The U.S. Department of Education’s Office of Special Education and Rehabilitative Services (OSERS) recently announced more than $121 million in grants will be awarded to help improve the outcomes of individuals with disabilities. Using a “cradle through career” approach, the monies are aimed at promoting inclusion, equity and opportunity for all children and adults with disabilities to help ensure their economic self-sufficiency, independent living and full community participation.
“These investments are significant in assisting individuals with disabilities to reach their full potential,” said U.S. Secretary of Education Arne Duncan in an October 8 press statement. “We want all individuals with disabilities to succeed and these investments symbolize our values and commitment as a nation toward achieving excellence for all.”
Among the grants, OSERS’ Rehabilitation Services Administration (RSA) awarded $47 million to fund its comprehensive and coordinated programs of vocational rehabilitation, supported employment and independent living for individuals with disabilities. And, OSERS’ National Institute on Disability and Rehabilitation Research (NIDRR) distributed $19 million to institutions of higher education and private and non-profit organizations for innovative, cutting-edge research projects.
Some of the key grants awarded by OSERS include:
University of North Carolina at Charlotte’s Technical Assistance Center on Postsecondary Education – Funded at $2.5 million, the National TA Center on Improving Transition to Postsecondary Education and Employment for Students with Disabilities (Transition Center) is the first major investment funded jointly out of RSA and OSEP to create a seamless transition process from high school through employment. The Transition Center will work with states, school districts, and vocational rehabilitation agencies to implement evidence-based and promising practices and strategies to ensure that students with disabilities, including those with significant disabilities, graduate from high school with the knowledge, skills, and supports needed for success in postsecondary education and employment.
University of Massachusetts Boston – Funded at $9 million for the next three years, the Job-Driven Vocational Rehabilitation TA Center (JDVRTAC) at the University of Massachusetts-Boston will assist state vocational rehabilitation agencies in developing training and employment opportunities for individuals with disabilities that meet the needs of employers and the demands of the local economy.
Gallaudet University – Funded at $950,000, Washington, D.C.-based Gallaudet University will support research and training to improve the accessibility, usability, and performance of technology for individuals who are deaf and hard of hearing.
TransCen – Funded at $875,000, TransCen, a non-profit organization dedicated to improving educational and employment outcomes for people with disabilities will support research and training to improve vocational rehabilitation practices for youth and young adults with disabilities.
OSERS’ Office of Special Education Programs (OSEP) also awarded $54 million to support research, demonstrations, technical assistance, technology, personnel development and parent-training and information centers. The OSEP grants include $8.7 million to WestED in San Francisco to create a Center for Systemic Improvement (CSI). The $8.7 million grant becomes the largest technical assistance investment ever funded by OSERS.
The OFCCP will not schedule supply and service compliance evaluations from October 1 through October 15, 2014 in order to allow contractors time to review and become acquainted with the new compliance review scheduling letter and accompanying itemized listing, the agency announced last week. These newly revised documents will allow the OFCCP to seek more, and more detailed, information from federal contractors during the desk audit phase of compliance evaluations. The number of items contained in the itemized listing has increased from 11 to 22, and now includes information on reasonable accommodation policies, more specific demographic information on employment decisions, more precise data for compensation analysis (aggregate data rather than the disaggregate data) and more data regarding compliance with Section 503 of the Rehabilitation Act of 1973 (Section 503) and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).
The Office of Management and Budget (OMB) approved the new scheduling letter and itemized listing, along with a revised compliance check letter, on September 30, 2014 — three years after the OFCCP submitted a revised proposal regarding changes to these documents. A notice announcing this approval, and highlighting some of changes, was published in the September 30, 2014 edition of the Federal Register (79 FR 58807-58808). OMB approval of all three documents, which are now posted on the OMB’s RegInfo.gov website, expires on March 31, 2016.
Notice of the revised proposal was published in the September 28, 2011 edition of the Federal Register (76 FR 60083-60084). The revised proposal addressed comments received regarding the OFCCP’s initial proposal issued in May of that year (76 FR 27670-27671) and, in response to those comments, contained several changes to the original proposal. The comment period on the revised proposal closed on October 28, 2011. The documents approved by the OMB on September 30, 2014 incorporate some, but not all, of the proposed changes from the 2011 revised proposal, as well as changes that the OFCCP states are needed to obtain the information required for evaluating the Section 503 and VEVRAA affirmative action programs under revised regulations which took effect earlier this year.
Changes to scheduling letter and itemized listing The September 30, 2014 Federal Register notice highlights the following approved changes:
- The scheduling letter will continue to allow contractors to submit employment activity data by either job group or job title. Thus, the OMB apparently rejected the OFCCP’s request to require contractors to submit data by job group and job title.
- Contractors will continue to provide this data by sex; however, they will submit race and ethnicity information using five specified categories instead of two broad categories (i.e., minority and nonminority).
- Regarding its compensation data requirements, the itemized listing will no longer requires that contractors submit annualized aggregate compensation data. Instead, contractors will be required to submit individualized employee compensation data as of the date of the workforce analysis in their Affirmative Action Programs, also noting the job title, job group and EEO-1 category.
- The definition of compensation is revised to include consideration of hours worked, incentive pay, merit increases, locality pay, and overtime.
- The revised letter requires contractors to provide the data electronically but only if they maintain it in an electronic format that is useable and readable.
- Several changes were made to the itemized listing to reflect regulatory changes since the letter was last approved, including changes to the OFCCP regulations regarding compensation, and regarding workers with disabilities and protected veterans.
Compliance check letter. The specific documents sought in the revised compliance check letter remain unchanged.
Supporting statement. The OFCCP’s supporting statement, which details the changes and the rationales behind them, and related documents are posted on the RegInfo.gov website at: http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201104-1250-001.
In the past six weeks, FedEx’s independent contractor model has suffered a triple blow. First, in a late August decision that the concurring judge said “substantially unravels FedEx’s business model,” the Ninth Circuit ruled in two companion decisions that FedEx delivery drivers are employees, not independent contractors, as a matter of California and Oregon law.
Next, at the end of September, a divided NLRB held that, although D.C. Circuit decisions required it to reexamine its approach in independent contractor cases, it would decline adopt the appeals court’s interpretation of Sec. 2(3) of the NLRA and accordingly found that FedEx Home Delivery drivers were employees entitled to coverage under Sec. 2(3).
Finally, the first week of October, the Kansas Supreme Court determined that FedEx delivery drivers who drive on a full-time basis were employees as a matter of law under the Kansas Wage Payment Act and not independent contractors. This most recent case covers drivers in Kansas and is part of the same multidistrict litigation as the California and Oregon cases decided by the Ninth Circuit just over a month earlier.
How did we get here? When a wave of lawsuits challenged FedEx’s independent contractor model (with cases filed in 40 states), the Judicial Panel on Multidistrict Litigation consolidated the cases for multidistrict litigation proceedings in a federal district court in Indiana. The MDL court held that nearly all of the plaintiffs were independent contractors as a matter of law in those states where their status was guided by common law agency principles. That holding applied to the California and Oregon full-time delivery drivers in the Ninth Circuit companion cases.
When the Judicial Panel on Multidistrict Litigation consolidated the class actions, it designated the Kansas class action as the lead case. The district court determined that the Kansas class plaintiffs were independent contractors under the KWPA and granted summary judgment in favor of FedEx. On appeal, the Seventh Circuit concluded that Kansas law did not clearly indicate how it should decide a close case like this one and accordingly certified to the Kansas Supreme Court whether the drivers were employees of FedEx as a matter of law under the Kansas act.
Ninth Circuit right to control test. FedEx drivers were identified as independent contractors under the company’s operating agreement (OA) that governed the parties’ relationship. While the OAs were fairly clear, the Ninth Circuit found that to the extent they were ambiguous, extrinsic evidence supported a finding that FedEx exercised substantial enough control over the drivers to suggest they were not “independent contractors.” The court considered the following:
- FedEx’s extensive and detailed grooming and appearance standards, “from their hats down to their shoes and socks.”
- FedEx’s equally meticulous vehicle specifications, including being painted a specific shade of white, marked with the FedEx logo, conforming to specific dimensions.
- Drivers’ work hours are adjusted by FedEx managers so that they work 9.5 to 11 hours daily; they cannot leave their terminals in the morning until all their packages are available and must report back to the terminals before a specified time.
- FedEx determines what packages to deliver and when. Each driver is assigned a specific service area that only can be altered at FedEx’s sole discretion.
- FedEx’s right to control the workers’ “entrepreneurial opportunities”; drivers’ ability to operate more than one vehicle or route was contingent on FedEx’s approval. To hire additional help, drivers had to be “in good standing” and replacement drivers had to be “acceptable” to FedEx.
What did they think? California also takes into consideration the parties’ beliefs as to the nature of their relationship, and the OA said the drivers were independent contractors and disclaimed any authority to direct drivers as to the manner or means of their work. But other contract provisions, plus other policies and procedures, allowed FedEx to exert considerable control over the drivers’ day-to-day work. Neither FedEx’s belief nor the drivers’ own perceptions provided the final answer. Simply calling the drivers independent contractors didn’t make it so.
Plus, the drivers’ work was “wholly integrated” into the company’s operations. “The drivers look like FedEx employees, act like FedEx employees, are paid like FedEx employees,” the Ninth Circuit noted. And picking up and delivering packages is not just part of FedEx’s regular business, it is “essential to FedEx’s core business.”
Kansas Supreme Court. As the Seventh Circuit discovered, the Kansas Supreme Court had not specifically identified a test to definitively determine employment status under the KWPA. But Kansas courts have long emphasized the right to control test, and the primary distinction between it and the economic reality test used under the FLSA to determine employee-independent contractor status is that under the economic reality test, the right to control is not considered the single most important factor. The Kansas court ultimately determined that the 20-factor test is a tool to be used in Kansas to determine whether an employer/employee relationship exists under the KWPA, and this test includes economic reality considerations, while maintaining the primary focus on an employer’s right to control.
Although the district court primarily focused on the statements in the drivers’ operating agreement, saying the actual control that FedEx exercised over the drivers was not the question, the Kansas Supreme Court found that how FedEx implemented the operating agreement was a compelling factor in determining the company’s right to control its drivers. Viewing the factors as a whole, the Kansas high court concluded that FedEx had established an employment relationship with its delivery drivers but had dressed the relationship in independent contractor clothing.
NLRB. The issue in the NLRB decision was whether drivers operating out of a FedEx Home Delivery terminal in Connecticut were employees covered under Sec. 2(3) or, instead, were independent contractors, excluded from coverage. Although the Board had taken the position that the drivers were statutory employees, the D.C. Circuit subsequently held that drivers performing the same job at two FedEx facilities in Massachusetts were independent contractors. Acknowledging that this decision raised important questions about the Board’s approach in independent contractor cases, the Board decided to reexamine its approach.
Common law agency tests. The D.C. Circuit had found the common-law agency test was the appropriate legal standard, but over the course of recent decisions, the standard had changed its focus from the employer’s right to control to the “significant entrepreneurial opportunity for gain or loss.” Acknowledging that all common law considerations were relevant, the appeals court concluded that an important way to evaluate those factors was whether the position presented the opportunities and risks inherent in entrepreneurialism.
But the Board was not convinced. It had never held that entrepreneurial opportunity, in and of itself, was sufficient to establish independent contractor status, it said. In fact, “if a company offers its workers entrepreneurial opportunities that they cannot realistically take, then that does not add any weight to the company’s claim that the workers are independent contractors.” Thus, the Board rejected the D.C. Circuit’s view that it treated entrepreneurial opportunity as the decisive factor. While actual entrepreneurial opportunity for gain or loss remains relevant, it was just one aspect of a factor that asks whether the evidence tends to show that the worker is, in fact, rendering services as part of an independent business, said the Board, finding again that the FedEx Home Delivery drivers were employees under Sec. 2(3).
The Ninth Circuit decisions are Alexander v FedEx Ground Package System, Inc dba FedEx Home Delivery and Slayman v FedEx Ground Package System, Inc dba FedEx Home Delivery, Inc. The decision of the NLRB is FedEx Home Delivery, a division of FedEx Ground Package Systems, Inc., and the Kansas Supreme Court decision is Craig v FedEx Ground Package System, Inc.
When the Supreme Court begins it Fall 2014 term on Monday, October 6, it faces a line-up of labor and employment law cases that give the Justices the opportunity to substantially shape the practice area. The issues laid at the Court’s door include weighty issues such as whether the DOL must go through notice-and-comment rulemaking before changing prior regulatory interpretations and the right of courts to pass judgment on the adequacy of the EEOC’s pre-litigation conciliation efforts. The Justices will also examine the increasingly controversial question of whether time spent in employer security screens is compensable and the extent to which companies must accommodate pregnant workers in keeping with the accommodations they extend to non-pregnant workers.
Below is a brief run-down of cases that should be on the radar of labor and employment law practitioners:
DOL’s flip-flop on FLSA’s administrative exemption. Related petitions in Perez v. Mortgage Bankers Association and Nickols v. Mortgage Bankers Association ask the Court to resolve the question of whether a federal agency must engage in notice-and-comment rulemaking before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation. The petitions were brought, respectively, by the Secretary of Labor and an intervening mortgage loan officer. The Court has consolidated the petitions and slated the question for an hour of oral argument on Monday, December 1.
Below, the D.C. Circuit reversed a district court order dismissing the Mortgage Bankers Association’s challenge to a DOL Wage and Hour Division “Administrator Interpretation” concluding that mortgage loan officers were nonexempt under the FLSA (Mortgage Bankers Association v Harris, July 2, 2013, Brown, J). According to the appeals court, since the DOL’s most recent interpretation was at odds with its earlier interpretations, the agency was required to go through the notice-and-comment process.
EEOC’s duty to conciliate. In Mach Mining v. EEOC, the Justices are slated to resolve the increasingly controversial question of whether and to what extent courts may enforce the Commission’s mandatory duty to conciliate discrimination claims before filing suit. The case has not yet been set for oral argument.
The Seventh Circuit ruled that Mach Mining could not raise the EEOC’s failure to conciliate in good faith as an affirmative defense to the agency’s sex discrimination in hiring suit against the company. The decision was at odds with the rulings of other federal circuit courts. The language of Title VII, the lack of a meaningful standard for courts to apply, and the overall statutory scheme convinced the Seventh Circuit that an alleged failure to conciliate is not an affirmative defense to the merits of a discrimination suit. The Seventh Circuit also explained that finding in Title VII an implied failure-to-conciliate defense would add to that statute an unwarranted mechanism by which employers could avoid liability for unlawful discrimination.
There is a messy circuit split on the question that begs for resolution by the Court. According to the EEOC, in contrast to the Seventh Circuit, the Second, Fourth, Fifth, Sixth, Eighth, Tenth, and Eleventh Circuits have concluded that courts are permitted at least to inquire into the sufficiency of the agency’s informal conciliation efforts. However, those courts of appeals differ as to what standard the agency must meet and whether its failure to meet that standard warrants dismissal of a Title VII lawsuit on the merits.
Compensation for time spent in employer security screening. Integrity Staffing Solutions, Inc. v. Busk presents a question that employees are challenging more and more: Whether time spent in security screenings is compensable under the FLSA, as amended by the Portal-to-Portal Act? The Court will hear oral argument on Wednesday, October 8.
The petition for cert was filed by an employer that was sued by warehouse workers seeking back pay, overtime, and double damages under the FLSA for time spent in security screenings after the end of their work shifts. The employees purportedly were not compensated for up to 25 minutes spent at the end of their workday waiting to be searched and passed through metal detectors.
The district court initially dismissed the warehouse workers’ claims on the grounds that such activities were not compensable under the FLSA. But the Ninth Circuit saw it differently and reversed. As alleged, the security clearances were necessary to the employees’ primary work as warehouse employees and done for Integrity’s benefit, according to the appeals court. As a result, the employees stated a plausible claim for relief.
Integrity asserts that the Ninth Circuit’s ruling “squarely conflicts with decisions from the Second and Eleventh Circuits holding that time spent in security screenings is not subject to the FLSA because it is not ‘integral and indispensable’ to employees’ principal job activities.”
Pregnancy accommodations. In Young v. United Parcel Service, Inc., the Justices are asked to determine the extent to which employers must accommodate pregnant employees in light of accommodations extended to other workers. Specifically, the question for review is: “Whether, and in what circumstances, an employer that provides work accommodations to nonpregnant employees with work limitations must provide work accommodations to pregnant employees who are ‘similar in their ability or inability to work.’” The case is scheduled for oral argument on Wednesday, December 3.
The petition for cert was filed by an employee who became pregnant during a leave of absence to receive in vitro fertilization, but found when she tried to return to work, UPS would not accommodate her 20-pound weight-lifting restriction. The question presented is “exceptionally important,” according to the petition, which points to a recent observation by the EEOC’s General Counsel: “[d]iscrimination against pregnant women and caregivers potentially affects every family in the United States.”
The Fourth Circuit held that the UPS policy providing light-duty work only to employees who had on-the-job injuries, employees with disabilities accommodated under the ADA, and employees who had lost Department of Transportation (DOT) certification was not direct evidence of pregnancy-based sex discrimination. Nor could a pregnant employee who was unable to work during her pregnancy because of a lifting restriction establish a prima facie case of pregnancy discrimination because the court agreed that she was not similarly situated to employees with work-related injuries, ADA disabilities, or those who had lost DOT certification.
Employer knowledge of need for religious accommodation. On October 2, the Supreme Court agreed to review the Tenth Circuit’s decision in EEOC v Abercrombie & Fitch Stores, Inc. involving what kind of “actual knowledge” an employer must have to be on notice that a religious accommodation is required. After losing its argument in the Tenth Circuit that proof by any means of an employer’s knowledge of an existing conflict between an employee’s religious practice and the employer’s workplace policy is enough for purposes of a prima facie religious accommodation case, the EEOC filed its petition for certiorari this summer. Ironically, the clothing retailer already had agreed to modify the policy last fall.
The EEOC had prevailed in the district court, which granted summary judgment to the EEOC finding that Abercrombie & Fitch violated Title VII by failing to provide a reasonable religious accommodation to a Muslim woman’s wearing of a headscarf, or “hijab.” Almost exactly one year ago, the Tenth Circuit reversed, finding Abercrombie was entitled to summary judgment as a matter of law because there was no genuine issue of material fact that the prospective employee never informed the store prior to its hiring decision that she wore her “hijab” for religious reasons and that she needed an accommodation for that practice due to a conflict with Abercrombie’s clothing policy.
Other pending petitions. Other cases of interest to labor and employment practitioners include:
- M&G Polymers USA, LLC v. Tackett, set for oral argument on Monday, November 10. The case presents the question whether, when construing CBAs in LMRA cases, courts should presume that silence concerning the duration of retiree health-care benefits means the parties intended those benefits to vest and thus continue indefinitely.
- Department of Homeland Security v. MacLean, slated for oral argument on Tuesday, November 4. The Justices are asked to determine whether certain statutory protections in the Whistleblower Protection Act that are inapplicable when an employee makes a disclosure “specifically prohibited by law” can bar an agency from taking enforcement action against an employee who intentionally discloses Sensitive Security Information.
- Dart Cherokee Basin Operating Company v. Owens, scheduled for oral argument on Tuesday, October 6, places an important procedural question before the Justices: Whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or is alleging the required “short and plain statement of the grounds for removal” enough?
Opening conference. The High Court held its opening conference on Monday, September 29. Following that conference, the Justices granted the petition for cert in EEOC v Abercrombie and Fitch Stores, Inc. and dismissed as improvidently granted Public Employees’ Retirement System of Mississippi v. IndyMac, a case that questioned whether filing of a putative class action serves, under the American Pipe rule, to satisfy the three-year time limitation in Sec. 13 of the Securities Act with respect to the claims of putative class members. Other pending petitions raise questions regarding the requirements of the test to determine compensable work under the FLSA when health and safety matters are at issue, ERISA’s anti-retaliation protections in the wake of unsolicited complaints to management, and whether a granted transfer request can be an adverse action in Title VII and ADEA discrimination cases, as well as several arbitration-related issues.
Fall protection tops the list of the most frequently cited workplace safety standards for fiscal year 2014, followed by hazard communication and scaffolding, according to preliminary figures from the Occupational Safety and Health Administration (OSHA). The list was announced by Patrick Kapust, deputy director of OSHA’s Directorate of Enforcement Programs, at the recent National Safety Council Congress and Expo.
The top 10 most frequently cited OSHA standards for FY 2014 include:
1. Fall Protection (29 CFR 1926.501) – 6,143;
2. Hazard Communication (29 CFR 1910.1200) – 5,161;
3. Scaffolding (29 CFR 1926.451) – 4,029;
4. Respiratory Protection (29 CFR 1910.134) – 3,223;
5. Lockout/Tagout (29 CFR 1910.147) – 2,704;
6. Powered Industrial Trucks (29 CFR 1910.178) – 2,662;
7. Electrical – Wiring Methods (29 CFR 1910.305) – 2,490;
8. Ladders (29 CFR 1926.1053) – 2,448;
9. Machine Guarding (29 CFR 1910.212) – 2,200; and
10. Electrical – General Requirements (29 CFR 1910.303) – 2,056.
Also just released, the Bureau of Labor Statistics’ latest Census of Fatal Occupational Injuries (CFOI) for 2013 indicates a preliminary total of 4,405 fatal work injuries were recorded in the U.S., lower than the revised count of 4,628 fatal work injuries in 2012. The rate of fatal work injury for U.S. workers in 2013 was 3.2 per 100,000 full-time equivalent workers, compared to a final rate of 3.4 per 100,000 in 2012. Final 2013 data from CFOI will be released in the late spring of 2015.
In line with the most frequently cited standard – fall protection – fatal falls, slips, or trips took the lives of 699 workers in 2013. Falls to a lower level accounted for 574 (82 percent) of those fatalities. In 2013, the height of the fall was reported for 466 of the fatal falls to a lower level. Of those, about 1 in 4 occurred after a fall of 10 feet or less. Another one-fifth of the fatal falls occurred from falls of over 30 feet. Ahead of fatal falls, depressingly, were 753 workers killed as a result of violence and other injuries by persons or animals, including 397 homicides and 270 suicides.