Wisconsin Developments in Employment Law 2014

A. Statutory Changes:

1. Wis. Stat. Section 995.55 – Wisconsin’s Social Media Protection Act

Act became effective April 10, 2014. It prohibits employers from requesting an employee or an applicant to grant access to, allow observation of, or disclose information that allows access to or observation of the employee’s or applicant’s “personal internet account” which is defined in the Act as an “internet-based account that is created and used by an individual exclusively for purposes of personal communications.” Under this new law, employers may not:

1. Request or require an employee or applicant for employment, as a condition of employment, to disclose access information for the personal Internet account of the employee or applicant or to otherwise grant access to or allow observation of that account (“rights”);

2. Discharge or otherwise discriminate against an employee for exercising their rights, for filing a complaint or attempting to enforce their rights, or in retaliation for testifying or assisting in any action or proceeding to enforce these rights; or

3. Refuse to hire an applicant for employment because the applicant refused to disclose access information for, grant access to, or allow observation of the applicant’s personal Internet account.

Under this law, an employer may:

1. Request or require an employee to disclose access information to the employer in order for the employer to gain access to or operate an electronic communications device supplied or paid for in whole or in part by the employer or in order for the employer to gain access to an account or service provided by the employer, obtained by virtue of the employee’s employment relationship with the employer, or used for the employer’s business purposes.

2. Discharge or discipline an employee for transferring the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account without the employer’s authorization.

3. Conduct an investigation or require an employee to cooperate in an investigation of any alleged unauthorized transfer of the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account, if the employer has reasonable cause to believe that such a transfer has occurred, or of any other alleged employment- related misconduct, violation of the law, or violation of the employer’s work rules as specified in an employee handbook, if the employer has reasonable cause to believe that activity on the employee’s personal Internet account relating to that misconduct or violation has occurred. This exception provides that, in conducting an investigation or requiring an employee to cooperate in an investigation, an employer may require an employee to grant access to or allow observation of the employee’s personal Internet account, but may not require the employee to disclose access information for that account.

4. Restrict or prohibit an employee’s access to certain Internet sites while using an electronic communications device supplied or paid for in whole or in part by the employer or while using the employer’s network or other resources. 5. Comply with a duty to screen applicants for employment prior to hiring or a duty to monitor or retain employee communications that is established under state or federal laws, rules, or regulations or rules that applied to “self-regulatory organizations.” Also, the law’s prohibitions do not apply to a personal Internet account or an electronic communications device of certain employees that are engaged in providing financial services who uses the account or device to conduct the business of an employer that certain federal securities regulations.

6. View, access or use information about an employee or applicant for employment that can be obtained without access information or that is available in the public domain.

7. Request or require an employee to disclose the employee’s personal electronic mail address.

Finally, the new law provides a type of “good faith” exception for situations where an employer inadvertently obtains access information for an employee’s personal Internet account through the use of an electronic device or program that monitors the employer’s network or through an electronic communications device supplied or paid for in whole or in part by the employer provided the employer does not use that access information to access the employee’s personal Internet account.

2. Wisconsin’s Unemployment Insurance Program Revisions – Chapter 108 Effective January 5, 2014, Wisconsin’s Unemployment Insurance statute was significantly revised. These revisions included a revised definition of “misconduct,” and “substantial fault” provision; a reduction in the employee’s burden of proof when contesting UI benefit eligibility; eliminates nearly half of the voluntary quit exceptions, making it more difficult for an employee who voluntarily resigns to be found eligible for benefits; and imposes greater requirements on the number of work search actions an employee must complete each week in order to maintain benefits. For a complete outline of all revisions, see “Wisconsin Development in Employment Law 2013” outline.

3. Wisconsin’s Payroll Recordkeeping Requirements – Wis. Stat. Section 104.09 Effective April 17, 2014, employers are no longer required to keep payroll records tracking the “hours worked” of their salaried employees who are “exempt” from Wisconsin’s overtime compensation laws. This change brings Wisconsin’s payroll recordkeeping requirements in line with those of the Federal Fair Labor Standards Act. Wisconsin companies no longer have to keep precise daily or weekly time records for their salaried exempt professional, executive (i.e. managerial and supervisory), administrative, and computer professional employees.

B. Federal Court Decisions

1. Ballard v. Chicago Park District, No. 13-1445 (7th Cir. Jan. 28, 2014):

Resolves whether the FMLA applies when an employee requests leave so that she can provide physical and psychological care to a terminally ill parent while that parent is traveling away from home. The 7th Circuit held an employee could use FMLA leave to accompany her mother to Las Vegas as her basic care support.

Beverly Ballard cared on a daily basis for her mother, Sarah, who suffered with end‐stage congestive heart failure. Through a social worker at her hospice, Sarah received a grant take a family vacation to Las Vegas. Ballard requested leave from her employer to travel with her mother, which was denied, although the record was unclear when the denial occurred. Several months later, the Park District terminated Ballard for her allegedly unauthorized absences accumulated during her trip.

The 7th Circuit affirmed the district court's decision denying a motion for summary judgment. The central promise of the family-care provisions of the FMLA is that employees are entitled to leave "[i]n order to care for" a family member with a "serious health condition." 29 U.S.C. § 2612(a)(1)(C). The Park District argued that only ongoing medical treatment, not routine support, was covered by this section. However, the court held that the FMLA speaks in terms of "care," not "treatment." Moreover, the FMLA nowhere limits where such care could be provided. Citing the Department of Labor's regulation, 29 C.F.R. § 825.116 (2008), it favors the employee's argument that even basic care was covered. This decision creates a split with cases in the 1st and 9th Circuits which held to the contrary.

2. Phillips v. Continental Tire the Americas, LLC, No. 13-2199, 7th Cir., Feb. 14, 2014.

Where an employee refused to submit to mandatory drug testing after filing a workers’ compensation claim, his subsequent discharge was not retaliatory. In this case, the 7th Circuit affirmed a decision by the Illinois District Court.

Jeff Phillips worked as a passenger general trucker for 22 years until his discharge at Continental Tire The Americas’ manufacturing facility in Mount Vernon. In April 2010, Phillips reported to the company’s on-site health services department to report that his fingers went numb while working. Phillips said he wanted to file a workers’ compensation claim. At the time of Phillips’ claim, the company had a written substance abuse policy that required drug testing in certain situations. Also, OSHA required an accounting of such incidents. The policy further provided that refusal to submit to such a test would be cause for immediate suspension pending termination.

Phillips was informed of the policy, but nevertheless decline to submit to a drug test because he did not think it should be a necessary consequence of filing a workers’ compensation claim. Phillips was terminated for refusing to submit to drug testing. Shortly after, Phillips sued Continental Tire alleging that the company retaliated against him for seeking workers’ compensation benefits in violation of Illinois law. The company was granted, summary judgment and Phillips appealed.

The 7th Circuit held the only issue before it was one of causation. Citing Marin v. Am. Meat Packing Co., the court noted that causation requires more than simply discharge in connection with filing a claim. The ultimate issue is the employer’s motivation in discharging the employee. Looking to the particular facts presented by this case, the court held Phillips failed to make an affirmative showing that his discharge was retaliatory. The court cited the deposition testimony of Phillips, finding that Phillips’ own testimony established that the company terminated him because he refused to take a drug test on initiation of a workers’ compensation claim as required by company policy. Further, the court noted the company had consistently enforced this policy, discharging other employees who similarly refused drug testing when filing workers’ compensation claims. The court concluded Phillips’ employment was terminated solely because of his refusal to submit to drug testing and not because he filed a worker’s compensation claim.

3. Kauffman v. Petersen Health Care VII, LLC, No. 13-3661 (7th Cir. Oct. 16, 2014):

The 7th Circuit issues a divided opinion on the issue of "qualified individual" under the ADA, in a case concerning a nursing-home beautician. Plaintiff Kauffman was a hairdresser for a nursing home. During half her working days, part of her job entailed pushing residents in wheelchairs from their rooms to a central parlor. She performed the task without difficulty for nearly three decades, until she required a reconstructive procedure on her bladder, resulting in a pushing limitation. The fact record was ambiguous about whether the pushing restriction was ever removed, but available literature suggested patients receiving this procedures should never push more than 50 pounds.

The nursing home's administrator, Mr. Wall, reportedly told the plaintiff that "we just don't allow people to work with restrictions, and you have a restriction on here ... . [A]s long as you've got the restriction we can't employ you." He denied the accommodation of having other employees push the wheelchairs on the ground that it "would put a hardship on the facility to hire somebody to transport the patients from the beauty shop to the resident's room and back and forth. That was something that we were not able to do." Notwithstanding, she was briefly and informally accommodated by her colleagues until she resigned.

Reversing summary judgment granted by the circuit court, the court noted several errors in the district court's opinion - the principal one being that the record on whether pushing the residents was an "essential function" of being a hairdresser was unresolved. The defendant contended that wheeling residents occupied 60-65% of the plaintiff's time, while the plaintiff calculated the time as 9%, or fewer than two hours a week on average.The question, as formulated by the 7th circuit, would then be whether her inability to wheel could reasonably be accommodated by assistance from other staff, as seems to have worked for the other hairdresser after the plaintiff left the nursing home until a replacement was hired." Assuming the correctness of the plaintiffs' estimate, the demand on the other employees' time, divided over the rest of the staff, would be trivial. "hat the best estimate of the plaintiff's time spent wheeling is can't be determined on a motion for summary judgment and therefore the court held a trial is required.

The court also found Wall's alleged statement of not allowing people with restrictions to work was, if believed, further evidence of a disability-biased motive. Moreover, as the record was devoid of any valid explanation why other employees could not be engaged to support the plaintiff in this one task, let alone an "interactive process" to locate another alternative, a trial on "reasonable accommodation" was required.

4. Suzan Gienapp v. Harbor Crest, et al, Case No. 14-1053 (7th Cir. Jun. 24, 2014).

7th Circuit held that an employee did not forfeit her right to leave under the FMLA to care for her seriously ill adult daughter by failing to provide her employer with an anticipated date of returnGienapp worked at Harbor Crestnursing care facility. In January 2011 she told Chattic, its manager, that she needed leave to care for her daughter, who was being treated for thyroid cancer. Chattic granted leave under the Family and Medical Leave Act, 29 U.S.C. 2612(a)(1). While on leave, Gienapp submitted an FMLA form, leaving blank a question about the leave’s expected duration. Harbor Crest did not ask her to fill in the blank, nor did it pose written questions as the 12-week period progressed. A physician’s statement on the form said that the daughter’s recovery was uncertain, and that if she did recover she would require assistance at least through July 2011. Chattic inferred from this that Gienapp would not return by April 1, her leave’s outer limit, and hired a replacement. When Gienapp reported for work on March 29, Chattic told her that she no longer had a job. The district court entered summary judgment, ruling that Gienapp had forfeited her FMLA rights by not stating exactly how much leave she would take. The Seventh Circuit reversed. Gienapp could not give a firm date; Department of Labor regulations call her situation “unforeseeable” leave, governed by 29 C.F.R. 825.303, which does not require employees to tell employers how much leave they need.

On December 10, 2014, the 7th Circuit affirmed summary judgment in a lawsuit in which the plaintiff alleged sex discrimination, age discrimination and retaliation under Title VII of the Civil Rights Act of 1964, as amended, and the Age Discrimination in Employment Act. Ripberger v. Corizon, Inc., No. 13-2070 (7th Cir., 12-10-2014). The plaintiff/employee claimed that her employer failed to hire her for an open position in connection with a restructuring because of her sex, age, and protected activity of assisting another employee with her sex discrimination grievance. The 7th Circuit agreed with the district court, that the plaintiff was an unfortunate victim of a reduced work force in the wake of the privatization of a state program. The 7th Circuit stated that the fundamental question on summary judgment is simply whether a reasonable jury could find prohibited discrimination, i.e., that a rational jury could conclude that the employer took the adverse action on account of her protected class.

C. Wisconsin EEOC Challenges:

EEOC has challenged three employer wellness programs alleging that the programs, which offer financial incentives to those who participate, violate the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The EEOC reasons that the programs’ financial incentives constitute unlawful penalties and inducements. In these cases, the EEOC has maintained that large financial incentives affect the voluntariness of the programs.

First lawsuit was brought by the EEOC in the Eastern District of Wisconsin, challenging Orion Energy Systems, Inc.’s wellness program. Orion’s program required employees to complete a health risk assessment, to self-disclose their medical histories, and to have blood work performed. If the employees participated in the program, Orion would cover the entire amount of the employee’s health care costs. If an employee declined participation, that employee would be required to pay the entire premium cost for coverage as well as a $50 non-participation fee. The EEOC has alleged that such financial incentive/disincentive is so great that it constitutes a penalty in violation of the ADA.

The second lawsuit was brought by the EEOC on September 30, 2014, in the Western District of Wisconsin challenging Flambeau Inc.’s wellness program, which requires employees to complete biometric testing and a health risk assessment. Such testing and assessments required employees to self-disclose their medical histories and have blood work and measurements performed. Employees who completed the testing were only obligated to pay 25 percent of the premium cost of their health insurance, but employees who did not complete the testing were subject to termination of health insurance and required to pay the entire premium cost for COBRA health insurance coverage. As in the Orion Energy Systems case above, the EEOC has alleged that Flambeau’s program is not job-related or consistent with business necessity and is not voluntary due to the financial penalty.

Finally, the EEOC’s brought an action in the District Court of Minnesota on October 27, 2014, against Honeywell International Inc., because its wellness program required its employees and their spouses to undergo biometric testing. If the employee and his/her spouse refused, that employee risked losing the employer’s contributions to their health savings accounts; would be charged a $500 surcharge that would be applied to their 2015 medical plan costs; would be charged a $1000 tobacco surcharge even if the employee chose not to undergo the testing for reasons other than smoking; and would be charged another $1000 tobacco surcharge if his/her spouse did not participate. In total, an employee could suffer a penalty of up to $4000. Similar to the Orion and Flambeau’s challenges, the EEOC has alleged Honeywell’s wellness program is not job-related or consistent with business necessity and is not voluntary due to the large financial penalties. In addition, the EEOC has alleged that the program violates GINA’s proscription against providing inducements to an employee to obtain that employee’s family medical history.

D. State Court Decisions

1. Integrity Staffing Solutions, Inc. v. Busk

Whether employees are entitled to be paid for time spent in anti-theft security screenings at the end of their shift. Integrity Staffing supplied employees to Amazon’s warehouses. These employees retrieved products from warehouse shelves and packaged them for delivery to Amazon’s customers. At the end of each shift, employees were required to submit to a security screening similar to the process used for airport security. Employees were required to remove anything containing metal, and to pass through a metal detector. The purpose of this screening was theft prevention. However, these procedures usually resulted in long lines and significant delays. On average, it took employees 25 minutes to get through this process before they could leave work. A class of employees claimed they should be paid for this time, but the Supreme Court did not agree.

The Court ruled that employees are not entitled to compensation for pre-shift or post-shift activities unless they are necessary for the safe or effective performance of their jobs. For example, meat cutting employees should be paid for time spent sharpening their knives because, without sharp knives, they would be ineffective. Also, the time employees spend changing clothes and showering after working in a battery plant is compensable because these employees work around toxic chemicals. The Court found the anti-theft screenings of the Amazon warehouse workers were different. Employees could safely and effectively do their jobs without such screenings, and therefore the time spent waiting for and submitting to these screenings is not compensable.

2. Madison Teachers Inc. v. Walker, 2014 WI 99 (July 2014)

The supreme court upheld 2011 Wisconsin Act 10 against numerous constitutional challenges described below. In 2011, the Wisconsin Legislature passed Act 10, a budget- repair bill proposed by Governor Scott Walker. Act 10, which significantly altered Wisconsin’s public-employee labor laws. It prohibits general employees (as opposed to public-safety employees) from collectively bargaining on issues other than base wages, prohibits municipal employers from deducting labor organization dues from paychecks of general employees, imposes annual recertification requirements, and prohibits fair-share agreements requiring nonrepresented general employees to make contributions to labor organizations.

In this case, plaintiffs Madison Teachers Inc. and Public Employees Local 61 challenged several provisions of the Act. Specifically, they alleged four aspects of the Act – the collective bargaining limitations, the prohibition on payroll deductions of labor organization dues, the prohibition of fair share agreements, and the annual recertification requirements – violated the constitutional associational and equal protection rights of the employees they represent. They also challenged Wis. Stat. § 62.623 (2011-12), a separate provision created

by the Act, which prohibits the City of Milwaukee from paying the employee share of contributions to the City of Milwaukee Employes’ Retirement System [ERS], alleging it violates the home rule amendment to the Wisconsin Constitution. In the alterntive, plaintiffs argued it violated the constitutionally protected right of parties to contract with each other.

In its decision, the Court upheld Act 10 in its entirety, rejecting all of plaintiffs' arguments. First, the Court held that plaintiffs’ associational rights argument was without merit, because collective bargaining remains a creation of legislative enactment and not constitutional obligation and the First Amendment cannot be used as a vehicle to expand the parameters of a benefit that it does not itself protect. Second, the Court reject plaintiffs’ equal protection claim under a rational basis standard of review. Third, the Court held plaintiffs’ home rule amendment argument failed because Wis. Stat. § 62.623 primarily concerns a matter of statewide concern. Finally, the Court held plaintiffs’ contract clause claim failed because the City of Milwaukee was not contractually obligated to pay the employee share of contributions to the Milwaukee ERS. Further, even if the contributions paid by the City were a contractual right, the Court held the contract was not substantially impaired by Wis. Stat. § 62.623.

3. Masri v. LIRC, 2014 WI 81 (July 2014)

The Court decided the issue of whether uncompensated interns are entitled to the anti- retaliation protections of Wis. Stat. section 146.997, Wisconsin’s health-care-worker protection statute. Masri was a doctoral student at the University of Wisconsin-Milwaukee when she began work as a “Psychologist Intern” in the Division of Transplant Surgery at the Medical College of Wisconsin (MCW). The MCW ended Masri’s internship after she met with an MCW administrator to report “clinical/ethical” concerns. Masri contended that the termination of the internship violated Wis. Stat. section 146.997, which provides that certain health care employers and their employees may not take “disciplinary action against ... any person” who in good faith reports violations of state or federal laws, regulations, or standards. A disciplinary action is defined as “any action taken with respect to an employee.” Wis. Stat. § 230.80(2) Masri argued that, even though she did not receive pay for her work, the receipt of other tangible benefits (an all-access badge, office space, parking, support staff, and networking opportunities) made her an employee; she also asserted that her supervisor at the MCW had promised her health insurance and financial grants-in-aid (although she never actually received those benefits, and there was no contractual guarantee of those benefits).

The Labor and Industry Review Commission (LIRC) determined that Wis. Stat. section 146.997 applies only to employees, and that as an unpaid intern, Masri was not an employee. LIRC noted that it had previously looked at compensation to determine employment status and indicated that it is possible that a worker could be an employee based on tangible benefits other than salary. However, LIRC rejected Masri’s argument that she received tangible benefits that would make her an employee. It determined that Masri’s alleged tangible benefits – the security badge, office space, parking, and support staff – all related to her duties and had no independent value. In addition, networking opportunities were not tangible and could not be assigned value. The fact that Masri’s supervisor told her she would have health insurance and had applied for grants was not enough to confer employee status on Masri since she never received those benefits. The circuit court, the court of appeals and the Supreme Court affirmed the LIRC's decision.

According due weight deference to LIRC’s decision, the Court agreed that Wis. Stat. §146.997 applies only to employees, a category that does not include interns who do not receive compensation or tangible benefits. As Wis. Stat. § 146.997 does not define ‘employee,’ the Court gave the term its ordinary meaning. After consulting the language, context, and structure of the statute, the Court concluded LIRC’s interpretation was reasonable, and that there was no more reasonable interpretation. Because Masri received no compensation or tangible benefits, the Court held she was not an employee of MCW and therefore not entitled to anti-retaliation protection under § 146.997(3)(a).

4. Rice Lake Harley Davidson v. LIRC, 2014 WI App 104 (Sept. 2014)

Appellate court held petitioner’s wage- and sex-discrimination complaint was timely, supported by sufficient evidence, and she was therefore entitled to attorney fees despite the reduced size of the award. Mack worked at a Harley Davidson dealership from 2003 until her termination in 2009. She contended that the dealership paid her substantially less because she is a woman. The administrative law judge ruled that she had been discriminated against during a two-year period and also awarded her two-thirds of her attorney fees, reducing the award because she failed to recover her entire requested back pay. The Wisconsin Labor and Industry Review Commission (LIRC) affirmed the ALJ’s decision. The circuit court affirmed and the court of appeals affirmed in part and reversed in part. First, the court held that Mack’s claim was timely. Applying due-weight deference, the court relied on case law that “is binding precedent and is directly on point” and held that “compensation discrimination is actionable if an employee received payment within the 300-day period before filing his or her complaint pursuant to a discriminatory compensation decision. ... If the employee received even one paycheck pursuant to the discriminatory compensation decision within 300 days before filing his or her complaint, the complaint is timely.” The appellate court held it was inconsequential whether the discrimination decision itself occurred within the 300-day period and it did not matter when the employee became aware of the discrimination. Second, the evidence supported LIRC’s finding of discrimination. Third, the court held Mack was entitled to attorney fees even though she received less than 10 percent of the award requested. Because Mack’s claim helps deter similar discrimination, the court rejected Harley’s contention that Mack’s attorney fees should be limited to the same percentage.

On cross-appeal, the court agreed with Mack that the circuit court erred by awarding her only two-thirds of her attorney fees for the work done by her lawyers in the circuit court. The court held the prior reduction in Mack’s attorney fees was not a valid basis to reduce the attorney fees Mack incurred in the circuit court proceedings because the work done was reasonable.