A city employer which threw out the results of an objective promotional exam because there was a statistical racial disparity in favor of white and Hispanic firefighters violated the intentional discrimination provisions of Title VII, the U.S. Supreme Court rules.

The City of New Haven had argued that had they certified the test results, they could have faced Title VII liability for adopting a practice having a disparate impact on minority firefighters. However, the white and Hispanic firefighters alleged that discarding the test results intentionally discriminated against them based on their race. The Supreme Court now adopts a “strong-basis-in evidence standard” in order to resolve conflicts between Title VII’s disparate-treatment and disparate-impact provisions.

“Under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional, disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action,” the Court holds.

“The racial adverse impact in this litigation was significant, and petitioners do not dispute that the City was faced with a prima facie case of disparate-impact liability,” the Court says. However, such a prima facie case—which was just “a threshold showing of a significant statistical disparity, and nothing more—is far from a strong basis in evidence that the City would have been liable under Title VII had it certified the test results,” the Court continues, deciding that the City could be liable for disparate impact discrimination “only if the exams at issue were not job related and consistent with business necessity, or if there existed an equally valid, less discriminatory alternative that served the City’s needs but that the City refused to adopt.” Ricci v. DeStefano

While a company could prohibit employees on paid or unpaid leave from working for another employer, it can’t specifically prohibit employees from moonlighting while the individual is on leave under the Family and Medical Leave Act, according to speakers from the U.S. Dept. of Labor at an HEC seminar on June 23.

Min Kirk and Jamika Lopez, investigators with the DOL’s Wage & Hour Division covered the new FMLA rules for companies with 50 or more employees. They clarified that the rules prohibit treating FMLA leave more stringently than other forms of leave. The speakers also said that although the company may recover medical premium payments owed by an employee returning from FMLA leave, it should make sure that the deduction does not bring the employee’s wages below the legal federal minimum wage (currently $6.55 per hour, will increase on July 24 to $7.25 per hour).

On June 17, the Equal Employment Opportunity Commission voted to revise its regulations on the Americans with Disabilities Act to reflect changes made by the ADA Amendments Act of 2008. Jackson Lewis, a national employment law firm, analyzed the proposed rule changes that are now headed for review by other federal agencies, including the Department of Justice and the Office of Management and Budget, before publication in the Federal Register.

Jackson Lewis says that the EEOC proposed rules adopt a “new approach of including examples in the text [which] is intended to increase the likelihood that courts will defer to the EEOC’s interpretation of the law. It would increase the importance of employers becoming familiar with the specific examples in the regulations, if adopted.”

“The proposal cites activities and bodily functions expressly referenced in the ADAAA, but adds others to the regulations’ non-exhaustive list. These include bending, reading and communicating, three activities not previously recognized by the EEOC as ‘major life activities,’” the law firm says. Jackson Lewis notes that the proposed rule “significantly revises the standard for determining whether an impairment substantially limits a major life activity:” to be “substantially limiting,” an impairment need not severely restrict or significantly restrict performance of a major life activity.

According to the law firm, the EEOC proposal appears to move closer to developing a “per se” list of impairments that will always be disabilities “by identifying examples of impairments that are ‘obviously’ substantially limiting. This virtually guarantees that individuals with such impairments will always be within the class of people protected as ‘disabled.’ Impairments falling in this category range from blindness, deafness, intellectual disabilities (formerly ‘mental retardation’) to major depression, bipolar disorder, post-traumatic stress disorder, and schizophrenia.”

“The EEOC’s proposal apparently also provides a non-exhaustive list of impairments that are not ‘obviously’ substantially limiting, but ‘may’ be substantially limiting. They include asthma, high blood pressure, coronary artery disease, learning disabilities, a back or leg impairment, carpal tunnel syndrome, psychiatric disabilities, such as panic or anxiety disorder and forms of depression other than major depression, and hyperthyroidism,” the law firm says.

With the next 12 months, a majority of U.S. employers plan to reverse some of the changes they’ve been making to their pay, benefits and other HR programs, according to the latest update in June to an ongoing series of surveys by Watson Wyatt.

Watson Wyatt finds that 62 percent of the companies that made hiring freezes and 69 percent of those that made salary freezes plan to eliminate them within the next 12 months. Also, 48 percent that have reduced their employer 401(k)/403(b) matches plan to reinstate them in the same timeframe.

Although the results indicate that more employers feel that the worst of the current downturn may be behind them, “most are not expecting to go back to ‘business as usual’,” says Watson Wyatt spokesperson Laura Sejen. According to the survey results, one in five employers (20 percent) will keep salary reductions in place, and another 20 percent are unsure. Nearly half (46 percent) do not plan to reverse the increases in the percentage that employees now pay for health care premiums. In the next three to five years, more than half (52 percent) of companies surveyed expect that staff sizes will decrease from pre-economic crisis levels, Watson Wyatt reports.

Despite a challenging economic environment, U.S. companies continue to view health care benefits as a vital part of their workplace “deal” with employees and are enlisting their active participation in efforts to improve workforce health and control program costs, according to a Towers Perrin survey of nearly 500 HR and benefit executives.

According to Towers Perrin, over half (53 percent) in the survey say they are trying or considering new benefit strategies they would not have considered otherwise. Almost three-quarters (70 percent) of employers are increasing communication to address employee concerns, and more than half (57 percent) say they are not cutting back on investments in benefit communication and education. The survey also finds that 50 percent of companies have or will introduce/increase investments in wellness and health promotion in 2009 and 2010, and 41 percent have or will introduce/increase investments in care/disease management programs. Many employers are increasing incentives to ensure their employees will participate in the programs; nearly one in three companies (32 percent) in the survey have or will introduce or increase financial incentives for wellness or health promotion activities in 2009 and 2010, and another 30 percent are considering this action. Employers are also getting tougher on employees who opt out: nearly half of the companies (45 percent) in the survey have, will or are considering introducing or increasing penalties for nonparticipation in wellness or health promotion activities.

“Employers recognize that we can't keep doing the same things and expect different results. So we're beginning to see leading companies taking steps to change the system from the inside out, focusing on new benefit designs, incentives for employees and providers, new technologies and new ways to measure and deliver the value of workforce health,” Towers Perrin spokesman Dave Guilmette says.

On an average day, 83 percent of women and 64 percent of men spent some time doing household activities, such as housework, cooking, lawn care, or financial and other household management, according to the Bureau of Labor Statistics.

However, on the days that they did household activities, women spent an average of 2.6 hours on such activities, while men spent somewhat less time, 2.0 hours, according to the BLS. The agency recently released the 2008 results from its American Time Use Survey, which also examines the average amount of time per day in 2008 that individuals worked, cared for household children, participated in educational activities, and engaged in leisure and sports activities.

Employed men spend more hours at work than employed women, the study finds. On the days that they worked, employed men worked about 0.9 hour (52 minutes) more than employed women. BLS says the difference partly reflects women's greater likelihood of working part time. “However, even among full-time workers (those usually working 35 hours or more per week), men worked longer than women—8.3 versus 7.7 hours,” BLS reports. Overall, employed persons worked an average of 7.6 hours on the days that they worked, and worked longer on weekdays than on weekend days—7.9 versus 5.6 hours. Other findings: about 10 percent of the population is engaged in educational activities, such as attending class or doing homework, on an average weekday; nearly everyone age 15 and over (96 percent) engaged in some sort of leisure activity, such as watching TV, socializing, or exercising on an average day.

A divided U.S. Supreme Court rules that in age discrimination cases it is the plaintiff, not the defending employer, who must prove “by a preponderance of the evidence, that age was the ‘but-for’ cause of the challenged adverse employment action.”

The case involved the demotion of a 54-year-old employee whose former job duties were assigned to a younger employee. The older employee sued his employer, alleging that his reassignment violated the Age Discrimination in Employment Act, which makes it unlawful for an employer to take adverse action against an employee “because of such individual’s age.” The lower courts ruled on the suit based on precedents under Title VII discrimination cases for “mixed motive”--where an employee alleges that he suffered an adverse employment action because of both permissible and impermissible considerations. The Supreme Court now rules 5-4 that the burden shifting framework established under Title VII mixed motive claims does not apply to ADEA cases.

“The burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision,” the Court majority says. “Unlike Title VII, which has been amended to explicitly authorize discrimination claims where an improper consideration was ‘a motivating factor’ for the adverse action [citation omitted] the ADEA does not provide that a plaintiff may establish discrimination by showing that age was simply a motivating factor.” Gross v. FBL Financial Service, Inc.

The Second Circuit says there is a difference between picketing and striking, and reverses a National Labor Relations Board decision upholding the termination of employees engaged in unlawful picketing.

A union sought to organize workers of an Albany health clinic, and conducted a 40-minute picketing in front of the facility without giving prior notice to the clinic. Five nonunion employees who were not on duty at the time joined in the picketing. According to the Court, they did not block the entrance to the clinic, and the picketing was peaceful. After the clinic sought an unfair labor practice declaration from the NLRB because the union did not provide the required 10-day notice, the employees were terminated for engaging in an “illegal picket.” The NLRB upheld the terminations.

The Second Circuit overturns the NLRB, stating that the National Labor Relations Act prohibits a “labor organization” from striking or picketing a health care institution without giving the specified period of notice, but “the statute does not state that an employee who does the same commits a violation.”

“While labor organizations are subject to sanction for either striking or picketing without observing the notice requirement specified by section 8(g) [of the NLRA] because of the obligation that section attributes to them, the statute specifies sanctions for employees who participate in the violation only in the case of strikes and not in the case of picketing (unless the employees are agents of the labor organization and have violated section 8(b)),” the Court holds. Civil Service Employees Association v. NLRB

A case involving a United Parcel Service policy of excluding hearing-impaired applicants for “package-car driver” positions has been settled between the company and drivers involved in the suit.

UPS had excluded driver candidates if they could not pass the U.S. Dept. of Transportation hearing standard, even though the vehicles operated by the drivers were not covered by the DOT rules. UPS argued that the hearing-impaired drivers were not “qualified individuals” because they could not meet the company’s requirement to pass the DOT hearing standard, and thus could not meet an essential function of the job, which was DOT certification to drive all commercial vehicles. In 2007, the Ninth Circuit remanded the case, Bates v. United Parcel Service, to a lower court for analysis under a business necessity framework: since UPS linked hearing with safe driving, it bore the burden to prove that as part of its defense to use the hearing qualification standard, the Ninth Circuit ruled.

The settlement agreement provides that UPS will establish a one-year pilot Hearing Protocol for drivers and applicants who do not meet the DOT hearing standard, after which the company will meet with the parties to evaluate how the protocol is working. Under the protocol, drivers with hearing impairments will be individually assessed upon their request to determine their ability to safely operate UPS vehicles weighing 10,000 pounds or less. Bates v. UPS Settlement Agreement

An employer who took prompt, effective corrective action when a racially offensive remark was reported to management was relieved of liability under a hostile work environment claim, a federal district court in Michigan rules.

It came to a worker’s attention that another worker was referring to him as “Cornelius,” an ape character from “Planet of the Apes.” The supervisor learned of the comment from another employee, and spoke with the offended worker because he was worried about a possible fight occurring. The supervisor cautioned the worker about “getting physical” with the alleged offender, then conducted an investigation with the accused. Upon confirming that the reference was made, the supervisor warned the accused about making racially offensive remarks and brought the incident to the attention of the comptroller. In the meantime, the offended worker confronted the accused, raising his voice and pointing his finger in the face of the other worker.

After the confrontation, management suspended the accused for making offensive remarks and gave him a final warning about any future work violations; he immediately stopped using the offensive term. The offended worker was also warned about his confrontational conduct, but was not otherwise disciplined. However, the worker got into a subsequent conflict with another employee and was subsequently terminated for his behavior. He then filed a discrimination complaint with the Equal Employment Opportunity Commission against his employer charging a hostile work environment and retaliatory discharge.

The court rejects the claim, stating that the offended worker learned of the “Cornelius” reference on the same day management did, and that management took prompt action including sending the offender home without pay and issuing a “last chance” warning. “A timely company reprimand that stops the offensive conduct is sufficient to relieve an employer of Title VII liability,” the court says. Furthermore, his confrontational behavior was not protected, because “Title VII does not protect acts of physical violence in opposing unlawful discrimination,” says the court. EEOC v. Dairy Fresh Foods, Inc.

About a third (34 percent) of all workers have increased their planned retirement age in the last 12 months, and for older workers, 44 percent of those aged 50 and over plan to delay their retirement, compared with only 25 percent of those under 40, according to Watson Wyatt.

Based on a survey of 2,200 full-time workers in February, Watson Wyatt finds that although the average planned retirement age for all employees is 65 years old, half (50 percent) of those aged 50 or more plan to retire at age 66 or later. According to the survey, 76 percent of older workers (aged 50 to 64) cited the decline in the value of their 401(k) accounts as the most important reason why they are planning to postpone their retirement, followed by the high cost of health care (63 percent) and higher prices for basic necessities (62 percent). Of this group, more than half (54 percent) also indicated that they will work for at least three years longer than previously expected, Watson Wyatt reports.

The survey also found that workers who participate in a defined contribution-only plan are more likely to delay retirement than those with a defined benefit plan. Only approximately a quarter (26 percent) of those with defined contribution plans, including 401(k)s, plan to retire before the age of 65, compared with 41 percent of those with defined benefit plans, Watson Wyatt says.

Outsourcing HR services has helped companies reduce costs and become more efficient, according to a new Hewitt survey.

Hewitt recently surveyed 104 companies on how they are using outsourcing to improve the delivery of their benefit and HR programs and also how their strategies might be affected by the current economic environment. Hewitt's survey finds that the majority of organizations (55 percent) are experiencing more cost pressures on benefits programs compared with 12 months earlier. About a third (34 percent) of companies said they are more inclined to outsource than they were two years earlier.

Overall, 82 percent of companies that are able to measure the success of their outsourcing initiatives believe they have realized the expected benefits, Hewitt says. Nearly two-thirds (62 percent) of survey respondents for whom cost savings is a primary outsourcing objective said they met expected cost reduction targets through their existing outsourcing program. When asked to assess the success of outsourced HR services, at least 89 percent of respondents rated nearly all services as being effective or highly effective. Almost all (98 percent) organizations that outsource their defined contribution administration rated their program as effective or highly effective; 88 percent rated their outsourced health and welfare services as effective or highly effective; and 100 percent rated their defined benefit programs as being effective or highly effective.