Layoffs can expose unwary companies to litigation minefield

Confusing and often conflicting regulations on employee leave and disability can be a minefield for potential litigation, particularly in times of widespread layoffs, according to local employment law experts that have seen an increase in such claims.

"There is certainly a lot of fear of employee retaliation cases out there," said Nancy Watson, a partner with Santa Rosa-based Bozman-Moss & Watson and chair of the labor and employment section for the Sonoma County Bar Association.

"Disability issues and who qualifies and how it crosses over into the different kinds of leave and what is reasonable accommodation and an interactive process - it is a huge maze, particularly if you have someone on multiple kinds of leave," she said.

Local attorneys said calls from employers concerning claims or preventing them have increased with the continuing economic recession. They said employees who may have tolerated an injury will file claims if they fear a layoff, or disgruntled former employees look to litigation fearing they will have trouble finding work quickly.

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"I am still getting calls every week about these claims. Employee layoffs didn't go smoothly. People are angrier because it's harder to find a job now. It's an issue of folks in survival mode," said Carle, Mackie, Power & Ross partner Dawn Ross.

The Santa Rosa attorney said most cases can be blocked by offering a severance, but employers should be particularly wary of implementing an extended furlough or removing a position while someone is on extended leave.

Attorney Linda Daube of the Law Office of Linda L. Daube said one pervasive issue "is how long an employer must tolerate extensions to medical leave before concluding that the employee can no longer perform the essential functions of their job and that further leave extensions are not a 'reasonable' accommodation."

A rigorous paper trail is the best defense, she said.

"About 70 percent of the time the employee will prevail simply because the employer is not well documented," she said.

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Legislation and court cases to watch:

-- AB 793 would extend the statute of limitations during which an employee can file a workplace claim or lawsuit relating to compensation to every time an employee is paid.

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-- Congresswoman Lynn Woolsey, D-Petaluma, introduced the Balancing Act of 2009 last month that would provide, among other things, paid time off for a list of incidents including for newborns, sick family members, attending school-related extracurricular activities, the needs of elderly family and times of domestic violence or sexual assault.

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-- The U.S. Supreme Court ruled this summer in Gross v. FBL Financial Service Inc. that the employee holds the burden of proving age was the key factor in a decision to demote or layoff.

The Equal Employment Opportunity Commission is now considering further rules to protect older workers from job discrimination.

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-- The California Supreme Court ruled in Munson v. Del Taco Inc. that even if an employer did not intend to discriminate, it will be subject to damages of at least $4,000 per failure to accommodate an impaired person.

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-- The U.S. Senate has scrapped a highly contentious piece of the Employee Free Choice Act in an effort to break a filibuster on a labor organization bill.

The act meant to streamline efforts to unionize workers will continue through the process without the "card-check provision," which would have required employers to recognize a union as soon as a majority of workers signed cards saying they wanted one.

Instead, the watered-down version would call for shorter unionization campaigns and faster elections.

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"The biggest issue for employers is that elections would happen so fast they would not have time to talk with employees about their options or the advantages or disadvantages of joining a union," said Dickenson Peatman & Fogarty attorney and director Brandon Blevans.

Submit items for this column to D. Ashley Furness at afurness@busjrnl.com, 707-521-4257 or fax 707-521-5292.