Labor, Employment and Benefits Law Update, March 2009



Employers May be Bound by Statements Regarding FMLA Leave, Even Though Employee Was Not Entitled to Leave
By Julia H. Halbach

A case recently decided by the Eighth Circuit Court of Appeals should serve as a warning to employers that they may be bound by their erroneous statements regarding an employee’s eligibility for a leave of absence under the Family Medical Leave Act (“FMLA”).  In Reed v. Lear Corp., No. 08-1498 (8th Cir. 2009), the court stated that employers can be bound by statements they make regarding an employee’s eligibility for leave under the FMLA.  While the court ultimately decided that the employee’s reliance was not reasonable in this case, the case nonetheless provides useful guidance to employers. 

Eighth Circuit Court of Appeals Upholds Arbitration Agreement Even Where Some Provisions of the Agreement are Unlawful
By Carrie L. Zochert

The Eighth Circuit Court of Appeals enforced an arbitration agreement despite the presence of two arguably unlawful provisions, because the parties could properly sever the invalid terms pursuant to a severability clause in the agreement.  In Franke v. Poly-America Medical & Dental Benefits Plan, an ERISA plan participant, James G. Franke, filed suit in Minnesota federal district court against the plan after a plan administrator denied compensation of his medical bills.  Franke, __ F.3d __, 2009 WL 260519, at *1 (8th Cir. 2009).

ERISA Plan Administrators Must Follow Participant’s Beneficiary Designation
By Carrie L. Zochert and Britta L. Orr*

In an unanimous opinion, the United States Supreme Court recently ruled that an ERISA plan administrator must follow a deceased participant’s beneficiary designation even where the beneficiary (in this case the decedent’s former spouse) validly waived her rights to an ERISA savings and investment plan under federal common law pursuant to a divorce decree years earlier.  Kennedy v. Plan Adm’r for DuPont Savings & Inv. Plan (U.S. 2009).  The decision has attracted significant attention from employment and family law communities because of its potential impact on 300,000 to 400,000 divorcing workers each year and their heirs, beneficiaries, and families.

Cobra Subsidy
By Mary L. Komornicka

The economic stimulus bill, the American Recovery and Reinvestment Act (“ARRA”), includes health coverage assistance for  employees laid off due to the current economic recession.   Effective immediately, the federal government will subsidize up to 65% of an employee’s premium cost under  a COBRA health plan continuation. 

Update on E-Verify
By Chris M. Heffelbower

E-Verify is an internet system that allows employers to electronically verify the employment eligibility of their newly hired employees.  The use of E-Verify is voluntary for most employers, however, it will be mandatory for certain federal contractors.  We informed you of the details of E-Verify in our September Newsletter.  Recently, there have been updates to the E-Verify requirements: 

About our Practice:
The Larkin Hoffman employment law team identifies and resolves workplace issues in this rapidly evolving and highly regulated area.  Our attorneys provide counsel and advice to employers.  We represent employers in state and federal courts and administrative agencies including the EEOC, MHRA, NLRB, OSHA and DOL.

Contact our Labor & Employment Attorneys: 
Dayle Nolan                   
Email 952.896.3275           
Christopher J Harristhal
Email 952.896.3312
Bruce J Douglas
Email 952.896.1569
Daniel J Ballintine
Email 952.896.3288
Chris M Heffelbower  
Email 952.896.1543
Sejal Desai Winkelman   
Email 952.896.3325
Carrie L Zochert  
Email 952.896.3353
Julia H Halbach  
Email 952.896.3264
Peter A.T. Carlson 
Email 952.896.3239


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This alert is provided as a service to our clients and firm associates.  While the information provided in this publication is believed to be accurate, it is general in nature and should not be construed as legal advice.