Back to Index Page   Schiff Hardin's Labor and Employment Breakfast Briefing, Thursday, February 8, 2007, at 9:00 a.m.   This free seminar will include presentations on the following three topics: Handling the Departing Employee — Choosing Employees for Layoff and Preparing Releases; Navigating the Regulations on Intermittent Leave Under the Family and Medical Leave Act; and What Every Employer Should Know about California Employment Laws. An emailed invitation and more information on the Breakfast Briefing will follow.   Illinois minimum wage increase effective July 1, 2007 Effective July 1, 2007, the minimum wage in Illinois will increase to $7.50 per hour. The minimum wage will continue to increase by 25 cents per year until the wage reaches $8.25 per hour on July 1, 2010. Employers may continue to pay employees under the age of 18 up to 50 cents per hour less than the adult minimum wage.

Schiff Hardin LLP continues on its path as an emerging national law firm by joining forces with San Francisco-based Morgenstein & Jubelirer LLP, effective January 1, 2007. We are excited to welcome the following 7 attorneys to the Schiff Hardin Labor and Employment Group: Wendi J. Berkowitz, William J. Carroll, Katharine Demgen, Stephen M. Hankins, Bita A. Karabian, Kathleen A. Stimeling, and Bruce A. Wagman.

A federal district court in Arizona has determined that an employer's decision to put an employee on an indefinite, paid administrative leave constituted an adverse employment action. This decision is notable because it applies the standards for "adverse employment action" set forth in the recent U.S. Supreme Court decision Burlington Northern v. White, to a paid administrative leave. (The Burlington decision is discussed in depth in our June 23, 2006 Labor and Employment Alert). The Burlington Court held that a plaintiff seeking to establish an adverse employment action in a retaliation case must show that the challenged action might have dissuaded a reasonable worker from engaging in protected activity. Grasping on the Burlington decision, the Arizona District Court held in Foraker v. Apollo Group that a public employer's decision to place an employee on paid administrative leave constituted an adverse employment action under the Family and Medical Leave Act (FMLA).

In Foraker, the employer placed the plaintiff on paid administrative leave in September 2005. The employer maintained that it put the employee on the paid leave because other employees were complaining that the plaintiff's behavior made them uncomfortable, a claim which the plaintiff denied. Although the plaintiff continued to receive full compensation and other benefits during his leave, the employer eliminated all of the plaintiff's job responsibilities and prohibited the plaintiff from coming into the workplace. The court held that, when coupled with the loss of all experience and education that would come from fulfilling one's job responsibilities, and the loss of all periodic performance reviews for an indefinite period of at least 12 months, the administrative leave "might have dissuaded a reasonable worker" from requesting FMLA leave.

This decision is important because the court found that the Supreme Court's ruling in Burlington supercedes a long line of pre-Burlington decisions holding that paid administrative leave can never constitute an adverse employment action. The Foraker court rejected this line of cases, finding that the specific facts surrounding the plaintiff's administrative leave demonstrated that it was an adverse employment action. In particular, the court found it significant that the plaintiff had remained on paid administrative leave for almost one year, with "no indication from Defendant as to when he might be permitted to return to work."

Interestingly, the court concluded that because the employer compensated the plaintiff for his administrative leave, the plaintiff was not entitled to economic damages. The court nonetheless ordered a hearing to address whether equitable relief (reinstatement or promotion) could be awarded on plaintiff's claim. Whether equitable relief will be awarded — or is even appropriate — is unclear. Federal courts are reluctant to second-guess an employer's business decisiosn regarding its employees, and ordering a reinstatement or promotion could be doing just that.

While Foraker appears to be limited to its facts, this decision may carry some weight in cases where the court is unsure about whether paid administrative leave constitutes an adverse employment action. The defendant will likely appeal this decision. We will continue to monitor the appeal, as well as the court's decision on whether equitable relief is appropriate, and will provide an update when more information becomes available.

Catherine Hobart Thompson, "Immigration Law for the Construction Industry," Lorman Education Services, Charlotte, N.C. (March 6, 2007) [Link]; Atlanta Electrical Contractors Association, Atlanta, Ga. (May 3, 2007)

Henry W. Sledz Jr., "2006-07 Developments in Labor and Employment Law," Food & Dairy Human Resources Conference, La Quinta, Calif. (March 6, 2007)

Ralph A. Morris, "How Far Can (Or Should) You Go? Pushing the Ethical Envelope," American Bar Association Section of Labor and Employment Law Midwinter Meeting, New Orleans, La. (March 31, 2007) [Link]

Avoiding a Holly, Jolly Lawsuit

NLRB Clarifies "Supervisor" Definition