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HR Matters
HR Matters - May 2007 - Volume XI, Issue 121
May 30, 2007
LABOR & EMPLOYMENT NEWSEmployee May Pursue Discrimination Claims Because of Company’s “Shifting Explanations.” A federal court in Alabama has allowed a 59-year-old white delivery driver to go forward with his claims of age and race discrimination. The court rejected the company’s motion for summary judgment because it offered shifting explanations for why it did not hire the white driver. Thus, the court concluded that there was a triable issue of pretext. The white driver was not hired when a new owner took over his company, and he alleged that the new owner preferred African American or younger applicants. Initially, the new owner told the EEOC that no jobs were available when the white driver applied. Later, the new owner stated that the white driver was not hired because of his poor performance record. These shifting explanations for not hiring the white driver produced enough evidence for a jury to reasonably disbelieve the new owner’s proffered reason for not hiring him. (McGaughy v. Ozark Delivery of Ala.)
No Smoking Signs Required. Ohio voters passed Issue 5 last Fall, creating Ohio’s indoor smoking ban. Enforcement of the ban began on May 3, 2007, although the new law required “public places” and “places of employment” to prohibit smoking as of December 7, 2006. Businesses and organizations must also post “No Smoking” signs that contain the telephone number 1-866-559-OHIO (6446) for reporting violations, as well as remove ashtrays and other smoking receptacles. For sample signs, visit the Ohio Department of Health website at http://www.odh.ohio.gov/alerts/ohiosmokingban.aspx.
IMMIGRATION NEWS
The Senate will begin a debate on a landmark immigration bill meant to address the future need for workers in the U.S. In its current proposed format, the immigration bill offers a path to legitimacy for unskilled and often illegal workers. Under the proposed bill, illegal residents who can prove they entered the U.S. before January 1 would get a temporary-resident permit.
The proposed bill also may eliminate the current employment-based immigration categories and replace them with a “merit-based” point system. The new point system would be geared toward highly educated, English-speaking professionals; but would have no provisions for multinational managers, extraordinary-ability aliens, outstanding professors or researchers, or those doing work in the national interest. If you are seeking to admit a worker under a business visa in the next several months, please contact our offices to discuss the impact the new bill may have on those visas.
WORKPLACE HEALTH & SAFETY NEWS
Eligibility for Temporary Total Continues Despite Discharge Unrelated to Disability. A truck driver injured his knee during a work-related accident in July 2003 and received temporary total benefits. While the driver was disabled, he was restricted to occupational driving privileges because of a DUI. After the driver returned to work, he injured his neck when his knee gave out while doing a light-duty job that did not comply with his restrictions. The driver’s doctor placed him on temporary total disability again. On March 31, 2004, the driver’s commercial driver’s license (CDL) expired. On April 28, 2004, the driver was convicted of DUI and served five days in jail. On May 10, 2004, the employer learned of the driver’s conviction and gave him two business days to provide a valid CDL. When the driver failed to produce a valid CDL, the employer fired him on May 13, 2004 and refused to pay any additional temporary total benefits. The driver filed a motion with the Industrial Commission to get his temporary total benefits reinstated, which was approved at all levels. However, a Court of Appeals ordered the Commission to examine whether the driver’s second DUI offense necessitated a lifetime ban on driving commercially. All parties appealed the Court of Appeals decision. The Ohio Supreme Court reversed the Court of Appeals and reinstated the Commission’s ruling. The Ohio Supreme Court reasoned that once an employee is disabled, he no longer has the physical capacity for employment and cannot abandon or remove himself from his former position. (State ex rel. OmniSource Corp. v. Indus. Comm’n)
EMPLOYEE BENEFITS & EXECUTIVE COMPENSATION
Plans Subject to the New Section 409A Regulations. The IRS recently issued final Section 409A regulations. Section 409A imposes restrictions on non-qualified deferred compensation plans or arrangements. A non-qualified deferred compensation plan or arrangement as defined by the final regulations is any plan, employment contract, or other arrangement in which an employee, independent contractor or other service provider has a legally binding right during a taxable year to receive compensation that is or may be payable in a future taxable year. Therefore, Section 409A applies to a broad range of plans or arrangements, including some that generally have not been treated as non-qualified deferred compensation plans in the past, such as change in control agreements, discounted stock options and stock appreciation rights, severance agreements, and even certain expense reimbursement arrangements. Any non-qualified deferred compensation plans that do not comply with the Section 409A requirements must be amended by December 31, 2007. Please contact a benefits attorney to determine if you have any plans that may be subject to Section 409A.
EB Question of the Month: Can a QDRO be submitted for a divorced participant after the participant’s death? Yes, according to the interim final regulations issued by the Department of Labor (DOL), a domestic relations order (DRO) that otherwise meets the requirements of a qualified domestic relations order (QDRO) will not fail to be treated as a QDRO solely because of the time at which it is issued. The regulations provided three examples of when a QDRO will not fail to be a QDRO solely because of the timing the DRO was submitted, including: after the participant’s death, after a divorce, and after payments have begun. However, a QDRO still cannot provide for a form or type of benefit, or any option not available under the plan, nor can it assign benefits to an alternate payee that were previously assigned to another alternate payee. The regulations became effective April 6, 2007.
This Newsletter is a periodic publication of Graydon Head & Ritchey LLP and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your own advisor concerning your situation and any specific legal question you may have.