A Game-Changing Misstep for Walmart?

This post was contributed by Jennifer J. Walsh, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Scranton, Pennsylvania.

A federal district court recently sanctioned Walmart for "spoliation of evidence" in an employment litigation case. Although Walmart has asked the Court to reconsider its decision or allow it to appeal the decision to the appellate court, there's an important lesson to be learned regardless of the outcome: Mind Your Rs & Ds. In other words, pay attention to your company’s retention and destruction of, well, everything employment-related, particularly if there is reason to suspect that litigation is a possibility. When an employer knows or has reason to know that litigation is possible, it has a duty to preserve all relevant evidence. If the company doesn't do that, and relevant evidence is destroyed, the Court has the discretion to punish, or sanction, the employer.

In Abdulahi v. Wal-Mart Stores East, L.P., Ibrahim Abdulahi's termination for poor performance came on the heels of his filing two discrimination complaints with the Equal Employment Opportunity Commission ("EEOC"). Mr. Abdulahi, assistant manager of Store 1181, was of Ethiopian national origin. He had a storied 15 year work history with his employer, consisting of disciplinary-type "coachings" alongside consistent "solid performer" evaluation ratings.

In the EEOC complaints, Abdulahi claimed that two of his superiors at Store 1181 were "belittling" him and treating him "different than other assistant managers," which treatment allegedly included negative comments and jibes about his ethnicity and accent. Two months after Abdulahi filed the EEOC charges, he was terminated for allegedly failing to lock the Garden Center entrance overnight. Walmart claimed that video surveillance confirmed that the gates were not locked.

So, what's the problem, you ask? Well, that video footage – the only objective evidence in support of Walmart's claim that Abdulahi was terminated for legitimate reasons - was not preserved, and was written over as a matter of the company's routine video storage and re-use practices. From Abdulahi's perspective, that video footage was the only way to establish that the gates were locked, and that Walmart's stated reason for firing him was a pretext for retaliation.

The Court agreed with Abdulahi, and sanctioned Walmart for failing to preserve the video footage. Walmart was on notice that litigation was reasonably foreseeable, since Abdulahi had already filed two charges of discrimination with the EEOC. Walmart's punishment for failing to preserve the video recordings is a stringent one: when this case goes to trial, Abdulahi will be entitled to a potentially game-changing jury instruction. The Court will tell the jury that Walmart's destruction of the video footage creates a presumption that Walmart's stated reason for firing Abdulahi (the unlocked Garden Center gates) was essentially a smoke screen, and that the real reason Walmart fired him was to retaliate against him for filing EEOC charges and complaining of discriminatory treatment. Game-changer, indeed.

If your company has a policy or practice of automatically destroying documents, materials, or information within a certain time frame, remember to halt that process until you preserve all information relating to an issue or person if litigation is reasonably foreseeable. This "preservation" requirement applies to electronically stored information too, so be sure to check your email systems for auto-delete parameters. Promptly taking the necessary steps to preserve information when litigation is reasonably foreseeable is most certainly the recommended route to avoid game-changing sanctions for spoliation of evidence.

New NLRB Determination Makes It Easier For Unions To Organize Faculty At Universities And Colleges

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

In still another break with long-standing precedent, the National Labor Relations Board (NLRB) has once again eased the way for union organizing – this time for unions seeking to organize faculty at private sector universities and colleges. In Pacific Lutheran University, 361 NLRB No. 157 (December 2014), the Board adopted a new standard for determining when faculty may be considered to be "managerial employees," which in turn critically impacts whether they may be subject to unionization.

The seminal case in this controversial area of federal labor law is NLRB v. Yeshiva University, 444 U.S. 672 (1980), where the United States Supreme Court found that the faculty at Yeshiva were managerial employees and therefore excluded from coverage under the National Labor Relations Act (NLRA or Act). The Court found that the Yeshiva faculty "formulate and effectuate management policies by expressing and making operative the decisions of their employer." They had effective power to control or implement employer policies, such as deciding what courses would be offered, when they would be scheduled, to whom they would be taught, and determining teaching methods, grading policies, matriculation standards, which students would be admitted, retained, and graduated, etc.

In the years since 1980, the Board has struggled (at least according to some of the reviewing Courts of Appeal) with applying the Yeshiva standard. But more often than not the Board applied Yeshiva to determine that faculty, particularly tenured faculty, were closely aligned with the management of their respective institution, resulting in their being excluded from coverage under the Act.

In Pacific Lutheran, however, the Board has chosen to refine or interpret the Yeshiva standard in a manner making it harder to assert or conclude that faculty are managerial. Perhaps unfortunately for those who would have preferred the prior status quo, the facts in Pacific Lutheran easily lent themselves to those Board Members who were looking to expand coverage of the Act to cover previously-excluded faculty. The union had petitioned for a representation election in a unit of all contingent (non-tenure eligible) faculty teaching a minimum of three credits during an academic term, of which there were about 176 in the petitioned-for unit. The University asserted that approximately 40 of the 176 were managerial and therefore excluded from voting in any election that might be scheduled. The NLRB Regional Director concluded otherwise, including the 40 as eligible voters when he directed that an election take place. The University appealed to the Board, where at least 20 organizations filed various amicus briefs.

Unlike the faculty in Yeshiva, the contingent faculty at issue did not appear to exercise the same level of managerial control or implementation. The Board in Pacific Lutheran first laid out a focus upon five areas of policy making to examine whether faculty actually exercise control or make effective recommendations regarding university policies. The five areas to be examined are academic programs, enrollment management, finances, academic policy, and personnel policies/decisions, with an emphasis on the first three being "primary" areas and the latter two being "secondary." Then within each of those policy areas, the Board will seek to determine whether the faculty actually exercise control or make effective recommendations in those areas. If they do, then the Board will find the faculty to be managerial and exclude them from coverage under the NLRA. And the Board emphasized that, to be excluded, the faculty must have "actual--rather than mere paper—authority" and in order for recommendations to be considered effective, they "must almost always be followed by the administration."

Turning to the facts in Pacific Lutheran, the Board found that the faculty at issue were not managerial. According to the Board, the faculty had only limited participation in the three primary and two secondary areas of policy making noted above, noting particularly that they were typically employed on only one-year contacts which inherently limited their ability to control or make effective recommendations regarding university policy. The faculty at issue also had only limited participation in decisions affecting academic programs, were not permitted to serve on faculty standing committees, did not vote on enrollment management policies, had little or no involvement in decisions involving finances, and had limited involvement in both academic policy and personnel matters. In short, it appears that the Board may have seized upon a set of facts which in any event would have fallen short of the Yeshiva standard, in order to erect new barriers for colleges and universities to overcome in future cases where the facts might have been more conducive to finding managerial status under Yeshiva.

This case or future cases utilizing the Pacific Lutheran rationale will likely receive further review and analysis by the federal Courts of Appeal and possibly the Supreme Court. Private sector universities and colleges that wish to see their faculty remain non-unionized should however take heed. Most authorities predict that this case will spur union organizing of faculty, and therefore institutions should be evaluating their vulnerability and taking proactive steps now to lessen the likelihood of having to deal with a unionized faculty.

Is An Injury Sustained by an Employee While Participating in a Workplace Wellness Program Compensable Under the Workers' Compensation Act?

This post was contributed by attorney Denise E. Elliott with assistance from attorneys John U. Baker and Kelley E. Kaufman. All are members of the McNees Wallace & Nurick Labor & Employment Practice Group. Denise practices in our Lancaster, Pennsylvania office, John practices in our State College, Pennsylvania office, and Kelley practices in our Harrisburg, Pennsylvania office.

With the new year upon us, chances are that your employees are making those age old resolutions to lose weight, get fit, and exercise more. And, if you sponsor or offer an employee wellness program, your employees might be looking to use the program to help them stick to their resolutions. But what happens if an employee exerts himself too much, pushes herself a little too far and hurts him or herself in the process? Are you, the employer, on the hook for such injury? Is the employee covered by workers' compensation? Maybe.

Ultimately, the answer to this question turns on whether the employee was in the course and scope of his/her employment when the injury was sustained. An employee is found to be in the course and scope of his/her employment when one of two situations is present: (1) where the employee is injured while actually engaged in the furtherance of the employer's business or affairs, regardless of where the injury is sustained; or (2) where the employee sustains an injury caused by the condition of the employer's premises, provided that the employee was required by the nature of his/her employment to be on the premises at the time of the injury. WCAB (Slaugenhaupt) v. U.S. Steel Corp., 376 A.2d 271 (Pa. Cmwlth. 1977); see also Scher v. WCAB (City of Philadephia), 740 A2d 741 (Pa. Cmwlth 1999). Cases analyzing the compensability of injuries sustained while the employee was engaged in physical fitness and/or wellness activities generally do so under the first of the two foregoing situations.

Although no Court in Pennsylvania has specifically addressed whether an injury sustained while participating in a wellness program is compensable under the Workers' Compensation Act, decisions addressing physical fitness injuries are instructive.

In Hemmler v. WCAB (Clarks Summit State Hospital), 569 A.2d 395 (Pa. Cmwlth. 1990), the Court found that an employee, who was injured while playing basketball on his lunch hour, was entitled to workers' compensation benefits. In so holding, the Court found that the employer encouraged its employees to engage in activities to better their health, relieve stress, and to have a better mental attitude in the performance of their work. The employer encouraged such activities through the use of postings on a bulletin board and by granting its employees access to company facilities, including the gymnasium, for physical activity. Based on these facts, the Court found that the Claimant was furthering the business interests of his employer when he was injured.

In Stanner v. WCAB (Westinghouse Electric Co.), 604 A.2d 1167 (Pa. Cmwlth. 1992), an employee who sustained a heart attack after working out at the employer's fitness center was found to be furthering the interests of his employer and was entitled to benefits under the Act. The key factors for the Court in Stanner were that: (a) the employer encouraged employees to use the fitness center, (b) flexible work hours were available to enable employees to use the facility, (c) the employer distributed brochures to employees advising that physical fitness benefits both the employee and the employer, and (d) the employer's benefits manager testified that employee participation in the fitness program reduced overall health care costs. The Court held that the "employer encouraged its employees' participation in the fitness program which benefited both Employer and the employees."

In SEPTA v. WCAB (McDowell), 730 A.2d 562 (Pa. Cmwlth. 1999), the Claimant injured his knee while running in a park, during non-working hours. Claimant testified that he ran several times a week in order to meet SEPTA's physical fitness requirements for transit police officers. The Court found that SEPTA had physical fitness guidelines for its officers, which were meant to benefit the officers, SEPTA, and the riding public. SEPTA encouraged its officers to meet the requirements by providing reimbursement for gym memberships, cash awards for the achievement of fitness goals, and by awarding bonus days to officers that met the requirements. SEPTA's fitness requirements were mandatory and failure to meet the requirements could result in disciplinary action. The Claimant testified that he ran only to meet SEPTA's requirements. Based on the foregoing factors, the Court found that the Claimant was engaged in the furtherance of SEPTA's business and thus, was entitled to workers' compensation benefits for his knee injury.

Finally, in McNany v. Travelers Ins. Co., 2008 WL 410254 (WCAB 2008), a Claimant who was injured while taking a walk during a work break was entitled to workers' compensation benefits. In McNany, the Claimant testified that his employer encouraged him to take walks outside of the building as a tool for stress management. Accordingly, the Claimant walked at least ten minutes per day. The Workers' Compensation Appeal Board found that because the employer encouraged the physical activity, which caused Claimant's injury, the Claimant was furthering the interests of the employer at the time he was injured. It was of no matter to the Board that Claimant's participation was voluntary or that the injury occurred off the employer's premises.

The Courts have consistently held that the phrase "actually engaged in the furtherance of the business or affairs of the employer" is to be liberally construed. Keeping in mind such liberal construction and applying the rationale of the above-four cases, an injury sustained by an employee engaged in an activity connected to an employer sponsored wellness program, likely would be compensable under the Workers' Compensation Act. Where fitness testing and achievement metrics are used to incentivize and reward employees who participate in the program, any time spent by the employee striving to achieve such metrics or goals likely would be deemed to further the interests of the employer. This especially will be true when the activity occurs on the employer's premises, during the work day, or during an employer sponsored or suggested activity. The bottom line is that employers clearly benefit from workforce wellness programs.

An employee's entitlement to workers' compensation benefits may be more tenuous if the injury is sustained off the employer's premises during an activity not directly related to the wellness program or not directly suggested by the employer. The risk of liability also may be somewhat reduced where the wellness program is managed by a third party vendor, all communications regarding the program come from such vendor, and the employer knows little to nothing about the participants in or activities of the program.

Despite the potential for liability, wellness programs can and do provide significant value to the workforce. Wellness programs benefit employers by promoting a healthier and more productive workforce and by helping to reduce health care costs. Employees also receive a benefit. Those who may not otherwise engage in physical or wellness activities, are induced to participate in wellness programs through employer offered incentives, health care premium bonuses, and suggested activities and, as a result, are healthier for it. For many employers, the benefits of promoting workforce wellness far outweigh the potential liability. If your company is implementing a workplace wellness program, or continuing an existing program, consider consulting counsel to develop wellness initiatives that promote the goals of the program while minimizing the risk of legal exposure.

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).