This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

As 2011 approaches, perhaps the biggest compliance issue for employers under the Patient Protection and Affordable Care Act ("PPACA") is whether it is advisable to retain "grandfathered" status for their health plan.  Our June 17, 2010 blog article discusses the interim federal regulations governing grandfathered status and the "do’s and don’ts" for plans that wish to maintain that status.  One of the more controversial provisions in those regulations is the "change of carrier" provision.  Under the interim regulations, a grandfathered health plan loses its grandfathered status if the sponsoring employer enters into a new policy, certificate, or contract of insurance after March 23, 2010.  In other words, for most plans, changing carriers after March 23, 2010, would defeat grandfathered status – even if the benefits available through the new carrier did not change.

The change of carrier provision made little sense for several reasons.  First, it presented an obstacle for employers who sought to obtain more competitive premium rates from other carriers to provide the same or better coverage.  Secondly, it arguably gave additional leverage to insurance carriers when negotiating rate increases, since the loss of grandfathered status was a disincentive for employers to switch plans.  Finally, the restriction did not seem to advance the regulatory goal of containing employee cost-sharing requirements.

Fortunately, the change in carrier provision is now a thing of the past.  On November 17, 2010, the regulating agencies jointly issued an "amendment" to the interim grandfather regulations which effectively removed the change of carrier provision from the regulations.  Importantly, the amendment does not apply retroactively, only prospectively for all such changes that are effective on or after November 15, 2010.  For any plan that enters into a new agreement with a carrier, it is the date on which the coverage becomes effective – not the date on which the plan entered into the new contract or policy – that applies for purposes of this rule.  Thus, this amendment will not apply to plans for which such changes became effective prior to November 15, 2010; those plans still lose their grandfather status under PPACA.

Prospectively, grandfathered group health plans may now change carriers without losing grandfathered status, provided the change does not involve a reduction of benefits or increase in cost-sharing that would defeat grandfathered status under the June 17 regulations.  However, the amendment only applies to group health plans; it does not apply to policies issued on the individual market.  Employers who are presently (or will soon be) considering a change in carriers for their group health plan may now do so without fear of losing grandfathered status by virtue of the change.

If you have any questions regarding the recent amendment to the grandfathering rules or any other aspect of PPACA, please consult our prior posts or contact any of the attorneys in our Labor and Employment Practice Group.

Today, Rick L. Etter, Esq. and Schaun D. Henry, Esq. of McNees Wallace & Nurick LLC’s Labor and Employment Group issued an Employer Alert entitled "OFCCP Jurisdiction Extended to More Hospitals and Health Care Providers."

The Employer Alert discusses the jurisdiction of the Office of Federal Contract Compliance Programs (OFCCP), which was recently extended to cover hospitals and other health care providers that provide services to participants of the Department of Defense’s (DOD) TRICARE program.

TRICARE is the federal government’s health care program for active duty service members, National Guard and Reserve members, retirees, and their families. TRICARE provides health care services through networks of civilian health care professionals, institutions, pharmacies and suppliers.

To read the Employer Alert click here.
 

In what the National Labor Relations Board’s (the "NLRB") Acting General Counsel called a "straightforward case" under the National Labor Relations Act ("NLRA"), the Hartford Regional Office of the NLRB issued a Complaint (pdf) alleging that an employer illegally terminated an employee who posted disparaging remarks about her supervisor on her personal Facebook page. While the October 27, 2010 Complaint is only an accusation, and not a formal ruling from the NLRB, the repercussions of this action are critically important for both unionized and non-union employers.

Employees of the employer, American Medical Response of Connecticut, Inc., are represented by Teamsters Local 443. One of those employees posted negative, critical comments mocking her supervisor on her personal Facebook page. Other employees commented on the posts, which prompted the employee to make further negative statements. The employee was subsequently terminated by the employer for posting the disparaging comments on the Internet, because the posts violated the employer’s social media policy. The NLRB conducted an initial investigation, and determined that there was enough evidence to warrant a hearing to determine whether the employer violated the NLRA.

The Complaint alleges that the termination violated the NLRA’s prohibition against punishing employees for engaging in concerted protected activity. The NLRB Regional Director has taken the position that the employee’s disparaging comments about her supervisor were protected activity under the NLRA because the employee was discussing her working conditions. Under the NLRA, employers are prohibited from punishing employees for concertedly discussing wages, benefits and other working conditions. In the NLRB’s view, the fact that other employees commented on the employee’s post meant that there was concerted activity by the employees.

Importantly for both unionized and non-union employers, the Complaint also alleges that the employer’s policies were overly broad and restricted employees from discussing working conditions. In the view of the NLRB Regional Director, the policies alone violate the NLRA.

While this matter is only at the Complaint stage, the Complaint itself is an eye-opener for many employers and may be another sign of things to come from the NLRB. On September 9, 2010, we added a post about President Obama’s appointments to the NLRB, and the likelihood that the NLRB would continue to pursue a decidedly pro-union agenda.

Unionized and non-union employers alike must be sure to review all of their policies, including their social media and internet posting policies, to ensure that the policies do not restrict employees’ abilities to discuss wages, hours and other working conditions. Also, we will continue to provide updates as this case unfolds, so employers should also be sure to check back for further posts.
 

A recent decision by the Third Circuit Court of Appeals allows employers to breathe a sigh of relief. In Noel v. Boeing Co. (pdf), the court concluded that an otherwise untimely discrimination claim, alleging that the employer discriminated against an employee by failing to promote the employee, is not rendered timely by the Ledbetter Fair Pay Act (the "Act") (pdf). The court’s decision limits the reach the Act, and it is now clear that claims involving discrete acts of discrimination are not covered by the Act.

The decision involved discrimination claims under Title VII of the Civil Rights Act brought by Emmanuel Noel, an African-American employee at Boeing’s Ridley Park, Pennsylvania facility. Basically, Noel claimed that Boeing failed to award him off site job assignments, which allowed for higher pay and per diem payments, and failed to promote him to a higher pay grade around September 2003. At that time, two white employees were promoted to a higher pay grade. In March 2005, Noel filed a complaint with the Equal Employment Opportunity Commission (EEOC), and eventually filed a lawsuit in June 2006. Noel’s suit alleged multiple counts of race and national origin-based employment discrimination and retaliation, but the trial court held for Boeing on all counts. Noel appealed only the trial court’s finding that his failure to promote claim was untimely.

Under Title VII, an employee in Pennsylvania must file a complaint with the EEOC within 300 days of the alleged discriminatory act or it will be deemed untimely. Noel’s complaint was filed with the EEOC in March 2005, well beyond the 300 day filing period following the alleged discriminatory promotion decision in September 2003. For this reason, the trial court dismissed his failure to promote claim. On appeal, Noel argued that the Act saved his otherwise untimely failure to promote claim.

The Act, passed by Congress in 2009, was in response to the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber, Co., Inc. On January 29, 2009, we posted information regarding the Act and the Court’s Ledbetter decision. The Act extended the time line for filing complaints of discrimination and states that "in pay discrimination matters an unlawful employment practice occurs each time an individual is affected by application of a discriminatory compensation decision." As a practical matter, this means that each time an employee receives a pay check that contains the effects of a discriminatory pay decision, the 300 day countdown for filing a complaint of discrimination with the EEOC is restarted.

Noel argued that the Act’s paycheck rule made his claim timely because each time he received his pay check he felt the effects of the 2003 failure to promote decision. The Third Circuit disagreed. The court found that in order for an untimely claim to be saved by the Act, the claim must involve pay discrimination and the plaintiff must point to some discriminatory compensation decision or practice.

The court first held that Noel did not allege a pay discrimination claim because he did not allege that he received less pay for doing equal work. The court noted that the white employees were promoted, and as a result, they were not doing the same work as Noel. The court concluded that this was not a pay discrimination claim, which alleges lower pay for equal work.

The court then went on to address whether a failure to promote claim is a discriminatory compensation decision under the Act. The court concluded that in accordance with the plain language of the Act, only decisions involving compensation are covered, and discrete employment decisions, such as promotion decisions, are not within the scope of the Act. A failure to promote claim is not a discriminatory compensation decision, and therefore Noel’s untimely failure to promote claim was not saved by the Act.

The court also found support for its decision in Justice Ginsburg’s blistering dissent in the Ledbetter decision, which many believe prompted Congress to pass the Act. In her dissent, Justice Ginsburg distinguished discriminatory compensation decisions, which may go undetected by employees for years, and discrete actions which are immediately felt by employees. Justice Ginsburg specifically referenced failure to promote decisions as discrete acts.

The court held that the Act was only intended to save untimely discriminatory pay decisions, and not all employment decisions. The court’s rationale and decision should apply to other discrete employment actions, such as demotions and terminations. This is a good sign for employers, who under the Act may face liability for discriminatory pay decisions years or even decades after those decisions are made.
 

Members of McNees Wallace & Nurick LLC’s Litigation Group published a Litigation Newsletter that contains an article that may be of interest to readers of our blog. The article, "The Internet – The Next Frontier for the ADA: Will Your Website Comply?" discusses a recent notice issued by the Department of Justice, which indicates that the Department is considering adopting accessibility guidelines for websites under the Americans with Disabilities Act.

Please click here to view the Litigation Newsletter.
 

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

The Patient Protection and Affordable Care Act (“PPACA”) (pdf), otherwise known as the Health Care Reform Law, is hundreds of pages long and contains dozens of requirements affecting employers, health care providers and group health plans. Implementation of these new requirements will be staggered over the next eight years, with many of the most sweeping changes taking effect in 2014. However, for some employers and plans, a very important implementation date is imminent.

When Must Your Plan Comply?  Group health plans and health insurance issuers are required to comply with a host of PPACA’s requirements by the first “plan year” beginning on or after September 23, 2010. For plans that operate on a calendar plan year basis, this means a compliance deadline of January 1, 2011. Employers who are uncertain of the start date of their next plan year should find it in the “general information” section at the back of their plan booklet or consult their employee benefits professional.

Requirements Affecting All Plans.  There are two types of requirements that will take effect for the upcoming plan year – the first group applies to all group health plans and the second applies only to plans that are considered “non-grandfathered” under recently issued interim federal regulations (pdf). The requirements that apply to all plans are as follows:

  • Extension of dependent coverage to children up to age 26;
  • Elimination of lifetime dollar limits on essential benefits and gradual elimination of annual limits;
  • Elimination of pre-existing condition exclusions for children under age 19;
  • Elimination of retroactive rescissions of coverage (except for fraud, misrepresentation and non-payment);
  •  Elimination of reimbursement for most over-the-counter medications under HRAs, HSAs and FSAs and an increased excise tax for non-qualified distributions under these plans (effective January 1, 2011).

Additional Requirements for Non-Grandfathered Plans.  As noted above, non-grandfathered plans have several additional requirements to comply with for plan years beginning on or after September 23, 2010. A non-grandfathered plan is one that was either established after March 23, 2010 or which existed beforehand but lost grandfathered status by making a disqualifying change to benefits after that date. These additional requirements include:Additional Requirements for Non-Grandfathered Plans. As noted above, non-grandfathered plans have several additional requirements to comply with for plan years beginning on or after September 23, 2010. A non-grandfathered plan is one that was either established after March 23, 2010 or which existed beforehand but lost grandfathered status by making a disqualifying change to benefits after that date. These additional requirements include:

  • Implementation of certain non-cost preventive health services;
  • Implementation of new required appeals processes;
  • Compliance with rules prohibiting discrimination in favor of highly compensate individuals for fully insured plans; and
  • Protection of a participant’s right to designate a primary care physician; and
  • Implementation of a participant’s right to obtain emergency care and OB-GYN services without prior authorization

Although opponents of PPACA hope to repeal the law through the election process or block its enforcement via litigation , those efforts will likely take years to be resolved. The requirements listed above take effect in the near term and employers should work with their benefits professionals to ensure that their plans are up to date by the first plan year following September 23, 2010. For additional information regarding these requirements and the “grandfathering” regulations, consult our prior posts or contact any of the attorneys in our Labor and Employment Group.

This post was contributed by Bruce D. Bagley, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group.  

In its first major ruling since being reconstituted by President Obama, the Democrat-controlled National Labor Relations Board (NLRB) has rejected the position of the NLRB’s General Counsel and has determined that stationary bannering does not violate Section 8(b)(4)(B) of the National Labor Relations Act (NLRA). United Brotherhood of Carpenters Local Union No. 1506, 355 NLRB No. 159 (2010). This decision gives labor unions a powerful weapon: the ability to pressure a secondary (neutral) employer and its customers, in order to gain leverage over the primary employer with whom the union actually has its dispute. The facts in United Brotherhood illustrate the point below.

The Carpenters Union had primary labor disputes with four construction contractors in Arizona, claiming that the contractors failed to pay wages and benefits in accord with "area standards." In furtherance of its primary disputes, the Union protested at two hospitals and a restaurant, secondary employers with whom the Union had no primary dispute. The four construction contractors had engaged in construction work at the sites of the secondary employers.
Section 8(b)(4)(B) of the Act makes it an unfair labor practice for a union to "threaten, coerce, or restrain" a secondary employer where an object is to cause the secondary employer to cease doing business with the primary employer. At issue in United Brotherhood was whether the Union’s conduct in "bannering" was the equivalent of picketing, which would have been clearly unlawful, or more like non-coercive peaceful "handbilling," which clearly would have been lawful.

At each of the secondary employers’ locations the Union displayed a large stationary banner, either stating "Shame On __________," naming the hospital, or "Don’t Eat At __________," naming the restaurant. The banners were three or four feet high and from 15 to 20 feet long. The banners were held in place at each location by two or three Union representatives. The banners were placed anywhere from 15 to 1,050 feet from the nearest entry to the secondaries’ establishments. The Union representatives also offered flyers to anyone who would take them, explaining therein that the Union’s underlying complaint was with the construction contractors, and that by using these contractors, the hospital or restaurant was contributing to the undermining of area wage standards.

At noted above, the NLRB’s General Counsel (as well as the Charging Parties) argued that bannering was the equivalent of picketing, that "picketing exists where a union posts individuals at or near the entrance to a place of business for the purpose of influencing customers, suppliers, and employees to support the union’s position in a labor dispute." But a majority of the NLRB disagreed (the two Republican appointees dissenting), finding that bannering was not picketing or its equivalent, because there was no "confrontational" conduct, such as patrolling back and forth in front of the entrance while carrying placards. Absent confrontational conduct, the majority concluded, bannering was more like peaceful handbilling, an exercise in "free speech," and therefore did not "threaten, coerce, or restrain" the secondary employers as would picketing.

There was a vigorous dissent by the minority members of the NLRB, who concluded there was no meaningful distinction between bannering and picketing. All parties would have agreed that a single picketer patrolling back and forth with a sign saying "Don’t Eat Here Because This Restaurant Was Built With Non-Union Labor" would be engaged in unlawful secondary boycott picketing. Yet the NLRB’s majority would find that three union protesters holding a much larger banner saying the same thing would not be engaged in unlawful conduct because the bannering allegedly does not rise to the level of confrontational conduct!

It will be interesting to see how this decision may be viewed by the reviewing federal Courts of Appeal. In any event, it provides a dramatic example of how the present Obama Board may construe the NLRA in an effort to expand the weaponry and capabilities of organized labor.
 

This post was contributed by Anthony D. Dick, Esq., an Associate and a member of McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Columbus, Ohio.

Most employers have at least some basic understanding of the Americans with Disabilities Act’s (ADA) prohibition against discrimination on the basis of an employee’s disability. Fewer are aware that the ADA contains separate provisions concerning public accommodation requirements for businesses open to the public. In its most basic form, Title III of the ADA requires virtually all facilities open to the public – including restaurants, hotels, motels, retailers, medical facilities, health clubs, museums, libraries, parks, day care facilities and entertainment venues – to remove architectural and communications barriers from their facilities to ensure access to persons with disabilities. The driving force behind the statute is to allow persons with disabilities to participate equally in the goods and services offered by places of public accommodation.

In conjunction with the 20th anniversary of the ADA’s enactment, the Department of Justice recently rolled out several new revisions to the ADA public accommodation regulations. In implementing the new regulations, the Department of Justice has made clear that the new standards should be viewed as “more than incremental changes” to the previously applicable 1991 standards. To that end, in many ways, the new regulations create heightened accessibility requirements for public accommodations.

It is important to note that the new rules contain a “safe harbor” provision. Covered entities that were built or altered in compliance with the 1991 standard will not be required to comply with the 2010 standards unless or until existing facilities are altered in the future. However, new requirements that were not a part of the 1991 standards are not subject to the safe harbor provision. Businesses should begin planning now to achieve compliance with the 2010 standards with regard to these new elements.

The new regulations modify the 1991 standards with respect to single toilet user rooms, reach ranges, assembly areas, common use circulation paths in employee work areas, fitting rooms, disbursement of accessible guest rooms in places of public lodging, accessible parking, urinals, and sales and service counters – just to name a few. Additionally, the new regulations address a number of brand new accommodation requirements for golf and miniature golf courses, amusement park rides, playgrounds, swimming pools, exercise equipment and other public accommodations.

The latest regulations targeting barriers to places of public accommodation specifically include the following:

Service Animals
The new ADA regulations now make clear that only dogs (and in limited circumstances miniature horses) can act as service animals. To qualify as a service animal, the dog must be individually trained to do work or perform tasks for the benefit of a disabled individual. Under the new rules, animals that merely provide emotional support and comfort to their owners do not qualify as service animals. The new rules also contain provisions regarding what questions a provider of a public accommodation may ask a person purporting to be with a service animal.

Wheelchair and Other Mobility Device Accessibility
The regulations mandate that public accommodations allow the use of wheelchairs and manually powered mobility aids in all areas open to the public. According to the new rules, public accommodations must also permit the use of “other power-driven mobility devices” (e.g. golf carts, Segways, etc.) unless they can show the use of such devices would create a safety hazard to others. The burden is on the provider of the public accommodation to show that the mobility device creates a safety hazard if it wishes to limit or exclude their use on the business’ premises.

Lodging Reservations
The regulations also contain new provisions that will have a significant impact on how hotels and other places of lodging do business. Key provisions include a requirement that hotels and other places of public lodging hold back accessible rooms until they are the last to sell. Additionally, handicap accessible rooms may no longer be double booked by hotel staff. Further, hotel reservation systems must identify the accessible features of the hotel and its guest rooms so that disabled persons may make an informed decision when choosing where to seek lodging.

Conclusion
The new regulations implementing the above-described changes are tedious and contain a multitude of caveats and intricacies. Business owners should sit down with legal counsel, designers and key personnel to develop a full understanding of the new regulations so that policies and practices can be appropriately modified to ensure ADA compliance. A failure to do so could lead to substantial expense in the form of avoidable lawsuits and civil penalties to the business.
 

 

In the recent case of Anderson Equip. Co. v. Unemployment Comp. Bd. of Review, 994 A.2d 1192 (Pa. Commw. Ct. 2010) (pdf), the Commonwealth Court of Pennsylvania examined whether an employee engages in willful misconduct when he fails to pay union fees and dues in violation of his employer’s collective bargaining agreement (CBA).  The court held that the employee engaged in willful misconduct by failing to pay his union dues and that the employee did not have good cause for his misconduct.  Thus, the court found that the employee was not entitled to unemployment benefits.

The CBA between the employer and the union required all employees to be members of the union, and prohibited the employer from employing non-union members for more than 90 days. The employee in Anderson Equip. Co. failed to join the union because he claimed he did not have the money to pay the union initiation fees and union dues. The employee attempted to work with the union to establish a payment plan, but was unsuccessful. After several months and several warnings, the employer fired the employee for his failure to secure his union membership.

Under the Pennsylvania Unemployment Compensation Law, an employee is not eligible for unemployment compensation benefits if he or she is discharged for willful misconduct. Willful misconduct includes a disregard for the employer’s interest, a deliberate violation of work rules, the disregard of standards of behavior expected of employees, or a substantial and intentional disregard for the employer’s interest or the employee’s duties and responsibilities. If the employer proves that the employee engaged in willful misconduct by deliberately violating a work rule, the employee can attempt to establish good cause for the violation. Good cause is established if the employee acted justifiably and reasonably under the circumstances.

In Anderson Equip. Co., the primary issue was whether the employee’s inability to pay the fees and dues was good cause for violating the work rule. The court found that the employee’s inability to pay the fees did not constitute good cause because the former employee could have saved the necessary money during his 90 day probationary period. The court held that the employee had advanced notice of the need to pay the fees and dues, but he decided instead to violate the rule by not paying to join union. Because his inability to pay the fees was not justification for his violation of the rule, the employee was not eligible for unemployment benefits.

This case provides a good summary of the rules associated with willful misconduct under the Pennsylvania Unemployment Compensation Law in conjunction with union membership issues. The case also provides some positive news for employers who may find themselves between a rock and a hard place when forced to discharge employees who fail to pay their union fees and dues.
 

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

Our June 17, 2010 posting discussed the interim regulations on "grandfathered" health plan status under the Patient Protection and Affordable Care Act ("PPACA") and the benefits of maintaining that status.  Grandfathered plans are exempt from a host of statutory requirements that apply only to non-grandfathered plans.  Until recently, little was known about the additional statutory requirements that apply to non-grandfathered plans.  However, the Internal Revenue Service, the Department of Health and Human Services and the Department of Labor (referred to collectively as "the agencies") recently issued interim regulations which explain two of the most significant requirements: (1) the internal claim and appeal and external review processes; and (2) availability of certain preventive health services at no cost.  These new requirements will take effect for plan years beginning on or after September 23, 2010.

Internal Claims and Appeals and External Review Processes

On July 23, 2010, the agencies jointly published interim final regulations governing a plan’s internal claims and appeals procedures and external review processes.  The interim regulations require that non-grandfathered group health plans and health insurance issuers offering such plans have an internal claim and appeal procedure which complies with existing Employee Retirement Income Security Act ("ERISA") regulations (29 C.F.R. §2560.503-1).  However, the interim regulations impose several additional requirements over and above existing ERISA regulations, including expedited notification of benefit determinations involving urgent care within 24 hours and additional notice requirements.

Non-grandfathered plans also are subject to external review of claims appeals.  Currently, 44 states have laws providing some level of external review.  Plans operating in states which already have laws that afford at least the same level of consumer protection as the Uniform Health Carrier External Review Model Act will satisfy the external review requirement.  The Model Act is a template statute published by the National Association of Insurance Commissioners ("NAIC").  Plans operating in states that have not adopted Model Act will be subject to either a state-run external review process that complies with the new interim regulations or a comparable federal review process.  Pennsylvania state law allows for review of claims only under managed care plans; this process will either be expanded by amendment of the state law or supplemented by the federal review process set forth in the new interim regulations.

Preventive Health Services 

PPACA requires that certain preventive health services be made available under non-grandfathered plans at no cost to participants.  On July 19, 2010, the agencies issued interim regulations regarding this requirement.  The new regulations prohibit plans from imposing any cost-sharing requirements (e.g. copay, co-insurance or deductible) on any of the following:

  1. Services that have a Grade A or B rating in the current recommendations of the United States Preventive Services Task Force with respect to the individual involved.  The current Grade A and B rating recommendations are included in the preface to the interim regulations and currently include 45 services, including screening for alcohol misuse, high blood pressure, breast cancer, cholesterol abnormalities, colorectal cancer, depression, diabetes, hepatitis B, obesity and sexually transmitted diseases.
  2. Certain immunizations recommended by the Centers for Disease Control ("CDC");
  3. Certain screenings recommended by the Health Resources and Services Administration.

Office visits to obtain free preventive services may be subject to cost-sharing only if the visit is billed (or tracked) separately from the preventive service provided or if the service was not the primary purpose of the visit.  Plans are not required to waive cost-sharing requirements for services rendered out-of-network.  Plans are permitted to use reasonable medical management techniques to determine the frequency, method, treatment or setting for a preventive service covered under the regulations.

These new interim regulations are the first of a series that explain the statutory requirements that apply solely to non-grandfathered plans.  We will keep you apprised as additional regulations are issued.  For additional information regarding health care reform, please click here to view the McNees Whitepaper regarding What Employers Need to Know about Health Care Reform.