Northwest Business Litigation

The Northwest Business Litigation blog is a resource for in-house counsel, business executives, human resource managers and others who monitor litigation and legal issues affecting Northwest businesses. The litigation group of Ater Wynne LLP hosts the blog.  Go to Ater Wynne LLP's Website.

This site is provided for informational purposes only and does not constitute legal advice, nor does it form the basis for an attorney-client relationship.

New Portland sick leave ordinance will go into effect January 1, 2014

Following in the footsteps of Seattle, San Francisco, and others, the City of Portland enacted a sick leave ordinance on March 13, 2013, applicable to employees who work at least 240 hours per calendar year within the City limits. Employees who work in the City intermittently accrue benefits under the ordinance only for the hours they are paid to work within the City.

The ordinance requires small employers – those with five or fewer employees – to provide one hour of unpaid sick time for every 30 hours of work performed by the employee. Employers of six or more employees must provide one hour of paid sick time for every 30 hours of work performed. Salaried executive, administrative or professional employees who are exempt from overtime under state and federal law are presumed to work 40 hours per week for purposes of accruing sick time under the ordinance, unless their regular work week is less than 40 hours.

Employees may accrue a maximum of 40 hours of paid sick time per year unless the employer provides or is contractually obligated to provide more. Employees may carry over up to 40 hours of unused sick time from year to year. An employer with an established sick leave or PTO policy that provides for the accrual of sick time that equals or exceeds the requirements of the ordinance need not provide additional time off.

Employees may use sick time accrued under the ordinance for:

• The diagnoses, care, or treatment of an illness, injury, or health condition, including pregnancy, childbirth and preventive care, of the employee or the employee’s family member.
• For protected leave under ORS 659A272 (covering absences due to domestic violence, criminal harassment, sexual assault , or stalking).
• Due to an ordered closure of a business, school or day care facility due to a public health emergency.
• Due to a legal requirement that the employee be excluded from the workplace for health reasons.
• To care for a family member of whose presence in the community would jeopardize the health of others, as determined by a public health authority.

The required sick time may be used for all of part of a shift in increments of no less than one hour, unless the employer allows a smaller increment to be used. Employees may not use sick time if the employee is not scheduled to work in the City for the shift for which the sick time is requested. Employees are also prohibited from using sick time in the first 90 days of employment, unless the employer allows it.

Employers must allow employees to trade shifts to avoid using sick time if the employer allows shift trading. Employees must otherwise use their accrued sick time whenever an absence qualifies for it.

Employees must notify employers of their need to use sick time. Employers are required to establish a written policy or standard to inform employees how that notice should be provided. For absences of more than three consecutive days, employers may require reasonable documentation that sick time has been used for a permissible purpose. Employers must pay the cost of any verification required from a health care provider that is not covered by insurance.

Employers are not required to pay employees for unused accrued sick time on termination of employment.

Employers may not count the use of sick leave toward as an unexcused absence under an attendance policy. In addition, employers are prohibited from interfering with or retaliating against employees who exercise or attempt to exercise their rights under the ordinance. Employers must post a notice informing employees of their rights under the ordinance.

The City has yet to adopt administrative rules for interpreting or implementing the ordinance, which will be subject to a public review process. Enforcement is likely to be governed by ORS Chapter 659A.800, which sets forth the procedures for enforcement and remedies for violation of many of Oregon’s employment-related statutes.

Employers have the rest of the year to beef of their sick leave policies or otherwise comply with the new ordinance. Stay tuned for further developments.

US Supreme Court: Class certification inquiry may involve a ruling on the merits

Courts considering motions to certify a class action can't shy away from considering the merits, if doing so is necessary to determine whether the class meets the requirements of FRCP 23(a).  That was the conclusion reached last week by the US Supreme Court in Comcast Corp. v. Behrend. 

In Comcast, the plaintiffs sought to certify a class of Comcast cable television customers in the Philadelphia area.  Plaintiffs claimed an antitrust violation arising out of Comcast's acquisition of competitor cable providers.  In order to certify a class action under FRCP 23(a), plaintiffs were required to show, among other things,that damages were measurable on a classwide basis through a common methodology.  In agreeing to certify the class, the Third Circuit Court of Appeals refused to entertain certain of defendant's arguments about the plaintiffs' damages model because those arguments had a bearing on the merits of plaintiffs' claim.

Justice Scalia, writing for the majority, stated that the inability of plaintiff's expert to tie the above-market prices to the alleged antitrust violations made the case improper for class certification.  The Third Circuit's refusal to address that issue because it touched on the merits was improper.

Employers must exercise caution when withdrawing offers of employment

The Oregon Supreme Court in Cocchiara v. Lithia Motors, Inc., (discussed in our earlier blog post here) opened up the possibility of a promissory estoppel or fraud claim against an employer who withdraws an offer of at-will employment. The Supreme Court found no conclusive presumption against recovery for lost at-will employment where the plaintiff was never hired or allowed to start work.  

The anomaly created by this case – and the one noted in other cases involving this issue – is that the employer may not have been subject to suit if it had allowed the employee to start work in the at-will position, and then terminated his employment soon thereafter. Short of that, employers seeking to avoid claims in connection with offers of employment will want to be clear about any contingencies that must be met before employment begins, and must insure that any representations they make to induce the employee’s reliance on a job offer are accurate.

Retracting an at-will job offer puts employer at risk for a tort claim

The Oregon Supreme Court this month held that a person offered at-will employment may be able to state a claim for promissory estoppel and fraud when the prospective employer retracts the offer. 

In Cocchiara v. Lithia Motors, Inc., according to the facts put forward by plaintiff in response to a summary judgment motion, plaintiff was a long-time employee of defendant who, after suffering a heart attack, asked defendant for a transfer to a less stressful position.  Defendant offered plaintiff a transfer to a new position, and plaintiff as a result turned down a job offer from another prospective employer. Soon thereafter, and before plaintiff made the transfer, the employer retracted the offer.  Plaintiff sued for promissory estoppel and fraud.

The trial court and Court of Appeals held that plaintiff could not state a claim as a matter of law.  Because the employment offered to him was at-will and could have been terminated at any time, those courts concluded he could not prove either reasonable reliance on the promise or damages.  The Supreme Court disagreed, finding nothing in the law to support the conclusion that "a promisee's reliance is per se unreasonable if the underlying promise is for a contract at will."  Reasonableness is an issue for the jury, considering all relevant circumstances.  Likewise, the fact that the offered job was terminable at will does not mean as a matter of law that plaintiff cannot prove associated damages.