Labor and Employment Law Weekly Update

19 March 2012 Publication
Author(s): Christopher Ward

Legal News: Employment Law Update

ADA May Soon Require Disabled Employees Be Given Super Preference for Internal Vacancies
Written by: Christopher G. Ward

An employer should have to place a disabled worker into an open position, even if far more qualified employees are seeking the same vacancy. Sound like a legal requirement? It could be.

In a recent case involving an employer’s obligation to accommodate a disabled employee by transferring her to a vacant position, the U.S. Court of Appeals for the Seventh Circuit appeared to indicate that the ADA required such an accommodation. However, because the three-judge panel’s belief was at odds with previous decisions, the Court affirmed dismissal of the case, but not without first inviting the entire appeals court to adopt a more employee-friendly standard.

In E.E.O.C. v. United Airlines, Inc., the employer adopted new reasonable accommodation guidelines. Those guidelines specified that while transferring a disabled employee no longer able to perform the essential functions of his or her job to a vacant position could be an appropriate accommodation, the transfer process is competitive, meaning that though disabled employees will receive priority consideration, they will not be guaranteed the vacancy over superior candidates seeking the same position. The EEOC took exception and filed suit, asserting that the ADA requires the disabled employee be given the vacancy as long as the disabled individual is minimally qualified for the position. Because the Seventh Circuit had addressed this same issue in 2000, the district court granted the employer’s motion to dismiss. The EEOC then appealed, arguing that the Seventh Circuit should overturn its previous decision.

While the Court declined the EEOC’s request and reaffirmed the previous ruling — that the ADA does not require disabled employees receive preferential treatment for vacancies when a more qualified candidate seeks the same position — its endorsement of that ruling was tepid at best. While the Court noted, “the EEOC’s interpretation may in fact be a more supportable interpretation of the ADA, and here we think that is likely,” the Court stated that it could not overturn a previous decision absent a change in the governing statutory language or an intervening Supreme Court decision directly undermining the previous decision. Because neither had occurred, the panel was constrained by the 2000 decision and thus affirmed dismissal. However, after noting that other U.S. Courts of Appeals had reached different conclusions and again suggesting that the EEOC’s position was persuasive, the panel closed its opinion by “strongly” recommending that the full Seventh Circuit reconsider the issue on an en banc basis — the only mechanism for reversal of the Seventh Circuit’s current precedent short of Supreme Court reversal.

While the recent decision does not render any immediate change to the ADA landscape, it does portend both that the EEOC will continue pushing this issue and that a national rule of law requiring super-preferential treatment for disabled employees may be on the horizon. In light of the Seventh Circuit’s language, the likelihood that the EEOC will seek en banc review from the Seventh Circuit is high, and if that effort is unsuccessful, the EEOC also is likely to petition the Supreme Court for review. The EEOC also is likely to push the issue in jurisdictions where the circuit court of appeals has not opined on this issue and, in light of the Seventh Circuit’s tepid decision, it may find other circuits to be receptive. Employers looking to avoid the risks presented by this uncertainty — particularly in areas where the governing circuit has yet to weigh in on this issue — might be wise to give preferential treatment to disabled employees seeking internal transfers, and if better qualified candidates for the same position exist, employers should seek legal counsel to assist with making an appropriate decision.

Does Your Company Have an LM-10 Reporting Deadline Soon?
Written by: Bernard J. Bobber

The Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) requires employers to file a report with the Department of Labor (DOL) for each year in which the employer has some reportable activity as defined by the LMRDA. This obligation applies to most every employer, including those whose employees are not represented by a union. Generally, the LMRDA requires the disclosure of certain payments of money or other things of value by an employer to a union, a union official, a labor relations consultant, and sometimes even to employees. The disclosure is to be filed on the DOL’s Form LM-10 (Employer Report). For many years this reporting requirement received little attention from both employers and regulators alike, but in 2006, the DOL issued new guidance and thereby refocused attention on this obligation.

The Form LM-10 filing deadline is 90 calendar days after the end of the employer’s fiscal year. So, if your company uses the calendar year as its fiscal year, the fast approaching reporting deadline is March 30, 2012. You still have time to investigate whether your company has to file a report this year, and to accomplish that mission if it does.

Doing this correctly is key. The LMRDA requires that the report be signed, under oath, by the employer’s president and treasurer, and the LMRDA imposes both potential criminal and civil penalties for willful violations. The DOL publishes instructions for employers on how to fill out the Form LM-10, but even with the instructions, doing this correctly can be easier said than done. For example, it can be challenging to determine with certainty what types of payments or arrangements need to be disclosed through the LM-10. The law identifies various reporting exemptions (like wages paid in the ordinary course of business to an employee who also is a union official), as well as a de minimis exception for amounts under $250, and those exemptions must be understood and applied. Also, identifying all the situations that might implicate the reporting requirement requires some comprehensive assessment and some creative thinking. To give you some idea, here is a partial of the list of payments the DOL says must be reported (assuming they are greater than $250):

  • An employer of union members takes a union official with whom it is negotiating a collective bargaining agreement out for dinner and drinks worth more than $250
  • An employer pays any of its employees to persuade other employees not to join a union or to affect the negotiation of a collective bargaining contract
  • An employer makes expenditures for the printing and dissemination of pamphlets, advertisements, or other printed matter that threatens to move or close the plant if organized
  • An employer gives gifts or provides services to employees on the condition that they will not organize
  • An employer pays a labor relations consultant to deliver an anti-union speech to its employees
  • An employer pays a labor relations consultant to plant agents among its employees to obtain reports about a union's organizational activities
  • An employer of the union members provides the union's officers an exclusive opportunity to purchase the employer's stock at below-market prices
  • A vendor of office supplies to a union guarantees payment of a bank loan made to a representative of that union
  • A vendor of printing and publishing services to a union sends a holiday gift basket worth more than $250 to the union's treasurer
  • A vendor of legal or accounting services to a union take the union's officers on a golf excursion
  • A vendor of financial services to a union affiliated pension plan provides a gift worth more than $250 to a union trustee

Legal News is part of our ongoing commitment to providing legal insight to our clients and colleagues. If you have any questions about or would like to discuss these topics further, please contact your Foley attorney or the authors of this week’s issue.

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