New Legislation and Regulations

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In passing the Employee Retirement Security Act of 1974 (“ERISA”), Congress sought to make it as easy and economical as possible for employers to provide benefits to their workers; for example, pensions, health insurance, life insurance and long-term disability (LTD) insurance.  However, because many of the statutes that govern benefit plans are so complicated, and since the regulations issued by the U.S. Department of Labor frequently are so convoluted, one must wonder if that goal will ever be realized.  A new decision by the Ninth Circuit may bring a bit more clarity to ERISA waters, but it also likely will make it more complex and costly for employers to offer LTD benefits to employees.Brenden-Begley-05_web

In Prichard v. Metropolitan Life Ins. Co., Ninth Circuit Case No. 12-17355, an employer outlined the LTD benefits it offered to employees in a document called a Summary Plan Description (“SPD”).  So far so good, as this is a widespread practice.  In so doing, the employer did not create a separate document known as a plan instrument.  Instead, the employer treated the SPD as the plan instrument – which also is a generally permissible and somewhat common practice.  As one would expect, the employer also obtained an insurance certificate from the carrier who would administer claims and provide benefit payments to eligible disabled employees. 
Continue Reading More ERISA Complications

The National Labor Relations Board (NLRB) has adopted a final rule amending its representation–case procedures.  The new procedures will speed up elections, shift the litigation of most disputes until after the election, and severely limit the opportunity for an employer to effectively run a campaign. These amendments are affectionately referred to as the NLRB’s “ambush election” rules.  While this phrase is certainly from the employer’s side of view, it is factually descriptive.  In addition, despite both houses of Congress voting overwhelmingly to block these amendments from taking effect, thanks to a presidential veto the NLRB ambush election rules took effect Tuesday, April 14, 2015.
Continue Reading “Ambush Election”: NLRB’s New Rules Take Effect April 14, 2015

The use of “No Rehire” Provisions in settlement agreements between employers and their former employees allow employers to protect themselves against “boomerang” lawsuits.  For instance, a former employee who claims he/she was terminated because of discrimination would be prevented from later submitting a new job application and then suing the employer again claiming he/she was not hired because of discrimination.  This common provision is basically an agreement by the employee that in exchange for consideration, usually the payment of a sum of money, he/she will dismiss their claims against the employer and will contractually agree not to seek to be rehired.  A recent decision from a panel of judges in the Ninth Circuit, however, has called the “No Rehire” provisions into question as possibly violating section 16600 of the Business and Professions Code.James-Kachmar-08_web

In Golden v. California Emergency Physicians Medical Group, the plaintiff doctor sued after he lost emergency room privileges at one of CEPMG’s facilities.  Prior to trial, the plaintiff doctor agreed to settle his claim for the payment of a large sum of money and initially agreed (at least orally through counsel) not to seek employment with CEPMG again.  The “No Rehire” provision that was subsequently incorporated into a written settlement agreement provided that the plaintiff doctor would not seek re-employment with CEPMG and also provided CEPMG the right to terminate the plaintiff’s employment should he be working at any facility that it subsequently acquired.  (CEPMG is a large consortium that manages or staffs many emergency rooms, in-patient clinics and other facilities in California and other Western states and intends to continue expanding.)

After the plaintiff doctor refused to sign the written settlement agreement containing the “No Rehire” provision, his former counsel filed a motion to enforce the settlement agreement (apparently to obtain his contingency fee from the settlement proceeds).  The District Court concluded that the “No Rehire” provision was not a “non-compete” provision and therefore did not run afoul of section 16600.  The Court ordered plaintiff to execute the written settlement agreement containing the “No Rehire” provision.
Continue Reading Are “No Rehire” Provisions in Settlement Agreements at Risk?

In our previous post, Same-Sex Marriage Partners Now Covered by FMLA, we reported on the final FMLA rule that expanded the definition of “spouse” under the FMLA to include employees in legal same-sex marriages. Although this rule took effect on March 27, 2015, a federal district court ruling in Texas left the status of…

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Unfortunately, both single-plaintiff and class-action wage and hour lawsuits continue to plague California employers. Often employers are sued because of technical violations that occur simply because the employer is unaware of its legal obligations. Come join the Labor and Employment Group at Weintraub Tobin as they discuss the nuts and bolts of…