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Paralift van drivers entitled to overtime pay because capacity of vans measured by present configuration

May 16th, 2017  |  Published in Blog

Paralift van drivers successfully argued that they were entitled to overtime pay because the vehicles they operated were not exempt from FLSA overtime under the Motor Carrier Act exemption, ruled the Eighth Circuit. In LaCurtis v. Express Medical Transporters, Inc., the appeals court concluded that a district court correctly determined that the vans were not “designed or used to transport more than eight passengers” under Section 306(c) of the SAFETEA-LU Technical Corrections Act (TCA). As originally manufactured, the vans could accommodate either 12 or 15 passengers. However, they underwent significant modifications to be employed as wheelchair accessible vehicles. The vans weighed less than 10,000 pounds, and were presently configured to accommodate less than eight passengers (including the driver).

In this case, several paralift van drivers initiated separate actions seeking to recover overtime pay. Those cases were consolidated into this action. Although the drivers routinely worked more than 40 hours a week, their employer did not pay them overtime. It argued that the drivers were not eligible for overtime because the overtime provisions did not apply to any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service—commonly referred to as the Motor Carrier Act (MCA) exemption.

Design and use. The pivotal issue was whether the paralift vans in this case were “designed or used to transport more than 8 passengers” for purposes of Section 306 of the TCA. The vans were originally designed and manufactured to carry up to 12 and 15 passengers. They have a gross vehicle weight of 10,000 pounds or less. Before placing the vans in service, they were converted into paralift vans. The vans as configured have a maximum seating capacity of five and six passengers (two passengers in wheelchairs, and up to five additional passengers).

Motor carrier exemption. In 2008, Congress passed the SAFETEA-LU Technical Corrections Act (TCA), which narrowed the scope of the MCA exemption. Under the TCA, the FLSA overtime provisions “apply to a covered employee notwithstanding the MCA exemption.” The term “covered employee” means a driver or helper “whose work, in whole or in part,” affects “the safety of operation of motor vehicles weighing 10,000 pounds or less,” unless the vehicle is “designed or used to transport more than 8 passengers (including the driver) for compensation.”

Deference. The district court gave deference to U.S. Department of Labor Field Assistance Bulletin No. 2010-2 (FAB 2010-2) in which the agency announced that it would determine whether a vehicle is “designed or used to transport more than 8 passengers” “based on the vehicle’s current design and the vehicle capacity as found on the door jam plate.” Accordingly, the lower court concluded that wheelchair placement should count as one passenger, and decided that the employees were “covered employees” under TCA Section 306 because the paralift vans they drove had fewer than eight seats. It granted the employee’s motion for partial summary judgment on the issue of liability.

On appeal, the Eighth Circuit had to determine whether the district court erred in failing to give controlling deference to 49 C.F.R. Section 571.3(b)(1) in interpreting TCA, Section 306. It concluded that it did not. There was nothing in the record to indicate that either the Secretary of Transportation or the FMCSA had examined the TCA or weighed in on its meaning or its possible effect on the MCA exemption, much less said that the limited definition in Section 571.3(b)(1) should control the appeals court interpretation of the TCA. Accordingly, the district court did not err in declining to give controlling deference to Section 571.3(b)(1) in deciding the drivers were “covered employees” under TCA, Section 306.

Meaning of “designed.” Next, the appeals court had to determine if the paralift vans were “designed or used to transport more than 8 passengers.” Here, the appeals court gave “some deference” to the WHD interpretation in FAB 2010-2. The term “designed” is not defined in the TCA, and the statute lacks a “temporal qualifier” that would make the meaning clear as it relates to the dispute in this case. It found that the interpretations proposed by both parties were reasonable. However, it concluded that Congress did not intend for the term “designed” as used in TCA, Section 306(c) to be limited to a vehicle’s original design no matter what happened to the vehicle after its original design. Because the paralift vans could no longer accommodate more than seven passengers following modification, the district court’s judgment that the employer was liable for overtime pay was affirmed.


Republican lawmakers warn HHS Secretary that memo may violate whistleblower protections

May 10th, 2017  |  Published in Blog

Efforts to remind the Trump Administration about whistleblower protections are still ongoing—and it’s a bipartisan effort. Most recently, Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-Utah) came down hard on the Department of Health and Human Services in response to a memo instructing employees to inform the agency before communicating independently with Congress. In a May 4 letter to Secretary Tom Price, the Republican leaders criticized the memo, calling it “potentially illegal and unconstitutional.” The Trump Administration has been called out on potential whistleblower issues since even before the inauguration, when federal agency Inspectors Generals were purportedly told to start looking for other employment.

In their letter to Secretary Price, the Senators reiterated the need for whistleblower protections and asked the Secretary to issue guidance clarifying that employees have the right to communicate “directly and independently with Congress.” Grassley and Chaffetz pointed out that the memo did not include an exception for “lawful, protected communications with Congress.” The Republican lawmakers expressed concern that in its current form, employees are likely to interpret the memo “as a prohibition, and will not necessarily understand their rights.”

“These provisions are significant because they ensure that attention can be brought to problems in the Executive Branch that need to be fixed,” the lawmakers wrote. “Protecting whistleblowers who courageously speak out is not a partisan issue—it is critical to the functioning of our government.”

“In order to correct this potential violation of federal law, we request that as soon as possible you issue specific written guidance to all agency employees making them aware of their right to communicate directly and independently with Congress. Such guidance should inform employees of the whistleblower protections that apply, and make clear that the agency will not retaliate against any employee who chooses to exercise these rights. Once you have issued this guidance, please provide the Committees with a copy.”

Still a problem … This is not the first time that warnings about whistleblower protections have been raised in response to actions taken under the Trump Administration. Following reports that federal employees had been ordered not to make outward-facing statements for public consumption, including through blogs and twitter accounts, the U.S. Office of Special Counsel (OSC) on January 25 released a statement detailing its enforcement of the anti-gag order provision in the WhistleblowerProtection Enhancement Act.

Amidst mounting concerns about retaliation against whistleblowers, House Committee on Oversight and Government Reform Ranking Member Elijah Cummings (D-Md.), in a January 25 interview on “Morning Joe,” expressed concern over the purported gag order imposed on federal employees at the direction of the Trump Administration. Cummings said that the Committee relies on whistleblowers and noted that there had been some confusion over whether whistleblowers can talk to Congress. Cummings assured federal employees that they can in fact talk to Congress and that the law protects then when they do so.

On February 1, Grassley, Chaffetz, and Government Operations Subcommittee Chairman Mark Meadows (R-N.C.) sent a letter to White House Counsel Donald McGahn, urging the Trump Administration to protect whistleblowers as a means of encouraging transparency throughout the federal government. “Whistleblowers can be one of the incoming Administration’s most powerful allies to identify waste, fraud, abuse, and mismanagement in the federal government and ‘drain the swamp’ in Washington, D.C.,” the Republican lawmakers wrote.

“The White House is in a position to alleviate any potential confusion for federal employees regarding whether … recent memoranda implicate whistleblower protection laws,” the Republican lawmakers suggested. “As the new Administration seeks to better understand what problems exist in this area, this is an appropriate time to remind employees about the value of protected disclosures to Congress and inspectors general in accordance with whistleblower protection laws.”

Earlier bid to remove Inspectors General. On January 31, Cummings and Gerald E. Connolly (D-Va.), Vice Ranking Member of the House Committee on Oversight and Government Reform, also sent a letter to McGahn. Cummings and Connolly requested information about what they called “disturbing reports that officials from the Trump Transition Team threatened to remove Inspectors General after the inauguration.” Inspectors General, of course are the formal “whistleblowers” of sorts who scrutinize federal agency actions.

The Inspector General Act of 1978, passed in the wake of the Watergate scandal, is aimed at ensuring integrity and accountability in the Executive Branch. The Act created independent and objective units to conduct and supervise audits and investigations related to agency programs and operations.

The Cummings and Connolly correspondence came in response to reports that on January 13, Trump officials from various federal agencies engaged in what was seen as a coordinated campaign to “inform” Inspectors General that their positions were “temporary.” Several Inspectors General were purportedly informed that they should begin looking for other employment. Following a number of urgent calls, some of the Inspectors General were informed that the action had been overruled by more senior officials and never should have occurred, but there was no official communication in confirmation.


Sharing racist Facebook post warranted demotion, arbitrator rules

May 4th, 2017  |  Published in Blog

A second shift supervisor took a vacation day to watch the Super Bowl. At some point, while at home watching the game, he received a video that he thought was amusing, and he posted it to his Facebook page. His Facebook friends included several co-employees, including at least one he supervised. As it turns out, however, the video, which was about two minutes long and showed a man giving a banana to a gorilla, was incredibly racist, given that the voiceover equated the gorilla with African-Americans. The employer received 40-50 phone calls complaining about the video. As a result, the employer demoted the supervisor, and he filed a grievance.

The employer’s justification for the demotion was found in the employee’s violation of two workplace policies. One policy required a work atmosphere free of discriminatory harassment and inappropriate behavior. The other required a respectful workplace free from violence, unethical conduct, or offensive conduct. The employee’s defense was that he had no idea that the video was racist because he did not listen to the audio and was unaware of the comparison of the gorilla to African-Americans. Even if he were to be believed, however, posting such a video created an environment that violated the employer policies.

One key question was whether those policies applied to activities that took place away from work. The arbitrator concluded that the video was “brought to the workplace” by posting the video to a Facebook page that included co-employees (and at least one person he supervised). It was the same, the arbitrator said, as if the employee had shown the video to co-workers in the break room at work.

The other key issue was whether the employee’s violation of the workplace policies justified a demotion, without first resorting to progressive discipline. Relying on testimony from a 37-year employee with supervisory responsibilities, the arbitrator concluded that the employee’s supervisory responsibilities had been fatally compromised by the Facebook posting. Admittedly, he was not given progressive discipline, but the employer could not be required to retain him as a supervisor in order to determine if morale and order suffer as a result of his actions. Its determination that his actions justified immediate demotion was reasonable under the circumstances. The grievance, therefore, was denied. Metropolitan Council and Transit Managers and Supervisors Association. 17-1 ARB ¶6883. Sherwood Malamud.


Company accused of terminating Air National Guard member settles DOJ lawsuit

April 28th, 2017  |  Published in Blog

Earlier this month, the Department of Justice announced that it had settled a case in which a Rapid City, South Dakota-based company allegedly violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to reemploy and ultimately terminating a servicemember.

According to the Justice Department’s complaint, Staff Sgt. Amber Ishmael’s military service was a motivating factor in BioFusion Health Products, Inc’s decision to deny her request for reemployment after an extended military leave and to terminate her employment.

At the time of her termination, Staff Sgt. Ishmael was a Senior Airman with the South Dakota Air National Guard, where she has served honorably since 2010. Staff Sgt. Ishmael was terminated following her deployment to attend Airmen Leadership School, a professional military education training associated with her military service. Under the terms of the settlement agreement, BioFusion has agreed to pay $3,000 in back pay.

“As a member of the Air National Guard, Staff Sgt. Ishmael was called upon to leave her civilian employment and serve our nation,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “Our role at the Department of Justice is to protect the rights of the men and women who defend our freedom and safeguard our way of life, and this settlement demonstrates our robust and continuing commitment to those efforts.”

“Members of our Air National Guard must frequently sacrifice time away from their families and civilian jobs in service to our country,” added U.S. Attorney Randolph J. Seiler of the District of South Dakota. “When military obligations require servicemembers to be absent from their jobs, their employment rights must be protected. The Civil Rights Section at the U.S. Attorney’s Office in South Dakota is committed to protecting those rights. This settlement agreement demonstrates that when employers disregard their obligations under USERRA, our office will hold them accountable for their violations.”

The complaint was filed in the U.S. District Court, District of South Dakota. The case stems from a referral by the Department of Labor following an investigation by the agency’s Veterans’ Employment and Training Service (VETS).  After resolution failed, VETS referred the complaint to the Justice Department’s Civil Rights Division.  Assistant U.S. Attorney Alison Ramsdell of the U.S. Attorney’s Office in the District of South Dakota, handled the lawsuit with the assistance of the Civil Rights Division, both of whom work collaboratively with DOL to protect the jobs and benefits of servicemembers.


Firing employee for expletive-laced Facebook post violated NLRA

April 25th, 2017  |  Published in Blog

An employer violated the National Labor Relations Act (NLRA) when it fired an employee because of comments he made on social media arguably disparaging his supervisor’s mother, the Second Circuit Court of Appeals ruled. The appeals court affirmed a National Labor Relations Board (NLRB) holding that the employee was engaged in protected conduct under the NLRA and his comments were not so “opprobrious” as to lose the Act’s protection (NLRB v. Pier Sixty, LLC, April 21, 2017, Cabranes, J.).

The NLRA prohibits employers from terminating an employee for union-related activity. But even otherwise-protected activity can lose the protection of the Act if it amounts to “opprobrious conduct,” leaving the employee subject to discharge. What constitutes “opprobrious conduct” in the context of an employee’s comments on social media? That was the question before the appeals court in the case of a catering company employee who referenced his supervisor’s mother in a profanity-filled Facebook post.

Break-time status update. The incident took place during a tension-filled lead-up to a union representation election. Two days before the scheduled vote, a supervisor used a “harsh tone” in giving directions to servers working a catering job. For one employee, it was just the latest example of management’s “continuing disrespect for employees.” So, during his break about 45 minutes later, he used his iPhone to post a message on Facebook. “Bob is such a NASTY MOTHER F@CKER,” he wrote, referring to the supervisor by name. “F@ck his mother and his entire f@cking family!!!!!” His brief post ended with “Vote YES for the UNION!!!!!!!”

The employee had ten coworkers or so among his Facebook “friends” who could view his post; he may not have known at the time that the post was publicly accessible. He took the post down after three days, but it had already come to management’s attention, and he was soon fired. He filed a charge with the NLRB that same day contending he was unlawfully terminated in retaliation for his protected, concerted activities.

Totality of the circumstances. Adopting an administrative law judge’s factual findings, a divided NLRB panel found the employee’s comments were “not so egregious as to exceed the Act’s protection.” The Board had eschewed its traditional four‐factor Atlantic Steel test used for evaluating “abusive” conduct within the brick-and-mortar workplace (a standard which had lost favor in the Second Circuit anyhow). Instead, the Board analyzed the Facebook post under the agency’s nine-factor “totality of the circumstances” test used in social media cases. The new test emerged from a recently issued guidance by the NLRB General Counsel’s office, one that paid heed to the “regularly‐observed distinction between activity outside the workplace and confrontations in the immediate presence of coworkers or customers.” (The appeals court was not convinced this new, more employee-friendly standard adequately balances an employer’s interests, but the employer didn’t challenge its use below, so the court would not address the matter.)

Checking off the “totality of the circumstances” factors, the Second Circuit held that the NLRB’s decision was supported by substantial evidence. The appeals court’s holding was informed by the larger context in which the offending comment was posted. In particular, the court noted:

  • While the Facebook post included a vulgar attack on the supervisor and his family, it also exhorted coworkers to “Vote YES for the UNION,” and the employee explicitly protested his supervisor’s mistreatment. It mattered that the underlying subject matter was workplace-related and addressed management’s poor treatment of workers and the impending union election.
  • The employer already had shown it was hostile to employees’ union activities. Before the employee ever posted the Facebook comment, the employer had threatened to rescind benefits or fire employees who voted in favor of the union. It also imposed a “no talk” rule on certain workers—including the employee discharged here, whose supervisor had prohibited him from talking about the union. As such, the social media “outburst” could be viewed not as an “idiosyncratic reaction to a manager’s request,” but as part of a larger dispute over the mistreatment of employees in the lead-up to the election.
  • The company consistently tolerated the widespread use of profanity by its workers—including the “f” word that so offended the employer here—as well as racial slurs, and it had never previously terminated an employee for the use of such expletives. In fact, the supervisor who was the target of the Facebook comment cursed at employees almost daily, screaming phrases like “Are you guys f@cking stupid?” In fact, the employee had worked for the employer for 13 years, with presumably as salty a tongue, yet only faced discharge for his election-eve profanity.
  • While the court conceded one could draw a distinction between the use of expletives generally and cursing at someone’s mother and family, the substance of the employee’s comments here could easily be taken not as a slur against the supervisor’s family, but rather, as an epithet directed toward the supervisor himself. (That’s how the law judge saw it).
  • Perhaps most notably, in terms of predictive value to employers: The appeals court observed that the comment was posted in “an online forum that is a key medium of communication among coworkers and a tool for organization in the modern era,” acknowledging the growing (and permissible) role that social media can play in labor organizing. Also, the employee claimed he had mistakenly thought his Facebook page was private, and he took the post down once he discovered it was publicly accessible. That the post was briefly visible to the whole world, as the employer pointed out, was less meaningful to the Second Circuit than the mitigating fact that his outburst did not occur in the immediate physical presence of customers; nor did it disrupt the catering event.

Insufficiently “opprobrious”—or not the true reason? The admittedly “vulgar and inappropriate” conduct in this case sat “at the outer‐bounds of protected, union‐related comments,” the Second Circuit stressed. The appeals court hewed to the Board’s totality of the circumstances test, but seemed to ground its holding not only on its sense that the Facebook post was insufficiently “opprobrious” based on the requisite factors, but also on what seemed like skepticism that the post was the real reason for the employee’s discharge. (Perhaps the Board’s “totality” test itself is borne of such skepticism, as much as a desire to balance employee rights with the legitimate need for workplace civility.)

Crediting the NLRB’s factual findings gleaned after a six-day trial, the appeals court simply didn’t seem to think the Facebook profanity (again, hardly a novelty in this workplace, according to testimony) would have earned such a harsh rebuke had it not been made by a union supporter two days before a representation election. Which evokes the timeless labor law truism, one that long predates our social media era: If you wouldn’t otherwise fire an employee for misconduct absent his pro-union leanings or activism, then you can’t fire him for misconduct—at least not without running afoul of the NLRA.


Airport workers with ‘supervisor’ in job title properly found to be non-supervisory

April 20th, 2017  |  Published in Blog

Even though members of a proposed bargaining unit had the word “supervisor” in their job titles, they were not statutory supervisors, ruled the D.C. Circuit, in finding that substantial evidence supported the conclusion of the NLRB. In Allied Aviation Service Co. of New Jersey v. NLRB, a group of 54 employees sought representation by a union. They worked for an employer that contracted to provide fueling services to approximately 50 airlines at the Newark Airport. These employees generally ensured the smooth provision of fuel service at the airport, and their job titles of all included the word “supervisor.”

Employer challenge. In March 2012, the union filed a petition seeking to represent the employees. The employer opposed the petition, arguing that the employees were supervisory within the meaning of Section 2(11) of the NLRA, and therefore exempt from its coverage. However, an NLRB regional director found that the employees were non-supervisors and directed an election in the petitioned for bargaining unit. The employer sought Board review of the non-supervisory designation.

Ultimately, the union won a tight election. Still, the employer refused to bargain, and the union charged it with refusal to negotiate a collective bargaining agreement in violation of Section 8(a)(5). The Board held in the union’s favor and ordered the employer to bargain. Among its objections to the Board’s finding, the employer challenged its classification of unit members as non-supervisors.

Statutory supervisors. The employer contended that the Board erred in classifying the unit members as non-supervisory under the NLRA. It argued that the unit members were statutory supervisors because they exercised disciplinary authority over other employees. However, the record evidence showed that the unit members merely filed forms reporting misconduct, which was then taken up by higher-ups who made the disciplinary decision. While the unit members’ filing the reports played a role in substantiating conduct on which discipline might be based, they were “never involved in the ultimate [disciplinary] decision.”

Unit members also had the prerogative to counsel employees verbally in lieu of writing up reports. However, neither the discretion to forgo a written report nor the authority to write one sufficed to establish independent disciplinary authority on unit members’ part. Moreover, the relevant evidence failed to show that unit members acted as supervisors because they were not held accountable for another employee’s mistake.


Decades-long saga ends as Bank of America agrees to pay $1 million to settle OFCCP charges of racial bias in hiring

April 19th, 2017  |  Published in Blog

Ending a 24-year saga, Bank of America (BOA) has agreed to pay $1 million in back wages and interest to 1,027 African-American applicants in a settlement that resolves OFCCP allegations of hiring discrimination against African-American applicants for entry-level clerical, teller and administrative positions at the bank’s Charlotte, North Carolina headquarters facility. Although Bank of America continues to deny these claims, it has agreed to the monetary settlement and also agreed to extend 10 job opportunities, according to an April 17, 2017 OFCCP statement announcing the settlement.

Litigation history. The case began in November 1993 when the OFCCP initiated a compliance review of the bank’s (at that time known as NationsBank) Charlotte, North Carolina facility. In April 2004, the bank responded without objection by providing the documents requested by the OFCCP and permitting the agency to conduct an onsite investigation. After the OFCCP advised the bank of its findings of discrimination, first in October 1994 and then with a revised notice in June 1995, the bank brought a federal court challenge to the agency’s authority to conduct the review, arguing that the OFCCP’s action violated the bank’s Fourth Amendment rights. NationsBank merged with the Bank of America, N.A. in 1998. When the court challenge failed (NationsBank Corp v. Herman, 4thCir, No 98-1127, April 6, 1999; cert. deniedsub nom. Bank of America Corp v. Herman, U.S.S.Ct., No 99-394, December 6, 1999) and Labor Department attorneys filed an administrative complaint, the bank pursued the case in the administrative forum.

On May 23, 2016, the bank filed a complaint in the federal district court for the District of Columbia (dkt no 1:16-cv-968) seeking review of the DOL Administrative Review Board’s (ARB) most recent ruling in the case (OFCCP v. Bank of America, ARB Case No 13-099 (ALJ Case No 1997-OFC-016), April 21, 2016). There, the ARB panel unanimously affirmed an ALJ’s conclusions that the bank intentionally discriminated against African Americans in 1993 as well as the ALJ’s award of remedies on those claims. However, a majority of the ARB panel foundfor different reasonsthat the OFCCP failed to establish that BOA was liable for the damages awarded for alleged discrimination in 2002-2005, and therefore, reversed the ALJ’s liability and remedy orders pertaining to 2002-2005 period. One of the administrative appeal judges in the 2-1 majority found fault with the OFCCP’s statistical analysis as to that period, while the other determined that the OFCCP violated the bank’s due process rights as to those claims. More detail on that ARB ruling and the history of this litigation is available here.

In December 2016, the parties informed the federal district court for the District of Columbia that they were in the process of negotiating a resolution of the matter, and requested a stay of the proceedings while settlement discussions were ongoing. On April 4, 2017, the court has entered an order to stay the proceedings until specified settlement provisions are met and ordered the parties to file a joint status report on July 7, 2017, if the matter has not been voluntarily dismissed by then.

Statements. “Although much time and effort has gone into this case by all parties, the department is pleased that the matter has been resolved. It is a win for the affected job applicants, for Bank of America and for the department,” said Acting OFCCP Director Thomas M. Dowd in the agency’s statement. “It reinforces our nation’s founding principles of fair treatment and level playing fields.”

In a statement provided to Employment Law Daily on April 18, 2017, a Bank of America spokesperson said: “We remain committed to fair hiring practices. While we continue to disagree with the Department of Labor’s analyses, we are pleased to have resolved this nearly-25-year-old matter.”


Goldman Sachs may have to reinstate plaintiffs even if they resigned or had division eliminated

April 16th, 2017  |  Published in Blog

By Lorene D. Park, J.D.

Finding that two former Goldman Sachs employees who sought reinstatement had standing to pursue injunctive and declaratory relief and that reinstatement was feasible even though one voluntarily resigned and the other left the company when her division was divested, a federal district court in New York denied Goldman Sachs’ motion to dismiss these plaintiffs’ claims for injunctive and declaratory relief. In so holding, the court revisited and departed from another judge’s interpretation of Wal-Mart Stores, Inc. v. Dukes on the issue of former employees’ standing to seek injunctive or declaratory relief.

The five plaintiffs in this long-running case accused Goldman Sachs of engaging in a pattern and practice of gender discrimination against its female associates, vice presidents, and managing directors with respect to compensation and promotion opportunities. They also claimed that gender bias “pervades Goldman Sachs’ corporate culture,” and that the company maintained a “boys’ club” atmosphere focused on things like drinking and sports. They claimed women were sexualized and those who complained were retaliated against. At issue here was the defendants’ motion to dismiss two of the plaintiffs’ claims for injunctive and declaratory relief.

Seeking reinstatement to “rightful position.” One of two plaintiffs was promoted to vice president in 2003, and became eligible to be promoted to managing director starting in 2005, but was never promoted again. She claimed she was evaluated more harshly than male colleagues, was paid less, and was given fewer opportunities. For example, she alleged that in 2007, her manager said she would be nominated to be managing director but should consider “adopting” rather than getting pregnant. When she took maternity leave, she was passed over for the promotion in favor of a male trader even though her revenue from her stock portfolio rose from $1.2M to over $6M that year and to $9.5M next year. Goldman Sachs subsequently “divested itself” of her department. Among other remedies, she sought reinstatement to “rightful position.”

The second plaintiff targeted by Goldman Sachs’ motion was a senior analyst who first worked in Miami and then Dallas, but traveled regularly to work from the New York office as well. She was promoted to associate in 2012 and made VP in 2014, but was allegedly evaluated unfairly based on gender and paid less than male colleagues. In March 2016, she asked to transfer back to Miami due to the relocation of her significant other. She was allegedly assured that “relocation to Miami in 2016 would be possible,” but she was later informed she could work in Dallas or New York or could apply for an “inferior position” in Miami. She alleged that she was denied the transfer in retaliation for participating in this lawsuit. She resigned but also seeks reinstatement.

Standing to seek injunctive or declaratory relief. In its motion, Goldman Sachs relied on a July 12, 2012 decision in this case issued by another judge. With “significant reservations,” that judge held that under Dukes, a former employee lacks standing to bring claims against her former employer for injunctive or declaratory relief. In the view of the court here, though, finding a “blanket denial” was too broad because Dukes involved a class, the application of Rule 23(b)(2) and (b)(3) to claims for back pay, and a need for individual review of monetary relief. The High Court’s decision did not address the impact of a request for reinstatement on standing. Noting that other courts have also disagreed with the 2012 ruling in this case, the court exercised its discretion to revisit the issue. Ultimately, it held that a former employee seeking reinstatement has standing to seek injunctive and declaratory relief. It also concluded that each plaintiff’s standing should be measured from the date of her motion to intervene in this case.

You don’t have to be fired to be reinstated. The defendants argued that allegations of unlawful discharge are required for a plaintiff to be eligible for reinstatement but the court disagreed. While the remedy might be most commonly used in such instances, reinstatement has been granted in a variety of other circumstances as well. That said, reinstatement may not always be feasible, and courts generally consider the circumstances to determine if it is appropriate.

Plaintiff who resigned proceeds with claim. Here, the plaintiff who resigned after being denied a transfer was a current employee when she intervened so she had standing to seek injunctive and declaratory relief. While the defendants argued that her claim became moot when she resigned, the court found that they failed to satisfy the “heavy” burden of showing it was “impossible” to grant her reinstatement. The court pointed out that she claimed she was consistently denied fair performance evaluations and resigned due to the systemic discrimination. She also claimed she was “assured” relocation was possible and that coordination of her team and “was already being done remotely.” With this in mind, and noting that she sought an order reinstating her to her “rightful position,” the court found reinstatement possible and denied the defendants’ motion.

At this point in the opinion, the court also granted this plaintiff’s motion to file a supplemental complaint adding retaliation claims under Title VII and New York City law (that the transfer denial was due to her participation in this suit). The claims arose after the most recent complaint was filed, and the plaintiff did not engage in undue delay or bad faith.

Plaintiff whose division was divested also proceeds. With respect to the plaintiff whose department was divested, although she was no longer employed at the time she intervened, the court found that she had standing to seek injunctive or declaratory relief under the principles discussed. Although Goldman Sachs argued that reinstatement was not feasible because her division no longer existed, the court disagreed. The plaintiffs claimed the company denied women opportunities for lateral moves into other areas of the firm and so it was possible that reinstatement in a lateral position might be the “rightful position” she sought.


Sexual harassment is in the news again; this isn’t anything new

April 11th, 2017  |  Published in Blog

Since the New York Times wrote April 1 about Fox News’ reported payments of $13 million in response to women’s complaints about Bill O’Reilly’s alleged behavior, with President Donald J. Trump himself weighing in during a later New York Times interview, saying “I don’t think Bill did anything wrong,” articles about sexual harassment have become inescapable.

In fact, there hasn’t been this much news about sexual harassment since former Fox News Chairman Roger Ailes left that organization after a reported $20 million settlement of sexual harassment claims brought by its former anchor Gretchen Carlson. That was six months ago. Approximately a month later (that would be five months ago), the Donald Trump/Billy Bush recording story broke about their “extremely lewd conversation about women” that took place in 2005. Just last month we learned about the Marine Corps and a private Facebook group called Marines United where naked photos of female marines were posted without their consent. It’s not like sexual harassment is out of the news for very long.

Averaging about one article every business day. We at Employment Law Daily are not surprised. Neither, I suspect, are you. Over the past five years of reporting employment law case analyses, Employment Law Daily has reported an average of approximately 244 articles per year involving sexual harassment. That is the equivalent of almost one article for every business day we publish, and that number has been pretty steady year over year. It looks like it is on track to continue in 2017; during the first quarter we have reported 64 articles involving sexual harassment.

At the EEOC too. EEOC charge statistics for sexual harassment haven’t varied that much since 2012, although they are down some: From 7571 charges filed in 2012, dropping to 7,256 in 2013, 6,862 in 2014, 6,822 in 2015, and 6,758 in 2016. Monetary benefits obtained, according to the EEOC, for sexual harassment claims run pretty steady: $43.0M in 2012; $44.6M in 2013; big drop to $35.0M in 2014; back up to $46.0M in 2015; and dropping again to $40.7M in 2016.

So what’s the point? The point is, simply, that we have chosen to tolerate some level of sexual harassment. It has a cost, in dollars and resources expended, as well as in lives and reputations compromised, but we act as though that is an acceptable cost of doing business—a societal norm, a level of which we expect and tolerate. In contrast, consider the impact that Mothers Against Drunk Driving (MADD) has had in the modification of social norms involving intoxicated driving, moving the public perception from a characterization of “drunk driving accidents” to “crashes caused by criminal negligence,” as a 2005 article in World Psychiatry suggested.

What will it take to move the needle on sexual harassment?  Is the issue lacking a grassroots organization—say, a “Mothers Against Sexual Harassment”—to lead the charge? More of the same anti-harassment training that has been used in the past does not seem to be the answer. Reports from June 2016 posit that “the type of anti-harassment training that has been done to date … is not as effective in actually changing behaviors,” according to Chai Feldblum, EEOC commissioner and co-author of the Select Task Force on the Study of Harassment in the Workplace.

The grandparent rule. Maybe another approach is warranted. A college friend who now has a medical practice instructs his employees to treat every patient like they would want their grandparent to be treated; perhaps that is the standard we could adopt for treating others in the workplace as well.


Working Families Flexibility Act: Choice between overtime pay or unguaranteed time off

April 6th, 2017  |  Published in Blog

On April 5, the House Education and the Workforce Subcommittee on Workforce Protections held a hearing on what proponents say is a commonsense proposal that would help Americans better balance work, family, and personal needs. The Working Families Flexibility Act, H.R. 1180, would amend the FLSA to let private-sector employers offer workers the choice of paid time off or cash wages for overtime hours. But those who oppose the measure argue that the bill would weaken overtime rights for low-income workers who are already struggling to keep pace with the economy and offers no guarantee that the promised time off actually would be made available.

Brief tour of the bill. Under H.R. 1180, employees would have the choice of being paid time and one-half for overtime hours as required by the FLSA, or compensatory time off at the same rate. The employee would have to agree to any compensatory time-off arrangement, either via a collective bargaining agreement made on behalf of the employee, of if not represented by union, through a written or otherwise verifiable record of an agreement made before the work is performed, which is “entered into knowingly and voluntarily by such employees and not as a condition of employment.”

Use. Employees who request the use of accrued compensatory time off “shall be permitted by the employee’s employer to use such time within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer.”

Accrual. Employees would not be permitted to agree to or receive compensatory time off unless they have worked at least 1,000 hours for the employer during 12 months of continuous employment before the date of agreement or receipt of compensatory time off. Employees would not be able to accrue more than 160 hours of compensatory time.

Unused comp time. By January 31 each year, employers would be required to pay employees monetary compensation for any unused compensatory time off for the preceding calendar year. Employers would have the option of using a 12-month period other than a calendar year, in which case payout would have to be made not later than 31 days after the end of the 12-month period. Employers would also be able to provide monetary compensation for an employee’s unused compensatory time in excess of 80 hours at any time after giving the employee 30 days’ notice.

Withdrawal. Employers also would be able to discontinue their compensatory time policy at any time upon 30 days’ notice to employees, unless a CBA provides otherwise. Employees would be able to withdraw from the agreement at any time also, but to get monetary compensation for unused compensatory time off, they would have to make a written request and the employer would have 30 days to pay.

Good or bad for workers? As is often the case, there is disagreement about whether the measure would serve the best interests of workers. Proponents pointed out that for more than 30 years, public-sector employees have been able to accrue “comp time” for working overtime hours. But outdated federal rules prevent private-sector workers from receiving the same flexibility. “This simply isn’t right, and it isn’t fair,” said Subcommittee Chairman Bradley Byrne (R-Ala.) at the hearing. “Private-sector workers should be afforded the same freedom to do what’s best for themselves and their families. For many Americans working paycheck to paycheck, earning extra overtime pay is the choice that’s best for them. But the federal government shouldn’t assume that’s the best choice for all workers.”

Subcommittee Democrats, see it differently, though, suggesting that instead of paying workers for their overtime work, H.R. 1180 would let employers pocket employees’ overtime pay in return for a vague promise that employees may be able to take compensatory time off at some point in the future.

“This bill ought to be named the Betrayal of Working Families Act because it once again violates the Trump administration’s promise to empower vulnerable Americans,” Subcommittee Ranking Member Mark Takano (D-Calif.) said in a statement. “The bill gives employers the right to deny low-income workers the overtime pay they’ve earned, while giving their employees nothing but vague promises in return. At a time when there is so much this Committee can do to support working families, it is disappointing that we are even considering legislation that would take us in the opposite direction.”

Parity and flexibility. One invited witness pointed to the parity between government workers and private employees, as well as the flexibility that H.R. 1180 would provide. “Many Wellstone employees work side-by-side with Huntsville Police Department officers, who do benefit from the option of receiving overtime pay or comp time,” said Leslie Christ, chief resource officer of an Alabama nonprofit focused on behavioral health. “It is difficult for employees to understand why the rules are different for public or governmental agencies when they work so hard for our community.”

Christ went on to explain how hard it was to inform an expectant mother that she couldn’t accrue comp time. “She incurred significant overtime and asked me if she could ‘waive’ the overtime to ‘credit’ her that time … I had to explain to her that we were unable to do so because it was against the law,” Christ said. “It was difficult conveying this message to this single mom-to-be, who felt she should be allowed the option to choose for herself whether to take the overtime pay or paid leave when her child was born.”

Crystal Frey, vice president of human resources for a Maryland real estate business, shared how comp time would help employees juggling school, family, and work. “I was recently approached by a non-exempt leasing consultant who was facing numerous life-changing events at one time, including the birth of her child, her upcoming marriage, and the completion of her college degree … If comp time had been an option available to her, I believe it would have given her even more access to paid leave.”

Urging Congress to pass the Working Families Flexibility Act, Frey said, “It is troubling that Congress has not yet extended this same benefit to hardworking private-sector employees. In the 21st century workplace, it’s time to give private-sector non-exempt employees the opportunity to choose for themselves whether to receive cash wages or paid time off for working overtime.”

Built-in protections. While opponents say the bill lacks necessary worker protections, Leonard Court, a labor attorney with years of experience, reminded members, “The bill is carefully drafted to ensure that employees retain maximum flexibility in being able to choose whether to take the comp time option, whether to continue exercising it, when they may seek a cash-out of their banked time, and to protect them from any coercion or undue influence from the employer as to whether they exercise the comp time option.”

Court added, “The Fair Labor Standards Act’s 40-hour workweek as the threshold for earning overtime compensation remains totally untouched.”

Christ explained how the bill puts workers in control. “If an employee opted to participate in a comp-time arrangement but later realized that overtime pay was a greater need, the employee would have the right to discontinue participating in the comp time program after given written notice,” Christ said.

Smoke and mirrors? Not everyone sees the bill as pro-worker. Vicki Shabo, Vice President of the National Partnership for Women and Families, testified about the legislation’s impact on workers. Speaking in opposition to H.R. 1180, Shabo said “the so-called Working Families Flexibility Act … will harm rather than help America’s working families. People today are struggling to meet their job and family obligations, to make ends meet and to save for the future. For most people, there is no “either-or choice” to be made between time and money. Both are absolutely critical to survival, security, and the pursuit of better opportunities.”

Shabo said there is no question that working people and families need updated workplace policies and higher wages, noting also that in some cities and states, successful policies are in place to offer just that. “Unfortunately, H.R. 1180 would do the opposite. This legislation is based on smoke and mirrors,” she said. “It pretends to offer the time off people need when they need it but, in fact, it offers a pay cut for workers without any attendant guarantee of time. It also sets up a dangerous, false dichotomy between time and money when, in fact, working families need both.”

“Quite simply, H.R. 1180 would be a step in the wrong direction for approximately 59 million hourly, full-time workers as well as for salaried, non-exempt workers who are eligible for overtime pay,” Shabo continued. “Instead of providing working people and their families with the time off and the financial stability they need to care for themselves and their loved ones, this ‘flexibility’ bill offers forced choices and false promises.”

Bills that would not trade pay for time off. Subcommittee Democrats noted that several concrete solutions that would strengthen wage and hour laws rather than weaken them already have been offered. For example, the Healthy Families Act, Schedules that Work Act, and the Family and Medical Insurance Leave Act would provide families with paid time off from work and fair schedules without forcing workers to forfeit overtime pay or work excessive hours to spend time with their families.