Tuesday, August 25, 2015

"Own Occupation" Clauses and Interpretation

I cover a broad range of (mostly) employment law topics on this blog - but I don't write many posts on long-term disability (LTD) insurance and benefits. Today, I'm sharing some research on "own occupation" clauses.

The gist of an "own occupation" (sometimes called "regular occupation") clause is that insureds must have an injury, illness, or disease that precludes them from working in their "own occupation" to receive benefits. This is often a point of contention between the insurer and the insured. The insured wants to argue for a very narrow definition of the occupation to be eligible for benefits ("I can't do my specific job, so I'm covered!"). Insurers often try to deny claims on the basis that the insured can still perform different jobs that fall under a giant umbrella of the same occupation ("Look at all of these other jobs you can do that are similar enough to be called the same occupation!").

So, what's the law? Here in the Third Circuit, the courts seem to have taken a fairly insured-friendly approach:

In Lasser v. Reliance Std. Life Ins. Co., 344 F.3d 381 (3d Cir. 2003), an insurer relied on a labor market survey to deny LTD benefits under a regular or own occupation clause. The insured was an orthopedic surgeon whose coronary artery disease rendered him unable to be “on call” or perform emergency surgeries. Although his job required these tasks, the insurer denied his claim by concluding that a generic orthopedic surgeon could practice in the field without being on call or performing emergency surgery. The Court rejected this interpretation. Instead of defining own occupation as “orthopedic surgeon” (as the insurer did), the Court defined the insured’s occupation as “an orthopedic surgeon responsible for emergency surgery and on-call duties in a relatively small practice group and within a reasonable travel distance from his home in New Jersey.” Do you see how narrowly they defined that?

The Court concluded that the insurer’s denial of benefits was “arbitrary and capricious” and the insured was entitled to judgment in his favor. Notably, the Court also recognized the “inherent conflict of interest” when the insurer acts as claims administrator. Thus, courts apply a “heightened” or stricter standard of review to benefits denials.

In Weiss v. Prudential Ins. Co. of Am., 497 F. Supp. 2d 606 (D.N.J. 2007), the district court ruled in favor of the insured, a teacher who fell and injured himself. The insurer denied his LTD benefits claim under a regular occupation clause that read:
Regular occupation means the occupation you are routinely performing when your disability occurs. Prudential will look at your occupation as it is normally performed instead of how the work tasks are performed for a specific employer or at a specific location.
The insurer argued that the insured’s occupation was just “teacher” and that he could work in his own occupation as a “light duty teacher.” The Court was not impressed:
Prudential never explained why it classified Weiss simply as a “teacher,” rather than the somewhat more specific title of “special education teacher,” or the even very specific “special education food services teacher” . . . . In sum, Prudential's decision to deny Weiss LTD benefits was arbitrary and capricious because that decision was based upon an unreasonable interpretation of the term “regular occupation.” In other words, had the Policy more clearly stated that those covered under the Policy were simply “teachers” rather than some more specifically defined teacher, then Prudential's decision that Weiss's injuries did not prevent him from performing the job of a light duty teacher would have been a reasonable decision. But given the more generalized definition in the Policy of the term “regular occupation,” Prudential's interpretation of that term cannot be characterized as reasonable under the heightened arbitrary and capricious review standard.
Obviously, individual cases will require fact-heavy analysis of the "occupation" in question and the specific language of the policy.


Tuesday, August 18, 2015

NLRB Punts on Northwestern Football Union

Yesterday, the NLRB issued its long-awaited decision in the Northwestern University football team's union bid. So, are college football players employees, or not? The NLRB drops back... annnnnd... it's a punt!

You can read the decision and a press release. In short, the NLRB declined to exercise jurisdiction because it "would not promote labor stability." Why? Because:
By statute the Board does not have jurisdiction over state-run colleges and universities, which constitute 108 of the roughly 125 FBS teams. In addition, every school in the Big Ten, except Northwestern, is a state-run institution.
The point being that most college football teams exist at schools that are governed by some kind of state labor act (like a "PERA" - Public Employee Relations Act). So, you would have different state labor relations boards ruling on the issue, and inevitably different teams would be governed by different interpretations.

I did not see this coming. Frankly, I'm not even sure I realized it was a possibility. In any event, it was a unanimous decision that managed to preserve the status quo in NCAA football while ducking a controversial issue.

Friday, August 14, 2015

3d Cir.: Paid Suspension "Typically" not an "Adverse Employment Action" Under Title VII

To state a claim for "disparate treatment" discrimination under Title VII, the plaintiff must allege that (s)he suffered an "adverse employment action." The statutory language encompasses hiring, firing, and “compensation, terms, conditions, or privileges of employment.” 42 U.S.C. § 2000e-2(a)(1).

In Jones v. SEPTA (opinion here), the Third Circuit addressed an issue of first impression (that means they have never addressed it before): Does a paid suspension constitute an adverse employment action? In short, the Court answered "no." The Court pointed to a number of other circuit courts that have held the same way, concluding "we think this chorus is on pitch."

Two caveats to attach to this holding:
  1. The Court left itself some room to distinguish this case from other situations. For example, they held that a paid suspension "typically" does not constitute an adverse an employment action. So, there's a little (in my opinion, not much) wiggle room.

  2. The standard for an adverse action in the retaliation framework is different, and easier to establish. The Court specifically noted "we need not consider and do not decide whether a paid suspension constitutes an adverse action in the retaliation context." 
The Court marked Jones "Precedential."

Wednesday, August 12, 2015

Lawffice Space Named to Top 10 List

Lawffice Space was named to Hennig Ruiz's 10 Employment Law Blogs to Help You Understand Your Rights! I'm mostly just shamelessly bragging, but I'm also sharing the list because it includes some other blogs that you may find helpful.

2d Circuit Weighs in on "the Manager Rule" and Pleading Standards

Earlier this month, the Second Circuit issued its opinion in Littlejohn v. City of New York addressing "the manager rule" under Title VII retaliation claims.

Sometimes, in retaliation cases, the employee claiming to have opposed discrimination also has a job responsibility that involves policing discrimination in the workplace. In litigation, employers will often argue that the employee has not really engaged in "protected activity" because the employee was just doing his or her job... not really opposing discrimination as contemplated in Title VII. Let's cut straight to the holding:
To the extent an employee is required as part of her job duties to report or investigate other employees' complaints of discrimination, such reporting or investigating by itself is not a protected activity under § 704(a)'s opposition clause, because merely to convey others' complaints of discrimination is not to oppose practices made unlawful by Title VII. But if an employee—even one whose job responsibilities involve *5656investigating complaints of discrimination—actively "support[s]" other employees in asserting their Title VII rights or personally "complain[s]" or is "critical" about the "discriminatory employment practices" of her employer, that employee has engaged in a protected activity under § 704(a)'s opposition clause.
The Court tried to contrast "just doing her job" with personal opposition to discrimination. This sounds like a good rule, but I suspect it will often be easier recited than applied. We'll see.

If you're into pleading standards for discrimination claims in a post-Iqbal-Twombly world, the Court also addressed that. Frankly, I think they dragged the analysis out a little longer than necessary... but ultimately reached what I think is the inevitable conclusion on this issue: The plaintiff must allege facts that establish a prima facie case under the McDonnell Douglas test (assuming it's a circumstantial case - obviously, allegations of direct evidence of discrimination would also suffice).

The tricky part is the discrimination prong of that initial analysis. The Court held that the plaintiff must allege facts that "give plausible support to a minimal inference of discriminatory motivation."

Tuesday, August 4, 2015

Craig James Files Religious Discrimination Lawsuit

Yesterday, Craig James filed a religious discrimination lawsuit against Fox Sports. You can read the Complaint here.

The whole saga played out over a couple of weeks (arguably a couple of days). Craig James appeared on Fox Sport on August 31, 2013 and got fired on September 1, 2013. Why? Two days is too short to blame it on his case of KOPS (Keith Olbermann Personality Syndrome). James claims it was because of some anti-same-sex marriage comments he made while running for Texas state senator.

From the Complaint:
[H]e believes marriage is between a man and a woman for biblical reasons, and the Bible – and Christianity – forms the basis of his beliefs on the issue. He repeatedly referenced his beliefs, and repeatedly called upon the audience to “stand up” “as Christians" . . . .  
In light of speculation, on or about September 6, 2013, Dallas Morning News Reporter Barry Horn asked Fox Sports executives whether Fox Sports terminated James for his beliefs about marriage. Even though most companies rarely comment on personnel matters, Fox Sports’ Senior Vice President of Communications responded to the question: “‘ We just asked ourselves how Craig’s statements would play in our human resources department,’ said a Fox spokesman. ‘He couldn’t say those things here.’”
That certainly doesn't sound very good. Of course, the problem is that James had already made the comments at the time he was hired. So, I'm not sure the discrimination theory makes sense. I guess we'll have to wait and see how this plays out.

Monday, August 3, 2015

Who Wears Short Shorts? - Not JC Penney, Apparently

When an employment law-related issue "goes viral", I feel like I have to weigh in on the ole blog here. By now, you may have seen this story: JC Penney employee sent home for wearing shorts she bought in store's career section. She went home and never came back, but went on an Internet tirade instead.
I think the appeal of the story is that the shorts were tagged "career" by JC Penney, but they were apparently not good enough for a "career" at JC Penney.

The young woman (w/Twitter handle "@queenfeminist") claims this was a sexist, anti-feminist rule against women showing too much skin. JC Penney claims it's a gender-neutral prohibition against anyone wearing shorts. For what it's worth, I've never seen employees wearing shorts in JC Penney... but concede that I'm not in there all that often, and our local store closed recently.

The employment law takeaways are limited:
  • If you have a "no shorts" policy, apply it evenly to men and women; 
  • If you have a dress code, notify your employees ahead of time (the young woman claims she was never informed of the dress code). 
Of course, the real question here is: What in the heck are "career" shorts? I'm hard-pressed to think of careers that involve those shorts.