginia to win a wrongful The only distinction between discharge suit, the Virginia Supreme Court rejected the claim of a poultry Spierling and Denton was that processing plant employee that he was fired for reporting food safety violations Spierling did not invoke the to federal inspectors, Dray v. New Market Poultry Products, Inc. 518 S.E. 2d 312 (Sept. 17, 1999). The court ruled that the employee had no claim because whistleblower law. the state law regulating food safety at the plant was designed to protect the The bottom line is that the right general public, not the plant’s employees. to terminate at-will employees is The court looked to the first case in which it recognized a claim for wrongful now a bit narrower for private discharge based upon a violation of public policy, Bowman v. State Bank of entities which receive funds from Keysville, 229 Va. 534, 331 S.E. 2d 797 (1985), pointing out that in that case, the two employees who were fired for exercising their right as corporate the Commonwealth. Such shareholders to vote against a bank merger, were themselves members of the employers likely will be subject to very group—shareholders—whose right to vote their conscience was protected suit for wrongful discharge if they by the law. fire a whistleblowing employee. But Here, the court said, the state law merely establishes a food processing outside the whistleblowing context, regulatory scheme directed to government inspectors and industry and for the many private employers management. It does not create rights for employees who work in the plants. who do not receive Commonwealth “In essence,” the court concluded, “plaintiff claims she has been wrongfully funds, the at-will doctrine remains terminated because she had a right to disregard management’s requirements unchanged and very helpful. that she report to her company superiors, and not directly to government Employers have something quite inspectors….” Since she had no legal right to disregard management’s valuable in the at-will doctrine and directive, her termination was not wrongful, so the trial court’s of her case was proper. should be careful not to do anything which might mistakenly turn at-will R. Mark Dare Falls Church, Virginia Office

Employment Law Review 15 REED SMITH AND HAZEL & THOMAS MERGE

Effective November 1, 1999, Reed of the Eastern District of Virginia. Smith Shaw & McClay LLP and Similarly, the combination will make Hazel & Thomas PC merged their available to Hazel and Thomas two practices. Hazel & Thomas PC clients the sophistication and depth practiced in various offices of Reed Smith’s more than 500 throughout Virginia. The combined lawyers throughout the mid-Atlantic region. The combined firm now has over 185 lawyers in the District of Peter Post, head of the Employment Law & Benefits Columbia and Northern Virginia Department, described the transaction as “an ideal fit.” marketplace. Peter Post, head of the Employment Law & Benefits Department, firm, to be known as Reed Smith described the transaction as Hazel & Thomas in Virginia for a “an ideal fit.” Mr. Post notes the period of time, is now one of the experience of Hazel & Thomas in largest law firms in Virginia, one of dealing with the “rocket docket” of the largest firms in the metro D.C. the United States District Court for area and one of the 50 largest firms the Eastern District of Virginia and in the United States. in litigation in Virginia state courts. For the Employment Law & Benefits Mr. Post commented: “This Department, this combination will addition, as well as the expansion enable Reed Smith to provide of the Employment Law & Benefits enhanced services. The experience Department in New York City, of the employment law lawyers of and the continued growth of the the former Hazel & Thomas will employment law and benefits bring greater depth to the practice practice in Eastern Pennsylvania and in Virginia, including considerable throughout New Jersey, will add to experience with the “rocket docket” the considerable strength enjoyed by this practice in Western Pennsylvania.” Patrick W. Ritchey Pittsburgh Office

16 SPEAKERS FORUM

Reed Smith attorneys are ending Mark Fontana and Renee Myers “Exercising Your Right to Discipline 1999 and moving into 2000 with spoke at the Pennsylvania Chamber or Termination for Absenteeism a variety of speeches, conferences of Business and Industry’s Annual Without Violating the FMLA or and seminars. Human Resources Conference on ADA.” On February 10, 2000, John November 17 at the Harrisburg Erickson will address the seminar on The Labor and Employment Law Hilton. The topic of their discussion “Crisis Intervention: Recognizing Group held a Workplace Law was “Recent Developments Under the Warning Signs of Potential Seminar on November 16, 1999 at the ADA, FMLA and FLSA.” Workplace Violence and How to the DoubleTree Hotel in Pittsburgh. Counsel Staff,” and Bridnetta The seminar began with a discussion Gene Connors spoke to the PBI Edwards will discuss “Mediation by Bill Bevan of “Employer Use Of on November 18 on the subject and Arbitration: Cost Effective Economic Weapons.” Mike Lynch, of Legal and Practical Implications Solutions for Improving Employee Peter Post and Bob Prorok did a of Electronic Communications in Relations.” presentation on “Selected Issues in the Workplace. Arbitration,” covering the subjects The Council on Education in On January 26, 2000, Pat Ritchey “Contracting Out and Plant Management will once more turn to will discuss “How to Draft Relocation,” “Discipline of Reed Smith for its March 13, 2000 Employment Documents in Employees for Off-Duty Conduct” seminar entitled “Personnel Law Pennsylvania” at the National and “— Update” being held in Falls Church, Business Institute seminar being and Other Issues.” Virginia. Mark Dare will discuss held at the Pittsburgh Marriott Gene Connors and Amy Macinanti “Managing Leave and Absence City Center. spoke on “Salting, Neutrality Issues Under the Latest ADA Agreements, E-mail, and Other Several attorneys will be and FMLA Cases.” Union Organizing Techniques.” participating in the Council on Several days later, on March 17, Rob Cottington and Bill Bevan Education in Management’s February 2000, Mark Dare will travel to spoke on “Concerted Activity: 9-10, 2000 seminar entitled Richmond to discuss “Employment What You Don’t Know Might “Progressive Discipline, Issues Faced by Law Firm Surprise You.” The morning and Termination Law” being held Management” at a seminar entitled concluded with a panel discussion by in Tysons Corner, Virginia. On “9th Annual Employment Law Jim Haggerty, Leonard Scheinholtz February 9, Mark Dare will speak Update” being sponsored by the and Scott Zimmerman on “Current on the subject of “Judicial and Virginia State Bar and the Virginia Topics and Trends in Collective Legislative Developments that Bar Association. Bargaining.” Impact Your Discipline Practices,” while Merrell Renaud will discuss

Employment Law Review 17 Contributors To This Edition Include:

Pittsburgh William Bevan III ...... (412) 288-3184...... [email protected] Cathy Bissoon...... (412) 288-3268...... [email protected] Anthony T. Cicchino ...... (412) 288-3210...... [email protected] Joseph P. McHugh...... (412) 288-7236...... [email protected] Patrick W. Ritchey ...... (412) 288-3072...... [email protected] Joshua D. Verdi ...... (412) 288-3304...... [email protected]

Falls Church, VA R. Mark Dare...... (703) 641-4290...... [email protected]

New York City Amanda M. Fugazy ...... (212) 521-5434...... [email protected] David L. Weissman...... (212) 521-5466...... [email protected]

Philadelphia Lisa A. Schworm ...... (215) 241-7966...... [email protected]

Reed Smith Princeton McLean Princeton Forrestal Village 8251 Greensboro Drive Shaw & McClay LLP 136 Main Street Suite 1100 Princeton, NJ 08540 McLean, VA 22102 Harrisburg Phone: 609-987-0050 Phone: 703-734-4600 213 Market Street Fax: 609-951-0824 Fax: 703-734-4699 Harrisburg, PA 17101 Phone: 717-234-5988 Washington, D.C. Richmond Fax: 717-236-3777 1301 K Street, N.W. Riverfront Plaza—W. Tower Suite 1100—East Tower 901 East Byrd Street New York Washington, D.C. 20005 Suite 1700 375 Park Avenue Phone: 202-414-9200 Richmond, VA 23219 17th Floor Fax: 202-414-9299 Phone: 804-344-3400 New York, NY 10152 Fax: 804-344-3410 ¨ Phone: 212-521-5400 Reed Smith Fax: 212-521-5450 Employment Law Review is Newark Hazel & Thomas LLP published by Reed Smith Shaw & © The Legal Center McClay LLP and Reed Smith Hazel & Thomas LLP© to keep One Riverfront Plaza Falls Church 3110 Fairview Park Drive clients and friends informed of Newark, NJ 07102 developments in employment law. Phone: 973-621-3200 Suite 1400 Falls Church, VA 22042 It is not intended to provide legal Fax: 973-621-3199 advice to be used in a specific fact Phone: 703-641-4200 situation. Philadelphia Fax: 703-641-4340 2500 One Place The editor of the Employment Philadelphia, PA 19103 Leesburg Law Review is Patrick W. Ritchey, Phone: 215-851-8100 44084 Riverside Parkway a partner in the firm’s Pittsburgh office. The assistant editor is Fax: 215-851-1420 Suite 300 Leesburg, VA 20176 Cathy Bissoon, an associate in the Pittsburgh Phone: 703-729-8500 firm’s Pittsburgh office. The editors 435 Sixth Avenue Fax: 703-478-8003 welcome readers’ comments and Pittsburgh, PA 15219 inquiries, which should be directed Phone: 412-288-3131 to Patrick W. Ritchey. Fax: 412-288-3063 ©Reed Smith Shaw & McClay LLP 2000.