Congress wrestles with age-old age bias problem that seems to have taken a turn for the worse
May 7th, 2010 | Pamela Wolf | Add a Comment
Congress should pass legislation to overturn a US Supreme Court decision that has made it more difficult for older Americans alleging employment discrimination to get their day in court, witnesses told the House Committee on Education and Labor’s Health, Employment, Labor and Pensions Subcommittee at a May 5 hearing on the Protecting Older Workers Against Discrimination Act (POWADA).
Introduced in October 2009, the POWADA would restore civil rights protections for older workers in the face of the US Supreme Court’s holding in Gross v FBL Fin Servs, Inc. In Gross, the High Court held that plaintiffs bringing ADEA disparate treatment claims must establish by preponderance of evidence that age was the “but for” cause of the adverse employment action; age cannot simply be a “motivating factor” in the adverse action. Victims of age bias face a higher burden of proof than those alleging race, sex, national origin or religious bias because they must prove that age is, in fact, the reason for the adverse decision, according to the bill’s sponsors. Mirroring Title VII’s mixed-motive burden-shifting rubric, the bill’s provisions clarify that a plaintiff can establish an adverse action by demonstrating by a preponderance of the evidence that age was a “motivating factor” for the action, even if other factors also contributed to the decision. Alternatively, the plaintiff can establish by a preponderance of the evidence that the challenged action would not have occurred absent the employee’s age.
“Today we heard testimony calling on Congress to reject the Supreme Court’s misguided decision in the Gross case and restore justice for American workers of all ages,” said Rep. Rob Andrews (D-NJ), chair of the subcommittee. “Older workers, who are already struggling enough to keep their jobs in this economy, deserve the same protections as those discriminated against on the basis of race, ethnicity or religion. The Supreme Court turned decades of well-established law on its head when it held that age discrimination is permissible if it is merely a motivating factor in an adverse employment decision. H.R. 3721 prevents claims like Mr. Gross’ from being dismissed based on sheer semantics and guarantees that all legitimate victims of age discrimination will not be shut out of the courthouse.”
Witnesses, including Gail Aldrich, member of the board of directors of the AARP, and Michael Foreman, Clinical Professor and Director of the Civil Rights Appellate Clinic, testified that the protections laid out in the bill are especially important for older workers because they often face an uphill battle of holding onto jobs in a struggling economy and can have a harder time finding new employment opportunities. “Once out of work, older persons are more likely than the younger unemployed to stop looking for work and drop out of the labor force,” said Alrich. “If they do find work, they are more likely than younger job finders to earn less than they did in their previous employment.”
“[The Supreme Court decision] undermined Congress’s legislative intent and immediately impacted older workers, relegating them to second-class status among victims of discrimination,” said Foreman. “Congress should take positive steps to ensure that our civil rights and employment laws protect all American workers.”
Not all agree. Eric Dreiband, of Jones Day in Washington, DC, said the Gross decision would not eliminate protections at all. “Before the Gross decision, age discrimination defendants could prevail, even when they improperly considered a person’s age, if they demonstrated that they would have made the same decision or taken the same action for additional reasons unrelated to age,” he said. “The Court in the Gross case eliminated this so-called “same decision” or “same action” defense. For this reason, since the Gross decision issued, the federal courts have repeatedly ruled in favor of age discrimination plaintiffs and against defendants.” He also said that the Protecting Older Workers Against Discrimination Act, as proposed, would restore the “same action” defense and may render the “motivating factor” standard nearly irrelevant. In addition, he said the bill is overly broad, vague, and ambiguous. It purports to apply to “any federal law forbidding employment discrimination,” and several other laws, said Dreiband, but the bill does not identify which laws the bill will amend; “Congress can fix this vagueness problem rather easily by amending the bill to apply solely to the [ADEA].”
Is the problem getting worse with age? Testifying a day later, before the Senate Committee on Health, Education, Labor and Pensions, EEOC Chair Jacqueline A. Berrien put the problem in real-life perspective: Over 40 years after Congress passed the ADEA, age bias “may be at historic highs,” she said. Berrien cited the “at or near record-levels” of ADEA charge received by the EEOC. In fiscal year 2008, age bias charges soared nearly 30 percent over the prior year, representing almost 26 percent of all charges received by the agency that year. In 2009, age bias charges were at their second-highest level ever (exceeded only by the prior year) – they constituted over 24 percent of all receipts.
“It is difficult to pinpoint the causes of this surge in age discrimination charges,” Berrien told the committee members. “It is clear, however, that negative stereotypes about older workers remain deeply entrenched.” She ticked off a list of unwarranted stereotypic assumptions: older workers are more costly, harder to train, less adaptable, less motivated, less flexible, more resistant to change, and less energetic than younger employees. Berrien also pointed to employers’ possible reluctance make investments in training and other developmental opportunities for older workers due to a perception that they have limited time remaining in their careers.
According to Berrien, “extensive research has shown that these negative age-based stereotypes have little basis in fact.” But, as she noted, these stereotypes “undoubtedly influence far too many employment decisions.” Older individuals typically receive lower ratings in interviews and performance appraisals than younger counterparts, despite their same or similar qualifications, Berrien said. And it’s no surprise that these stereotypes work against older workers in downsizing scenarios. Once older workers are laid off, they again must face age-based stereotyping when they look for new jobs.
Legal landscape aging poorly. “Unfortunately, older workers who are victims of such age-based decision-making now must seek to assert their ADEA rights in a legal landscape that increasingly minimizes the significance of age discrimination,” Berrien asserted. “The prevailing judicial approach distinguishes ADEA claims from those brought under Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, sex, religion, or national origin.” Berrien pointed to none other than our very Highest Court as an example: “[I]n a statement that appears to reflect the erroneous but widespread stereotypes about older workers, the Supreme Court has said that a lower level of protection under the ADEA than under Title VII is ‘consistent with the fact that age, unlike race or other classifications protected by Title VII, not uncommonly has relevance to an individual’s capacity to engage in certain types of employment.’” Ouch!
“This judicial antipathy to age discrimination claims also can be seen in lower court decisions in which courts apply crabbed interpretations of the ADEA to rule against plaintiffs even when plaintiffs present evidence of age-based comments by managers,” Berrien said. “Given this relatively inhospitable legal climate, it is perhaps not surprising that while all discrimination plaintiffs face enormous challenges in proving their claims, success seems to be especially elusive for age discrimination plaintiffs,” Berrien observed.
“Don’t get old,” my grandmother used to say (she walked this earth for 95 years) – maybe she was right.
Congress and DOL ARB now tackling issue of SOX subsidiary coverage
May 4th, 2010 | Cynthia L. Hackerott | Add a Comment
Legislation is currently pending in Congress that would eliminate a defense now raised in a substantial number of SOX actions brought by whistleblowers and clarify that the SOX whistleblower protections apply to both companies and their subsidiaries and affiliates. Moreover, the DOL’s Administrative Review Board (ARB) has recently issued an order inviting amicus briefs in a case that presents the issue of whether, under current law, an employee of a non-public subsidiary of a publicly held company may bring a SOX whistleblower action against that non-public subsidiary.
The SOX whistleblower provision, Section 806, now codified as 18 USC, Section 1514A, states, “[n]o company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 USC §781) or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 USC §780(d)), or any officer, employee, contractor, subcontractor, or agent of such company” may discriminate against an employee based on that employee’s reporting of fraudulent conduct.
In the order inviting amici curiae, the ARB noted its decision in Klopfenstein v PCC Flow Tech Holdings, Inc (DOL ARB, 04-149, May 31, 2006; CCH Employment Practices Guide ¶5216) where it found a non-public subsidiary to be an agent of a publicly-traded company where common managers were involved in the termination decision at issue. Notwithstanding Klopfenstein, “ALJs and the courts have struggled with this question, resulting in a variety of diverging and conflicting opinions,” the ARB observed. Amicus briefs in the case, Johnson v Siemens Bldg Techs, Inc (ARB No 08-032, ALJ No 2005-SOX-15), are due on July 15, 2010. In addition to briefings from the parties and amici curiae, the ARB specifically requested briefings from OSHA and the SEC.
A September 9, 2008 letter from Senators Charles Grassley (R-IA) and Patrick Leahy (D-VT), authors of SOX’s whistleblower provisions, to the DOL emphasized that federal whistleblower protection extends to employees of subsidiaries of companies and that the DOL should not interpret the statute otherwise.
Currently, the Senate Banking Committee is considering revised draft financial reform legislation (at Section 929A), which would specifically state that any subsidiary or affiliate whose financial information is included in the consolidated financial statements of a SOX-covered company is also covered by the statute. The House passed (223-202) a similar measure as part of the Wall Street Reform and Consumer Protection Act (HR 4173) on December 11, 2009.
Wage-Hour Division webchat focuses on rulemaking initiative to beef up recordkeeping requirements, revise companionship services regs
April 29th, 2010 | David Stephanides | Add a Comment
The Wage and Hour Division held a webchat this morning on its recently published spring 2010 regulatory agenda. Nancy Leppink, Wage and Hour deputy administrator, fielded questions from webchat participants on the DOL’s coming plan to beef up FLSA recordkeeping requirements and on pending rulemaking on the companionship services exemption.
Recordkeeping rules. DOL is considering a proposed rule that would revamp current FLSA recordkeeping regulations to require employers to notify workers of their rights under the FLSA, and to provide information regarding hours worked and wage computation. Employers that seek to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain the analysis to give to WHD enforcement personnel who might request it. The current recordkeeping regulations require covered employers to keep specified payroll records and other information, the agency noted, but they do not require that such information be disclosed to the worker. The proposal will also address burdens of proof when employers fail to comply with records and notice requirements.
The likely content of the recordkeeping proposals sparked the greatest interest. The questions offered a telling glimpse of the issues the DOL will be grappling with as it formulates a rule, as well as the input it will no doubt receive during the comment period. Among the questions posed:
- Do you intend to exempt any industries from the FLSA classification analysis and enhanced recordkeeping requirements?
- Classification analysis is generally conducted on a position-by-position basis, so when an incumbent leaves a position and a new hire occurs, what will the obligation be to re-analyze the position when the position is filled with a new hire?
- What are the proposed retention requirements for classification analysis in light of the Lilly Ledbetter Act?
- Will employers be required under the new recordkeeping requirements to inform employees of their exempt status?
- Would the notice requirements entail a new posting or some type of mandatory training?
- Would we need to formally notify each employee of [his or her] FLSA status and how it was determined?
- What information will be required for notices provided to independent contractors? Is the scope of this proposed rule limited to independent contractors or does it include every employee designated as exempt by his/her employer?
- Can you share what the proposed burdens of proof might be?
In response to a question whether the rulemaking would likely include changes to recordkeeping requirements “associated with employer credits for things like lodging and meals,” Leppink stated, “We are considering what information employers ought to disclose information regarding wage computations.”
Leppink otherwise declined to offer substantive responses to the queries, noting that the rule is currently under development and that “we have not yet determined exactly what will be proposed.” However, she did offer, in general terms: “Our regulatory agenda includes updating recordkeeping requirements. We expect this update to promote transparency and encourage greater levels of compliance by employers. We also expect the regulation to enhance awareness among workers of their status as employees or independent contractors, as well as enhance awareness of employee rights, and entitlements to minimum wage and overtime pay.” The agency’s time table is to publish the proposed regulation in August.
Companionship services. DOL also intends to update its companionship services regulations in order to clarify when domestic service employees are exempt from the minimum wage and overtime provisions of the FLSA. At issue is whether the current exemption for companions working for a third-party agency needs revision in light of significant changes in the home care industry. DOL also intends to address the scope of training required to render a worker “trained personnel” excluded from the companionship exemption, and the amount of household work that may be performed by the worker without losing the companionship exemption.
The regulations governing this exemption have remained largely unchanged since they were promulgated in 1975, the agency notes, in its fact sheet on the proposed rulemaking. “We intend to consider whether the scope of the companionship exemption as currently defined in the regulations continues to be appropriate in light of substantial changes in the home care industry over the last 35 years,” Leppink said. The DOL expects the companionship notice of proposed rulemaking to be published in October 2011.
Ambitious agenda? “Is the current agenda typical or is it more ambitious than prior years?” asked one participant. “While we cannot compare this agenda with previous ones, we do intend to vigorously pursue those regulatory changes that can best protect workers,” said Leppink in response. “We believe our regulatory agenda will advance the Secretary’s goal of good jobs for everyone. We seek to advance openness and transparency, and help prevent violations before they occur.” The Wage and Hour Division held a webchat this morning on its recently published spring 2010 regulatory agenda. Nancy Leppink, Wage and Hour deputy administrator, fielded questions from webchat participants on the DOL’s coming plan to beef up FLSA recordkeeping requirements and on pending rulemaking on the companionship services exemption.
Connecticut proposes to increase fines for misclassification of employees
April 27th, 2010 | David Stephanides | Add a Comment
Legislation implementing recommendations of Connecticut’s Joint Enforcement Commission on Worker Misclassification has passed both houses as of April 21. House Bill 5204 proposes to increase civil penalties for violators from $300 per violation to $300 a day per violation. Connecticut law provides that an employer that misrepresents either the number of employees or casts them as independent contractors to defraud or deceive an insurance company to pay lower workers’ compensation insurance is guilty of a class D felony and subject to a stop work order. H.B. 5204 would apply the same penalty if an employer defrauds or deceives the state in the same way. The bill increases the penalty for violations by specifying that each day of the violation constitutes a separate offense. H.B. 5204 also specifies that any employer who is fully insured for workers’ compensation and fails to pay the required state assessments for administration of the Workers’ Compensation Commission and for the administration and payment fund of the Second Injury Fund would be guilty of a class D felony and subject to a stop work order.
The legislation follows a March 17 announcement by Connecticut attorney general Richard Blumenthal in which he proposed measures to crack down on companies that misclassify employees as independent contractors, called for the increased penalty and criminal sanctions, and recommended joint investigations of misclassification complaints with other state agencies. The Joint Enforcement Commission, co-chaired by Blumenthal and acting labor commissioner Linda Agnew, has been investigating employee misclassification for the past year. If enacted, the changes would take effect on October 1.
Work-Life Balance Award Act hearing held
April 22nd, 2010 | Connie Eyer | Add a Comment
A hearing on legislation that would establish an award for employers that recognize the importance of balancing work with family and personal obligations was held April 22 by the House Committee on Education and Labor. The Work-Life Balance Award Act (H.R. 4855), authored by Reps. Lynn Woolsey (D-CA) and George Miller (D-CA), would create, through the Department of Labor, a bipartisan advisory board to develop the necessary criteria for employers that wish to qualify for the award. “It is unacceptable,” Woolsey said, “that our country, which is the number one economy in the world, can barely compete with developing nations in this arena. Workers should not have to choose between work and family.”
Stating that the introduction of this legislation was a great step, Woolsey added that it can be further improved by adding the minimal requirements for the advisory board to use in establishing its criteria for awardees. “For example,” she said, “the bill should identify certain work-life practices on which employers would be measured. While I do not have an exhaustive list, these policies could include paid sick leave to care of oneself or a sick family member and for the birth or adoption of a child; time off to attend children’s extracurricular activities and school conferences; telecommuting; job sharing, and on site-child care. While the bill requires the board to consider only those employers who are in compliance with all labor and employment laws, we certainly should consider the “whole company” as an example of a good employer, so an employer with wage and hour or OSHA citations may not qualify.”
EEOC Commissioner Victoria Lipnic, who noted that she was not testifying in her official capacity, offered the view that “any initiative that encourages voluntary efforts for employers to offer work-life policies that work best for their employees and meet their operational needs at the same time is worthwhile. I support such initiatives by private entities and as a matter of public policy. The ability of employers to have the creativity to adopt policies that work in their workplaces is critical to their ability to compete in our global economy.”
Testifying on behalf of the Society for Human Resource Management (SHRM), China Miner Gorman called the measure “a common-sense bill to recognize and showcase those public and private organizations delivering benefit plans and policies that truly help their employees better balance their work and personal life obligations.” Gorman also urged Congress to consider other initiatives as H.R. 4855 moves forward, and said more can be done legislatively to encourage or create incentives for organizations to offer flexible work options, including paid leave, rather than imposing government mandates.
Also offering testimony was Carol Evans, President of Working Mother Media.
