EMPLOYMENT LAW

CURRENT ARTICLES

 

 

 

WEST VIRGINIA SUPREME COURT ADDRESSES
"FRINGE BENEFIT" ENTITLEMENT

The West Virginia Supreme Court in the consolidated cases of Meadows v. Wal-Mart Stores, Inc.; Austin v. Sheetz Corporation; Remsburg v. K-Mart Corporation; Hutzler v. Easton Molding Corporation; and, Stewart v. Waco Equipment Co. addressed the issue and interpreted the legality of various vacation and sick leave policies of employers. Susan Snowden of the law firm of Martin & Seibert, L.C. briefed and argued the case both as counsel for an employer and as amicus curiae on behalf of the West Virginia Manufacturer’s Association and West Virginia Retailer’s Association. According to Mrs. Snowden, the Court held that pursuant to W.Va. Code §21-5-1(c), whether fringe benefits had been accrued, are capable of calculation and payable directly to an employee so as to be included in the term "wages" is determined by the terms of employment and not by the provisions of W.Va. Code §21-5-1(c). The statutory definition of the term "wages" under the Code provision "Shall also include then accrued fringe benefits capable of calculation and payable directly to an employee ...". This is an important decision from the West Virginia Supreme Court for employers because the Court went on to state that terms of employment may condition the vesting of a fringe benefit right on eligibility requirements in addition to the performance of services and these terms may provide that unused fringe benefits will not be paid to employees upon separation from employment.

There is, however, an important caveat in the Court’s Order and that is that terms of employment concerning the payment of unused fringe benefits to employees must be expressed and specific so that employees understand the amount of unused fringe benefit pay, if any, owed to them upon separation from employment. The Court concluded that any ambiguity in the terms of employment will be construed in favor of employees. This will create fact questions to be resolved by juries rather than conclusions of law which would be decided by the judge in many employment cases. However, the importance of the decision is that employers now have a presumption in their favor when litigating the terms of employment issues throughout the state of West Virginia. Mrs. Snowden recommends that all employers in the state review their employment handbooks and personnel policies to ensure that they comply with the Court’s opinion as issued in this matter.

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UNITED STATES SUPREME COURT RULES THAT RECEIPT OF SOCIAL SECURITY DISABILITY BENEFITS DOES NOT BAR ADA CLAIM

The United States Supreme Court in the case of Cleveland v. Policy Management Sys. Corp., 119 Sup. Ct. 1597 (1999) addressed the effect of an Americans with Disabilities Act (ADA) Plaintiff’s contention to the Social Security Administration that she was totally disabled on an essential element of her ADA claim. This is the first time that the United States Supreme Court has addressed the interplay between the ADA and another disability statute, particularly where a person claims total disability in one proceeding, then claims ability to work in another. The Cleveland Court considered the Social Security claimant as an ADA Plaintiff. The Court found that pursuit and receipt of Social Security Disability Insurance Benefits (SSDI) does not necessarily conflict with the pursuit of an ADA claim and does not serve to estop a Plaintiff from pursuing a claim. However, the Court recognized that the statements of total disability to Social Security may conflict with pursuit of an ADA claim and set forth the requirement that a Plaintiff faced with summary judgment must offer sufficient information of the contention of total disability. In Cleveland, the Supreme Court found that the Plaintiff had explained the discrepancies between her SSDI statements that she was totally disabled and her ADA claim that she could perform the essential functions of her job. Cleveland had argued to the Court that her SSDI statements were made in a form that does not consider the effect of reasonable accommodations on the claimant’s ability to work.

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UNITED STATES SUPREME COURT RULES PUNITIVE DAMAGES MAY BE AWARDED FOR TITLE VII VIOLATIONS

The United States Supreme Court, in the case of Kolstad v. American Dental Assoc., 119 S. Ct. 2118, 1999 U.S. Lexis 4372 (June 22, 1999), held that punitive damages may be awarded for violations of Title VII of the Civil Rights Act of 1964. In that case, Kolstad was denied a promotion with the American Dental Association in favor of a male candidate. Kolstad filed suit against the association alleging sex discrimination in violation of Title VII, 42 U.S.C. §2000 et. seq. The trial court refused to allow a jury instruction on punitive damages and held that the Plaintiff was not entitled to recovery of punitive damages because she had failed to prove that the Defendant had engaged in egregious misconduct as required for such an award.

The United States Supreme Court, in its decision, noted that Title VII authorizes punitive damages where the employee demonstrates that the employer has engaged in intentional discrimination with malice or with requisite indifference to the employee’s federally protected rights. 42 U.S.C. §1981(a) et. seq. The Court went on to say that the terms relate to the employer’s knowledge that it may be acting in violation of federal law. Therefore, the Court concluded that to be liable for punitive damages an employer must not only intentionally discriminate, but it must also discriminate in the face of the perceived risk that its actions will violate the law. This appears to be a lowering of the threshold for punitive damages which may, indeed, open an area for Plaintiffs to have such damages considered more often by a jury than in the past.

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ADA DISABILITY DETERMINATION SHOULD BE MADE WITH REFERENCE TO MEASURE THAT MITIGATE IMPAIRMENT

The Supreme Court has held that under the Americans with Disabilities Act, a determination of whether an individual is disabled should be made with reference to measures that mitigate the individual’s impairment. In Sutton v. American Airlines, Inc., 119 S. Ct. 2139, U.S. Lexis 4371, (June 22, 1999), two sisters with severe myopia applied to United Airlines for jobs as pilots. The applicants were rejected for failure to meet the vision requirements of the airline. Plaintiffs filed suit against United Airlines claiming ADA violations and discrimination on the basis of their disability. The trial court had dismissed the Plaintiffs’ Complaint finding that they were not disabled persons under the ADA because they could fully correct their visual impairments. The United States Supreme Court, in its decision and review of this case, noted that the ADA defines disability as a physical or mental impairment that substantially limits "one or more of the major life activities of an individual." The Court found that a person whose impairment is corrected does not have an impairment that presently "substantially limits" a major life activity. The pivotal point of the Court’s analysis was the language found in the ADA which indicates that the disability must be one which "substantially limits" in the present tense. Therefore, the Court held that if a person is taking measures to correct for or mitigate an impairment, the effects of those measures must be considered when determining whether that person is substantially limited and, therefore, disabled under the Americans with Disabilities Act.

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MC BEE V. U.S. SILICA COMPANY

West Virginia Supreme Court, No. 25340, Filed June 24, 1999

Harold McBee, an employee of U.S. Silica was injured in a work-related accident. McBee then filed suit against his employer based upon the statutory "deliberate intention" exception to the immunity of employers from civil liability provided by the Worker’s Compensation system in W.Va. Code §23-4-2(c)(ii) (1994). The facts of the case were that McBee was a "tester" at U.S. Silica’s Berkeley Springs facility. Occasionally, McBee was required to take additional samples and was required to walk across an elevated catwalk that was located between the first and second floors. The catwalk had been part of the facility since 1948 and had two accesses, either descended from the second floor down a set of steps or ascended from the first floor up a vertical ladder that extended through an opening in the catwalk. On August 24, 1995, McBee was injured when he fell through the opening. McBee had no memory of how the accident occurred and no witnesses were present at the time he was injured. The West Virginia Supreme Court found that a Plaintiff may establish deliberate intention in a civil action against an employer for a work-related injury by offering evidence to prove the five specific requirements found in W.Va. Code §23-4-2(c)(ii) (1983). The five specific requirements are:

1. The specific unsafe working condition existed in the work place which presented a high degree of risk and a strong probability of serious injury or death;

2. That the employer had a subjective realization and an appreciation of the existence of such specific unsafe working condition and of the high degree of risk and the strong probability of serious injury or death presented by such specific unsafe working conditions;

3. That such specific unsafe working condition was a violation of a state or federal safety statute, rule or regulation, whether cited or not, or of a commonly accepted and well-known safety standard within the industry or business of such employer, which statute, rule, regulation or standard was specifically applicable to the particular work and working condition involved, as contrasted with a statute, rule, regulation or standard generally requiring safe work places, equipment, or working conditions;

4. That notwithstanding the existence of the facts set forth in Paragraph 1, 2 and 3 hereof, such employer, nevertheless, thereafter exposed an employee to such specific unsafe working condition intentionally; and,

5. That such employee so exposed suffered serious injury or death as a direct and proximate result of such specific unsafe working condition.

McBee had argued that another accident had occurred just two weeks prior to his fall in which another U.S. Silica employee had fallen through a different opening at the facility and had died. The Court specifically found that a review of the records demonstrated that the ladder access opening involved in McBee’s accident had been in place since at least 1948 and that U.S. Silica was not aware of any fall through the specific ladder access opening on which McBee was injured. There had been no prior injuries which would have given the employer subjective realization and appreciation of the unsafe working conditions. The Court found that McBee’s accident and the fatality two weeks prior to his accident were not sufficiently similar so as to give Silica a subjective realization of any danger with respect to the ladder access opening.

The Court specifically held that "given the statutory framework of W.Va. Code §23-4-2(c)(ii) which equates proof of the five requirements listed in W.Va. Code §23-4-2(c)(ii) with deliberate intention, a Plaintiff attempting to impose liability on the employer must present sufficient evidence, especially with regard to the requirement that the employee had a subjective realization and an appreciation of the existence of such specific unsafe working condition and the strong probability of serious injury or death presented by such specific unsafe working condition. This requirement is not satisfied merely by evidence that the employer reasonably should have known of the specific unsafe working condition and of the strong probability of serious injury or death presented by that condition. Instead, it must be shown that the employer actually possessed such knowledge."

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ROBERTSON, ET. AL. V. OPEQUON MOTORS, INC., ET. AL.

West Virginia Supreme Court, Filed June 17, 1999

This suit involved the calculation of commissions at an automobile dealership. The employees argued that the dealership illegally reduced the amounts payable to the employees in three ways:

1. By making deductions for repairs made to a vehicle after a sale;

2. By deductions for costs associated with a customer’s use of a credit card when purchasing a vehicle; and,

3. By making arbitrary additions to the dealership’s alleged "costs" of a vehicle thereby reducing the "profit" on which the employees’ commissions were calculated.

The trial court had directed a verdict in favor of the dealership on the tort claims and had denied the employees’ attempt to amend their Complaint at trial to include a charge of fraud. The trial court did, however, direct a verdict in favor of the employees on the counts involving repair costs, credit card costs and vacation pay.

A jury considered the allegation of the dealership’s liability concerning the calculation of "profit" on each vehicle and the matter of holiday pay and ruled in favor of the employees. The Court reiterated the holding in Jones v. Tri-County Growers, Inc., 179 W.Va. 218, 366 S.E.2d 726 (1988) in which it had found that compliance with all requirements of the West Virginia Wage Payment Collection Act is mandatory when assigning an employee’s wages.

Working under the assumption that the Wage Payment Collection Act is remedial legislation designed to protect working people and assist them in collection of compensation wrongly withheld, the Court went on to review the issue of whether Opequon should be required to pay holiday pay to its employees. Because the dealership, in its own handbook, established holiday pay as a fringe benefit, the Court found that the Wage Payment Collection Act demanded that the dealership honor its agreement and pay its employees the holiday pay.

With regard to the issue of the calculation of the commission, the Court noted that the Wage Payment Collection Act does not establish a particular rate of pay, but does require an employer to notify an employee of the rate of pay and of any changes to that rate. W.Va. Code §21-5-9 requires that "Every person, firm and corporation shall:

1. Notify his employees in writing, at the time of hiring of the rate of pay, and of the day, hour and place of payment; and,

2. Notify his employees in writing or through a posted notice maintained in a place accessible to his employees of any changes in the arrangements specified above prior to the time of such changes."

As the jury returned a verdict in favor of the employees, the Supreme Court refused to set aside that portion of the verdict. Even more importantly, the Court found that the trial court’s ruling that the dealership violated the Wage Payment Collection Act by withholding from employees’ checks any costs associated with a customer’s use of a credit card was not in error. The Court also found that the dealership illegally deducted sums from employees’ paychecks for repairs made to cars that the employees had sold. The dealership had argued that the deductions for credit card sales were not wage assignments, but instead reflected a calculation of commission. The Supreme Court rejected the employer’s argument and upheld the trial judge’s ruling.

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