Monthly Archives: June 2012

Affordable Care Act Upheld

The U.S. Supreme Court ruled on Thursday that the Patient Protection and Affordable Care Act is constitutional. But it did so in an unexpected way.

The majority opinion ruled that the individual mandate was constitutional as a tax, but only four of nine justices ruled that it was valid under the Constitution’s Commerce Clause. The bottom line remains that the entire Affordable Care Act stands.

This is important news for employers who now face the prospect of providing coverage for employees or paying a penalty. There was a remote possibility that the entire Affordable Care Act could have been struck down, leading to uncertainty over many other provisions that have already been implemented. However, the entire law now stands. This should prompt the federal agencies implementing it to continue producing guidance over the next few years to flesh out all the remaining issues.

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Supreme Court Says Pharmaceutical Sales Exempt from FLSA

The Supreme Court this week released an opinion ruling that pharmaceutical sales reps are exempt from the overtime requirements of the FLSA because they are “outside salesmen.”

The ruling, though, is more significant because it rejected the Department of Labor’s interpretation of the exemption. The DOL tried to present a very narrow definition of “sales” by arguing that title to an actual product had to change hands. The Supreme Court rejected the DOL’s interpretation as
“quite unpersuasive.”

This is becoming an important issue as more and more federal agencies are introducing new interpretations, rules, and guidance that haven’t been approved by federal courts.

Supreme Court to Release Healthcare Opinion

Being the final week of the Supreme Court’s term, its remaining opinions will be released this week, including the much-awaited constitutional challenge to the Patient Protection and Affordable Care Act.

The ruling will come either Monday or, if the Court schedules additional days, possibly Wednesday or Thursday. If the Court strikes down the entire law, it will have significant impacts not only on the requirement to purchase health insurance, but also on already-implemented changes, including those to flexible spending accounts, dependent coverage, and other issues.

Judge Rejects Emotional Distress Claim

In an opinion released earlier this month, a federal judge in Alexandria rejected a sweeping set of claims by a terminated employee. After allegedly being fired for reporting his boss’s sexual harassment of other employees, the plaintiff sued for Title VII violations, intentional infliction of emotional distress, breach of contract, and wrongful termination.

Highlighting the narrow scope of employee protections, the judge rejected all the claims. The plaintiff missed the Title VII filing deadline by one day, and failed to claim behavior so outrageous that it rose to the level of intentional infliction of emotional distress. In other words, it takes extremely serious offenses to rise to that level, and significant, verifiable emotional distress. The judge also found that the wrongful termination claim didn’t fit into the narrow scope of permissible wrongful termination claims, and that the employee’s employment was at will and could be terminated at any time.

The ruling highlights the objectively bad facts that still make it difficult to bring an actionable claim.

EEOC Sues for Religious Discrimination in Hiring

The EEOC filed a lawsuit against Voss Lighting, a national lighting company, alleging that it refused to hire an applicant because he wasn’t a Christian.

The company, whose website says its mission is “to sell….to tell” the gospel is now facing scrutiny in the face of charges it refused to hire a non-Christian for an operations manager job.

The EEOC argues the company violated Title VII by discriminating based on religion for a job position that didn’t involve any religious functions. The company defended itself in a statement saying that the applicant it eventually hired was better qualified than the applicant it rejected.

AG Affirms Firearm Ban

In a recently issued opinion, Virginia’s Attorney General reaffirmed that private employers may prohibit firearms on company property.

The opinion, which largely discussed the recent statutory amendment allowing people to keep loaded guns in their cars, noted that the law still allows private employers to restrict or prohibit firearms on the employer’s private property.

Employers are therefore free to prohibit firearms not only from buildings or other company property, but also from employees’ cars on company property, despite the fact that it’s legal.

$25 Million Verdict in Racial Harassment Case

In a startling case in New York, ArcelorMittal Steel wound up with a $25 million judgment against it based on harassment of an African-American employee in the company’s Pennsylvania plant.

With most of the judgment coming from punitive damages, the case involved only one plaintiff, who was subjected to ongoing racial harassment over the course of three years, including finding a stuffed monkey with a noose around its neck in his car. Other incidents involved racial slurs and graffiti.

The jury found the employer didn’t take reasonable steps to stop the harassment, and imposed most of the liability on the company, giving a stark reminder of the risks posed by not taking harassment or discrimination claims seriously enough.