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Amendments to Family Medical Leave Act (”MFLA)

On October 28, 2009, President Obama signed into law the National Defense Authorization Act for Fiscal Year 2010 (”NDAA”). Although the NDAA is a defense appropriations law, it includes amendments to the family military leave provisions of the Family and Medical Leave Act (”FMLA”). These recent changes to FMLA deal primarily with qualifying exigency leave and military caregiver leave.

Qualifying Exigency Leave
The NDAA expands the exigency leave available under the FMLA to eligible family members of active-duty service members, and also amends the FMLA to provide eligible employees with up to 12 workweeks of leave during the designated 12-month FMLA leave year when the employee’s son, daughter or parent (who is a “covered military member”) is on active duty or call-to-active-duty status for one or more qualifying exigencies. Prior to these amendments, FMLA qualified exigency leave applied to Reserve and National Guard members only, and not members of the regular Armed Forces. Qualifying exigency leave includes: short-notice deployment; military events and related activities; child care and school activities; financial and legal arrangements; counseling, rest and recuperation; post-deployment activities; and any other event the employer and employee agree is a qualifying exigency.

Military Caregiver Leave
Additionally, the NDAA extends eligibility for military caregiver leave to the families of veterans, not just current members of the Armed Forces. Caregiver leave provides eligible employees, who are the spouse, son, daughter, parent or next of kin of covered military members of the Armed Forces, including members of the National Guard or Reserves, 26 workweeks of leave during a 12-month period to care for that military member, who because of a serious injury or illness, is undergoing medical treatment, recuperation, or therapy, is in outpatient status, or is otherwise on the temporary disability retired list. The law extends the 26 weeks of leave to family members of veterans who are undergoing medical treatment, recuperation, or therapy for a serious injury or illness at any time during the period of five years preceding the date on which the veteran undergoes that treatment. Therefore, the caregiver would be able to take up to 26 weeks of leave to care for a veteran for up to five years after the military member leaves military service.

These changes, presumed to be effective immediately, will once again require employers to update their FMLA policies and inform proper personnel accordingly.

Julie Pfitzenmaier

You write a check, but, by the time it’s presented to your bank for payment, there’s not enough money in your account to cover it. You go to the ATM and make a withdrawal, or, use a debit card to make a purchase, but, unknown to you, there is not enough money in your account to cover the transaction. What happens? One would think that the check would be returned for nonsufficient funds and the ATM and debit card transactions would simply be denied. Not necessarily so. To the contrary, most banks will automatically advance the funds to cover the check, the ATM withdrawal and the debit card purchase. Then, the next time you make a deposit, they will pay themselves back, along with an overdraft fee.

With check writing going the way of the rotary dial telephone (industry sources estimate that 75% of financial transactions today are electronic), banks and credit unions are increasingly turning to overdraft fees on electronic transactions to bolster their bottom lines in these tough economic times. In fact, it is anticipated that the financial services industry will make $38 billion in income in 2009 from overdraft fees alone, which typically run about $35 per transaction.

While the idea that your bank will cover your overdraft transaction may sound like a good thing, the problem is that the $3 latte at your favorite coffee house that you paid for with your debit card may end up costing you as much as $40 once the overdraft fee is added. And, in many cases, due to the timing of transactions, you may have no idea that your account is overdrawn in the first place, which leads to even more fees. What began as a good idea for bank customers has led to consumer outrage, increasing government scrutiny and class action lawsuits across the country against the nation’s largest banks. While the US Congress considers legislation to reign in what it believes to be abusive and unfair practices involving overdraft fees, the Federal Reserve Board, on November 12, 2009, announced sweeping new rules regulating overdraft fees on ATM and one-time debit card transactions. Those rules, intended to enable consumers to limit their exposure to overdraft fees, include the following provisions:

1. Consumers must affirmatively consent to being enrolled in the institution’s overdraft protection service for ATM and one-time debit transactions (”opt-in”) before overdraft fees can be assessed. This is a marked change from the current policy of many institutions whereby the mere issuance of an ATM or debit card includes automatic enrollment in the institution’s overdraft protection program. The rule also affords the ongoing right to revoke such consent at any time;

2. The opt-in requirement applies to all consumers, including existing account holders;

3. The rules do not apply to overdraft protection for written checks and automatic on-line bill pay; banks may continue to enroll customers in those programs automatically. However, the new rules prohibit banks from tying overdraft protection for checks and automatic bill pay to a requirement that consumers also opt-in to overdraft protection for ATM and debit card transactions;

4. The rules require institutions to provide consumers who do not opt-in with the same account terms, conditions, features and prices, as those provided to consumers who do opt-in; and

5. Compliance by July 1, 2010 is mandatory.

Irrespective of this action by the Federal Reserve, Congress continues to draft and debate its own legislative response to this situation. Much can, and undoubtedly will, happen between now and July 1, 2010 as financial institutions react to these new mandates. (For more information, please visit the website for the Federal Reserve at: www.federalreserve.gov, or, simply keyword search “overdraft fees” using your internet browser.)

Duane L. Reynolds

From an article quoting Wright Penning & Beamer partner Dirk A. Beamer which appeared in The News Herald:

Saturday, October 31, 2009

By Jason Alley

DETROIT — The city of Ecorse has filed a lawsuit against a former mayor who is seeking re-election Tuesday, alleging that he owes the city more than $90,000 for a legal battle he lost in 2007.

A neighbor of former Mayor Larry Salisbury sued him years ago in both his official capacity as mayor and as an individual, claiming that Salisbury harassed him and denied him the city approval needed to sell his house.

A federal jury heard the case and sided with the neighbor, Joseph Door. The jury ordered the city to pay Door $11,000 and for Salisbury to individually pay him $66,000.

Nearly four months later, the federal court also ordered the city and Salisbury to jointly pay Door’s attorney fees and costs totaling nearly $30,000.

While mayor, Salisbury had the city put up a bond with taxpayer money to satisfy the judgment against him while he appealed the verdict, according to the latest lawsuit.

The 6th U.S. Circuit Court of Appeals in Cincinnati upheld the jury’s decision Dec. 29, 2008, and ordered the city and Salisbury to pay Door the money he was owed.

Since that time, the latest lawsuit alleges, Salisbury has never reimbursed the city for the amount that was fronted to cover his part of the judgment.

“Salisbury owed a duty of loyalty and a duty of good faith to (the) city,” the lawsuit says. “It was Salisbury’s duty to promote and protect the financial interests of the city, and it was his duty not to exploit the financial interests of the city for his personal gain or benefit.”

Attorney Dirk Beamer, who filed the suit on behalf of the city, said he isn’t sure Salisbury was authorized to use “cash out of the city’s coffers” to pay for a judgment against him individually.

“We question the propriety of him in the first place allowing the bond to be placed on his behalf with city funds,” Beamer said. “The city has effectively been forced to cover what is his own personal liability. … The city, obviously, is in need of funds and should be reimbursed by Mr. Salisbury.”

While the case was filed days before the election, Beamer said the timing is coincidental at best.

“People can infer what they choose to … but it’s a straightforward fact that there is money advanced or paid and arguably should not have been,” he said.

Salisbury declined to comment on the allegations of the suit, but through a spokesman said he intends to file a grievance with the State Bar of Michigan against the city’s attorney for abuse of process by bringing the case against him.

The lawsuit was filed in Wayne County Circuit Court and has been assigned to Judge Jeanne Stempien.

Contact Staff Writer Jason Alley at jalley@heritage.com or at 1-734-246-0867.

Read the entire article and comments posted on The News Herald website.

Statistics from the Equal Employment Opportunity Commission (”EEOC”) confirm what many of us lawyers defending businesses already knew: the number of discrimination charges filed against employers continues to grow each year. In the current economic climate, employers are more vulnerable than ever as terminated employees look for any recourse that might soften the economic blow of losing a job.

Before pursuing a lawsuit under state or federal anti-discrimination laws, employees must first pursue administrative relief with the State Department of Civil Rights or the EEOC. Once a claim or “charge” is filed, the employer will be notified and given the opportunity to file a written response. An investigation then ensues, which results in a written determination on whether discrimination occurred.

Many employers fail to appreciate the potential implications of a poorly handled EEOC investigation. They tend to process the initial request for information and response in the same way they might handle an application for unemployment or worker’s compensation benefits. Consequently, the response is often relegated to, and drafted by, a bookkeeper or office manager who lacks training in this area. Not infrequently, the same manager who mishandled the termination process in the first place is assigned the job of addressing the EEOC charge.

This lack of attention can needlessly extend what should be a straightforward investigation. Worse, it may generate a paper trail of careless, potentially harmful statements that will be attributed to the employer if the employee ultimately files a lawsuit. Worse still, a poorly handled investigation may convince the EEOC that discrimination did occur and that the EEOC should step in itself to bring a lawsuit against the employer on the employee’s behalf. What started as an irritating bit of “paperwork” has become a two-headed monster well beyond the employer’s ability to control.

Now more than ever, it is imperative that employers be cautious, informed and proactive when dealing with employee discipline and termination. Seek counsel before you act. And if you do receive notice that a charge of discrimination has been filed, give it undivided and immediate attention. If you fail to do so, it most certainly will demand that much more time and attention in the days and weeks to come.

Dirk A. Beamer