Roundup of Notable Labor and Employment Law Opinions


Recent Court Opinions

By Joseph S. Murray IV
This roundup of notable labor and employment law opinions includes cases from the U.S. 4th Circuit Court of Appeals, the N.C. Supreme Court and the N.C. Court of Appeals from the past several weeks.
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Copyright 2017 North Carolina Bar Association.

FMLA – What is an Equivalent Position?


In Waag v. Sotera Def. Solutions, Inc., the Fourth Circuit provided some guidance as to what an employer’s responsibilities under FMLA are regarding returning the employee to work. Waag alleged he was not returned to a position equivalent to the job held before his leave.

In the return to work requirement under the Family Medical Leave Act, FMLA states an employee must be returned to the “same position or equivalent position.” In this case, the court indicated Waag did not have to be returned to the same position, even if the position still exists.

The question then becomes what does the word “equivalent” mean? The Fourth Circuit held that Waag’s position after his return from leave was equivalent because the salary was the same; he was eligible for bonuses in both positions; the benefits were the same in both positions; his position title and hierarchy in the company stayed the same: and his primary duties were the same for both.

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

Fourth Circuit Sets Joint Employment Test


In a wage and over-time pay lawsuit filed under state and federal law, the Fourth Circuit Court of Appeals set forth its own test for “joint employer” relationships under the Fair Labor Standards Act. The issue was whether two persons or companies constitute joint employers for FLSA purposes.

The court stated that joint employment exists when (1) two or more persons or entities share, agree to allocate responsibility for, or otherwise codetermine essential terms and conditions of worker’s employment and (2) the two entities’ combined influence over the essential terms and conditions of the worker’s employment render the worker an employee as opposed to an independent contractor. The court set out six (6) distinct factors to examine and meeting only one of those factors can support a finding of a joint employer relationship.

Salinas v. Commercial Interiors, Inc. has broad implications for the wage and overtime responsibilities of employers located within the Fourth Circuit, which has jurisdiction over appeals from federal courts located in Maryland, Virginia, North Carolina, South Carolina, and West Virginia.

In another case decided the same day using the new test, the Fourth Circuit applied the test it announced in Salinas to find that satellite television installation technicians were jointly employed by both DirecTV and the subcontractor that employed them initially, so the technicians could bring wage and hour claims against both DirecTV and the contractor.

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

Computer Fraud and Abuse Act and Employment


In a case filed in Eastern District of North Carolina alleging a claim under the federal Computer Fraud and Abuse Act (CFAA), (Sageworks, Inc. v. Creatore) the district court found that the employee accessed information belonging to the employer without authorization and exceeded his authorized access to obtain information.

Cases under CFAA can be brought in federal or state court. An employer can sue employee when the employee accesses and uses information without authorization. This law is commonly being used to file a lawsuit against an employee when the employee takes employer information and goes to work for a competitor.

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

Paid Leave as Reasonable Accommodation in NC


The EEOC has published guidance that providing paid maternity-only leave related to mother’s recovery does not violate Title VII. But does the policy raise the possibility of paid leave as a reasonable accommodation for a qualified individual with a disability?

By linking the leave to the mother’s recovery, the leave is based on a physical impairment. If paid maternity leave is linked to a disability, then employers may not be able to deny similar paid leave as a reasonable accommodation to other qualified individuals with a disability. Nothing in the ADA allows employers to favor one type of disability over another by providing better accommodation or benefits. Employer’s attorneys need to be mindful when advising clients on paid maternity leave policies.

If you have questions about North Carolina employment law, please contact Tracy Stroud at Colombo Kitchin Attorneys at 252-321-2020.

NC Choice of Law and Forum in Business Contracts


The North Carolina General Assembly has decided to legislate choice of law in commercial transactions.  It will be codified at N.C. Gen. Stat. §1G-1. The statute only applies to business contracts. The definition in the statute excludes consumer contracts and employment contracts. The statute says is when it becomes law and applies to business contracts entered into before, on, or after that date.

The benefit of this statute is that that parties they can choose North Carolina law to govern their contracts and they can select North Carolina as a forum to resolve their disputes. Before the statute was enacted an opposing party could attack choice of law in court by saying that the dispute did not have a “reasonable relation” to North Carolina or application of our law would violate a “fundamental policy” of the state whose law would apply in the absence of the choice of law provision.

Now, those attacks are not allowed under the statute. If the parties to a business contract agree that North Carolina law will govern their relationship, it may not be attached on reasonable relation or fundamental policy grounds.

The new law also allows parties to a contract to choose whether they want disputes litigated in North Carolina. Before, parties could attack forum clauses on the basis of substantial hardship or unequal bargaining power.

Finally, the new law also gives parties to business contracts the ability to select a specific North Carolina county in the contract as the place where any lawsuit relating to the contract must be filed.

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

New Seventh Circuit Court of Appeals Case Holds that Sex = Sexual Orientation


Laws governing employment discrimination based on sexual orientation are changing.

  • EEOC has consistently issued guidance that “sex” includes sexual orientation and gender identification.
  • As much as EEOC had wanted it to, until April 4, 2017, no court had held that Title VII barred sexual orientation discrimination.
  • Seventh Circuit Federal Court of Appeals (Illinois, Indiana, and Wisconsin) ruled that sex discrimination extends to sexual orientation Hively v. Ivy Tech Community College of Indiana (April 4, 2017)
  • This is the law in Illinois, Indiana, and Wisconsin and provides persuasive authority for our Federal Circuit, the Fourth Circuit.

If you have questions about employment law issues, please contact Tracy Stroud at 252-321-2020.

How Repeal of Bathroom Bill Affects Employment Law


After a controversial year on the books, North Carolina’s HB2 has been repealed.

  • Repeal of House Bill 2 and House Bill 142: Statute of Limitations for wrongful termination claims based on discrimination based on race, sex, religion, national origin, age, and disability under N.C. Gen. Stat. § 143-422.2 (NC Equal Employment Practices Act) has been restored to three (3) years.
  • Under House Bill 142 in July 2016, there was a one (1) year Statute of Limitations to file lawsuit.
  • The new law does not have any explicit recognition of employment protections based on sexual orientation or gender identity but with repeal, lawyers are again free to argue that “sex” in NC Equal Employment Practices Act refers to both sexual orientation and gender identity.
  • Existing ordinances will not go away, however all localities are pre-empted from amending or enacting employment laws until December 2020.
  • The bill passed March 30, 2017.

If you have other employment law questions, please contact Tracy Stroud at 252-321-2020.

New North Carolina Law Regarding Franchisors


Franchisors are not employers under N.C. Gen. Statute Chapters 95, 96, 97 and 105, which means franchisors cannot be held responsible for NC Wage and Hour violations, Occupational Safety and Hazard violations, Workers’ Compensation violations, and unemployment claims.

  • Only about 2,500 franchisors in the United States
  • Law will likely protect out-of-state interests and if franchisor is the decision-maker for the franchisee, there is no one to hold liable
  • The burden on compliance on Wage and Hour law, OSH workers’ compensation and unemployment will fall to small business owners, the local franchisee
  • Law signed by Governor Roy Cooper on May 4, 2017

For more information about the passage of the new law or if you have other employment law questions, please contact Tracy Stroud at 252-321-2020.

Come September, Your Form I-9 Will be Outdated


Here are changes to the I-9 form.  The new form must be used by September 18, 2017.

  1. The USCIS has changed the name of the Office of Special Counsel for Immigration-Related Unfair Employment Practices to its new name: Immigrant and Employee Rights Section.
  2. Removal of the words “the end of” from the phrase “the first day of employment.”
  3. Revisions to the list of acceptable documents:
  • The Consular Report of Birth Abroad (Form FS-240) has been added to List C. If you’re filling out the Form I-9 online, you will be able to select this form from the dropdown menus. Using e-verify? You can also select Form FS-240 when creating a case for an employee who presents this document for Form I-9.
  • All the certifications of report of birth issued by the Department of State (Form FS-545, Form DS-1350 and Form FS-240) have been combined into selection C #2 in List C.
  • All List C documents except the Social Security card have been renumbered. Example: The employment authorization document issued by the Department of Homeland Security on List C has changed from List C #8 to List C #7.

Employers can continue using the older version through Sept. 17. On Sept. 18, you must use the revised version. You’ll notice the revision date of 07/17/17 N at the bottom of the form. Storage and retention rules for any previously completed Forms I-9 remain the same.

Penalties for non-compliance:

Just last year, the Immigration and Customs Enforcement (ICE) nearly doubled fines for violations with Forms I-9. There is a $216 – $2,126 fine per Form I-9 paperwork violation. That’s an increase from $110 – $1,100. For unlawful employment of unauthorized workers, the fine for the first offense increased to $539 – $4,313 per worker from $375 – $3,200. For unfair immigration-related practices, specifically document abuse, the fine per individual increased to $110 – $1,110.

If you have any questions regarding employment issues, please contact Tracy Stroud at Colombo Kitchin Attorneys, 252-321-2020.