C ASE L AW C OSMOS : A S TATE AND F EDERAL E MPLOYMENT L AW U PDATE Tara O’Hanlon and Jeffrey Chicoine I. OREGON. A. Court opinions. 1. Unemployment benefits: Nielsen v. Employment Dept. , 263 Or. App. 274, 328 P.3d 707 (2014). Plaintiff, Nielsen, worked for defendant Westwind Landscape Supply as an office manager for about one year. During that time, Westwind repeatedly failed to pay her (and other employees) for her overtime work, and she witnessed physical fights between employees and management when employees complained about unpaid overtime. Nielsen did not want to push the issue of her missing overtime pay with Westwind management because she was scared of a confrontation, so she quit her job and filed for unemployment benefits. But the Employment Department denied her application on the grounds that she had voluntarily left work. The Oregon Court of Appeals held that Nielsen was eligible for unemployment benefits, since she had shown good cause for leaving her position at Westwind. The court noted that the alternatives to voluntarily leaving Westwind were not reasonable: if Nielsen had complained to the Bureau of Labor and Industries (“BOLI”), she would have subjected herself to ongoing underpayment, and if she had complained to her supervisors, she risked a frightening and possibly violent confrontation. Since there was no reasonable alternative to leaving her job, the court found that Nielsen had good cause for quitting, and the Employment Department should not have denied her application for unemployment compensation. 2. Definition of “employee” under minimum-wage laws: Cejas Commercial Interiors, Inc. v. Torres-Lizama , 260 Or. App. 87, 316 P.3d 389 (2013). A construction contractor brought a declaratory judgment action against drywall workers, seeking a declaration that the workers were not employees of the contractor under Oregon’s minimum-wage law (ORS 653.025). The court determined that the economic-realities test and not the right-to-control test should apply. Under that test, the courts look at formal and functional control factors. The court held that the contractor did not formally or functionally control the drywall workers because the workers were involved with a small portion of the project, had no association outside the one project, and were supervised by their employer, a subcontractor, who assumed the risk for the profitability of the work. -1-
3. Liability for wage violations of predecessor: Blachana, LLC v. Bureau of Labor and Industries , 354 Or. 676, 318 P.3d 735 (2014). Plaintiff, an operator of a bar and restaurant, sought Oregon Supreme Court review of a BOLI order requiring plaintiff to reimburse BOLI for payment of wage violations of the operator’s predecessor. The Oregon Supreme Court held that the operator was a “successor” under the wage-claim statute because the name and identity of the establishment was similar under the prior owners and current operator, the location did not change, the client base was similar, only 47 days had elapsed from the date the predecessor closed its doors until the current operator reopened for business, and the current operator used much of the same equipment, even though the claimants had never worked for the current operator. 4. Constructive discharge/public employer: Nkrumah v. City of Portland , 261 Or. App. 365, 323 P.3d 453 (2014). A communications director for a former mayor brought wrongful-discharge and wage claims against the city, and the trial court granted summary judgment for the city. The court of appeals held that the communications director had failed to establish constructive discharge. The court noted that the employee must show that he quit because of an “objectively intolerable condition” that the employer intentionally created. The court further reasoned that in a wrongful-discharge case, the “the intolerable conditions must be created as the result of the employee’s fulfillment of—or attempt to fulfill—an important public duty.” Here, the employee objected to Mayor Adams’s allegedly lying about a relationship with an underage person, but there was no evidence that plaintiff was ever required to lie to the public. Thus, even if being truthful to the public was an important societal duty under the wrongful-discharge standard, the evidence did not support a constructive-discharge claim that action was taken against plaintiff for being truthful. Class action/joint employment: Delgado v. Del Monte Fresh Produce, 5. N.A., Inc. , 260 Or. App. 480, 317 P.3d 419, rev. denied, 355 Or. 380. Del Monte appealed various judgments related to a class-action claim brought by minimum-wage production workers regarding the donning and doffing of protective clothing off the clock before and after work and before and after the 30-minute lunch break. Plaintiffs claimed that Del Monte was their joint employer in addition to the direct employer, a staffing company. The court of appeals upheld the class certification because all class members were minimum-wage workers who worked at the same facility during a specified period, and the claims of all class members were based on the theory that Del Monte had a custom or practice of requiring or permitting the employees to don and doff necessary work clothing off the clock and during the meal break, resulting in unpaid work time. 6. Public employer/unfair labor practice: Am. Fed’n of State, Cnty. & Mun. Emps. v. City of Lebanon , No. A152059, 265 Or. App. __, __ P.3d __ (Sept. 4, 2014). The court of appeals reversed an order of the Employment Relations Board that found that the city had committed an unfair labor practice against a union under ORS 243.672 -2-
because a city councilor wrote a letter criticizing unions and sent it to a local paper. The court explained that the councilor was not acting as the city’s agent or apparent agent when she wrote and sent her letter and that there was nothing to indicate that this letter-writing was “ordinarily entrusted” to someone in that position, it was not on city stationery, and it was not written on city property or during business hours. 7. Employees versus independent contractors: Broadway Cab LLC v. Emp’t Dep’t , 265 Or. App. __, __ P.3d __ (Sept. 4, 2014). Taxicab drivers were held to be employees of a taxicab company, not independent contractors, and the employer was held liable for unemployment insurance tax. The court reasoned that the drivers leased their vehicles from the company and did not own them, and that the company controlled access to the vehicles during off hours, provided maintenance, and controlled parking, among other factors. The court held that the cab drivers provided “services” for “remuneration” under ORS 657.030 and that they did not fall within the statutory exemption for independent contractors under ORS 670.600(2) . 8. Employees versus independent contractors: Ponderosa Properties, LLC v. Employment Dept. , 262 Or. App. 419, 325 P.3d 762 (2014). Ponderosa contracted with a resort community to provide maintenance and cleaning services to the community’s houses. Ponderosa engaged 21 employees to do this work. Believing the employees were independent contractors, Ponderosa did not pay unemployment taxes on their wages, and the Employment Department instituted this action. The evidence showed that Ponderosa instructed its workers regarding which houses to clean and the deadline by which the work needed to be done. Otherwise, workers set their own schedule, used their own equipment, and did not have a particular set of procedures to follow to get the work done. Ponderosa did check the jobs after they were completed, and occasionally required the workers to redo a job if it was not up to Ponderosa’s standards. The court held that it was impossible for even the most independent of contractors to be completely free of a client’s control, so it was not dispositive that Ponderosa gave the workers deadlines and was able to check their final work. Although Ponderosa set pay rates and deadlines, it did not control the means and manner in which the work was to be performed. Moreover, the deadlines were determined not by Ponderosa but by the occupancy schedules of the community’s houses. Therefore, the workers were independent contractors, not employees of Ponderosa. 9. Boyle v. City of Portland, No. 1305-07824 (2014). A jury awarded plaintiff Michael Boyle $226,000 because it found that the City of Portland had failed to give Mr. Boyle preferential treatment based on his status as a disabled veteran after his job was eliminated and returned to work for the city as a part-time employee. Plaintiff had also sued the City of Portland for age discrimination, a claim that the jury rejected. The jury awarded damages based on plaintiff’s disabled veteran status because it found that under the revised state law on preferential treatment afforded to veterans and disabled veterans, the city had not given plaintiff the proper credit for his status. -3-
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