Following the Yellow Brick Road of Employee Leave Rights and Accommodations.  SEAC invites you to spend the morning with attorneys and leave and accommodation experts Lizbeth (“Beth”) West and Charles (“Chuck”) Post from Weintraub Tobin as they discuss the ins and outs of this difficult area of employment law.

Date:         Wednesday, August 20, 2014

Time:         7:30 a.m. -12:30 p.m.

Location:       Sacramento State Alumni Center, 6000 J Street, Sacramento, CA

For information and details of this workshop, please click here.

In Lupyan v. Corinthian Colleges, Inc., a FMLA interference lawsuit, the Third Circuit Court of Appeals reversed a summary judgment in favor of the employer when the employee claimed she never received an FMLA designation letter that her employer claims it mailed to her. The Court essentially held that if an employer wishes to prevail on summary judgment, it will need to send the FMLA designation letter via a method that establishes receipt by the employee.

Lisa Lupyan was hired as an instructor at Corinthian Colleges Inc. (“CCI”) in 2004. In December 2007, Lupyan’s supervisor, James Thomas, noticed that she seemed depressed and suggested she take a personal leave of absence. On her Request for Leave Form, Lupyan specified that she was taking “personal leave” from December 4, 2007 through December 31, 2007. However, Thomas suggested that she apply for short-term disability coverage instead.  Accordingly, Lupyan scheduled an appointment with her doctor and received a DOL “Certification of Health Provider.” Based on the Certification, CCI’s human resources department determined that Lupyan was eligible for leave under the FMLA, rather than personal leave so on December 19th, CCI’s Supervisor of Administration, Hixson, met with Lupyan and instructed her to initial the box marked “Family Medical Leave” on her Request for Leave Form. Hixson also changed Lupyan’s projected date of return to April 1, 2008, based upon the Certification.

Later in the afternoon of December 19th, CCI allegedly mailed Lupyan a letter advising her that her leave was designated as FMLA leave and explaining her rights under the FMLA (the “Letter”). Lupyan denies ever having received the Letter, and denies having any knowledge that she was on FMLA leave until she attempted to return to work. When Lupyan did not return to work after the exhaustion of her FMLA leave, her employment was terminated.  CCI explained that due to low student enrollment and her failure to timely return from FMLA leave, there was no position available to her. Lupyan claims that the first time she had any knowledge that she was on FMLA leave was at the time of her termination.

Lupyan sued CCI alleging that it interfered with her rights under the FMLA by failing to give notice that her leave fell under that Act, and that she was fired in retaliation for taking FMLA leave. The District Court granted CCI’s initial motion for summary judgment as to both claims. Thereafter, the District Court sua sponte reversed its ruling on Lupyan’s FMLA interference claim. The court recognized that summary judgment was not appropriate because there was a factual dispute regarding whether CCI had informed Lupyan of her FMLA rights. CCI responded with an amended summary judgment motion which included affidavits from CCI employees who testified that the Letter was properly mailed to Lupyan. Based on the affidavits, the District Court relied on the evidentiary presumption that arises under the “mailbox rule” and found that Lupyan had received the Letter. The Court entered summary judgment in favor of CCI, and Lupyan appealed.

The Court of Appeal explained that the FMLA requires employers to provide employees with both general and individual notice about the FMLA. To meet the general notice requirements, an employer must post a notice of FMLA rights on its premises. (29 CFR § 2619(a)). Because employers have some discretion in the way FMLA policies are implemented, employers must also include information regarding the employer’s FMLA policies in a handbook or similar publication. (29 CFR § 825.300).  Lupyan claimed that CCI interfered with her FMLA rights by not informing her that her leave was under the FMLA. According to her, she therefore was unaware of the requirement that she had to return to work within twelve weeks or be subject to termination.*  Given Lupyan’s claim that she did not receive the Letter that CCI claims was properly mailed to her, the Court had to decide whether the District Court properly afforded CCI the benefit of the presumption of receipt of properly mailed letters that arises under the “mailbox rule.”

Under the “mailbox rule,” if a letter “properly directed is proved to have been either put into the post-office or delivered to the postman, it is presumed . . . that it reached its destination at the regular time, and was received by the person to whom it was addressed.”  However, the presumption is a rebuttable presumption that can be rebutted by opposing evidence that the letter was never received.  The Court explained that in the absence of actual proof of delivery, receipt can be proven circumstantially by introducing evidence of business practices or office customs pertaining to mail. This evidence may be in the form of a sworn statement.  In this case, CCI submitted the affidavits of its Mailroom Supervisor and its HR Coordinator, both of whom had personal knowledge of CCI’s customary mailing practices when the Letter was allegedly mailed to Lupyan.  Moreover, the HR Coordinator swore that she personally prepared the Letter and placed it in the outgoing mail bin.

However, CCI provided no corroborating evidence that Lupyan received the Letter. The Letter was not sent by registered or certified mail, nor did CCI request a return receipt or use any of the now common ways of assigning a tracking number to the Letter. Therefore, the Court held that there is no direct evidence of either receipt or non-receipt.  Consequently, for purposes of a summary judgment motion, Lupyan’s contention that she had no notice that her leave was subject to the limitations of the FMLA because she never received CCI’s Letter, sufficiently burst the mailbox rule’s presumption, and requires that a jury determine the credibility of her testimony, as well as that of CCI’s witnesses.

Takeaway for Employers:

Employers should send all FMLA notices to employees via a method that tracks delivery and receipt by the employee (e.g. Federal Express or other overnight mail, certified mail/return receipt requested, or hand-delivery with a signed acknowledgment of receipt).  Be careful of sending the notices via email as, similar to this case, the employee could claim that he/she did not receive the email and the burden is on the employer to prove the employee did in fact open and read his or her email.

*Caveat:  Employers should never automatically terminate employees who do not return from FMLA (or CFRA) leave at the expiration of the 12 week period.  Instead they should engage in the interactive process to determine if the employee is eligible for a reasonable accommodation (including possibly more leave) under the ADA and FEHA.

In an attempt to gain leverage in settlement negotiations, the NLRB Office of the General Counsel issued a directive that has rocked the franchise world.  Days ago, the NLRB Office of the General Counsel determined that McDonald’s USA, LLC, the franchisor, could potentially be held liable for the employment actions of its franchisees under a “joint employer” theory. The General Counsel’s decision has authorized numerous unfair labor practice complaints based on alleged violations of the National Labor Relations Act (NLRA) to proceed against both the franchisor and franchisee entities.  While this shift by the NLRB is in its early stages, it is startlingly significant and tees up years of legal battles over the issue.

This decision follows an earlier amicus brief filed approximately one month ago on behalf of the NLRB General Counsel in Browning-Ferris Industries of California, Inc. The amicus brief argued that the Board “should abandon its existing joint employer standard.” The existing standard only finds joint employer liability when an employer exercises direct or indirect control over significant terms and conditions of employment of another entity’s employees.  The amicus brief advocated for a new, more liberal standard “that takes account of the totality of the circumstances, including how the putative joint employers structured their commercial dealings with each other.”

The NLRB’s proclamation sent shockwaves through the franchise world.  If the NLRB General Counsel follows through on its threats and Court’s later ignore precedent and adopt this radical viewpoint, the essence of the franchise business model would be significantly affected.  Typically, franchisors do not exert the level of control over the franchisees’ terms and conditions of employment to be deemed a joint employer.  This has stuck the appropriate balance between franchisor and franchisee liability.  Under the existing standard, those franchisors that do exhibit control open themselves up to being held joint employers.  Those that don’t, don’t.  The proposed “totality of the circumstances” standard blurs the line that franchisors rely on in setting up their business model and managing their liability.

The new standard becomes a catch-22 for franchisors.  Franchisors would have to consider whether they need to exercise more control over the terms and conditions of the franchisees’ employees’ employment. Franchisors may then feel compelled to weigh in on wages, payroll organization, hiring decisions, terminations, and disciplinary issues typically solely left to franchisees.  When they do so, they will fall into the NLRB’s General Counsel’s trap and perpetuate the argument that they are joint employers.

We will have to wait and see whether the NLRB begins actively pursuing “joint employer” cases against other Franchisors or parent companies that would otherwise not have been included in the earlier definition of “employer” under the NLRA.  However, this change in course by the NLRB may also send a signal that other departments within the administration, i.e. the Department of Labor, Equal Employment Opportunity Commission.

The NLRB is still in its investigation phase with McDonald’s franchisees. McDonald’s has responded to the NRLB stating, “We believe there is no legal or factual basis for such a finding, and we will vigorously argue our case at the administrative trials and subsequent appeal processes which are likely to follow from the issuance of the complaints.”  If the complaints are issued against McDonald’s as a franchisor, the next step will be for McDonald’s to address any complaints filed against it before an administrative law judge.   Depending on the outcome, the issue could then go to the full Board or the Courts.  Depending on what type of administration we get in the coming years or changes at the NLRB, we may see this issue flip flop between standards for a while.  Certainly this issue is one that could eventually be decided by the U.S. Supreme Court.  McDonald’s deserves our support during this fight.  So super-size your order because this fight is going to cost a lot more than their dollar menu can support.

Summary of Program

The risks involved in misclassifying a worker as an independent contractor rather than an employee have always been serious. A number of federal and state agencies regulate the proper classification of workers and have the authority to impose significant monetary and non-monetary sanctions against employers who get the classification wrong.

Program Highlights

This informative webinar will cover the legal landscape of independent contractor status. Topics will include:

  • A summary of the various tests applied by federal and state agencies to determine independent contractor status;
  • A summary of the enforcement authority of various federal and state agencies and the sanctions they may impose on employers;
  • The due diligence employers must engage in before classifying a worker as an independent contractor;
  • The federal Department of Labor’s $25 million “Misclassification Initiative” designed to work closely with state agencies to investigate misclassifications and take enforcement action; and
  • California’s law imposing monetary and non-monetary sanctions against employers (and certain individuals) who willfully misclassify workers as independent contractors.

If you or your company is currently using independent contractors, this is a webinar you cannot afford to miss. Register today!

Date:    August 21,  2014

Time:  9:30 a.m. – 11:00 a.m.

To register for this webinar, please email Ramona Carrillo at rcarrillo@weintraub.com.  For additional information, visit our website at www.weintraub.com and click on the News and Events tab.

On June 12, 2014, U.S. Secretary of Labor Thomas E. Perez announced a proposed rule raising the minimum wage to $10.10 per hour starting on January 1, 2015, for workers on federal service and construction contracts. The proposed rule implements Executive Order 13658, “Establishing a Minimum Wage for Contractors,” which President Barack Obama signed on February 12.