Workplace Bullying

The January/February 2009 volume of the Municipal Lawyer has a terrific article by Douglas Harvey titled "Bullying: It's Not Just Kid's Stuff." The article discusses that a recently completed workplace survey conducted in the U.S. found that thirty-seven (37%) of American workers have or are being bullied at work. It is surprising to learn that one in three employees face this issue and even more surprising to learn about the toll bullying takes on employees and their employers.

Mr. Harvey's article also states that up to seventy-five (75%) of work-bullying victims have elevated levels of stress, anxiety, sleeplessness, loss of concentration, paranoia, depression, panic attacks, neurological changes, muscular-skeletal and digestive problems, or chronic fatigue. This also causes problems for employers with increased employee absenteeism, turnover, medical claims, decrease in worker productivity, and even lawsuits.

No federal or state laws specifically prohibit workplace bullying (as separate from harassment and discrimination), but to date, twenty-five (25) workplace bullying bills have been introduced in over dozen states. In Europe, several nations already have laws that allow employees to recover for injuries or ailments caused by workplace bullying. In fact, in Great Britain an employee was awarded $1.5 million in damages to recompense for repeated bullying which eventually caused her to be hospitalized as a suicide risk.

Despite any laws on the books, some American courts are sympathetic to employees who are bullied. The Indiana Supreme Court recently upheld a jury verdict of $325,000 against a physician who bullied a subordinate employee.

Employers and Electronic Communication

In the January/February 2009 issue of the Municipal Lawyer, Joshua K. Leader and Caroline C. Marino wrote an interesting article on "Municipalities and Employee Electronic Communications."

A primary case study set forth in the article is Quon v. Arch Wireless Operating Co., Inc., which involved a city police department that contracted for wireless text-messaging services for two-way pagers, which were distributed to employees. An employee, Quan, repeatedly went over the monthly text limit for his pager, which caused overages. The police department assumed that the overcharges were a result of him using the pager for personal messages. The department had suggested that their policy of banning personal use of department owed computers applied to the pagers but there was no official rule. Instead the employees who had the overages were to pay the amount that exceeded their limit. Eventually the department obtained transcripts of Quan’s texts and to find the real cause of the overages and discovered they were a result of sending personal messages. Quan then sued the police department, alleging his fourth amendment right to privacy was violated.

The U.S. Court of Appeals for the Ninth Circuit ruled Quan had a reasonable expectation of privacy in his texts because of the police department’s informal policy of letting employees pay for the overages. They also determined that the department should not have been allowed to obtain the transcripts from the service provider because the federal Stored Communications Act only allows the sender and addressee of the messages to view their content, regardless of who pays the bill.

The Quan case--and Mr. Leader's and Ms. Marino's article--should serve as a warning for both public and private employees. While an employer may need to monitor its employees for many reasons, it must be aware of the potential constitutional implications when doing so. Monitoring employee electronic correspondence could amount to an unlawful government search and seizure if the employees have a reasonable expectation of privacy in that correspondence. Employers that do wish to monitor their employees should adopt a ban on personal employer-issued devices and make clear that these devices are subject to monitoring.

Changes to Iowa Limited Liability Corporation Act

As of January 1, 2009, all limited liability companies ("LLC") organized and incorporated in Iowa will be governed by a Revised Uniform LLC Act (Re-ULLCA). Iowa LLCs established before 2009 will continue to be governed by the old Iowa LLC Act (ILLCA) until January 1, 2011, which is the date when all LLCs--regardless of when formed--will be governed by the Re-ULLCA. In his article “Iowa’s Revised Uniform Limited Liability Company Act: Formation Issues” from the June, 2009 issue of The Iowa Lawyer, Matthew Dore does an excellent job of explaining the differences between the old ILLCA and the new Re-ULLCA, as well as setting forth some of the reasons for the changes.

Under the old ILLCA, to form an LLC one had to file “Articles of Organization” with the Secretary of State. Under Re-ULLCA, however, one files a “Certificate of Organization.” The change in terms, Dore explains, is to “signal that [a] publicly-filed record is not the LLC’S foundational document.” Rather, the Certificate of Organization simply states that an LLC exists. Under Re-ULLCA, it is the Operating Agreement that “establishes foundational accords for an LLC.” The only information needed in the new Certificate of Organization is the name of the LLC and the mailing addresses of the registered office and agent.

Another big difference is under the old ILLCA was that to form an LLC one must had to first file the Articles of Organization then have at least one member join the company. Under the new Re-ULLCA, an LLC exists once the Certificate of Organization has been filed regardless of the number (or lack thereof) of members. However, under the new Re-ULLCA, the LLC exists upon filing but it lacks the capacity to conduct any business other than admitting members.

The new LLC law will affect business and employers across Iowa so, for more information on the changes, I would encourage you to review Mr. Dore's article in this month's Iowa Lawyer.

Reimbursement of Training Wages

The current issues of Cityscape, the magazine published by the Iowa League of Cities, has an excellent, anonymous article about police officer reimbursement of training expenses. I am currently working with several clients on this issue and thought this might be of assistance to others.

Many cities hire untrained persons as police officers with the agreement that the employee obtain the required training at the city's cost. The reimbursements typically include, the training fees, mileage, food, lodging and wages (i.e, travel time, study time and class time). In exchange, the employee agrees to reimburse the city for those expenses, if he/she fails to complete the training, or if he/she voluntarily resigns without having served for a minimum period of time.

Reimbursement is often on a sliding scale, with 100 percent within the first year, 75 percent between one and two years, etc. In a recent case, City of Humboldt vs. Geoff Miller, the officer challenged the validity of the agreement that he reimburse 100% of the wages as void under the minimum wage laws of the Fair Labor Standards Act. The minimum wage at the time was $5.15 per hour, the employee was receiving $12.64 per hour and he only ever spent half of any pay period in training. As such, the Court ruled that the reimbursement never reduced the officer's pay below the minimum wage and did not violate federal law.

Based on this case, which helped clarify existing law, both parties to a reimbursement agreement should make certain that the total amount of reimbursement (i.e., training fees, wages, mileage, food, lodging, etc.) for any given pay period is not less than the applicable minimum wage, which is currently $6.55 per hour but $7.25 per hour effective July 24, 2009.

Transgender Discrimination

Margaret Hershiser has an illuminating article in the November/December issues of the Nebraska Lawyer highlighting employment discrimination against transgender individuals. This is of particular importance for Iowa employers as Governor Chet Culver signed Bill SF427 to include gender identity and sexual orientation to the state's Civil Rights Act.

The bill broadly definers gender identity as "a gender-related identity of a person, regardless of the person's assigned sex at birth" and sexual orientation as "actual or perceived heterosexuality, homosexuality, or bisexuality." This new classification pertains to employers, employees, employment agencies, labor organizations, public accommodations, housing, educational institutions, creditors, and anyone else previously covered by the Civil Rights Act.

While not every state has laws protecting transgender individuals, in 1989 the Supreme Court issued a decision for transgenders in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In that case, Ann Hopkins was the only woman chosen as as candidate for partner with Price Waterhouse, along with 87 other males. Twenty candidates were held for later reconsideration, including Ann Hopkins. However, when the partners refused to re-nominate her, she quit and sued under Title VII claiming sexual discrimination. Some of her former employees advised her "to walk more femininely, talk more femininely, dress more femininely, wear make-up and have your hair styled and wear jewlery." The Federal District Court ruled in Hopkins' favor with regards to her claim that the partners criticism was a product of sexual stereotyping. The Court of Appeals and six members of the U.S. Supreme Court agreed that those type of comments displayed gender discrimination.

There have been other federal courts that decline the reasoning in Price Waterhouse to other transgenders. The court entered a summary judgment ruling for the employer that terminated it's employee, a pre-operative transsexual, based on the employee's expressed intent to use the women's restrooms while still retaining male genitalia in Etsitty v. Utah Transit Auth., 2005 WL 1505610 (D. Utah 2005). Esitty had changed his name and sex designation on his driver's license, however; the court found Price Waterhouse inapplicable, recognizing "[c]oncerns about privacy, safety and propriety are the reason gender specific restrooms are universally accepted in our society."

A growing problem for employers is how to handles issues where transgender discrimination and gender discrimination collide. For example, the law provides no guidance for an employer with a transgender employee who wants to use the woman's restroom and with female employees who do not want to share the bathroom with a person of the opposite gender.

Illegal Employees Filing DOL Claims

The November/December issue of the Nebraska lawyer has an interesting article written by Rachel Alexander regarding the rise of lawsuits and claims by undocumented workers against their employers.

As Ms. Alexander discusses, recently, a federal court in Louisiana decided that temporary nonagricultural guestworkers working under H-2B visas were employees that could sue under the FLSA for minimum wage violations. While this isn’t a surprising decision, it may be surprising to learn that U.S. citizens and legal immigrants aren’t the only employees who can sue under federal employment laws. Undocumented workers can too.

Many federal employment laws define “employee” broadly to cover any employee or applicant looking to sue for overtime and minimum wage violations, employee benefits issues, retaliation, and discrimination. Some courts have gone so far as to say “it is well established” that these federal laws protect citizens and aliens alike and “whether an alien in documented or undocumented is irrelevant.”

As such, it is important to treat all employees, citizen or not, alike because you never know when one might use the broadly worded employment laws to their advantage.

Understanding the ADAAA

The May 2009 Cityscape (the magazine of the Iowa League of Cities) has an overview article covering the recent passage of the ADA Amendments Act (“ADAAA”) and what it will mean for most cities. As the co-author of the article, I would not recommend it for its readability or prose; however, it does highlight a number of the major changes for employers.

The Act specifically rejected prior Court decisions restricting the scope of who was protected by the ADA. These changes went into effect on January 1, 2009, with the primary change being far more people falling within the definition of disabled.

All employers need to update their interactive process policies and to offer accommodations to a wider percentage of the workforce. Based on the changes to the ADA:

1. Expect more lawsuits to be filed. The ADAAA makes it easier for employees to make claims of disability discrimination and the defense of these suits will be more difficult as the more expansive construction of the meaning of disabled may limit prior defenses.
2. Review all employment policies to make sure the language complies with the new law. Handbook changes should be communicated clearly to all employees.
3. Make sure all managers and supervisors in the organization receive training regarding the changes to the ADA. These individuals must understand the implications of the changes in the definition of disability.
4. Focus on the interactive process with disabled workers and discuss what reasonable accommodations will allow them to satisfactorily perform their essential job duties. Cities need to make sure their supervisors and department heads know of their obligation to provide reasonable accommodations and that they do not reject requests out of hand, without analysis.