Washington Supreme Court Clarifies Pregnancy Discrimination

(Thanks to Barran Liebman for sharing their Electronic Alert on this subject.)

A longstanding Washington court battle has ended with a cautionary ruling for employers. Hegwine v. Longview Fibre involved a claim that the employer had discriminated on the basis of an applicant’s pregnancy when it refused to hire her because she was unable to satisfy the lifting requirements of the job. The Washington Supreme Court described the facts this way: Hegwine had been offered a job subject to a physical examination. She disclosed her pregnancy during that examination and, on request, presented a medical release authorizing lifting at 20-30 lbs and showed up for work, but was sent home while the employer evaluated the lifting authorization. Hegwine had her doctor raise the limits to 40 lbs, but after a conversation with the company’s doctor, he settled at “20 pounds frequently and 40 pounds occasionally to infrequently.” That led to a job analysis and a decision that Hegwine could not perform the essential functions, a withdrawal of the job offer, and a finding of discrimination on the basis of sex (pregnancy).

Washington law recognizes a defense of business necessity but in this case the court concluded it had not been established because of the way the facts laid out:

• The ad for the job did not mention lifting requirement;
• The interviewers mentioned a requirement of only 25 pounds;
• Hegwine did not suggest she had any restrictions;
• The employer made an assumption that because Hegwine was pregnant, she would be restricted;
• After Hegwine’s doctor cleared her, the employer changed the lifting requirement;
• When the employer received further clearance, the employer talked to the doctor;
• Even though the third release still permitted Hegwine to do the job, the employer sent her home until it sorted out the situation;
• Only then did the employer start a job analysis, which identified an even higher requirement;
• The new higher requirement was not disclosed to Hegwine or her physician; and
• Hegwine’s offer was withdrawn because of her “availability.”

The inability to show a business need had far reaching consequences. The Court went further and concluded that even asking about pregnancy was an unfair employment practice because there was no reason to believe that pregnancy was inconsistent with the requirements of this job.

Hegwine is a detailed fact-intensive decision but the cautions are clear:

• If there are physical requirements for the job, identify them before hiring.
• Make sure the requirements are consistently applied throughout the hiring process including advertisements, interviews, and post-hire physicals; avoid making changes after an applicant has disclosed a pregnancy or other condition.
• Avoid assumptions about what an applicant can or cannot do.
• Be clear, precise and correct when articulating the reasons for a termination or withdrawal of a job offer.
• General safety considerations don’t matter as much to applicants, judges, or juries as they do to employers. Pay attention to whether the status actually interferes with the applicant’s ability to do the job.

The Court made one final legal ruling that is important for employers to understand: pregnancy is not a disability, so employers should not be evaluating employment in the language and with the procedures used for disability law (“essential functions” and “accommodation” being the most common). The issue here is whether there was discrimination. “Should an employer hire a pregnant employee, that employee is to receive the same treatment as any other employee with similar physical limitations.” This decision does not suggest that employers have to hire pregnant employees who cannot perform the job – just that the employer has to be pretty certain that is so.

Electronic Alerts are written by Barran Liebman attorneys for their clients and friends. Alerts are not intended as legal advice, but as employment law, labor law, and employee benefits announcements. Copyright © 2007 by Barran Liebman LLP

No Surprise: Small Business Owners Concerned About Rising Health Care Costs

According to a recent survey conducted by the National Association of Professional Employer Organizations (NAPEO), after pay, health insurance is the most important inducement small businesses use to recruit and keep workers. Yet more than half the 365 small businesses in a recent survey said their premiums rose as much as 10 percent this year.

To learn more about Xenium’s health benefit options, click here.

Almost one in 10 told the National Association of Professional Employer Organizations they would dump their health coverage next year or are unsure about it. "This is another wake-up call," said Milan P. Yager, executive vice president of the trade association, called NAPEO. "Soaring health costs hit small businesses especially hard, and these businesses employ the vast majority of workers.

"So this is an extremely troubling development, not just for small businesses and their workers, but the entire economy."

Around 1996, more small companies with fewer than 200 workers began offering health benefits. Then, from 2000 to 2005, the percentage dropped, says the Kaiser Family Foundation, from 68 percent to 59 percent - back to the same level as in 1996.

That's stabilized in the last two years. NAPEO's survey shows 71 percent will continue to insure their workers in the coming year - but another five percent remain unsure about continuing.

Professional employer organizations let small businesses outsource their complicated and time-consuming human resources chores, like doing payroll or administering health benefits, so owners can focus on making a profit.

NAPEO surveyed members' clients in November and found that health care costs were their second-biggest worry after attracting workers.

Many of these companies said they will pass at least some costs along to employees next year. One in five said they would raise co-payments for office visits or deductibles; one in four said they'd raise premiums.

"Small businesses are the foundation our economy rests on," said Greg Slamowitz, NAPEO's president and co-CEO of the New York-based PEO Ambrose Employer Group LLC. "This survey is more evidence that sky-high health costs are starting to erode that foundation. And that should worry all of us."

To review the NAPEO survey report, go to www.napeo.org/newscenter/research.cfm.

Heavy Debt Load Adding "Substantial Stress" to Workforce

A 2005 study by Thomas Garman, an employee debt expert at Virginia Tech University, showed that 30 percent of U.S. employees feel substantial financial stress that affects their job performance. In another survey, 28 percent of workers said they were not only worse off than the prior year but also nearing financial disaster. Employee Assistance Programs -- like those offered through Xenium -- provide debt counseling to employees of Xenium client companies. You can learn more about the EAP services offered by Xenium partner, Cascade Centers, by clicking here.

With the volatile economy, housing crisis and high fuel prices, he said, there may be an even greater demand for this type of training and counseling. "That's going to pay dividends for the company who offers this to their employees," says Leslie Nielsen, Xenium President. "Footing the bill for such programs benefits employers in the long run."