Wednesday, October 10, 2012


Business and Employment Law Update
Third Quarter, 2012

Tips and suggestions, case reports, and
other helpful information for northwest businesses. 

Mark Your Calendar: November 29 – 30, the Oregon Bureau of Labor & Industries presents its annual Employment Law Conference. Northwest Employment Law attorney Shari Lane will be speaking on Lawful Terminations on Thursday, November 29, at 2:30. Other topics include: Culture Clash or Consensus, Workers Compensation, Hurricane I-9, Recordkeeping and Background Checks, Dealing with Garnishments, Leave Laws – Tracking, and more!
Check it out at:

Lawyerly Caveat:  This newsletter is for informational purposes, and is not and should not be construed as legal advice.  For assistance with specific legal issues, consult an attorney.

Tip of the Day – Oregon
Under state and federal law, all employers must report new hires to the Department of Justice, Child Support Division within 20 days of hire or re-hire, for purposes of child support tracking. Employers may use the form provided by DCS, or may simply provide a copy of the W-4.
Tip of the Day – Washington
Washington employers have the same obligation as Oregon employers, to report new hires. Employers may file reports online:
Tip of the Day – Federal
Employers who conduct criminal background checks, credit checks, or other background investigations will need to update their Fair Credit Reporting Act notices as of January 1, 2013.  New notice language can be found in Appendices F, G and H:
(Sorry – there doesn’t appear to be an easy electronic shortcut!)

BOLI Files Proposed New Rules

BOLI is proposing to amend OAR 839-009-0390 and -0410 as follows (proposal new language in italics):

* Provide 14 days of Oregon Military Family Leave Act (“OMFLA”) leave for each deployment until OFLA leave entitlement is exhausted.

* “An eligible employee need not be eligible for protected leave under  . . . OFLA in order to take protected leave under the Oregon Military Family Leave Act (“OMFLA”).

November 9, 2012 is the last day to file public comment.

Keep up to date on proposed rules and opportunities for public comment:

Oregon Bureau of Labor & Industries:

Washington Department of Labor & Industries:

Fitness for Duty Exams
It’s a common scenario: Roberta, who is recovering from a stroke, tells you she’s having difficulty remembering all the steps in some of her day-to-day tasks. Her doctor recommends time off to evaluate various therapies and medications. You readily grant the time off, as she is eligible for medical leave. She’s a valued employee, and  you hope the treatment will be successful. Two months later, she says she’s ready to come back to work, but confides she doesn’t feel anything her doctor tried is working. 

You are (understandably) nervous about bringing her back without a full “all clear” from her doctor.

What if she makes mistakes, and causes liability to the company? What if you try to impose discipline for those mistakes, and she claims discrimination?

On the other hand, you know (if you’ve been reading these newsletters, and otherwise doing your homework!), that you can’t make employment decisions based on hypothetical problems. So you order a fitness for duty exam. And step right into a minefield.

There are two sets of laws governing when an employer may require a current employee to obtain certification from a medical provider that she is “fit” to perform her job: (1) medical leave laws, and (2) disability laws – and it’s only a slight exaggeration to say never the twain shall meet. 

Medical Leave
  • Notice must be given at the time leave is granted, and must include position description or list of duties
  • Certification may be required only pursuant to a “uniformly-applied policy or practice that requires [certification from] all similarly-situated employees (i.e. same occupation, same serious health condition)”
  • Inquiry must be “job-related and consistent with business necessity” (“The business necessity standard is . . . not to be confused with mere expediency. . . . [It requires] significant evidence that would cause a reasonable person to question whether [the employee] is still capable of performing her job”)
  • Inquiry must be narrowly limited to the issue (that is, you don’t need a full medical history if the question is whether an employee’s sleep apnea is interfering with his attendance)

Other provisions:

  • Under both federal and state disability laws, the employer must pay the cost of the medical exam and/or obtaining the certificate, to the extent there are any costs not covered by insurance. Under Oregon medical leave laws, the rule is the same. Under federal medical leave laws, the employee may be required to pay the cost. Washington law is silent on this issue.
  • Under both state and federal laws, all medical information must be maintained separately from other personnel records, and treated as confidential. (There are reasonable exceptions. For instance, a supervisor may be informed of necessary restrictions.
  • As an aside, keep in mind that pre-employment physicals and medical exams related to returning from workers compensation leave are another ball of wax altogether.
So what should you do with Roberta? If you did not initially notify her that certification would be required before returning from medical leave, you will need to assess whether you have “significant evidence” that would cause you to question whether she can perform her duties. If she was making serious errors before taking leave, and she has assured you that her condition has not changed, you are probably on solid ground (usual lawyerly caveats apply) to initiate the interactive process, beginning with requesting that Roberta share her position description with her doctor and obtain certification that she is capable of performing her job or, if not, whether she and her doctor can suggest any accommodations


It’s good to keep tabs on cases in our circuit—it helps to know what not to do, and how judges and juries are interpreting the laws.  Here, in no particular order, are a few updates from the courts and legislative bodies.

Occasional Handyman is an Employee
As mentioned in the last newsletter, the definition of “independent contractor” is very narrow under both Oregon and Washington law. That legal principle was reiterated in a recent Oregon Court of Appeals decision affirming the Oregon Employment Department’s finding that an individual who was hired by a laundromat owner for occasional repair and maintenance of the machines and building was in fact an employee, not an independent contractor. In Whitsett v. Employment Department, the court acknowledged that the “handyman” had no set schedule, had the authority to hire and fire others to assist him, was required to correct defective work, occasionally worked from home and used his own telephone for work-related business, provided his own tools, and had performed similar services for another laundromat.  Nevertheless, the Court said there was insufficient evidence the handyman had an independently established business because, during the two years in question, he did not provide similar services to others, and did not engage in any marketing or advertising efforts to offer similar services to others.

The consequences are significant, as an employer must: pay unemployment insurance premiums and other employer-source taxes; provide workers compensation coverage; pay minimum and overtime wages; create and maintain a host of records related to the employment relationship, including time records; and supervise the work to ensure the employee refrains from discrimination, harassment, OSHA violations, etc., for which liability may be imputed to an employer.

Interestingly, the Court of Appeals focused on the fact that the individual in question had not provided handyman services to another laundromat during the relevant time. It is unclear whether providing handyman services to other individuals or businesses (not related to laundry services), would have demonstrated an “independently established business” sufficient to support his independent contractor status, or whether the court’s decision implies the “similar services” must be essentially identical.

Safety Incentives May Violate the Law
Last spring, the Federal Occupational Safety and Health Administration issued a memorandum calling safety incentive programs “problematic,” because such programs “unintentionally or intentionally provide employees an incentive to not report injuries.”

By way of example, OSHA cited “enter[ing] all employees who have not been injured in the previous year in a drawing to win a prize,” or “award[ing] a bonus if no one from the team is injured over some period of time.” Instead, OSHA suggested “providing tee shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.” The memo states “careful investigation is needed” by OSHA whenever an employer disciplines an employee who has reported an injury – even if the discipline arises out of the employee’s failure to follow company safety rules (ahem!). Oregon and Washington laws prohibiting discrimination for filing workers compensation claims (or, in Oregon, for “invoking” the workers compensation system, even if no claim is filed), likely give rise to similar scrutiny of any safety incentive program. 

Last Word: What Do You Think?

Every few months, I use this space to advise you and tell you what I think about drug tests, executive employment agreements, internal investigations, and more. Now it’s your turn.

Increasingly, I’m hearing this from business owners, human resources directors, and managers: I give up! It’s too hard to be an employer these days. The regulations are too complex, and too burdensome. It’s too easy to inadvertently violate the law, and some employees seem to be just waiting for an opportunity to file a lawsuit. I barely have time to run my business any more, I’m so busy filling out forms and documenting performance.

Case in point: the rules about seeking certification that an employee is fit to return to work (see above).

And yet, I haven’t met an employer yet who advocates for elimination of regulation altogether. It is right and good that, in a society that (purportedly) values hard work, community, family, equal opportunity, and the entrepreneurial spirit, we should have laws that ensure a fair day’s pay for a fair day’s work, that prohibit a company from refusing to hire a man because of the color of his skin, that require an employer to at least try to accommodate a woman struggling with a disabling medical condition, and that confirm the freedom of all (employers and employees alike) to hold and express religious faith (or no faith).

What do you think? Have we gone too far in enacting protections for employees? Have we hamstrung employers so they can’t make logical and sensible decisions to support their business operations? Or are we still missing the boat, enacting more and more complex legislation but failing to protect the most vulnerable workers from abuse?

If you were “in charge,” how would you change our employment laws? Tell me your thoughts on this Blog. If we get enough responses with detailed suggestions, we’ll share them with the Oregon Bureau of Labor and Industries, and see if we can’t get a conversation going.

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