NLRB Re-Issues "Quickie Election" Rule In Continuous Effort to Boost Union Organizing

This post was contributed by Bruce D. Bagley, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Harrisburg, Pennsylvania. 

The National Labor Relations Board (NLRB) is at it again. Unions are already winning close to 70% of NLRB-conducted elections. NLRB elections are already conducted quite promptly, with the median processing time being about 38 days from date of petition filing to date of election. Nevertheless the three Democrat Members of the NLRB have apparently concluded that organized labor needs additional governmental assistance in unionizing the unorganized workforce.

Over the vehement dissent of the two Republican Members, the Board Majority, on December 15, 2014, issued its Final Rule amending election procedures in what most observers are calling the "Quickie Election" Rule. Thankfully the Rule does not actually go into effect until April 14, 2015, as it is 733 pages in length and will therefore require substantial time just to wade through. But the implications of the Rule are starkly clear – effective April 14, elections will be held approximately 10 to 21 days after a union election petition has been filed – with profound consequences for non-union employers.

First, if this all sounds familiar, it should. The Board first issued an almost identical Rule in 2011, but it was invalidated by a federal court because the Board lacked a proper quorum when it had voted to adopt the Rule. See Chamber of Commerce of the U.S. v. NLRB, 879 F. Supp 2d 18 (D.D.C. 2012).

Undeterred by this setback, the Board proposed virtually the same Rule in February 2014, and has now adopted it, despite an overwhelmingly negative reception by employers and trade associations. The new Rule is every bit as pro-union as the original 2011 Rule, and in some ways is even more stringent in addressing what the Majority determined to be shortcomings and inequities existing under current procedures.

What are some of the major changes promulgated under the new Final Rule? They will be addressed below, but collectively, they will operate to dramatically shorten the period of time from the date the election petition is filed to the date the election is conducted. That time period is particularly critical for employers, because it is often the only time the employer will get to express its views on unionization. An organizing effort may have been ongoing for weeks or months without the employer's knowledge, with the employer only learning about it when it is served with the election petition. A dramatically shortened time period prior to the date of the election necessarily deprives employers of the time needed to fairly present both sides of the representation question to employees.

Among the changes in the Final Rule are the following:

  1. The employer, upon receipt of the petition will have just two business days in which to post a "Notice of Petition for Election" and distribute it electronically to employees. The Notice references various employer conduct which, if committed, would constitute unfair labor practices. Failure to comply with this posting requirement, inadvertent or otherwise, will constitute grounds to set aside the results of the election if the employer wins.
  2. The employer will have seven days from date of service of petition to file with NLRB and serve on the union a "Statement of Position" regarding any issues it plans on raising at the pre-election hearing, and failure to raise an issue in the Statement will preclude the employer from litigating the issue at the pre-election hearing.
  3. Pre-election hearings will be held precisely eight days after the petition is served, but unlike present procedures, there will be no litigation of individual employee eligibility to vote or inclusion in the bargaining unit, with such issues being deferred to the post-election challenge procedure. This provision is particularly onerous to employers, as it is likely to prevent the employer from litigating the supervisory status of individuals, thereby making it more difficult for the employer to know which individuals it can rely on as company representatives during the election campaign.
  4. Under current procedures, post-hearing briefs can be filed seven days after the hearing. Under the Final Rule, such briefs will no longer be entertained, resulting in less time for the Board's Regional Director to consider the issues and less time until the issuance of a Decision and Direction of Election.
  5. Employers will now be required to provide to the Board and to the union expanded personal information about employees, to include not only names and home addresses (per present procedures) but now also home telephone number, personal cell phone number and e-mail address if known by the employer, work location, shift, and job classification. All of this of course is to enhance the union's ability to contact employees for pre-election campaigning purposes.

The above are only some of the changes, with others including eliminating the right to seek pre-election review of a Regional Director's Decision by the Board, eliminating the current 25 day waiting period to conduct elections after the issuance of a Decision and Direction of Election, and expediting of any post-election objections. The bottom line, of course, is that effective April 14, 2015, it will be easier than ever before for unions to unionize the presently unorganized.

What should employers be doing now to prepare for implementation of the Final Rule? Some suggestions below:

  1. Unless you believe you are virtually invulnerable to a union organizing effort, you should not remain idle. If and when an election petition is filed, there may be too little time to do too much.
  2. Consider conducting union avoidance training for managers and supervisors now, before the Final Rule becomes effective.
  3. Honestly consider whether your organization is susceptible to a union organizing effort. If it is, perhaps you should be analyzing potential bargaining unit issues, reviewing company policies (such as solicitation and use of electronic resources), determine who is likely to be considered supervisory and who is not, compose a company response team which can promptly address union organizing efforts, etc.

These are but a few of the proactive steps that all non-union entities should be considering in light of the Board's adoption of its Quickie Election Rule. If you have questions, concerns, or would like further assistance, please contact the undersigned or your usual McNees attorney contact.

The Obama NLRB Strikes Another Blow on Behalf of Organized Labor: Employees May Use Company E-Mail Systems to Unionize and Engage in Other "Protected Concerted Activities"

This post was contributed by Bruce D. Bagley, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Harrisburg, Pennsylvania.

Most employers have policies or work rules limiting employee use of Company e-mail systems to "business purposes." Many employers have policies or work rules specifically prohibiting employees from using Company e-mail to solicit for outside organizations (such as soliciting fellow employees to join a union). In Purple Communications, Inc., 361 NLRB No. 126, issued on December 11, 2014, the National Labor Relations Board (NLRB) decided that employees must presumptively be permitted to use their employer's e-mail system, during non-working time, to communicate with each other about workplace issues, including but not limited to union organizing efforts.

In reaching this determination, the three Democrats on the Board, over the vigorous dissent of the two Republican members, reversed the 2007 NLRB Decision in Register Guard, which had held that employees have no statutory right to use their employer's e-mail system for engaging in union or other activities protected by Section 7 of the NLRA.

The Purple Communications majority premised its decision on what it deemed "the importance of e-mail as a means of workplace communication," noting that "e-mail remains the most pervasive form of communication in the world." According to the majority, "the workplace is 'uniquely appropriate' and 'the natural gathering place' for such communications, and the use of e-mail as a common form of workplace communication has expanded dramatically in recent years." The majority concluded that, if employees are already provided access to their employers' e-mail systems, then they must also be permitted to use these systems, during non-working time, for union organizing purposes and for any other protected communications about terms and conditions of employment.

It is significant to note that the Board's Decision applies to employees, not non-employees, and does not present outside union organizers with the right to use the employer's e-mail system. It does not require employers to now provide e-mail access to employees who do not already have such access. Nor does the decision reach any employer communication system other than e-mail. And while the decision announces a "presumption" that employees have the right to use the e-mail system for protected communications on non-work time, it also states that employers can at least try to assert "special circumstances" that would allow a ban on such use of e-mail if necessary to maintain production or discipline. (Editor's note: good luck trying to establish sufficient "special circumstances" that would satisfy the present Board!).

Notwithstanding Purple Communications, it is still permissible for employers to prohibit employee use of employer e-mail systems for non-work-related activities during working time, including communications regarding union or other Section 7 activities. But that would be the case only if the employer consistently enforces such rule against employee use of e-mail during working time for other non-work-related communications as well (which most employers do not). Put another way, if an employer does not monitor and prohibit content of non-work-related e-mail sent or received during working time, it similarly cannot lawfully prohibit the use of e-mail during working time for union-related or other Section 7 protected communications.

This NLRB case raises significant issues for virtually all employers, unionized and non-unionized. No doubt there will be appeals from the Board's Decision to the federal appellate courts, but for the immediate future at least, Purple Communications is the law of the land. If you have questions or concerns about how this Decision may impact your policies or work force, particularly your policies regarding e-mail and other electronic resources, "Bring Your Own Device," solicitation, social media, handbooks, etc., please feel free to contact the undersigned or your usual attorney contact at McNees Wallace & Nurick.

Supreme Court Confirms No Pay Required for Post-Shift Security Screenings

This post was contributed by Adam R. Long, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Harrisburg, Pennsylvania.

In a 9-0 decision issued yesterday, the U.S. Supreme Court held that time spent by non-exempt workers waiting to undergo and undergoing security screenings before leaving their workplace at the end of their work day was not compensable hours worked under the Fair Labor Standards Act ("FLSA"). In Integrity Staffing Solutions, Inc. v. Busk, the plaintiffs were hourly warehouse employees required to submit to a security screening before leaving the warehouse at the end of each day. The plaintiffs claimed that they spent approximately 25 minutes each day waiting for and undergoing the security screening, which required them to remove their wallets, keys, and belts before passing through a metal detector.

The Portal-to-Portal Act of 1947 amended the FLSA to exempt from compensable hours worked any time spent on "activities which are preliminary to or postliminary to" an employee's principal activity or activities. Prior Supreme Court decisions established that "principal activity or activities" included all activities that are an "integral and indispensable part of the principal activities."

Writing for a unanimous Court, Justice Thomas applied existing Court precedent to conclude that the post-shift security screenings at issue were noncompensable postliminary activities. Specifically, Justice Thomas explained that the screenings were neither the warehouse workers' principal activity nor "integral and indispensable" to their job duties of retrieving products from shelves or packing them for shipment.

In reversing the decision of the Ninth Circuit Court of Appeals, the Court rejected the Ninth Circuit's focus on the fact that the employer required the screenings. Instead, the proper analysis is whether the activity at issue is "tied to the productive work that the employee is employed to perform."

The Court made clear that an activity is "integral and indispensable" to an employee's principal activities only "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." Because post-shift security screenings do not meet that test, the plaintiffs' FLSA claims failed.

Claims for unpaid hours worked by non-exempt employees are a growing and significant source of class-based FLSA claims. Going forward, employers can feel confident that pre-shift and post-shift security screenings will not be a source of liability. That said, employers still should ensure that their time records accurately capture all hours worked by non-exempt employees. Many sources of potential class-based liability still exist for "off-the-clock" work, including remote access to employer computer networks and e-mail, work during unpaid breaks, and travel time. While the Integrity Staffing Solutions decision is welcome news for many employers, the "off-the-clock" work issue remains a real and significant concern for the unwary employer.

Best Practices for Handling Unemployment Compensation Claims Part 3: Appeals, Legal Counsel, & Quarterly Reports

This post was contributed by Joseph S. Sileo, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Scranton, Pennsylvania.

Pennsylvania employers can achieve positive results and realize other important gains by wisely and effectively responding to, and when appropriate, contesting unemployment compensation claims. This post is Part 3 of a 3 part series on handling UC claims and addresses best practices for appealing to the Unemployment Compensation Board of Review/Commonwealth Court, when to involve legal counsel, and mandatory electronic filings of UC quarterly reports. Part 1 can be viewed here and Part 2 can be viewed here.

Appeal to the Unemployment Compensation Board of Review (UCBR)

  • It is important that you file your appeal within 15 days from the date the Referee’s Decision/Order is issued (not the date of employer's receipt)
  • This is a simple process and can be completed by letter or by filling out a UC Appeal petition form. You can mail, fax, or e-mail the appeal letter/petition.
  • Be sure to include the claimant's name, UC claim number, last four digits of the claimant's social security number, the date of the decision, and statement of the reasons for the appeal.
  • This is a paper appeal. There is no additional hearing. An additional hearing will only be ordered in very rare instances to take additional evidence if the initial hearing was not complete. The Board will consider the Referee's hearing transcript and exhibits and will issue a Decision and Order.
  • The appealing party can request a copy of the hearing transcript and permission to submit a letter highlighting why the decision should be reversed or a more formal brief with legal authority in support of an appeal--but a supporting letter/brief is not required. Likewise, the non-appealing party can request a transcript and permission to submit a letter or brief in opposition to appeal (but neither is required).

Appeal to Commonwealth Court

  • You can appeal the decision of the UCBR to the Pennsylvania Commonwealth Court. This is more complex and costly than administrative appeals to the Referee or the UCBR.
  • A petition for appeal must be filed with the Court within 30 days of the date of the Board's Decision/Order (not from date of employer's receipt).
  • An appeal to the Commonwealth Court is a much more formal and has detailed procedural requirements including the provision of a reproduced record and supporting/opposing briefs. Technically you can "do it yourself" but you should have an attorney involved due to substantial procedural requirements.

When to Involve Legal Counsel in UC Cases

  • Involving legal counsel at the earliest stage, when necessary, can greatly increase an employer's chances of success and limit exposure to more significant liability in certain cases.
  • Example of when to involve counsel include:

A) complex cases involving difficult factual or legal issues (independent contractor vs. employee classification issues, separations due to failed drug test);

B) When there is the possibility of exposure to other more significant potential liabilities, such as when a claim of discrimination has been made or is anticipated in connection with the employee separation related to the UC benefit application; or

C) When the claimant has legal counsel.

Mandatory Electronic Filing of UC Quarterly Reports

Effective with the first quarter of 2014, employers are required to electronically file quarterly UC tax and wage reports through the Unemployment Compensation Management System (UCMS). Employers will not receive and may not file paper filing forms unless a waiver has been requested and granted. Failure to electronically file as required may result in assessment of a penalty (10% of quarterly contributions for the period with a minimum $25 and maximum $250 penalty amount).

If you have any questions regarding any of the information discussed in this 3-part series or need assistance with an unemployment compensation matter, please contact any member of our Labor and Employment Law Group.

Best Practices for Handling Unemployment Compensation Claims Part 2: The Referee's Hearing

This post was contributed by Joseph S. Sileo, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Scranton, Pennsylvania.

Pennsylvania employers can achieve positive results and realize other important gains by wisely and effectively responding to, and when appropriate, contesting unemployment compensation claims. This post is Part 2 of a 3 part series on handling UC claims and addresses best practices for preparing for and participating in a Referee's Hearing. Part 1 can be viewed here.

Preparing for the Referee's Hearing

  • Know relevant facts inside and out. 
  • Review Notice of Hearing to confirm issues that will be addressed at the hearing.
  • Identify and prepare necessary witnesses. Only present witnesses with first-hand, direct knowledge of relevant facts. Avoid hearsay and second-hand testimony.
  • Timely request and serve a subpoena for any necessary adverse or other witness that is not readily available to you. Be sure to check the availability of all necessary witnesses in advance!
  • Timely request a continuance if necessary.
  • Identify, assemble, and organize relevant documents to be introduced at the hearing. Each document used at the hearing must be identified and authenticated by a proper witness (one with first hand knowledge of what the evidence is). Bring 4 copies of each document to the hearing (one each for the witness, the employer's presenter/representative, claimant/opposing attorney, and the Referee).
  • Review the Referee’s file prior to the hearing. You can do this the day of prior to the start of the hearing or prior to the hearing date.
  • Request copies of any claimant statements or other documents that you don’t have which could be helpful to (or hurt) your case.
  • Prepare an outline and/or questions in advance to avoid missing any important points.

Telephone Testimony

  • Determine if any witness qualifies and will need to testify by telephone and if so make a prompt request. The Referee may schedule testimony by telephone when a party or witness is located at least 50 miles from the hearing location.
  • Testimony by telephone of a party or witness may also be allowed, at the request of a party, when the parties consent to the receipt of testimony by telephone or the party or witness is reasonably unable to testify in person due to a compelling employment, transportation, or health reason, or other compelling problem.
  • Special rules apply to hearings involving telephone testimony. For example, special notices must be issued by the Referee’s office well in advance of a hearing involving telephone testimony (as much as 14 days in advance). Submit a request for permission to present telephone testimony as soon as possible.
  • Documents to be used in connection with the telephone testimony must be identified, exchanged, and provided to the witness who will testify by telephone in advance. The party requesting testimony by telephone is responsible for identifying, assembling, and providing documents. The requesting party must supply the name, location, and telephone number of any witness who will testify by telephone. The witness may be questioned to confirm identity.

At the Hearing

  • Be respectful and polite to the Referee, the other side, and witnesses despite the adversarial nature of the hearing. Referees will evaluate your actions during the hearing including an assessment of your credibility. Substance/facts--neither style nor grandstanding--will carry the day.
  • Organize and present your case in a logical and clear manner. Start with relevant background, present a chronology of events, and tell the Referee what the case is about early on (e.g., the Claimant was terminated for stealing), then go back and fill in details.
  • Stick to relevant facts: Get all important facts in the record; avoid getting side tracked and distractions.
  • Object to irrelevant or improper testimony or documents. Use your judgment and common sense, if it does not seem relevant, state an objection on the record.
  • State on the record if you feel that the Referee is precluding you from presenting relevant information. This could be important if there is an appeal.

Stay tuned for Part 3 of this series. In part 3, we will provide tips for appealing a Referee's decision, when to involve legal counsel, and filing required reports.

Best Practices for Handling Unemployment Compensation Claims Part 1: Responding to the Initial UC Claim and Appealing the Initial Determination

This post was contributed by Joseph S. Sileo, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Scranton, Pennsylvania.

Pennsylvania employers can achieve positive results and realize other important gains by wisely and effectively responding to, and when appropriate, contesting unemployment compensation claims. This post is Part 1 of a 3 part series on handling UC claims and addresses best practices for responding to the initial UC claim.

Responding to the Initial UC Claim

  • Prior to termination, think about possible claims. If applicable, couch the decision in terms of willful misconduct. If you issue a discharge letter, be sure to cite relevant policies.

Respond to all claims (both contested and uncontested).

  • A late 2013 amendment to PA’s UC Law provides that an employer’s UC reserve account will be charged for claimant overpayments as a result of an employer’s failure to respond or late response to information requests by UC authorities.
  • An Employer’s response will be considered inadequate if “the response misrepresents or omits facts that, if represented accurately or disclosed” would have been the basis for denying a claimant benefits. Other penalties can apply.
  • The days of not responding are over -- Employers can no longer risk playing too fast and loose with responding to requests for information relating to UC benefit applications.
  • Be careful of “assisting” separating employees with obtaining UC benefits or promising not to contest benefits.

Respond timely.

  • 14 days to respond (from date on UC questionnaire form (not date of employer's receipt).
  • Consequence of failure to respond or late response: an eligibility determination may be issued without consideration of employer’s information.

Be accurate and consistent.

  • Provide clear, first-hand information regarding reason for separation.
  • Inconsistencies, inaccuracies and exaggerations can come back to bite an employer in connection with other more significant matters! (Example - discrimination claims).

Appealing the Initial Determination

  • Simple process: can be by letter or a UC appeal petition form
  • Can mail, fax, or e-mail appeal letter/petition
  • Be sure to include the claimant's name, UC claim number, last four digits of the claimant's social security number, the date of the decision, and statement of the reasons for the appeal.
  • Submit timely appeals --15 days from the date of the decision (not the date of the employer's receipt). The appeal is timely if post-marked by the appeal deadline date or otherwise upon receipt.

Stay tuned for Part 2 of this post where we will explore preparing for a referee's hearing and what to do at the hearing!

Your First Line of Defense: a Well-Trained Workforce!

This post was contributed by Kelley E. Kaufman, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Harrisburg, Pennsylvania.

Has your Company conducted training on the prevention of discriminatory harassment in your workforce recently? Does the Company regularly train supervisors and managers on how to recognize important employee issues and to promptly (and effectively) address them? For example, do your supervisors and managers understand the importance of wage and hour issues? Do they understand how to recognize medical leave and accommodation-related issues? Do they appreciate the necessity of candid performance evaluations, timely and concise recordkeeping, and consistent policy enforcement? Do they know when and how to get Human Resources and/or management involved? The answer to all of these questions should be "YES!"

As your Company begins planning and budgeting for 2015, don't forget the necessity and importance of employee training – from your rank and file employee base, to your supervisors and managers, to Human Resources and Company management. Remember: a little bit of training now can go a long way towards preventing employment law claims in the future!

Our Labor & Employment Practice Group regularly works with employers to develop and provide customized labor and employment law training. Through our McNees Training Academy, we can help you build an efficient, effective training curriculum that is tailored to suit the needs of your workforce – from general labor and employment law compliance to basic Human Resources skill-building to narrowly focused, industry-specific topics. We can also design your training program to help you "train the trainer," coaching your Human Resources and management teams on how to effectively train hourly employees on selected legal issues. For a sampling of topics that can be incorporated into a training program tailor-made for your Company, click here for a copy of the MWN Training Academy brochure.

If you have any questions about the McNees Training Academy, or on considerations key to developing an effective employee training program, contact any member of our Labor & Employment Practice Group in Harrisburg (717-232-8000), Lancaster (717-291-1177), State College (814-867-8500), Scranton (570-209-7220), or Columbus, Ohio (614-469-8000).

Employee Fired for Working Additional Hours Eligible for UC Benefits Despite Prior Warning

This post was contributed by Joseph S. Sileo, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Scranton, Pennsylvania.

In a recent unreported decision, the Pennsylvania Commonwealth Court considered a part-time employee's eligibility for Unemployment Compensation ("UC") benefits after she was fired for disregarding her employer's prior directive to not work past the end of her shift after punching out. The unemployment claim yo-yoed through the administrative process: after the claimant was initially determined eligible for UC benefits, the Referee reversed that decision and determined the claimant ineligible, and then the Board of Review reversed the Referee's decision and determined the claimant eligible for benefits.

On appeal to the Commonwealth Court, the record contained credible evidence submitted by the employer that the claimant-employee was informed during a morning meeting that working past her scheduled hours, after punching out, violated both wage and hour laws as well as the employer's policy, and that she must stop the practice immediately. Despite this, at the end of her shift that same day, the claimant once again continued to work beyond her scheduled shift after punching out. She was terminated as a result.

Although acknowledging that her employer in fact had at least mentioned that working after punching out was in violation of wage and hour laws, the claimant downplayed that part of the discussion, claiming that the primary topic of the meeting was the claimant's recent history of reporting to work late. The claimant further testified that because the meeting made her very upset and anxious, she simply forgot the discussion about working past her scheduled shift and therefore she did not act willfully or deliberately disregard the employer's directive when she again worked past the end of her scheduled shift after punching out later that day.

The Commonwealth Court agreed with the Referee and found that the record "amply supported" the factual finding that the claimant simply "forgot" the discussion only a few hours earlier that morning about working off the clock hours because she was stressed and distraught. Consequently, the Court ruled, the Board of Review did not commit an error of law when it determined that the claimant's failure to comply with the employer's directive prohibiting working after punching out was not intentional or deliberate; meaning that, because the claimant's separation from employment was not due to "willful misconduct," she was eligible for UC benefits under Section 402(e) of the Law.

Although the employer in this case did the right thing from a wage and hour perspective, by informing its employee that working "off the clock hours" was prohibited, its good intentions and correct approach in that respect failed to carry the day in the unemployment compensation arena. In that regard, this case is but another example of how the eligibility standards for unemployment benefits are applied very liberally in favor of employees. Although we do not view this decision as well reasoned, balancing the potential risks and liabilities, the employer nonetheless took the better approach by addressing the more significant and potentially more costly wage and hour issue in spite of, and even if doing so compromised, the unemployment eligibility outcome. One recommendation: confirm similar directives to employees in writing.

If you have any questions regarding this post or need assistance with an unemployment compensation matter, please contact any member of our Labor and Employment Practice Group.

Recent Workers' Compensation Cases Focus on "Going and Coming" Rule

This post was contributed by Paul D. Clouser, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Lancaster, Pennsylvania.

As a general rule, an employee is deemed not to be "in the course and scope of employment" and is therefore not entitled to workers' compensation benefits, while commuting to and from work. This is known as the "going and coming" rule. However, if the employee is deemed to be a "traveling employee" (as opposed to a stationary employee with a fixed place of work), the scope of employment is much broader and the employee is entitled to a presumption of coverage while commuting, unless his actions at the time of injury were so foreign to and removed from his usual activities, as to constitute an abandonment of employment.

In Holler v. WCAB (Tri-Wire Engineering Solutions), the Claimant was employed as a cable technician, responsible for installing cable and network services at customers' homes and businesses. He began each day by reporting to his employer's facility, where he checked in, received his assignments for the day and picked up his equipment. He then spent the rest of the day traveling to and working at various customer locations. Employer allowed Claimant to take a company vehicle home each evening and then use it to return to work in the morning. Claimant was prohibited from using the vehicle for any purpose other than commuting or traveling between customer locations.

On the morning of August 13, 2010, on his usual commute to work, Claimant was seriously injured when his vehicle ran off the road and struck a utility pole. He was life-flighted to the hospital and was unable to return to work following the accident.

The WC Judge and Appeal Board both denied benefits, on the basis of the familiar "going and coming rule," and since Section 301(c)(i) of the Act specifically states that injuries are not compensable if those "injuries [are] sustained while the employee is operating a motor vehicle provided by the employer if the employee is not otherwise in the course of employment at the time of injury." However, the Commonwealth Court reversed and awarded benefits, noting that Claimant was more accurately described as a "traveling employee," despite the fact that he briefly reported to the employer's office each morning, before beginning to make his rounds. Accordingly, the "going and coming" rule was inapplicable and Claimant's morning "commute" to the office was presumed to be part of his work and the resultant injuries compensable.

In Simko v. WCAB (U.S. Steel Corporation), the WC Judge awarded benefits for a severe brain injury sustained by Claimant, while he was commuting to the employer's premises for a safety meeting. Claimant was a member of the safety committee and was required, on a monthly basis, to report to work one and one-half hours before the start of his regular shift. Attendance was mandatory and Claimant was paid for this time. Additionally, "stand-down" meetings were held less frequently, when serious accidents or fatalities would occur. Testimony established that on the morning of the accident, Claimant was heading into a combination monthly meeting/stand-down meeting.

The WC Judge held that although Claimant was a stationary employee and therefore subject to the "going and coming rule," an exception to the rule exists for "special missions" that further the interests of the employer. Claimant was engaged in such a "special mission" when he left his home on the morning of the accident, to meet with management and other safety committee members for a "stand-down" meeting, prior to his regularly scheduled shift.

The Board and Commonwealth Court reversed, however, holding that meeting attendance is deemed to be a part of an employee's regular work duties, and that traveling to or from such meetings is not a special mission. Also rejected, was Claimant's argument that the "special circumstances" exception to the going and coming rule applied. In other words, Claimant argued that he was in fact furthering the interests of his employer by commuting to work for a meeting on workplace safety, which by definition promotes the employer's safety goal. Once again, however, the Court noted that although attendance at such meetings may further the employer's safety goal, it is still a part of Claimant's regular work duties. Further, Claimant did not dispute that the safety meetings were treated as a part of his regular duties and pay, and that the meetings were held on the same premises where he performed his regular job as a strand operator.

If you have any questions or concerns as to whether an employee was truly in the "course and scope" of his or her employment, thus entitling the employee to payment of WC benefits, please contact Paul Clouser or Denise Elliott in our Lancaster office.

Feds Tighten the Belt on "Skinny Plans" and Other ACA Workarounds

This post was contributed by Eric N. Athey, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Lancaster, Pennsylvania.

On January 1, 2015, employers with 100 or more "full-time equivalents" will be subject to the "Pay or Play" regulations under the Affordable Care Act ("ACA"). Over the past few years, many consultants have sought to identify loopholes in the law and lower-cost strategies for complying. Unfortunately for employers who were banking on these "workarounds," the Internal Revenue Service and the U.S. Department of Labor both issued guidance this week dismissing several of the more aggressive strategies that have garnered attention in the press.

Skinny Plans Kaput? A 2013 article in the Wall Street Journal highlighted the possibility that employers might offer low-cost "skinny plans" to avoid some or all of the "pay or play" penalties under ACA. Skinny plans typically offer little or no hospitalization benefits or physician services and only minimal preventive services. The legitimacy of skinny plans under the ACA appeared to be secure when they were not expressly addressed in final regulations governing "minimum value." In addition, many skinny plans appeared to pass muster under the "minimum value calculator" that was developed by the feds for use by employers and carriers. However, on November 4, 2014, the IRS issued Notice 2014-69 indicating that they will promptly be issuing proposed regulations stating that plans which do not offer hospitalization and/or physician service benefits do not constitute "minimum value" coverage under the ACA. The forthcoming proposed regulations will not apply to skinny plans that were in existence before November 4, 2014; however, such plans will lose their exempt status at the end of the plan year beginning no later than March 31, 2015.

The recent IRS guidance further states that employers may not issue any notices to employees suggesting that their skinny plan is considered "minimum value" under ACA or will otherwise affect an employee's eligibility for a tax subsidy – and that any prior notices to this effect must be rescinded and clarified. The practical impact of this change is that employers who solely offer skinny plans that do not qualify as minimum value coverage may be subject to a penalty of $3000 for every full-time employee who qualifies for a tax subsidy to purchase coverage on the health insurance exchange. Notwithstanding this development, skinny plans will likely continue to qualify as "minimum essential coverage" and thereby prevent imposition of the "no coverage penalty" (i.e. $2000 for all but 30 full-time employees); however, it remains to be seen whether they will be adopted by many employers for this reason.

Reimbursing Employees For the Cost of Individual Plans. Some employers have considered dropping group coverage but reimbursing full-time employees for part or all of the premium for a policy purchased on the individual market. Doing so could constitute a valuable employee benefit and some believed it could minimize employer pay or play penalties under ACA. However, in guidance issued on November 6, 2014, the U.S. Department of Labor ("DOL") indicated that such arrangements constitute "part of a plan, fund, or other arrangement established or maintained for the purpose of providing medical care to employees." This being true, the DOL found that these payment arrangements must comply with ACA's market reform provisions – including free preventive care requirements and no annual or lifetime limits. According to the DOL, payment arrangements of this nature cannot be "integrated" (i.e. combined) with individual market policies in order to comply with these requirements. Significantly, the DOL guidance applies to these arrangements regardless of whether the employee payments or reimbursements are handled on a pre-tax or after-tax basis.

What if an Employee is Reimbursed Via a Section 105 Plan Through a Broker or Agent? Some vendors have sought to avoid the status of "employer reimbursement plans" (discussed in the paragraph above) by setting up their own Section 105 plans through which client-employers can reimburse their employees for the cost of individual coverage. In their recent guidance, the DOL specifically pointed out that these arrangements are, in themselves, health plans and will disqualify participating employees from receiving tax subsidies on the exchange. In addition, as health plans, these arrangements will be subject to ACA requirements regarding free preventive care and annual and lifetime limits. This conclusion is consistent with prior guidance issued by the IRS. Employers that pursue such arrangements do so with substantial risk.

Paying Plan Participants with High Claims to Drop Coverage. ACA prohibits employers from discriminating against employees who qualify for a tax subsidy to purchase coverage on the exchange (which will often trigger an employer penalty). However, the Act says nothing about employers who offer cash incentives to employees to drop employer-provided coverage. Over the past year, a number of commentators argued that such employer "cash-outs" or "dumping" of high-risk or high-claim participants would save costs for employer group health plans and threaten the viability of exchange plans. Although the ACA is silent on this specific practice, the DOL's November 6, 2014 guidance indicates that offering cash to such participants would violate HIPAA's non-discrimination rules and may constitute a violation of Section 125 non-discrimination rules. Suffice it to say, the DOL's reasoning is somewhat strained and does not bear repeating here; however, the guidance makes it clear that such "cash out" programs targeted at high-risk or high-claim participants are likely to be challenged by the Department.

The ACA provides ample room for employers to be creative in their compliance strategies. However, many of the "silver bullet" strategies that have been touted by some consultants over the past 18 months always seemed too good to be true and, it turns out, they are. Employers that have been considering these strategies will need to redirect their efforts or proceed with knowledge that they are likely to face a challenge if audited. Only time will tell whether the positions taken by the IRS and DOL in the recent guidance will hold up in court. Employers who prefer to stay out of court are well-advised to steer clear of these workarounds.