Spring 2022 Legal Update from GWINN LEGAL PLLC

Dear Friends and Clients:

We’ve almost made it through another winter of Covid! While the is-it-an-endemic-or-pandemic virus still grabs more than its share of the headlines, news relating to employment law is slowly shifting to issues that do not revolve around the disease. So, while we must include some news about Covid, here is a quick look at some issues you might encounter this spring.

Michigan moves closer to deciding the extent of LGBTQ protections when the Michigan Supreme Court hears oral arguments in Rouch World LLC v Dept of Civil Rights on March 2. At issue is whether discrimination because of sexual orientation or gender identity is discrimination “because of sex” under Michigan’s Elliott-Larsen Civil Rights Act. As interpreted now, the law, which applies to businesses with one or more employees, permits discrimination against LGBTQ Michiganders in employment and housing. Such discrimination is prohibited under federal law for all employers with 15 or more employees. (Gwinn Legal filed an amicus curiae brief in the case on behalf of a client, in support of the Department of Civil Rights.)

After a year without any increase in the minimum wage, Michigan’s minimum inched up to $9.87 per hour in January. A scheduled increase in 2021 was a no go when a 2020 jobless rate of more than 9 percent triggered a section of the law that puts the brakes on wage increases when the previous year’s unemployment reaches 8.5 percent or higher. Most employers in low-wage sectors are beating that minimum. According to ziprecruiter.com, the average wage for a part-time retail sales associate is $11 per hour, while the average for a grocery store cashier is about $10.36 per hour.

New guidance from the Department of Labor would let thousands of Michiganders off the hook for repayment of unemployment benefits for which the Unemployment Insurance Agency incorrectly determined they were eligible. The guidance does not apply to all overpayments — benefits received as a result of fraud or misrepresentation are excluded — but would waive repayment for large numbers of workers who received benefits under CARES-Act programs.

The Michigan Legislature is also looking to help workers who applied for and received benefits in good faith and were socked with large bills months later when the Agency belatedly determined they were, after all, ineligible. Under the bill, passed by the House on January 26, the Agency would not be allowed to start collection proceedings for improperly paid benefits — except in cases of fraud and misrepresentation — more than “one year after the date that the last determination, redetermination, or decision establishing restitution” becomes final.” The proposed legislation would also ramp up the Agency’s obligation to inform claimants of a negative determination, and of their rights, by requiring the Agency to mail the notice and send it via the UIA’s computer system, and to either speak with the claimant over the phone or send a notice to the claimant’s last-known email address.

On January 20, the U.S. Supreme Court struck down an OSHA emergency rule that would have mandated that businesses with more than 100 employees require workers to receive a Covid-19 vaccine. Although the Court ruled against the OSHA requirement for private businesses in the 6-3 decision, it upheld a similar rule from the Center for Medicare and Medicaid Services that mandated vaccines for health-care workers at federally funded facilities.

The Court’s decision does not affect the right of private employers to impose vaccine mandates, if they choose. Factors private employers should consider when making this decision include the risk of workplace spread of the virus, the risk of infecting customers, and the impact of a mandate on their ability to retain workers, among other issues.

While the omicron variant is less severe than previous COVID-19 variants, it is highly contagious. The World Health Organization said an estimated 90 million COVID-19 cases had been reported worldwide since the omicron variant was identified in November — more than all COVID-19 cases reported in 2020. In the United States, according to the CDC, hospitalizations were 23 times higher among people who were unvaccinated than among those who were vaccinated and had received a booster. A study of New Yorkers at the end of January found that the unvaccinated were 26 times more likely to die of the virus than people who had been fully vaccinated.

Michigan’s Supreme Court recently said that an employee’s communication to an in-house attorney was not a “report” to a public body under Michigan’s Whistleblowers’ Protection Act (WPA). The communication was not made to a “public body” because the attorney was the employer’s agent and communications made to an agent count as communications made to the principal — the employer. Further, for a communication in a WPA case to be a report, the plaintiff must have made it on his or her own initiative, “in an attempt to bring the, as yet hidden, violation to light …” The plaintiff in the case, Rivera v SVRC Industries, spoke to the attorney at the direction of her employer, not on her own initiative. Finally, the Court stated that the communication was not a report because, before talking about the issue with the attorney, the plaintiff had discussed the same information with several other people — and so the conversation with the attorney did not bring any information “as yet hidden” to light.

However, the Court’s decision in the case was not based on its narrow interpretation of the WPA’s reporting requirements. The Court’s ruling in favor of the employer was instead based on its finding that the plaintiff had failed to carry her burden of showing that she was terminated because of the alleged report. Thus, although the Court’s lengthy discussion of the reporting requirement is sure to be cited by employers’ attorneys, it is not binding precedent as the rule of the case. Time will tell if the Court’s reasoning is adopted by Michigan courts.

While the FMLA’s special treatment of “key employees” — among the highest paid 10 percent of all employees within 75 miles of the employee’s worksite — is not a new issue, it is one that is frequently overlooked. The law, 29 CFR 825.219, recognizes that some employees, like the CEO, COO or CFO, are so necessary that a firm can’t operate without them, and may deny reinstatement if “substantial and grievous economic injury” would result.

The focus of this inquiry is not whether the business will be harmed by the key employee’s absence, but whether it will be harmed by reinstating the key employee. For example, the firm might be unable to function without its CFO, and unable to find anyone with the right qualifications to fill in on a temporary basis. If the firm is required to hire a new CFO, reinstating the CFO on leave may cause the kind of harm required to justify denying reinstatement.

The employer must give notice at the time the employee applies for or begins FMLA leave, that he or she qualifies as a key employee and may be denied reinstatement at the end of the leave period if substantial and grievous harm will result. At this point, the employer does not need to know if harm on reinstatement is anything more than a possibility. (If time is needed to determine whether the employee is a key employee, notice must be given as soon as practicable after the employer is notified of the need for leave.) An employer who fails to provide this notice will lose the right to deny restoration even if “substantial and grievous economic injury” will result.

Once the employer has made a good faith determination that, in fact, substantial and grievous economic injury will result if the employee is reinstated, the employer must explain the basis for this finding and inform the leave-taking key employee in writing that it intends to deny job restoration on completion of the FMLA leave. This second notice must be served on the key employee in person or by certified mail. The key employee must be given a “reasonable time” in which to return to work after being informed that continued time off will harm the employer.

A key employee’s FMLA rights continue, even if the employee does not return to work after receiving the second notification of intent to deny restoration. The key employee continues to be entitled to FMLA leave and continuation of health benefits until he or she either gives notice of the intent not to return to work or the employer denies reinstatement at the end of the leave period.

A key employee can request reinstatement at the end of the leave — despite receiving notice that substantial and grievous economic injury will result. The employer must then determine — for a third time — that substantial and grievous injury will (still) result if the employee is restored to his or her position and must notify the employee in writing, in person or by certified mail, that restoration will be denied.

We look forward, with you, to the change in seasons and hope the headlines this spring will report good news! Please call us if we can be of assistance.[1]

[1] This newsletter is for informational purposes only and is not a substitute for legal advice, nor does it establish an attorney-client relationship. Call us for professional recommendations regarding your specific situation. Laws and regulations are subject to change. This newsletter is available in electronic form — with hyperlinks to the cases and facts mentioned — on our website, gwinnlegal.com.