By Joy P. Waltemath, J.D.
Today, Indiana Governor Mike Pence signed a “religious freedom” bill in a private ceremony. Senate Bill 101 is modeled on the Religious Freedom Restoration Act, a federal law passed in 1993 but inapplicable to the states due to a U.S. Supreme Court decision in 1997. Consequently, a number of states have passed their own “RFRA”-type laws to apply to state and local governments; Indiana is the 20th state to have enacted legislation.
Modeled on federal law? Specifically, the new state law bars a governmental entity from substantially burdening a person’s exercise of religion, even when the burden results from a rule of general applicability, unless the governmental entity demonstrates that the burden as applied to the person is:
- in furtherance of a compelling governmental interest; and
- the least restrictive means of furthering that compelling governmental interest.
Indiana’s newly enacted law will apply to all governmental entity statutes, ordinances, resolutions, executive or administrative orders, regulations, customs, and usages, including their implementation or application—regardless of whether they were enacted, adopted, or initiated before, on, or after the law’s effective date of July 1, 2015.
The governor’s view. In a statement released by the Indiana governor’s office, Pence noted that he signed the bill “because I support the freedom of religion for every Hoosier of every faith. The Constitution of the United States and the Indiana Constitution both provide strong recognition of the freedom of religion but today, many people of faith feel their religious liberty is under attack by government action.”
Pence referenced the federal law in his statement, noting that the Religious Freedom Restoration Act limited “government action that would infringe upon religion to only those that did not substantially burden free exercise of religion absent a compelling state interest and in the least restrictive means.”
“Last year the Supreme Court of the United States upheld religious liberty in the Hobby Lobby case based on the federal Religious Freedom Restoration Act,” Pence said, “but that act does not apply to individual states or local government action. At present, nineteen states—including our neighbors in Illinois and Kentucky—have adopted Religious Freedom Restoration statutes. Indiana joined that group “in order to ensure that religious liberty is fully protected under Indiana law,” he continued.
Pence’s statement says that “This bill is not about discrimination, and if I thought it legalized discrimination in any way in Indiana, I would have vetoed it. In fact, it does not even apply to disputes between private parties unless government action is involved. For more than twenty years, the federal Religious Freedom Restoration Act has never undermined our nation’s anti-discrimination laws, and it will not in Indiana.”
Far broader than federal law? However, Jeffrey I. Pasek, the immediate past chair of the Cozen O’Connor’s Labor & Employment Group, whose avocation involves the role of religion in public life, commented to Employment Law Daily that “This bill goes far beyond the federal RFRA in two ways. First, it allows individuals to claim exemptions from neutral government mandates even in cases in which the government is not involved.”
S.B. 101 provides that a person whose exercise of religion has been substantially burdened, or is likely to be substantially burdened through a violation of the new law, may assert that violation or impending violation as a claim or defense in a judicial or administrative proceeding—even where the state or any other governmental entity is not a party to the proceeding. However, where a relevant governmental entity is not a party to the proceeding, it nonetheless would have an unconditional right to intervene in order to respond to the person’s invocation of the new law.
“It would fall to the individual who is being discriminated against to attempt to justify an otherwise neutral law by asserting that the government has a compelling interest in enforcing the law, but nothing in this bill says the government has to get involved in those cases,” explained Pasek. “At least if someone outright challenges a governmental requirement against government enforcement, we can expect the government to make a reasoned decision about whether to support its requirement and to apply that rationale on an even-handed basis. That is totally lacking here.”
Further, Pasek noted that “Without support of the government, how can any individual job applicant, wedding cake purchaser, or would-be apartment renter be able to uphold the government’s interest? How will such a person be able to compile and present evidence of an actual government interest and not just a theoretical interest? Also, how can a would-be plaintiff in one of these cases establish a less burdensome alternative when the government is the one that would have to choose that alternative and has not been asked for its opinion? In short, this bill goes way beyond the RFRA because it leaves religious objectors in a position where they are much less likely to be challenged and much more likely to prevail.”
Broader than Hobby Lobby. Likely in response to the U.S. Supreme Court’s decision last year in Burwell v. Hobby Lobby, referenced by Governor Pence in his statement, the new law also applies to a very broadly defined category of “person,” which includes: (1) an individual; (2) an organization, a religious society, a church, a body of communicants, or a group organized and operated primarily for religious purposes; and (3) a partnership, a limited liability company, a corporation, a company, a firm, a society, a joint-stock company, an unincorporated association, or another entity that may sue and be sued, and exercises practices that are compelled or limited by a system of religious belief held by an individual or the individuals who have control and substantial ownership of the entity, regardless of whether the entity is organized and operated for profit or nonprofit purposes.
“Hobby Lobby involved a privately held company where there were no dissenting shareholders,” noted Pasek. “What do we do if a large public company like Wal-Mart wants to invoke religion to avoid a state imposed mandate that health insurance policies cover blood transfusions? Do the officers decide the religious views of the company, or must the board of directors or shareholders vote on it? Nothing like this exists under federal law because the Supreme Court has not extended Hobby Lobby to such a situation. The opinion suggests the Hobby Lobby decision would not extend that far, but this is only dictum, and we don’t know where the line will eventually be drawn.”
Impact on religious minorities. “The Indiana bill jumps right into the fire on this issue by giving every company religious rights regardless of its size. But,” Pasek asked, “how about protecting the religious rights of the minority shareholders? They have religious rights as shareholders, and this bill says that majority rules. What is the compelling government interest for not protecting them? Won’t there be many cases in which some less restrictive means exists beside straight-out majority vote by which the religious rights of the corporation can be protected? Individuals can change their religious views at any time. Presumably companies can too. Do we get a new vote on religious beliefs every time there are new shareholders?
Pasek predicted, for these reasons, that the Indiana legislation could “lead to significant litigation, expose government to substantial costs and force government officials to become dragged in to numerous disputes that they would rather avoid.”
He also added a note of caution concerning the law: “It will also curtail the civil liberties, employment rights, and contract rights of individuals whose only sin is that they do not follow the same religious views as their employer, their landlord, their baker, or some other third party.”
In latest act of longstanding, unsuccessful protest against revised OFCCP disability regulations, construction contractor group asks SCOTUS to weigh in
Continuing its dogged attempt to overturn OFCCP regulatory revisions that require federal contractors and subcontractors to establish a 7 percent utilization goal for the employment of workers with disabilities, Associated Builders and Contractors (ABC) has filed a petition for writ of certiorari requesting the U.S. Supreme Court to review the DC Circuit’s December 2014 decision upholding the regulations. According to ABC’s petition, the OFCCP exceed the statutory authority granted to the agency by Section 503 of the Rehabilitation Act of 1973 (Section 503) in promulgating the rule. ABC further asserts that the rule is “arbitrary and capricious in its failure to distinguish between the diverse industries covered by its terms.” (Associated Builders & Contractors, Inc v Shiu, Dkt No 14-1111, petition filed March 12, 2015).
New requirements. The final rule containing the revisions at issue was published in the Federal Register on September 24, 2013 (78 FR 58682-58752); the rule revises the OFCCP’s regulations at 41 CFR Part 60-741 that implement the provisions of Section 503. The OFCCP derived the 7 percent utilization goal primarily from disability data collected as part of the Census Bureau’s American Community Survey (ACS). Contractors must apply the utilization goal to each of their Affirmative Action Plan job groups, with the exception of contractors with 100 or fewer employees, who may apply the go to their entire workforce. In addition, contractors must conduct an annual utilization analysis and assessment of problem areas, and establish specific action-oriented programs to address any identified problems.
On top of the utilization goal, the rule imposes new data collection and recordkeeping requirements. Among other obligations, contractors are required to invite applicants to self-identify as individuals with disabilities (IWDs) at both the pre-offer and post-offer phases of the application process. It also requires that contractors invite their incumbent employees to self-identify as IWDs every five years.
Lower court rulings. On November 19, 2013, ABC, a national trade association representing 22,000 members from more than 19,000 construction and industry-related firms, sued the OFCCP and its Director, Patricia Shiu, as well as the Labor Department and Secretary of Labor Thomas Perez (defendants) in the federal district court for the District of Columbia. In its complaint, ABC asserted that the final rule violates not only Section 503, but also the Administrative Procedure Act, and the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act.
On November 25, 2013, the trial court granted the parties joint motion for an expedited briefing schedule for dispositive motions. On March 21, 2014, the district court denied ABC’s motion for summary judgment and granted the defendants’ cross motion for summary judgment, thereby allowing the rule to take effect as scheduled on March 24, 2014. ABC filed an appeal with the DC Circuit on March 28, 2014.
On December 12, 2014, the DC Circuit affirmed the district court’s decision. Emphasizing that its review of an agency’s exercise of rulemaking authority was narrow, the appellate court upheld the rule’s utilization goal as well its data collection requirements. The circuit court also found that, in promulgating the rule, the OFCCP was justified in not exempting construction contractors (98 EPD ¶45,216).
Questions presented. ABC’s cert petition presents the following two questions for review:
“1. Whether OFCCP exceeded the limited authority delegated to the agency by Congress under the plain language of [Section 503] by requiring government contractors for the first time to collect burdensome and meaningless data on applicants who are “not qualified individuals with disabilities.”
2. Whether OFCCP acted arbitrarily and in violation of the Administrative Procedure Act by promulgating a rule that requires all government contractors, regardless of significant differences among different industries and different jobs, to meet a uniform utilization goal of seven percent qualified disabled individuals.”
Related veterans rule. On the same day the Section 503 final rule was published, the OFCCP also published a similar final rule (78 FR 58614–58679) to revise the agency’s regulations at 41 Part 60-300 that implement the provisions of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) (and rescind the outdated regulations at 41 CFR Part 60-250). The VEVRAA rule requires contractors to set a variable hiring benchmark for protected veterans per establishment (rather than job group), either based on the national percentage of veterans in the workforce (currently 7.2 percent – see, http://www.dol-esa.gov/errd/VEVRAA.jsp ), or based on the best available data and factors (specified in the regulations at 41 CFR § 60-300.45(b)(2)) unique to their establishments. The benchmark applies only to hiring data and does not need to be applied to each AAP job group. The VEVRAA rule also imposes new data collection and recordkeeping requirements that are similar, but not identical to, the requirements in the Section 503 rule. The agency has repeatedly made clear that failing to meet the benchmark is not a violation of the regulations and will not carry any penalties. However, failure to set the benchmark and meet the data collection, analysis, and recordkeeping requirements related to this benchmark does violate the regulations.
Both rules took effect on March 24, 2014, with the exception of the requirements in Subpart C of both rules the affirmative action program (AAP) requirements which was phased in accommodate individual contractor’s standard affirmative action program (AAP) review and updating cycles.
Longstanding protest. ABC’s objections to the Section 503 rule go back prior to its finalization. In July 2013, ABC was part of a coalition of employer advocacy groups that sent a letter to the newly sworn-in Secretary of Labor Thomas Perez seeking a meeting to discuss the then pending Section 503 rule. The coalition asserted that the new requirements contained in the proposal would place enormous cost and time burdens on federal contractors without actually achieving the stated goal of increasing the employment and advancement of workers with disabilities.
In light of employer concerns expressed about both rules during the public comment period, some of the more onerous provisions of the proposals were eliminated or made more flexible in order to reduce the compliance burden on contractors. The changes between the proposed and final rules are detailed in the preambles contained in the Federal Register publications of each final rule.
Nevertheless, on August 28, 2013, the day after both final rules were announced, ABC issued a press release in which its Vice President of Government Affairs Geoff Burr said, “[a]lthough industry studies show that the individuals covered by these rules are already appropriately represented in the federal contracting sector, now contractors will be saddled with incredibly expensive recordkeeping obligations that will do nothing to increase employment of these individuals.” ABC further complained that “the new rules revise existing procedures by drastically the paperwork burdens on federal contractors in all industries.” Of most concern to construction contractors, ABC asserted, were the provisions requiring written documentation and tracking of workforce statistics to determine whether the percentage of protected employees meets affirmative action requirements for federal projects. “Such paperwork and reporting provisions are completely new to the construction industry—a fact that was not taken into account in OFCCP cost estimates,” the ABC stated, adding that the OFCCP “ignored the unique nature of the construction industry and its workforce, which the agency itself has characterized as ‘fluid’ and ‘transitory,’ and which has historically warranted a unique approach toward affirmative action compliance.”
Only one of the two similar rules challenged. Further, the ABC statement said the organization “will explore avenues to challenge the rules in federal court” (emphasis added). Interestingly, even though the August 28, 2013 statement indicated that ABC was considering litigation to challenge both rules, it chose to challenge only the Section 503 rule in federal court; thus, begging the question of why the alleged burdens of the Section 503 rule warranted litigation but the similar alleged burdens of the VEVRAA rule did not.
Secretary of Labor Thomas E. Perez, in testimony before the House Education and the Workforce Committee on Wednesday, March 18, to justify the President’s budget proposal for the DOL, pointed to the need to raise the minimum wage and combat overtime wage violations, among other things, and outlined the DOL’s new approach to enforcing wage and hour laws. His comments, particularly in the wage-and-hour arena, put certain employers on notice of stepped-up compliance enforcement efforts, particularly those at “the top of the chain.”
Economic recovery. Perez began his testimony by reminding lawmakers that we are now in a climate of economic recovery: “We’ve come a long way in the last six years. In the few months before President Obama took office, the economy was in free fall—we had lost roughly two million jobs. Today, we have had five years—60 consecutive uninterrupted months—of private sector job growth, to the tune of 12 million new jobs over that time. That’s the longest such streak on record, and 2014 was the best year for job creation in the United States since 1999.
“The wind is clearly at our back. The economic indicators are promising across the board. The current unemployment rate is 5.5 percent, down from 10 percent in the fall of 2009. 2014 was the first year in 30 years that the unemployment rate declined in every state in the nation. Consumer confidence is near a seven-year high. The deficit hasn’t fallen this fast since the end of World War II. We’re exporting more in American goods and services than ever before. The auto industry was almost left for dead in 2008, but today sales are high again. All of these factors are leading finally to a strengthening labor market—coming out of the Great Recession, there were nearly seven job seekers for each available position; today that ratio is less than two-to-one.”
But according to Perez, it’s not yet time to celebrate, but rather to “find the common ground to do even better” and “ensure that the fruits of this recovery are enjoyed by more people and more working families.”
Raising the minimum wage. Perez also noted that the impressive economic recovery has not “reversed a decades-long trend in wage stagnation among middle- and low-income families.” He said “we have to help more people increase their incomes and make their paychecks go further,” suggesting that it should begin with “a long-overdue increase” in the minimum wage, including for tipped workers. “The President first called on Congress to take this step more than two years ago, because he believes that no one who works full-time in the wealthiest nation on earth should have to raise their family in poverty.”
The Labor Secretary talked about the many low-wage workers who “need SNAP (formerly known as food stamps) or other forms of public assistance to get by. Often, they are one setback away from complete desperation. For you or me, car trouble and a trip to the repair shop are inconvenient; for many of them, it’s a financial catastrophe,” he observed.
Perez also applauded what he called “forward-looking employers” that are paying higher wages even though not required to do so, “as a matter of enlightened self-interest,” including Costco, the Gap, Shake Shack, and Ace Hardware. “They recognize that it translates into improved morale and greater productivity. It increases retention rates, thus cutting turnover and training costs. Besides, many of them recognize that in an economy driven by consumer demand, better paid workers mean more people with more money in their pockets to spend on all kinds of goods and services, which leads to stronger business growth and more jobs—a virtuous cycle.”
But not all employers will “do the right thing,” according to Perez, “we know that there are some who will try any way they can to raise their profits at the expense of their workers.”
Sketching out the growing wage-hike trend among the states, Perez observed: “Over the last two years, 17 states plus the District of Columbia have raised their own minimum wages, thus benefitting a total of seven million workers nationwide. On Election Day last November, Nebraska, South Dakota, Alaska, and Arkansas all passed ballot measures to increase their states’ minimum wage.”
Nonetheless, Perez urged that the federal minimum wage should be raised “because whether a full time job lifts you out of poverty shouldn’t depend on whether you’ve won the geographic lottery or not.”
Overtime pay. In addition to the Obama administration’s efforts to make headway on the wages front through the president’s executive order mandating a $10.10 minimum wage for workers on new federal construction and service contracts, Perez pointed to the Labor Department’s move “to modernize the nation’s rules on overtime pay, which have not kept up with inflation or with changes in the economy.” Those rules have not been updated since 1975.
“The basic premise of the overtime law that Congress enacted more than 75 years ago is pretty straightforward: If you work more, you should get paid more. But that basic principle is undermined in too many cases,” Perez said. “The assistant manager at a fast food restaurant who puts in 60-70 hours a week for $455 and spends almost all of their time performing the same work as the employees they supervise and who does not get overtime is getting a raw deal. We are updating the rule to prevent this situation.” In doing so, the DOL has “conducted unprecedented levels of outreach, holding multiple listening sessions with employers and workers in a wide array of industries,” he asserted.
The new wage-law enforcement approach. Perhaps the most instructive of Perez’s comments pertained to wage-hour law enforcement, which matters, he said “because the laws that you pass, and the regulations that we promulgate to implement those laws, are only as good and as meaningful as our ability to make those words on a page a reality for American workers,” and enforcement “also levels the playing field for employers who play by the rules.”
The Wage and Hour Division’s investigation force has been increased by more than one-third, Perez noted, also clarifying that the increase only brings staffing back to 1970s levels when the labor force was significantly smaller. The president’s fiscal year 2016 budget calls for more staffing increases, requesting $277 million overall for the WHD, including a $31.7-million increase for additional enforcement staff and support.
How has the WHD changed its approach to enforcement? “We have equipped our investigators with the modern tools they need to do their work. We’ve used data and evidence-based strategies to deploy them strategically,” the Labor Secretary explained. “And we’ve also shifted the focus of our enforcement efforts. Instead of a purely reactive approach where we respond to incoming complaints, we have targeted investigations in industries where we know workers are vulnerable, and where they are often reluctant to raise their voices and exercise their rights.” According to Perez, strategic enforcement yields “very real results for working families” and is also “a more efficient use of resources.”
According to Perez, the WHD has directed its resources to:
• where the data and evidence show wage violations are most likely to occur,
• where emerging business models lend themselves to such violations, and
• where workers are least likely to exercise their rights.
And Perez made clear that the WHD’s continued efforts will focus on industries with low-wage workers: “[W]age violations are pervasive, especially for low-wage workers, and so we must continue to step up our efforts and take our enforcement to the next level. We want and need to create ripple effects that impact compliance far beyond the workplaces where we are actually on the ground investigating.”
The WHD’s efforts will be targeted to employers at the top of the supply chain. “One way to leverage our enforcement resources is to identify the supply chain,” the Labor Secretary explained. “The idea is to cause those at the top of the chain to evaluate the compliance practices of those below them; and to get them to think twice about whether it is worth the risk to their good name, and possibly their bottom line, to do business with a supplier or subcontractor who skirts the law.”
Employers that fit the profile described by the Labor Secretary should consider themselves on notice of stepped-up compliance enforcement.
By Lorene D. Park, J.D.
You may be amused when the office comedian imitates a coworker’s accent or other unusual trait, but when it comes to mockery, the result may be no laughing matter. For example, several recent cases demonstrate that mocking an employee’s accent or physical limitation can support discrimination and harassment claims under Title VII, the ADA, and other federal laws. While courts routinely point out that Title VII is not a general civility code, it seems that personal mockery is often considered worse than incivility.
Title VII cases. In Bryant v. Wilkes-Barre Hospital, a federal court in Pennsylvania refused to dismiss an African-American employee’s Title VII and state law racial harassment claims, finding them sufficiently supported by allegations that coworkers frequently mocked her pronunciation of some words—such as “aks” instead of “ask” and “birfday” instead of “birthday”—and that one asked her if she ate chicken and watermelon. And in Rojas v. Hospital Español de Auxilio Mutuo de Puerto Rico, Inc., a Title VII national origin-based hostile work environment claim survived summary judgment based largely on evidence that an employee’s Dominican accent was often mocked by her Puerto Rican coworkers.
In both of these cases, the employees complained but the employers took no remedial action, providing a basis for employer liability. Also, both courts found that the alleged harassment was so severe that the employees could advance their claims of constructive discharge.
ADA and FMLA cases. In a case from Connecticut, human resources employees allegedly mocked an employee’s disability after she underwent finger surgery and back surgery that required placing six screws and two rods in her back. Though her doctors had released her to return to work from medical leave, the employer delayed her return and, according to the employee, an HR rep explained: “The reason why I didn’t think you should come back was because I was greatly afraid that . . . you would be looking like this.” The HR rep then stood and “grabbed the wall like an invalid” and “mimicked a person grabbing on for dear life to the walls.” The employee found this so upsetting that she asserted she will “never forget” the incident as long as she lives. The employer may not forget it either, considering that her ADA discrimination and FMLA retaliation claims will go to trial (Lewis v. Boehringer Ingelheim Pharmaceuticals, Inc.).
An ADA claim was also at issue in a case recently settled by the EEOC on behalf of a cleaning service employee who walked with an abnormal gait due to a stroke. According to the agency’s complaint, one of the company’s officers harassed her by calling her a “cripple” and mockingly imitated how she walked. A federal judge in Illinois entered a consent decree requiring that the employer pay her $15,000, train its managers and other employees on the ADA, and meet recordkeeping and reporting requirements for the duration of the three-year decree.
Lessons learned. Though the takeaways from these cases seem like common sense, mockery appears often enough in employment litigation that employers should consider including the following points in training managers and employees:
- The workplace is not a stage and you’re not employing stand-up comics. Mockery is not funny unless you are a late-night talk show host impersonating a politician. Mockery is personal, it is mean, and it doesn’t go over well in court.
- Nip it in the bud. Even if one employee mocks another’s accent in a poor (though clear) attempt at humor rather than harassment, it is best to stop it the first time it happens rather than chalking it up to a single instance of insensitivity. Not only could the employee repeat the error, but coworkers who overhear may think it is okay to join in. If that happens, employers may really have a problem because, even if the mockery isn’t severe in one instance, it can become bad enough to support a hostile work environment claim, if repeated. And obviously, if an employee complains, take swift action to stop the mockery, as indicated by both the Bryant and Rojas cases.
- Actions speak louder than words. If commenting on someone’s disability in the context of taking an adverse employment action can support a discrimination claim, what do you think mimicking the disability will do in the same context? Indeed, it could be that those engaged in mockery exaggerate the effect of the disability (or other characteristic) for comedic or dramatic effect (as could have been the case in Lewis), thereby making things unforgettable, and perhaps unforgiveable in the eyes of a jury. At the very least, it would likely be considered evidence of discriminatory intent.
In addition, the usual advice applies: maintain and enforce policies prohibiting discrimination, harassment, and retaliation; adequately train all personnel on those policies; and fully investigate any complaints of violations.
An Ohio prison corrections officer was justifiably terminated after his employer discovered that he had been secretly living a double life as a member of a criminal biker gang for the past four year. In fact, not only was he a member of the gang, he held the title of “enforcer” (State of Ohio Department of Rehabilitation & Correction, Franklin Medical Center and Ohio Civil Service Employees Association, Local 11, AFSCME, AFL-CIO, Craig A. Allen, Arbitrator).
The officer, the 14-year employee, filed a grievance contending that he was able to keep his two lives separate, as evidenced by the fact that his evaluations during the investigatory period were positive, and that he personally received no criminal convictions during his time in the gang. He also argued that his employer’s investigation and disciplinary action were fatally flawed, and he denied any knowledge that his gang was engaged in any criminal activities. To counteract these arguments, the employer pointed out that the officer knew the gang’s president had not only been convicted of a crime, but that he was also locked up in the same prison where the officer worked. It also pointed out that the officer had once been arrested in a police raid in which he was caught carrying two guns, but he was later released without the employer discovering the arrest because of his prison affiliation.
The arbitrator sustained the grievance. Every year since 2007, officers had been given training on outlaw motorcycle gangs, yet the officer never disclosed his affiliation. Furthermore, under employer rules, the officer was obligated to disclose his relationship with any prisoner, which he failed to do. His claim that the gang was simply a collection of people who wanted to ride motorcycles and have fun, rather than a criminal gang, was impossible to accept. (If for no other reason than that he held the title of “enforcer.”) Murders, assaults, and shootings were going on all around him, and gang members were going to prison. The woman who recruited him to the gang was a suspect in an attempted homicide.
The arbitrator concluded that the employee’s affiliation with this gang brought discredit to the employer and seriously compromised his ability to do his job. The fact that he received positive performance reviews did not offset the seriousness of his off-duty conduct, nor did the fact that he was not convicted of any crime. The employer’s investigation was complete and untainted, and it had just cause to terminate him.