BizLawBuz …. The Power of Know

Two recent decisions from the 6th Circuit Court of Appeals in Cincinnati show how careful employers must be to avoid discrimination claims and violations of the Family and Medical Leave Act (FMLA). In the first case, Sanford v. Main Street Baptist Church Manor, Inc., the Court found that the employer had not taken sufficient steps to protect against sexual harassment in the workplace. In the second, Hunter v. Valley View Local Schools, the federal appeals court ruled that an employee may bring a claim under the FMLA so long as she can show that her use of FMLA leave was at least a “factor” in the employer’s decision to take adverse action against her.

In Sanford, the Plaintiff-employee sued the employer for an alleged sexually hostile work environment. As a defense, the employer argued that it had exercised reasonable care to prevent and correct any sexual harassment that the employee might have suffered. Normally, if supervisors and superiors take appropriate action, the employer will not be held liable based on inappropriate remarks or comments “on the floor” that might be offensive to other co-workers. But the decision in Sanford makes clear that employers cannot escape liability if they have not taken actual steps to weed out and discourage intimidating or harassing behavior. Specifically, the judges from the 6th Circuit were concerned that the employer’s handbook did not force supervisors to report harassing conduct. Nor did it offer a process for informal or verbal complaints. Nor did it give the employee the option to bring a complaint to someone else in management where the supervisor was the alleged harasser. Finally, the Court took note of the fact that the employer had not conducted any sexual harassment training in the workplace. For all of these reasons, the Court determined that the employer had not shown “reasonable care” to prevent sexual harassment in the workplace.

In Hunter, the Plaintiff-employee had returned to work with certain medical restrictions after being out on FMLA leave. The employer forced her to take an unpaid medical leave for up to one year. She sued, arguing that the forced leave was unlawful retaliation for her exercising her right to leave under the FMLA. The employer argued that, even if her FMLA leave had been one reason for forcing her to take unpaid medical leave, it was not the only reason. Because the medical restrictions limited her ability to perform, the employer claimed it had a legitimate reason to require the medical leave.

In a significant ruling, the 6th Circuit determined that a plaintiff may bring a claim for retaliation under the FMLA if his use of FMLA leave was one of the factors that caused the employer to take an adverse employment action – even if the other factors were lawful. Thus, in “mixed motive” cases under the FMLA, employers will not be able to defeat claims simply by showing they had a legitimate basis for their decision where improper bases also entered the decision-making process.

In difficult economic times, employees are more likely than ever to pursue any plausible basis for economic recovery. Employers should review their employee handbook and their employment practices very carefully to minimize the risk of unwanted and unintended employment claims.

Dirk A. Beamer

If your company has a federal contract, you should take notice of the federal government’s requirement that all federal contractors use E-Verify to check the employment eligibility of newly hired workers. A coalition lead by the U.S. Chamber of Commerce and the Society for Human Resource Management (SHRM) has filed an emergency request seeking to delay the rule’s implementation. Unless they obtain a last minute reprieve, the requirement will take effect today. For more information on how E-Verify will work and what it will mean for your business, go to The United States Citizenship and Immigration Services’ (USCIS) website, or join the webcast hosted by SHRM this Thursday at 2:00 p.m. eastern time by visiting http://www.shrm.org/multimedia/webcasts/Pages/legislativewebcast.aspx.

In response to concerns that people are declining to take medically valuable tests for fear they will face discrimination or invasions of their personal privacy, the federal government has passed the Genetic Information Nondiscrimination Act (”GINA”). GINA’s purpose is to prohibit discrimination on the basis of genetic information with respect to health insurance and employment. Title II of GINA, which takes effect November 21, 2009, relates specifically to employer practices, and prohibits employers from using genetic information for hiring, firing, promoting, or otherwise discriminating against an employee based on the employee’s genetic information.

GINA does not apply to employers with 15 employees or less, but state laws may impose additional conditions beyond GINA. As with many other federal laws, GINA establishes baseline regulations for employers nationwide, but individual states are permitted to impose stricter regulations above and beyond that provided by federal law.

Genetic information includes the individual’s genetic tests, genetic tests of family members, genetic tests of a fetus or embryo of the individual or family members, manifestation of a disease or disorder in family members, and the request for, or receipt of, genetic services or participation in clinical research. While there are exceptions to the information an employer can request or require, employers should now take greater caution when dealing with employee’s genetic information, and should consult an employment attorney to ensure compliance with both GINA and applicable states laws.

Julie Pfitzenmaier

Michigan Trust Code Becomes Law

On June 18, 2009, the new, Michigan Trust Code (MTC) was signed into law by Governor Granholm. In adopting the MTC, Michigan becomes the 23rd state to revise its laws pertaining to trusts in order to reflect the Uniform Trust Code as promulgated by the National Conference of Commissioners on Uniform State Laws. The MTC recognizes that revocable trusts in particular have become increasingly popular as a means to settle one’s affairs at death, as opposed to nothing more than a simple Will.

Although the MTC totally replaces existing Michigan black-letter law pertaining to trusts, only a few provisions of the MTC are significantly different from current law.

The first change deals with the mental capacity of a person to make a trust and a Will. Whereas Michigan law has recognized different standards in the past, the MTC clearly provides that the same standard of capacity will apply to both Wills and trusts. And, that standard has been modified to bring it in line with the standard of capacity to execute other estate plan documents such as powers of attorney.

The second change recognizes the authority of “trust protectors.” A trust protector is a person or persons designated in the trust with the authority to direct certain actions under certain circumstances. The authority of a trust protector can thereby supersede the authority of the trustee. Although Michigan attorneys have used the concept of trust protectors in the past, their authority has never been recognized under Michigan law. The MTC provides for, and recognizes, the authority of trust protectors.

As with EPIC, many of the provisions of the MTC are default rules, that is, fallback rules that will apply in the event that the creator of the trust does not provide otherwise. As with prior law, however, there are a number of rules that cannot be modified by the creator of the trust.

If you have not created an estate plan, or have not reviewed or updated your plan in recent years, now is an excellent time to make sure that your wishes for the disposition of your assets at death are properly secured.

Duane L. Reynolds