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Who will and who won’t attend NLRB hearing on VW-UAW election results

April 17th, 2014  |  David Stephanides  |  Add a Comment

Update: The UAW announced in the morning hours of April 21 that it is withdrawing objections filed with the NLRB, effectively ending the case before the Board. In a statement, UAW President Bob King said the “UAW based its decision on the belief that the NLRB’s historically dysfunctional and complex process potentially could drag on for months or even years. Additionally, the UAW cited refusals by Tennessee Gov. Bill Haslam and U.S. Sen. Bob Corker to participate in a transparent legal discovery process, which undermines public trust and confidence.”

“Looking ahead,” the statement contnued, “the UAW believes the congressional inquiry into the Haslam administration’s incentives threat to Volkswagen provides the best opportunity for additional scrutiny. The UAW will ask Congress to examine the use of federal funds in the state’s incentives threat, in order to protect Tennessee jobs and workers in the future.”

***

On Monday, April 21, the NLRB will hold a hearing on UAW’s challenge to the mid-February no-union vote rendered by workers at Volkswagen’s Chattanooga, Tennessee plant. Just after the election, the UAW filed objections with the NLRB over what the union saw as interference by politicians and outside special interest groups in the election that resulted in a 712-626 vote. The UAW is asking the NLRB to set aside the election results due to third-party misconduct and to hold a new election.

At issue is alleged improper conduct by very vocal outside forces, with the union claiming foul as to comments seen as threats that were made by elected officials. Comments of Sen. Bob Corker (R-Tenn.), widely covered in the local media and repeated frequently by anti-union organizations, was cited as the most damaging to the election process.

Corker is reported to have commented that he had been “assured” that VW would manufacture its new mid-size SUV in Chattanooga if workers voted against unionization. Volkswagen’s U.S. chief executive immediately refuted his remarks, but in response, Corker suggested that his information came from executives in Germany. Corker’s comments, it is maintained, could have caused widespread fear and confusion among the workers and pressured them to vote “no.”

However, Corker says that in spite of a subpoena, he will not attend the hearing on Monday. In an e-mailed statement to WTVC News of Chattanooga, the Senator’s Chief of Staff  stated, “Everyone understands that after a clear defeat, the UAW is trying to create a sideshow, so we have filed a motion to revoke these baseless subpoenas. Neither Senator Corker nor his staff will attend the hearing on Monday.”

Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Bill Hagerty have also not scheduled an appearance at the hearing, but they did not explicitly rule it out.

On the other hand,  five employees represented by the National Right to Work Foundation will be attending the hearing. The UAW had sought to bar the workers from participating in the case. They have argued that VW and the union entered into a neutrality agreement that prevented the workers from getting other points of view that might otherwise have been offered by managers and supervisors.

In a decision released April 16, the NLRB said that “due to the unique circumstances of the case” the plant workers had a right to participate and offer evidence that they really intended to vote against the UAW. As they explained in a March reply motion: “The UAW’s request [to bar the workers from the hearing] must be denied because, if it were granted, there would be no party left in the case who would cross-examine the UAW’s witnesses, rebut its evidence and arguments, and otherwise defend the election results.”

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Finding deep pockets gets easier as courts stretch the law to find entities liable for unlawful employment practices as joint employers, agents, or others

April 15th, 2014  |  Lorene Park  |  Add a Comment

By Lorene D. Park, J.D.

Courts have flexed a bit of statutory muscle lately, finding that threshold definitions of “employer” and “agent” stretched just enough to extend potential liability to entities that were not direct employers in the traditional sense, including franchise operations, purchasers of assets, building managers, insurers that administered benefits, and more. From a plaintiff’s point of view, this makes the search for deep pockets to pay a potential judgment much easier. But from a company’s vantage point, there is a greater possibility for liability that it didn’t see coming. Consider these examples:

Successor in interest. Companies that purchase the assets of an employer and hire its employees may find they have taken on unexpected liabilities as well. The key considerations for liability as a successor employer often include the pre-purchase relationship of the entities and whether the transition involved no real change in operations. The Third Circuit Court of Appeals applied federal common law and ruled that a mortgage company could be liable under the FLSA for overtime violations as a successor in interest. Vacating the dismissal of an underwriter’s claims, the appeals court found that it was enough that she alleged that all facets of the business, such as operations, staffing, office space, email addresses, and employment conditions, remained the same after the transition; that the successor had pre-transfer notice of the overtime obligations (the same managers controlled payroll and scheduling); and that the predecessor was now “defunct,” indicating it could not pay a potential award. The employee’s direct liability and joint employer liability theories were also revived, as were her claims against individual managers (Thompson v Real Estate Mortgage Network).

Similarly, the operator of a bar and restaurant that took over the business assets of a sports bar that went out of business was a successor employer, the Oregon Supreme Court found, requiring it to reimburse a state agency for wages paid from the state’s Wage Security Fund on behalf of four claimants previously employed by the sports bar. Since the defendant conducted essentially the same business, it was liable as a successor (Blachana, LLC dba Penner’s Portsmouth Club v Bureau of Labor and Industries).

Agent of “future” employer. One of the more unusual cases of recent note was a ruling that a company was liable under the ADA as a matter of law for unlawful pre-offer medical exams as an agent of a “future employer,” even though the employer was not operational at the time of the alleged ADA violations (and thus not an “employer” as defined by the Act). The federal court from the Western District of Pennsylvania noted that the company (“agent”) itself had enough employees to satisfy the ADA’s numerosity requirement and it was undisputed that it controlled applicants’ access to employment with the future employer. The EEOC was thus granted partial summary judgment in that regard. The court denied the EEOC’s motion as to the future employer because the company had no employees during the relevant time. Though the future employer might be liable under a “joint employer” theory, further factual development was needed to make that determination (EEOC v Grane Healthcare Co).

Franchise. There have also been several recent cases concerning whether franchise operations might be liable for FLSA violations as a joint enterprise with a franchisee. A federal court in the Northern District of Georgia explained that, while franchise operations generally do not meet the requirements for inclusion, the FLSA does not categorically exclude franchise relationships from joint enterprise coverage. Department of Labor regulations “make it clear that an ordinary franchise arrangement does not create an enterprise,” but that “some franchise . . . arrangements have the effect of creating a larger enterprise and whether they do or do not depends on the facts.” The key inquiry is whether plaintiffs show: (1) related activities; (2) unified operation or common control; and (3) a common business purpose.

Applying this test in a suit brought by drivers for a restaurant food delivery service, the court granted conditional certification of an FLSA collective action over minimum wage violations because the drivers adequately alleged that a franchise operation formed a joint enterprise under the Act. The defense argued that the employer had not generated sufficient revenue to be governed by the FLSA, but the court found that the proposed amendment to the complaint (alleging that the relation between GoWaiter Franchise Holding and its related company, GoWaiter Business, constituted a joint enterprise) was not futile (Wilson v GoWaiter Franchise Holdings, LLC).

Managing entity. Other entities that are sufficiently related to, or involved in, an employer’s operations also risk litigation. For example, a hospital clerk who alleged that she was disciplined and fired because she had to take FMLA leave for post-traumatic stress disorder after sexual harassment and an assault by a medical director survived dismissal of her FMLA “discrimination” claims against the hospital and the corporate entities that managed and operated it. Though she failed to name the managing entities in her administrative complaint, a federal district court in Iowa noted that a complainant should not be expected to know the intricacies of complex corporate relationships, and the clerk plausibly alleged that the entities were “substantially identical” and had notice of her complaints. She also alleged that the related entities “managed” and were “doing business as” Franklin General Hospital and that certain supervisors were their “agents” (Whitney v Franklin General Hospital).

Insurers. In addition, insurers that administer leave and other benefits could find themselves on the hook as an “employer.” In one case, a federal court in Maine refused to dismiss a Bank of America (BOA) employee’s disability discrimination claims against Aetna, the insurer that administered BOA’s disability and leave claims, concluding that she sufficiently alleged Aetna was an employer under the ADA and state law. After discussing the tests for finding “constructive ‘employer’ status,” the court noted that Aetna allegedly did more than administer benefits; it controlled whether leave would be granted as an ADA accommodation of the employee’s post-traumatic stress disorder after a sexual assault by a coworker. According to the complaint, BOA authorized Aetna to handle disability and FMLA claims; the bank had her provide information to Aetna to justify leave; Aetna interacted with her and directed the information she was to produce; and Aetna informed BOA she was “being placed on ‘LOA-closed’ status” and directed BOA to take action within three days. While this did not show Aetna controlled the bulk of the indicia of employment, “it may well be that Aetna was ‘intertwined’ with BOA” as to her employee benefits, the court wrote.

The court also found that the allegations placed Aetna outside of the safe harbor provisions of 42 U.S.C. Sec. 12201(c) and Maine law for insurers that “administered the terms of a bona fide benefit plan” because the employee was not claiming Aetna violated those Acts as a plan administrator, but rather as an employer. She alleged BOA delegated to Aetna certain personnel functions normally handled by an employer, such as whether an employee’s disability justified leave and whether BOA should accommodate the claimed disability. Aetna’s motion to dismiss was denied on the disability discrimination claims. It was also denied as to the claim that it violated a state personnel records law by refusing to produce all of the employee’s medical and other records (Brown v Bank of America, NA).

Building and land owners. In another case, a federal court in New York found that a company that owned and managed a building where a security company’s employee was assigned could be liable, as joint employer, for Title VII, FMLA, and other statutory claims he asserted against both companies. The employee was interviewed by the owner before being assigned there, and one of the owner’s employees granted him days off. The employee alleged that he was harassed based on his race, national origin and sexual orientation by a security company employee, who he claimed acted as an agent of the building owner (Daniel v T&M Protection Resources, Inc). As indicated by this case, the right to control the workplace as well as the terms and conditions of employment are key issues. In contrast, for example, an employee of a contractor that provided cleaning services to a Missouri plant had his tort claims against the plant owner for severe personal injuries dismissed on summary judgment after the Eighth Circuit concluded that the company did not retain sufficient control over the jobsite or the contractor’s employees (Spaulding v Conopco, Inc).

Other contractor cases. Several of the foregoing examples involved instances where companies contracted with other companies and, based on the circumstances, were potentially liable. Factors considered by courts vary depending on the theory of liability (e.g., as a “constructive” employer, joint employer, or otherwise), though there is some overlap. In one recent case, an employee threw it all on the table and the resulting unpublished Third Circuit opinion set forth a concise summary of the Darden “right to control” factors in determining whether an entity is an “employer” under Title VII, as well as the tests for joint employer and integrated enterprise liability. Because the employee in Plaso was unable to show that the hospital where she worked as a consultant (under contract with a consulting business) was her “employer,” her Title VII and state law claims, alleging that her boss at the consulting firm sexually harassed her, failed. The Third Circuit found no support for her claims under joint employer, integrated enterprise, or independent contractor theories of liability (Plaso v IJKG, LLC).

Key considerations

While there are too many examples of the potential for liability on the part of non-traditional “employers” to include them all here, suffice it to say that courts are willing to let claims proceed against non-traditional employers based on jurisprudence concerning joint employer status, integrated or common enterprise, agent status, successor in interest, and more. Generally speaking, courts look to the totality of circumstances. Although the precise test varies by statute and between federal circuits, key considerations for liability often include:

  • “Constructive” employer (direct liability): the “right to control” test, often focusing on who paid the plaintiff; who hired and fired the plaintiff; and who had control over the plaintiff’s daily employment activities.
  • “Agent” of employer: according to the court in EEOC v Grane Healthcare Co, an agent that independently satisfies the numerosity requirement can be sued under employment laws for its own discriminatory conduct perpetrated against a plaintiff employed by a distinct entity when it exercised control over employment opportunities. (Note that this is a distinct analysis from the more typical case where the question is whether an employer is liable for the unlawful acts of its employees/agents.)
  • Joint employer: whether the entities exercise significant control over the same workers, considering the authority to hire and fire, promulgate work rules and assignments, and set conditions of employment; the day-to-day supervision of employees, including discipline; and the control of employee records, including payroll, insurance, and taxes.
  • Integrated or common enterprise: the relationship between the companies, including: related activities; unified ownership, management, operations; a common business purpose; whether the entities present themselves as a single entity to third parties; whether one indemnifies the expenses or losses of the other; and whether one entity does business exclusively with the other.
  • Successor employer: the pre-purchase relationship between the entities (factors similar to integrated enterprise liability); whether the transition involved no real change (e.g., changes in operations, staff, office space, addresses, working conditions); the successor’s pre-transfer notice of potential liability; and the predecessor’s ability to pay a potential award.

Under the premise that forewarned is forearmed, companies that do not fit within the traditional role of employer should be cognizant that they may nonetheless find themselves liable for unlawful employment practices under circumstances such as those outlined above. Any company that outsources to another company, perhaps to avoid liability under labor and employment laws, may nonetheless find itself liable to the other company’s employees. And a company that purchases the assets of another company should take a hard look at the potential for liability under employment laws (with respect to the other company’s employees) and factor that in to the negotiations for a purchase price. At the very least, keep in mind that if a company controls an important aspect of an individual’s employment relationship with a separate entity (e.g., hiring, hours, benefits, etc.), the company should assess its potential for liability under labor and employment laws.

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Though employee suffered from depression, his long term vacation schedule and argument that he was “potentially qualified” for protection under FMLA were insufficient

April 13th, 2014  |  Sheryl Allenson  |  Add a Comment

Without question, the FMLA presents a number of quandaries for employers, who are often left wondering whether they are properly protected when an employee presents a request for leave. To some, it may seem easiest to simply treat all requests as proper under the FMLA; others may take some employment action in the face of what could be seen as an ambiguous leave request, facing potential liability under the FMLA. One appellate court recently provided some guidance to help employers wade through the FMLA abyss, reversing a district court’s order denying an employer’s motion for judgment as a matter of law. The Eleventh Circuit said an employee cannot base his claim on notice that he has a “potentially qualifying” need for FMLA leave; rather, it has to be based on an actual incapacity or treatment due to a chronic serious health condition. However, employers must still carefully determine whether a leave request falls within the gamut of the FMLA.

Vacation schedule. In this case, an employee who suffered from depression and anxiety sent an email to the CEO of his employer’s parent company, indicating that he would take 11 weeks of vacation over the next two years, stating that “attached is my vacation schedule going forward. The dates are subject to change.” In that email, he never mentioned that he suffered from depression and anxiety. The CEO denied the request and asked the employee to schedule a meeting to discuss the matter. However, the email exchange did not end there; the employee sent him a response stating that his was not a request but instead was a schedule, and that “I have been advised by medical/health professionals that my need to avail myself of vacation time that I have earned is no longer optional.” In that email, the employee also accused the CEO of failing to pay him an overdue bonus and privately ridiculed his ideas.

FMLA form post-termination. There was a dispute about what happened after that point. The employee claimed he told the CEO about his condition in a conversation; the CEO denied it. In any event, there was no dispute that the CEO fired him, allegedly for insubordination and poor performance. Clearly, the employee did not give up on his effort to convince the employer he was entitled to protected leave.  A week later he went to his doctor, who filled out an FMLA form (although the doctor knew the employee had been terminated). Although the doctor said the employee suffered from depression and had received treatment, he also said that he could not determine the duration and frequency of any incapacity.

The employee filed suit, asserting both interference and retaliation claims under the FMLA. His complaint alleged that he suffered from a serious medical condition, but did not contain any allegations that he was unable to work or that he was incapacitated. Seems like it should have been an open and shut case, right? Not according to the district court, which first denied the employer’s motion for summary judgment. In that motion, the employer acknowledged that the employee suffered from depression, but argued that his leave request was not protected under the FMLA because he did not have any period of incapacity, and that it was simply a request for vacation leave. The court never considered that issue, instead ruling that there was evidence supporting the employee’s contention that he had a “chronic health condition.”

Case goes to jury. Moving onward, a jury considered the employee’s claims, all based on his allegations that he was wrongfully terminated. He requested back pay, front pay, and liquidated damages. During the trial, the doctor testified that he had never seen the employee’s schedule included with his leave request and did not mean to imply he needed medical leave for that specific schedule. According to his testimony, he would not have certified FMLA leave for any future dates. The employee himself admitted that his leave schedule was submitted without input from a healthcare professional; he also picked days that wrapped around holiday weekends. Nonetheless, he still claimed that he sought leave for medical reasons, and that his “leave was not intended to predict” when he would be incapacitated, because he “just never knew when [he] was going to have an episode or when the panic attacks would come.” Also, he acknowledged that no doctor had told him to take a specific amount of vacation time; rather, he said that the schedule he tendered was “FAR less aggressive than I have been advised to take.”

The employee did not claim that, at the time he asked for FMLA leave, he had doctor’s appointments scheduled.  On this point, he asserted he would schedule treatment when the dates he sought leave approached. He thought that “normal vacation activities” would help him get better. Testimony from the employee’s counselor was no more supportive; he said that although he told the employee that he needed to get away from work, he was not telling him to take medical leave. The counselor testified that he thought there was a difference between the employee taking time off to improve his health and necessary medical leave because he could not work.

Jury verdict. After the jury heard the employee’s evidence, the employer moved for judgment as a matter of law, arguing that although he may have had a chronic serious health condition, he failed to produce evidence that the leave he sought was for a period of incapacity. Unconvinced, the court denied the motion, and the case went to the jury for verdict. In a verdict highlighting the perils to an employer, the jury found that the employee had a serious health condition, that he was an eligible employee for FMLA leave, and that he gave proper notice under the Act. The jury responded “no” to the question “[T]hat the Plaintiff’s request for leave was a substantial or motivating factor that prompted the Defendant to terminate the Plaintiff’s employment.” Surprisingly, however, the jury decided that the employee should be awarded damages for actual monetary losses sustained as a direct result of the employer’s conduct, in the amount of $200,000.

Undeterred, the employer renewed its motion for judgment as a matter of law, asserting that the employee’s leave request did not qualify for protection under the FMLA; however, the district court was unconvinced and denied that motion. It also denied the employer’s motion for a new trial, while taking its motion for remitter under advisement. Though there seemed no clear basis for the jury’s damages award, the district court ultimately denied the employer’s motion for remitter, and then entered judgment in favor of the employee on the interference claim, awarding actual damages in the amount of $200,00, liquidated damages of $200,00 and front pay of approximately $353,901. Later, the district court also awarded the employee attorney fees and costs.

After being shut down by the district court, the employer appealed to the Eleventh Circuit. Though the employer raised two issues for review, the appeals court only addressed its assertion that the district court erred by denying its renewed motion for judgment as a matter of law. Though the employer challenged the damages entered, in this instance the appeals court’s opinion provided no guidance.

Potentially qualifying leave insufficient.  Although the employer argued that it was entitled to its motion as a matter of law on the basis that the employee’s requested leave did not qualify for protected leave under the FMLA, the employee did not suggest that his leave actually qualified under the FMLA. He took a different approach; he argued that he provided notice of his intention to take leave, and that he only had to “potentially qualify” for FMLA leave.

This is where the case gets a little tricky. There was no issue that the employee provided notice, but as the Eleventh Circuit pointed out, “notice is only relevant to an FMLA claim if the noticed leave is protected by the FMLA.” An employee who tenders notice on an unqualified leave does not draw the claim under the FMLA’s protection. To that end, an employee’s claim that he had a “potentially qualifying” need for leave did not satisfy the requirements of the Act; he had to show that he had an actual qualifying need.

In this instance, the employee only argued that he had a chronic condition and that the leave would have been beneficial; he admitted that his leave was not for a period of incapacity and never asserted that his leave would have been “treatment for such incapacity.” He could not even predict when any potential periods of incapacity might occur. Thus, the Eleventh Circuit made clear that an employee’s “potentially qualifying” need for leave will not support an  FMLA claim; the future possibility that an employee will have a qualifying need must give way to an actual qualifying event.

Ultimately, the Eleventh Circuit’s decision bodes well for employers who may prevail on an FMLA interference claim if an employee’s notice does not invoke an actual qualifying event. There is a caveat: the Eleventh Circuit’s decision came after years of litigation and related costs.  

The case is Hurley v. Kent of Naples, Inc.

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Marking Equal Pay Day, President signs executive actions prohibiting “pay secrecy” and requiring pay data collection as to federal contractors

April 8th, 2014  |  Cynthia L. Hackerott  |  Add a Comment

To mark Equal Pay Day on April 8, 2014, President Obama signed an Executive Order (EO) prohibiting federal contractors from retaliating against employees who choose to discuss their compensation and a Presidential Memorandum (Memorandum) instructing the Secretary of Labor to establish new regulations requiring federal contractors to submit to the Department of Labor (DOL) summary data on compensation paid to their employees, including data by sex and race. Both executive actions mirror provisions of the Paycheck Fairness Act (PFA) currently pending in Congress (S. 2199; H.R. 377). The PFA was originally introduced in 2009, but has twice failed to pass in Congress.

Equal Pay Day is marked annually by some political leaders and advocacy groups to signify the point in the year that a woman must work to earn what a man made the previous year. According to a White House fact sheet corresponding with the executive actions, U.S. Census statistics reveal that, on average, full-time working women still earn 77 cents to every dollar earned by men.

Executive Order. The new EO, entitled “Non-Retaliation for Disclosure of Compensation Information,” amends EO 11246, which is enforced by the OFCCP, by adding the following provision:

“The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee’s essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor’s legal duty to furnish information.”

In addition, the Memorandum requires the DOL to propose, within 160 from the date of the EO, regulations to implement its requirements.

“Pay secrecy fosters discrimination and we should not tolerate it not in federal contracting or anywhere else,” the President remarked at the signing ceremony where he was joined by Lilly Ledbetter, the namesake of Lilly Ledbetter Fair Pay Act which President Obama signed in 2009. Ledbetter spoke about how she worked for Goodyear Tire and Rubber Co. for 19 years before discovering that men in her same job with equal or lesser experience were earning significantly more money than she was. Moreover, she only learned of this discrepancy through an anonymous note.

The White House fact sheet states that the EO “does not compel workers to discuss pay, nor does it require employers to publish or otherwise disseminate pay data – but it does provide a critical tool to encourage pay transparency, so workers have a potential way of discovering violations of equal pay laws and are able to seek appropriate remedies.”

Presidental Memorandum. Enforcement of equal pay laws is “impeded by a lack of sufficiently robust and reliable data on employee compensation, including data by sex and race,” the Memorandum explains, adding that the President’s National Equal Pay Task Force identified this lack of data as a barrier to closing the persistent pay gap for women and minorities. To this end, the Memorandum notes that a compensation data tool is currently in the works at the OFCCP (RIN: 1250-AA03).

On August 10, 2011, the OFCCP published an Advance Notice of Proposed Rulemaking (ANPRM) in the Federal Register (76 FR 49398 – 49401) regarding the agency’s consideration of the development of such a tool that would be designed to effectively identify contractors that are likely to violate EO 11246. In addition, the data collection tool could play a key role in the agency’s establishment-specific, contractor-wide, and industry-wide analyses. The ANPRM did not contain the proposed tool; rather, the agency sought stakeholder comments on issues relating to the scope, content, and format of the tool to ensure that it is an effective and efficient data collection instrument. Over 2,400 comments were submitted prior to the closing of the ANPRM comment period on October 11, 2011. Although the current regulatory agenda states that the OFCCP planned to publish a Notice of Proposed Rulemaking (NPRM) in January 2014, the agency has not yet published its proposal.

The Memorandum will expedite the publication of this NPRM because it directs the Secretary of Labor to propose, within 120 days of April 8, 2014, a rule that would require federal contractors and subcontractors to submit to DOL summary data on the compensation paid their employees, including data by sex and race. In doing so, the Secretary “shall consider approaches that: (1) maximize efficiency and effectiveness by enabling DOL to direct its enforcement resources toward entities for which reported data suggest potential discrepancies in worker compensation, and not toward entities for which there is no evidence of potential pay violations; (2) minimize, to the extent feasible, the burden on [f]ederal contractors and subcontractors and in particular small entities, including small businesses and small nonprofit organizations; and (3) use the data to encourage greater voluntary compliance by employers with [f]ederal pay laws and to identify and analyze industry trends.”

To the extent feasible, the DOL must “avoid new record-keeping requirements and rely on existing reporting frameworks to collect the summary data.” In addition, the DOL “should consider independent studies regarding the collection of compensation data” in developing the proposal.”

Paycheck Fairness Act. The PFA, a measure intended to create stronger incentives for employers to comply with equal pay laws and strengthen federal outreach and enforcement efforts, would rewrite important provisions of Equal Pay Act (EPA) and impose new duties, including data collection, on the EEOC and the OFCCP. It would:

  • expand damages available under the EPA to include compensatory and punitive awards;
  • change the ‘‘any other factor other than sex’’ affirmative defense to ‘‘a bona fide factor other than sex, such as education, training, or experience”;
  • prohibit employers from punishing employees for discussing or comparing salaries; and
  • facilitate equal pay-based class action lawsuits.

The measure would also require the EEOC, within 18 months of the bill’s enactment, to complete a survey about pay information and issue regulations providing for the collection of pay information data from employers as described by the sex, race and national origin of employees. In addition, the bill would require the OFCCP to reinstate the Equal Opportunity (EO) Survey, a controversial compensation data collection tool. The regulatory requirement for federal contractors to file the EO Survey, put into place by the Clinton Administration, was eliminated by the Bush Administration on September 8, 2006 (71 FR 53032-53042). In a January 7, 2011 webchat hosted by OFCCP Director Patricia A. Shiu, the agency clarified that the compensation data tool currently under development will be not be a reissue of the defunct EO Survey, but rather will be a new compensation data collection tool.

The Senate Committee on Health, Labor, Education and Pensions (HELP) held a hearing on the PFA on April 1, 2014, and the Senate is expected to take up the bill on April 9. Even if the PFA clears the Senate, passage in the House is unlikely.

The White House fact sheet on the April 8 executive actions states that the President “is using the power of his pen to act where he can on this issue, and will continue to urge Congress to pass the Paycheck Fairness Act to ensure all employers are held to the same high standard working women deserve.”

Republican opposition. Republicans assert that the PFA is “misleading,” noting that existing laws already prohibit pay discrimination on the basis of gender. Rather than providing fairness for women, the PFA “will cut flexibility in the work place for working moms and end merit pay that rewards good work” by tightly regulating how employers can pay their employees, according to an April 5, 2014 statement posted on the Republican National Committee (RNC) website. The PFA will also “make it far easier to file frivolous lawsuits that line the pockets of trial lawyers,” according to the RNC.

An April 8 RNC statement further criticized the White House actions as a political ploy that “overlooks the gender gap in [Obama’s] own White House and among his fellow Democrats in the Senate.”

*Update: On April 9, the day after the President’s executive actions, the Senate failed to reach the necessary number of votes to open debate on the Paycheck Fairness Act. The 53 – 44 vote on invoking cloture was 7 votes shy of the 60 required to overcome a Republican filibuster.

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No general civility code here: No employer liability for supervisor who pushed for sex with his employee’s wife

April 2nd, 2014  |  Joy Waltemath  |  Add a Comment

Those who fear that Title VII is being interpreted by the courts to devolve into the dreaded “general civility code” will be encouraged by an Eleventh Circuit decision last month. It decisively affirmed summary judgment to an employer in a Title VII action brought by an employee who alleged that his supervisor had engaged in ongoing efforts to solicit sex from the employee’s wife. You read that right: The supervisor wanted to have sex with the employee’s wife and sought the employee’s help in convincing her.

Soliciting the employee’s wife. While working in the maintenance department of a school district under the direction of his supervisor, a “friend,” the employee said his supervisor continuously tried to solicit the employee’s wife for sexual activity. Specifically, he claimed that his supervisor (1) offered his wife money in return for sex; (2) offered money to the employee – maybe even a promotion! – if he could convince his wife to have sex with the supervisor; and (3) proposed the idea that the two men have sex with the employee’s wife and other women.  Apparently, the supervisor’s antics did not stop there, as he also asked the employee to persuade waitresses to have sex with him in exchange for money.

We’re friends, bro; I just want you to pimp out your wife. On appeal, the Eleventh Circuit in an unpublished opinion acknowledged that the supervisor’s conduct was “highly offensive and inappropriate” but decided there was no error in granting the employer’s motion for summary judgment. And clearly, there was no evidence suggesting the supervisor’s treatment of the employee was based on the employee’s gender; thus, no reasonable juror could conclude that the supervisor discriminated against the employee because of his gender. From the court’s perspective, the supervisor was attracted to his friend’s wife, and the supervisor was talking to the employee “as a friend.” Not even a general civility code violation among friends, apparently.

Additionally, there was no evidence that the employee suffered from any adverse employment action that had any causal link, either directly or indirectly, to his supervisor’s conduct. Focusing on the men’s personal friendship, the court engaged in no discussion of the coercive impact of a supervisor leaning on an employee daily for sexual favors from his wife. Personally I wonder about the quality of the men’s friendship; after all, the employee pursued the claim all the way to the Eleventh Circuit. In any event, the court affirmed summary judgment for the employer here.

But not so frivolous as to award attorneys’ fees. The Eleventh Circuit had a different view on the issue of attorneys’ fees and costs, ruling that although the employer won on summary judgment, it was not entitled to fees and costs. In a Title VII case, a district court may award attorneys’ fees and costs to a prevailing defendant only when the “plaintiff’s action was frivolous, unreasonable, or without foundation,” the appeals court wrote. So an employer that prevails must surpass a threshold showing that the employee’s is case “markedly weak” or “exceedingly weak” – instead, it must demonstrate that the employee’s case is “so patently devoid of merit as to be frivolous.”

Weak yes; frivolous … well … While perhaps weak, the employee’s claim here surpassed that threshold requirement. For example, the employee could not rely on any binding precedent because a factually similar HWE gender discrimination claim had never been addressed in the Eleventh Circuit. So there was no circuit precedent “squarely foreclosing” the employee’s legal argument. In fact, the court said it was “difficult to say” whether the employee’s claim was frivolous. Plus, the employee had in fact provided evidence in support of his claim. Maybe not enough to defeat summary judgment, but that did not reduce his claim to frivolous, so the appeals court reversed the district court’s decision granting attorneys’ fees.

The case is Richardson v Bay District Schools.

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