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Labor & Employment Bulletin - February 2015



ADA Compliance Lawsuits Against Small Businesses On The Rise

Title III of the Americans with Disabilities Act provides that no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of public accommodations - including restaurants, bars, movie theaters, hotels, motels, inns, and retail shops. The ADA permits private citizens to file lawsuits to enforce compliance. Unfortunately for business owners, there is no requirement that a plaintiff request a business owner to remove barriers or make an accommodation prior to filing suit. Often, the first time a business is aware of the issue is when they are served with a lawsuit.

Recently, the Wall Street Journal reported a sharp increase in the number of disability lawsuits against small businesses. AL.com also reports a twenty-seven percent increase in ADA compliance lawsuits filed nationwide during the first ten months of 2014, compared to the same time period during 2013.

The number of disability lawsuits against small businesses is also on the rise in Alabama. From January to November 1, 2014, one-hundred twenty-four ADA compliance lawsuits were filed in Alabama. This is a 288% increase from the thirty-two ADA compliance lawsuits filed during the same period in 2013 - and more than the past ten years combined.

The increase in litigation follows the decision of the Eleventh Circuit Court of Appeals in Houston v. Marod Supermarkets, Inc., 733 F.3d 1323 (11th Cir. 2013), which found that a disabled citizen did not have to be a patron of the business in order to have standing to file a lawsuit, as long as he or she can demonstrate "a concrete and realistic plan" to return to the business in the future. This opened the door for "tester" plaintiffs to sue numerous businesses on the basis of accessibility. The increase also follows the release of a new set of compliance standards by the Justice Department.

Interestingly, Plaintiffs cannot win monetary damages in an ADA accessibility compliance suit. However, they are allowed to seek reimbursement for their attorneys' fees. This can leave the business owner responsible for his or her own attorneys' fees, plus those of the Plaintiff's attorney. These attorneys' fees, court costs, and the cost of modifications to the premises can add up and have a significant impact on the business owner.

Business owners may consider having their property inspected by an ADA compliance expert and/or attorney to determine whether they are in compliance. This may ultimately save attorney fees and costs down the road if faced with a lawsuit. Business owners that do receive a letter from plaintiff's counsel alleging ADA violations should consider seeking legal counsel before responding.

-- Alex Wood


Paid Sick Leave: A Right or A Privilege?

As Labor and Employment attorneys, we are often asked to assist employers in drafting sick leave policies. In doing so, we regularly inform Alabama employers that sick leave is a privilege and not a right, and as a result, it is up to the employer as to how much leave to allow employees. However, given the current trend among states and President Obama's initiatives for 2015, this advice may soon be outdated and incorrect.

During the State of the Union address, President Obama described his plans to improve all United States workers' access to paid sick leave and announced various initiatives to reach this goal. First, he plans to sign a Presidential Memorandum that will ensure federal employees have access to at least 6 weeks of paid sick leave for the birth of a child. Next, President Obama plans to ask Congress to pass the Healthy Families Act, which would allow all workers to earn up to 7 days of paid sick leave each year. Workers could use the accrued paid sick leave for themselves or to care for a family member. Finally, his initiative also includes a plan (and a $2.2 billion budget) to help states and towns start their own sick leave programs.

Currently, no federal law mandates paid sick leave for U.S. workers, and the United States is one of the only - if not the only - industrialized nations that does not guarantee paid sick leave. According to the U.S. Bureau of Labor Statistics, 74% of full-time workers in the United States receive paid sick leave, while only 24% of part-time workers enjoy the same benefit. However, some states (California, Connecticut, Massachusetts, and the District of Columbia) and municipalities (Trenton, New York City, San Francisco, and Oakland, to name a few) have passed paid sick leave laws that guarantee all workers some amount of paid sick leave. These states and municipalities have sparked a trend across the country, and the legislatures in many other states (including Alaska, Arizona, Hawaii, Illinois, Iowa, South Carolina, and Vermont) have also introduced various paid sick leave bills, although the measures have not made it out of committees at this time.

The guarantees under these paid sick leave laws vary by state. For example, beginning July 1, 2015, all California employers must provide employees with at least 3 days (24 hours) of paid sick leave per year. This includes temporary, part-time, and seasonal employees. Employers are allowed to cap the use of paid sick time at 3 days (24 hours); however, unused, accrued sick days must carry over to the next year, up to a permissible accrual cap of 48 hours (6 days). In contrast, Connecticut employers with 50 or more employees must provide "service workers" up to 40 hours per year of paid sick time. The accrual rate is one hour of paid sick leave for each 40 hours worked.

Also beginning July 1, 2015, Massachusetts employers with 11 or more employees must provide a minimum of one hour of paid sick leave for every 30 hours worked, up to a maximum of 40 hours per calendar year. Finally, the District of Columbia uses a tiered approach to the accrual of paid sick leave based on the number of employees. For example, employers with 100 or more employees must provide each employee at least 1 hour of paid leave for every 37 hours worked, capped at 7 days of leave per year. Employers with 25 to 99 employees must provide at least 1 hour of paid leave for every 43 hours worked, capped at 5 days of leave per year. Employers with 24 or less employees must provide at least 1 hour of paid leave for every 87 hours worked, capped at 3 days of leave per year.

Based on this growing national trend and President Obama's dedication to improving workers' access to paid sick leave, it is important for employers to monitor this issue, and we will continue to keep you updated on the state of the law. Until then, Alabama employers may continue to treat paid sick leave as a privilege and not a right.

-- Alfred H. Perkins, Jr. & Breanna H. Young


Unanimous Supreme Court Holds Employees Not Entitled to Pay For Waiting For and Undergoing Post-Shift Security Screenings

In Integrity Staffing Solutions, Inc. v. Busk, two hourly employees filed a lawsuit on behalf of all other similarly situated employees that worked in Amazon.com's Nevada warehouses retrieving products from the shelves and packaging them for delivery. No. 13-433, 2014 WL 6885951 (2014). The employees alleged they were entitled to compensation under the Fair Labor Standards Act ("FLSA") for the approximately twenty-five minutes each day that they spent waiting to undergo and actually undergoing an anti-theft screening following the end of their shifts each day. They also alleged that since the screenings were done to prevent employee theft, the process only benefitted the employer and its customers. The employees further alleged that their wait time could have been reduced to a negligible amount by adding additional screeners or staggering the employees' shift terminations.

The district court dismissed the Plaintiffs' complaint, holding the screenings were not compensable under the FLSA because they occurred after the Plaintiffs' regular work shift and were not an integral and indispensible part of the principal activities they were employed to perform. Instead, the court held that the screenings were merely noncompensable "postliminary activities." The Ninth Circuit Court of Appeals reversed, concluding that, accepting as true the screenings were done to prevent employee theft, the Plaintiffs' time was compensable because the screenings were necessary to the employees' primary work as warehouse employees and done for their employer's benefit.

The Supreme Court reviewed the case on appeal and in a 9-0 decision, reversed the Ninth Circuit, relying on an exception to the FLSA found in the Portal-to-Portal Act. That Act amends the FLSA by providing that activities that would otherwise constitute "work" are not compensable if they fall into either of two categories: 1) "walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform," and 2) activities which are "preliminary or postiliminary to the principal activity or activities" and occur either before the principal activity begins or after it ends on a particular workday. See 29 U.S.C.A. § 254. At issue in the Integrity Staffing case was whether the security screenings fell into the second category of "preliminary or postliminary" activities.

The Supreme Court began its analysis by noting that "principal activity or activities" includes all activities which are an "integral and indispensible part of the principal activities." The Court further elaborated that an activity is "integral and indispensible to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities." The Court found that the security screenings at issue did not meet this test, but rather fell into the category of noncompensable postliminary activities. It explained that the screenings were clearly not "principal activities," as the employees were employed to retrieve and package products for delivery-not undergo security screenings. Moreover, the screenings were not an "intrinsic element" of the employee's principal activities and thus not "integral and indispensible" to their jobs as warehouse workers because the employer could have eliminated the screenings altogether without impairing the employees' ability to complete their duties. Additionally, the Court rejected the Plaintiffs' argument and held that a test that simply focused on whether the employer required an activity or whether the activity was done for the employer's benefit would include activities that the Portal-to-Portal Act was clearly designed to exclude and thus be overbroad. Moreover, the Court also rejected the Plaintiffs' argument that the employer could have reduced the time waiting to undergo screenings as insignificant to its inquiry.

In contrast, the Court distinguished two of its previous cases that found other "off the clock" time to be compensable under the FLSA. In the first, it found the time battery plant employees spent showering and changing clothes to be compensable because the chemicals in the plant were toxic to human beings and the employer conceded that such activities were "indispensable to the performance of their productive work and integrally related thereto." Second, the Court noted that it had previously held the time meatpacker employees spent sharpening their knives to be compensable because dull knives would slow down production, affect the quality of the meat, cause waste, and lead to accidents.

The major holding of this case is the Court's decision that "an activity is integral and indispensible to the principal activities that an employee is employed to perform-and thus compensable under the FLSA-if it is an intrinsic element of those activities and one which the employee cannot dispense if he is to perform his principal activities." Thus, off the clock activities that impact the productivity of the work that the employee is employed to perform are likely compensable under the Court's holding. However, "off the clock" activities are not compensable merely because the employee requires it or it is for the employee's benefit. Given the large number of FLSA suits seeking compensation for "off the clock" activities, employers should evaluate their current practices and consult with counsel to resolve any questions as to compensability of a particular activity.

-- Chris Vinson

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