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L&E Evolution Part II: Discrimination

October 25th, 2018  |  Lorene Park

In the second of a series of Special Briefings by Employment Law Daily, Senior Employment Law Analyst Lorene D. Park examines the evolution of federal labor and employment laws addressing discrimination and harassment based on sex (including pregnancy), age, race, religion, national origin, immigration status, LGBTQ status, military service, and more.

Highlights of this Special Briefing include:

• Changes in the definition of “sex,” with cases on same-sex harassment and stereotypes, and a Circuit split on whether Title VII prohibits sexual orientation discrimination

• Key Supreme Court decisions, including those establishing causation standards under the ADEA and Title VII, and those clarifying basic definitions (“sex” and “supervisor,” for example)

• Hot topics, such as: drug tests and medical marijuana; social media; appearance policies and race or religion; telecommuting, service animals, and other accommodations; wellness programs; caregiver discrimination; and implicit bias, among others

• Social movements and political activities impacting perceptions of discrimination and harassment, including the #MeToo movement and Trump’s policies on immigration and transgender members of the military

• Issues involving discrimination based on “perceived” race, religion, or disability

• Difficulties employers face if employees have conflicting legal rights (the tension between accommodating an employee’s sincerely held religious belief and avoiding bias against LGBTQ employees, for example)

As with the first briefing in this series, which covered changes in the employment relationship and who can be liable as an “employer,” this Special Briefing also provides practical advice for minimizing liability under Title VII, USERRA, the ADA, the ADEA, and other federal laws, given the changing realities of the workplace.


Free webinar on LGBTQ+ issues in the workplace

October 17th, 2018  |  Pamela Wolf

Please consider this a personal invitation to join me on October 25 at 2:00 PM Central (3:00 PM Eastern, Noon Pacific) for what promises to be an engaging and informative one-hour webinar on LGBTQ+ issues in the workplace. As many of you know, this can be a particularly thorny area for employers to navigate.

During our roundtable discussion, a panel of attorneys will provide their expert insights and practical guidance to help employers better understand the often complex LGBTQ+ issues that may arise in their own workplaces. We’ll be taking you through some “real life” scenarios.

Featured attorneys include Brooke Colaizzi, Member at Sherman & Howard L.L.C.; Eric Meyer, Partner at FisherBroyles, LLP; Michelle E. Phillips, Principal at Jackson Lewis P.C., and Nonnie Shivers, Shareholder at Ogletree Deakins.

Roundtable Discussion: Navigating LGBTQ+ Issues in the Workplace, a free webinar offering one hour of CLE credit, will address these issues and more:

  • Vulnerable applicants and employees;
  • Knowing LGBTQ+ discrimination when you see it;
  • Dealing with gender fluidity;
  • Proactive measures to prevent discrimination;
  • How to handle discrimination complaints.

Click here to register.


What federal contractors need to know about the OFCCP’s latest directives

September 20th, 2018  |  Pamela Wolf

On September 19, the OFCCP released two new policy Directives that the federal contract compliance agency said would shine a brighter light on its compliance activities and establish a program designed to listen to concerns that contractors may be reluctant to share.

To understand the implications of these new Directives, Employment Law Daily reached out to Polsinelli Shareholder Connie Bertram. She called them “the most recent in a series of Directives designed to facilitate contractors’ efforts to self-audit and understand their compliance obligations, and increase the transparency and accessibility of the enforcement efforts of OFFCP.”

Transparency in compliance audits. Directive 2018-08 is aimed at furthering the OFCCP’s goal of transparency in the compliance audit process. The agency explains that this Directive is the most recent of a series designed to increase transparency and the quality of compliance reviews, including hosting a series of compliance assistance events across the country, issuing a Directive requiring Pre-Determination Notifications prior to the issuance of Notices of Violation, issuing a Directive that outlines what contractors can expect during compliance evaluations and investigations, and publishing the OFCCP’s supply and service scheduling methodology, Bertram observed.

The agency states in this Directive that it “extends OFCCP’s transparency initiative to every stage of a compliance evaluation to facilitate consistency of operations, improve efficiency, and resolve collaboratively matters during compliance evaluations.”

Changes in the audit process. Bertram pointed to the following changes to the compliance audit process announced in Directive 2018-08:

  • Compliance officers will contact the contractor within 15 days of sending a Corporate Scheduling Announcement Letter (CSAL) so that the officer can provide technical assistance and support to the contractor in responding to it.
  • The OFCCP will provide a 30-day extension to provide supporting data responsive to the CSAL if (1) the contractor requests the extension prior to the initial 30 day due-date; and (2) the contractor timely submits the basic affirmative action programs (AAPs) within the initial 30-day period. If these conditions are not satisfied, the OFCCP will only allow extensions in “exceptional circumstances.”
  • The failure to submit timely AAPs or supporting data will result in the immediate issuance of a procedural Notice to Show Cause. The contractor will have an additional 30 days to submit these materials after the issuance of the Notice. After the compliance officer receives the contractor’s AAPs and supporting data, he or she will contact the contractor to confirm receipt and start the desk audit promptly, ideally within five days.
  • The compliance officer initially will review the submission to make certain that it is complete and acceptable. If there are deficiencies in the submission, the compliance officer will notify the contractor promptly and provide 15 days to cure the deficiencies. The OFCCP will issue an immediate procedural Notice to Show cause if the deficiencies are not cured.
  • The compliance officer will then review the submission and contact the contractor to request follow-up information or clarifying information. Compliance officers may not request information beyond the categories listed in the CSAL (e.g., data to refine indicators, employment applications, manager interviews) until after the desk audit has been completed and the conclusion of the desk audit has been recorded in the OFCCP’s case management system.
  • Compliance officers should work to close reviews quickly if there are no indicators of discrimination or other evidence of violations. The Directive states that ideally, and in the majority of cases, the OFCCP should complete a typical desk audit within 45 days of receiving complete and acceptable AAPs and supporting data.
  • Prior to an onsite visit, the compliance officer may request supplemental data to refine indicators and prepare for a potential onsite visit.
  • Critically, the Directive states that “[s]upplemental information requests must include the basis for the request, be reasonably tailored to the areas of concern, and allow for a reasonable time to respond.”
  • Prior to an onsite visit, the OFCCP should provide a “high-level summary” of any preliminary indicators of discrimination in the onsite confirmation letter.

Contractors should note. Bertram underscored several aspects of Directive 2018-08. Although the Directive does not address the onsite review process, it states that the offsite analysis should begin “immediately” after the onsite visit is completed and that the OFCCP should maintain regular contact with the contractor (at least every 30 days) to keep the contractor informed of the status of the evaluation, she observed. “The Directive also does not address the process for reviewing the data and information collected through the desk and onsite audits, or for determining whether the OFCCP should issue a Notice of Violation,” she said. “However, it addresses new procedures for the conciliation process after the issuance of a Notice of Violation.”

The Polsinelli attorney noted the Directive’s statement that the OFCCP should undertake a collaborative process, including:

  1. Sharing information and essential source data in electronic format so that contractors can understand and replicate the OFCCP’s methodology and findings;
  2. Sharing the factors used to calculate back pay; and
  3. Providing an overview or summary of anecdotal evidence or non-statistical findings to provide support or context for the statistical analyses.

The Directive additionally says that Branch of Expert Services and/or the staff of the Office of Solicitor may become involved to facilitate the conciliation process. It also states that the OFCCP will work with the contractor to identify innovative remedies, such as apprenticeship programs and proactive corporate-wide solutions.

What’s behind the move? The Directive is designed to address contractors’ complaints that many audits are taking too long and are not following the steps required in the compliance manual, according to Bertram. “Many compliance audits have become endless desk audits where compliance officers request endless follow-up data without undertaking an onsite review or notifying contractors of their findings at the end of it,” she said. “These audits—now referred to by the OFCCP as ‘aged audits’—have become an area of concern for the senior leadership of the OFCCP.”

A bit of advice … Although Directive 2018-08 is designed to address these concerns, “it will be important for contractors to hold Compliance Officers to these standards, requesting that they present required findings and that they not request information beyond the CSAL until they [the findings] have been provided,” Bertram suggested. “Although it is the objective of most contractors to be cooperative during audits, they can certainly request that the OFCCP comply with its own Directives without becoming adversarial.”

Bertrim added that contractors and their counsel can draw a lot of guidance from the Transparency Directive. “It is clear that contractors must be prepared to produce immediately their basic AAPs upon the receipt of a CSAL,” she said. “To ensure that employees responsible for the preparation and implementation of AAPs are notified immediately of the receipt of CSALs, contractors should confirm that the OFCCP has accurate contact information for the contractor and each of its establishments or functional units.” Bertram also suggested that with these new deadlines, contractors must stay on top of their AAPs, ensuring that they are prepared on time and implemented effectively.

“Contractors should also confirm that they have the ATS [applicant tracking system] and HRIS [human resources information system] systems and other databases available that will allow them to pull and analyze the hiring, promotion, termination, and compensation information that is accurate and includes the categories of information necessary to provide the data requested through the CSALs,” Bertram added.

Ombud Service. Turning to Directive 2018-09, Bertram explained that through it, the OFCCP adopts an Ombud Service in the National Office to help resolve concerns raised by external stakeholders, including federal contractors and subcontractors, industry groups, law firms, and complainants. The Directive explains that “transparency is the foundation of a relationship of respect, dialogue, and feedback with its stakeholders that will help the agency improve its effectiveness in both compliance assistance and evaluations,” the Polsinelli attorney noted. She said the agency “believes that increased transparency will improve operational efficiency and effectiveness and support contractors’ ability to conduct meaningful self-audits that proactively identify and address areas of concern.”

How it will work. Addressing the genesis of the development, Bertram said that to respond to concerns raised in a September 2016 report by the Government Accountability Office, the OFCCP is “adopting an independent mechanism through which external stakeholders can share their concerns with the OFCCP about a particular open matter or provide general feedback or recommendations.” The OFCCP will hire an OFCCP Ombud who reports directly to the Deputy Director. The Ombud will be responsible for:

  1. Listening to the concerns of external stakeholders;
  2. Promoting and facilitating the resolution of OFCCP matters at the regional and district levels; and
  3. Working with OFCCP regional and district offices as a liaison to resolve certain issues after stakeholders have exhausted those channels.

What does it mean for contractors? If the Ombud program operates consistently with the Directive, it should provide contractors with an additional resource when they are facing challenging situations during the course of an audit, according to Bertram. “For instance, if a district office is demanding extensive records (perhaps for the third or fourth time) from a contractor during a compliance audit, without an explanation (or what the contractor considers to be a reasonable one), contractors could reach out to the Ombud for assistance and support,” she explained. “The Directive emphasizes that the Ombud will not act as an advocate for either side or give advice or opinions. However, he or she may be able to help the contractor and the district or regional office reach a resolution of their dispute.”

Best practices. Bertram said that in these situations, it would be advisable for the contractor to work the issue through the “chain of command,” presenting and documenting its communications and positions in a constructive and professional manner at each step in the chain. “Then, it will be able to reach out to the Ombud with a written record, showing its efforts to reach a resolution, and clearly identifying its position and arguments on the dispute,” she said. “It would also be advisable to work with the Ombud on constructive issues, such as suggestions for improvement, so that he or she knows that the contractor supports the OFCCP and its compliance efforts,” Bertram recommended.


Top labor and employment developments for August 2018

September 6th, 2018  |  Joy Waltemath

By Joy P. Waltemath, J.D.

In case you missed the in-depth coverage of Employment Law Daily for August, here’s a recap of some key developments in the L&E community.

Trump administration news

Parts of Trump executive orders reducing federal employee collective bargaining rights declared invalid by D.D.C. Provisions of three executive orders issued by President Trump on May 25, 2018, which were challenged by labor unions that represent employees of various federal agencies, were declared invalid August 25. The federal district court in D.C. concluded that many of the challenged provisions effectively reduced the scope of the right to bargain collectively as Congress has crafted it by enacting the Federal Service Labor-Management Relations Act (FSLMRS), or impaired the ability of agency officials to bargain in good faith as Congress has directed. Viewed collectively, the challenged EOs reflected a decidedly different policy choice: namely, the president’s stated view that federal employees’ right to engage in collective bargaining over the conditions of their employment is “not apropos of” an “effective and efficient Government,” and should be rendered subordinate to the agencies’ interest “in developing efficient, effective, and cost-reducing collective bargaining agreements.” As such, certain EO provisions dramatically curtail the scope of bargaining because agencies and unions would no longer negotiate over a host of significant issues, said the court, finding the orders remove these matters from the scope of the right to bargain despite the fact that Congress has made them negotiable; the removed topics are important to the functioning of labor organizations and the fairness of collective bargaining negotiations; and provisions of the EOs impede the prospect of good faith negotiations. Accordingly, the president’s subordinates were enjoined from implementing or giving effect to: Executive Order 13,836 Sections 5(a) 5(e), and 6; Executive Order 13,837 Sections 3(a), 4(a), and 4(b); and Executive Order 13,839 Sections 3, 4(a), and 4(c) (American Federation of Government Employees v. Trump).

Independence of military’s plan, report banning transgender individuals from service questioned. A little over a year ago, in July 2017, President Trump tweeted a change in U.S. government policy to neither accept nor allow transgender individuals to serve “in any capacity” in the U.S. military. Following that up, on August 25, 2017, was a formal presidential memorandum. After federal courts blocked as unconstitutional Trump’s ban on transgender people serving in the military, and following a memorandum and report submitted by the defense secretary, Trump revoked that memorandum. However, the result of Defense Secretary James Mattis’ Implementation Plan is pretty much the same: transgender individuals are generally not allowed to serve openly in the military.

Now, with litigation still pending in several districts and a nationwide injunction in place, the D.C. district court refused on August 24 to dismiss or grant summary judgment to the government—which claims its decisions regarding transgender military service are owed “great deference because they are the product of extensive deliberation, study and review.” The court refused summary judgment to the plaintiffs as well because the facts related to the process used by the government to prepare its current proposed policy—and especially how independent that process was—were disputed material facts affecting the degree of deference owed by the court to the government’s policy decisions, and the level of scrutiny to apply to the challenged policy. The plaintiffs would get discovery, too; the government had “withheld nearly all information concerning this alleged deliberation. This is not how civil litigation works,” the court reminded (Doe 2 v. Mattis).

Supreme Court news

State AGs ask justices to take up “error of national importance” in transgender discrimination case. Although August is not typically a hotbed of Supreme Court activity, this month a 16-state coalition of attorneys general has urged the High Court to take up whether Title VII protects employees from discrimination based on transgender status. The group contends that a March 2018 decision from the Sixth Circuit, which finds employers are barred from discriminating against transgender workers, was an improper expansion of the definition of “sex” in Title VII—an error of “national importance” the Supreme Court must correct.

The petition for certiorari in R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC (Docket No. 18-107) asks the Court to determine the scope of Title VII’s prohibition against discrimination based on “sex”—particularly, whether the statute stands as a shield against employment discrimination based on gender identity and transgender status. In their amicus brief supporting the employer in the case, the attorneys general asserted the appeals court decision should be overturned. “In rewriting Title VII to its own liking, rather than interpreting the statute based on its text, history, and purpose, the Sixth Circuit not only ignored the will of Congress, but bestowed upon itself (an unelected legislature of three) the power to rewrite congressional enactments in violation of the separation of powers,” the brief states.

Federal agency developments

DOL signals it will propose occupations subject to state drug testing for unemployment benefits. The Office of Management and Budget received a proposal from the DOL August 21, Drug Testing by States for Purposes of Determining Unemployment Compensation Eligibility,” for the agency to identify the occupations that regularly conduct drug testing for purposes of unemployment compensation. In March 2017, President Trump signed a congressional joint resolution of disapproval (H.J. Res. 42) nullifying the prior final rule. Seen by the administration as a limitation on states’ ability to require those who apply for unemployment benefits to submit to drug testing, that rule established, for state unemployment compensation program purposes, occupations that regularly conduct drug testing. The DOL issued a statement at the time of the resolution saying “The rule contradicted clear congressional intent—it narrowly limited the circumstances under which drug testing may be carried out and constrained a state’s ability to conduct a drug testing program under the act.” Now the DOL has signaled it is prepared to act again. The resolution under the CRA, however, prevents a federal agency from implementing a rule or issuing a rule that is substantially the same without congressional authorization. Will the DOL’s proposal here be considered “substantially the same?”

DOL “public listening sessions” seek input on white-collar regs’ salary level. The DOL announced August 28 that it will conduct public listening sessions to gather views on white-collar exemption regulations under the FLSA—specifically to provide input on issues related to the salary level test. Five listening sessions are scheduled across the country in September, according to the DOL notice; for specific location details and register to attend, click here.

DOL issues six new opinion letters addressing FLSA, FMLA issues. The DOLs Wage and Hour Division issued six new opinion letters August 28, which include:

1.

Organ donors’ qualification for FMLA leave.

2.

Compensability of time spent voluntarily attending benefit fairs and certain wellness activities.

3.

Application of the movie theater overtime exemption to a movie theater that also offers dining services.

4.

Application of the commissioned sales employee overtime exemption to a company that sells an internet payment software platform.

5.

Volunteer status of nonprofit members serving as credentialing examination graders.

6.

“No-fault” attendance policies and attendance points under the FMLA.

OSHA beryllium standard compliance date delayed to December 12 for certain ancillary requirements. It’s tough to keep up with what OSHA is doing with respect to the beryllium standards. The agency published a final rule notice on August 9 extending the compliance date for certain ancillary requirements of the general industry beryllium standard to December 12, 2018. This compliance date affects certain ancillary provisions related to methods of compliance, beryllium work areas, regulated areas, personal protective clothing and equipment, hygiene areas and practices, housekeeping, communication of hazards, and recordkeeping. Note that this rule does not affect the new permissible exposure limits (PELs) for general industry, construction, and shipyards, or the general industry provisions for exposure assessment, respiratory protection, medical surveillance, and medical removal, which OSHA began enforcing on May 11, 2018. This rule also does not affect the March 11, 2019, compliance date for the provisions on change rooms and showers in the beryllium standard’s paragraph (i) (hygiene areas and practices) or the March 10, 2020, compliance date for implementation of the engineering controls required by paragraph (f) (methods of compliance). Further, the final rule does not affect the applicability of paragraph (a) (scope and application) or paragraph (b) (definitions).

FMCSA considering loosening hours-of-service restrictions for commercial truck drivers. The Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) is soliciting public comment on a proposed revision of its current hours-of-service (HOS) regulations, which limit the operating hours of commercial truck drivers. The Advanced Notice of Proposed Rule Making, published August 23, responds to what it calls widespread Congressional, industry, and citizen concerns. The agency wants public comment on whether HOS revisions may alleviate “unnecessary burdens” placed on drivers while still maintaining safety on U.S. highways and roads.

EEOC nets some big-money settlements:

  • Alorica, Inc., will pay $3.5 million and take remedial measures to resolve a sexual harassment lawsuit, according to the EEOC.
  • Giant poultry supplier Koch Foods has agreed to pay $3.75 million and furnish other relief to settle class allegations of sexual harassment, national origin, and race discrimination, as well as retaliation against a class of Hispanic workers at Koch’s Morton, Mississippi, chicken processing plant, the EEOC reported. (The EEOC’s case was later consolidated with the lawsuit previously filed by plaintiff/intervenors, Cazorla v. Koch Foods of Mississippi, LLC . Notably, that case went to the Fifth Circuit over Koch’s desire to discover employees’ attempts to acquire U visas—an immigration benefit that can be sought by victims of certain crimes (even undocumented immigrants) who have assisted government authorities in criminal investigations.)
  • Coca-Cola Refreshments USA, Inc., will pay $2.25M and improve its disability leave policies, practices, the EEOC announced in a news release. The agency entered into a settlement agreement as part of informal conciliation with the company, which agreed to make monetary payments totaling $2.25 million to individuals who filed charges of discrimination, and provide annual financial support to selected “non-profit entities dedicated to helping individuals with disabilities find and keep employment.”

NLRB drama continues

Board reconsidering Purple Communications employee email ruling. On August 1, the Board issued an invitation for briefs on what it should do with Purple Communications, Inc., which held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system, on nonworking time, for communications protected by NLRA Section 7. That holding overruled Register Guard, which had held that while union-related communications cannot be banned because they are union-related, facially neutral policies regarding the permissible uses of employers’ email systems do not become unlawful simply because they have the “incidental” effect of limiting the use of those systems for union-related communications. Although Purple Communications and Register Guard addressed only email systems, the Board is also inviting comment on the standard it should apply to evaluate policies governing the use of employer-owned computer resources other than email. The case in which the Board has invited briefing is Caesars Entertainment Corporation dba Rio All-Suites Hotel and Casino, 28-CA-060841.

ALJs are validly appointed because the Board is a “Department,” Members collectively are “Head of Department.” Unified, for once, on a significant issue of Board law or procedure, the five Members of the NLRB agreed August 6 that the Board’s appointment of administrative law judges is constitutionally valid under the Appointments Clause because the Board itself is a “Department” and the Board’s Members collectively are a “Head of Department.” Although the employer here argued that the ALJ assigned to its case was an inferior officer who was not constitutionally appointed under the Appointments Clause, the Board pointed to Supreme Court precedent finding the SEC to be a “freestanding component of the Executive Branch, not subordinate to or contained within any other such component,” and as such, a Department for the purposes of the Appointments Clause. That holding applied equally to the NLRB as a “freestanding component of the Executive Branch,” the Board reasoned, noting the same precedent also held that that the SEC’s Commissioners collectively constitute a Head of Department under the Appointments Clause, and this similarly applied to the Board’s Members. In Lucia v. SEC, the High Court reiterated this holding, which was good enough for the Board here, and it dismissed the employer’s challenge to the complaint (WestRock Services, Inc ., August 6, 2018).

Meanwhile, 38 employees take Board up on voluntary retirement or separation offer. On August 22, the Board announced that 38 agency employees holding positions eligible for the Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Payments (VSIP) programs have submitted applications to participate in the opportunity for voluntary early retirement and separation. Earlier in the month, on August 7, the Board announced that it was offering voluntary early retirement and voluntary separation to certain employees under the VERA and VSIP programs. The window to submit applications for these programs closed on August 21. The NLRB stressed that applying for the VERA and VSIP opportunities was “entirely voluntary.”

And Trump re-nominates Pearce. On August 28, the White House quietly announced that President Trump’s re-nomination of Mark Gaston Pearce to be a Member of the NLRB was being forwarded to the Senate. If the re-nomination is confirmed, Pearce will serve for a term of five years expiring August 27, 2023. The news came the day after Pearce’s current term expired, leaving a 3-1 Republican majority on the Board.

OFCCP announces five new policy directives

New directive protects “religion-exercising” federal contractors. OFCCP announced two new policy directives on August 10 focused on protecting the religious freedoms of “religion-exercising organizations and individuals” and on ensuring compliance with equal employment opportunity provisions enforced by the agency. The religious freedom directive (DIR 2018-03) protects the rights of “religion-exercising” federal contractors, according to the agency—effectively expanding a religious freedom defense for contractors faced with discrimination allegations.

The most pressing question likely to emerge will be the tension between protecting the exercise of religious freedoms and current protections based on sexual orientation. Since 2015, EO 11246 explicitly covers both sexual orientation and gender identity bias, following the issuance of EO 13672 by President Obama in 2014. (In 2015, the OFCCP issued Directive 2015-01, “Handling Individual and Systemic Sexual Orientation and Gender Identity Discrimination Complaints,” setting agency policy on accepting and investigating individual and systemic complaints based on gender identity or sexual orientation.) Shortly after his inauguration, as questions arose whether he might rescind Obama’s expanded protections based on sexual orientation, President Trump announced that EO 13672 would remain in force. In March 2017, he issued an Executive Order revoking Obama’s Fair Pay and Safe Workplaces EO 13673; section 3 of EO 13683 and EO 13738, which amended the Fair Pay and Safe Workplaces EO. However, EO 13672 was left intact.

Restoring focused reviews. Noting that the OFCCP is undertaking a comprehensive compliance initiative, DIR 2018-04 announces the agency’s intent to undertake focused reviews. The aim, according to the directive, is to ensure compliance with all EEO and anti-discrimination regulations in all of its protected groups—particularly, compliance with Section 503, which addresses disability discrimination.

Other directives. Three additional directives were announced on August 24, including new procedures for reviewing contractor compensation practices, a program to verify that contractors are in compliance with federal affirmative action program (AAP) requirements, and an initiative establishing a recognition program for contractors with high-quality and high-performing compliance programs and initiatives. They include:

  • Directive 2018-05: Analysis of Contractor Compensation Practices during a Compliance Evaluation. This directive further clarifies and provides additional transparency to contractors about OFCCP’s approach to conducting compensation evaluations; supports compliance and compensation self-analyses by contractors under applicable law and OFCCP regulations and practices; and improves compensation analysis consistency and efficiency during compliance evaluations. It rescinds and replaces OFCCP DIR 2013-03 (known as Directive 307) and is accompanied by Frequently Asked Questions.
  • Directive 2018-07: Affirmative Action Program Verification Initiative. This new OFCCP initiative establishes a program for verifying compliance by all contractors with AAP obligations.
  • Directive 2018-06: Contractor Recognition Programs. This directive establishes a contractor recognition program that will include awards that highlight implementable best or model contractor practices, a contractor mentoring program that uses contractors to help their peers improve compliance, and other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.

In the federal courts of appeals

D.C. Cir.: NLRB properly allowed stationary picketing outside nonemergency hospital entrance. The D.C. Circuit upheld the NLRB’s determination that off-duty hospital employees holding picket signs on hospital property, next to a nonemergency entrance, were engaged in protected activity. The Board correctly applied the framework set forth in Republic Aviation Corp. v. NLRB to reject the hospital’s attempt to stop the employees’ stationary display of picket signs. The medical center argued that picketing should be treated differently than leafletting so that the Republic Aviation presumption would not apply. The NLRB properly rejected that argument, the appeals court found on August 10: Stationary picketing is less confrontational than leafletting because those holding picket signs did not have direct contact with nonemployees. The NLRB did not hold that picketing must always be permitted on premises to the same degree as handbilling or soliciting. Instead, it noted that where picketing disrupts operations or interferes with patient care, Republic Aviation would permit a hospital to bar it. The NLRB’s application of Republic Aviation was therefore sustained as reasonable, not only as to solicitation and handbilling, but as to the picketing in this case. Note, though, that General Counsel Peter Robb has signaled his intent to revisit the Obama Board’s reasoning in this case (Capital Medical Center v. NLRB).

1st Cir.: Retaliatory acts and pretext were not enough to show teacher’s discipline was due to her advocacy for disabled students. A divided First Circuit panel on August 21 upheld the judgment of a district court, following a five-day bench trial, that although a kindergarten teacher had established both a prima facie case of retaliatory treatment and that the school’s rationale for putting her on a performance improvement plan and transferring her was pretextual, she had not proven that the actions taken against her by the superintendent, the principal, and vice principal were a result of her advocacy on behalf of students with disabilities in her classroom. Dissenting, Judge Torruella would have held this to be “that rare case in which the district court’s finding that there was no retaliatory animus was clearly erroneous” based on questions concerning the motivations of not just the superintendent, but other “crucial actors”—the principal and vice principal (Richard v. Regional School Unit 57).

1st Cir.: Porn-possessing fired employee needed expert to prove screen-capture software was “interception” under ECPA. Expert testimony was necessary to establish whether a fired employee could show a contemporaneous interception of an electronic communication under the Electronic Communications Privacy Act (ECPA) had occurred when his employer installed screenshot-capturing software on his computer after it discovered evidence he was viewing child pornography on the job. Although the majority of lay persons likely would understand both email and the concept of screenshot capturing, to prove an ECPA contemporaneous “interception” would require expert testimony explaining what the screenshot-capturing software actually did when it captured a screenshot, the timing of it, what a web browser’s progress bar actually indicates, and how exactly the email system the employee was using auto-saves emails as a user drafts them. Because the employee lacked this expert testimony, the appeals court agreed on August 21 that his claims against his employer failed (Boudreau v. Lussier).

2d Cir.: Healthcare employer that “laundered” housekeepers to divest them of CBA-negotiated rights violated NLRA. When the healthcare employer in this appeal “laundered” its housekeeping workers by first moving them over to the payroll of a third party, and then bringing them back in as employees without contractual rights under the CBA, it violated the NLRA, the Second Circuit explained, denying on August 23 the employer’s petition for review of an NLRB decision. In fact, the record supported the conclusion that the employer’s “dominant (if not sole) purpose” in using a subcontractor was to mask a “quasi alter-ego scheme.” The appeals court also agreed with the Board that the employer committed additional violations by unilaterally changing policies related to holiday pay and by refusing to “rehire” two senior housekeepers. The employer’s petition for review was denied and the Board’s application for enforcement was granted (HealthBridge Management, LLC v. NLRB).

3d Cir.: Dispute over retiree benefits not subject to arbitration; retirees not “employees” under CBA. In an appeal raising important questions of appellate jurisdiction and contract interpretation, the Third Circuit ruled August 29 that where a district court had compelled arbitration, dismissed a union’s substantive claims, and administratively closed the case, the district court’s order was an appealable final order. And the appeals court agreed with the employer that a dispute over retiree healthcare benefits was not subject to arbitration because retiree health benefits were not covered under the CBA, reasoning that former employees who retired before the CBA went into effect were not “employees” under the agreement. Further, the appeals court found that a single mention of retiree healthcare benefits in the CBA was insufficient to incorporate a memorandum of agreement on the subject of retiree healthcare into the CBA absent an express intent to incorporate the MOA (Cup v. Ampco Pittsburgh Corp.).

4th Cir.: No § 10(j) injunction for NLRB; effectiveness of Board’s remedial power was not in jeopardy. Finding no abuse of discretion in a district court’s denial of an NLRB motion for preliminary injunctive relief under NLRA § 10(j), a divided Fourth Circuit held on August 28 that the Board failed to demonstrate sufficiently that the “effectiveness of its remedial power was in jeopardy” in its adjudication of unfair labor practice charges against two hospitals. Three and a half years after RNs voted for union representation at the two hospitals, and just less than a year after negotiations began, the union filed charges alleging that the hospitals had failed to bargain in good faith, and six months later, the Board sought the § 10(j) injunction. The district court found no irreparable harm. Chief Judge Gregory dissented because the district court failed to analyze irreparable harm in the proper context—preserving the Board’s remedial power (Henderson v. Bluefield Hospital Co., LLC).

6th Cir.: Common law “tender-back” doctrine does not apply to claims brought under Title VII or Equal Pay Act. In a question of first impression, a divided Sixth Circuit panel held that an employee is not required to “tender back” consideration received under a severance agreement before bringing claims for violations of Title VII or the Equal Pay Act. The appeals court expressed its concern that requiring recently discharged employees to return their severance before they can bring claims under Title VII and the EPA would serve only to protect malfeasant employers at the expense of employees’ statutory protections at the very time that those employees are most economically vulnerable. The August 16 case involved a pregnant employee whose supervisor made negative comments about her pregnancy and her prenatal doctor appointments, and who was fired and pressured to sign a severance agreement without benefit of counsel. In addition, she did tender back the $4,000 in severance she received, but the employer would not accept it (McClellan v. Midwest Machining, Inc.).

6th Cir.: Reasonable for jury to have found Dollar General discriminated against a diabetic employee fired for violating “anti-grazing” policy. In a case brought by the EEOC on behalf of a diabetic Dollar General sales associate, the Sixth Circuit found on August 7 that a jury permissibly determined that the discount retailer discriminated on the basis of disability when it fired the employee after discovering she drank orange juice from the store’s cooler during hypoglycemic episodes. Prior to her promotion to lead sales associate, when she experienced hypoglycemic episodes at work, she typically went to the break room, where she kept orange juice in a cooler. After her promotion, she often worked alone in the store. To avoid the risk of a hypoglycemic episode, she asked if she could keep orange juice at her register, but her manager refused, telling her it was against store policy. When she experienced two hypoglycemic episodes in late 2011 and early 2012, she took a bottle of orange juice from the store cooler, drank it, paid the $1.69 she owed for each bottle, and told the store manager. Finding that these two events violated Dollar General’s “grazing policy,” which forbids employees from consuming merchandise in the store before paying for it, the company fired her. All that mattered, said the appeals court, is whether the jury had a legally sufficient basis to conclude that Dollar General failed to provide the employee reasonable alternatives to keeping orange juice at her register. “Ample evidence supported that conclusion.” The appeals court also upheld the district court’s award of $445,322 in attorneys’ fees to the intervening employee’s attorneys (EEOC v. Dolgencorp, LLC dba Dollar General Corp.).

7th Cir.: Butcher’s trial evidence established that the sexual taunting, touching he endured was directed only at males and was based on sex. Because the Seventh Circuit found that “ample” trial evidence presented by a butcher who claimed sexual harassment did show that the genital grabbing, buttock groping, and sex pantomiming he experienced from male coworkers behind the meat counter did not extend to female employees in the small store’s mixed-sex workplace, it was reasonable for the jury to have concluded that the butcher was subjected to a Title VII hostile work environment based on sex. On August 2, the appeals court also affirmed the jury’s favorable decision on the butcher’s Section 1981 retaliation claim; although the store argued that no retaliation could have occurred because there was no evidence his coworkers even knew he filed an EEOC race bias charge, the court found the store forfeited this argument by focusing in post-trial motions only on whether the butcher’s decision to quit amounted to a constructive discharge (Smith v. Rosebud Farms, Inc., dba Rosebud Farmstand).

7th Cir.: FCRA class action revived because lost opportunity to respond to background check was concrete injury. A job applicant whose employment offer was rescinded after a background check, and whose class action lawsuit against the employer was dismissed based on a district court’s finding that she lacked Article III standing, had part of her suit reinstated by the Seventh Circuit on August 29. The employer’s action in rescinding the job offer without first providing the applicant a copy of the report denied her the chance to review it and present her side of the story, the court explained, which was the “very reason” the FCRA obligated employers to produce such reports before taking adverse action. However, the appeals court agreed that the employee did not have standing to bring a notice claim (Robertson v. Allied Solutions, LLC).

9th Cir.: Divided en banc court allows unionized flight attendant to pursue state-law claim for use of vacation time to cover medical leave, no RLA preemption. In an en banc decision, a deeply divided Ninth Circuit held that the Railway Labor Act did not preempt a flight attendant’s claim premised on a state-law right to reschedule accrued vacation leave, which she had already scheduled for later in the year, for family medical purposes to care for her son when that right to vacation leave was covered by a collective bargaining agreement. The CBA did not allow scheduled vacation days to be moved for family medical reasons. The employee alleged a violation of the Washington Family Care Act’s independent right to use banked vacation days, and her claim did not require interpretation of the CBA. The appeals court voted for en banc rehearing, reasoning that the fact that a state-law cause of action is conditioned on some term or condition of employment that was collectively bargained, rather than unilaterally established by the employer, did not itself create a CBA dispute. Judge Ikuta dissented in the August 1 decision, joined by Judges Tallman, Callahan, Bea and M. Smith (Alaska Airlines Inc. v. Schurke).

9th Cir.: Future attorneys’ fees recoverable by statute or contract must be included in assessing CAFA’s amount in controversy. Assessing whether CAFA’s amount-in-controversy requirement is met, a court must include future attorneys’ fees recoverable by statute or contract, the Ninth Circuit ruled August 8. Applying that rule here, it vacated a lower court order remanding an employee’s wage-hour class action complaint to state court. Because the employee demanded attorneys’ fees permitted by California law, and the law entitled him to an award of fees if successful, future attorneys’ fees were at stake in the litigation. Thus, the lower court’s conclusion that, as a matter of law, the amount in controversy included only attorneys’ fees incurred up to the time of removal and could not include any future fees was incorrect (Fritsch v. Swift Transportation Co. of Arizona, LLC).

9th Cir.: BNSF violated ADA by requiring an applicant it perceived had a back impairment to pay for MRI, and revoking his job offer when he refused. BNSF perceived an applicant for a senior patrol officer position as having a back impairment at the time it asked for an MRI and at the time it revoked his job offer, the Ninth Circuit determined August 29. BNSF could not hide behind its argument that there was some uncertainty as to the actual state of his back when it assumed he had a back condition that disqualified him for the job. Finding that he was qualified and that BNSF impermissibly conditioned his job offer on his procuring an MRI, at his own expense, because it assumed he had a back impairment, the appeals court affirmed the judgment imposing liability on BNSF under the ADA. It vacated, however, the lower court’s nationwide injunction that prohibited BNSF from engaging in certain hiring practices, finding the court below needed to make adequate factual findings to support the injunction’s scope (EEOC v. BNSF Railway Co.).

10th Cir.: Overturning precedent, 10th Circuit concludes that filing an EEOC charge is not a jurisdictional prerequisite to suit. Overturning nearly 40 years of precedent holding that filing an EEOC charge is a jurisdictional prerequisite to suit, the Tenth Circuit declared that a plaintiff’s failure to file an EEOC charge regarding a discrete employment incident merely permits the employer to raise an affirmative defense of failure to exhaust, but it does not bar a federal court from assuming jurisdiction over a claim. Acknowledging that as an individual panel, it could not overrule Tenth Circuit precedent, the panel first circulated its opinion to all active members of the court, who concurred in its conclusion that its prior precedent was no longer correct. Accordingly, on August 17, the appeals court reversed the district court’s dismissal for lack of jurisdiction of several parts of the ADA claims of two BNSF employees who alleged that a tank car spill rendered them partially and permanently disabled and prevented them from working outdoors (Lincoln v. BNSF Railway Co.).

11th Cir.: Citrus grove owner not a joint employer of migrant workers under common law. The owner of a citrus grove that utilized migrant workers under the H-2A visa program to harvest citrus fruit was not the workers’ joint employer under common law, ruled the Eleventh Circuit August 2. The Immigration and Nationality Act governed the H-2A visa program, and Congress intended this statute to carry the definition of the term “employer” from the common law of agency, the appeals court concluded. Applying the common-law definition in this case, the appeals court concluded that the grove owner was not an “employer” and, as a result, it was not the migrant workers’ joint employer for purposes of their breach of contract action (Garcia-Celestino v. Ruiz Harvesting, Inc.).


STRATEGIC PERSPECTIVES—Top labor and employment developments for July 2018

August 9th, 2018  |  Ron Miller

In case you missed the in-depth coverage of Employment Law Daily for July, here’s a recap of some key developments in the L&E community.

SUPREME COURT NEWS

Justices asked to decide if Title VII shields against gender identity discrimination

The Supreme Court has been again asked to determine the scope of Title VII’s prohibition against discrimination based on “sex,” this time, whether the statute stands as a shield against employment discrimination based on gender identity and transgender status. The petition for certiorari in R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC follows a petition filed in June, in Altitude Express, Inc v. Zarda, asking the Justices to determine whether Title VII protects against sexual orientation discrimination.

Gender transition. The employee, who intervened in the case after the EEOC filed suit on her behalf, is a transgender woman who was “assigned male at birth.” She was hired in 2007 and presented as a man until July 2013, when she informed her employer that she intended to have sex reassignment surgery and, as the first step, would live and work full-time as a woman for one year. The funeral home fired her approximately two weeks later because she would no longer dress like a man under the funeral home’s dress code, which required all public-facing male employees to wear suits and ties and its public-facing female employees to wear skirts and jackets.

In March 2018, the Sixth Circuit ruled that discrimination against employees, either because of their failure to conform to sex stereotypes or because of their transgender and transitioning status, is illegal under Title VII. The unrefuted facts showed that the funeral home fired its transgender funeral director because she refused to abide by its stereotypical conception of her sex. The appeals court thus reversed the district court’s contrary decision, holding that the EEOC was entitled to summary judgment as to its unlawful termination claim on behalf of the employee.

WHITE HOUSE NEWS

Brett Kavanaugh nominated to replace Justice Kennedy on Supreme Court

After a selection process that started with a list of 25 potential nominees to the Supreme Court, President Donald J. Trump selected Judge Brett M. Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit as his nominee to fill Justice Anthony M. Kennedy’s seat on the Supreme Court, the White House announced.

Executive Order takes ALJs out of competitive hiring and into excepted service

On July 10, President Trump issued an Executive Order placing the position of administrative law judge (ALJ) into the excepted service. Excepted service agencies set their own qualification requirements; they are not subject to the appointment, pay, and classification rules of Title 5, United States Code.

In his Executive Order Excepting Administrative Law Judges from the Competitive Service, President Trump found that “conditions of good administration make necessary an exception to the competitive hiring rules and examinations for the position of ALJ,” including the need to provide agency heads with additional flexibility to assess prospective appointees without the limitations imposed by competitive examination and competitive service selection procedures. Making ALJs part of the excepted service will also mitigate concerns about undue limitations on their selection, reduce the likelihood of successful challenges under the U.S. Constitution’s Appointments Clause, and forestall litigation raising such concerns, the EO says.

Trump signs whistleblower protection bill into law

On July 9, the White House announced that President Trump had signed the “All Circuit Review Act,” which provides permanent authority for judicial review of certain Merit Systems Protection Board decisions related to whistleblowers.

Introduced in April 2017 by Representative Elijah Cummings (D-Md.), the bipartisan H.R. 2229 makes permanent a pilot program under the Whistleblower Protection Enhancement Act that allows federal employees who blow the whistle to file appeals wherever they work or live, rather than only in the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., a process Cummings has characterized as “overly restrictive of whistleblower rights.”

Court dismisses most of Trump Administration’s challenges to California state immigration laws

After concluding that the Trump Administration is not likely to succeed on the merits of its Supremacy Clause claims against two California immigration-related laws (S.B. 54 and A.B. 103) and the notice requirement provision of a third (A.B. 450), a federal district court in California has granted the state’s motion to dismiss those claims. However, after finding in its July 5 ruling that the United States had shown a likelihood of success on its claims against the remaining provisions of A.B. 450, as those provisions apply to private employers, the court also denied California’s bid to dismiss those claims in a July 9 dismissal order.

Trump takes action to better prepare workers to compete successfully, address ‘skills crisis’

On July 19, President Trump issued an Executive Order he said would provide a coordinated process for developing a national strategy that will ensure American students and workers have access to “affordable, relevant, and innovative education and job training” designed to equip them to compete in a global economy, and monitor and implement that strategy.

“Skills crisis.” The “Executive Order Establishing the President’s National Council for the American Worker” is aimed at the “skills crisis” in the United States, which currently has more than 6.7 million unfilled jobs. American workers need skills training to fill them, according to the EO. The economy is changing rapidly because of technology, automation, and artificial intelligence that is shaping many industries, from manufacturing to healthcare to retail. Our country’s education and job training programs have prepared Americans for “the economy of the past,” the EO observes.

IN THE FEDERAL COURTS OF APPEAL

1st Cir.: Right to ‘inspect’ CBAs negotiated by union didn’t include right to take notes

A union member’s statutory right to “inspect” collective bargaining agreements negotiated by her union with employers other than her own did not encompass a right to take notes while doing so, ruled the First Circuit. The appeals court first took the standard definition of “to inspect” as the statutory meaning. Thus, to “inspect” did not mean to take notes. That conclusion was buttressed by two features of the LMRDA itself. The legislative history of a neighboring provision made clear that Congress did not intend the term to include the right to take notes. Secondly, Congress gave employees whose rights were directly affected by a CBA the right to a copy of that CBA. Accordingly, Congress did not invest the member with a right to take notes of other CBAs (Acosta v. Local Union 26, UNITE HERE, July 11, 2018, Souter, D.).

3d Cir.: Failure to report harassment may have been reasonable where employer turned blind eye to past complaints

Because fact questions existed as to whether an employee reasonably failed to avail herself of her employer’s procedure for reporting sexual harassment, her Title VII complaint should not have been dismissed on summary judgment, held the Third Circuit. After years of unwanted sexual advances by her supervisor, a secretary brought a sexual harassment claim against him and her employer. The district court held that the employer was not liable because it exercised reasonable care to eliminate the harassing behavior and that by not reporting the supervisor’s behavior, the employee had failed to take advantage of the safeguards put in place by the employer. But the appeals court found that disputed fact issues should have permitted the claim to go to a jury—including evidence of prior harassment complaints against the supervisor, and the employee’s genuine fear of reprisal and belief that her complaint would be futile (Minarsky v. Susquehanna County, July 3, 2018, Rendell, M.).

4th Cir.: African-American secretary fired after complaining of harassment can proceed with reprisal claim

An African-American employee whose absences were continuously monitored by her supervisor (including while going to the bathroom), who was disciplined for tardiness despite a previous agreement concerning her arrival time, who was physically attacked, and then fired the day after she stated her intention to file a grievance could proceed with her Title VII retaliation claim, the Fourth Circuit ruled. Reversing and remanding the district court’s grant of summary judgment in favor of her employer, the appeals court found the lower court erred given the substantial evidence of the supervisor’s bias, including senior management’s admission that she harbored racial animus (Strothers v. City of Laurel, Maryland, July 6, 2018, Gregory, R.).

5th Cir.: Burger chain’s public image didn’t justify ‘Fight for $15’ button ban

The Fifth Circuit enforced an NLRB order finding that In-N-Out Burger violated Section 8(a)(1) of the NLRA when it barred employees at an Austin, Texas, restaurant from wearing buttons supporting the “Fight for $15″ movement. The company could not overcome the presumption that blanket bans on such insignia are unlawful under the Act, failing to convince the court of appeals that public image considerations or food safety concerns constituted “special circumstances” justifying the prohibition (In-N-Out Burger, Inc. v NLRB, July 6, 2018, Graves, J., Jr.).

7th Cir.: Supervisor’s use of N-word to deny he was racist helps revive officer’s hostile environment claim

Vacating and remanding in part, the Seventh Circuit revived the hostile environment claim of one university police officer who was called the N-word by his supervisor and the retaliation claim of another officer who, after refusing to implement the supervisor’s retaliatory treatment of the first officer, was slapped with unwarranted disciplinary notices and then demoted for his trouble. There was plenty of admissible evidence to send these claims to a jury, said the appeals court, finding they should not have been dismissed on summary judgment. Although the district court refused to award any attorneys’ fees to the first officer, whose retaliation claim against his supervisor was the only claim to get to a jury, the appeals court now revived two claims, and if either a trial or a settlement resulted in more than nominal damages, the attorneys’ fee analysis would need to be revisited as well (Robinson v. Perales, July 2, 2018, Rovner, I.).

8th Cir.: NLRB misapplied Wright Line when it failed to tie discharge to anti-union animus

The NLRB misapplied Wright Line when it held the General Counsel need not establish a nexus between an employee’s discharge and an employer’s antiunion animus, the Eighth Circuit ruled, denying the Board’s petition for enforcement in a case involving an employee who was fired for internet surfing and sleeping on the job. The appeals court also rejected the Board’s finding that the employer separately violated the Act when it interviewed the employee’s coworker in preparation for the hearing, noting it had previously rejected the agency’s “per se” rule that interviews conducted of another employee in preparation for a Board hearing are unlawfully coercive (Tschiggfrie Properties, Ltd. v. NLRB, July 24, 2018, Benton, W.).

9th Cir.: Taco Bell policy requiring discounted meals to be eaten on-site, without pay, upheld

In a putative class action against Taco Bell concerning employee meal breaks, the Ninth Circuit found that the fast-food chain’s policy of requiring employees to stay on the premises to eat discounted meals did not violate the California Labor Code since they were relieved of all duties during their meal break, were free to use the 30 minutes in any way they wished, and were only subject to the stay-on-the-premises restriction if they voluntarily chose to purchase a meal at a discount. Affirming dismissal of the plaintiff’s claims on summary judgment, the appeals court also rejected the plaintiff’s assertion that the value of the discounted meals must be added to the regular rate of pay for overtime purposes (Rodriguez v. Taco Bell Corp., July 18, 2018, Schroeder, M.).

11th Cir.: Black employees get renewed chance to prove state minimum wage law was discriminatory

Employees in Birmingham, Alabama, who alleged that the state’s Minimum Wage Act had the purpose and effect of discriminating against the city’s black citizens, in violation of the Equal Protection Clause, stated a plausible claim, the Eleventh Circuit ruled, reversing dismissal of that claim by a district court. The lawsuit came about after Governor Bentley signed the Minimum Wage and Right-to-Work Act, which mandated a uniform minimum wage throughout the state, currently sitting at $7.25 per hour, and preempting all local labor and employment regulation, in response to a city ordinance raising the minimum wage to over ten dollars per hour. The lower court’s decision was affirmed in part, reversed in part, and remanded (Lewis v. Governor of Alabama, July 25, 2018, Wilson, C.).

OTHER DECISIONS OF NOTE

Cal. Sup. Ct.: De minimis defense doesn’t (usually) apply to California wage claims

Under California law, employees’ off-the-clock time, no matter how minimal, must be compensated, a unanimous California Supreme Court ruled in a significant decision for California employers. Addressing a question from the Ninth Circuit in a wage suit brought by a Starbucks shift supervisor, the state high court rejected the FLSA’s de minimis defense, holding that it does not apply to claims for unpaid wages under the California Labor Code or state wage orders. Nor does the legal doctrine otherwise apply to wage-hour claims as a matter of state law—at least on the facts here. In this case, the $8-an-hour employee’s off-the-clock work, a few minutes per shift, added up to $102.67 of uncompensated time over a 17-month period. “That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” the court wrote. “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.” The matter is now in the Ninth Circuit’s hands, where the litigation is still pending (Troester v. Starbucks Corp., July 26, 2018, Liu, G.).

D. Kan.: UPS Freight policy of paying disabled drivers less for non-driver work, formalized in CBA, violates ADA

The EEOC won its bid for a permanent injunction barring UPS Freight from continuing its facially discriminatory policy of paying disabled drivers only 90 percent of what nondisabled drivers earned while temporarily performing non-driving jobs. Granting the agency’s motion for judgment on the pleadings, a federal court in Kansas ruled that the facially discriminatory policy, which was contained in its soon-to-expire collective bargaining agreement with the Teamsters union, violated the ADA as a matter of law (EEOC v. UPS Ground Freight, Inc., July 27, 2018, Robinson, J.).

AT THE NLRB

Union waived right to intervene by opposing Board motion to remand case in Ninth Circuit

In a five-member decision by the NLRB, a divided Board denied a union’s motion to intervene in proceedings to which it was not a party. Additionally, the Board dismissed the union’s motion for reconsideration. The Board ruled that under the circumstances presented in this case, its rules did not provide for intervention. After the Board overruled Lutheran Heritage Village-Livonia in its Boeing decision issued December 14, 2017, it filed a motion in the Ninth Circuit to remand Caesars Entertainment dba Rio All-Suites Hotel and Casino, a decision in which the union was involved. The Board concluded that the union sacrificed its right to be heard in this case when it opposed the Board’s motion to remand Rio All-Suites in the appeals court. Members Pearce and McFerran filed a separate dissenting opinion (The Boeing Co., July 17, 2018).

Dissent. In a dissenting opinion, Members Pearce and McFerran argued that because the union correctly asserted that its interests were directly affected by the decision, due process demanded that its motion be granted. The dissent observed that the union seeking intervention here was the charging party in Rio-All Suites, but had no notice that the Board intended to reverse the 2015 decision in its favor—and no reason to suspect that the Board would do so: no party in Boeing had asked the Board to overrule Lutheran Heritage. Moreover, the dissent pointed out that Section 10(b) provides that in the discretion of the Board, any person may be allowed to intervene in the proceeding. Accordingly, the dissent argued that intervention was clearly warranted.

Employer lawfully closed outdated facility and relocated production

Finding that an employer had met its Wright-Line rebuttal burden, a three-member panel of the NLRB concluded that it did not violate Section 8(a)(3) and (1) of the NLRA by closing an outdated facility and relocating production. Here, the Board found the employer established that it would have closed the outdated plant and relocated the production for compelling economic reasons regardless of the union’s presence there. Additionally, the Board overturned an administrative law judge’s determination that the employer unlawfully promulgated a confidentiality/nondisclosure agreement in response to union activity. The Board also reversed the ALJ’s finding that a unilateral $9 reduction in the value of a Thanksgiving gift was unlawful (Dura-Line Corp., July 12, 2018).

Review of archived video footage constituted unlawful surveillance of employee union activity

An employer engaged in unlawful surveillance of its employees’ union activities by reviewing archived video footage of two employees distributing union literature in an employee breakroom, and by searching employees’ clipboards for union authorization cards, ruled a three-member panel of the NLRB. The employer also interrogated one of the employees regarding the union activity of a coworker. Moreover, the Board found that the employer’s solicitation of employees to revoke their union authorization cards violated Section 8(a)(1) because they occurred contemporaneously with serious violations that went to the heart of the card-signing process and began immediately after the employer learned of the union’s organizing campaign (Advance Pierre Foods, Inc., July 19, 2018).

Enforcing work rules to fire employee for his Facebook post was unlawful interference

An electrical cooperative violated Section 8(a)(1) when it fired an employee after he posted comments in a Facebook forum that in the employer’s view, displayed a “poor attitude” and riled coworkers. The Facebook comment at issue, made pursuant to an online discussion about safety concerns in the lineman industry, was clearly protected concerted activity; and even if it wasn’t, the employer separately violated Section 8(a)(1) by enforcing two work rules when it cited them as the basis for his discharge, thus rendering those rules unlawful (North West Rural Electric Cooperative, July 19, 2018).

Law judge rejects proposed settlement in McDonald’s joint employer litigation

An NLRB administrative law judge rejected a proposed settlement that would have resolved Board charges that McDonald’s USA, LLC, as a joint employer along with its franchisees, committed unfair labor practices in response to employees’ involvement in Fight for $15 protests in 2012 and 2013. The case was to be a key litmus test of joint employer status under the Obama Board’s push to hold related entities accountable as joint employers for labor law violations—applying joint employer principles to the franchise business model, in particular. Then-General Counsel Richard Griffin signaled he would pursue charges against the national restaurant chain alongside the 30 or so franchise restaurants across the country alleged to have interfered with employees’ rights under the Act and to have discharged workers for exercising those rights. However, the Trump NLRB under new General Counsel Peter Robb retreated, hoping to resolve the dispute without addressing the essential question of the corporation’s status as a joint employer. But the Board ALJ wouldn’t have it (McDonald’s USA, LLC, July 17, 2018, Esposito, L.).

New pilot aimed at increasing ADR program participation

The NLRB is launching a new pilot program aimed at increasing participation opportunities for parties in the Board’s Alternative Dispute Resolution (ADR) program and helping to facilitate mutually satisfactory settlements. Under the pilot program, the Board’s Office of the Executive Secretary will “proactively engage” parties with pending cases to determine whether their cases are appropriate for inclusion in the ADR program. Parties may also contact the Office of the Executive Secretary to request that their case be placed in the ADR program. There are no fees or expenses charged for using the program.

New advice memos address non-disclosure, social media, confidentiality rules, other issues

On July 13, the NLRB released seven Division of Advice memoranda that deal with topics such as non-disclosure provisions, social media policies, intellectual property and confidentiality rules, withdrawal of union recognition, outsourcing bargaining unit work, retaliation against the union, and interest arbitration.

OTHER AGENCY NEWS

DOJ NEWS—Sessions rescinds more guidance, including on Obama-era affirmative action

On July 3, Attorney General Jeff Sessions announced the rescission of 24 guidance documents he considers unnecessary, outdated, inconsistent with existing law, or otherwise improper, consistent with his November 2017 memorandum prohibiting the Justice Department from making rules without following procedures required by Congress. The now-rescinded guidance documents addressed topics such as the treatment of juvenile offenders, housing discrimination, and race discrimination in education.

DOL NEWS—New guidance addresses whether caregiver registries are ‘employers’

On July 13, the Department of Labor issued Field Assistance Bulletin No. 2018-4 to Wage and Hour Division field staff to help them determine whether home care, nurse, or caregiver registries are employers under the FLSA. Acting WHD Administrator Bryan Jarrett noted that a “registry” is an entity that typically matches people who need caregiving services with caregivers who provide the services—usually nurses, home health aides, personal care attendants, or home care workers with other titles. The FAB treats all of these as “caregivers.”

DOL and NLRB get budget cuts under draft FY 2019 appropriations bill

On July 11, the House Appropriations Committee approved the draft fiscal year 2019 Labor, Health and Human Services, and Education (LHHS) funding bill that includes funding for programs within the DOL, which would see an $88.8 million budget drop if the measure is passed, according to a summary. The LHHS funding legislation also provides funding for the NLRB, which would get a $12.9 million budget cut.

FEDERAL REGULATIONS

Beryllium rule enforcement delayed to August 9, DFR confirmed

On July 3, OSHA announced a delay in its enforcement of certain requirements of the final rule on occupational exposure to beryllium in general industry. These requirements will not be enforced until August 9, 2018. The requirements include beryllium work areas, regulated work areas, methods of compliance, personal protective clothing and equipment, hygiene areas and practices, housekeeping, communication of hazards, and recordkeeping, OSHA said in a release.

DOL rescinds ‘persuader rule’

Nearly a year after being urged to do so by a 17-state coalition of Attorneys General led by Texas Attorney General Ken Paxton, the DOL has rescinded the so-called 2016 “persuader rule.” In November 2016, a federal district court in Texas entered a permanent, nationwide injunction, ruling that the persuader rule was unlawful and would have required attorneys to publicly disclose confidential information protected by attorney-client privilege. Paxton was behind that lawsuit.

OSHA proposes new exemptions for railroad work in cranes and derricks final rule

Following up on a settlement agreement with the Association of American Railroads, OSHA is proposing to expand several exemptions and issue clarifications affecting work on or along railroad tracks in its final rule for cranes and derricks in construction, published on August 9, 2010. OSHA’s proposed rule was published in the Federal Register July 19, 2018.

OSHA proposes electronic recordkeeping rule revision

On July 26, the day after a new lawsuit was filed to challenge its suspension of parts of the final electronic recordkeeping rule, OSHA announced plans to issue a Notice of Proposed Rulemaking (NPRM) “to better protect personally identifiable information or data that could be re-identified with a particular individual” by removing certain provisions of the rule. The complaint alleged that the agency violated the Administrative Procedure Act when it previously suspended these same requirements without public notice and an opportunity to comment. OSHA’s NPRM was published in the Federal Register on July 30.

FEDERAL LEGISLATION

House lawmakers introduce bill to replace H-2A program, require E-Verify use

A group of Republican, plus two Democratic, lawmakers have teamed up to introduce and co-sponsor the “AG and Legal Workforce Act,” which would replace what sponsors called the “outdated and broken H-2A agricultural guestworker program” with a new H-2C program. The move is intended to ensure that America’s farmers and ranchers have access to a reliable workforce. Among other things, the bill, H.R. 6417, would expand employer eligibility and the number of visas available, make housing and transportation provision optional, and make Affordable Care Act subsidies unavailable to guestworkers, but require them to have health insurance.

House approves bipartisan health care-related tax packages

The House has cleared two bipartisan health care-related tax packages. The packages, combining several bills, aim to expand health savings accounts (HSAs) and the health insurance premium tax credit, as well as delay the so-called “health insurance tax,” among other things.

HSAs. The Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Bill of 2018 (H.R. 6311) was approved by the House on the evening of July 25 by a 242-to-176 vote. The measure, among other things, would delay the annual fee for health insurance providers through 2021 and increase access to catastrophic “copper” plans as well as allow coverage to be used with HSAs.

IN THE NEWS …

AG coalition takes aim at franchise no-poaching agreements

A coalition of 11 state Attorneys General are taking on the practice by franchisors of using “no-poach” agreements in franchise contracts—a practice said to hurt low-wage workers and limit their ability to get better jobs. The AGs are seeking information and documents from eight national fast food franchisors concerning these agreements, which restrict a franchisee’s ability to recruit or hire employees of another franchisee of the same chain. The move is likely intended to spark a dialogue about ending the practice.

DOL’s 80/20 provision, ‘dual jobs’ rules for tip credit challenged

The Restaurant Law Center (RLC) and the Texas Restaurant Association (TRA) have filed a lawsuit against the DOL challenging the so-called “80/20″ rule on the availability of the tip credit based on tipped and non-tipped duties. According to their complaint, not only was the provision quietly slipped into an internal agency handbook without notice to the public or an opportunity for comment, the DOL has tried to elevate this subregulatory pronouncement to the force of law through repeated amicus curiae briefs arguing that courts should defer to its rule. But the DOL’s action is ultra vires, contrary to the pertinent statute, and illegal, the plaintiffs contend.

Dramatic decline in enforcement found at many federal agencies

During the Trump Administration’s first year, there has been a dramatic decline in enforcement against corporate crime and wrongdoing, with total penalties for such violations plummeting from the final year of the Obama Administration, according to a new report from Public Citizen.

Notably, at the Department of Justice, total penalties against corporations fell 90 percent from $51.5 billion in the Obama Administration’s final year to $4.9 billion in Trump’s first year, and the number of enforcement actions against corporations fell by 22 percent from Obama’s final year. Plea deals dropped to 50 compared to 117 in Obama’s last year.

ICE focuses on I-9 compliance: 5,200 businesses served notices of inspection

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) has served I-9 audit notices to more than 5,200 businesses around the country since January in a two-phase nationwide operation, according to the agency. A notice of inspection (NOI) informs business owners that ICE is going to audit their hiring records to determine whether they are complying with existing law.