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A recent lawsuit against Northwestern Mutual Life Insurance Company underscores the need for employer care in correctly classifying independent contractors. On June 25, 2009, three former employees of Northwestern Mutual filed a class action lawsuit alleging that sales and financial representatives of the Company had been incorrectly treated as independent contractors under federal and California state law. The complaint seeks class certification and damages of more than $200 million. Plaintiffs' case is based upon the degree of control Northwestern Mutual had over these alleged independent contractors, including their hours of work, their office and equipment, performance quotas and non-competition agreements. According to the complaint, the Company required the alleged independent contractors to work a minimum of 10 hours a day for five or six days a week. Plaintiffs therefore seek overtime and a higher hourly rate since the effective rate for these California employees was less than the minimum wage. Read the full article.

On June 17, 2009, the EEOC approved a notice of proposed rulemaking under the Americans With Disabilities Amendments Act ("ADAAA"), and sent the proposed regulations to the White House Office of Management and Budget ("OMB") for review.
President Bush signed the ADA Amendments Act on September 25, 2008. EEOC previously attempted to approve proposed regulations under the ADAAA in December, 2008, at the end of the Bush Administration, but that effort failed. The new proposed regulations are substantially different both from those formerly proposed and from the pre-ADAAA regulations currently in effect. The articulated intent of the new regulations is to carry out what the Commission views as Congressional intent in the ADAAA to shift from legal fights over who is "disabled" to consideration of whether disability discrimination has occurred. The lone Republican Commissioner has said that parts of the proposed regulations have no support in either the ADA or its legislative history. Read the full article.

Sheryl Willert, Managing Director and Member in the Seattle office, is interviewed in the July 2009 edition of The Metropolitan Corporate Counsel regarding the effects of the recently passed Fraud Enforcement and Recovery Act (FERA) on the False Claims Act (FCA). Read the full article.

Congress and the Obama administration have shifted recent immigration enforcement efforts onto employers. This shift may impact how employers verify the employment eligibility of employees.

E-Verify

Earlier this month, the Senate approved a significant amendment to a homeland security appropriations bill (H.R. 2892) that would (1) make E-Verify permanent, (2) mandate its use by federal contractors, and (3) allow employers to use E-Verify for all employees. The House approved a similar, but different version of the bill. At the same time, the Department of Homeland Security (DHS) announced the Obama administration?s plan to implement a rule requiring federal contractors to use E-Verify beginning September 8, 2009. Read the full article.

Ever since the United States Supreme Court's 2005 decision of Alvarez v. IBP, Inc., employers have been wary of potential employee claims alleging that the time spent putting on and taking off protective clothing, as well as time spent walking to and from this activity, constitutes "work time" compensable under federal or state wage and hour laws. In Andrako v. United States Steel Corporation, a federal district court in Pennsylvania determined that production and maintenance employees of United States Steel Corporation were not entitled to additional compensation for the time they spent donning and doffing protective clothing but were entitled to be paid for "hours worked" walking to and from their work areas once the protective clothing was put on. The decision addressed the interplay between the federal Fair Labor Standards Act and the Portal-to-Portal Act which excludes from compensable hours worked "any time spent in changing clothes or washing at the beginning or end of each work day which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the particular employee." Read the full article.

Signed by the governor on May 18, 2009, this legislation is intended to expand Washington's domestic partnership law to require that state registered same sex couples be treated the same as married couples for all purposes, except marriage, under state law. Opponents are currently collecting signatures to block the implementation of this legislation. Read the full article.

In NLRB v. C&C Roofing Supply, Inc., the Ninth Circuit Court of Appeals, which has jurisdiction over Washington state, enforced a settlement agreement involving liquidated damages for unauthorized workers. In doing so, the Court provided a helpful road map when the National Labor Relations Act and the Immigration Reform and Control Act collide. Read the full article.

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Williams, Kastner & Gibbs PLLC - 2009