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September 11, 2001, has foreverchanged the lives of all Americans.The tragedy that began that dayimpacted the entire nation. Prior tothat date, fear of working in high-rise office buildings, using masstransportation, opening mail or trav-eling by air was virtually non-exis-tent. Unfortunately, today these arecommon and serious recurringthemes that may take an emotionaltoll on your employees and impacttheir ability to fully and productivelyperform their jobs. Data suggeststhat 30% of individuals who havefamily connections to disasters expe-rience disabling traumatic reactions.Post-traumatic stress is a real issuein the workplace and can affect allemployees, from those who lostloved ones in the tragedy to thoseexposed to extensive and graphicnews coverage. With continuedmedia attention and the ongoingmilitary intervention, we can onlyassume that an increased number ofemployees will be affected by theever mounting “War on Terrorism.”Some common reactions employeesmay experience include: recurringthoughts or nightmares about theevents; difficulty sleeping; changesin appetite; anxiety and fear; feelingsof depression or isolation; memoryproblems; and difficulty focusing onwork or daily activities. Employees’reactions to these tragic events maynot appear immediately but, rather,

may register weeks or months afterthe events. Similarly, the signs andsymptoms exhibited by employeesmay last a few hours or severalmonths. Employers should recog-nize common signals of post-traumatic stress and the impact it may have on the workplace.

In times of tragedy, employees mayneed assistance in order to return to a “normal” schedule. You can helpemployees return to normalcy by pro-viding more hands-on supervision,i.e., specific instructions and short-term goals. Additionally, managersmay want to exercise more patiencein dealing with employees who needtime to recover. Employers may,where appropriate, consider beingmore flexible with respect to dead-lines, requests for leave or vacation,increased telephone use to checkwith loved ones, and an increasedneed to stay aware of news events.Additionally, employers should offersupport to grieving employees andencourage open communication ofconcerns with respect to the “War onTerrorism” and fear of bio-terrorism.It also is important for employers tocommunicate and provide informa-tion to employees on security meas-ures taken by the employer to allevi-ate employee concerns aboutworkplace safety. Concrete facts areless frightening than rumor and mayreplace feelings of helplessness with

January 2002

Volume 3, Number 1

Supreme Court Update: ToyotaMotor Manufacturing v.Williams—Page 2

Employees on Military Leave—Recent Observations—Page 3

Revised DOT Drug and AlcoholTesting Rules Go Into Effect—Page 4

You’re Hired—Subject to theResults of Your Credit Report—Oops,We Rescind Your Offer!—Page 5

The D.C. Circuit Upholds theBoard’s Extension ofWeingarten Rights toNonunionized Workers—Page 6

The People Behind OurBusiness—Page 7

Catch-Up Contributions andIncreased 401(k) EmployeeContribution Limits—Page 8

Third Circuit Creates MoreEmployer Confusion RegardingDuty to Accommodate afterDecision in Skerski—Page 9

Happenings—Page 11

Second Circuit RemindsEmployers They Generally MustAccept Employee Criticism inGroup Meetings—Page 12

The Best Way to Comply withDisability DiscriminationLaws—Think AccommodationFirst—Page 15

Recent Reed SmithPublications—Page 16

Employment Law

Employee Assistance in Times of Turmoil

2

feelings of safety and empowerment.Where appropriate, unite withemployees to be proactive in helpingthe community—raise money forrelief organizations, organize blooddrives, etc.

Finally, employees should beinformed of counseling orEmployee Assistance Programs(“EAP”) that are available to them. EAP professionals can helpemployees not only with their feel-ings of grief and anxiety, but alsocan provide valuable tips and guid-ance on how to focus their energyin a productive, meaningful way.Another unfortunate side-effect ofthese tragic events is an expectedincrease in the use and abuse ofalcohol and drugs. EAP also can

help employees avoid or recoverfrom substance abuse. Moreover,EAP can provide management withguidance on the proper manner toapproach employees who areexhibiting signs of severe stress,depression or anxiety. Just asemployers should educate theirmanagers and supervisors on howto recognize post-traumatic stress,it is equally important that theyare trained properly to referemployees to EAP. Providing sta-bility in times of turmoil makesthe workplace a more productiveand more humane environment.

Sara BegleyPhiladelphia Office

Jami SegotaPrinceton Office

Employees’ reactions tothese tragic events may not appear immediately

but, rather, may registerweeks or months after the

events.…Employers shouldrecognize common signals

of post-traumatic stress and the impact it may

have on the workplace.

“Employee Assistance” – continued from page 1

Supreme Court Update: Toyota Motor Manufacturing v. Williams

On January 8, 2002, the SupremeCourt grappled again with the definition of the now commonAmericans With Disabilities Act(“ADA”) catch-phrase, “substantiallimitation.” The Court of Appealsfor the Sixth Circuit ruled in thecase below that Williams, a qualitycontrol employee with carpal tun-nel syndrome and bilateral ten-donitis, was disabled under theADA because she was substantiallylimited in her ability to performmanual tasks. In so ruling, theSixth Circuit held that in order toestablish she was disabled in herability to perform manual tasks,Williams needed to demonstratethat her impairment “involve[d] a‘class’ of manual activities affectingthe ability to perform tasks at

work.” The Court of Appealsfound that Williams satisfied thistest because her conditions prevent-ed her from performing a variety ofjob-related manual tasks. The SixthCircuit specifically disregarded evi-dence that Williams was able toperform any number of everydaymanual tasks in her personal life.

The Supreme Court unanimouslyheld that the Sixth Circuit erred in disregarding evidence that theemployee was able to perform rou-tine manual tasks that are of “cen-tral importance to most people’sdaily lives.” The Court concludedthat the individual who is limitedmerely in his or her ability to per-form “some isolated, unimportant,or particularly difficult manualtask” is not the intended recipient

of ADA coverage. Recognizingthat the manual tasks associatedwith a particular job are not neces-sarily those that are of “centralimportance” in daily life, the Courtheld that the Court of Appealsshould have taken note of the evi-dence establishing that Williamscould wash her face, brush herteeth, fix meals, bathe, play withher children and perform otherpersonal and household chores.

Williams reiterates to employersand practitioners that it is wise to focus on a claimant’s ability toperform routine daily tasks whendefending against ADA claims, anddispels any notion that a claimant’sinability to perform particularwork tasks is dispositive in theADA disability analysis.

Cathy BissoonPittsburgh Office

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As U.S. military units are involvedin operations overseas and athome, many private and publicemployers are experiencing theimpact of their employees takingmilitary leave. Some employersare offering, or considering, sup-plemental pay to make up for lostwages during military leave. Otheremployers are limiting the dura-tion of supplemental pay to theemployee’s length of service. Stillothers are choosing to provide nosupplemental pay to employees onmilitary leave. In Reed SmithClient Bulletins (01-26 and 01-28),we generally described the provi-sions of the Uniformed ServicesEmployment and ReemploymentRights Act of 1994 (“USERRA”),which provides protections toemployees who serve in the mili-tary—both during the time of theirmilitary leave and upon return. AsReserve and National Guard unitshave been called, a number ofpractical considerations confrontemployers:

� Because employees on militaryleave must generally be restoredto their prior position, or onethat they would have attained ifnot for the military leave, manyemployers face issues aboutreplacement workers—issueswhich can be complicated evenmore if a collective bargainingagreement is involved.

� Employees (and their depend-ents) on active duty for morethan 30 days are covered by mil-itary health care. However, ifcovered under an employer’s

group health plan immediatelyprior to taking military leave, an employee must be given theopportunity for COBRA-likemedical coverage for up to18 months. But, for somehealth plans, the employee’sleave may trigger loss of cover-age which gives rise to actualCOBRA coverage rights.Because COBRA contains sub-stantial penalties for failure toprovide notice, employersshould coordinate carefully thetwo continuation coverages, andconsider providing COBRAnotice as well as USERRA cover-age.

� Employees on military leavewho participate in the employ-er’s 401(k) plan may suspendloan payments if they have out-standing loans to the plan. Thiswill not result in a default onthe loan or other adverse taxconsequences for the plan.Loan payments must restartwhen the employee returns frommilitary leave.

� The employer’s 401(k) plan mayallow a participant on militaryleave (or their designated powerof attorney) to take out a loanor a hardship withdrawal ifapplicable requirements are met.No special rules exist that eitherrestrict or relax a participant’sability to take a loan or a hard-ship withdrawal during the timeof military leave.

� An employee on military leavealso can designate another indi-vidual to change investment allo-

cations in a 401(k) plan, if theplan permits other employees inother contexts to do so, forexample, by power of attorney.

� If the employer experiencesfinancial difficulties during theemployee’s military leave ormust reduce its workforce, theemployee may not have reem-ployment rights upon returnfrom military leave.

� Employees may, if permittedunder the plan, continue tomake contributions to a 401(k)plan out of supplemental pay.In addition, members of the mil-itary may be able to enroll in theFederal government’s ThriftSavings Plan during a specialenrollment period.

For further information aboutUSERRA and reemployment rights of employees on militaryleave, visit our Web site atwww.reedsmith.com.

Amy BergnerWashington Office

Employment Law Review

Employees on Military Leave—Recent Observations

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Changes to the U.S. Department ofTransportation’s (“DOT”) drug andalcohol testing rules went intoeffect on August 1, 2001. TheDOT’s regulations mandate drugand alcohol testing of workers insafety-sensitive positions in indus-tries regulated by the FederalAviation Administration, the CoastGuard, the Research and SpecialPrograms Administration, theFederal Railroad Administration,the Federal Motor Carrier SafetyAdministration, and the FederalTransit Administration. The DOT’sdrug-testing regulations were firstissued in 1988. Alcohol testingwas added in 1994. Some of thechanges that went into effectAugust 1, 2001, are as follows:

� Employers now may apply forwaivers allowing them to tem-porarily remove employees fromsafety-sensitive duties pendingverification by a medical reviewofficer of a positive test result.

� Employers no longer mayrequire employees to sign arelease or waiver of rights inconnection with submission to aDOT-mandated drug or alcoholtest.

� Changes have been made to thedrug and alcohol testing speci-men collection forms.

� Employers must obtain drug-testing information from prioremployers before permitting anemployee to perform safety-sensitive duties for the first time. Likewise, before assigningan employee to safety-sensitive

duties, an employer must askthe employee if he/she had test-ed positive on a pre-employ-ment test that resulted in theindividual not receiving employ-ment in a covered position.

� The DOT regulation’s follow-uptesting requirements now followan employee from job to job andthrough any breaks in service.

� The revised rules also establishprocedures for validity testing ofspecimens, i.e., testing for dilu-tion, adulteration, or substitu-tion, and for addressing negativedilute test results.

� New training requirements fordrug-testing personnel havebeen established.

� The revised rules also providefor disbarment of serviceproviders such as labs, medicalreview officers, and collectionsites for serious noncompliancewith the DOT’s regulations.

Employers subject to the DOT’sregulations should review theirdrug and alcohol testing programsto ensure they are in compliancewith the revised rules.

Rob CottingtonPittsburgh Office

Revised DOT Drug and Alcohol Testing Rules Go Into Effect

Employers subject to theDOT’s regulations should

review their drug andalcohol testing programs

to ensure they are incompliance with the

revised rules.

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Employment Law Review

Employers routinely condition theoffer of employment upon receiptof a satisfactory credit report. Butcan employers legally fail to hirean individual based solely on theresults of negative information in acredit report? And if so, how canemployers protect themselves inthe face of legal challenge? Boththe Fair Credit Reporting Act(“FCRA”) and the United StatesBankruptcy Code (“BankruptcyCode”) contain provisions thataddress these questions.

The FCRA allows employers toobtain an applicant’s credit reportfor the purpose of evaluating acandidate for employment, promo-tion, reassignment or retention asan employee. The BankruptcyCode prohibits discrimination inemployment against an individualwho has filed bankruptcy.Additionally, an employer’s use of credit reports in employmentdecisions affecting employees orprospective employees may violateTitle VII of the Civil Rights Act of1964 (“Title VII”). As long asemployers comply with the disclo-sure requirements of the FCRA,they may obtain a credit report for a potential applicant. But howcan the employer use the legallyobtained information without violating the Bankruptcy Code or Title VII?

A case involving a bankruptcydebtor in the United States DistrictCourt for the Southern District ofNew York recently highlighted thepotential pitfalls of utilizing credit

reports during the hiring process.In Leary v. Warnaco, a successfulcandidate was extended anemployment offer during her sec-ond interview,1 contingent uponthe results of her credit check.The company later advised Ms.Leary that she would not be hiredas a result of her credit report,which revealed that Ms. Leary hadfiled for Chapter 7 bankruptcy in1998, and received her discharge amonth prior to interviewing forthe position. Ms. Leary sued thecompany for violation of theBankruptcy Code’s anti-discrimina-tion provisions. The companyargued that the anti-discriminationprovision only applies once theemployment relationship has beenestablished. In ruling that this wasan issue for a jury, the Court heldthat Section 525(b) of theBankruptcy Code, which prohibitsdiscrimination on the basis ofbankruptcy status, applied to allaspects of employment includinghiring, firing and material changesin job conditions. However, asguidance to employers, the Courtnoted that “the mere ordering of acredit report or a review of thebankruptcy file followed by rejec-tion of the applicant does not com-pel an inference of discrimina-tion.” The Court observed that anapplicant’s bankruptcy file “mayreveal a material character defector problem, such as a history ofprofligate living, a gambling habit,or drug usage, by a job applicantseeking a fiduciary position or a policy position dealing with government or the public.”2

Employers may protect themselvesfrom legal challenge or reducelegal liability by implementing thefollowing practices when usingcredit reports and making hiringdecisions:

� Perform credit checks in a faciallyneutral manner on all applicantsfor a specific position withoutregard to race, age, disability, reli-gion, national origin, gender orother protected category;

� Ensure that the credit checksserve a legitimate, job-relatedbusiness purpose (i.e., fiduciaryposition, licensure require-ments);

� Provide a clear and conspicuousdisclosure to applicants that acredit report will be obtained;

� Receive written authorizationfrom the applicant to obtain thereport; and

� Provide a copy of the report tothe applicant as well as a sum-mary of the applicant’s rightsunder the FCRA, if you decideto take adverse action (such asnot hiring an applicant, denyinga promotion, or terminating anemployee).

Bridnetta EdwardsWashington Office

1 Leary v. Waranco, 251 B.R. 656 (S.D.N.Y. 2000).

2 Waranco, 251 B.R. at 659.

You’re Hired—Subject to the Results ofYour Credit Report—Oops, We Rescind Your Offer!

6

Although nonunionizedemployees now have

Weingarten rights,employers are not obligatedto inform employees of the

right.…Accordingly,employers in nonunionized

workplaces simply need to be mindful of the

employee’s rights once a request is made by

accommodating the requestto have a coworker present

during any investigatoryinterview from whichdiscipline may result.

On November 2, 2001, the UnitedStates Court of Appeals for theDistrict of Columbia Circuit, in a3-0 decision, Epilepsy Foundationof Northeast Ohio v. NLRB, 268 F.3d1095 (D.C. Cir. 2001), upheld theNational Labor Relations Board’s(“Board”) decision in EpilepsyFoundation of Northeast Ohio, 331NLRB No. 92 (2001), to extendWeingarten rights to employees innonunionized workforces.

The Evolution Of Weingarten Rights

In NLRB v. J. Weingarten Inc., 420U.S. 251 (1975), the United StatesSupreme Court held that employ-ees in unionized workforces havethe right to have a co-worker pres-ent during employer-conductedinvestigatory meetings or inter-views, which the employee reason-ably believes may lead to disci-pline. Following Weingarten, theBoard flip-flopped on whetherthese rights applied to employeesin nonunionized settings, holdingfirst that they did apply inMaterials Research Corp., 262 NLRB1010 (1982), but then reversing itsholding three years later in Sears,Roebuck & Co., 274 NLRB 230(1985), holding that employeeswho are not union members haveno Weingarten rights. In EpilepsyFoundation, the Board returned toits original position in MaterialsResearch by extending Weingartenrights to nonunionized employeesand workforces and the Court ofAppeals has now blessed theBoard’s interpretation of the Act.

Epilepsy Foundation:The Court’s Decision

In Epilepsy Foundation, theemployer asked two employees—Arnis Borgs and Ashraful Hasan—to attend a disciplinary meetingafter the two penned a memoran-dum criticizing a supervisor to the supervisor’s boss. Borgsrefused to attend the meetingunless Hasan could also attend.The employer refused and dis-charged Borgs for failing to meet asrequested. Although an adminis-trative law judge held that theemployer’s discharge of Borgs didnot violate the National LaborRelations Act (the “Act”) becauseWeingarten did not apply tononunionized employees, theBoard reversed and took Borg’scase as an opportunity to onceagain extend Weingarten tononunionized workers.

On appeal, the Foundationadvanced three arguments againstthe extension of Weingarten: (1) that the presence of a co-work-er during an investigatory inter-view is not “concerted” and there-fore is not within the scope of anemployee’s Section 7 rights; (2) that the application ofWeingarten to nonunion work-forces contradicts Section 9 of theAct, which requires a union select-ed by a majority of the employeesto be the exclusive representativeof all employees in the bargainingunit; and (3) that applyingWeingarten to nonunionized work-forces violates the employer’s FirstAmendment rights to speak with its employees.

The D.C. Circuit Upholds the Board’s Extension of Weingarten Rights toNonunionized Workers

The Court rejected each of thesearguments. First, the Courtexplained that extendingWeingarten “recognizes that evennonunion employees may have ashared interest in preventing theimposition of unjust punishment,and an employee’s assertion ofWeingarten invokes this sharedinterest” and, thus, would be pro-tected by Section 7 of the Act.Second, the Court rejected theFoundation’s Section 9 argumentnoting that Section 9 refers to theemployer’s obligation to collectivelybargain with a union as the employ-ees’ exclusive representative;because the extension of Weingartendoes not require the employer tobargain with the employee’s chosenrepresentative, there is no Section 9violation. Third and finally, theBoard rejected the Foundation’sargument that its First Amendmentrights were being violated by theapplication of Weingarten to

nonunionized employees because ithad not raised the argument beforethe Board.

Although the Court of Appealsupheld that Board’s extension ofWeingarten, it disagreed with theBoard that this extension should beapplied retroactively. The Courtexplained that “[e]mployees andemployers alike must be able to relyon clear statements of law by theNLRB. Because, at the time ofBorg’s scheduled interview, employ-ees in nonunion workplaces pos-sessed no right to have a coworkerpresent during investigatory meet-ings, the Foundation’s decision todischarge Borgs for refusing to meetalone with his supervisors was notunlawful under the NLRA.”

What Epilepsy FoundationMeans To Employers?

The Board’s position and the posi-tion of the D.C. Circuit are clear—employers must afford employees

in nonunionized workforces therights promised by Weingarten.Although nonunionized employeesnow have Weingarten rights,employers are not obligated toinform employees of the right—employers must only honor anemployee’s specific request to havea co-worker present, once therequest is made. Accordingly,employers in nonunionized work-places simply need to be mindfulof the employee’s rights once arequest is made by accommodatingthe request to have a coworkerpresent during any investigatoryinterview from which disciplinemay result.

Casey RyanPittsburgh Office

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Employment Law Review

Bob Prorok hasbeen with thefirm since 1980.Bob has repre-sented employersin the full rangeof employmentand labor lawmatters including

litigation in federal and state court,litigation before various labor arbi-trators, collective bargaining, andlitigation before the NationalLabor Relations Board, the EqualEmployment OpportunityCommission, the PennsylvaniaHuman Relations Commission andvarious other federal and stateagencies.

In addition to Bob’s labor andemployment legal practice, he is a former adjunct professor with St. Francis College of Loretto,Pennsylvania in the Master of Arts inPersonnel Administration/IndustrialRelations program. Bob is frequentlyquoted in human resource publica-tions and has authored articles on avariety of employment-related topicsthat have been published inCommerce Clearing House, thePittsburgh Business Times, and theAllegheny Business News. He also hasserved on the Advisory Board for theNational Institute of BusinessManagement’s publication “You andthe Law,” and as a Board member forthe National Association of LegalAssistants.

A native of Pittsburgh, Bob is a1977 graduate of the University ofPittsburgh School of Law and wasa member of the Law Review. Hereceived his undergraduate degreein rhetoric and political sciencemagna cum laude in 1974 from theUniversity of Pittsburgh. Aftergraduating from law school, Bobserved as a law clerk in the UnitedStates District Court for theWestern District of Pennsylvania.

Robert F. Prorokrprorok@reedsmith.com

Pittsburgh412.288.4210

The People Behind Our Business

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[T]here are two significantchanges to 401(k) plans,

effective for plan yearsbeginning on or after 2002:

(1) a participant who hasattained age 50 may make“catch-up” contributions toa retirement savings plan;and (2) a participant may

elect to make largerelective deferrals to a

401(k) plan.

In 2001, Congress passed creativetax legislation that expands a par-ticipant’s ability to save under acompany-sponsored 401(k) plan,“EGTRRA”—the Economic Growthand Tax Relief Reconciliation Act of2001, P.L. 107-16. Although manyof EGTRRA’s law changes do nottake effect until after tax year 2002,there are two significant changes to401(k) plans, effective for planyears beginning on or after 2002:(1) a participant who has attainedage 50 may make “catch-up” con-tributions to a retirement savingsplan; and (2) a participant mayelect to make larger elective defer-rals to a 401(k) plan.

“Catch-Up” Contributions

Effective for plan years beginningin 2002, a plan sponsor may amendits 401(k) plan to allow participantswho attain age 50 by the end of aplan year to make an additional$1k contribution. This additionalcontribution is known as a “catch-up” contribution. For years 2003-2006, the maximum amount ofcatch-up contributions will increasefrom the 2002 limit of $1k to $2k,$3k, $4k, and $5k, respectively.Catch-up contributions are not sub-ject to other contribution limits andare disregarded for purposes of theADP and ACP tests. However, theCode Section 401(a)(4) nondis-crimination rules will apply tocatch-up contributions.

The following example very gener-ally illustrates how to determinethe amount of catch-up contribu-tions that a participant can make in2002. Under the catch-up rules, aparticipant who can contribute$11k and who will be age 50 or

older in 2002, can contribute $12k,with the extra $1k being consid-ered a catch-up contribution.Assuming a 15% contribution limitunder the current terms of a plan,only those making more than$73.3k would be able to make atotal contribution of $12k with $1k being a catch-up contribution.A participant earning less than$73.3k would still be able to makea catch-up contribution providedthat he or she makes the maximum401(k) contribution allowed underthe plan. Thus, a participant earn-ing $50k would be permitted tomake a $1k catch-up contributionto the plan provided the participantelects to make elective contribu-tions in an amount equal to 15% ofhis or her compensation, or $7.5k.The total tax-deferred employeecontribution, under this hypotheti-cal, for the participant earning$50k would be $8.5k.

Limits On Employee 401(k)Elective Deferrals

EGTRRA also increased the totalamount of elective deferrals thatmay be made by amending CodeSection 402(g) and Code Section415(c). Generally, Code Section402(g) sets forth the total dollaramount that a participant may con-tribute through elective deferralsunder a 401(k) plan. Under newlaw, in tax years 2002-2006, a partic-ipant may elect to defer the follow-ing: for 2002, $11k; for 2003, $12k;for 2004, $13k; for 2005, $14k; andfor 2006; $15k. Code Section415(c) indirectly limits the amountof elective deferrals participants maymake under a 401(k) plan; CodeSection 415(c) limits the “total” contribution (both employee and

Catch-Up Contributions and Increased401(k) Employee Contribution Limits

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Employment Law Review

employer) to the lesser of a specifieddollar amount (for 2002, $40k) or acertain percentage of a participant’scompensation (for 2002, 100%whereas prior to 2002, the percent-age was 25%). Thus, under theexample for catch-up contributionsabove, the participant could make

the full $11k elective deferral plusthe $1k catch-up contribution, if theplan were amended to reflectamended Code Section 415(c).

The revisions discussed in this arti-cle are only a few of EGTRRA’smany changes. By enacting EGTRRA, Congress created many

exciting design and planningopportunities for sponsors of taxqualified retirement plans. Theopportunities, if capitalized upon,generally expand participants’ ability to save for retirement.

David SawyerPittsburgh Office

Third Circuit Creates More Employer Confusion Regarding Duty toAccommodate after Decision in Skerski

On July 9, 2001, the Third Circuitissued its decision in Skerski v.Time Warner, 257 F.3d 273 (3d Cir.2001), further compoundingemployer confusion over the dutyto accommodate disabled employ-ees under the Americans WithDisabilities Act (“ADA”).

The Plaintiff, Larry Skerski, beganworking as a cable service installertechnician in 1982 for NewChannels, a predecessor of TimeWarner Cable. The job requiredSkerski to climb ladders, poles andtowers approximately 50% of thetime. In May 1993, Skerski beganexperiencing dizziness, nausea andirregular heartbeats while workingat heights. He was eventually diag-nosed as having panic and anxietydisorder associated with prematureventricular contractions in hisheart. Shortly thereafter, a psychol-ogist recommended that Skerskistop working at heights. Afterlearning of the diagnosis, Skerski’ssupervisor modified his schedulelimiting his assignments to “under-ground” work. Time Warneracquired New Channels in March1995 and continued Skerski’s modi-fied schedule until January 1997.

In October 1996, Skerski’s newsupervisor gave him a below stan-dard performance review becauseof his inability to climb, althoughTime Warner later conceded that

his performance was otherwisesuperior. Time Warner toldSkerski that he would no longer be able to work a modified “no-climb” schedule. Skerski told hissupervisor that he would be ableto climb if he were given a buckettruck, which had allowed him towork at heights in the past.Skerski’s supervisor responded thatno trucks were available.

Time Warner subsequently offeredSkerski the opportunity to com-plete a 90-day training program inorder to reacquire his climbingskills, but warned that failure tocomplete the course would lead tohis termination. After failing thecourse, Skerski’s psychologist senta letter to Time Warner reinforcinghis prior medical opinion that “thefear of panic attacks is incapacitat-ing and interferes with [Skerski’s]work and his private life.”

Although Time Warner intendedto terminate Skerski in light of hiscontinued inability to climb, itoffered Skerski a newly created,lesser-paid warehouse position.Skerski had expressed interest inthe position, although he made itclear that he preferred to remain aservice technician.

Skerski accepted the warehouseposition, though he stated he didso “only under duress.” Skerski

further claimed that he did nothave the skills to perform the newjob and injured his back liftingand carrying heavy materials.

Skerski filed suit against TimeWarner alleging discrimination onthe basis of a disability in violationof the ADA.

Although the Court found thatthere were disputed issues of factas to whether Skerski was disabledor had suffered an “adverseemployment action” as a result ofthat disability, it granted TimeWarner’s motion for summaryjudgment because it held as a mat-ter of law that Skerski had failed toestablish that he was “qualified”for the service technician positionunder the ADA.

On appeal, Skerski first arguedthat the District Court erred indetermining that climbing was anessential function of his job as aservice technician.

The Court of Appeals, utilizing thefactors outlined in the EEOC regu-lations to distinguish essentialfrom marginal job functions, foundthat there were only a limitednumber of employees who couldengage in climbing. The Courtalso found it relevant that neitherNew Channels nor Time Warner

continued on page 10

10

[T]he Third Circuit inSkerski has simply

reemphasized the need foremployers “to look deeper

and more creatively intovarious possibilities

suggested by an employeewith a disability,” and to

further engage in aninteractive process with the

employee in determiningwhat accommodations, if

any, are reasonable.

“Third Circuit Creates More Employer Confusion”–continued from page 9

listed climbing as an essential jobfunction in their job descriptions(instead it was listed as a “specialskill” or “physical requirement”),and that Skerski had performed nooverhead work for more than threeyears.

The Court concluded that whileTime Warner’s judgment and writ-ten job descriptions warrantedsome deference, Skerski put forthconsiderable contradictory evi-dence that warranted a trial onthat issue.

Skerski next argued that even ifclimbing was an essential job func-tion, there was an issue of materialfact as to whether he could per-form the job as a service techni-cian with a reasonable accommo-dation.

The Third Circuit (citing Walton v.Mental Health Ass’n of SoutheasternPA, 168 F.3d 661 (3d Cir. 1999))noted that “on the issue of reason-able accommodation, the plaintiffbears only the burden of identify-ing an accommodation, the cost ofwhich, facially, does not clearlyexceed its benefits,” so that sum-mary judgment should be grantedonly “in cases in which the plain-tiff’s proposal is either clearly inef-fective or outlandishly costly.” Ifthe plaintiff satisfies that burden,the defendant then must demon-strate that the proposed accommo-dation creates an undue hardship.

The District Court found thatTime Warner had fulfilled itsresponsibilities under the ADA byassigning Skerski to the warehousejob, which he had requested.However, because Skerski testifiedhe had requested the transferunder duress, the Court of Appealsrefused to draw any inference that

the transfer was reasonable. Inaddition, the Court noted that atransfer to a job for which theemployee is unqualified is not areasonable accommodation.Finally, the Court pointed to theEEOC regulations commentarywhich make it clear that reassign-ment “should be considered onlywhen accommodation within theindividual’s current position wouldpose an undue hardship.”

While the Court of Appeals inter-preted Time Warner’s defense to bethat it would have been inconven-ient for it to make adjustmentsneeded to retain Skerski in theservice technician job, it notedthat the ADA was enacted to com-pel employers to look deeper andmore creatively into the variouspossibilities suggested by a disabled employee.

Skerski contended that TimeWarner should have allowed himto use a bucket truck to work atheights as an installer, which hehad requested from his supervisorprior to being reassigned.

Time Warner argued that thebucket truck accommodationwould be “clearly ineffectual” inlight of the letter sent by Skerski’spsychologist, which stated thatSkerski’s panic disorder preventedhim from, among other things,using a bucket truck.

The Court of Appeals found that agenuine issue of material fact exist-ed as to whether the bucket truckwas a reasonable accommodation.Time Warner had not argued thatthe bucket truck was unavailable orthat providing one would have cre-ated an undue hardship. In addi-tion, Skerski’s psychologist hadnever been questioned as to

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Employment Law Review

whether the truck was a viable alter-native or under what circumstancesSkerski might have been able to usethe truck. The Court noted that ifthe bucket truck was reasonable,the reassignment did not satisfy therequirements of the ADA.

The confusion created by Skerskicenters around the Court’s analysisof what Time Warner’s obligationswere to Skerski in providing anaccommodation. Unfortunately,the Court does not clearly differen-tiate between Skerski’s burden ofproving he is “qualified” and TimeWarner’s duty to provide a reason-able accommodation once Skerskimeets that burden. Many believethat Skerski marked a significantdeparture from previous court rul-ings that gave great deference toemployers in determining whataccommodations are reasonable.Indeed, Skerski’s holding has beeninterpreted to require employers toaccept any and all accommoda-tions requested by disabled

employees unless such accommo-dations create undue hardship.

However, a close reading of theopinion reveals that in determiningwhether an employee is a “qualifiedindividual with a disability,” a plain-tiff must only identify an accommo-dation, “the costs of which, facially,do not clearly exceed its benefits.”Once the Plaintiff identifies such anaccommodation, an employer willbe granted summary judgment onan ADA claim only if the employercan demonstrate that the proposedaccommodation creates an unduehardship.

The Court confuses the issue byattempting to analyze whether TimeWarner provided Skerski a “reason-able accommodation” by transferringhim to the warehouse position utiliz-ing the same standard. However, acloser look at the Court’s analysisreveals that the Court was NOTrequiring Time Warner to show thatSkerski’s request for a bucket truck

was an undue hardship; rather, itrequired Time Warner to demon-strate: (1) whether a reasonableaccommodation could have beenmade to keep Skerski in the servicetechnician position (either the use ofa bucket truck or a continuation ofthe modified work schedule); and(2) if not, whether the transfer to thewarehouse position was reasonable.

In sum, the Third Circuit in Skerskihas simply reemphasized the need foremployers “to look deeper and morecreatively into various possibilitiessuggested by an employee with a dis-ability,” and to further engage in aninteractive process with the employeein determining what accommoda-tions, if any, are reasonable. What theThird Circuit has not done is changethe standard by which courts willmeasure whether a particular accom-modation is reasonable.

Reneé Mattei MyersWilliam Loy

Harrisburg Office

Rob Cottington was quoted in theOctober 2001 issue of Workforcemagazine in an article entitled“Overtime Lawsuits: Are You AtRisk?”

On November 16, Joe McHugh co-authored a paper on the workplaceas a front-line in the war on terror-ism. It was presented to theFederalist Society’s Labor andEmployment Practice Group at theannual Lawyer’s Convention inWashington, D.C.

On December 6, Russ Boehnerand Joe McHugh spoke at theLabor & Employment LawBreakfast Briefing on “Who Is An Employee.”

On December 6, Casey Ryan pre-sented a speech on telecommutingfor the Pennsylvania Bar Institute’sAnnual Employment Law Institute.

Effective in January 2002, ReneéMyers will begin her term asPresident of the Dauphin CountyBar Association Young Lawyer’sDivision.

Don Innamorato will be speakingat the Mealey’s Employment LawConference, February 25-26, 2002.The conference will be at theLaJolla Marriott in San Diego,California.

On Saturday, January 12, 2002, Pat Ritchey, the Practice GroupLeader of the Employment LawGroup, spoke at a CLE in Londonfor in-house counsel of multi-national corporations on theAmerican perspective for conduct-ing reductions in force and down-sizings. The program was spon-sored by the Consortium forContinuing Legal Education inEurope and featured a comparisonof the legal issues in employmentdownsizings in the United States,the United Kingdom and France. Inaddition, Mark Hunt of Reed SmithWarner Cranston presented the sub-ject from the perspective of down-sizings in the United Kingdom.

Happenings

12

[S]tatements, which could typically be grounds

for discharge, may be“concerted activity”protected under the

National Labor RelationsAct (the “Act”) if the

employee makes them with the intent of

initiating group action.

A recent Second Circuit decisionreminds employers of somethingthey would like to forget: inemployee meetings held to discusswages, benefits, or working condi-tions, employees have the legalright to complain about theemployer and to criticize manage-ment, harshly, even profanely, ifthey wish. Such statements,which could typically be groundsfor discharge, may be “concertedactivity” protected under theNational Labor Relations Act (the“Act”) if the employee makesthem with the intent of initiatinggroup action. The case is thecourts’ latest effort to draw thefine line between protected andunprotected statements.

In National Labor Relations Bd. v.Caval Tool Div., Chromalloy GasTurbine Corp., 2001 U.S. App.LEXIS 18790 (2d Cir. Aug. 21,2001), the Court upheld theBoard’s decision that the employer,a Connecticut aircraft parts manu-facturer, committed an unfairlabor practice when it suspendedan employee and placed her onprobation for criticizing a newwork break policy during a groupmeeting. As a result of dissatis-faction with worker productivityand with employee lingering nearthe company’s vending machines,the company’s presidentannounced a change in the breakschedule: employees wouldreceive two 10-minute breaks.Under the prior break policy,employees received one fifteen-minute break in the morning, butwere free to leave their work areas

throughout the day to get coffeefrom the vending machines or toattend to personal business.

At the meeting, hourly employeeDiane Baldessari asked the presi-dent if, under the new policy,employees would no longer beable to get coffee throughout theday outside of the designatedbreak time, and if employeeswould be “written up” if they did so. The president respondedaffirmatively to both questions.Baldessari then asked the presi-dent if the new policy wouldapply to office employees. Whenthe president asked Baldessari ifshe thought it should apply tooffice employees, Baldessari saidyes and that “it would nice ifthings were fair for a change.”The president then stated that the policy would apply to officeworkers.

Baldessari next asked the presi-dent if the new break policy wasmeant to punish workers for ahigh “scrap” rate and downtime.Baldessari explained that she feltmanagement was taking a privi-lege away from the workersdespite the fact that they had nocontrol over the amount and tim-ing of the work given them.Baldessari also blamed manage-ment for scheduling problemsleading to poor work flow. Thepresident responded to these com-ments by asking Baldessari if shewould like him to fire all of themanagers. Baldessari replied thatthat would be a start, except forone manager who she consideredcompetent. At that point, the

Second Circuit Reminds Employers TheyGenerally Must Accept Employee Criticismin Group Meetings

president expressed displeasurewith Baldessari’s complaints andsuggested a human resourcesemployee “come up with a pack-age so [Baldessari could] leave.”Because of Baldessari’s statementsat the meeting, Caval Tool sus-pended her and placed her onprobation.

The Board held that Baldessari’sseemingly insubordinate state-ments were protected “concertedactivity” and, therefore, CavalTool’s discipline of her violatedSection 7 of the National LaborRelations Act. The Court heldthat “the guarantees of Section 7of the Act extend to concertedactivity which in its inceptioninvolves only a speaker and a lis-tener, for such activity is an indis-pensable preliminary step toemployee self-organization.” Id.(citing Whitaker Corp., 289 NLRB.933 (1988)). Furthermore, anindividual employee’s speech is“concerted as long as it is engagedin with the object of initiating orinducing… group action.” Id.Baldessari’s statements fit this cri-teria because “under the circum-stances they bore a direct relation-ship to her concern that thechange in the break policy wasmeant as punishment for theworkers’ reduced productivity.”Id. at *16. Because Baldessari’sstatements were protected, CavalTool’s punishment was unlawful.

In sum, the Second Circuit reaf-firmed that employers must acceptemployee criticism of this type ingroup meetings if the criticism isnot a personal gripe, but directedto conditions the employer impos-es upon all employees.

Employees Have Leeway ToVoice Their ComplaintsVociferously

What about the manner in whichBaldessari expressed her criti-cisms? Could Baldessari have notmore diplomatically raised theseissues? Was her caustic and sar-castic attitude toward the CavalTool’s president grounds for dis-charge? Caval Tool argued thisseemingly promising point, butfailed. The Court acknowledgedthat “an employee may engage inconcerted activity in such an abu-sive manner that he loses the pro-tection of § 7,” but added that“employees receive some leewaysince passions may run high andimpulsive behavior is common.”Id. at *19. As the Board noted inCaval Tool, “[t]he Board has foundconcerted activity to be protectedeven where the employee oremployees are rude, argumenta-tive, use vulgarities or profanities,or make statements which are per-ceived to be insulting or demean-ing to their bosses.” Caval ToolChromalloy Gas Turbine Corp., 168LRRM, 331 NLRB No. 101, 2000NLRB LEXIS 464, at *36 (2000).This is consistent with NLRBprecedent, including a case inwhich the Board held that a sales-woman engaged in protectedactivity when she shouted profani-ty while complaining in a groupmeeting that paperwork require-ments depressed the company’ssalespersons’ earnings. See UnitedEnviro Sys., Inc., 301 NLRB 942,137 LRRM 1222 (1991).

Why Employees Can CriticizeManagement In Group Meetings

When a group meeting is held anemployee’s speech is more likelyto be considered “concerted activi-ty” because “the requisite intentto initiate or induce group action[can] be inferred in the context ofa group meeting held to discussthe terms and conditions ofemployment.” Id. at *13 (citingWhittaker Corp., 289 NLRB 933(1988)). In other words, if anemployer invites discussionamong its employees about termsand conditions of employment,the NLRB and the courts are morelikely to consider statements madein such a meeting to be directedto other employees for the pur-pose of inspiring concerted action.

What Are The Limits OfEmployee Expression?

There is a limit, albeit vaguelydefined, to what employers mustendure in group meetings. Speechintended solely to disrupt themeeting is prohibited. J.P. Stevens& Co., 219 NLRB 850 (1975),enforced, 547 F.2d 792 (4th Cir.1976). Calumny directed at anemployer representative, such ascalling him a “bastard,” is unpro-tected activity. Clark Equip. Co.,250 NLRB 1333 (1980). Threatsof physical violence also are pro-hibited.

Lessons Of Caval Tool For TheCurrent Economic Environment

Because of the current economicconditions, more employers maybe conducting group meetings inwhich they have to convey badnews, inform employees of toughdecisions, and push employees

13

Employment Law Review

continued on page 14

14

The law may require incertain situations that

employers be thick-skinnedwhen employees respond

with criticism, anger, andeven profanity at such

meetings.

harder to meet the current chal-lenges. The law may require incertain situations that employersbe thick-skinned when employeesrespond with criticism, anger, andeven profanity at such meetings.Managers who attend group meet-ings or speak at meetings must beprepared to accept the slings andarrows that the Act places inemployees’ quivers.

Management employees atemployee meetings should notexpress displeasure when con-fronted with employee criticism.Should it later become necessaryto discipline or discharge employ-ees who criticize management atemployee meetings, the employeeswill use any expression of dis-pleasure with their statements tosuggest that the employer disci-plined them for their criticisms,and not for a legitimate reason.See National Labor Relations Bd. v. Talsol Corp., 155 F.3d 785 (6thCir. 1998) (noting that supervisorleading a safety meeting was “irri-tated and visibly angry” afteremployee (who was later dis-charged) challenged supervisor’srepresentations concerning thesafety of chemicals in plant).

Employer representatives shouldbe prepared to address the issuesemployees raise in group meetingsand to defend the company’s deci-sion on their merits. Many caseson this issue involve managerswho were taken by surprise, feelembarrassed at their performancein front of the group, and then,against their better judgment, illegally use discipline to try torebuild their diminished stature.

Another feature of cases on thisissue is employers who takeaction precipitously without anyapparent input from humanresources personnel or attorneys.If an employer thinks an employ-ee’s speech at a group meetingcrossed the line into unprotectedterritory, the employer shouldconsult counsel before acting, toensure that the law supports theemployer’s decision.

Paul RooneyNew York

“Second Circuit Reminds Employers” – continued from page 13

15

Employment Law Review

The first question employers gen-erally ask when confronted with adisability discrimination/accom-modation issue is whether a cov-ered disability exists which triggersan obligation to accommodate.This is hardly surprising and cer-tainly makes sense since an affir-mative answer to the “disability”question is a necessary predicate tothe employer’s legal obligation.

However, an employer may not bewell-served analyzing the issue inthis fashion. Why? Because thecomplexity and unpredictability ofthe “disability” analysis may cam-ouflage a much simpler and effi-cient solution, i.e., whether anaccommodation can be quicklyand easily provided.

The definition of a disability underthe discrimination laws is complexand does not lend itself to self-confident business planning. Thefederal Americans with DisabilitiesAct definition is representative:

a physical or mental impair-ment that substantially limitsone or more of the major lifeactivities of such individual;

42 U.S.C. § 12102(2)(A). Theabove definition is unspecific, fact-sensitive and involves three differ-ent areas for analysis: (1) does aphysical or mental impairmentexist? (2) is it substantially limit-ing? and (3) does it substantiallylimit “a major life activity?”

The lesson to be learned from thisthree-pronged analysis is that an

employer can never be sure, exceptin the clearest of cases, that it hasproperly decided the disabilityissue. Just like a pitch in baseballis nothing until the umpire calls ita ball or strike, so is the employer’sdecision subject to second-guessinguntil a government agency, courtor jury makes the call on the “disability” pitch.

Unfortunately, by the time theexistence of a disability is litigated,it is too late to retrace steps. The“second guessed” employer by thattime might have run up substantiallegal bills, be responsible for thesubstantial legal fees and costs ofits employee/adversary, and berequired to make the requestedaccommodation anyway. How can all of this be avoided?

The key is to forget in the firstinstance about whether there is acovered disability and focus onlyon the requested accommodation.For example, a warehouse employ-ee alleges that he or she has a badback and needs a dolly to moveboxes rather than continuing to liftand carry. Perhaps providing thedolly is so simple and inexpensivefor the employer that it does notmatter whether the back injury issevere enough to constitute a dis-ability or whether the back injuryeven exists.

This approach, of course, requiresthe employer to consider whateffect providing the accommoda-tion will have on other employeesand jobs. Are there other non-

disabled employees in the samejob classification? What if all ofthe other similarly situatednon-disabled employees ask to usea dolly? Will granting the requestwhere not required hamper pro-ductivity? These inquiries all raiseissues that might put the employerright back where it started: decid-ing whether the employee has acovered disability and is entitled to a reasonable accommodation.

However, at least in someinstances, the employer only willneed to make a simple accommo-dation without the potential ofburdensome and troublingrequests from other employees. In those situations, the employerhas reached an easy and practicalsolution that avoids the sticky“disability” issue which possiblycould lead to litigation and sub-stantial legal fees.

This intuitively reversed way ofanalyzing accommodation requestsmay result in considerable savingsof time and money. Try it!

Bob ProrokPittsburgh

The Best Way to Comply with Disability Discrimination Laws—Think Accommodation First

It’s not just business. It’s personal.r e e d s m i t h . c o m

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CONTRIBUTORS

Sara A. BegleyPhiladelphia, PA215.851.8214sbegley@reedsmith.com

Amy B. BergnerWashington, D.C.202.414.9453abergner@reedsmith.com

Cathy BissoonPittsburgh, PA412.288.3268cbissoon@reedsmith.com

Robert B. CottingtonPittsburgh, PA412.288.4294rcottington@reedsmith.com

Bridnetta D. EdwardsWashington, D.C.202.414.9281bedwards@reedsmith.com

William A. LoyHarrisburg, PA717.257.3063wloy@reedsmith.com

Reneé C. Mattei MyersHarrisburg, PA717.257.3046rmyers@reedsmith.com

Robert F. ProrokPittsburgh, PA412.288.4210rprorok@reedsmith.com

Paul P. RooneyNew York, NY212.521.5435prooney@reedsmith.com

Catherine S. RyanPittsburgh, PA412.288.4226cryan@reedsmith.com

David M. SawyerPittsburgh, PA412.288.3838dsawyer@reedsmith.com

Jami SegotaPrinceton, NJ609.520.6032jsegota@reedsmith.com

ReedSmith

Employment Law Review is published by Reed Smith to keep clients and friends informed of developments inemployment labor and benefits law. It is not intended to provide legal advice to be used in a specific fact situation.

The editor of Employment Law Review is Cathy Bissoon, a partner in the firm’s Pittsburgh office. The assistant editor is Casey Ryan, an associate in that same office. They welcome readers’ comments and inquiries.

“Reed Smith” refers to Reed Smith LLP and related entities. ©Reed Smith LLP, 2002.

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To obtain a copy of any of these resources, contact Heather Dudjak at 609.520.6380 or hdudjak@reedsmith.com.