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The dust has yet to settle in Washington concerning the current administration’s attempts to roll-back Obama’s regulation and oversight of the workplace. The FLSA regulations promulgated by the prior administration are effectively dead, yet there are miles to go before a new agenda may take hold. The Supreme Court, now fully staffed, is whittling away at the cases that were effectively decided by a tie and is also reviewing arbitration agreements. Moreover, the 7th Circuit has ruled that “extended time off” may not be an accommodation under the ADA. Also in the news is the Illinois legislature’s continued foray into the workplace. Recently the “Responsible Job Creation Act” was passed and signed. Meanwhile, the United States House of Representatives is considering legislation reversing the 2015 NLRB decision that expands liability for the definition of “joint employer” relationships.


One of the most anticipated decisions for the Supreme Court involves the question of whether employers can enforce employment agreements that bar employees from pursuing employment-related claims in class or collective lawsuits or arbitrations. NLRB v. Murphy Oil USA, Inc., Epic Systems Corp. v. Lewis, and Ernst & Young LLP v. Morris. On October 2, 2017, the Supreme Court heard arguments on these consolidated cases to address the validity of arbitration agreements employers have used to lessen the financial threat of class actions.


The Supreme Court is at full strength with a Trump appointment and confirmation of Neil Gorsuch. Now the recent issues that have ended in a basic “tie” are being revisited. Less than a year ago the Supreme Court ruled on Friedrichs v. California Teachers Association. As predicted, without Scalia, the Justices split 4-4 which was a win for unions in a case they feared. In Friedrichs, the Court was to address whether public employees who did not join a union can be charged an “agency” or “fair share” fee to pay for other costs that the union incurs – for example, for collective bargaining.

Last week, the United States Supreme Court agreed to rehear the issue of whether public sector nonunion workers can be required to pay union fees for costs in bargaining over their employment terms. Janus v. American Federation of State, County and Municipal Employees. The Janus case originates in the battle between Illinois’ Governor Rauner and AFSCME. With the confirmation of Justice Gorsuch to the U.S. Supreme Court, there is an expectation that this will be the swing vote to ban such fees.


Employers in Illinois, Wisconsin and Indiana were finally provided guidance on how much time workers can take for medically-related conditions. Recently, the United States Court of Appeals for the Seventh Circuit held that a “multi-month leave of absence is beyond the scope of a reasonable accommodation” under the ADA.

The Lawsuit

Severson v. Heartland Woodcraft, Inc., (7th Cir., No. 15-3754, 9/20/17), involved two federal laws, the Family and Medical Leave Act (FMLA), which is a job-protected medical leave statute and the Americans with Disabilities Act (ADA), which is an accommodation statute for medical conditions.

Severson, an employee of Heartland Woodcraft and the plaintiff in this case, had taken FMLA leave for non-surgical treatments for his serious back pain. Prior to the expiration of his FMLA leave, he notified his employer that he was scheduled for back surgery on his last day of FMLA leave and requested two months of non-FMLA extended leave for recovery. Heartland told Severson that his employment would be terminated at the expiration of his FMLA leave but that he could reapply when he was medically cleared to work. Severson recovered within three months after his surgery, but did not reapply. Severson filed a lawsuit against Heartland for failing to make reasonable accommodations under the ADA.

The Equal Employment Opportunity Commission (EEOC) filed an amicus brief in the lawsuit arguing that extended leave was a reasonable accommodation because it was for a definite period of time, the request was in advance and would have enabled the employee to return to work. However, the district court granted summary judgment for Heartland finding that Severson was unable to perform some of the essential functions of the position for at least three months. Therefore, Severson’s request for a leave of absence would not have been a reasonable accommodation because he was not a “qualified” individual entitled to a reasonable accommodation. The district court stated that whether an employee is “qualified” is examined at the time of the adverse action. Severson appealed to the 7th Circuit.

The 7th Circuit’s Ruling

Contrary to the EEOC’s long-held stance that the ADA requires extended leave in some instances as an accommodation, the 7th Circuit held that Heartland was not obligated to provide ADA leave to Severson. The Court stated that the ADA is an “anti-discrimination” statute, not a “leave entitlement” statute. The Court also noted that the EEOC’s position that the length of leave does not matter and employees are entitled to extended time off as a reasonable accommodation is an “untenable interpretation” of the term “reasonable accommodation.” In effect, it would transform the ADA into a medical-leave statute and an open-ended extension of the FMLA.

But employers in all states, including Illinois, Wisconsin and Indiana, should still proceed with caution. Requests for leave as a reasonable accommodation must still be evaluated on a case-by-case basis. Additionally, employers must engage in the interactive process regarding reasonable accommodations. The 7th Circuit recognized that, in some circumstances, “intermittent time off or a short leave of absence – say a couple of days or even a couple of weeks” – could be a reasonable accommodation similar to a part-time or modified work schedule. And the EEOC is not going away. The EEOC still maintains its position that a time-limited medical leave request is a reasonable accommodation. In fact, the day after the ruling in Severson v. Heartland Woodcraft, Inc., the EEOC announced in a press release that it was

suing an Illinois employer for firing an employee who needed additional time off for cancer treatment in violation of the ADA.

It is interesting to note that when recently confirmed United States Supreme Court Justice Gorsuch was a Tenth Circuit Judge, he wrote for the court in a lawsuit entitled, Hwang v. Kansas State University, holding that the EEOC’s reasonable accommodation guidance did not support extending the plaintiff’s leave beyond the six months provided by the employer’s leave policies. Like the 7th Circuit ruling discussed above, the Tenth Circuit ruled that the plaintiff could not show that the requested accommodation was reasonable.

Illinois Amends the Illinois Day and Temporary Labor Services Act

Illinois added to its myriad of employment regulations with the “Responsible Job Creation Act” The Act amends the Illinois Day and Temporary Labor Services Act. The new law, effective beginning January 1, 2018, has five major features:

·      requires staffing agencies to notify workers about the types of equipment, protective clothing, and training required for each task;

·       requires agencies to provide transportation back to a pickup site at the end of a shift if the agency provides transportation to the work site;

·       prohibits agencies from charging workers for any consumer reports, criminal background checks, or drug tests required for a job;

·      requires agencies to attempt to place temporary workers in permanent positions with a client when the client informs the agency of plans to hire a permanent employee for the position; and

·      requires agencies to report gender and race data about day and temporary laborers to the Department of Labor.

Save Local Business Act

 Congress is considering the “Save Local Business Act.” The Act would limit the extent to which affiliated businesses are considered joint employers for violations of laws designed to protect workers’ rights against wage abuse and empower them to bargain collectively. This would be a return to the “direct control” standard for classification of its workers and reduces the likelihood of joint employer liability.

Businesses have been critical of the National Labor Relations Board's 2015 Browning-Ferris Industries decision, in which the board said businesses that exercise indirect control over workers can be considered joint employers.

Republicans generally argue that the ruling was too broad. They maintain that the standard makes it easy for businesses that have indirect control over workers to be unfairly considered jointly responsible for unlawful employment practices against those workers. Democrats largely contend the ruling simply re-established long-standing principles of common law. They also say it reflects the modern economy, which is made up in large part of gig-workers and contractors whose employment terms may come from multiple entities.

New standards for determining joint-employer status impact employers in almost every industry across the country. As a first step, employers will want to closely examine their relationships with those who provide them with temporaries and other contingent workers, and their contracts and relationships with those other businesses that provide integral services and support, to assess whether there is a vulnerability to findings of joint-employer status.

In June 2017, the U.S. Department of Labor (DOL) retracted its “Obama-Era” guidance letters issued in 2015 and 2016, undoing the economic realities test for worker classification and extinguishing the broad definition of “joint employer.”

Before the 2015 guidance, the DOL looked at how much control an employer exercised over a worker. The DOL modified the worker classification test from control over the work to an economic realities test, which revolved around how economically dependent the worker was on the employer. In that informal guidance, the DOL opined that most workers were improperly classified as independent contractors instead of employees, which could make the workers eligible for minimum wage and overtime.

In 2016, the DOL’s administrative interpretation of the federal Fair Labor Standards Act (FLSA) expanded the definition of “joint employer,” using horizontal and vertical standards. The horizontal standard is where a worker is employed by two separate employers, such as a franchise. The vertical standard applied to staffing and contractor employment where the worker may be an employee of a staffing agency but is dependent on the company where the work is performed. This increased the likelihood that two employers would be jointly liable for wage-law violations.

But the joint employment doctrine is not completely resolved. The “Obama-Era” DOL had based its broadening definition of joint employment on the 2015 National Labor Relations Board (NLRB) Browning-Ferris decision. The Browning-Ferris decision expanded the joint employment doctrine to include situations where a business exerts “indirect control” over employees. The Browning-Ferris case is now on appeal to the D.C. Circuit Court of Appeals. Time will tell as to whether the D.C. Circuit agrees with the NLRB expanded definition of joint employment or whether the rescission of this expanded definition will be followed.

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Alert: Summer 2018 Labor and Employment Update

Justice Kennedy's retirement will create ideological consequences, but what about in the Labor and Employment arena? How have the recent Supreme Court decisions - Janus & Epic changed the landscape in employment law? Has the NLRB changed its tune regarding handbook policies? These questions and more are in Pappas & O’Connor’s 2018 Summer Labor & Employment Update.

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