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President nullifies DOL unemployment drug testing rule

April 4th, 2017  |  David Stephanides

On March 31, President Trump signed a congressional joint resolution of disapproval (H.J. Res. 42) that nullifies a Department of Labor Employment and Training Administration final rule. Seen by some 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 regulations, which were finalized on August 1, 2016, and effective September 30, 2016, implemented the Middle Class Tax Relief and Job Creation Act of 2012 amendments to the Social Security Act. They permit states to enact legislation that would allow state unemployment compensation agencies to conduct drug testing on UC applicants for whom suitable work (as defined under the state law) is available only in an occupation that regularly conducts drug testing (as determined under regulations issued by the Secretary of Labor). States may deny UC to an applicant who tests positive for drug use under these circumstances.

Earlier, the White House had signaled its support for H.J. Res. 42, saying that the final rule it would nullify “imposes an arbitrarily narrow definition of occupations and constrains a State’s ability to conduct a drug testing program in its unemployment insurance system.”

The Department of Labor issued a statement 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.” Acting U.S. Secretary of Labor Ed Hugler commented that “The Department of Labor supports the president’s nullification and looks forward to examining additional flexibilities for states relative to the drug testing of persons seeking unemployment benefits.”

The 2012 law amended the Social Security Act to add a new subsection permitting states to drug test unemployment compensation applicants as a condition of eligibility and deny jobless benefits for failing the test, under two specific circumstances:

  • If they were terminated from employment with their most recent employer because of the unlawful use of a controlled substance.
  • If the only available suitable work for an individual was in an occupation that regularly conducted drug testing.

Rule 23: A primer

March 31st, 2017  |  Lisa Milam-Perez

One of the fun parts of my job is collaborating with the smart people at Jackson Lewis on its Class Action Trends Report. The newest issue has just been released. It’s a primer of sorts on Rule 23 written by lawyers in the firm’s Class Action & Complex Litigation Practice Group.

The issue takes a closer look at the fine points of Rule 23 and the procedural requirements for certifying a class, with an eye toward defeating class certification–which, as Jackson Lewis notes, “is where the most vigorous defense can reap the greatest reward.”

It’s an important time to stay abreast of Rule 23 and class action developments in general, with recent amendments to the Federal Rules of Civil Procedure, and still more revisions in store. Also, Congress has just introduced legislation that would enact even more sweeping changes–a measure that has considerable prospects for success given our Republican-controlled everything. Jackson Lewis talks about these developments, too.

Read the latest issue here: Class Action Trends Report,

Access Board issues guidance on International Symbol of Accessibility

March 28th, 2017  |  Deborah Hammonds

In response to questions that have been raised on the use of alternative symbols, the Access Board has released guidance on the International Symbol of Accessibility (ISA). For almost 50 years, the ISA has been recognized worldwide as a symbol identifying accessible elements and spaces. Some cities and states have adopted a different symbol and the guidance explains how use of a symbol other than the ISA impacts compliance with the Americans with Disabilities Act (ADA) and the Architectural Barriers Act (ABA).

Standards under the ADA require that the ISA label certain accessible elements, spaces, and vehicles, including parking spaces, entrances and restrooms. Similar requirements are contained in standards issued under the ABA for federally funded facilities.

“Consistency in the use of universal symbols is important, especially for persons with limited vision or cognitive disabilities,” Marsha Mazz, Director of the Access Board’s Office of Technical and Information Services, said in a March 27 statement. “In addition to the ADA and ABA Standards, many codes and regulations in the U.S. and abroad also require display of the ISA.”

While the ADA Standards do not recognize specific substitutes for the ISA, they do generally allow alternatives to prescribed requirements that provide substantially equivalent or greater accessibility and usability under a provision known as “equivalent facilitation.” However, in the event of a legal challenge, the entity pursuing an alternative has the burden of proof in demonstrating equivalent facilitation. Under the ABA Standards, use of a symbol other than the ISA requires issuance of a modification or waiver by the appropriate standard-setting agency.

The ISA bulletin is available on the Access Board’s website along with other issued guidance on the ADA Standards and the ABA Standards.

ALJ dismisses OFCCP individual sexual orientation bias claim due to voluntary compliance, rejects jurisdictional claims

March 24th, 2017  |  Cynthia L. Hackerott

A DOL ALJ has dismissed, due to the defendant company’s agreement to comply with the agency’s request for an on-site investigation, what is apparently the OFCCP’s first enforcement action based on an individual complaint of sexual orientation discrimination. In a previous decision issued ten days before the dismissal, the ALJ rejected arguments by the defendant, AccuWeather, Inc. that it was not a federal contractor subject to the OFCCP’s jurisdiction. (OFCCP v AccuWeather, Inc., March 13, 2017, DOL OALJ Case No 2017-OFC-11)

Weather forecasting service AccuWeather, Inc. of State College, PA provides a wide-range of enterprise solutions to media, business, government as well as news, weather, content and video for third party websites. According to the OFCCP’s administrative complaint, filed on or about January 19, 2017, the agency received a complaint from a former AccuWeather employee alleging that she was subjected to a hostile work environment and ultimately terminated due to her sexual orientation. She also claimed that a Vice President of AccuWeather called her derogatory names on the basis of her sexual orientation, and that this VP, along with people who worked under him, interfered with her work performance by cutting her out of communications and refusing to follow her instructions.

On-site investigation access denied. On October 25, 2016, the OFCCP sent a letter to the contractor to schedule an on-site complaint investigation starting on November 8, 2016. On November 2, the contractor send a letter responding that it would not permit the agency to conduct an on-site complaint investigation because it asserted that the company was not a federal contractor. The OFCCP discussed the issue with the company via phone on November 2 and 10, but the company reaffirmed that it was denying access, and it’s legal counsel reiterated this position in a November 10 letter.  That same day, the OFCCP issued a Notice to Show Cause why the agency should not initiate enforcement proceedings. On December 15, the company’s legal counsel sent a letter responding to the Notice to Show Cause by reaffirming the company’s refusal to produce requested documents and or permit access to its facility to conduct an on-site investigation In the complaint, the OFCCP asserts that this denial violated Executive Order (EO) 11246.

Contracts at issue. In its answer to the administrative complaint, AccuWeather maintained its assertion that it is not a federal contractor subject to OFCCP jurisdiction, arguing that it fell under the exemption at 41 CFR Sec. 60-1.5(a)(1) for contractors that hold government contracts of less than $10,000. The company requested dismissal of the complaint on that basis. The OFCCP countered, as it had also alleged in the complaint, that AccuWeather had federal contracts totaling in excess of this threshold amount, specifically, with the Defense Logistics Agency (DLA) for $11,845 (effective May 20, 2015, with a completion date of May 23, 2020) and the Department of the Navy for 74,107.41 (effective June 24, 2015, with a completion date of June 20, 2018). On March 3, ALJ Richard A. Morgan issued an order finding that the OFCCP had proper jurisdiction in this case because AccuWeather, Inc. was a federal contractor within the meaning of the EO 11246 and its implementing regulations.

As to the DLA contract, to which the defendant acknowledged it was a party, it argued that contract did not exceed $10,000 because the base amount of the contract was $2,369 for the first year, and the additional three years of option contract in the amount of $2,369 per year should not be considered as aggregate in valuing the contract. The base value of the Navy contract was $23,976 with two subsequent option year extensions, the first valued at $24,695 and the second valued at $25,436. AccuWeather did not deny that this contract exceeded the $10,000 jurisdictional threshold. Yet, the defendant asserted that it was not a party to the Navy contract because AccuWeather, Inc. was not a party to that contract, but rather, the specified contract was between a related company, AccuWeather Enterprise Solutions (AWES), and the Navy.

Jurisdiction established. The ALJ, however, found that the alleged distinctions between AccuWeather, Inc. and AWES were neither noted or accepted by the contracting representative of the Department of the Navy who issued the Navy contract to “AccuWeather, Inc.”  Based on the evidence submitted by the parties, the court pointed out that the contractor-identifying “Commercial and Governmental Entity” (CAGE) number belonging to AccuWeather, Inc. was also used on all the Navy contract documents, and that CAGE number was assigned only AccuWeather, Inc. Indeed, AWES was not registered in the System for Awards Management as a government contractor. Further, there was no acknowledgement by the government contracting agency of a modification to the Navy contract subsequent to AWES’ claimed scratching out of AccuWeather, Inc. on the contract and handwriting in AWES. As the OFCCP’s counsel pointed out, if this alleged scratch out could be  viewed as a request to modify the contract, that modification was never agreed to in writing by the government. Moreover, the option year one modification of the Navy contract was sent to AccuWeather, Inc. and signed by a representative “on behalf of AccuWeather, Inc.”

Therefore, even assuming that there were significant distinctions between AccuWeather Inc. and AWES based on the services that they provide as well as legal distinctions in the formation and operation of these companies, the ALJ found no evidence to support that these distinctions were made known to, or acknowledged by the representatives of the government agency that prepared the Navy contract or the DLA contract. “At the very least, there was a blurring of these distinctions by the defendant which was never adequately clarified by the defendant and was never corrected or acknowledged by the contracting agency,” the ALJ wrote.

Finding that OFCCP jurisdiction was established under the Navy contract, the court deemed it  unnecessary to address whether the DLA contract fell within the $10,000 exemption and whether the value of the option extensions should be considered in the aggregate.

Case dismissed due to voluntary compliance. Since the defendant did not allege any defense to the complaint outside of the jurisdictional issue, the ALJ ordered the parties to address whether the hearing scheduled for March 21, 2017 should go forward. On March 9, the OFCCP informed the court that the company had agreed to comply with the OFCCP’s requested on-site investigation, and as such, a hearing in the case would not be necessary. The following day, AccuWeather confirmed to the court that it had scheduled an on-site investigation in compliance with the OFCCP’s request. Accordingly, on March 13, the ALJ dismissed the complaint due to AccuWeather’s voluntary compliance, thereby cancelling the March 21, 2017 hearing date.

Sexual orientation discrimination enforcement background. Sexual orientation and gender identity were expressly added to the categories protected from discrimination under EO 11246 on July 21, 2014, when President Obama signed EO 13672 (79 FR 42971- 42972), which applies to covered contracts entered into or modified on or after April 8, 2015, the effective date of the OFCCP’s regulations (79 FR 72985-72995) promulgated under EO 13672). On March 17, 2015, pursuant to the Paper Reduction Act, the Office of Budget and Management (OMB) approved the information collection requirements necessary for implementation of those regulations.

On April 16, 2015, the OFCCP issued Directive 2015-01, entitled “Handling Individual and Systemic Sexual Orientation and Gender Identity Discrimination complaints,” to establish the agency’s policy on accepting and investigating individual and systemic complaints based on gender identity or sexual orientation. The policy set forth in this directive provides that the OFCCP will accept and investigate individual and systemic complaints that allege discrimination on the basis of sexual orientation and gender identity against a federal contractor or subcontractor. It will analyze each complaint to determine whether the alleged discrimination occurred on the basis of sexual orientation or gender identity, as well as on the basis of sex, and will coordinate with, and refer complaints to, the EEOC on a case-by-case basis.

Scope of sex discrimination rules. In addition, the OFCCP published a final rule on June 15, 2016 (81 FR 39108-39169) to replace the guidelines at 41 CFR Part 60-20 with new sex discrimination regulations. While EO 11246, as amended by EO 13672, now covers explicitly covers both sexual orientation and gender identity bias, the final sex discrimination rule reflects the OFCCP’s view that adverse treatment of employees based on failure to conform to particular gender norms and expectations about their appearance, attire, or behavior is unlawful sex discrimination. In contrast, courts have not generally recognized claims based on sexual orientation as cognizable under Title VII. The OFCCP says that it enforces the nondiscrimination obligations under EO 11246 by following Title VII and the case law principles that have developed interpreting Title VII, and the agency notes, in the preamble to the final rule, the weakness of federal court support for the proposition that Title VII’s prohibition against sex discrimination encompasses sexual orientation discrimination not based on sex stereotyping. (The most recent case of note on this point is the Eleventh Circuit’s March 10, 2017 decision in Evans v Georgia Reg’l Hosp.)

Recent enforcement developments. At the end of January 2017, the Trump White House issued a statement indicating that President Obama’s EO 13672 will remain in force. The statement was issued in light of speculation that the Trump Administration might back off of the prior administration’s efforts to advance and protect the rights of the lesbian, gay, bisexual, transgender, and queer community.

On February 21, 2017, the OFCCP published a renewed notice (82 FR 11245-11246) seeking comments regarding its request for OMB approval to update the OFCCP’s complaint form, to add “sexual orientation” and “gender identity” as protected bases, among other updates. The renewed notice notes that “additional substantive information” on this request is contained in its earlier, related notice published on July 1, 2016 (81 FR 43254- 43261). The earlier notice included a supporting statement, a copy of the proposed revised form, and a corresponding instruction sheet. The comment period for the July 2016 notice closed on August 30, 2016. Written comments on the renewed notice are due by March 23, 2017.

The agency reports in the supporting statement that it received 790 complaints from individuals in fiscal year (FY) 2013, 699 complaints in FY 2014, and 769 complaints in FY 2015. Therefore, on average, the OFCCP receives about 753 individual complaints annually.

As previously discussed in an Employment Law Daily piece last year regarding the OFCCP’s sex discrimination regulations, a potential legal impediment to OFCCP enforcement of protections on the basis of sexual orientation or gender identity, such as those included in EO 13672 and its implementing regulations, is the fact that Congress has not explicitly delegated legal authority to the President to protect employees from discrimination based on sexual orientation or gender identity, according to John C. Fox, a former OFCCP official and current president of Fox, Wang & Morgan P.C. in Los Gatos, California.

[Author’s note: This story was originally published in the Employment Law Daily email newsletter on March 20, 2017]

Is the NLRB a bit too union-friendly?

March 21st, 2017  |  Lorene Park

By Lorene D. Park, J.D.

The NLRB was put under the microscope at a February 14 hearing of the House Subcommittee on Health, Employment, Labor, and Pensions, chaired by Representative Tim Walberg (R-Mich.). Most panelists at the hearing, titled “Restoring Balance and Fairness to the National Labor Relations Board,” aligned with the view that the Board in recent years has lost its balance, leaning away from employers and business and more toward employees and unions. Among other actions considered “troubling,” the subcommittee discussed the NLRB’s advancing an ambush election rule and “expanding its joint employer standard.”

Board rulings. Meanwhile, the Board has issued a number of arguably employee- and union-friendly rulings recently. For example, in a February 22 decision, it found that an acting regional director did not err in overruling, without a hearing, Jacmar Food Service’s objections to the solicitation of union authorization cards. That same day, the Board ruled that a nursing home management company unlawfully threatened to “call the cops” after housekeeping staff protested their “rehiring” as probationary workers at the starting wage, with no seniority, and demanded to contact the union.

On February 23, the NLRB opined that Hawaiian Telecom, Inc., acted unlawfully when it ceased providing employees health benefits when they went out on a strike—their eligibility for benefits had already accrued and the employer lacked a legitimate business justification for discontinuing benefits. On February 24, the Board ruled that Verizon’s code of conduct rule restricting the use of personal employee information violated the NLRA because it could be reasonably understood as an attempt to keep employees from discussing the terms and conditions of employment.

In a March 8 ruling, the NLRB found that a country club violated the NLRA when it hired “summer employees” instead of recalling full-time “regular employees” from a seasonal layoff, and unilaterally contracted out bargaining unit work without giving a union notice and an opportunity to bargain over the changes. The Board found no basis to conclude that the union waived its right to bargain by agreeing to a management rights clause, nor was the employer’s conduct permissible under a reasonable interpretation of the CBA.

In the appellate courts. Appearing before federal appellate courts, the Board met with mixed results on the gateway issue of who is covered as an employer or employee under the NLRA. The Fifth Circuit upheld a ruling that an employer and subsidiary constituted a “single employer” and could be liable for denying parent company employees access to the subsidiary’s facilities for handbilling. However, the Sixth Circuit found that substantial evidence did not support the NLRB’s ruling that charge nurses at a long-term care facility were statutory employees (instead of supervisors) and were entitled to elect a union as their exclusive bargaining representative.

In a March 3 opinion, the D.C. Circuit found that the NLRB erred by holding, contrary to recent court precedent, that FedEx drivers were employees under the NLRA. Because the appeals court had previously ruled that single-route FedEx drivers working out of Wilmington, Massachusetts, were independent contractors, not employees, the NLRB could not rule, on a materially indistinguishable factual record, that single-route FedEx drivers located in Hartford, Connecticut, were statutorily protected employees, not independent contractors.

The NLRB also faced challenges beyond that gateway issue. For example, the Sixth Circuit ruled that, contrary to a Board opinion, a general complaint about reductions in employee benefits was not a request to bargain about an employee-recognition program. The recognition program was not the only issue raised by the union rep and the monetary effect was less than four dollars per union member per year. The NLRB also erred, in the Seventh Circuit’s opinion, when it ordered Columbia College Chicago to reimburse a union for negotiation expenses in connection with a successor bargaining agreement.

Board has to explain shift in analysis. On March 7, the D.C. Circuit ruled that the NLRB erred in departing from its own precedent to follow a similar shift in the National Mediation Board’s (NMB) jurisdictional analysis concerning claims brought by airline baggage handlers. Vacating an NLRB order that found a union’s effort to represent airline baggage handlers was governed by the NLRA rather than the Railway Labor Act (RLA), the D.C. Circuit explained that under long-settled NMB precedent concerning RLA jurisdiction (to which the NLRB has historically deferred), the airlines had sufficient control over baggage handlers’ employment with a contractor, so the RLA governed. The NLRB erred in concluding otherwise. While the NMB may have recently shifted its jurisdictional test without explanation, the NLRB had to justify its change: “an agency cannot avoid its duty to explain a departure from its own precedent simply by pointing to another agency’s unexplained departure,” the court said.

Take-away. With these recent examples in mind, there may be some support for House panelists’ view that the Board is less balanced than perhaps it should be in its decisionmaking; favoring employees and unions. And while things may change under the Trump administration, the Board will have to explain any departure from precedent. This could be interesting . . . .