Issue 1 - 2007

Family Medical Leave Rights - Do Your Homework
Overtime Exemption For Computer "Professionals" -- Revisited
Can Firing An Employee For Angry Outbursts
Violate Anti-Discrimination Laws?

Employee leave rights require detailed analysis before making employment decisions. The recent case of Rucker v. Lee Holding Co., d/b/a Lee Auto Malls highlights the need for employers to take a broad and critical look at Family Medical Leave Act ("FMLA") eligibility requirements.

In this case, Kenneth Rucker ("Rucker") was employed by Lee Holding ("Lee") as a car salesman for several years before voluntarily terminating his employment. Rucker rejoined Lee after a five year absence. Rucker then worked for Lee for seven and a half months when he ruptured a disc in his back. Over the next month and a half, Rucker received medical treatment for his back injury and took medical leave at various times due to pain. Lee terminated Rucker's employment after Rucker had missed a total of thirteen (13) days of work and was still out on medical leave. Rucker sued Lee for violating the FMLA.

The FMLA defines an eligible employee as someone who has been employed "for at least 12 months by the employer with respect to whom leave is requested" and "for at least 1,250 hours of service with such employer during the previous 12-month period." Lee sought to dismiss Rucker's complaint on the grounds that he was not eligible for FMLA because although Rucker met the 1,250 hours worked requirement, he had worked less than 12 months for Lee during his second employment period. Rucker argued that he was eligible for FMLA because the Department of Labor (DOL) Regulations provide that "The 12 months an employee must have been employed by the employer need not be consecutive months."

Ultimately, the Court of Appeal reasoned that since Congress had not directly addressed the precise question at issue, it would defer to the DOL's interpretation of the law: "the 12 months an employee must have been employed by the employer need not be consecutive months."

It is possible the DOL will adopt a different view of eligibility requirements for FMLA and change its regulations in the future. In the meantime, employers should include all service performed by employees, irrespective of breaks in service, when analyzing FMLA eligibility. Prudent employers will consult employment law counsel before terminating employees on medical leave.

State and federal wage and hour law provide an overtime exemption for those persons employed as "Computer Professionals." That category, however, is very restrictive; far fewer employees qualify for that exemption than employers may believe.

In California, employees may be exempt as a computer professional if they:

• Spend more than half their work time in duties that:
  Are intellectual or creative
  Require the exercise of discretion and independent judgment
  Consist of one or more of the following:
• Applying systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications
• Designing, developing, documenting, analyzing, creating, testing, or modifying computer systems or programs, including prototypes, based on and related to user or system design specifications; or
• Documenting, testing, creating, or modifying computer programs related to the design of software or hardware for computer operating systems.

• Are highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering; and
• Are paid at least the minimum compensation set annually by the state. For 2007 -- $49.77 per hour or an annual salary of $103,521.60.

Recent settlements underscore the limited application of the exemption. IBM recently agreed to pay $65 million to employees whose primary duty was to install, maintain and support computer software and hardware for IBM and its customers. Siebel Systems, Inc. has agreed to pay up to $27 million to employees titled "software engineers" who claimed they were misclassified as exempt in violation of California law. Electronic Arts settled separate class action lawsuits with entry level graphic artists and entry level computer programmers for $15.6 million and $14.9 million, respectively.

To illustrate, the federal Department of Labor recently issued an opinion letter regarding the exemption status of an employer's Information Technology (IT) Support Specialists. The IT Support Specialist position at issue was formerly named the Help Desk Support Specialist, and was responsible for the diagnosis of computer-related problems as requested by employees and contractors of the employer. To make that diagnosis, the IT Support Specialist would conduct problem analysis and research, troubleshoot, and resolve complex problems either in person or by using remote control software. The IT Support Specialist position required only a high school diploma or GED, although an associate degree was preferred.

The Department of Labor concluded that the IT Support Specialist position would not qualify for the computer professional exemption under the federal law. The Department of Labor explained that maintaining a computer system and testing by various systematic routines to see that a particular piece of computer equipment or computer application is working properly according to the specifications designed by others are examples of non-exempt work. The primary duty of this employee does not involve: determining hardware, software or system functional specifications; designing, developing, documenting, analyzing, creating, testing or modifying computer systems or programs, including prototypes, based on and related to user or system design specifications; designing, documenting, testing, creating or modifying computer programs related to machine operating systems all as required by the computer professional exemption.

The determination that an IT employee is exempt from federal and California state overtime requirements is not one which should be made without careful legal analysis. The attorneys at Simpson, Garrity & Innes, P.C. can provide assistance for that process. No employer is safe from scrutiny in this environment of increasing wage and hour litigation.

Employers should take care when deciding whether to terminate an employee with a mental disability for misconduct. If the misconduct is caused by the mental disability, and does not pose a threat to either the employee or others in the workplace, the termination may violate anti-discrimination laws.

In a decision issued March 2007, a federal court of appeals overturned a jury verdict in favor of the employer in a disability discrimination case. The jury had found that the employer did not discriminate on the basis of the employee's mental disability, bipolar disorder, when it made the decision to terminate the employee based on her poor job performance and her "violent outbursts" at work. The decision to terminate the employee was made following a meeting between the employee and her supervisors to discuss her poor job performance as well as her unacceptable "general disposition." After the meeting, the employee shouted profanities at her supervisors, slammed the door on her way out of her supervisor's office, and kicked and threw things at her cubicle. The employee's behavior prompted at least one of her co-workers to request that she be prevented from returning to work.

The federal court overturned the jury verdict and sent the case back for another trial on the grounds the first jury had not been correctly instructed in the law. The Court explained that the jury should have been instructed that they could find that the employer violated anti-discrimination laws if the employer's decision to terminate the employee was motivated in part by conduct caused by her disability. In this instance, the employee had told the Company she had been diagnosed with bipolar disorder, a mental disability that can cause extreme mood swings and displays of anger, and had told a supervisor shortly before her termination that she was struggling with her medication. If the jury found that the employee's "violent outbursts" were caused by her bipolar disorder, the jury could find that the Company violated anti-discrimination laws by terminating her employment.