Settlement for lost wages taxable

After Jack Rivera settled his race discrimination cases against his employer for the “sum of forty thousand ($40,000) less all lawfully required withholdings", he received a settlement check in the amount of $25,140 after his employer retained $14,860 as a 'lawfully required withholding.' The amount withheld included $10,000 in federal income tax, $3,060 in Federal Insurance Contributions Act ('FICA') tax, and $1,800 in state income tax.

Rivera cashed the check, but refused to dismiss his case, contending that the withholding was excessive and not required by law. He argued that the settlement proceeds were intended to reimburse him for personal physical injuries and should therefore be excluded from his gross income under 26 U.S.C. Sec. 104(a)(2). Rivera also argued that even assuming that the settlement proceeds represented lost wages, an award of back pay was not subject to tax withholding.

The Ninth Circuit held that Rivera's settlement for race discrimination did not fall within the Internal Revenue Code exclusion for physical injuries or sickness. It held that there was neither an express designation of settlement amounts apportioned to physical injury, nor any evidence that this purpose was intended by the payor. Second, the panel held that "back pay and lost wages constitute 'wages' for taxable withholding purposes, and the district court properly held that these settlement payments were subject to withholding.

Case: Rivera v. Baker West, Inc., No 03-17261 (9th Cir. Dec. 13, 2005)

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Body Piercings, Tatoos, Hairstyles, Fashion Statements

The following article is taken from law.com and was written for the New York Law Journal as:

"Keeping Up Appearances at Work"-- Louis PechmanNew York Law JournalDecember 16, 2005.



It is generally recognized that employers are free to set reasonable dress codes and grooming standards that are business-justified and applied in a nondiscriminatory manner.

In the case of individuals with tattoos and piercings, there is no federal or state law that affords them explicit protection from employment discrimination on the basis of their appearance. Employees in such cases have met with limited success in trying to establish a connection between their body art and a protected class such as religion, gender or national origin.

PIERCINGS

In Cloutier v. Costco Wholesale,[FOOTNOTE 1] Kimberly Cloutier, a Costco cashier who was terminated after refusing to remove her eyebrow piercing, alleged that she was discriminated against based on her religion. Cloutier refused to comply with Costco's dress code prohibiting facial or tongue jewelry, citing her membership in the Church of Body Modification, which practices piercing, tattooing, branding, transdermal or subcutaneous implants and body manipulation such as flesh hook suspensions and pulling. The church proclaims that it is aimed at achieving acceptance in society so that its members may "celebrate their bodies with modification." Cloutier rejected Costco's proposed accommodation to cover her eyebrow piercing with a flesh-colored bandage, insisting that she be exempted from the dress code because her religion required her to display her facial jewelry at all times.

The 1st U.S. Circuit Court of Appeals found that Costco had no duty to agree to Cloutier's request that she be exempted from the dress code. In the court's view, such an accommodation would pose an undue hardship because it would have an adverse effect on Costco's legitimate business interest in maintaining a "neat, clean and professional image." The court held that a religious accommodation constitutes an undue hardship when it would impose upon an employer more than a de minimus cost, including lost business or noneconomic costs. The court recognized that "Costco is far from unique in adopting personal appearance standards to promote and protect its image" and observed that "courts have long recognized the importance of personal appearance regulations." Such dress codes, it added, which are designed to appeal to customer preference or promote a professional public image, have been upheld.

A dress code policy is permissible under federal and state discrimination laws as long as it is enforced on an equal basis. In Kleinsorge v. Eyeland Corp.,[FOOTNOTE 2] Frank Kleinsorge, an optometrist, was terminated "for cause" for wearing an earring to work in violation of a workplace rule prohibiting men from wearing jewelry. He sued, claiming that the company's policy was discriminatory because women were permitted to wear earrings while men were not. The U.S. District Court for the Eastern District of Pennsylvania dismissed the claim because Kleinsorge did not allege that the company's grooming policies were unevenly enforced as between male and female employees.

The Kleinsorge court relied heavily on a decision by the U.S. District Court for the Eastern District of New York, Capaldo v. Pan American Federal Credit Union,[FOOTNOTE 3] in which Judge Thomas C. Platt upheld a company policy prohibiting male employees from wearing earrings. Robert Capaldo, a loan counselor, was informed by the company's president that he did not present an appropriate professional image and was terminated for failing to remove his earring. The court, describing the company's policy as a "minor sex-based distinction in dress and grooming codes," dismissed the claim because there was no allegation that the company's policy was unevenly applied. Specifically, Capaldo did not assert that female employees at the company were free from all grooming standards or that the company unevenly applied its grooming policies as among male and female employees. Because the company did not impose special appearance rules on one sex and not the other, no inference of sex discrimination arose.
More recently, the Supreme Court of Iowa agreed that a company's grooming code that forbade male employees from wearing earrings at work did not constitute sex-based discrimination. In Pecenka v. Fareway Stores, Inc.,[FOOTNOTE 4] Michael Pecenka, a Fareway Stores employee was terminated for refusing to remove his ear stud while he worked. The court rejected Pecenka's claim of disparate treatment, noting that the discrimination laws "were not meant to prohibit employers from instituting personal grooming codes which have a de minimus affect on employment." Because the court concluded that the earring policy did not rise to the level of sex-based discrimination, the company did not need a business justification for it. The court also dismissed the claim of "sex-plus" discrimination, because wearing an earring is not an "immutable characteristic" and does not involve a "fundamental right" such as the right to marry or bear children and the company's earring policy was not alleged to perpetuate a sexist or chauvinistic attitude in employment that significantly affected employment opportunities.

TATTOOS

The unequal application of employment policies is always a source of potential liability for employers. In Hub Folding Box Company, Inc. v. Massachusetts Commission Against Discrimination,[FOOTNOTE 5] Deborah Connor, a clerk at the Hub Folding Box Co., sued her employer for gender discrimination and retaliation. Although a male employee was not required to cover his Navy tattoo, Connor was told to cover a heart-shaped tattoo on her forearm or be terminated. The company was concerned that customers who saw Connor's tattoo would have a negative reaction because a tattoo on a woman "symbolized that she was either a prostitute, on drugs, or from a broken home." In the employer's view, women with tattoos were ne'er-do-wells, whereas men with tattoos were heroes. The employer's reasoning, according to the court, was based on outdated gender stereotypes and constituted an unlawful basis for treating men and women differently in the workplace.

Disparate treatment was also the basis of a discrimination claim in Riggs v. City of Forth Worth.[FOOTNOTE 6] Michael Riggs, a police officer, sued the Fort Worth, Texas, police department for discrimination because of his Celtic national origin, race and fundamental right of free expression. While other officers in the bike unit with tattoos were allowed to wear shorts and short sleeves, the department claimed that Riggs' tattoos were excessive to the point of being unprofessional. Riggs' tattoos included a Celtic tribal band, a Celtic design that included his wife's name, a mermaid, a family crest, the cartoon character Jessica Rabbit and a two-foot by two-foot full-color rendering on his back of St. Michael spearing Satan. The court found that Riggs failed to provide any evidence that the department's reasons for requiring him to wear long sleeves and pants or for transferring him out of his unit were discriminatory.

The nature of the images depicted by tattoos weighs in the balance where claims of religious discrimination are made. In Swartzentruber v. Gunite Corp.,[FOOTNOTE 7] Sheldon Swartzentruber, a member of the Church of the American Knights of the Klu Klux Klan, sued his employer for religious discrimination after being terminated because of his tattoo, which extended from his elbow to his wrist, depicting a hooded figure standing in front of a burning cross. The court held that the company reasonably accommodated Swartzentruber's asserted religious beliefs by allowing him to continue working so long as he covered his tattoo. Any alternative accommodation, the court suggested, would have imposed an undue hardship on both the company and Swartzentruber because the tattoo offended his coworkers and made them uncomfortable. Moreover, the court held that a claim for hostile environment harassment could not succeed because any harassment was a result of self-identification as a Klu Klux Klan member, not because of religious beliefs.

CONSTITUTIONAL ISSUES

Prohibitions against tattoos in the workplace have also been challenged on First Amendment grounds. Courts that have considered the issue have found that tattoos are not protected speech under the First Amendment. For example, the 8th U.S. Circuit Court of Appeals concluded that, "the tattoo is nothing more than 'self expression,' unlike other forms of expression or conduct which receive First Amendment protection."[FOOTNOTE 8] Because tattoos are not protected expression, an employer must show merely that the challenged classification is rationally related to a legitimate state interest rather than having to meet the more stringent strict scrutiny standard.

Even when a tattoo is deemed speech on a matter of public concern, the public interest at issue has been found to outweigh the employee's interest in displaying their tattoo. For example, in Baldetta v. Harborview Medical Center,[FOOTNOTE 9] John Baldetta, an HIV-positive hospital employee, was terminated after refusing to cover a tattoo saying "HIV positive." In finding that the hospital's interest in facilitating patients' recovery outweighed Baldetta's interest in "speaking" on a matter of public concern, the court relied on the opinion of doctors who concluded that display of the tattoo could cause stress in patients and hinder their recovery.

Employees have also failed to establish that the right to display tattoos is protected by the First Amendment right to free association and privacy. In Montoya v. Giusto,[FOOTNOTE 10] a group of corrections deputies alleged that their First Amendment rights were violated after they were terminated for displaying tattoos that read "Brotherhood of Strong." The U.S. District Court for the District of Oregon found that the decision to wear the tattoos did not enjoy constitutional protection because the tattoos, which signified "a loosely knit friendship of weight lifters," was not the kind of political, social, economic, educational, religious or cultural association protected by the First Amendment.

STATUTORY PROTECTION

A few local jurisdictions have enacted legislation prohibiting discrimination on the basis of appearance. The District of Columbia has prohibited discrimination on the basis of "personal appearance."[FOOTNOTE 11] Similarly, the city of Santa Cruz, Calif., has a statute barring discrimination on the basis of "physical characteristics."[FOOTNOTE 12] A unique statute in Madison, Wis., classifies "physical appearance" as a protected class, defining it in terms of immutable characteristics, such as height, weight and facial features, but also includes mutable characteristics like hairstyle, beards and manner of dress.[FOOTNOTE 13]

Although Wisconsin's statute protects appearance, employer requirements that are uniformly applied "in a business establishment for a reasonable business purpose" are exempted. The breadth of protection afforded by this statute was tested in Sam's Club Inc. v. Madison Equal Opportunities Comm'n,[FOOTNOTE 14] in which the Madison Equal Opportunities Commission decided that Sam's Club had violated the ordinance by terminating an employee who wore an eyebrow ring in violation of company dress code. The Wisconsin Court of Appeals reversed, stating "Sam's Club attempts to project ... a conservative, no frills, no flash image for its business; it does so because Sam's Club wants to convey to customers that they are getting the best value for their money." The court noted it was undisputed that facial jewelry and eyebrow rings in particular do not convey a conservative image. Inasmuch as Sam's Club's prohibition came within that exception of a "reasonable business purpose," its decision to terminate was held to be legal.

CONCLUSION

In sum, individuals with piercings or tattoos have limited rights in the workplace. It is the rare case where a protected characteristic of an employee is so inextricably linked with a piercing or tattoo that it implicates legal interest. Underlying this lack of protection is that tattoos and piercings are neither explicitly protected by statute nor immutable characteristics. Rather, tattoos and piercings are voluntary body art that an employer may choose to exclude from the workplace.

Louis Pechman is a partner at Berke-Weiss & Pechman, concentrating in labor and employment law.

::::FOOTNOTES::::
FN1 390 F3d 126 (1st Cir. 2004).
FN2 No. Civ. A. 99-5025, 2000 WL 124559 (E.D.PA. Jan. 31, 2000).
FN3 No. 86 Civ. 1944, 1987 WL 9687 (EDNY March 30, 1987).
FN4 672 NW2d 800 (2003).
FN5 750 NE2d 523 (Mass. App. Ct. 2001).
FN6 229 FSupp2d 572 (N.D. Tex. 2002).
FN7 99 FSupp2d 976 (N.D. Ind. 2000).
FN8 Stephenson v. Davenport Comm. Sch. Dist., 110 F3d 1303 (8th Cir. 1997).
FN9 116 F3d 482 (9th Cir. 1997).
FN10 Civ. No. 02-446-JE, 2004 WL 3030104 (D. Ore. Nov. 24, 2004).
FN11 D.C. Human Rights Act, §§1-2512 (1981).
FN12 Santa Cruz, Calif., Ordinance 92-11 (April 28, 1992).
FN13 Madison General Ordinance, §3.23(2)(bb).
FN14 266 Wis2d 1060, 668 NW2d 562 (Wis. Ct. App. 2003).


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Approaches and Tactics for Older Workers Who Can't Find a Job

If you're over 40 and unemployed, you can try these tactics to snag a job:

• Keep your skills current. Computer skills are especially important. Depending on what type of job you seek, be sure you are savvy on the Internet and with Windows-based programs, such as word-processing, spreadsheet, database, and presentation applications. Microsoft offers training programs though such organizations such as the AARP.
• If you've been downsized, look for new work as soon as you can. The longer you're out of work, the harder it will be to land a new position.
• Seek out companies that embrace older workers: The CVS drugstore chain is one example.
• Networking is especially important for older workers because jobs at the senior levels are the least likely to be advertised. It's important to fight the perception that your skills and knowledge might not be on the cutting edge. Stay up to date with technological trends and be sure to demonstrate your savvy when you converse with network contacts.
• Use networking venues as opportunities to show what you can do. Get involved with professional associations, volunteering or consulting. Perhaps join the board of a professional association and then work to demonstrate your skills to the membership. Or seek a consulting or volunteer role that will afford the opportunity to achieve measurable results and will enable you to build relationships with a wider network of people. As you become perceived as a valuable team member, your age will seem less relevant.
• Broaden your pool of targeted employers.
• Consider starting your own business -- and in the ultimate twist -- think about starting a business that targets other older workers as customers or employees.
• If you're retired and already have a pension and health benefits from your old employer, consider working for salary only. If being productive means more to you than additional benefits, consider companies with programs in which workers in their 50's who would otherwise take advantage of early retirement provisions in their pensions are offered the chance to work reduced hours and supplement their reduced incomes by tapping those pensions.
• Consider flexible options that may be advantageous to both you and the employer, such as a compressed work week, flextime, job reassignment, job redesign, part-time work, job sharing, phased retirement, or telecommuting.
• Consider offering to put in odd hours that younger workers with family obligations might not be able to work.
• Register with a temp agency so you can generate some income, update your skills, and build your resume while waiting for the perfect job. Some temp agencies even specialize in older workers.
• Locate programs that help with job training and employability skills for older workers.
• When all else fails, consider legal recourse.

(from quintcareers.com)

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Equal Opportunity Harassment: The Workplace Bully

Bullying, as opposed to illegal workplace harassment, is a form of "equal opportunity harassment". Bullies pick on people without regard to sex, age, race, ethnicity, national origin, or disability. A recent reliable study estimates that approximately 1 in 6 U.S. workers has directly experienced destructive bullying in the past year. (according to a year 2000 scientific sample of State of Michigan residents)

Bullying transcends gender. Half of all bullies (58%) are women. Half of all bullying is woman-on-woman. Women comprise 80% of targets. The vast majority of bullies (71%) are bosses. [Research taken from the Workplace Bullying and Trauma Institute (WBTI)].

Bullies bully because they can; they do so with impunity. The complex answer to why bullies bully can be reduced to 3 factors: (a) some workplaces pit worker against worker in zero-sum (cutthroat) competitive schemes, (b) Machiavellian types (who live to manipulate others to accomplish their own goals) see the opportunities presented, and (c) in bullying-prone workplaces, employers reward the aggression with promotions and rewards. Bullies are rarely psychopathic, but are always narcissistic and Machiavellian. (Again, based on research by the WBTI.)

According to the WBTI research, bullies pick "Targets" who have two characteristics: a desire to cooperate and a non-confronting interpersonal style. Bullying poses a serious health hazard to Targets by compromising their psychological and physical health, disassembling their social network and risking economic devastation through the loss of their jobs because "employment at will" encourages the bully's whimsical misuse of power. Targets who are most surprised by the baseless cruelty inflicted on them suffer the most severe effects and take the longest time to heal afterward. Silent, frozen co-workers worsen the problem often by choosing to cut off support, to tacitly or directly join the bully's personal vendetta against the Target. Eventually, the workplace is paralyzed by fear, incapable of productive work, and susceptible to costly downtime with an unhealthy workforce and an increased liability for destructive employment practices.

Between 2003 and 2005, anti-bullying bills have been introduced in five states -- California, Oklahoma, Hawaii, Washington and Oregon. It has not yet become a law. The 'Healthy Workplace' Bill (sponsored by the WBTI) is advocated by its sponsors as a needed protection against the devastating emotional (and sometimes physical) workplace injuries caused by bullies. Opponents state that the proposed laws, while well intentioned, can't be adequately policed and enforced by a limited court system.

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Search for Nurses in California Is Feverish

From the LA Times:

Competition to hire nurses in California is so intense that some headhunters routinely make cold calls to nursing stations at rival hospitals, desperate for recruits.

Others are sending out direct-mail pitches that read like time-share come-ons. Mission Hospital in Mission Viejo, for example, offers nurses a $200 gift card just to come in and take a look around. And in one extreme case, a nurse-staffing firm is using a $10-million Newport Beach mansion as a lure.

Scrambling to comply with California's first-of-its-kind law mandating 1 nurse for every 5 patients in most wards starting this year, hospitals are in a hiring frenzy reminiscent of Silicon Valley's lust for engineers in 1999. Gov. Arnold Schwarzenegger this month dropped his fight to suspend the law, leaving hospitals to cope with a labor shortage that is expected to grow for decades.

One hospital staffing agency, in an extreme example of creative recruiting, has turned to reality TV. It invited six nurses from around the country to work in local hospitals for 13 weeks while living in a mansion not far from the scene of MTV's hit reality show "Laguna Beach." The result is a show designed to tantalize nurses around the country with the joys of nursing in Southern California.

The show highlights the lives of "travelers," U.S.-trained nurses who bounce from hospital to hospital on 13-week contracts, following the sun, ski season and shifting staffing needs. The prevalence of travelers is one indication of the degree to which the nursing shortage has put power in the hands of employees.

Last year, 11,000 travelers moved to California from other states, along with about 3,700 foreign-trained nurses, according to a study this year by UC San Francisco.

"There's a limited supply of qualified RNs out there, and there's just a huge demand," said Evan Burks, executive vice president of Comforce Corp., a Woodbury, N.Y.-based staffing company. "As California hospitals have to meet those ratios, there is going to be a greater and greater push to bring traveling nurses from other parts of the country. It could make shortages elsewhere worse."

Nurse wages in California are the highest in the nation, up 23% over the last seven years to an average of more than $33 an hour. In competitive areas, such as Orange County, nurses can earn $30 an hour right out of school. Travelers make even more - as much as $60 an hour, on top of housing, meals, benefits and, often, signing or completion bonuses.

The shortage is expected to worsen as nurses - whose average age is nearing 50 - retire in waves. Those retirements will be in full swing just as the oldest baby boomers are reaching their 70s, a milestone that is expected to put a crushing demand on hospitals. With California's continuing population growth, the number of unfilled nursing jobs could exceed 122,000 by 2030, according to the UC San Francisco study.

And although nursing schools have succeeded in attracting students, a new problem has emerged: a nationwide shortage of nursing teachers. Today, a nurse with the experience and advanced degree necessary to teach can make two or three times as much as a hospital nurse manager.

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