About Us  |  About Cheetah®  |  Contact Us

Blog

L&E Evolution Part II: Discrimination

October 25th, 2018  |  Published in Blog

In the second of a series of Special Briefings by Employment Law Daily, Senior Employment Law Analyst Lorene D. Park examines the evolution of federal labor and employment laws addressing discrimination and harassment based on sex (including pregnancy), age, race, religion, national origin, immigration status, LGBTQ status, military service, and more.

Highlights of this Special Briefing include:

• Changes in the definition of “sex,” with cases on same-sex harassment and stereotypes, and a Circuit split on whether Title VII prohibits sexual orientation discrimination

• Key Supreme Court decisions, including those establishing causation standards under the ADEA and Title VII, and those clarifying basic definitions (“sex” and “supervisor,” for example)

• Hot topics, such as: drug tests and medical marijuana; social media; appearance policies and race or religion; telecommuting, service animals, and other accommodations; wellness programs; caregiver discrimination; and implicit bias, among others

• Social movements and political activities impacting perceptions of discrimination and harassment, including the #MeToo movement and Trump’s policies on immigration and transgender members of the military

• Issues involving discrimination based on “perceived” race, religion, or disability

• Difficulties employers face if employees have conflicting legal rights (the tension between accommodating an employee’s sincerely held religious belief and avoiding bias against LGBTQ employees, for example)

As with the first briefing in this series, which covered changes in the employment relationship and who can be liable as an “employer,” this Special Briefing also provides practical advice for minimizing liability under Title VII, USERRA, the ADA, the ADEA, and other federal laws, given the changing realities of the workplace.


Free webinar on LGBTQ+ issues in the workplace

October 17th, 2018  |  Published in Blog

Please consider this a personal invitation to join me on October 25 at 2:00 PM Central (3:00 PM Eastern, Noon Pacific) for what promises to be an engaging and informative one-hour webinar on LGBTQ+ issues in the workplace. As many of you know, this can be a particularly thorny area for employers to navigate.

During our roundtable discussion, a panel of attorneys will provide their expert insights and practical guidance to help employers better understand the often complex LGBTQ+ issues that may arise in their own workplaces. We’ll be taking you through some “real life” scenarios.

Featured attorneys include Brooke Colaizzi, Member at Sherman & Howard L.L.C.; Eric Meyer, Partner at FisherBroyles, LLP; Michelle E. Phillips, Principal at Jackson Lewis P.C., and Nonnie Shivers, Shareholder at Ogletree Deakins.

Roundtable Discussion: Navigating LGBTQ+ Issues in the Workplace, a free webinar offering one hour of CLE credit, will address these issues and more:

  • Vulnerable applicants and employees;
  • Knowing LGBTQ+ discrimination when you see it;
  • Dealing with gender fluidity;
  • Proactive measures to prevent discrimination;
  • How to handle discrimination complaints.

Click here to register.


What federal contractors need to know about the OFCCP’s latest directives

September 20th, 2018  |  Published in Blog

On September 19, the OFCCP released two new policy Directives that the federal contract compliance agency said would shine a brighter light on its compliance activities and establish a program designed to listen to concerns that contractors may be reluctant to share.

To understand the implications of these new Directives, Employment Law Daily reached out to Polsinelli Shareholder Connie Bertram. She called them “the most recent in a series of Directives designed to facilitate contractors’ efforts to self-audit and understand their compliance obligations, and increase the transparency and accessibility of the enforcement efforts of OFFCP.”

Transparency in compliance audits. Directive 2018-08 is aimed at furthering the OFCCP’s goal of transparency in the compliance audit process. The agency explains that this Directive is the most recent of a series designed to increase transparency and the quality of compliance reviews, including hosting a series of compliance assistance events across the country, issuing a Directive requiring Pre-Determination Notifications prior to the issuance of Notices of Violation, issuing a Directive that outlines what contractors can expect during compliance evaluations and investigations, and publishing the OFCCP’s supply and service scheduling methodology, Bertram observed.

The agency states in this Directive that it “extends OFCCP’s transparency initiative to every stage of a compliance evaluation to facilitate consistency of operations, improve efficiency, and resolve collaboratively matters during compliance evaluations.”

Changes in the audit process. Bertram pointed to the following changes to the compliance audit process announced in Directive 2018-08:

  • Compliance officers will contact the contractor within 15 days of sending a Corporate Scheduling Announcement Letter (CSAL) so that the officer can provide technical assistance and support to the contractor in responding to it.
  • The OFCCP will provide a 30-day extension to provide supporting data responsive to the CSAL if (1) the contractor requests the extension prior to the initial 30 day due-date; and (2) the contractor timely submits the basic affirmative action programs (AAPs) within the initial 30-day period. If these conditions are not satisfied, the OFCCP will only allow extensions in “exceptional circumstances.”
  • The failure to submit timely AAPs or supporting data will result in the immediate issuance of a procedural Notice to Show Cause. The contractor will have an additional 30 days to submit these materials after the issuance of the Notice. After the compliance officer receives the contractor’s AAPs and supporting data, he or she will contact the contractor to confirm receipt and start the desk audit promptly, ideally within five days.
  • The compliance officer initially will review the submission to make certain that it is complete and acceptable. If there are deficiencies in the submission, the compliance officer will notify the contractor promptly and provide 15 days to cure the deficiencies. The OFCCP will issue an immediate procedural Notice to Show cause if the deficiencies are not cured.
  • The compliance officer will then review the submission and contact the contractor to request follow-up information or clarifying information. Compliance officers may not request information beyond the categories listed in the CSAL (e.g., data to refine indicators, employment applications, manager interviews) until after the desk audit has been completed and the conclusion of the desk audit has been recorded in the OFCCP’s case management system.
  • Compliance officers should work to close reviews quickly if there are no indicators of discrimination or other evidence of violations. The Directive states that ideally, and in the majority of cases, the OFCCP should complete a typical desk audit within 45 days of receiving complete and acceptable AAPs and supporting data.
  • Prior to an onsite visit, the compliance officer may request supplemental data to refine indicators and prepare for a potential onsite visit.
  • Critically, the Directive states that “[s]upplemental information requests must include the basis for the request, be reasonably tailored to the areas of concern, and allow for a reasonable time to respond.”
  • Prior to an onsite visit, the OFCCP should provide a “high-level summary” of any preliminary indicators of discrimination in the onsite confirmation letter.

Contractors should note. Bertram underscored several aspects of Directive 2018-08. Although the Directive does not address the onsite review process, it states that the offsite analysis should begin “immediately” after the onsite visit is completed and that the OFCCP should maintain regular contact with the contractor (at least every 30 days) to keep the contractor informed of the status of the evaluation, she observed. “The Directive also does not address the process for reviewing the data and information collected through the desk and onsite audits, or for determining whether the OFCCP should issue a Notice of Violation,” she said. “However, it addresses new procedures for the conciliation process after the issuance of a Notice of Violation.”

The Polsinelli attorney noted the Directive’s statement that the OFCCP should undertake a collaborative process, including:

  1. Sharing information and essential source data in electronic format so that contractors can understand and replicate the OFCCP’s methodology and findings;
  2. Sharing the factors used to calculate back pay; and
  3. Providing an overview or summary of anecdotal evidence or non-statistical findings to provide support or context for the statistical analyses.

The Directive additionally says that Branch of Expert Services and/or the staff of the Office of Solicitor may become involved to facilitate the conciliation process. It also states that the OFCCP will work with the contractor to identify innovative remedies, such as apprenticeship programs and proactive corporate-wide solutions.

What’s behind the move? The Directive is designed to address contractors’ complaints that many audits are taking too long and are not following the steps required in the compliance manual, according to Bertram. “Many compliance audits have become endless desk audits where compliance officers request endless follow-up data without undertaking an onsite review or notifying contractors of their findings at the end of it,” she said. “These audits—now referred to by the OFCCP as ‘aged audits’—have become an area of concern for the senior leadership of the OFCCP.”

A bit of advice … Although Directive 2018-08 is designed to address these concerns, “it will be important for contractors to hold Compliance Officers to these standards, requesting that they present required findings and that they not request information beyond the CSAL until they [the findings] have been provided,” Bertram suggested. “Although it is the objective of most contractors to be cooperative during audits, they can certainly request that the OFCCP comply with its own Directives without becoming adversarial.”

Bertrim added that contractors and their counsel can draw a lot of guidance from the Transparency Directive. “It is clear that contractors must be prepared to produce immediately their basic AAPs upon the receipt of a CSAL,” she said. “To ensure that employees responsible for the preparation and implementation of AAPs are notified immediately of the receipt of CSALs, contractors should confirm that the OFCCP has accurate contact information for the contractor and each of its establishments or functional units.” Bertram also suggested that with these new deadlines, contractors must stay on top of their AAPs, ensuring that they are prepared on time and implemented effectively.

“Contractors should also confirm that they have the ATS [applicant tracking system] and HRIS [human resources information system] systems and other databases available that will allow them to pull and analyze the hiring, promotion, termination, and compensation information that is accurate and includes the categories of information necessary to provide the data requested through the CSALs,” Bertram added.

Ombud Service. Turning to Directive 2018-09, Bertram explained that through it, the OFCCP adopts an Ombud Service in the National Office to help resolve concerns raised by external stakeholders, including federal contractors and subcontractors, industry groups, law firms, and complainants. The Directive explains that “transparency is the foundation of a relationship of respect, dialogue, and feedback with its stakeholders that will help the agency improve its effectiveness in both compliance assistance and evaluations,” the Polsinelli attorney noted. She said the agency “believes that increased transparency will improve operational efficiency and effectiveness and support contractors’ ability to conduct meaningful self-audits that proactively identify and address areas of concern.”

How it will work. Addressing the genesis of the development, Bertram said that to respond to concerns raised in a September 2016 report by the Government Accountability Office, the OFCCP is “adopting an independent mechanism through which external stakeholders can share their concerns with the OFCCP about a particular open matter or provide general feedback or recommendations.” The OFCCP will hire an OFCCP Ombud who reports directly to the Deputy Director. The Ombud will be responsible for:

  1. Listening to the concerns of external stakeholders;
  2. Promoting and facilitating the resolution of OFCCP matters at the regional and district levels; and
  3. Working with OFCCP regional and district offices as a liaison to resolve certain issues after stakeholders have exhausted those channels.

What does it mean for contractors? If the Ombud program operates consistently with the Directive, it should provide contractors with an additional resource when they are facing challenging situations during the course of an audit, according to Bertram. “For instance, if a district office is demanding extensive records (perhaps for the third or fourth time) from a contractor during a compliance audit, without an explanation (or what the contractor considers to be a reasonable one), contractors could reach out to the Ombud for assistance and support,” she explained. “The Directive emphasizes that the Ombud will not act as an advocate for either side or give advice or opinions. However, he or she may be able to help the contractor and the district or regional office reach a resolution of their dispute.”

Best practices. Bertram said that in these situations, it would be advisable for the contractor to work the issue through the “chain of command,” presenting and documenting its communications and positions in a constructive and professional manner at each step in the chain. “Then, it will be able to reach out to the Ombud with a written record, showing its efforts to reach a resolution, and clearly identifying its position and arguments on the dispute,” she said. “It would also be advisable to work with the Ombud on constructive issues, such as suggestions for improvement, so that he or she knows that the contractor supports the OFCCP and its compliance efforts,” Bertram recommended.


Top labor and employment developments for August 2018

September 6th, 2018  |  Published in Blog

By Joy P. Waltemath, J.D.

In case you missed the in-depth coverage of Employment Law Daily for August, here’s a recap of some key developments in the L&E community.

Trump administration news

Parts of Trump executive orders reducing federal employee collective bargaining rights declared invalid by D.D.C. Provisions of three executive orders issued by President Trump on May 25, 2018, which were challenged by labor unions that represent employees of various federal agencies, were declared invalid August 25. The federal district court in D.C. concluded that many of the challenged provisions effectively reduced the scope of the right to bargain collectively as Congress has crafted it by enacting the Federal Service Labor-Management Relations Act (FSLMRS), or impaired the ability of agency officials to bargain in good faith as Congress has directed. Viewed collectively, the challenged EOs reflected a decidedly different policy choice: namely, the president’s stated view that federal employees’ right to engage in collective bargaining over the conditions of their employment is “not apropos of” an “effective and efficient Government,” and should be rendered subordinate to the agencies’ interest “in developing efficient, effective, and cost-reducing collective bargaining agreements.” As such, certain EO provisions dramatically curtail the scope of bargaining because agencies and unions would no longer negotiate over a host of significant issues, said the court, finding the orders remove these matters from the scope of the right to bargain despite the fact that Congress has made them negotiable; the removed topics are important to the functioning of labor organizations and the fairness of collective bargaining negotiations; and provisions of the EOs impede the prospect of good faith negotiations. Accordingly, the president’s subordinates were enjoined from implementing or giving effect to: Executive Order 13,836 Sections 5(a) 5(e), and 6; Executive Order 13,837 Sections 3(a), 4(a), and 4(b); and Executive Order 13,839 Sections 3, 4(a), and 4(c) (American Federation of Government Employees v. Trump).

Independence of military’s plan, report banning transgender individuals from service questioned. A little over a year ago, in July 2017, President Trump tweeted a change in U.S. government policy to neither accept nor allow transgender individuals to serve “in any capacity” in the U.S. military. Following that up, on August 25, 2017, was a formal presidential memorandum. After federal courts blocked as unconstitutional Trump’s ban on transgender people serving in the military, and following a memorandum and report submitted by the defense secretary, Trump revoked that memorandum. However, the result of Defense Secretary James Mattis’ Implementation Plan is pretty much the same: transgender individuals are generally not allowed to serve openly in the military.

Now, with litigation still pending in several districts and a nationwide injunction in place, the D.C. district court refused on August 24 to dismiss or grant summary judgment to the government—which claims its decisions regarding transgender military service are owed “great deference because they are the product of extensive deliberation, study and review.” The court refused summary judgment to the plaintiffs as well because the facts related to the process used by the government to prepare its current proposed policy—and especially how independent that process was—were disputed material facts affecting the degree of deference owed by the court to the government’s policy decisions, and the level of scrutiny to apply to the challenged policy. The plaintiffs would get discovery, too; the government had “withheld nearly all information concerning this alleged deliberation. This is not how civil litigation works,” the court reminded (Doe 2 v. Mattis).

Supreme Court news

State AGs ask justices to take up “error of national importance” in transgender discrimination case. Although August is not typically a hotbed of Supreme Court activity, this month a 16-state coalition of attorneys general has urged the High Court to take up whether Title VII protects employees from discrimination based on transgender status. The group contends that a March 2018 decision from the Sixth Circuit, which finds employers are barred from discriminating against transgender workers, was an improper expansion of the definition of “sex” in Title VII—an error of “national importance” the Supreme Court must correct.

The petition for certiorari in R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC (Docket No. 18-107) asks the Court to determine the scope of Title VII’s prohibition against discrimination based on “sex”—particularly, whether the statute stands as a shield against employment discrimination based on gender identity and transgender status. In their amicus brief supporting the employer in the case, the attorneys general asserted the appeals court decision should be overturned. “In rewriting Title VII to its own liking, rather than interpreting the statute based on its text, history, and purpose, the Sixth Circuit not only ignored the will of Congress, but bestowed upon itself (an unelected legislature of three) the power to rewrite congressional enactments in violation of the separation of powers,” the brief states.

Federal agency developments

DOL signals it will propose occupations subject to state drug testing for unemployment benefits. The Office of Management and Budget received a proposal from the DOL August 21, Drug Testing by States for Purposes of Determining Unemployment Compensation Eligibility,” for the agency to identify the occupations that regularly conduct drug testing for purposes of unemployment compensation. In March 2017, President Trump signed a congressional joint resolution of disapproval (H.J. Res. 42) nullifying the prior final rule. Seen by the administration as a limitation on states’ ability to require those who apply for unemployment benefits to submit to drug testing, that rule established, for state unemployment compensation program purposes, occupations that regularly conduct drug testing. The DOL issued a statement at the time of the resolution saying “The rule contradicted clear congressional intent—it narrowly limited the circumstances under which drug testing may be carried out and constrained a state’s ability to conduct a drug testing program under the act.” Now the DOL has signaled it is prepared to act again. The resolution under the CRA, however, prevents a federal agency from implementing a rule or issuing a rule that is substantially the same without congressional authorization. Will the DOL’s proposal here be considered “substantially the same?”

DOL “public listening sessions” seek input on white-collar regs’ salary level. The DOL announced August 28 that it will conduct public listening sessions to gather views on white-collar exemption regulations under the FLSA—specifically to provide input on issues related to the salary level test. Five listening sessions are scheduled across the country in September, according to the DOL notice; for specific location details and register to attend, click here.

DOL issues six new opinion letters addressing FLSA, FMLA issues. The DOLs Wage and Hour Division issued six new opinion letters August 28, which include:

1.

Organ donors’ qualification for FMLA leave.

2.

Compensability of time spent voluntarily attending benefit fairs and certain wellness activities.

3.

Application of the movie theater overtime exemption to a movie theater that also offers dining services.

4.

Application of the commissioned sales employee overtime exemption to a company that sells an internet payment software platform.

5.

Volunteer status of nonprofit members serving as credentialing examination graders.

6.

“No-fault” attendance policies and attendance points under the FMLA.

OSHA beryllium standard compliance date delayed to December 12 for certain ancillary requirements. It’s tough to keep up with what OSHA is doing with respect to the beryllium standards. The agency published a final rule notice on August 9 extending the compliance date for certain ancillary requirements of the general industry beryllium standard to December 12, 2018. This compliance date affects certain ancillary provisions related to methods of compliance, beryllium work areas, regulated areas, personal protective clothing and equipment, hygiene areas and practices, housekeeping, communication of hazards, and recordkeeping. Note that this rule does not affect the new permissible exposure limits (PELs) for general industry, construction, and shipyards, or the general industry provisions for exposure assessment, respiratory protection, medical surveillance, and medical removal, which OSHA began enforcing on May 11, 2018. This rule also does not affect the March 11, 2019, compliance date for the provisions on change rooms and showers in the beryllium standard’s paragraph (i) (hygiene areas and practices) or the March 10, 2020, compliance date for implementation of the engineering controls required by paragraph (f) (methods of compliance). Further, the final rule does not affect the applicability of paragraph (a) (scope and application) or paragraph (b) (definitions).

FMCSA considering loosening hours-of-service restrictions for commercial truck drivers. The Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) is soliciting public comment on a proposed revision of its current hours-of-service (HOS) regulations, which limit the operating hours of commercial truck drivers. The Advanced Notice of Proposed Rule Making, published August 23, responds to what it calls widespread Congressional, industry, and citizen concerns. The agency wants public comment on whether HOS revisions may alleviate “unnecessary burdens” placed on drivers while still maintaining safety on U.S. highways and roads.

EEOC nets some big-money settlements:

  • Alorica, Inc., will pay $3.5 million and take remedial measures to resolve a sexual harassment lawsuit, according to the EEOC.
  • Giant poultry supplier Koch Foods has agreed to pay $3.75 million and furnish other relief to settle class allegations of sexual harassment, national origin, and race discrimination, as well as retaliation against a class of Hispanic workers at Koch’s Morton, Mississippi, chicken processing plant, the EEOC reported. (The EEOC’s case was later consolidated with the lawsuit previously filed by plaintiff/intervenors, Cazorla v. Koch Foods of Mississippi, LLC . Notably, that case went to the Fifth Circuit over Koch’s desire to discover employees’ attempts to acquire U visas—an immigration benefit that can be sought by victims of certain crimes (even undocumented immigrants) who have assisted government authorities in criminal investigations.)
  • Coca-Cola Refreshments USA, Inc., will pay $2.25M and improve its disability leave policies, practices, the EEOC announced in a news release. The agency entered into a settlement agreement as part of informal conciliation with the company, which agreed to make monetary payments totaling $2.25 million to individuals who filed charges of discrimination, and provide annual financial support to selected “non-profit entities dedicated to helping individuals with disabilities find and keep employment.”

NLRB drama continues

Board reconsidering Purple Communications employee email ruling. On August 1, the Board issued an invitation for briefs on what it should do with Purple Communications, Inc., which held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system, on nonworking time, for communications protected by NLRA Section 7. That holding overruled Register Guard, which had held that while union-related communications cannot be banned because they are union-related, facially neutral policies regarding the permissible uses of employers’ email systems do not become unlawful simply because they have the “incidental” effect of limiting the use of those systems for union-related communications. Although Purple Communications and Register Guard addressed only email systems, the Board is also inviting comment on the standard it should apply to evaluate policies governing the use of employer-owned computer resources other than email. The case in which the Board has invited briefing is Caesars Entertainment Corporation dba Rio All-Suites Hotel and Casino, 28-CA-060841.

ALJs are validly appointed because the Board is a “Department,” Members collectively are “Head of Department.” Unified, for once, on a significant issue of Board law or procedure, the five Members of the NLRB agreed August 6 that the Board’s appointment of administrative law judges is constitutionally valid under the Appointments Clause because the Board itself is a “Department” and the Board’s Members collectively are a “Head of Department.” Although the employer here argued that the ALJ assigned to its case was an inferior officer who was not constitutionally appointed under the Appointments Clause, the Board pointed to Supreme Court precedent finding the SEC to be a “freestanding component of the Executive Branch, not subordinate to or contained within any other such component,” and as such, a Department for the purposes of the Appointments Clause. That holding applied equally to the NLRB as a “freestanding component of the Executive Branch,” the Board reasoned, noting the same precedent also held that that the SEC’s Commissioners collectively constitute a Head of Department under the Appointments Clause, and this similarly applied to the Board’s Members. In Lucia v. SEC, the High Court reiterated this holding, which was good enough for the Board here, and it dismissed the employer’s challenge to the complaint (WestRock Services, Inc ., August 6, 2018).

Meanwhile, 38 employees take Board up on voluntary retirement or separation offer. On August 22, the Board announced that 38 agency employees holding positions eligible for the Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Payments (VSIP) programs have submitted applications to participate in the opportunity for voluntary early retirement and separation. Earlier in the month, on August 7, the Board announced that it was offering voluntary early retirement and voluntary separation to certain employees under the VERA and VSIP programs. The window to submit applications for these programs closed on August 21. The NLRB stressed that applying for the VERA and VSIP opportunities was “entirely voluntary.”

And Trump re-nominates Pearce. On August 28, the White House quietly announced that President Trump’s re-nomination of Mark Gaston Pearce to be a Member of the NLRB was being forwarded to the Senate. If the re-nomination is confirmed, Pearce will serve for a term of five years expiring August 27, 2023. The news came the day after Pearce’s current term expired, leaving a 3-1 Republican majority on the Board.

OFCCP announces five new policy directives

New directive protects “religion-exercising” federal contractors. OFCCP announced two new policy directives on August 10 focused on protecting the religious freedoms of “religion-exercising organizations and individuals” and on ensuring compliance with equal employment opportunity provisions enforced by the agency. The religious freedom directive (DIR 2018-03) protects the rights of “religion-exercising” federal contractors, according to the agency—effectively expanding a religious freedom defense for contractors faced with discrimination allegations.

The most pressing question likely to emerge will be the tension between protecting the exercise of religious freedoms and current protections based on sexual orientation. Since 2015, EO 11246 explicitly covers both sexual orientation and gender identity bias, following the issuance of EO 13672 by President Obama in 2014. (In 2015, the OFCCP issued Directive 2015-01, “Handling Individual and Systemic Sexual Orientation and Gender Identity Discrimination Complaints,” setting agency policy on accepting and investigating individual and systemic complaints based on gender identity or sexual orientation.) Shortly after his inauguration, as questions arose whether he might rescind Obama’s expanded protections based on sexual orientation, President Trump announced that EO 13672 would remain in force. In March 2017, he issued an Executive Order revoking Obama’s Fair Pay and Safe Workplaces EO 13673; section 3 of EO 13683 and EO 13738, which amended the Fair Pay and Safe Workplaces EO. However, EO 13672 was left intact.

Restoring focused reviews. Noting that the OFCCP is undertaking a comprehensive compliance initiative, DIR 2018-04 announces the agency’s intent to undertake focused reviews. The aim, according to the directive, is to ensure compliance with all EEO and anti-discrimination regulations in all of its protected groups—particularly, compliance with Section 503, which addresses disability discrimination.

Other directives. Three additional directives were announced on August 24, including new procedures for reviewing contractor compensation practices, a program to verify that contractors are in compliance with federal affirmative action program (AAP) requirements, and an initiative establishing a recognition program for contractors with high-quality and high-performing compliance programs and initiatives. They include:

  • Directive 2018-05: Analysis of Contractor Compensation Practices during a Compliance Evaluation. This directive further clarifies and provides additional transparency to contractors about OFCCP’s approach to conducting compensation evaluations; supports compliance and compensation self-analyses by contractors under applicable law and OFCCP regulations and practices; and improves compensation analysis consistency and efficiency during compliance evaluations. It rescinds and replaces OFCCP DIR 2013-03 (known as Directive 307) and is accompanied by Frequently Asked Questions.
  • Directive 2018-07: Affirmative Action Program Verification Initiative. This new OFCCP initiative establishes a program for verifying compliance by all contractors with AAP obligations.
  • Directive 2018-06: Contractor Recognition Programs. This directive establishes a contractor recognition program that will include awards that highlight implementable best or model contractor practices, a contractor mentoring program that uses contractors to help their peers improve compliance, and other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.

In the federal courts of appeals

D.C. Cir.: NLRB properly allowed stationary picketing outside nonemergency hospital entrance. The D.C. Circuit upheld the NLRB’s determination that off-duty hospital employees holding picket signs on hospital property, next to a nonemergency entrance, were engaged in protected activity. The Board correctly applied the framework set forth in Republic Aviation Corp. v. NLRB to reject the hospital’s attempt to stop the employees’ stationary display of picket signs. The medical center argued that picketing should be treated differently than leafletting so that the Republic Aviation presumption would not apply. The NLRB properly rejected that argument, the appeals court found on August 10: Stationary picketing is less confrontational than leafletting because those holding picket signs did not have direct contact with nonemployees. The NLRB did not hold that picketing must always be permitted on premises to the same degree as handbilling or soliciting. Instead, it noted that where picketing disrupts operations or interferes with patient care, Republic Aviation would permit a hospital to bar it. The NLRB’s application of Republic Aviation was therefore sustained as reasonable, not only as to solicitation and handbilling, but as to the picketing in this case. Note, though, that General Counsel Peter Robb has signaled his intent to revisit the Obama Board’s reasoning in this case (Capital Medical Center v. NLRB).

1st Cir.: Retaliatory acts and pretext were not enough to show teacher’s discipline was due to her advocacy for disabled students. A divided First Circuit panel on August 21 upheld the judgment of a district court, following a five-day bench trial, that although a kindergarten teacher had established both a prima facie case of retaliatory treatment and that the school’s rationale for putting her on a performance improvement plan and transferring her was pretextual, she had not proven that the actions taken against her by the superintendent, the principal, and vice principal were a result of her advocacy on behalf of students with disabilities in her classroom. Dissenting, Judge Torruella would have held this to be “that rare case in which the district court’s finding that there was no retaliatory animus was clearly erroneous” based on questions concerning the motivations of not just the superintendent, but other “crucial actors”—the principal and vice principal (Richard v. Regional School Unit 57).

1st Cir.: Porn-possessing fired employee needed expert to prove screen-capture software was “interception” under ECPA. Expert testimony was necessary to establish whether a fired employee could show a contemporaneous interception of an electronic communication under the Electronic Communications Privacy Act (ECPA) had occurred when his employer installed screenshot-capturing software on his computer after it discovered evidence he was viewing child pornography on the job. Although the majority of lay persons likely would understand both email and the concept of screenshot capturing, to prove an ECPA contemporaneous “interception” would require expert testimony explaining what the screenshot-capturing software actually did when it captured a screenshot, the timing of it, what a web browser’s progress bar actually indicates, and how exactly the email system the employee was using auto-saves emails as a user drafts them. Because the employee lacked this expert testimony, the appeals court agreed on August 21 that his claims against his employer failed (Boudreau v. Lussier).

2d Cir.: Healthcare employer that “laundered” housekeepers to divest them of CBA-negotiated rights violated NLRA. When the healthcare employer in this appeal “laundered” its housekeeping workers by first moving them over to the payroll of a third party, and then bringing them back in as employees without contractual rights under the CBA, it violated the NLRA, the Second Circuit explained, denying on August 23 the employer’s petition for review of an NLRB decision. In fact, the record supported the conclusion that the employer’s “dominant (if not sole) purpose” in using a subcontractor was to mask a “quasi alter-ego scheme.” The appeals court also agreed with the Board that the employer committed additional violations by unilaterally changing policies related to holiday pay and by refusing to “rehire” two senior housekeepers. The employer’s petition for review was denied and the Board’s application for enforcement was granted (HealthBridge Management, LLC v. NLRB).

3d Cir.: Dispute over retiree benefits not subject to arbitration; retirees not “employees” under CBA. In an appeal raising important questions of appellate jurisdiction and contract interpretation, the Third Circuit ruled August 29 that where a district court had compelled arbitration, dismissed a union’s substantive claims, and administratively closed the case, the district court’s order was an appealable final order. And the appeals court agreed with the employer that a dispute over retiree healthcare benefits was not subject to arbitration because retiree health benefits were not covered under the CBA, reasoning that former employees who retired before the CBA went into effect were not “employees” under the agreement. Further, the appeals court found that a single mention of retiree healthcare benefits in the CBA was insufficient to incorporate a memorandum of agreement on the subject of retiree healthcare into the CBA absent an express intent to incorporate the MOA (Cup v. Ampco Pittsburgh Corp.).

4th Cir.: No § 10(j) injunction for NLRB; effectiveness of Board’s remedial power was not in jeopardy. Finding no abuse of discretion in a district court’s denial of an NLRB motion for preliminary injunctive relief under NLRA § 10(j), a divided Fourth Circuit held on August 28 that the Board failed to demonstrate sufficiently that the “effectiveness of its remedial power was in jeopardy” in its adjudication of unfair labor practice charges against two hospitals. Three and a half years after RNs voted for union representation at the two hospitals, and just less than a year after negotiations began, the union filed charges alleging that the hospitals had failed to bargain in good faith, and six months later, the Board sought the § 10(j) injunction. The district court found no irreparable harm. Chief Judge Gregory dissented because the district court failed to analyze irreparable harm in the proper context—preserving the Board’s remedial power (Henderson v. Bluefield Hospital Co., LLC).

6th Cir.: Common law “tender-back” doctrine does not apply to claims brought under Title VII or Equal Pay Act. In a question of first impression, a divided Sixth Circuit panel held that an employee is not required to “tender back” consideration received under a severance agreement before bringing claims for violations of Title VII or the Equal Pay Act. The appeals court expressed its concern that requiring recently discharged employees to return their severance before they can bring claims under Title VII and the EPA would serve only to protect malfeasant employers at the expense of employees’ statutory protections at the very time that those employees are most economically vulnerable. The August 16 case involved a pregnant employee whose supervisor made negative comments about her pregnancy and her prenatal doctor appointments, and who was fired and pressured to sign a severance agreement without benefit of counsel. In addition, she did tender back the $4,000 in severance she received, but the employer would not accept it (McClellan v. Midwest Machining, Inc.).

6th Cir.: Reasonable for jury to have found Dollar General discriminated against a diabetic employee fired for violating “anti-grazing” policy. In a case brought by the EEOC on behalf of a diabetic Dollar General sales associate, the Sixth Circuit found on August 7 that a jury permissibly determined that the discount retailer discriminated on the basis of disability when it fired the employee after discovering she drank orange juice from the store’s cooler during hypoglycemic episodes. Prior to her promotion to lead sales associate, when she experienced hypoglycemic episodes at work, she typically went to the break room, where she kept orange juice in a cooler. After her promotion, she often worked alone in the store. To avoid the risk of a hypoglycemic episode, she asked if she could keep orange juice at her register, but her manager refused, telling her it was against store policy. When she experienced two hypoglycemic episodes in late 2011 and early 2012, she took a bottle of orange juice from the store cooler, drank it, paid the $1.69 she owed for each bottle, and told the store manager. Finding that these two events violated Dollar General’s “grazing policy,” which forbids employees from consuming merchandise in the store before paying for it, the company fired her. All that mattered, said the appeals court, is whether the jury had a legally sufficient basis to conclude that Dollar General failed to provide the employee reasonable alternatives to keeping orange juice at her register. “Ample evidence supported that conclusion.” The appeals court also upheld the district court’s award of $445,322 in attorneys’ fees to the intervening employee’s attorneys (EEOC v. Dolgencorp, LLC dba Dollar General Corp.).

7th Cir.: Butcher’s trial evidence established that the sexual taunting, touching he endured was directed only at males and was based on sex. Because the Seventh Circuit found that “ample” trial evidence presented by a butcher who claimed sexual harassment did show that the genital grabbing, buttock groping, and sex pantomiming he experienced from male coworkers behind the meat counter did not extend to female employees in the small store’s mixed-sex workplace, it was reasonable for the jury to have concluded that the butcher was subjected to a Title VII hostile work environment based on sex. On August 2, the appeals court also affirmed the jury’s favorable decision on the butcher’s Section 1981 retaliation claim; although the store argued that no retaliation could have occurred because there was no evidence his coworkers even knew he filed an EEOC race bias charge, the court found the store forfeited this argument by focusing in post-trial motions only on whether the butcher’s decision to quit amounted to a constructive discharge (Smith v. Rosebud Farms, Inc., dba Rosebud Farmstand).

7th Cir.: FCRA class action revived because lost opportunity to respond to background check was concrete injury. A job applicant whose employment offer was rescinded after a background check, and whose class action lawsuit against the employer was dismissed based on a district court’s finding that she lacked Article III standing, had part of her suit reinstated by the Seventh Circuit on August 29. The employer’s action in rescinding the job offer without first providing the applicant a copy of the report denied her the chance to review it and present her side of the story, the court explained, which was the “very reason” the FCRA obligated employers to produce such reports before taking adverse action. However, the appeals court agreed that the employee did not have standing to bring a notice claim (Robertson v. Allied Solutions, LLC).

9th Cir.: Divided en banc court allows unionized flight attendant to pursue state-law claim for use of vacation time to cover medical leave, no RLA preemption. In an en banc decision, a deeply divided Ninth Circuit held that the Railway Labor Act did not preempt a flight attendant’s claim premised on a state-law right to reschedule accrued vacation leave, which she had already scheduled for later in the year, for family medical purposes to care for her son when that right to vacation leave was covered by a collective bargaining agreement. The CBA did not allow scheduled vacation days to be moved for family medical reasons. The employee alleged a violation of the Washington Family Care Act’s independent right to use banked vacation days, and her claim did not require interpretation of the CBA. The appeals court voted for en banc rehearing, reasoning that the fact that a state-law cause of action is conditioned on some term or condition of employment that was collectively bargained, rather than unilaterally established by the employer, did not itself create a CBA dispute. Judge Ikuta dissented in the August 1 decision, joined by Judges Tallman, Callahan, Bea and M. Smith (Alaska Airlines Inc. v. Schurke).

9th Cir.: Future attorneys’ fees recoverable by statute or contract must be included in assessing CAFA’s amount in controversy. Assessing whether CAFA’s amount-in-controversy requirement is met, a court must include future attorneys’ fees recoverable by statute or contract, the Ninth Circuit ruled August 8. Applying that rule here, it vacated a lower court order remanding an employee’s wage-hour class action complaint to state court. Because the employee demanded attorneys’ fees permitted by California law, and the law entitled him to an award of fees if successful, future attorneys’ fees were at stake in the litigation. Thus, the lower court’s conclusion that, as a matter of law, the amount in controversy included only attorneys’ fees incurred up to the time of removal and could not include any future fees was incorrect (Fritsch v. Swift Transportation Co. of Arizona, LLC).

9th Cir.: BNSF violated ADA by requiring an applicant it perceived had a back impairment to pay for MRI, and revoking his job offer when he refused. BNSF perceived an applicant for a senior patrol officer position as having a back impairment at the time it asked for an MRI and at the time it revoked his job offer, the Ninth Circuit determined August 29. BNSF could not hide behind its argument that there was some uncertainty as to the actual state of his back when it assumed he had a back condition that disqualified him for the job. Finding that he was qualified and that BNSF impermissibly conditioned his job offer on his procuring an MRI, at his own expense, because it assumed he had a back impairment, the appeals court affirmed the judgment imposing liability on BNSF under the ADA. It vacated, however, the lower court’s nationwide injunction that prohibited BNSF from engaging in certain hiring practices, finding the court below needed to make adequate factual findings to support the injunction’s scope (EEOC v. BNSF Railway Co.).

10th Cir.: Overturning precedent, 10th Circuit concludes that filing an EEOC charge is not a jurisdictional prerequisite to suit. Overturning nearly 40 years of precedent holding that filing an EEOC charge is a jurisdictional prerequisite to suit, the Tenth Circuit declared that a plaintiff’s failure to file an EEOC charge regarding a discrete employment incident merely permits the employer to raise an affirmative defense of failure to exhaust, but it does not bar a federal court from assuming jurisdiction over a claim. Acknowledging that as an individual panel, it could not overrule Tenth Circuit precedent, the panel first circulated its opinion to all active members of the court, who concurred in its conclusion that its prior precedent was no longer correct. Accordingly, on August 17, the appeals court reversed the district court’s dismissal for lack of jurisdiction of several parts of the ADA claims of two BNSF employees who alleged that a tank car spill rendered them partially and permanently disabled and prevented them from working outdoors (Lincoln v. BNSF Railway Co.).

11th Cir.: Citrus grove owner not a joint employer of migrant workers under common law. The owner of a citrus grove that utilized migrant workers under the H-2A visa program to harvest citrus fruit was not the workers’ joint employer under common law, ruled the Eleventh Circuit August 2. The Immigration and Nationality Act governed the H-2A visa program, and Congress intended this statute to carry the definition of the term “employer” from the common law of agency, the appeals court concluded. Applying the common-law definition in this case, the appeals court concluded that the grove owner was not an “employer” and, as a result, it was not the migrant workers’ joint employer for purposes of their breach of contract action (Garcia-Celestino v. Ruiz Harvesting, Inc.).


STRATEGIC PERSPECTIVES—Top labor and employment developments for July 2018

August 9th, 2018  |  Published in Blog

In case you missed the in-depth coverage of Employment Law Daily for July, here’s a recap of some key developments in the L&E community.

SUPREME COURT NEWS

Justices asked to decide if Title VII shields against gender identity discrimination

The Supreme Court has been again asked to determine the scope of Title VII’s prohibition against discrimination based on “sex,” this time, whether the statute stands as a shield against employment discrimination based on gender identity and transgender status. The petition for certiorari in R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC follows a petition filed in June, in Altitude Express, Inc v. Zarda, asking the Justices to determine whether Title VII protects against sexual orientation discrimination.

Gender transition. The employee, who intervened in the case after the EEOC filed suit on her behalf, is a transgender woman who was “assigned male at birth.” She was hired in 2007 and presented as a man until July 2013, when she informed her employer that she intended to have sex reassignment surgery and, as the first step, would live and work full-time as a woman for one year. The funeral home fired her approximately two weeks later because she would no longer dress like a man under the funeral home’s dress code, which required all public-facing male employees to wear suits and ties and its public-facing female employees to wear skirts and jackets.

In March 2018, the Sixth Circuit ruled that discrimination against employees, either because of their failure to conform to sex stereotypes or because of their transgender and transitioning status, is illegal under Title VII. The unrefuted facts showed that the funeral home fired its transgender funeral director because she refused to abide by its stereotypical conception of her sex. The appeals court thus reversed the district court’s contrary decision, holding that the EEOC was entitled to summary judgment as to its unlawful termination claim on behalf of the employee.

WHITE HOUSE NEWS

Brett Kavanaugh nominated to replace Justice Kennedy on Supreme Court

After a selection process that started with a list of 25 potential nominees to the Supreme Court, President Donald J. Trump selected Judge Brett M. Kavanaugh of the U.S. Court of Appeals for the District of Columbia Circuit as his nominee to fill Justice Anthony M. Kennedy’s seat on the Supreme Court, the White House announced.

Executive Order takes ALJs out of competitive hiring and into excepted service

On July 10, President Trump issued an Executive Order placing the position of administrative law judge (ALJ) into the excepted service. Excepted service agencies set their own qualification requirements; they are not subject to the appointment, pay, and classification rules of Title 5, United States Code.

In his Executive Order Excepting Administrative Law Judges from the Competitive Service, President Trump found that “conditions of good administration make necessary an exception to the competitive hiring rules and examinations for the position of ALJ,” including the need to provide agency heads with additional flexibility to assess prospective appointees without the limitations imposed by competitive examination and competitive service selection procedures. Making ALJs part of the excepted service will also mitigate concerns about undue limitations on their selection, reduce the likelihood of successful challenges under the U.S. Constitution’s Appointments Clause, and forestall litigation raising such concerns, the EO says.

Trump signs whistleblower protection bill into law

On July 9, the White House announced that President Trump had signed the “All Circuit Review Act,” which provides permanent authority for judicial review of certain Merit Systems Protection Board decisions related to whistleblowers.

Introduced in April 2017 by Representative Elijah Cummings (D-Md.), the bipartisan H.R. 2229 makes permanent a pilot program under the Whistleblower Protection Enhancement Act that allows federal employees who blow the whistle to file appeals wherever they work or live, rather than only in the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., a process Cummings has characterized as “overly restrictive of whistleblower rights.”

Court dismisses most of Trump Administration’s challenges to California state immigration laws

After concluding that the Trump Administration is not likely to succeed on the merits of its Supremacy Clause claims against two California immigration-related laws (S.B. 54 and A.B. 103) and the notice requirement provision of a third (A.B. 450), a federal district court in California has granted the state’s motion to dismiss those claims. However, after finding in its July 5 ruling that the United States had shown a likelihood of success on its claims against the remaining provisions of A.B. 450, as those provisions apply to private employers, the court also denied California’s bid to dismiss those claims in a July 9 dismissal order.

Trump takes action to better prepare workers to compete successfully, address ‘skills crisis’

On July 19, President Trump issued an Executive Order he said would provide a coordinated process for developing a national strategy that will ensure American students and workers have access to “affordable, relevant, and innovative education and job training” designed to equip them to compete in a global economy, and monitor and implement that strategy.

“Skills crisis.” The “Executive Order Establishing the President’s National Council for the American Worker” is aimed at the “skills crisis” in the United States, which currently has more than 6.7 million unfilled jobs. American workers need skills training to fill them, according to the EO. The economy is changing rapidly because of technology, automation, and artificial intelligence that is shaping many industries, from manufacturing to healthcare to retail. Our country’s education and job training programs have prepared Americans for “the economy of the past,” the EO observes.

IN THE FEDERAL COURTS OF APPEAL

1st Cir.: Right to ‘inspect’ CBAs negotiated by union didn’t include right to take notes

A union member’s statutory right to “inspect” collective bargaining agreements negotiated by her union with employers other than her own did not encompass a right to take notes while doing so, ruled the First Circuit. The appeals court first took the standard definition of “to inspect” as the statutory meaning. Thus, to “inspect” did not mean to take notes. That conclusion was buttressed by two features of the LMRDA itself. The legislative history of a neighboring provision made clear that Congress did not intend the term to include the right to take notes. Secondly, Congress gave employees whose rights were directly affected by a CBA the right to a copy of that CBA. Accordingly, Congress did not invest the member with a right to take notes of other CBAs (Acosta v. Local Union 26, UNITE HERE, July 11, 2018, Souter, D.).

3d Cir.: Failure to report harassment may have been reasonable where employer turned blind eye to past complaints

Because fact questions existed as to whether an employee reasonably failed to avail herself of her employer’s procedure for reporting sexual harassment, her Title VII complaint should not have been dismissed on summary judgment, held the Third Circuit. After years of unwanted sexual advances by her supervisor, a secretary brought a sexual harassment claim against him and her employer. The district court held that the employer was not liable because it exercised reasonable care to eliminate the harassing behavior and that by not reporting the supervisor’s behavior, the employee had failed to take advantage of the safeguards put in place by the employer. But the appeals court found that disputed fact issues should have permitted the claim to go to a jury—including evidence of prior harassment complaints against the supervisor, and the employee’s genuine fear of reprisal and belief that her complaint would be futile (Minarsky v. Susquehanna County, July 3, 2018, Rendell, M.).

4th Cir.: African-American secretary fired after complaining of harassment can proceed with reprisal claim

An African-American employee whose absences were continuously monitored by her supervisor (including while going to the bathroom), who was disciplined for tardiness despite a previous agreement concerning her arrival time, who was physically attacked, and then fired the day after she stated her intention to file a grievance could proceed with her Title VII retaliation claim, the Fourth Circuit ruled. Reversing and remanding the district court’s grant of summary judgment in favor of her employer, the appeals court found the lower court erred given the substantial evidence of the supervisor’s bias, including senior management’s admission that she harbored racial animus (Strothers v. City of Laurel, Maryland, July 6, 2018, Gregory, R.).

5th Cir.: Burger chain’s public image didn’t justify ‘Fight for $15’ button ban

The Fifth Circuit enforced an NLRB order finding that In-N-Out Burger violated Section 8(a)(1) of the NLRA when it barred employees at an Austin, Texas, restaurant from wearing buttons supporting the “Fight for $15″ movement. The company could not overcome the presumption that blanket bans on such insignia are unlawful under the Act, failing to convince the court of appeals that public image considerations or food safety concerns constituted “special circumstances” justifying the prohibition (In-N-Out Burger, Inc. v NLRB, July 6, 2018, Graves, J., Jr.).

7th Cir.: Supervisor’s use of N-word to deny he was racist helps revive officer’s hostile environment claim

Vacating and remanding in part, the Seventh Circuit revived the hostile environment claim of one university police officer who was called the N-word by his supervisor and the retaliation claim of another officer who, after refusing to implement the supervisor’s retaliatory treatment of the first officer, was slapped with unwarranted disciplinary notices and then demoted for his trouble. There was plenty of admissible evidence to send these claims to a jury, said the appeals court, finding they should not have been dismissed on summary judgment. Although the district court refused to award any attorneys’ fees to the first officer, whose retaliation claim against his supervisor was the only claim to get to a jury, the appeals court now revived two claims, and if either a trial or a settlement resulted in more than nominal damages, the attorneys’ fee analysis would need to be revisited as well (Robinson v. Perales, July 2, 2018, Rovner, I.).

8th Cir.: NLRB misapplied Wright Line when it failed to tie discharge to anti-union animus

The NLRB misapplied Wright Line when it held the General Counsel need not establish a nexus between an employee’s discharge and an employer’s antiunion animus, the Eighth Circuit ruled, denying the Board’s petition for enforcement in a case involving an employee who was fired for internet surfing and sleeping on the job. The appeals court also rejected the Board’s finding that the employer separately violated the Act when it interviewed the employee’s coworker in preparation for the hearing, noting it had previously rejected the agency’s “per se” rule that interviews conducted of another employee in preparation for a Board hearing are unlawfully coercive (Tschiggfrie Properties, Ltd. v. NLRB, July 24, 2018, Benton, W.).

9th Cir.: Taco Bell policy requiring discounted meals to be eaten on-site, without pay, upheld

In a putative class action against Taco Bell concerning employee meal breaks, the Ninth Circuit found that the fast-food chain’s policy of requiring employees to stay on the premises to eat discounted meals did not violate the California Labor Code since they were relieved of all duties during their meal break, were free to use the 30 minutes in any way they wished, and were only subject to the stay-on-the-premises restriction if they voluntarily chose to purchase a meal at a discount. Affirming dismissal of the plaintiff’s claims on summary judgment, the appeals court also rejected the plaintiff’s assertion that the value of the discounted meals must be added to the regular rate of pay for overtime purposes (Rodriguez v. Taco Bell Corp., July 18, 2018, Schroeder, M.).

11th Cir.: Black employees get renewed chance to prove state minimum wage law was discriminatory

Employees in Birmingham, Alabama, who alleged that the state’s Minimum Wage Act had the purpose and effect of discriminating against the city’s black citizens, in violation of the Equal Protection Clause, stated a plausible claim, the Eleventh Circuit ruled, reversing dismissal of that claim by a district court. The lawsuit came about after Governor Bentley signed the Minimum Wage and Right-to-Work Act, which mandated a uniform minimum wage throughout the state, currently sitting at $7.25 per hour, and preempting all local labor and employment regulation, in response to a city ordinance raising the minimum wage to over ten dollars per hour. The lower court’s decision was affirmed in part, reversed in part, and remanded (Lewis v. Governor of Alabama, July 25, 2018, Wilson, C.).

OTHER DECISIONS OF NOTE

Cal. Sup. Ct.: De minimis defense doesn’t (usually) apply to California wage claims

Under California law, employees’ off-the-clock time, no matter how minimal, must be compensated, a unanimous California Supreme Court ruled in a significant decision for California employers. Addressing a question from the Ninth Circuit in a wage suit brought by a Starbucks shift supervisor, the state high court rejected the FLSA’s de minimis defense, holding that it does not apply to claims for unpaid wages under the California Labor Code or state wage orders. Nor does the legal doctrine otherwise apply to wage-hour claims as a matter of state law—at least on the facts here. In this case, the $8-an-hour employee’s off-the-clock work, a few minutes per shift, added up to $102.67 of uncompensated time over a 17-month period. “That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” the court wrote. “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.” The matter is now in the Ninth Circuit’s hands, where the litigation is still pending (Troester v. Starbucks Corp., July 26, 2018, Liu, G.).

D. Kan.: UPS Freight policy of paying disabled drivers less for non-driver work, formalized in CBA, violates ADA

The EEOC won its bid for a permanent injunction barring UPS Freight from continuing its facially discriminatory policy of paying disabled drivers only 90 percent of what nondisabled drivers earned while temporarily performing non-driving jobs. Granting the agency’s motion for judgment on the pleadings, a federal court in Kansas ruled that the facially discriminatory policy, which was contained in its soon-to-expire collective bargaining agreement with the Teamsters union, violated the ADA as a matter of law (EEOC v. UPS Ground Freight, Inc., July 27, 2018, Robinson, J.).

AT THE NLRB

Union waived right to intervene by opposing Board motion to remand case in Ninth Circuit

In a five-member decision by the NLRB, a divided Board denied a union’s motion to intervene in proceedings to which it was not a party. Additionally, the Board dismissed the union’s motion for reconsideration. The Board ruled that under the circumstances presented in this case, its rules did not provide for intervention. After the Board overruled Lutheran Heritage Village-Livonia in its Boeing decision issued December 14, 2017, it filed a motion in the Ninth Circuit to remand Caesars Entertainment dba Rio All-Suites Hotel and Casino, a decision in which the union was involved. The Board concluded that the union sacrificed its right to be heard in this case when it opposed the Board’s motion to remand Rio All-Suites in the appeals court. Members Pearce and McFerran filed a separate dissenting opinion (The Boeing Co., July 17, 2018).

Dissent. In a dissenting opinion, Members Pearce and McFerran argued that because the union correctly asserted that its interests were directly affected by the decision, due process demanded that its motion be granted. The dissent observed that the union seeking intervention here was the charging party in Rio-All Suites, but had no notice that the Board intended to reverse the 2015 decision in its favor—and no reason to suspect that the Board would do so: no party in Boeing had asked the Board to overrule Lutheran Heritage. Moreover, the dissent pointed out that Section 10(b) provides that in the discretion of the Board, any person may be allowed to intervene in the proceeding. Accordingly, the dissent argued that intervention was clearly warranted.

Employer lawfully closed outdated facility and relocated production

Finding that an employer had met its Wright-Line rebuttal burden, a three-member panel of the NLRB concluded that it did not violate Section 8(a)(3) and (1) of the NLRA by closing an outdated facility and relocating production. Here, the Board found the employer established that it would have closed the outdated plant and relocated the production for compelling economic reasons regardless of the union’s presence there. Additionally, the Board overturned an administrative law judge’s determination that the employer unlawfully promulgated a confidentiality/nondisclosure agreement in response to union activity. The Board also reversed the ALJ’s finding that a unilateral $9 reduction in the value of a Thanksgiving gift was unlawful (Dura-Line Corp., July 12, 2018).

Review of archived video footage constituted unlawful surveillance of employee union activity

An employer engaged in unlawful surveillance of its employees’ union activities by reviewing archived video footage of two employees distributing union literature in an employee breakroom, and by searching employees’ clipboards for union authorization cards, ruled a three-member panel of the NLRB. The employer also interrogated one of the employees regarding the union activity of a coworker. Moreover, the Board found that the employer’s solicitation of employees to revoke their union authorization cards violated Section 8(a)(1) because they occurred contemporaneously with serious violations that went to the heart of the card-signing process and began immediately after the employer learned of the union’s organizing campaign (Advance Pierre Foods, Inc., July 19, 2018).

Enforcing work rules to fire employee for his Facebook post was unlawful interference

An electrical cooperative violated Section 8(a)(1) when it fired an employee after he posted comments in a Facebook forum that in the employer’s view, displayed a “poor attitude” and riled coworkers. The Facebook comment at issue, made pursuant to an online discussion about safety concerns in the lineman industry, was clearly protected concerted activity; and even if it wasn’t, the employer separately violated Section 8(a)(1) by enforcing two work rules when it cited them as the basis for his discharge, thus rendering those rules unlawful (North West Rural Electric Cooperative, July 19, 2018).

Law judge rejects proposed settlement in McDonald’s joint employer litigation

An NLRB administrative law judge rejected a proposed settlement that would have resolved Board charges that McDonald’s USA, LLC, as a joint employer along with its franchisees, committed unfair labor practices in response to employees’ involvement in Fight for $15 protests in 2012 and 2013. The case was to be a key litmus test of joint employer status under the Obama Board’s push to hold related entities accountable as joint employers for labor law violations—applying joint employer principles to the franchise business model, in particular. Then-General Counsel Richard Griffin signaled he would pursue charges against the national restaurant chain alongside the 30 or so franchise restaurants across the country alleged to have interfered with employees’ rights under the Act and to have discharged workers for exercising those rights. However, the Trump NLRB under new General Counsel Peter Robb retreated, hoping to resolve the dispute without addressing the essential question of the corporation’s status as a joint employer. But the Board ALJ wouldn’t have it (McDonald’s USA, LLC, July 17, 2018, Esposito, L.).

New pilot aimed at increasing ADR program participation

The NLRB is launching a new pilot program aimed at increasing participation opportunities for parties in the Board’s Alternative Dispute Resolution (ADR) program and helping to facilitate mutually satisfactory settlements. Under the pilot program, the Board’s Office of the Executive Secretary will “proactively engage” parties with pending cases to determine whether their cases are appropriate for inclusion in the ADR program. Parties may also contact the Office of the Executive Secretary to request that their case be placed in the ADR program. There are no fees or expenses charged for using the program.

New advice memos address non-disclosure, social media, confidentiality rules, other issues

On July 13, the NLRB released seven Division of Advice memoranda that deal with topics such as non-disclosure provisions, social media policies, intellectual property and confidentiality rules, withdrawal of union recognition, outsourcing bargaining unit work, retaliation against the union, and interest arbitration.

OTHER AGENCY NEWS

DOJ NEWS—Sessions rescinds more guidance, including on Obama-era affirmative action

On July 3, Attorney General Jeff Sessions announced the rescission of 24 guidance documents he considers unnecessary, outdated, inconsistent with existing law, or otherwise improper, consistent with his November 2017 memorandum prohibiting the Justice Department from making rules without following procedures required by Congress. The now-rescinded guidance documents addressed topics such as the treatment of juvenile offenders, housing discrimination, and race discrimination in education.

DOL NEWS—New guidance addresses whether caregiver registries are ‘employers’

On July 13, the Department of Labor issued Field Assistance Bulletin No. 2018-4 to Wage and Hour Division field staff to help them determine whether home care, nurse, or caregiver registries are employers under the FLSA. Acting WHD Administrator Bryan Jarrett noted that a “registry” is an entity that typically matches people who need caregiving services with caregivers who provide the services—usually nurses, home health aides, personal care attendants, or home care workers with other titles. The FAB treats all of these as “caregivers.”

DOL and NLRB get budget cuts under draft FY 2019 appropriations bill

On July 11, the House Appropriations Committee approved the draft fiscal year 2019 Labor, Health and Human Services, and Education (LHHS) funding bill that includes funding for programs within the DOL, which would see an $88.8 million budget drop if the measure is passed, according to a summary. The LHHS funding legislation also provides funding for the NLRB, which would get a $12.9 million budget cut.

FEDERAL REGULATIONS

Beryllium rule enforcement delayed to August 9, DFR confirmed

On July 3, OSHA announced a delay in its enforcement of certain requirements of the final rule on occupational exposure to beryllium in general industry. These requirements will not be enforced until August 9, 2018. The requirements include beryllium work areas, regulated work areas, methods of compliance, personal protective clothing and equipment, hygiene areas and practices, housekeeping, communication of hazards, and recordkeeping, OSHA said in a release.

DOL rescinds ‘persuader rule’

Nearly a year after being urged to do so by a 17-state coalition of Attorneys General led by Texas Attorney General Ken Paxton, the DOL has rescinded the so-called 2016 “persuader rule.” In November 2016, a federal district court in Texas entered a permanent, nationwide injunction, ruling that the persuader rule was unlawful and would have required attorneys to publicly disclose confidential information protected by attorney-client privilege. Paxton was behind that lawsuit.

OSHA proposes new exemptions for railroad work in cranes and derricks final rule

Following up on a settlement agreement with the Association of American Railroads, OSHA is proposing to expand several exemptions and issue clarifications affecting work on or along railroad tracks in its final rule for cranes and derricks in construction, published on August 9, 2010. OSHA’s proposed rule was published in the Federal Register July 19, 2018.

OSHA proposes electronic recordkeeping rule revision

On July 26, the day after a new lawsuit was filed to challenge its suspension of parts of the final electronic recordkeeping rule, OSHA announced plans to issue a Notice of Proposed Rulemaking (NPRM) “to better protect personally identifiable information or data that could be re-identified with a particular individual” by removing certain provisions of the rule. The complaint alleged that the agency violated the Administrative Procedure Act when it previously suspended these same requirements without public notice and an opportunity to comment. OSHA’s NPRM was published in the Federal Register on July 30.

FEDERAL LEGISLATION

House lawmakers introduce bill to replace H-2A program, require E-Verify use

A group of Republican, plus two Democratic, lawmakers have teamed up to introduce and co-sponsor the “AG and Legal Workforce Act,” which would replace what sponsors called the “outdated and broken H-2A agricultural guestworker program” with a new H-2C program. The move is intended to ensure that America’s farmers and ranchers have access to a reliable workforce. Among other things, the bill, H.R. 6417, would expand employer eligibility and the number of visas available, make housing and transportation provision optional, and make Affordable Care Act subsidies unavailable to guestworkers, but require them to have health insurance.

House approves bipartisan health care-related tax packages

The House has cleared two bipartisan health care-related tax packages. The packages, combining several bills, aim to expand health savings accounts (HSAs) and the health insurance premium tax credit, as well as delay the so-called “health insurance tax,” among other things.

HSAs. The Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Bill of 2018 (H.R. 6311) was approved by the House on the evening of July 25 by a 242-to-176 vote. The measure, among other things, would delay the annual fee for health insurance providers through 2021 and increase access to catastrophic “copper” plans as well as allow coverage to be used with HSAs.

IN THE NEWS …

AG coalition takes aim at franchise no-poaching agreements

A coalition of 11 state Attorneys General are taking on the practice by franchisors of using “no-poach” agreements in franchise contracts—a practice said to hurt low-wage workers and limit their ability to get better jobs. The AGs are seeking information and documents from eight national fast food franchisors concerning these agreements, which restrict a franchisee’s ability to recruit or hire employees of another franchisee of the same chain. The move is likely intended to spark a dialogue about ending the practice.

DOL’s 80/20 provision, ‘dual jobs’ rules for tip credit challenged

The Restaurant Law Center (RLC) and the Texas Restaurant Association (TRA) have filed a lawsuit against the DOL challenging the so-called “80/20″ rule on the availability of the tip credit based on tipped and non-tipped duties. According to their complaint, not only was the provision quietly slipped into an internal agency handbook without notice to the public or an opportunity for comment, the DOL has tried to elevate this subregulatory pronouncement to the force of law through repeated amicus curiae briefs arguing that courts should defer to its rule. But the DOL’s action is ultra vires, contrary to the pertinent statute, and illegal, the plaintiffs contend.

Dramatic decline in enforcement found at many federal agencies

During the Trump Administration’s first year, there has been a dramatic decline in enforcement against corporate crime and wrongdoing, with total penalties for such violations plummeting from the final year of the Obama Administration, according to a new report from Public Citizen.

Notably, at the Department of Justice, total penalties against corporations fell 90 percent from $51.5 billion in the Obama Administration’s final year to $4.9 billion in Trump’s first year, and the number of enforcement actions against corporations fell by 22 percent from Obama’s final year. Plea deals dropped to 50 compared to 117 in Obama’s last year.

ICE focuses on I-9 compliance: 5,200 businesses served notices of inspection

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) has served I-9 audit notices to more than 5,200 businesses around the country since January in a two-phase nationwide operation, according to the agency. A notice of inspection (NOI) informs business owners that ICE is going to audit their hiring records to determine whether they are complying with existing law.


We need a social movement opposing age bias

July 23rd, 2018  |  Published in Blog

By Lorene D. Park, J.D.

The ADEA took effect in June 1968, but age discrimination still persists based on outdated and inaccurate assumptions about older workers and ability, according to a report released in June 2018 by Victoria A. Lipnic, Acting EEOC Chair. Today’s experienced workers are more diverse, better educated, and working longer than previous generations, yet the report finds age discrimination to be an “open secret.” Given that the median age of Americans is going up (the so called “graying of society”), and given that every human being who is lucky to live long enough will be in this particular protected class, one might expect a social movement opposing age discrimination, but not so far.

Employment Law Daily reached out to a group of seniors through the Council on Aging in Acton, Massachusetts, to discuss their views on discrimination. Several experienced age bias, both in and out of the workplace. Only one complained to the employer about discrimination; the rest explained they had not done so out of fear of losing their jobs and because they didn’t know that they could complain. When discussing various anti-discrimination movements, the seniors believed that the #MeToo movement has been very successful, and they offered several reasons why there is no similar movement opposing age discrimination, including: (1) seniors don’t realize they can oppose discrimination; (2) age discrimination isn’t as “glamorous” as other forms of discrimination; and (3) discrimination against seniors is accepted by society. One pointed out that in news stories, if there is a car accident, the media reports the age of elderly drivers as if implying age was a cause. Others keyed in on the “implicit bias” issue, noting that when interacting with the public, their opinions are often ignored or assumed to be less valuable.

Five things to know about age discrimination cases

• ADEA claims are harder to prove than Title VII claims because the ADEA requires age be the “but-for” cause for an adverse action and there are no mixed-motive claims (Gross v. FBL Financial Services)

• There can be subclass discrimination, so for example, an employer who favors employees in their 50’s over those in their 70’s can be liable, even though both groups are protected by the ADEA. The question is whether the age difference is substantial enough to show age bias. (Millen v. Oxford Bank)

• The OWBPA adds protections to older employees with respect to severance agreements waiving any ADEA rights; such waivers must be knowing and voluntary. Also, the ADEA prohibits waiver of future claims. The EEOC provides additional information on this issue.

• ADEA plaintiffs sometimes include “regarded as” disabled claims under the ADA and, given the society presumption of diminished capacity with age, those may become more common. (Presta v. Omni Hotels Management Corp.)

• Federal courts are split on whether the ADEA allows job applicants to bring disparate impact claims. (Kleber v. CareFusion Corp.)

Typical age discrimination claims

Age discrimination often arises from a presumption by employers that older employees have diminished abilities, are harder to train, and are less likely to be invested in the company’s future as compared to younger employees. Claims may involve being denied training and advancement opportunities offered to younger employees, being left out of important decisions, and being asked about retirement or encouraged to retire (e.g., “wouldn’t you like to go enjoy more time with family?). And there are often allegations of age-related derogatory remarks, such as calling workers “old man,” “grandpa,” the “old guard,” or saying things like “you can’t teach an old dog new tricks,” or that the company needs “fresh faces” or “young blood.”

Age-related remarks. For example, an attorney who was hired temporarily to perform in-house counsel work but denied a permanent position that was given to a much younger lawyer, raised triable issues based in part on a manager’s alleged statement that the company wouldn’t want him because he had “too much experience” and would be inflexible, which he argued was code for “too old” (Owen v. STMicroelectonics, Inc.). In another case, a 54-year-old regional salesman raised a jury question on whether part of his sales territory was reassigned to a younger salesman, his support staff was reduced, and he was constructively discharged because of age, based in part on the company president’s questioning if he was “too old to keep up with the younger guys” and comment that “you can’t teach an old dog new tricks” when referring to the employee’s ability to operate technological devices” (Giugliano v. FS2 Capital Partners, LLC). In some cases, though, courts find the term “old” or “older” to be ambiguous because it could refer to age or to longer tenure (e.g., Wexler v. Jensen Pharmaceuticals).

Suspicious circumstances. Many cases involve the discharge of a long-time employee under suspicious circumstances. For example, a produce manager in Maine who worked for a grocery chain for over 30 years and was considered the “food safety guru,” was nonetheless fired for improperly dating fruit, even though he disputed the accusation and though his termination did not follow the progressive discipline policy. These facts, combined with his supervisor’s questions about whether he could “handle” an upcoming increase in sales volume raised triable issues on whether he was fired due to his age (Pennington v. Hannaford Bros. Co., LLC).

In another case, a federal court in Pennsylvania found it suspicious that a truck and trailer parts distributor hired a second (much younger) counter salesman after years of having only one, had the longtime incumbent train the new guy, and then decided a short time later to eliminate the incumbent employee’s job (purportedly due to financial reasons) and keep the new guy. The timing, the 15-year age difference between the two men, and the long-time employee’s good performance history suggested pretext (English v. Truck Pro, LLC).

EEOC recommendations to avoid age-related stereotypes and implicit bias
The EEOC has suggestions for employers on workplace practices that can counter unconscious bias and stereotyping based on age, recommending the following:

• Include age in diversity and inclusion programs; age diversity can improve organizational performance, increase productivity, and lower employee turnover.

• Recruit workers of all ages and years of experience. Older workers do not cost significantly more than younger workers and tend to stay with employers longer than Millennials do.

• Assess interviewing strategies to avoid age bias. Interviewers tend to favor candidates who remind them of themselves, so consider an age-diverse interview panel.

• Provide career counseling, training, and development opportunities to workers at all ages.

We need a social movement. Meanwhile, I’m still waiting for social media to advance the cause for seniors who remain able and ready to work, who have valuable knowledge and skills to offer, but who are denied equal opportunities just because of implicit age bias. Perhaps we need some hashtags: #OlderWorkersRule #AgeEquality #ValueExperience #OlderWiser #FreeTheDentures #TakeItOldSchool


Top labor and employment developments in June 2018

July 13th, 2018  |  Published in Blog

In case you missed Employment Law Daily’s in-depth coverage, here’s a recap of just some of the key developments in the L&E community for June 2018.

BUSY END TO SUPREME COURT TERM

Justice Kennedy announces retirement. Although the Court issued several major decisions in June, arguably the biggest news out of SCOTUS was Justice Kennedy’s announcement on June 27 that he will step down at the end of July. Kennedy, the regular swing vote on the High Court, submitted a formal notification to President Trump of his retirement, empowering the President to move the Court further rightward as he leaves an indelible mark on the federal judiciary. “It has been the greatest honor and privilege to serve our nation in the federal judiciary for 43 years, 30 of those years on the Supreme Court,” Kennedy said, noting in parting his “admiration for his colleagues on the Court.” Justice Kennedy was nominated by President Reagan and took his oath of office on February 18, 1988.

Court deals blow to public sector unions . . . On the same day Justice Kennedy announced his retirement, the U.S. Supreme Court issued its highly anticipated decision in Janus v. AFSCME, barring unions from imposing agency fees on public employees who are not union members and overturning High Court precedent that had persisted for four decades: its 1977 decision in Abood v. Detroit Board of Education, which found that levying “agency” fees to cover a union’s costs of collective bargaining, and other activities that advantaged members and nonmembers alike, did not unduly intrude upon the rights of nonmembers.Abood, said the Court, was inconsistent with other First Amendment cases and has been undermined by more recent decisions. The outcome, handed down in a sharply divided 5-4 decision, surprised no one.

The decision is an undisputedly critical blow to public employee unions—and to the labor movement as a whole—which now must redouble its efforts to bring new dues-paying members into the fold. And it will have to do so with union organizing coffers precipitously diminished. One day after this landmark decision, the Supreme Court issued an order directing the Seventh Circuit to reconsider a decision in which it affirmed a district court’s refusal to certify a class of caregivers seeking a refund on their “fair share” fees. The High Court granted certiorari in Riffey v. Rauner, Dkt. No. 17-981, vacated the appellate court’s opinion, and remanded for further consideration in light of Janus.

. . . hands Trump win in battle over ‘travel ban 3.0.’ And just a day before the Janus decision, the Trump Administration scored a big victory when the High Court, in another sharply divided 5-4 opinion, ruled in Trump v. Hawaii that the President lawfully exercised the broad discretion granted to him under the Immigration and Nationality Act when he suspended the entry of aliens into the United States under the third version of his controversial series of “travel bans.” The Court’s decision reversed the nationwide preliminary injunction affirmed by the Ninth Circuit. President Trump’s third iteration of the “travel ban,” Proclamation 9645, suspended and limited indefinitely the entry into the United States of foreign nationals of Chad, Iran, Libya, North Korea, Somalia, Syria, Venezuela, and Yemen. (It effectively removed Sudan from the second travel ban and added Chad, North Korea, and Venezuela). On April 10, 2018, Chad was dropped from the travel ban because the country had raised its security standards to meet U.S. national security requirements.

Mincing no words in her dissent, in which Justice Kagan joined, Justice Sotomayor wrote: “The United States of America is a Nation built upon the promise of religious liberty. Our Founders honored that core promise by embedding the principle of religious neutrality in the First Amendment. The Court’s decision today fails to safeguard that fundamental principle. It leaves undisturbed a policy first advertised openly and unequivocally as a ‘total and complete shutdown of Muslims entering the United States’ because the policy now masquerades behind a facade of national-security concerns.”

Will invalidating civil service appointments of ALJs reach beyond the SEC? On June 21, the Court in Lucia v. SEC held that the SEC’s administrative law judges are inferior officers of the U.S. government for purposes of the U.S. Constitution’s Appointments Clause, largely comparing the SEC’s ALJs to the Tax Court’s special trial judges whom the Court previously held were officers in its Freytag opinion. Authored by Justice Kagan, the decision is consistent with the Tenth Circuit’s Bandimere opinion, which held the SEC’s ALJs are officers. An open question of interest to employment lawyers is whether the Court’s opinion will be limited to the SEC or potentially impact OSHA or MSHA citations, or ALJs for the NLRB. According to Ogletree Deakins’ Arthur G. Sapper, who wrote a post about the case when the Court granted cert in January 2018, “The key fact in the SEC challenge is that the SEC ALJs were appointed by the SEC’s Chief Judge, who is not a ‘Head’ of the SEC. By contrast, Occupational Safety and Health Review Commission (OSHRC) ALJs are appointed by the OSHRC’s chairman, who is a ‘Head’ and thus satisfies the requirement of the Appointments Clause.”

American Pipe tolling does not preserve subsequent class actions. On June 11, the High Court, in China Agritech, Inc. v. Resh, ruled that American Pipe tolling does not allow a previously absent class member to bring a subsequent class action outside the limitations period. “The watchwords of American Pipe are efficiency and economy of litigation, a principal purpose of Rule 23 as well,” Justice Ginsburg wrote for the eight-member majority. “Extending American Pipe tolling to successive class actions does not serve that purpose.” Justice Sotomayor concurred in the judgment only for cases governed by the Private Securities Litigation Reform Act.

Cake show owner prevails over same-sex couple in wedding cake controversy . . . On June 4, the Court decided Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, a nonemployment case that pitted a business owner’s personal beliefs against the rights of a gay couple. With Justice Kennedy writing for the majority, the Court ruled that a Colorado civil rights commission violated the cake shop owner/designer’s right to the free exercise of religion by failing to consider, with the constitutionally required neutrality, his religious objections to creating a wedding cake for a same-sex wedding. The “lack of neutrality” was evident to the Court from commissioners’ comments disparaging the shop owner’s faith and likening it to the defense of slavery, and from the disparate treatment his case received compared to cases of other bakers objecting to making cakes with anti-gay messages. Justice Kagan filed a concurring opinion joined by Justice Breyer, and Justice Gorsuch filed a concurring opinion in which Justice Alito joined. Justice Thomas concurred in part. Justice Ginsberg filed a dissenting opinion, joined by Justice Sotomayor.

. . . sending florist’s case back to state high court. On June 25, the Supreme Court sent the case of a florist who refused, on religious grounds, to provide flowers for a same-sex wedding—and was found to have violated her state’s antidiscrimination law as a result—back to the Washington Supreme Court to reconsider its decision in light of Masterpiece Cakeshop v. Colorado Civil Rights Commission. In Arlene’s Flowers, Inc. v. Washington, the Court granted the petition for review, vacated the state high court’s judgment, and remanded.

Challenges to Obama-era tip pooling regulation dropped from docket. Also in June, the Court denied the petitions for certiorari filed by Wynn Las Vegas and the National Restaurant Association (and others) in consolidated cases that challenged a controversial Obama-era tip pooling rule that has since been rescinded and replaced by new provisions. The tip pooling rule took a series of twists and turns that went beyond the Obama-era rule. A fresh controversy erupted when the DOL proposed a new tip rule that was said to permit employers to pocket tips, but that firestorm was squelched when Congress took action to address the concerns about the proposed rule in the Consolidated Appropriation Act, 2018 (CAA) (H.R. 1625).

FEDERAL COURTS OF APPEALS

5th Cir.: Administrative exhaustion is not a jurisdictional requirement; Title VII suit revived. Title VII’s administrative exhaustion requirement is not a jurisdictional bar to suit, the Fifth Circuit held, noting the circuit’s discordant case law on the question and citing the rule of orderliness to choose the line of precedent that finds exhaustion is merely a prudential prerequisite. Consequently, a county employer facing a Title VII action forfeited its exhaustion defense by not timely raising it, so a district court erred in disposing of the employee’s claim on exhaustion grounds. Reviving her suit for a second time, the appeals court reversed summary judgment and remanded (Davis v. Fort Bend County, June 20, 2018, Elrod, J.).

6th Cir.: CBAs clear; no lifetime healthcare benefits for Honeywell retirees. Reversing a district court’s conclusion that Honeywell retirees were entitled to lifetime healthcare benefits, the Sixth Circuit noted that general principles of contract interpretation applied and, because the language of the collective bargaining agreements was clear, there was no need to look to extrinsic evidence as the lower court had. While it might seem unusual, the CBAs specifically provided for lifetime healthcare benefits to surviving spouses and dependents, but did not provide such lifetime benefits to retirees themselves (Fletcher v. Honeywell International, Inc., June 8, 2018, Gibbons, J.).

7th Cir.: No fee award in EEOC’s Sec. 707(a) severance agreement suit against CVS. Finding the EEOC’s Section 707(a) pattern or practice lawsuit against CVS Pharmacy over its use of a broad (and potentially chilling) severance agreement to be neither legally nor factually frivolous, the Seventh Circuit reversed an attorneys’ fee award to CVS of over $300K. Stressing that “it takes much more than a loss on the merits to warrant a fee award,” the appeals court found the EEOC’s novel legal distinction between Section 707(a) and Section 707(e) procedural requirements affecting conciliation to be a “colorable legal argument” with some basis in the text and with no precedent squarely against it. Plus, even the district court found the EEOC’s factual foundation for bringing the case was reasonable, and the appeals court agreed, concluding that the “district court’s decision impermissibly rested on hindsight” (EEOC v. CVS Pharmacy, Inc., June 8, 2018, Wood, D.).

7th Cir.: Disputed whether maintenance man was employee or independent contractor. Finding genuine disputes of fact material to the determination of a plaintiff’s employment status, the Seventh Circuit reversed a district court’s grant of summary judgment holding that the plaintiff was an independent contractor, rather than an employee. Not only did the appeals court find disputed facts as to the nature and degree of control the putative employer exercised over the manner in which the plaintiff performed his work, there was a fact dispute as to the origins of the tools, materials, and equipment the plaintiff required to perform his work. Finally, the appeals court found unanswered questions as to how long and to what extent the parties’ contracts actually governed their relationship (Simpkins v. DuPage Housing Authority, June 20, 2018, Bauer, W.).

9th Cir.: Hotel owner on constructive notice of predecessor’s pension plan liability. A corporate hotel owner incurred withdrawal liability for the predecessor owner’s unpaid employee pension payments because the new owner had constructive notice of the withdrawal liability, the Ninth Circuit ruled. The appeals court reversed the district court’s determination that the new owner had no actual notice and constructive notice didn’t apply, finding instead that constructive notice was consistent with the Multiemployer Pension Plan Amendment Act’s purpose and legislative history. The equity group purchaser reasonably should have discovered the withdrawal liability because it had previous experience with similar purchases and could have reviewed publicly available documents, required the predecessor company to produce the information, or contacted the pension plan directly (Heavenly Hanna LLC dba Travaasa Hotel Hana v. Hotel Union & Hotel Industry of Hawaii Pension Plan, June 1, 2018, Thomas, S.).

D.C. Cir.: Union gets second shot to contest regulations allowing student aliens to stay for STEM jobs. In a lawsuit stemming from regulations allowing certain nonimmigrant aliens on student visas to remain in the United States for up to three years after finishing a degree in order to pursue related work, the D.C. Circuit returned the case to the district court that had dismissed all of a union’s claims. Partially reversing the lower court’s decision, the appeals court instructed the lower court to reconsider one of the counts related to a rule promulgated in 2016 that allowed the students to remain for up to three years working in STEM jobs (Washington Alliance of Technology Workers v. U.S. Dept. of Homeland Security, June 8, 2018, Henderson, K.).

AT THE NLRB

NLRB to issue ‘joint employer’ rule. Stymied in its efforts to undo its Obama-era Browning-Ferris decision, which expanded the definition of “joint employer” and thereby increased potential liability under the NLRA for companies that utilize contingent workforce and franchise arrangements, the NLRB on May 9 announced it was considering resolving the matter through issuance of a proposed rule. That news prompted a May 29 letter to NLRB Chairman John F. Ring from three senators, pushing back against the news that the agency was toying with formal rulemaking. In a June 5 letter to the senators, Ring responded: “Candor requires me to inform you that the NLRB is no longer merely considering joint-employer rulemaking. A majority of the Board is committed to engage in rulemaking, and the NLRB will do so. Internal preparations are underway, and we are working toward issuance of a Notice of Proposed Rulernaking (NPRM) as soon as possible, but certainly by this summer.”

“Rulemaking is appropriate for the joint-employer subject because it will permit the Board to consider and address the issues in a comprehensive manner and to provide the greatest guidance,” Ring wrote. “Although legal standards of general applicability can be announced in a decision of a specific case, case decisions are often limited to their facts. With rulemaking, by contrast, the Board will be able to consider and apply whatever standard it ultimately adopts to selected factual scenarios in the final rule itself. In this way, rulemaking on the joint-employer standard will enable the Board to provide unions and employers greater “certainty beforehand as to when [they] may proceed to reach decisions without fear of later evaluations labeling [their] conduct an unfair labor practice,” as the Supreme Court has instructed us to do.”

Board upholds Member Emanuel’s disqualification from participation in Hy-Brand II . . . Finding that an employer had not identified any material error or extraordinary circumstances warranting reconsideration under Section 102.48(d)(1) of the Board’s Rules and Regulations, a four-member panel of the NLRB denied its motion for reconsideration of Hy-Brand II, 366 NLRB No. 26. The Board rejected challenges by the employer and General Counsel to the determination by the NLRB’s Designated Agency Ethics Official that Member Emanuel was disqualified from participating in the case. Chairman Ring and Member Kaplan filed a concurring opinion. Members Pearce and McFerran filed a separate concurring opinion. Member Emanuel was disqualified from participating in the case (Hy-Brand Industrial Contractors, Ltd., June 6, 2018).

. . . will conduct ethics and recusal process review. The Board subsequently announced that it would undertake what it called “a comprehensive review of its policies and procedures governing ethics and recusal requirements for Board Members.” The initiative is intended to ensure that the agency’s stakeholders and the American people generally can have full confidence in the Board’s integrity and its recusal processes. The move comes in the aftermath of concerns raised by the Board’s December 2017 Hy-Brand Industrial Contractors decision, which would have overturned the controversial Browning-Ferris joint-employment standard had the decision not later been vacated in response to ethical concerns raised over Board Member William Emanuel’s participation in that ruling. The decision was rendered during a narrow window of a Republican majority on the Board, before the departure of Republican Chair Philip Miscimarra closed that window, albeit temporarily.

New memo talks permissible vs. impermissible handbook rules in light of Boeing. In the aftermath of its December 2017 Boeing Company decision, the NLRB issued new guidance on handbook rules. The June 7 General Counsel memorandum provides general guidance for Regions about the placement of various types of rules into the three categories set out in Boeing, as well as the Section 7 interests, business justifications, and other considerations that Regions should take into account in arguing to the Board that specific Category 2 rules are unlawful. Not only did the Board in Boeing add a balancing test, it also significantly altered its jurisprudence on the reasonable interpretation of handbook rules. The Trump Board “severely criticized” Lutheran Heritage and its progeny for prohibiting any rule that could be interpreted as covering Section 7 activity, as opposed to only prohibiting rules that would be so interpreted. The new memo states that ambiguities in rules are no longer interpreted against the drafter (upending any traditional contract interpretation approach), and generalized provisions should not be interpreted as banning all activity that could conceivably be included.

OTHER AGENCY NEWS

Proposed Executive Branch reorg plan would merge labor and education departments . . . On June 21, the White House announced a proposed reform and reorganization plan that President Trump contends will make the federal government “more responsive and accountable to the American people.” That plan includes a proposed merger of the Departments of Education and Labor into a single Cabinet agency which, according to the Trump Administration, would better meet the needs of American workers and students. The move follows Trump’s earlier Executive Order 13781, directing the Office of Management and Budget to work on a comprehensive plan to reorganize the Executive Branch. The reform proposal came after a year of planning about how the Trump Administration believes the federal government could be made more efficient, effective, and accountable. The White House said that the planning included input from stakeholders, agencies, and the public. Conspicuously missing in the aftermath of the merger announcement was any official statement by Secretary of Labor Alexander Acosta, who has previously been vocal in his support of Trump Administration policies.

SETTLEMENT

CSX Transportation to pay $3.2M to settle EEOC disparate impact suit over pre-employment testing. CSX Transportation, Inc. (CSXT), one of the nation’s leading transportation suppliers, will pay $3.2 million and furnish other relief to settle a companywide sex discrimination lawsuit filed by the EEOC, the federal agency announced on June 13. According to the EEOC, CSXT conducted isokinetic strength testing as a requirement for workers to be hired for various jobs. The EEOC said that the strength test used by CSXT, known as the “IPCS Biodex” test, caused an unlawful discriminatory impact on female workers seeking jobs as conductors, material handler/clerks, and a number of other job categories. The EEOC also charged that CSXT used two other employment tests, a three-minute step test seeking to measure aerobic capacity and a discontinued arm endurance test, as a requirement for selection into certain jobs, and that those tests also caused an unlawful discriminatory effect on female workers.


Florist gets chance to show she was victim of ‘religious hostility’ after declining to provide wedding flowers for same-sex couple

June 26th, 2018  |  Published in Blog

By Joy P. Waltemath, J.D.

On June 25, the Supreme Court sent the case of a florist who refused, on religious grounds, to provide flowers for a same-sex wedding—and was found to have violated her state’s antidiscrimination law as a result—back to the Washington Supreme Court to reconsider its decision in light of Masterpiece Cakeshop v. Colorado Civil Rights Commission. In Arlene’s Flowers, Inc. v. Washington, the Court granted the petition for review, vacated the state high court’s judgment, and remanded.

Washington Supreme Court decision. In February 2017, the state supreme court had found in State of Washington v. Arlene’s Flowers, Inc. that the business’s refusal to sell wedding flowers to a same-sex couple was not protected by the state or federal constitutions. It was undisputed that the florist, who had sold flowers to the couple for years, is a Southern Baptist and her sincerely held religious beliefs include that marriage can exist only between one man and one woman. She said she could not sell flowers for the wedding because of “her relationship with Jesus Christ” and providing the arrangements would be tantamount to endorsing marriage equality for same-sex couples. Deeply hurt, one of the plaintiffs posted on Facebook that his favorite flower shop refused their business. The post drew media attention, resulting in offers of free flowers to the plaintiffs and threats against the defendant’s business.

The Washington Law Against Discrimination bars discrimination in “public … accommodation[s]” based on “sexual orientation.” The couple sued, as did the state attorney general’s office. The florist raised defenses, including that her actions were protected by constitutional guarantees of free exercise, free speech, and free association. Affirming judgment for the plaintiffs, the state high court explained, among other things, that the WLAD has no mandate to balance religious rights against rights of protected class members; the refusal to provide flowers did not express a message about the wedding, so was not protected speech; and the WLAD, as applied, did not violate her right to religious free exercise or to free association.

Masterpiece Cakeshop. Earlier this month, the U.S. Supreme Court decided Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, in which it found the Colorado civil rights commission violated the right of a cake shop owner/designer to the free exercise of religion by failing to consider, with the constitutionally required neutrality, his religious objections to creating a wedding cake for a same-sex wedding. The lack of neutrality was evident to the Court from commissioners’ comments disparaging the shop owner’s faith and likening it to the defense of slavery, and from the disparate treatment his case received compared to cases of other bakers objecting to making cakes with anti-gay messages. The 7-2 opinion was authored by Justice Kennedy.

Reversing the state court of appeals, the Supreme Court pointed out that our society has recognized that gay persons and gay couples cannot be treated as inferior, and “the laws and the Constitution can, and in some instances must, protect them in the exercise of their civil rights. The exercise of their freedom on terms equal to others must be given great weight and respect by the courts. At the same time, the religious and philosophical objections to gay marriage are protected views and in some instances protected forms of expression.” Here, the Commission’s actions violated the cake shop owner’s constitutional rights. The majority explained that while Colorado law can protect gay persons in acquiring products and services on the same terms and conditions offered to other members of the public, the law must be applied in a manner that is neutral toward religion. The Commission’s treatment of the cake designer’s case showed elements of impermissible hostility toward the sincere religious beliefs motivating his objection to creating a cake celebrating a same-sex marriage.

Reaction. Following the Supreme Court’s order in Arlene’s Flowers, the Human Rights Commission, a national LGBTQ civil rights organization, released a statement: “The Supreme Court has simply asked the lower court to take another look at this case in light of their recent decision in Masterpiece, but they did not indicate there was anything wrong with the ruling,” said HRC Legal Director Sarah Warbelow.

“In Masterpiece, the Supreme Court found that the state of Colorado’s enforcement of its civil rights law was flawed due to perceived bias in the process; however, there is no indication that there were flaws in the application of civil rights law in Arlene’s Flowers. We view this decision as encouraging news that justice will prevail and the Washington State Supreme Court will again uphold the state’s non-discrimination laws ensuring LGBTQ people cannot be turned away from a business open to the public.”

Religious hostility? After Masterpiece was decided, UCLA law professor Eugene Volokh expressed some disappointment that the Supreme Court’s decision left almost all the “big questions” unresolved, including whether bakers have a First Amendment right to refuse to bake cakes for same-sex weddings, even if state law bans sexual orientation discrimination by such businesses. Volokh also posed a question echoed by others, pondering: “Does all this talk about government officials’ statements showing religious bias foreshadow the result in the so-called (rightly or wrongly) ‘Trump Travel Ban’ case, where the challengers are arguing that various statements by candidate Trump or President Trump show that the restrictions on travel from certain countries were motivated by religious hostility?”

However, on June 26, the High Court appeared less concerned about questions of “religious hostility” when it upheld the Trump administration’s third iteration of a travel ban in Trump v. Hawaii. In that case, one of the assertions by the challengers was that the primary basis for the ban was religious animus against Muslims. At the heart of the case was a series of statements made by President Trump and his advisersm both during the campaign and since the president took office. But the Court found that the issue was not whether to denounce Trump’s statements, but the significance of those statements in reviewing his presidential directive, “neutral on its face,” addressing a matter within the core of executive responsibility. In so doing, the Court said it must consider not just the statements of a particular president, but also the authority of the presidency itself.

So, as to those comments expressing impermissible religious hostility: We really don’t care, do we?

The Court’s order granting certiorari, vacating, and remanding is Dkt. No. 17-108, Arlene’s Flowers, Inc. v. Washington, June 25, 2018.


Check out our Check-in!

May 30th, 2018  |  Published in Blog

Please consider this a personal invitation to join me on June 6 at 1 PM Central (2 PM Eastern) as I moderate a panel of labor and employment law experts who will share their insights on how the EEOC, the DOL, and the NLRB currently are handling their enforcement mandates, and what employers need to know about this state of affairs.

The one-hour webinar, Check-In: EEOC, DOL, and NLRB Compliance—A Labor and Employment Law Roundtable, will explore:

• The current compliance environment
• Federal agency enforcement priorities
• Practical guidance for navigating tricky compliance issues
• Best practices for avoiding common pitfalls

We’ll also be going through three scenarios that take a “real life” look at some of the issues that employers may be facing. Tune in to find out what Eric Meyer, Partner, FisherBroyles, LLP; Tasos C. Paindiris, Principal, Jackson Lewis P.C.; and Jonathon Watson, Associate, Sherman & Howard L.L.C., have to say about these scenarios and what practical guidance they have to offer.

To learn more about the free webinar that offers 1 CLE credit, click here.


An Epic infringement on the ‘right to work’

May 25th, 2018  |  Published in Blog

This is gnawing at me, as we sit here sandwiched between two significant Supreme Court labor decisions.

The Epic Systems Corp. v. Lewis decision issued earlier this week emphatically allows employers to impose mandatory, individual-and-not-class arbitration as a condition of employment, notwithstanding any NLRA-endowed right of employees to engage in protected, concerted activity.

The impending Janus v. AFSCME, Council 31 decision, most prognosticators expect, will hasten the demise of “fair share” fees, if not the demise of the public employee unions that rely upon them. These fees have been prohibited by 27 states already under the guise of “right to work” legislation (in August, Missouri may become the 28th).

These “right to work” laws are premised on the notion that no worker should be compelled to join a union as a condition of employment–or to pay a union for the services they are compelled to provide to non-members. As a matter of scope, the problem is fairly limited—as of 2017, only 6.5 percent of private-sector workers are unionized, whether by choice or compulsion, and the number of unionized workplaces decreases steadily every year.

By comparison, 53 percent of employers require their employees to consent to mandatory arbitration, take-it-or-leave-it, and as Justice Ginsburg quite reasonably predicts in her Epic Systems dissent, that number will now rise sharply.

These arbitration provisions are framed as “agreements,” of course, two equal parties mutually deciding to resolve their disputes outside of court. If the employee doesn’t wish to “agree,” he or she is free to work elsewhere, as one management attorney reminded me this week.

But where are they to work, if a majority of employers compel them to give up their day in court?

If a worker wishes to avoid unionization, the overwhelming majority of workplaces remain open to him. For a worker wishing to preserve her right of access to the courts, more than half the nation’s workplaces are foreclosed. And she will have far fewer options, soon enough.

Compulsory unionism or compulsory arbitration? Which is the bigger deprivation of the “right to work”?