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Top labor and employment developments for June 2017

July 6th, 2017  |  Lisa Milam-Perez  |  Add a Comment

The Supreme Court closed out a rather anti-climactic term, employment law-wise, in June. However, the month offered numerous significant developments, including a steady stream of welcome news for employers from the Department of Labor. We also saw forward movement on solidifying a Trump NLRB and a significant win for the president on his travel ban, thus far the defining issue of his presidency. Here, an overview of June’s biggest developments in labor and employment law:

DOL “guidances” revoked. With new Labor Secretary Alexander Acosta now settled in at the helm, the Department of Labor has set about undoing much of the Obama DOL’s regulatory actions. On June 7, Acosta announced that the DOL has withdrawn its 2015 and 2016 informal guidance on joint employment and independent contractors. Administrator’s Interpretation No. 2015-1, issued on July 15, 2015, took the position that most workers are employees under the FLSA, not independent contractors. Administrator’s Interpretation No. 2016-1, issued January 20, 2016, advised that the test for joint employment uses the same expansive “suffer or permit to work” language found in the FLSA—“the broadest definition that has ever been included in any one act,” as the Supreme Court observed. The DOL said its use of this “ensures that the scope of employment relationships and joint employment… is as broad as possible.” In issuing the documents, the Obama DOL said it was responding to the evolving nature of workplace relationships—the rapidly growing “gig” economy and increasingly “fissured workplace”—and looking to ensure that the nation’s statutory employment protections continue to apply to as broad a swath of workers as intended. However, opponents contended these issuances exceeded the agency’s statutory authority and imposed potential barriers to job growth. The rollback was a welcome relief to employers—and to businesses that found themselves at greater risk of liability under the sweeping definition of “employer” under the Obama DOL.

Opinion letters are back! On June 27, DOL announced that it will reinstate its practice of issuing opinion letters, which had been on hiatus under the Obama administration. Opinion letters are official written opinions issued by the Wage and Hour Division in response to specific requests from employers (and far less so, employees) addressing how the law applies in a particular set of circumstances. The Obama DOL had issued (very) occasional “Administrator’s Interpretations” instead; these were meant to offer broad guidance to the regulated community as to how the agency would apply and interpret the law (see, for example, the now-revoked joint employer and independent contractor guidances). This came as more good news for employers, who have long sought such guidance as to how the law applies in specific circumstances.

Overtime revamp revamped. In a brief filed June 30 in the Fifth Circuit, the current arena for the legal challenge to the DOL’s revised overtime rule, the agency made it clear that it will vigorously defend its right to establish a salary level for purposes of defining who qualifies as exempt from overtime under the FLSA’s “white collar” exemptions. However, the agency indicated that it will not defend the $913 per week salary level ($47,476 annually, for full-time workers) set by the Obama administration, after a federal district court enjoined the rule from taking effect. The DOL has asked the appeals court to resolve only the threshold question of the agency’s statutory authority to set a salary level, “without addressing the specific salary level set by the 2016 final rule.” Days earlier, the DOL on June 27 announced it had sent a pending request for information on the overtime rule to the Office of  Management and Budget for review, giving the public yet another opportunity for comment—and signaling that a significant revamp of the revised regulation was in the works.

Persuader rule purged. In a June 12 Federal Register notice, the Office of Labor-Management Standards formally announced that it intends to rescind its much-maligned “persuader” rule, officially deemed “Interpretation of the ‘Advice’ Exemption in Section 203(c) of the Labor-Management Reporting and Disclosure Act.” The rulemaking “reinterpreted” the advice exemption (which exempts from statutory reporting and disclosure requirements the work of labor relations consultants unless they communicate directly with employees to persuade them concerning union organizing). The rule also revised OLMS Forms LM-10 and LM-20, documents that must be filed when an employer engages a labor relations consultant to undertake efforts to persuade employees regarding whether to vote for union representation. The rule was scheduled to take effect April 2016, but a federal court enjoined the measure last June, calling it “defective to its core.” The court later made the injunction permanent. The DOL appealed that decision to the Fifth Circuit, but on June 2, the agency filed a motion to hold in abeyance its appeal, noting its intention to commence notice-and-comment rulemaking on a move to rescind the rule and adding that it was seeking expedited review at the OMB.

NLRB nominations announced. President Trump nominated two individuals to round out the five-member NLRB. On June 19, he announced his choice of Marvin Kaplan to serve as NLRB member for the remainder of a five-year term expiring August 27, 2020. Kaplan is currently chief counsel of the Occupational Safety and Health Review Commission (OSHRC). Before that, he spent nearly seven years as counsel, first to the House Oversight and Government Reform Committee, and then to the House Education and the Workforce Committee, where he was responsible for labor and employment oversight and policy. Kaplan began his public service in 2007 as a special assistant in the DOL’s Office of Labor-Management Standards. On June 27, the president nominated William J. Emanuel, currently a shareholder at Littler, to fill the final vacancy. Emanuel has extensive experience representing employers in traditional labor matters, including NLRB cases, collective bargaining, labor arbitrations, union election campaigns, strikes and picket lines, and litigation concerning union access to employers’ private property. House and Senate Republicans leaders of the Congressional labor committees lauded the picks. Senate HELP Committee Chair Lamar Alexander (R-Tenn.) promised the committee would move promptly on the nominations.

Undoing “quickie” elections. On June 14, Alexander introduced the Workforce Democracy and Fairness Act, which would amend the NLRA to roll back the Obama-era’s so-called “quickie election” rule. Opponents have taken issue with several aspects of the revised representation election procedures, which took effect in April 2015. The Senate bill, S. 1350, would undo the revised election rule’s problematic features, which sharply curtailed the time in which employers can respond to a union organizing campaign and the extent to which they can raise pre-election challenges. Among other provisions, the bill mandates that no union election will be held in less than 35 days; provides employers at least 14 days to prepare their case to present before a NLRB election officer; requires the NLRB to determine the appropriate bargaining unit and address any questions of voter eligibility before the union is certified; and gives employers at least seven days to provide a list of employee names and one additional piece of contact information chosen by each individual employee, protecting workers’ privacy.

In even bigger news, the House Committee on Education and the Workforce advanced three bills on June 29 that would dramatically alter federal labor law in 22-16 votes. The Workforce Democracy and Fairness Act (H.R. 2776) would roll back the NLRB’s revised election procedures as well as the Board’s new standard for recognizing “micro” bargaining units. (Here: a fact sheet on the bill.) The Employee Privacy Protection Act (H.R. 2775) reverses Obama Board policies giving unions greater access to employee contact information during union organizing campaigns. (The committee released a fact sheet.) The Tribal Labor Sovereignty Act (H.R. 986) would amend the NLRA to clarify that it does not apply to any enterprise or institution owned and operated by an Indian tribe and located on tribal land. (Here, one more fact sheet.)

DOJ switches sides on class waivers. In a rare move, the Justice Department has switched sides in a case pending before the Supreme Court. Here, the flip-flop came in an amicus curiae brief filed by the solicitor general on June 16 in NLRB v. Murphy Oil USA, Inc. (No. 16-307), along with two other cases, Epic Systems Corporation v. Lewis (No. 16-285) and Ernst and Young LLP v. Morris (No. 16-300).  The High Court had granted certiorari in January to address whether arbitration agreements that bar employees from pursuing work-related claims on a collective or class basis in any forum violate the NLRA. The solicitor general represented the NLRB on its petition for certiorari and its reply to Murphy Oil’s response, arguing in favor of the Board’s position on arbitration agreements. In the subsequent amicus brief, however, the solicitor general is now arguing against the Board in Murphy Oil, and in support of the employers in Ernst & Young and Epic Systems. On the same day, the NLRB announced that the acting solicitor general has authorized the Board to represent itself in the Murphy Oil case. How vigorously the reconfigured, Republican-majority NLRB will pursue its case, however, remains to be seen.

Supreme Court lifts travel ban. The Supreme Court on June 26 granted certiorari to review Fourth and Ninth Circuit decisions affirming injunctions against Sections 2(c), 6(a), and 6(b) of President Trump’s second “travel ban,” and also granted in part the Trump administration’s request to stay the injunctions in the meantime. Finding that the balance of equities changes depending on whether a foreign national has a relationship to a person or entity in the United States, the High Court narrowed the injunctions. EO 13780 “may not be enforced against foreign nationals who have a credible claim of a bona fide relationship with a person or entity in the United States. All other foreign nationals are subject to the provisions,” the High Court ruled in its June 26 per curiam decision in Trump v. International Refugee Assistance Project.

Trump initially issued EO 13769, the so-called “travel ban,” on January 27. Among other things, the measure suspended for 90 days admission to the United States by individuals from seven majority-Muslim countries. A federal court in Washington enjoined enforcement in part, and the Ninth Circuit refused to stay that order. On June 12, the Ninth Circuit largely affirmed the nationwide preliminary injunction against Sections 2 and 6 of the revised travel ban. Two weeks later, however, the High Court handed the Trump administration a major win.

DHS rescinds DAPA program. The Trump administration on June 15 rescinded the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program, erasing a path for undocumented aliens with a U.S. citizen or lawful permanent resident child to be considered for deferred deportation action. DHS Secretary John F. Kelly signed a memorandum rescinding the November 20, 2014 memorandum that created the DAPA program because, as the administration sees it, there is no credible path forward to litigate the currently enjoined policy. A DHS release announcing the rescission described the details of the DAPA program. In short, the program sought to implement immigration reform measures proposed by President Obama in November 2014 after reform efforts had stalled in Congress. But the program had been blocked by a federal district court. A preliminary injunction also blocked the proposed expansion of a similar program, Deferred Action for Childhood Arrivals (DACA), initially implemented in 2012, which expanded work authorization for recipients for three years versus two years.

Church-affiliated plans dodge ERISA oversight. A pension plan maintained by a church-affiliated hospital qualifies as a church plan even if not established by a church, and, therefore, is exempt from ERISA regulation, the U.S. Supreme Court ruled, reversing decisions by the Third, Seventh, and Ninth Circuits. The decision addressed a recent wave of litigation challenging the view of the federal agencies responsible for administering ERISA (Advocate Health Care Network v. Stapleton, June 5, 2017). The petitioners before the Court were church-affiliated nonprofits that run hospitals and other healthcare facilities, and offer defined benefit pension plans to their employees. Those plans were established by the hospitals themselves—not by a church—and are managed by internal employee benefits committees. The federal agencies read the ERISA provisions at issue as exempting such plans from the statute’s mandates. However, the district courts handling the cases agreed with the employees’ position that a church plan must be established by a church for the plan to be exempt from ERISA. Three courts of appeals affirmed those decisions. But the Supreme Court reversed. It was not disputed that under ERISA, a “church plan” need not be maintained by a church; it may instead be maintained by a principal-purpose organization. At issue, however, was whether a plan maintained by that kind of organization must still have been established by a church to qualify for the church-plan exemption. The High Court agreed with the hospitals that the relevant statutory provision intended to bring within the church-plan definition all pension plans maintained by a principal-purpose organization, regardless of whether a church first established them.

Appellate jurisdiction over class cert denials. In a non-employment class action lawsuit, a unanimous Supreme Court ruled that circuit courts lack jurisdiction under 28 U.S.C. §1291 to review orders denying class certification (or an order striking class allegations) after the named plaintiffs have voluntarily dismissed their claims with prejudice. The High Court held that the voluntary dismissal did not qualify as a “final decision” within the meaning of Section 1291, and that allowing the use of the tactic by plaintiffs would undermine Section 1291’s firm finality principle, which was designed to guard against piecemeal appeals. It also would subvert the balanced solution that FRCP 23(f) put in place for immediate review of class action orders. (Microsoft Corp. v. Baker, June 12, 2017). Plaintiffs in putative class actions cannot transform a tentative interlocutory order into a final judgment within the meaning of Section 1291 simply by dismissing their claims with prejudice while preserving the right to “revive” those claims if the denial of class certification is reversed on appeal, the High Court held. Even more than the “death-knell” doctrine discussed in detail in its opinion, the Court found that the voluntary-dismissal tactic invites protracted litigation and piecemeal appeals. Therefore, it reversed and remanded the Ninth Circuit’s judgment.

Circuit scuffle over representative proof. Responding to a Supreme Court order that vacated its prior opinion and remanded for further consideration in light of Tyson Foods, Inc., v Bouaphakeo, the Sixth Circuit found that the High Court’s Tyson decision did not compel a different resolution in this case, and that Tyson’s ratification of the Mt. Clemens legal framework and validation of the use of representative evidence supported its original decision. Once again, the appeals court affirmed the certification of an FLSA collective action, and agreed with the lower court that sufficient evidence supported jury verdicts in favor of cable company technicians who challenged the employer’s time-shaving policy (Monroe v. FTS USA, LLC, June 21, 2017). A vigorous dissent by Judge Stranch called into question the use of representative evidence, particularly here, where there were ostensibly “three different ways in which the employer violated the FLSA.” In her view, the plaintiffs should have broken their suit into subclasses. Instead, the court took an “all-or-nothing approach to certifying the collective in this case,” and forced the jury to deliver a classwide verdict—to decide whether the employer was liable to everyone in the class or no one, “when the truth lies somewhere in the middle.”

Deepening split on tip credits. The Eleventh Circuit, in an unpublished decision, held that a class of valet parking employees whose tips were diverted could not sue their employer under FLSA, Section 203(m) because the employer did not avail itself of the tip credit. The plaintiff alleged that the employer illegally diverted a portion of the tips. However, she did not contend that the employer used tips as a credit against the minimum wage, or that it failed to pay minimum wage or overtime. She argued, nonetheless, that tips are the property of employees—regardless of whether the employer takes a tip credit—and so the tips were not the employer’s to divert. However, the appeals court held that Section 203(m) does not require employers to return tips to employees if it does not take the tip credit. Therefore, the FLSA provided no relief for the tip diversion (Malivuk v. Ameripark, LLC, June 9, 2017). Weeks later, the Tenth Circuit weighed in, agreeing with the Eleventh Circuit and rejecting the Ninth Circuit’s contrary holding. More emphatically, the Tenth Circuit held the DOL exceeded its authority when it implemented a regulation categorically prohibiting employers from retaining tips regardless of whether they avail themselves of the tip credit. The underlying suit was brought by a catering employee whose employer pocketed the gratuities added by customers when paying the final bill after catering events. Here, too, the caterer did not take the tip credit—in fact, the server earned well above the minimum wage—so the tip-credit provision did not apply, and she had no beef. The DOJ had filed an amicus brief in the case to defend the DOL regulation, to no avail (Marlow v. The New Food Guy, Inc., June 30, 2017).

A circuit split is deepened as to the DOL’s authority to regulate tips when the tipped employees earn more than the minimum wage. Currently a petition for certiorari is pending in the Supreme Court in a challenge to the DOL’s policy brought by the National Restaurant Association and several state associations. “It is becoming clearer that the Supreme Court will need to step in to declare what the law is (and is not),” said Paul DeCamp, a Principal in the Washington, D.C., office of Jackson Lewis (and the DOL’s Wage and Hour Administrator during the Bush administration). DeCamp is lead counsel for the National Restaurant Association in the case.

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Innovators in accessibility communications technology honored by FCC Chairman

June 29th, 2017  |  Deborah Hammonds  |  Add a Comment

FCC Chairman Ajit Pai recently announced the four winners and two honorable mentions of the 2017 Chairman’s Awards for Advancement in Accessibility (Chairman’s AAA). Established in 2011, the awards recognize innovative communications technology designed for people with disabilities.

“Communications technology has awe-inspiring power to open doors that have too-long been closed to Americans with disabilities,” said Chairman Pai. “I’m grateful that the FCC can play a role in promoting life-enhancing breakthroughs and encouraging collaborations to fulfill the promise of accessible technologies for millions of Americans.”

In his speech, Chairman Pai said the Commission had “no higher calling” than to extend digital opportunity to all Americans. He was proud that over the past five years, he and his colleagues had worked to empower individuals with disabilities, noting that many of their actions flowed from implementation of the Twenty-First Century Communications and Video Accessibility Act (CVAA). He also noted that it was a sign of success that over the past six years, the event had grown to attract thousands of people from around the world who exchange information about accessible mobile technologies.

The winners of the 2017 Chairman’s AAA:

Ava App for People Who Are Deaf or Hearing Impaired

Ava (”audio-visual accessibility”) is a mobile application that connects multiple smartphones and uses the microphone on each individual device to transcribe a conversation among several parties. For example, in a multi-party meeting, a person who is deaf or hard of hearing can launch the Ava app on a smartphone or tablet and invite hearing participants to join via their smartphones. The app generates captions from each participant that are displayed on the user’s device. Using multiple devices improves the quality of the sound and reliability of the speech-to-text engine, and makes it possible to identify speakers automatically.

Facebook – Automatic Alt Text (AAT)

Alt text is hidden text that screen readers speak aloud to describe an image that cannot be “read” by those devices. This technology enables people who are blind, visually impaired or print-disabled to understand the content of photos, drawings, charts and diagrams. AAT is a new, free feature on Facebook that uses artificial intelligence and object recognition to automatically generate alt text for such images.

The Integrated Described Video Best Practices Guide

The Integrated Described Video Best Practices Guide is an Accessible Media Inc.-led initiative created in collaboration with the Canadian Association of Broadcasters, broadcast service providers, described video practitioners and members of the public. The guide was created to encourage producers to naturally include more descriptive text in scripts, reducing the need to add video description to program content after it is created. The free guide highlights the benefits of IDV and includes best practices and techniques that can be used to create inclusive programming that is more easily understood by blind and low-vision individuals.

Amazon – VoiceView

Amazon’s VoiceView speaks out loud text that is on-screen as a blind, visually impaired or print-disabled user navigates menu options and settings for video programming via Amazon’s “Fire TV Stick with Alexa Voice Remote,” a stand-alone streaming video programming device. Users can customize VoiceView’s rate of speech, volume and key echo, which determines how text characters are echoed back to the user as they are entered with the on-screen keyboard. Other features include: “orientation text,” which provides a onetime description of how to navigate with VoiceView; “review” mode, allowing a user to explore the grid layout of a Fire TV screen in detail; and additional fine control of navigation options for text blocks and descriptive content.

Honorable mentions:

Aira App

Aira is a smartphone app and paid subscription service that connects blind users to sighted agents who use geolocation information, streaming video, and other interconnected devices to provide guidance and information about the user’s surroundings.

Teach Access

Teach Access is an initiative by industry, academia and accessibility advocates to expand the quality and quantity of undergraduate programs that teach the fundamentals of accessibility in fields such as design, computer science and human computer interaction. The initiative has established a core set of Accessibility Fundamental Concepts and Skills on web accessibility, federal accessibility laws and industry best practices, along with an industry guest speakers program and online accessibility tutorials for the purpose of preparing designers, engineers and researchers to build products and services inclusively.

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Creative forces behind fictional crime fighters—and the EEOC—are on the case in advancing equality for women in Hollywood

June 21st, 2017  |  Cynthia L. Hackerott  |  Add a Comment

The impressive box-office performance of the new Wonder Woman movie, the recent success of two female stars of a long-running network television series in negotiating pay increases on par with their male counterparts, and reports earlier this year that the EEOC is in settlement talks with the major studios to resolve charges that they systemically discriminated against female directors are promising signs that equal opportunity and pay equity for women in Hollywood is progressing. However, getting a “Hollywood ending” as to gender equity remains a struggle.

Success illustrates value of wonder women. In two recent developments of note, women who have brought beloved fictional female crime fighters to movie and television screens have triumphed. First, Forbes reported just yesterday that the new Wonder Woman film has earned around $582-$585 million worldwide as of Monday, and is expected to cross the $600 million-plus global milestone on Thursday. Wonder Woman is the first superhero film that has both a woman, Gal Gadot, in the title role, and a woman, Patty Jenkins*, as its sole director. According to the Forbes article, the film is well on its way to becoming the biggest-grossing live-action movie ever from a female director, and it looks like the film will be the largest grossing movie ever helmed by a solo female director. A June 14 piece in Variety discusses how the critical and commercial success of the film could pave the way for more female directors. Indeed, Variety was the first to report (in an exclusive story) yesterday that Jenkins is already at work in developing a sequel.

Second, earlier this month, various media outlets, including Variety and Deadline, reported that long-time “Criminal Minds” stars Kirsten Vangsness and A.J. Cook closed deals to return to the 13th season of the CBS series (a personal favorite of mine) after the women negotiated together  seeking parity with their male co-stars, Joe Mantegna and Matthew Gray Gubler, who both closed their contracts in May. The reports indicate that the two actresses have landed raises that put them essentially on par with Gubler. According to the Deadline story, the female stars took a similar stand during their 2013 negotiations, with less success. The two woman had consistently been paid less than half of what their male counterparts, Gubler and Shemar Moore, were making at the time, Deadline noted, reporting that while they eventually secured salary increases, they did not achieve parity at that time.

On June 14, Vangsness tweeted that she was correctly quoted in the Variety article as to the following statement she made last month when asked by TMZ if she would not return to the popular show if she was unsuccessful in her pay parity efforts:

“’That’s the way it works sadly,’ she said. ’I feel so uncomfortable about it and I feel so sad. You know what it would be telling me? That my value isn’t what I thought it was and in that case, I need to go get another job.’ Speaking of Mantegna and Gubler, she continued, ‘There is the rationale that they’re a little more popular or they’ve paid their dues a little more — that’s absolutely true and that’s why I’m not asking to be paid the same amount as them. I’m asking to be paid closer. Just closer.’”

EEOC reportedly in settlement talks. This past February, Deadline reported that an EEOC investigation, started in 2015, into allegations of discrimination against female directors in the film and television industries “is over” and the agency “has moved into the settlement phase.” Deadline quotes “a knowledgeable source” as saying “‘[e]very one of the major studios has received a charge contending that they failed to hire women directors.” If the agency is unsuccessful in resolving the charges, it may file a lawsuit, Deadline’s source said (noting the EEOC’s standard process).

In October 2015, the EEOC began contacting female directors to investigate gender discrimination in Hollywood, according to a contemporaneous report in the Los Angeles Times. Deadline published a similar report at that time. An updated story posted by the LA Times on May 11, 2016, reports that the EEOC interviewed more than 50 women directors during the fall and winter of 2015, and the federal agency was “widening its circle of interview subjects to include studio executives, producers, agents, actors and male directors.”

Also on May 11, 2016, the ACLU issued a statement reporting that the EEOC and the OFCCP were investigating allegations of discrimination against women directors in the film and television industries. In that statement, Melissa Goodman, director of the LGBTQ, Gender and Reproductive Justice Project at the ACLU of Southern California said that the investigation was launched following the group’s 2015 efforts in which it sent letters to the EEOC, the OFCCP, and the California Department of Fair Employment and Housing asking these government agencies “to investigate the systemic failure to hire women directors at all levels of the film and television industry.” Among other statistical evidence, the letters cited a 2015 USC study which found that only 1.9 percent of directors of the top-grossing 100 films of 2013 and 2014 were women, and that, of the 1,300 top-grossing films from 2002-2014, only 4.1 percent of all directors were women. Wide disparities also exist as to women in directing episodic television, the letters claimed.

The failure to hire women directors in film and television cannot be attributed to a lack of qualified or interested women, the ACLU asserted, stating that estimates place the number of female students in prominent film schools such as USC, NYU and UCLA who are focusing on directing as roughly equal to the number of men.

In a statement commenting on the February 2017 report in Deadline, the ACLU noted that, while it could not independently confirm the information in the Deadline piece because federal law prohibits government agencies from commenting on specific ongoing investigations, it had “no reason to doubt its veracity.” Moreover, the ALCU believes that the story was bolstered by another Deadline article earlier that month concerning December 2016 contract negotiations between the major studios and networks and the Directors Guild of America during which the guild pressed producers to adopt a rule “’that would have required producers to interview female and minority candidates as part of the hiring process for directing jobs.’” According to Deadline, the companies, “declined to discuss the proposal ‘for legal reasons’” that involved their settlement talks with the EEOC.

Despite the recent successes of prominent female directors, the vast majority of women directors are still denied equal opportunity, the ACLU maintains in its February 2017 statement, citing another USC study published that same month which showed that “the percentage of women directing movies in 2016 fell by nearly 50 percent from the 2015 number, all the way down to the same percentage as in 2007.”

“And even if a female director does get hired,” the ACLU statement continues, “research shows she’s much less likely than a male director to get hired again.”

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* I cannot resist pointing out that, like me, Jenkins grew up primarily in Lawrence, KS, and attended my alma mater, Lawrence High School, through her junior year.

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Employee’s refusal to provide social security numbers of children results in denial of enrollment in health plan

June 15th, 2017  |  Ron Miller  |  Add a Comment

There was no way around the eligibility requirements of a union healthcare benefit plan for a union member, even if those requirements violated his religious beliefs, ruled a federal district court in California in Sanchez v. Teamsters Western Region & Local 177 Health Care Plan. The plan was adamant that the member would have to provide proper certified birth certificates and social security numbers for the dependent children he sought to enroll in the plan, even though he asserted that he could not receive the social security numbers of his children because of his belief in God’s law.

Change in plan administrator. The employee worked for UPS, and had been a member of the Teamsters’ union for over 15 years. He received benefits in accordance to the union’s collective bargaining agreement between the employer and union. In 2014, the union began using the Teamsters Western Region Health Care Plan for its health care, and Southwest Service Administrators (SSA) administered it. The employee met the eligibility requirements for benefits, and he alleged that his dependents were also eligible.

Enrollment of dependents denied. The employee tried to enroll his three children into the plan by providing records of their birth, affidavits, letters from the hospital, and a photocopy of the Sanchez’s family bible record. However, the plan’s eligibility and enrollment department declined to enroll his dependents without proper certified birth certificates and social security numbers. According to the employee, his religious beliefs prevented him from acquiring social security numbers for his children. He submitted a written appeal, and provided the requested birth records, but not social security numbers. The appeal failed and his children were denied enrollment. Thereafter, he initiated this lawsuit alleging that the union violated 42 U.S.C. § 1981 and Section 7 of the Privacy Act. The defendants filed a motion to dismiss.

Intentional discrimination. The court found that although the employee stated that he could not receive the social security numbers of his children because of his belief in God’s law, he did not state that the denial of enrollment in the plan for his children was based on a desire to intentionally discriminate against his race or religious beliefs. As a consequence, he could not maintain a suit for violation of his rights under §1981.

The employee first alleged that by denying his children enrollment in the plan, the union and administrator violated §1981, which protects against intentional race-based discrimination in making contracts. The defendants argued that this claim should be dismissed because the employee alleged that his children were denied health insurance coverage for religious, not racial, reasons, and there was no allegation of intentional discrimination.

To obtain relief under §1981, a plaintiff must allege intentional or purposeful discrimination. Further, the intentional discrimination must be racially based. Here, the employee’s claim was legally insufficient. He merely alleged that the plan denied his children’s enrollment after not receiving the documentation the plan requested. There was no suggestion that the plan’s denial was related to race or other discrimination. Accordingly, the court granted the union’s motion to dismiss the claim under §1981.

Privacy claim. The employee first alleged that the union violated Section 7 of the Privacy Act. Section 7 provides, in part, that it is unlawful for any governmental agency to deny any individual any right, benefit or privilege provided by law because of the individual’s refusal to disclose his social security number. Moreover, he alleged that the defendants were withholding agents under 26 U.S.C. § 6109(a)(3), and therefore subject to Section 7. According to the employee, when a government, state, or private employer makes a request for information, such as the collection of social security numbers, it is acting as a withholding agent under § 6109(a)(3). Therefore the defendants were acting as a withholding agents by requesting social security numbers.
The court found that the employee’s statement that the defendants were acting as a withholding agent by requesting social security numbers was not an accurate reading of § 6109(a)(3). Neither § 6109(a)(3) nor its other subdivisions addressed withholding agents or stated that a party may become a withholding agent. Thus, the employee’s conclusory allegation that defendants became withholding agents by asking for social security numbers was not supported by § 6109(a)(3).

Private right of action. Alternatively, the defendants argued that they were not liable under Section7 because a private right of action extends only as against agencies of the government. The Privacy Act’s private right of action is limited to actions against agencies of the government, and does not apply to private individuals, state and local officials, or private entities. Here, the employee did not allege any nexus between the defendants and the government, so that they maintained their status as private entities. Further, he did not allege any deprivation of a benefit or privilege that is provided by law. Rather, he alleged that the defendants denied his children the right to benefits provided by the CBA. Receiving health care benefits under the plan was not a legal right nor law. Accordingly, the court granted the defendants’ motion to dismiss the Privacy Act claim.

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When an employee requests a religious accommodation, take it on faith that his belief is sincere

June 13th, 2017  |  Lisa Milam-Perez  |  Add a Comment

I’m not sure what the employer was thinking, with this one. The case had drawn considerable attention because the facts were novel. And as religious accommodation cases go, the employer’s defense was novel, too.
The employer had just implemented a new biometric hand scanner system to better track its employees. A devout Evangelical Christian with 40 years at the company told his supervisor that he could not use the hand scanner. As he understood the Book of Revelation, the Mark of the Beast brands followers of the Antichrist, allowing the Antichrist to manipulate them. Use of a hand-scanning system would result in being so “marked,” he feared, “for even without any physical or visible sign, his willingness to undergo the scan … could lead to his identification with the Antichrist.” Because using the hand scanner would violate his sincerely held religious beliefs, he asked for a religious accommodation, some alternative means by which the company could follow his comings and goings.

I’m not sure what the employer was thinking with this one. The case had drawn considerable attention because the facts were novel. And as religious accommodation cases go, the employer’s defense was novel, too.

The employer had just implemented a new biometric hand scanner system to better track its employees. A devout Evangelical Christian with 40 years on the job told his supervisor that he couldn’t use the hand scanner. As he understood the Book of Revelation, the Mark of the Beast brands followers of the Antichrist, allowing the Antichrist to manipulate them. Use of a hand-scanning system would result in being so “marked,” he feared, “for even without any physical or visible sign, his willingness to undergo the scan … could lead to his identification with the Antichrist.” Because using the hand scanner would violate his sincerely held religious beliefs, he asked for a religious accommodation, some alternative means by which the company could follow his comings and goings.

But the employer was adamant. It was armed with written assurances from the scanner’s manufacturer that the system did not detect or place a mark, including the Mark of the Beast, on a person’s body. The manufacturer also offered its own interpretation of “the Scriptures,” explaining that because the Mark of the Beast “is associated only with the right hand or the forehead, use of the left hand in the scanner would be sufficient to obviate any religious concerns regarding the system.” But that was not the employee’s interpretation. And, faced with the employer’s insistence that he would be subject to discipline if he did not use the scanner (with his left hand, as the manufacturer recommended), the employee retired instead.

It’s unclear why the employer dug in its heels here, especially since, as the employee later discovered, the company had provided an alternative to the hand scanner for two employees with hand injuries. They simply had to enter their personnel numbers on a keypad attached to the system—a bypass that came at absolutely no cost or hardship to the company.

Because the employer refused to provide this accommodation for the employee’s religious beliefs, the EEOC brought a Title VII constructive discharge suit on his behalf, and won a jury verdict in his favor. The district court denied the employer’s motion  for judgment as a matter of law. Affirming, the Fourth Circuit, in EEOC v. Consol Energy, Inc., upheld the verdict, ruling there was sufficient evidence from which the jury could find a conflict between the employee’s bona fide religious belief and the requirement that he use the hand scanner.

Management lawyers typically advise employers: Never doubt the sincerity of an employee’s religious belief. Instead, focus on whether the religious accommodation that the employee has requested would be an undue hardship for the company. In this case, the employer didn’t doubt the sincerity of the employee’s belief. Where it went wrong, though, was in insisting that his religious belief was mistaken. In the employer’s view—which essentially relied on the scanner manufacturer’s interpretation of scripture—allowing the employee to scan his left hand instead of his right hand was enough to avert any potential religious conflict. In fact, at oral argument, the employer cited scripture passages “purporting to demonstrate that the Mark of the Beast can be imprinted only on the right hand.”

That the employer thought the employee’s religious beliefs were unfounded was beside the point, the appeals court explained. Nor did it matter that the scanner manufacturer, or even the employee’s own pastor, did not share his view. The jury specifically found that the employee’s religious belief was sincere, and that was all that mattered. As the appeals court pointed out, it wasn’t the employer’s place—or the court’s—“to question the correctness or even the plausibility of [the employee’s] religious understandings.”

Again, in religious accommodation cases, the dispute usually centers on the “undue hardship” question. Here, though, once the “sincerely held belief” issue was resolved, this was an easy case, the appeals court noted, because the employer conceded it would pose no additional burden on the company to have honored the employee’s religious belief. Indeed, that much was obvious, since the employer had readily granted an accommodation to other employees.

All that was left to make out a constructive discharge case was for the EEOC to show that the employee was put in such an intolerable position that he had no choice but to quit. And the appeals court affirmed: Demanding that an employee use a scanner that he “sincerely believed would render him a follower of the Antichrist, ‘tormented with fire and brimstone,’” was objectively intolerable.

Consequently, the employer was left to pay nearly $600,000 in damages, and learned a costly lesson: Courts (and juries, it seems) are quite deferential to employees’ asserted religious beliefs. Rather than debate scripture with an employee, take it on faith that his views are sincere, regardless of whether you deem them theologically sound.

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