Connecticut's New Civil Union Law

Necessitates Thorough Review Of

Employment Policies And Benefit Plans

   With the passage of "An Act Concerning Civil Unions" on April 20, 2005, Connecticut has joined Vermont and Massachusetts as the only states to afford legal status/protections to same-sex couples. The new law, which takes effect on October 1, 2005, extends the same legal benefits, protections and responsibilities to same-sex couples that are currently provided to married couples under nearly 600 different state statutes, several of which impact upon issues in the workplace.  As a result, Connecticut employers need to thoroughly review their employment policies and employee benefit plans to implement changes necessitated by the new law.

   Beginning on October 1, 2005, two adults of the same sex who are: (1) not parties to another civil union or marriage; (2) not immediate family members; and (3) at least 18 years of age (or emancipated minors) may obtain a "civil union license" from the appropriate municipal authority (similar to a marriage license).  Once a license has been obtained, same sex couples can then be joined in a civil union by anyone authorized to marry heterosexual couples. Thereafter, civil union parties will be deemed to have the same legal status as married couples in a variety of non-workplace related situations such as: (1) family law issues (i.e., custody, child support); (2) property issues (i.e., ownership and transfer); (3) probate issues; and (4) medical issues (i.e., emergency treatment, hospital visitation).  In addition, civil union parties will be afforded the same legal benefits and protections as married couples in a variety of workplace related situations such as: (1) benefits under the Connecticut Family and Medical Leave Act; (2) prohibition of discrimination based on marital status (and/or sexual orientation) under Connecticut's Fair Employment Practices Act; (3) absences from work pursuant to Connecticut's Crime Victims' Rights laws; (4) benefits under Connecticut's Workers' Compensation laws; (5) benefits under group health insurance plans and/or retirement or pension plans; (6) absences from work pursuant to employer policies regarding bereavement leave, personal leave and/or sick leave; and (7) employment policies pertaining to hiring or employing relatives at work.

Bottom Line For Employers

   Prior to October 1, 2005, employers need to identify existing policies and practices that apply to married individuals within the workplace and modify such practices and policies to accommodate the civil union relationship.  For example, to the extent that an employer has a bereavement leave policy that provides for paid time off due to the death of an employee's "spouse," such policy should be rewritten to provide the same benefit for civil union parties.  Similarly, should an employer's group health insurance plan provide for coverage for an employee's "spouse" as "spouse" is defined under applicable state law, then health insurance coverage would need to be extended to Connecticut employees who are parties to a civil union as well.   Further, employers who are subject to the requirements of the Connecticut Family and Medical Leave Act (but not employers who are only subject to the requirements of the federal family and medical leave act) must rewrite their policies to include civil union parties wherever spouses are referenced.  

   Employers who require assistance in reviewing and/or revising their policies, or in implementing new policies to comply with the requirements of the civil union law, may contact any of our attorneys who would be able to provide specific advice to respond to individual employer needs and circumstances.

Connecticut Superior Court Rules

That "Whistle-Blower" Employed

By Privately Held Company

Is Entitled To Protection Under Connecticut's

Version Of The Sarbanes-Oxley Act

   A Connecticut Superior Court judge has provided a new cause of action to protect employees fired for internal whistle-blowing activities at privately held companies. 

   In Chenarides v. Unilever Bestfoods, the former director of human resources claimed that he was illegally fired for conducting an investigation of fraud and corruption that implicated employees at some of Unilever Bestfoods' subsidiaries, including the company responsible for producing Thomas's English Muffins. More specifically, Mr. Chenarides alleged that he was terminated after failing to heed his superiors' warnings to curb his investigation because it was "pissing people off."  Accordingly, Mr. Chenarides asserted a claim of wrongful discharge in violation of public policy, arguing that his firing contravened the public policies against fraud, corruption and cover-ups in the workplace.

   In response, the employer moved to strike the complaint for failure to state a claim upon which relief could be granted, arguing that the termination did not implicate any public policies against fraud because there existed no state statutes that prohibited the alleged conduct. However, the judge denied the employer's motion to strike, allowing the claim to proceed to trial. In so doing, the judge cited to the public policies contained in two different state statutes to provide support for Mr. Chenarides's claims:  (1) Conn. Gen. Stat. § 31-51, which prohibits firing a worker for whistle-blowing to a state or federal enforcement agency; and (2) Conn. Gen. Stat. § 31-1336, the state's version of the federal Sarbanes-Oxley act, which prohibits retaliation/discrimination against "whistle-blowers" in publicly held companies.

   Despite the fact that neither statute directly applied to Mr. Chenarides's employer (since his complaints were only internal and since his employer was not a publicly held entity), the judge looked beyond the letter of the statutes to sustain the wrongful discharge claim.  More specifically, the judge noted that Connecticut's version of the Sarbanes-Oxley Act may focus on the need to protect investors in public companies from fraud, but it also protects employee whistleblowers whether they report internally or to government authorities.  Therefore, the judge reasoned that there was a need to protect innocent third parties in private corporations from fraudulent conduct, beyond the act's policy of protecting shareholders in public companies.  Accordingly, while acknowledging that neither statute was directly applicable, the judge determined that both statutes could supply the public policy basis to support a wrongful discharge case "for an employee of a privately held corporation who, like Chenarides, reports fraud only internally."

Bottom Line For Employers

   The decision in the Chenarides case continues a disturbing trend for Connecticut employers in which courts have extended the wrongful discharge cause of action based on violations of public policies contained in statutes that do not directly apply to the employers at issue.  Indeed, in the Chenarides case, the judge based his ruling, in part, on the recent decision in Thibodeau v. Design One Architects, in which the Connecticut Supreme Court applied the underlying public policy behind Connecticut's Fair Employment Practices Act (CFEPA) prohibiting (among other things) pregnancy discrimination to sustain a wrongful discharge claim against an architectural firm, despite the fact that CFEPA did not apply to the architectural firm at issue (since they employed less then 3 employees, which is the threshold for coverage under CFEPA). 

   Given this trend to expand the wrongful discharge cause of action in Connecticut, employers are cautioned to be cognizant of the public policies underlying all of the state's laws that could potentially impact their employees prior to making adverse employment decisions, even if the laws themselves are not directly applicable.

Employers Fight Back

Against "Cybersmearers"

   A number of courts have recently issued decisions affording protections for employers faced with employees who engaged in "cybersmearing" against their organizations. "Cybersmearing" is when an employee anonymously goes on to existing Web sites or creates their own Web sites or "blogs" (an online Web log or journal) and either discloses confidential information about their employers or makes professional or personal criticisms of management.  In response to such tactics, employers have sued the anonymous "cybersmearers" under various legal theories (such as defamation, invasion of privacy, breach of contract) with the goal of forcing the applicable Internet Service Provider (ISP) to disclose the identity of the "cybersmearer" and to then enjoin the now identified individual from further acts of "cybersmearing."

   While the courts have been receptive to employers seeking to force ISPs to divulge the identity of the anonymous individuals in response to such lawsuits, the standard for obtaining such injunctive relief is still fairly high. The employer generally must show that the company's reputation in the market has been harmed or that there has been a significant financial loss (either in market share or a drop in stock prices) because of the anonymously posted comments.  In addition, the employer must demonstrate that what has been posted is not already widely available public information about the company.

   Once the identity of the "cybersmearer" has been discovered, employers will ultimately have to demonstrate that what has been written about them is not: (1) a matter of free speech for the employee; or (2) concerted activity under the National Labor Relations Act as "communication to co-workers" about their labor rights; or (3) an act of "whistleblowing" in order to successfully enjoin the individual from further acts of "cybersmearing" and/or to recover any monetary damages due to the employee's conduct.

Bottom Line For Employers

   As we continue to move towards a society where more and more information is communicated via the Internet, it is imperative that employers curb the spread of any "cybersmearing" that may be occurring regarding their organizations. While the courts have forced ISPs to provide the identities of such anonymous "cybersmearers" when employers can satisfy the high standards for obtaining injunctive relief, it may be more worthwhile for the employer to investigate and attempt to discover for itself the identity of the "cybersmearer" without resorting to the uncertainty of such litigation. 

   In conducting any such investigation, the employer should first determine who had access to any information now appearing online and then try to trace the information posted back through the organization to discover who could have leaked the information to the "cybersmearer." In addition, employers should examine the timing of the messages to determine if they correlate with an adverse job action against any particular employee.  Finally, employers should consider attempting to tease out the anonymous "cybersmearer" by planting certain information with certain individuals to see if the information makes it onto the website in order to eliminate the number of potential suspects.     

Overtime Exemptions Continue To

Perplex Connecticut Employers

   It has been nearly one year since the United States Department of Labor ("DOL") issued new regulations under the Fair Labor Standards Act ("FLSA"), known as the FairPay Rules, which significantly revised the standards for determining whether an employee is "non-exempt" and eligible for overtime pay under federal law or whether an employee qualifies as "exempt" from overtime payments.  While the exact contours of these newly enacted federal regulations continue to be tested in litigation (with recent trends showing that FLSA litigation is now outpacing discrimination lawsuits in courts throughout the country), Connecticut employers continue to be perplexed about the extent to which the federal FairPay Rules even apply, given the differences that remain between the federal overtime laws and Connecticut's own overtime laws.

   In an effort to assist Connecticut employers in this endeavor, the Connecticut Department of Labor ("CT DOL") has developed a chart comparing the overtime exemption regulations under state and federal laws. A copy of the chart may be downloaded from the CT DOL's Wage and Workplace Standards Website at www.ctdol.state.ct.us/wgwkstnd/wgemenu.htm.  The following highlights some of the significant differences that remain between the state and federal laws as identified on this chart:

Ø      Unlike federal law, there is no separate overtime exemption for computer employees under state law.

Ø      Unlike federal law, Connecticut law does not permit unpaid disciplinary suspensions of one or more full days for violating workplace rules (i.e., sexual harassment policy) and instead only permits such suspensions in increments of full weeks.

Ø      Unlike federal law, there is no exemption under state law for "highly compensated employees."

Ø      Unlike federal law, Connecticut's "short test" for executive exemption does not require an employee to have "hire and fire" authority.

Bottom Line For Employers

   Because Connecticut employers are governed by both state and federal wage and hour laws, they must determine the exempt status of their employees in accordance with the requirements under both laws.  Where such requirements conflict, or where the state has not adopted some of the requirements under federal law (such as the computer employee exemption), Connecticut employers need to comply with the requirements that are most favorable to their employees. Employers who need further assistance in sorting through the nuances between state and federal overtime laws may contact any of the attorneys in our firm for specific guidance.

Clarifying The Interplay Between

Severance Packages And

COBRA Notification Obligations

   Employers often offer terminated employees a severance package that includes full payment of group insurance coverage for the severance period.  However, employers need to be aware of when the law requires that such employees receive notice of their rights to continuation of health insurance, or what is commonly referred to as notice of their "COBRA" rights.

   Under COBRA, the termination of employment is considered to be the "qualifying event" causing loss of eligibility for insurance coverage.  A COBRA notice must be issued to the terminated employee and all qualified beneficiaries (i.e., covered dependents) within 14 days of the qualifying event.  The fact that a company may be paying the premium for the terminated employee during a severance period does not delay the start of the 18-month COBRA continuation period.  Rather, employers should send a COBRA election notice instructing the employee to elect coverage upon termination of employment (not termination of the severance period), even though the employee will not be making any payments during the severance period when the company has agreed to pay the premium.

   The consequences of not sending the COBRA notice until after the severance period has ended would be that the employer has improperly extended the COBRA continuation period beyond the permissible 18 months from the qualifying event.  If that occurred, the insurance carrier would likely deny any claims for reimbursement or payment of medical expenses sent in by the employee after the "true" COBRA period had ended. The employer might then be held responsible for payment of any such unpaid medical bills, because the employer erroneously established the period of insurance coverage by improperly delaying the sending of the COBRA notice after the severance period instead of at the time of the employee's termination itself. 

Bottom Line For Employers

   While it is permissible for employers to pay the COBRA premiums for terminated employees during any period of severance pay, employers must not delay the sending of the COBRA notice.  Rather, such notice must be sent in connection with the qualifying event (i.e., the termination) to avoid complications with respect to coverage issues in the future.

Legislative And Regulatory Update

   There have been a number of revisions to state and federal employment laws and regulations over the past several months and more changes are expected within the next few months.

   Some recent legislative and regulatory changes in the employment context include the following:

Ø      The Veteran Benefits Improvement Act has been enacted, requiring employers to provide health care continuation coverage for up to 24 months (instead of 18 months) for employees who are serving in the military. In addition, the Act requires employers to provide employees with an annual notice of their rights and obligations under the Uniformed Services Employment and Reemployment Rights Act ("USERRA"). The USERRA protects the job rights of individuals who voluntarily or involuntarily leave employment positions to undertake military service and further prohibits employers from discriminating against past and present members of the uniformed services and applicants to the uniformed services.  Employers may meet this obligation by means of displaying a poster in a prominent place where employees customarily check for such information (such as an employee bulletin board). The United States Department of Labor has created a USERRA sample poster in this regard, a copy of which can be downloaded at www.dol.gov/vets/programs/userra/poster.pdf.

Ø      Connecticut's Family and Medical Leave Act has been amended to require employers to provide unpaid family and medical leave for an employee to serve as an organ or bone marrow donor in addition to the other categories of individuals entitled to leave.

Ø      The United States Department of Labor has issued new child labor rules governing restaurants, roof work and driving.  The new rules governing restaurant workers establish restrictions on the type of cooking and cooking-related work that 14 and 15 year olds may perform as employees of retail, food service and gasoline service establishments.  The rule eliminates the "in plain view" interpretation that limited youth workers doing cooking and baking to positions in "soda fountains" and "snack bars" where the customer could see the worker at all times.  Instead, the new rule prohibits 14 and 15 years olds from doing any cooking except cooking with electric or gas grills and using automated deep fryers where "baskets" are lowered and raised through devices.  In addition to the restaurant rules, the US DOL now prohibits employees under 17 years of age from performing any on-the-job driving and restricts driving for 17 year olds except where the employee has a valid state license, has completed a state-approved driver education course and has no record of moving violations.  Finally, the new rules prohibit 16 and 17 year olds (except those who qualify as apprentices and student learners) from all roofing occupations, including work performed on or about a roof (such as window washers who stand or work on ladders or scaffolding or who are transported to and from the roof in mechanical devices such as hoists).

   In addition to the above-referenced changes that have already been enacted, other proposed changes in state and federal legislation and regulations are anticipated within the next few months:

Ø      The United States Department of Labor is expected to issue the first implementing regulations under USERRA, which will mark the first time that the law (which was created in 1994) has had accompanying regulations.

Ø      The United States Department of Labor is further expected to issue the long-delayed proposed rules adapting the Federal Family and Medical Leave Act to address the various court decisions and pending lawsuits that have overturned and/or which are challenging several current FMLA regulations that have been promulgated by the department.

Ø      The Connecticut Department of Labor is considering whether to further regulate the means and methods by which an employer can conduct a drug test of a prospective or current employee.  Urinalysis is the only method of testing that is presently addressed by statute or regulation.  Other methodologies, such as saliva and hair testing, are being reviewed for possible regulation.  Further, clarifications to the procedures for drug testing are being considered as well.

  2005 Kainen, Escalera & McHale, P.C.