Most Oregon employers are aware that in response to the #MeToo movement, the Legislature made changes to the state’s discrimination law through the Workplace Fairness Act (SB 726). It included two effective dates: Sept. 29, 2019, and Oct. 1, 2020. As of Sept. 29, 2019, the deadline to bring claims for discrimination on the basis of race, color, religion, sex, sexual orientation, national origin, marital status, age, military service and disability, was extended from one year to five years from the occurrence of the alleged unlawful employment practice.

As of Oct. 1, 2020, employer obligations under the Workplace Fairness Act went into effect requiring changes in employment agreements and employer harassment policies. With respect to employment agreements, as of Oct. 1, 2020, employers cannot require an employee or prospective employee, as a condition of employment, continued employment, raise or promotion, to sign an agreement that has the “purpose or effect” of preventing an employee from disclosing or discussing discrimination prohibited by ORS 659A.030, including conduct that constitutes sexual assault, or discrimination prohibited by ORS 659A.082 (military service discrimination) or 659A.112 (disability discrimination).

Restrictions on nondisclosure and nondisparagement, as well as no-hire provisions and other confidentiality restrictions, can be included in an agreement when requested by an employee who claims to have been the victim of discrimination or sexual assault, provided that the employee is provided with seven days to revoke acceptance of the agreement. Examples include a separation, severance or settlement agreement. Employers can also include these restrictions, as well as no-hire provisions, in an agreement to be entered into with an employee who has, based on an employer’s good faith determination, engaged in discrimination or conduct that constitutes sexual assault.

With respect to harassment policies, as of Oct. 1, 2020, Oregon employers are required to adopt a written discrimination and workplace harassment policy (or revise existing policies) to include specific language and information. Policies must:

• Provide a process for employees to report prohibited conduct;
• Identify the individual or position as well as an alternate individual or position to whom an employee can report of prohibited conduct;
• Include a statement that notifies employees of the five-year statute of limitations to bring claims for harassment or discrimination;
• Include a statement that an employer may not require or coerce an employee to enter into a nondisclosure or nondisparagement agreement, including a description of the meaning of those terms;
• Include an explanation that an employee claiming to be aggrieved by unlawful discrimination or sexual assault may voluntarily request to enter into a settlement, separation or severance agreement that contains a nondisclosure, nondisparagement, or no-rehire provision only if the employee has at least seven days to revoke the agreement after signing; and
• Include a statement that advises employers and employees to document any incidents involving unlawful discrimination and sexual assault.

Employers must make the discrimination and workplace harassment policy available to employees, provide a copy of the policy to each employee at the time of hire, and require whomever is designated to receive complaints to provide a copy of the policy to an employee who discloses information about prohibited discrimination or harassment.

A sample policy is available at: .

The Workplace Fairness Act does not affect agreements entered into prior to Oct. 1, 2020, and its requirements with respect to restrictions on disclosure and nondisparagement do not apply to agreements where discrimination and/or sexual assault are not at issue.

Employers should review hiring documents and handbooks to ensure compliance with the Workplace Fairness Act. And they should work with counsel when negotiating a severance, separation and/or settlement agreement with an employee who claims to be aggrieved by conduct addressed by the Workplace Fairness Act if the employer is interested in including nondisclosure, nondisparagement or no-hire provisions in such agreements.

Elizabeth Semler is a partner at Sussman Shank and chairwoman of its employment and business practice groups. Contact her at 503-243-1661, ext. 264, or esemler@sussmanshank.com. Note: This article is intended to provide readers with general information and not legal advice. For specific situations, consult with competent counsel.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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Businesses often seek to use litigation to stop a former employee (and his or her new employer) from using information that they consider confidential. Emergency relief in the form of temporary restraining orders and preliminary injunctions can be an effective, although expensive, approach in this situation. However, officials need to understand that emergency relief may not be available if their businesses have not taken appropriate security measures with respect to the information they seek to protect.

To obtain emergency relief from a court, a business must show that it has a likelihood of success on its claims. To bring a successful claim for misappropriation of trade secrets under Oregon law or under the federal Defend Trade Secrets Act, a business must show that the information: 1, meets the definition of a trade secret; 2, derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and 3, is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

It is this last element that often torpedoes a business’ efforts to obtain emergency relief. Before going to court, a business must consider whether it will be able to show that it has taken reasonable measures to keep the information secret. A business can make such a showing by presenting facts to show that it:

1, limits/restricts access to the information (documents are locked in a file cabinet, electronic data is saved separately and password protected);

2, limits/restricts the number and categories of people who have access to the information;

3, limits/restricts physical access to locations where information is stored and/or used;

4, requires people who have access to the information to sign nondisclosure agreements (both internally and externally);

5, publishes a confidentiality policy putting all employees on notice regarding nondisclosure of information and providing instructions for use and dissemination of information; and

6, marks information “Confidential” and posts signs in areas where access is restricted.

When evaluating reasonable measures, a court will look at the size and nature of the business, the kind of information at issue, and the circumstances of the alleged misappropriation. However, in almost all situations, a court will not issue emergency or other injunctive relief to a business that could not bother to protect information it now claims is valuable and confidential.

To obtain relief when information is at risk, and as a regular part of ongoing operations, businesses should assess how they use, share and store confidential information. Then, based on that assessment, officials should implement policies and practices to protect the information.

Elizabeth Semler is a partner in Sussman Shank LLP’s business litigation group and chairwoman of its employment law group.��Contact her at 503-243-1661, ext. 264 or esemler@sussmanshank.com.

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Here are some suggested resolutions for Oregon employers in 2016:

Pay for sick time

Starting Jan. 1, private employers in Oregon with 10 or more employees are required to provide up to 40 hours of paid sick leave per year to eligible employees. Statewide employers with fewer than 10 employees will be required to provide up to 40 hours of unpaid sick leave. Employees must be able to carry over up to 40 hours of sick leave from year to year; however, the law does not require employers to provide more than 40 hours of sick leave each year. Employers are required to provide existing employees with notice of their right to take sick leave no later than the end of the employer’s first pay period after Jan. 1, 2016. The new sick leave law, regulations, frequently asked questions, and a form notice to provide to employees, can be found at: .

Job application restrictions

Employers need to remove questions about criminal convictions from employment applications for most positions. Starting Jan. 1, employers cannot require a job applicant to disclose a criminal conviction on an application or prior to an initial interview. If no interview is conducted, employers cannot require an applicant to disclose a criminal conviction prior to making a conditional offer of employment. The new law does not prevent employers from considering an applicant’s conviction history when making a hiring decision – it just prohibits automatic disqualification from consideration for employment for many jobs on the grounds that an applicant has a criminal conviction.

Noncompetition terms

Employers entering into noncompetition agreements with employees in Oregon after Jan. 1 need to shorten the term of post-employment restrictions on competition from two years to 18 months based on an amendment to an Oregon statute. Post-termination restrictions on solicitation are not addressed by the amendment. Accordingly, post-employment restrictions on solicitation are not limited to 18 months.

Employee wage discussions

In line with protections afforded to employees by the National Labor Relations Act, Oregon has a new law that makes it an unlawful employment practice for an employer to discharge, demote or suspend, or to discriminate or retaliate against, an employee because he or she has: (i) asked about or discussed or disclosed in any manner the wages of the employee or of another employee; or (ii) made a charge, filed a complaint or instituted, or caused to be instituted, an investigation, proceeding, hearing or action based on the disclosure of wage information by the employee. With some exceptions, the new law does not apply to employees who have access to wage information as part of their job function and who disclose wages to individuals not authorized access to the information, unless the disclosure is in connection with a complaint or is in furtherance of an investigation.

Employee classification

In July 2016, the Department of Labor is expected to issue a new rule that updates the minimum salary requirement for administrative or executive employees to be exempt from overtime. The proposed rule is expected to increase the minimum salary for exempt employees from $455 per week to $970 per week ($50,440 annually). In anticipation of the new rule, employers should take a close look at how their managerial/supervisory employees are classified and start making decisions about which employees to reclassify as nonexempt and which employees should receive increased compensation to maintain their exempt status.

Health insurance and family leave

House Bill 2600 brings the Oregon Family Leave Act in line with the federal Family Medical Leave Act by requiring employers to continue group health insurance during family leave on the same terms as if the employee continued to work. Employees are required to continue to make regular contributions towards the cost of health insurance premiums while on OFLA leave.

Employers also should resolve to review their employment policies annually, update policies on a regular basis, require compliance with policies, and document noncompliance in writing as much as possible.

Elizabeth Semler is a partner in Sussman Shank LLP’s business litigation group and chairwoman of its employment law group.��Contact her at 503-243-1661, ext. 264 or esemler@sussmanshank.com.

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Do you train your supervisors to understand the federal Family Medical Leave Act (“FMLA”) and the Oregon Family Leave Act (“OFLA”)? What about the person who handles employee phone calls about absences?

If you are an employer in Oregon with 25 or more employees, or an employer with 50 or more employees, you should consider educating supervisors and anyone outside of human resources who handles employee absences about FMLA and OFLA. This is because when an employee is absent for a few days and returns with a doctor’s note, or misses work because a family member is sick, there is potential that the employee may be entitled to rights and protections under FMLA and OFLA. If the supervisor does not notify anyone of the employee’s situation, the employer risks exposure for interfering with and/or denying an employee’s FMLA/OFLA rights and retaliating against the employee if the employer imposes discipline or terminates the employee based on absences that should have been protected under the law.

Most employers are generally aware that an employee may take FMLA/OFLA leave if an employee or an employee’s family member has a “serious health condition” as a result of suffering an illness, injury, impairment, or physical or mental condition that requires in-patient care in a medical care facility such as a hospital, hospice or a residential facility. Many employers also are aware that the definition of “serious health condition” includes a broad range of other situations which may qualify an employee for leave, including an absence of more than three consecutive calendar days (called a “period of incapacity”) when the employee cannot perform at least one essential job function or perform regular daily activities, and where the employee has received two or more treatments by a health care provider, or one treatment plus a regimen of continuing care.

What employers forget is that an employee need not expressly assert their rights to FMLA/OFLA leave or even mention FMLA or OFLA. It is the employer’s obligation to recognize when circumstances implicate the possibility of leave under FMLA or OFLA. As a result, supervisors need to be able to recognize what information about an employee or family member will trigger possible FMLA/OFLA rights.

Similarly, supervisors and others who take employee phone calls about absences must be aware of the “period of incapacity” basis for leave. For example, an employee calls in sick for four days and then returns and tells his supervisor that he hurt his knee and could not get off the couch to do anything. The employee also discloses that he saw his doctor and that the doctor said the employee would need to rehab the knee, but can work if he wears a brace. The supervisor welcomes the employee back to work, but takes no other action with respect to the knee injury and the employee’s need for subsequent physical therapy. Over the next month, the employee calls in sick on a number of occasions because his knee hurts and exceeds his available sick leave. The employee also leaves work early to go to physical therapy appointments. When the employee exhausts his sick time, the employer fires him for excessive absences.

In the scenario described above, the employer had knowledge (via the supervisor) that the employee: had a period of incapacity where he could not get off the couch for more than three days; saw a doctor for treatment; and had a regimen of continuing care in the form of physical therapy. This information is sufficient to trigger the employer’s obligations under FMLA and OFLA to seek information to verify whether the employee qualifies for leave and, if the employee qualifies, to notify the employee of his rights, including the option to take intermittent leave when his condition flares up, and to attend physical therapy.  Assuming the employee provided adequate certification of his need for leave from his doctor, the absences should have been protected leave and should not have formed the basis of the employer’s decision to terminate the employee. Had the supervisor been trained to understand what kinds of health conditions trigger FMLA/OFLA leave, this problem would have been avoided.

Another situation where employers miss the boat on FMLA/OFLA leave is where supervisors are not aware that chronic conditions may qualify as “serious health conditions” and may entitle an employee to take intermittent leave under FMLA/OFLA. The employee need not be incapacitated for three consecutive days. Instead, the employee must be otherwise eligible for leave, and the employee’s health care provider must certify the health condition and need for leave. Employers also should understand, and help their supervisors understand, that employees with certain chronic conditions are not able to foresee when they will need leave and cannot be punished for taking leave – even when the timing is inconvenient or seems suspicious. Managing intermittent leave for all employers can be a challenge, but failing to recognize that an employee may be entitled to leave in the first place can create liability that far outweighs the challenge.

The bottom line for employers is to train supervisors to recognize what circumstances might qualify as the basis for FMLA or OFLA leave. Set up a chain of communication for supervisors to provide information to human resources so that employees can be promptly notified of their possible right to leave. Supervisors (and all employees) also need to be notified that retaliation against an employee on medical leave is not permitted and may subject the supervisor or anyone else who engages in retaliation to discipline, up to and including termination of employment.

Elizabeth A. Semler is a member of Sussman Shank LLP’s business litigation group and chair of firm’s Employment Law Group.�� You can reach her at 503. 227.1111 or esemler@sussmanshank.com.��

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Increasingly, employees are using personal cellphones, tablets, laptop computers and other electronic devices for work, including remote access to employer networks and databases. In the not-too-distant past, employers’ electronic communication policies focused primarily on regulating employee use of electronic equipment owned by the employer and dispelling employee expectations of privacy in communications exchanged and stored on employer-owned devices.

Now, with employees’ increased use of personal electronic devices for work, employers should consider introducing policies on such use. In connection with such policies, there are a number of issues to consider:

1. Should only certain categories of employees be permitted to use personal devices for work and to access networks and databases?

2. What kind of anti-virus software should employees be required to use (or not use), and what kind of procedures should be followed to ensure employees install the required software and update their devices?

3. What kind of data storage should be used, and how should work data and personal data be segregated?

4. What kinds of security measures are appropriate (for example, requiring password protection, restricting use solely to the employee)?

5. Does the industry require heightened security for any categories of data?

6. Is any existing electronic communications policy sufficient to cover employee expectations of privacy for employer and work-related data stored or exchanged on personal devices?

Employers that permit nonexempt employees to use personal electronics for work also need to determine how to avoid unexpected claims for overtime based on employee use of devices for work after hours. Also, for employees who drive as part of their job responsibilities, employers should adopt a policy that prohibits the use of electronic devices while driving, except as permitted by law (for example, with a hands-free device).

From a financial standpoint, employers need to decide whether they will pay for employees’ personal devices and/or cellphone/data plans (and in what amount), and if so then also the procedure for payment/reimbursement. In this context, the employer also has to consider if it will limit the brand or operating system of devices that employees may be permitted to use (which is sometimes dictated by the employer’s software and hardware).

Employers also need to address what employees should do in the case of loss or theft of a personal electronic device that is used for work. Employers may require employees to report such losses to their supervisors, and install mobile kill switch or remote-wipe software that allows stored data to be erased.

Further, in the same way that employers require employees to return employer property upon termination of employment, employers need to put procedures in place to block employee access via personal devices to employer networks and databases post-termination, and remove and/or obtain any work-related communications and/or data stored on an employee’s personal devices.

Finally, from a practical standpoint, employers need to consider whether they have sufficient information technology resources to implement and manage a bring-your-own-device policy, especially since IT will have to provide technical support and oversight to multiple employee devices.

Elizabeth Semler is chairwoman of Sussman Shank’s employment law group and a member of its business litigation group. Contact her at 503-243-1661 (extension 264) or at esemler@sussmanshank.com.

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By now, most employers are familiar with the risks of misclassifying employees as independent contractors. In the tax context, misclassification can result in significant liability for unpaid employment taxes, interest and penalties.

A recent Oregon Court of Appeals decision revisits the definition of independent contractor in the context of employment taxes under ORS 670.600.

In AGAT Transport v. Employment Department, AGAT contracted with drivers to provide transportation services. AGAT entered into contracts with drivers whereby the drivers were free to accept or reject specific driving assignments. However, the drivers: could only hire other people to drive if the people were qualified by AGAT; were prohibited from carrying passengers; and were required to call AGAT’s dispatcher on a set schedule, as well as when instructed to do so.

The contracts also included a “lease to own” provision whereby drivers leased trucks from AGAT to use to perform delivery services. Drivers also had to: 1, carry cargo insurance and fire/theft/collision insurance; 2, get AGAT’s permission before performing repairs on the trucks; and 3, display signage and insignia as directed by AGAT.

The Oregon Employment Department concluded that the drivers were employees and, after a hearing, an administrative law judge (ALJ) agreed. On appeal, AGAT challenged the ALJ’s conclusion that the drivers were employees and not independent contractors. Specifically, AGAT disputed the ALJ’s conclusion that the drivers were not free from AGAT’s control over the means and manner by which they provided services.

On appeal, the court revisited ORS 670.600’s requirement that, to qualify as an independent contractor, a worker must be “free from direction and control, beyond the right of the service recipient to specify the desired result.”

The Court of Appeals first explained that the “direction and control” test addresses two aspects of a person’s work: “the means and the manner by which the person provides services.” The court then explained that the definition of “means” is “resources used or needed in performing services” and that to be free from direction and control over the means of providing services, a person “must determine which resources to use in order to perform the work, and how to use those resources.” Finally, the court explained that the “manner” by which a person performs services means the “method by which the services are performed.”

The court also acknowledged that a “person who is compensated for performing services virtually always will be subject to some level of oversight by the entity or individual for whom the work is performed,” but clarified that the critical question is “whether that oversight relates primarily to ‘specifying the desired results of the work, or, instead, to having authority to control the way in which the work is performed.”

Based on these principles, the court ruled that the drivers were employees, and not independent contractors. In particular, the court found that AGAT directed and controlled the means and manner in which the drivers performed their services because, even though the drivers leased their trucks from AGAT, as a practical matter, AGAT supplied the drivers with the primary piece of equipment they needed to be able to provide driving services.

And AGAT exerted control over how the drivers did their work because it prohibited drivers from carrying passengers, required drivers to contact dispatch at set times, and had to approve any delegation of driving by a contracted driver to another driver. Based on these facts, the Court of Appeals affirmed the ALJ’s ruling.

Although the court ultimately ruled that the drivers were employees, the decision discusses a number of facts that weigh against that classification. Specifically, the court found that the requirement that drivers meet customer expectations regarding pickup and delivery related to AGAT’s right to specify the desired results of the driver’s work and did not indicate control over the means or manner by which drivers could achieve that goal. Further, the decision suggests that the court’s analysis might have been different if the drivers entered into separate contracts to lease trucks which were not co-extensive with the service contracts.

The AGAT decision is a reminder that employers should tread carefully when classifying the workers as independent contractors and that, at least pursuant to ORS 670.600, the more control exercised, the less likely a worker will be an independent contractor.

Elizabeth Semler is chairwoman of Sussman Shank’s employment law group. Contact her at 503-243-1661 (extension 264) or at esemler@sussmanshank.com.

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Oregon employers should be familiar with Oregon’s unique statute governing the validity of noncompetition agreements between employers and employees. The statute, ORS 653.295, lists the conditions under which a noncompetition agreement is enforceable.

A noncompetition agreement is voidable and may not be enforced unless:

(a) The employer informs the employee, in a written employment offer received by the employee at least two weeks before the first day of the employee’s employment, that a noncompetition agreement is required as a condition of employment, or the noncompetition agreement is entered into upon a subsequent bona fide advancement of the employee by the employer;

(b) The employee is a person described in ORS 653.020(3);

(c) The employer has a protectable interest, meaning that the employee has access to trade secrets, or has access to competitively sensitive confidential business or professional information that otherwise would not qualify as a trade secret, including product development plans, product launch plans, marketing strategy, or sales plans;

(d) The total amount of the employee’s annual gross salary and commissions, calculated on an annual basis at the time of the employee’s termination, exceeds the median family income for a four-person family, as determined by the U.S. Census Bureau for the most recent year available at the time of the employee’s termination.

In addition, the statute provides that the term of the noncompetition agreement may not exceed two years from the date of the employee’s termination.

Subsection b of the statute limits the category of employees who can validly enter into noncompetition agreements to employees who are exempt from minimum wage – individuals engaged in administrative, executive or professional work who perform predominantly intellectual, managerial or creative tasks; exercise discretion and independent judgment; and earn a salary and are paid on a salary basis.

The statute does not expressly include outside salespersons, who are defined as employees who are employed for the purpose of, and are customarily and regularly engaged away from the employer’s place or places of business in, making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer, and who spend 30 percent or less of their time on non-sales related activities.

Instead, one must look to ORS 653.020(6), which provides that “an individual engaged in the capacity of an outside salesperson or taxicab operator” is exempt from minimum wage.

Accordingly, unless an outside salesperson is also exempt from minimum wage on another basis (e.g., if the requirements of 653.020(3) are met), a noncompetition agreement with an outside salesperson may be voidable and not enforced if challenged in court.

How do employers protect themselves if they cannot use a noncompetition agreement with an outside salesperson? One option is to use a bonus restriction agreement that includes both a confidentiality provision and a nonsolicitation provision. A bonus restriction agreement is defined as one under which:

(A) Competition by the employee with the employer is limited or restrained after termination of employment, but the restraint is limited to a period of time, a geographic area and specified activities, all of which are reasonable in relation to the services described in subparagraph (B);

(B) The services performed by the employee pursuant to the agreement include substantial involvement in management of the employer’s business, personal contact with customers, and knowledge of customer requirements related to the employer’s business or knowledge of trade secrets or other proprietary information of the employer; and

(C) The penalty imposed on the employee for competition against the employer is limited to forfeiture of profit sharing or other bonus compensation that has not yet been paid to the employee.

Based on this definition, a bonus restriction agreement with confidentiality and nonsolicitation provisions is a smart approach to take with an employee who meets the criteria in section (B), and who will be entitled to a year-end bonus or to an award of stock options/profit sharing at the end of a finite time period.

In cases where an employee’s responsibilities and compensation model do not support the use of a bonus restriction agreement, an employee can still gain a measure of protection via use of a confidentiality/nonsolicitation agreement that prohibits: use of the employer’s confidential and proprietary information; and an employee from soliciting employees of the employer or soliciting or transacting business with customers of the employer.

This type of agreement does not prohibit employees from working for a competitor; it simply limits what employees can do in their new job. Note, however, that any nonsolicitation agreement must be narrowly tailored so as to afford fair protection to the interests of the employer, without being so broad that the agreement is, in reality and application, a noncompetition agreement.

Section (3) was added to ORS 653.295 in 2008 to specifically limit the class of employees who could be restrained from competing with their former employers. Since its enactment, there have been no cases reported on the application of the law to outside salespersons, nor has there been any information to suggest a change to the statute to include outside salespersons in the class of employees subject to noncompetition agreements.

Until changes are made, employers should approach entry into employment contracts with outside salespeople with caution, and note that noncompetition with such employees, unless they are otherwise exempt, may be void and not enforceable.

Elizabeth Semler is a member of Sussman Shank LLP’s business litigation group and chairwoman of its employment law group. Contact her at 503-227-1111 or esemler@sussmanshank.com.

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According to the Equal Employment Opportunity Commission, 25 percent of new veterans report possessing a service-connected disability. While not all service-connected disabilities qualify as disabilities under the Americans with Disabilities Act, the ADA Amendments Act of 2008 expanded the definition of disability to encompass a broad range of conditions, many that may afflict veterans.

For example, the term “major life activities” now includes the operation of major bodily functions such as the brain and neurological system, so traumatic brain injuries and post-traumatic stress disorder (PTSD) likely qualify as disabilities under the ADA.

The ADA prohibits employers with 15 or more employees from discriminating against an applicant or employee in any aspect of employment because the employee has a disability, a history of having a disability, or because the employer perceives the employee as having a disability.

One practical application of the ADA in regard to veterans is that it is illegal for an employer to refuse to hire a veteran (or service member) because the veteran has PTSD or was previously diagnosed with PTSD, or because the employer assumes the veteran has PTSD.

Once hired, a veteran with a service-connected disability that constitutes a disability under the ADA is entitled to reasonable accommodation just like any other disabled employee. The ADA, however, requires that the veteran be otherwise qualified to do the job.

In contrast, the Uniformed Services Employment and Reemployment Rights Act places a higher standard for reasonable accommodation on employers.

USERRA prohibits employers with one or more employees from discriminating against applicants and employees on the basis of their military status or military obligations. Upon service members’ return, USERRA generally entitles them to be re-employed in the job that they would have attained had they not been absent for military service (the “escalator” principle).

Under USERRA, if the returning service member has a service-connected disability, an employer must make reasonable efforts to accommodate the disability so the employee can perform the escalator position (the one the person would have held if the person had remained continuously employed).

Further, unlike the ADA, if the employee is not qualified for the escalator position because of the disability (even with reasonable accommodation efforts), the employer still must re-employ the employee in a position of equivalent seniority, status and pay, so long as the employee is qualified to perform the duties of the position, or could become qualified to perform them with reasonable efforts by the employer.

Put another way, USERRA obligates employers to assist returning service members to become qualified for a job, which could include training or re-training (regardless of whether the service member is disabled or simply unqualified to perform the equivalent position).

Finally, an employee who does not become qualified for the escalator position or an equivalent position must be re-employed in a position that, consistent with the circumstances of that person’s case, most nearly approximates the equivalent position in terms of seniority, status and pay. Thus, USERRA expands employer obligations to accommodate service members and veterans with service-connected disabilities.

USERRA also has an impact on an employee’s right to medical leave under the Family Medical Leave Act and Oregon Family Leave Act.

Typically, to be eligible to take medical leave, an employee must have worked for an employer for at least 12 months, and for at least 1,250 hours during the 12-month period preceding the start of the leave.

The Department of Labor and the Bureau of Labor and Industries have taken the position that employers are required to give a returning service member credit for time they would have been working, but for their military service. Thus, employers must count periods of military service toward the months-of-employment eligibility requirement for FMLA/OFLA leave.

Employers’ obligations to employees in the military or returning from service, with or without service-connected disabilities, are complex. However, as the number of troops deployed overseas continues to decrease, and veterans and service members return to work, employers need to be prepared to re-employ, hire and accommodate these individuals.

Finally, employers need to recognize that veterans/service members are a “protected class” under USERRA and ORS 659A.082, and cannot be discriminated against on the basis of their military status or military obligations.

Elizabeth Semler is a member of Sussman Shank’s business litigation group and chairwoman of its employment law group. Contact her at 503-227-1111 or lizs@sussmanshank.com.

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Think 76 is too old to work as a diesel mechanic? Think 60 is too old to teach English as a second language? Think again.

Recent Equal Employment Opportunity Commission settlements provide an important reminder to employers to judge employment candidates objectively.

In EEOC v. Southern Metals Co., Southern Metals agreed to settle an age discrimination claim based on its failure to hire a 76-year-old man as a diesel mechanic because of his age. The rejected candidate was fully qualified to perform the job; however, the employer told him they decided to hire someone “younger.”

Similarly, in EEOC v. Community College of Baltimore, the college failed to hire a 60-year-old employee for an open position as a part-time English as a Second Language adviser based on her age. The college was not only fined $50,000, but also was required to train its managers on age discrimination.

Employers not only need to be careful when hiring, but also must make sure to apply objective criteria when terminating employees. In particular, when older employees are replaced by younger employees, employers must be certain that the termination decisions are performance based or otherwise rationally tied to business needs.

For example, the EEOC recently entered into a consent decree with an Arizona company that required the payment of $250,000, based on the company’s termination of three employees over age 40. The consent decree was entered after the Ninth Circuit Court of Appeals reversed a summary judgment ruling for the employer on the grounds that the employees presented triable issue of fact with respect to whether their terminations were age-related.

Specifically, the court found that employees showed an inference of age discrimination because one older worker was replaced by an employee 15 years younger but without superior qualifications, and because the other two employees’ responsibilities were redistributed to employees more than 20 years younger than the terminated employees.

In addition, the court found that supervisors made comments from which a jury could find they harbored discriminatory animus toward older workers (the comments included referring to the employees as “old” and indicating that the job was a “young man’s game” and that the company needed “young blood”).

In 2008, there were 38.9 million Americans over the age of 65. By 2030, that number is expected to be 72.1 million, or 19 percent of the population. As a result, employers will increasingly face issues related to age discrimination and must be prepared to handle such issues.

Employers should review hiring criteria and job qualifications to ensure they are age-neutral and, as always, maintain current job performance information on all employees to substantiate termination decisions.

Employers also should train supervisors and managers to understand age discrimination laws and recognize that comments about age and retirement, even if innocent, can be evidence of age bias.

Elizabeth Semler is a member of Sussman Shank LLP’s business litigation group and chairwoman of its employment law group. Contact her at 503-227-1111 or lizs@sussmanshank.com.

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Most employers are generally familiar with the difference between exempt and nonexempt employees: exempt employees are paid a salary and do not receive overtime pay; nonexempt employees are paid by the hour and are entitled to overtime pay.

However, when classifying employees who perform office or nonmanual work, employers frequently disregard an important element of the legal test for whether an employee is exempt: what the employee actually does all day. The exemptions applicable to employees who perform office or nonmanual work require that the employee be paid on a salaried basis and primarily perform certain duties. Both criteria must be met; otherwise, the employee will not be exempt from minimum wage or overtime, with potentially costly results.

Generally, three exemptions are potentially available for employees who perform office or nonmanual work: executive, administrative and professional. The second exemption, for administrative employees, is frequently misunderstood and misapplied in an office context.

For example: A small business employs five employees in the office. Two of the office workers process customer orders, input accounts receivable/payable information, issue invoices and submit payroll. Two other employees handle filing, correspondence, customer service, process orders and returns, purchase supplies, and take turns answering the phones. These four office employees follow prescribed procedures when performing their jobs, and none of the four employees are authorized to give customer discounts, replace defective or damaged goods, or provide refunds without authorization from their supervisor. The fifth employee is responsible for managing the office, hiring and firing employees, handling issues related to human resources, and must authorize discounts and refunds, and approve any purchase over $100. All five office workers are salaried employees earning more than $1,900 per month. The office employees typically work 40 hours per week, except one week each month when they work 50 hours. The employer has classified all five office workers as exempt.

Under Oregon law, to be exempt as an executive, an employee must manage the business, direct the work of two or more employees, have authority to hire or fire other employees (or have their opinion on hiring, firing and promotion given particular weight), and customarily and regularly exercise discretionary powers. In the aforementioned example, only the supervising employee is likely to be exempt as an executive. The four others aren’t because, although they are paid a salary that meets the financial minimum for exempt employees ($455 per week), they do not perform the required duties for executive employees.

The definition of an administrative employee applicable in this scenario requires that the employee’s primary duty consist of the performance of office or nonmanual work directly related to management policies or general business operations of the employee’s employer or the employer’s customers. The employee also must customarily and regularly exercise discretion and independent judgment; regularly and directly assist a proprietor or an employee employed in a bona fide executive or administrative capacity; or must perform, under only general supervision, work along specialized or technical lines requiring special training, experience or knowledge; or execute, under only general supervision, special assignments and tasks.

In the example, the four office employees probably are not administrative employees because, although the office employees perform office or nonmanual work directly related to the general business operation of their employer and regularly and directly assist their supervisor, they do not customarily and regularly exercise discretion and independent judgment because they follow prescribed procedures when doing their jobs and need their supervisor’s authorization to depart from those procedures. (Independent judgment and discretion, according to state law, means “the selection of a course of action from a number of possible alternatives after consideration of each, made freely without direction or supervision with respect to matters of significance.”)

The result of misclassifying the four employees exposes the employer to potential liability for unpaid overtime. In the example, the four employees worked 50 hours per one week each month, resulting in 120 overtime hours annually. Hours worked over 40 are paid at one and one-half times the employee’s regular rate of pay – a simple calculation for an hourly employee. But for a salaried employee, the employer must first determine the employee’s regular hourly rate of pay – which is done by dividing the employee’s weekly salary by 40 hours. Here, if the employee makes $500 per week, their regular hourly rate of pay will be $12.50 and their overtime rate will be $18.75, resulting in $2,250 of unpaid overtime for one year. The total would be $9,000 for all four misclassified employees.

If the employees sue for unpaid overtime and win, the employer’s potential liability for unpaid overtime doubles because, by law, the employer is liable for twice the amount of the unpaid overtime (plus the employee’s attorneys’ fees and court costs). That is a potentially devastating financial burden.

To avoid liability for misclassifying employees, employers should: 1, periodically review the exempt and nonexempt status of employees, and consider the job descriptions for each exempt position; 2, consider requiring salaried employees to maintain time records and review those records on a regular basis; 3, maintain a written overtime policy that includes a requirement that all overtime be approved in advance; and 4, remember not to retaliate against an employee who complains about misclassification or seeks clarification of exempt status.

Elizabeth A. Semler is a member of Sussman Shank LLP’s Litigation and Employment Law Groups. Contact her at 503-227-1111 or lizs@sussmanshank.com.

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