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White House’s FY 2018 budget proposal calls for steep OFCCP funding decrease, merger into EEOC prior to FY 2019

May 24th, 2017  |  Published in Blog

The White House’s FY 2018 budget proposal calls for a $17 million decrease in OFCCP funding and merger of the agency into the EEOC by the end of FY 2018. As for other FY 2018 actions, the budget proposal focuses heavily on compliance assistance, pay discrimination, and construction contractor compliance. In the budget proposal, released on May 23, 2017, the Trump Administration proposes $88 million in funding for the OFCCP, down from the current $105 million funding level. This funding level would include 440 full-time equivalent (FTE) employees, down from the current FY 2017 estimate of 571 FTEs. On top of reducing the overall number of FTEs, the agency would consider reducing the number of its field office locations.

Regarding the proposed merger, the Appendix section for the proposed DOL budget, at page 749, states: “The 2018 Budget proposes merging OFCCP into the Equal Employment Opportunity Commission (EEOC), creating one agency to combat employment discrimination. OFCCP and EEOC will work collaboratively to coordinate this transition to the EEOC by the end of FY 2018. This builds on the existing tradition of operational coordination between the two agencies. The transition of OFCCP and integration of these two agencies will reduce operational redundancies, promote efficiencies, improve services to citizens, and strengthen civil rights enforcement.”

Priorities. According to the DOL’s budget justification for the OFCCP, the budget request will enable the OFCCP to focus on the following priorities:

• Work collaboratively with the EEOC to develop and implement a plan to merge OFCCP into the EEOC by the end of FY 2018.

• Continue its focus on combating pay discrimination through intensive contractor compliance assistance aimed at educating contractors about their contractual obligations, supporting their voluntary compliance with those obligations, and conducting high quality compliance evaluations.

• Continue its focus on larger federal and federally-assisted construction projects that have the potential to employ large numbers of diverse workers.

The OFCCP anticipates that about 35 percent of its discrimination conciliation agreements will address systemic pay discrimination violations, and that at least 50 percent of construction compliance evaluations will be associated with large, high impact construction projects; this number reflects an increase from the 35 percent set in FY 2017.

Skilled Regional Centers. The proposed budget allows for the OFCCP to continue with its plaint to establish two Skilled Regional Centers located in the Pacific (San Francisco) and Northeast (New York) regions. These centers would have highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology. In addition, they would reduce the need for a network of field area and district offices.

Merger plan. The merger plan calls for the OFCCP and the EEOC to establish a transition workgroup to strategically plan and implement the transition process throughout FY 2018. The proposed transfer of operations would touch upon every aspect of OFCCP’s operations including compliance evaluations, compliance assistance, policy, training, stakeholder outreach and education, personnel, contracting and procurement, and information technology.

Under the budget proposal, the OFCCP would focus much of its policy-related actions and activities on supporting the agency merger process in FY 2018. This includes policy and guidance development, stakeholder engagement (e.g., compliance assistance that support contractor voluntary compliance, and communication), and compliance officer training and education. These work priorities, slated to begin in FY 2018 include:

• Drafting and reviewing legislative proposals amending VEVRAA and Section 503 of the Rehab Act;

• Drafting and reviewing a new Executive Order amending EO 11246;

• Undertaking and/or assisting with the rulemaking required to implement the transfer of authority under Section 503, VEVRAA, and EO 11246;

• Finalizing the restructuring of its compliance officer training program;

• Assessing, in coordination with EEOC, a variety of policy and training requirements, such as investigator training programs;

• Developing a plan for integrating OFCCP’s Help Desk functions and EEOC’s system;

• Working with GAO and/or OIG to close-out pending audits and audit recommendations;

• Identifying, merging, and/or eliminating redundant information technology and procurement systems and/or contracts; and

• Creating an effective stakeholder communications strategy that can be used before and during the merger.

Of the OFCCP policy priorities that are not directly related to legally executing the transfer of enforcement authority, finalizing the training program’s framework and completing the Federal Contractor Compliance Manual are the most important, the DOL budget justification states.

The DOL’s press statement on the budget proposal does not mention the OFCCP at all.

Experts predict broad opposition to proposed merger. Both business groups and civil rights groups will strongly oppose the proposed merger, according to experts in the area.

“Not often have we seen such unanimity among civil rights groups, employee advocates, and business groups who are lining up to vocally oppose this proposal,” Mickey Silberman, a Principal in the Denver, Colorado, office of Jackson Lewis P.C. told Employment Law Daily in a May 23rd interview. Considering that the Republicans currently control the House and Senate the policy optics on this proposed merger are “wholly unfavorable,” he said. Prior to the release of the budget, the business community caught wind of the merger proposal and have already had significant discussions among themselves as to the matter, and are “squarely opposed” to it, Silberman reports.

Likewise, in an OFCCP update webinar presented by the National Employment Law Institute (NELI) on May 18, 2017, attorney and former OFCCP official John C. Fox stated that most business leaders support the OFCCP’s mission, even while they may criticize its practices in carrying out that mission. Accordingly, the White House will be “stunned” as to how many Republican CEOs will vouch for the OFCCP. “CEOs want the OFCCP to be efficient, focused, and professionally run, not killed,” he said.

The administration frames this proposed merger as an action that would reduce the federal budget, but the actual budget savings would not be significant, Silberman pointed out. The EEOC’s FY 2018 budget has not been reduced, and a merger of the two agencies would call for an increase to the EEOC’s FY 2019 budget. Even if the post-merger EEOC’s FY 2019 budget were increased by half of the $88 million allocated for the OFCCP in FY 2018, that $44 million dollar in savings “would be less than a drop in the bucket,” he noted.

Fear of “super EEO enforcement agency.” The White House also asserts that the merger will reduce compliance costs and burdens on business, but it will actually have the opposite effect, according to Silberman. Among the employer community, there has been a “quickly growing realization” that the proposed merger could result in a “super EEO enforcement agency” empowered by broader jurisdiction and the ability to impose greater remedies for non-compliance, he said. Because the interests of business would not be well-served, groups such as the U.S. Chamber of Commerce and the Institute for Workplace Equality will oppose this proposal, he added.

Required Congressional actions unlikely. Among the issues with merging the two agencies is the fact that the EEOC doesn’t have statutory authority to enforce EO 11246, VEVRAA or Section 503 of the Rehab Act. While the non-discrimination requirements of the laws enforced by the OFCCP largely overlap with the those of the laws enforced by the EEOC, whether the affirmative action areas that are unique to OFCCP enforcement will stay within the DOL, be transferred to the EEOC, or be eliminated entirely, is still an issue, Fox explained in the webinar. Any of these options would require some Congressional action as well as the President amending EO 11246, he pointed out. Currently, the EEOC does not have the authority to do many things that the OFCCP has, including bringing administrative actions to debar federal contractors.

As mentioned above, the DOL’s budget justification as to the OFCCP does call on the agency to draft and review: (1) legislative proposals to amend VEVRAA and Section 503; and (2) a new Executive Order amending EO 11246. In addition, the agency would need to draft/revise its EO 11246, VEVRAA, and Section 503 regulations to implement the transfer of authority. Notably, the budget proposal is silent on whether these changes to the laws enforced by the OFCCP and their implementing regulations would eliminate the affirmative action component of the OFCCP’s enforcement mission.

In the face of strong business community opposition to the proposal, the Republicans in the House and Senate are not likely to support the proposal, and thus, Congress will not undertake the necessary actions to effectuate the merger, Silberman predicts. It will be an “unpleasant surprise” for this administration to learn that business community is lined up in opposition to this plan, he stated.


OFCCP continues to post FY 2017 settlements not publicized via agency press releases

May 18th, 2017  |  Published in Blog

The OFCCP’s practice of posting online (via its Class Member Locator webpage and FOIA Reading Room) some conciliation agreements and consent decrees for which the agency did not issue a corresponding press release continues. The following is a listing of such agreements not previously reported in Employment Law Daily . In all of the cases listed below, the contractor did not admit liability.

Compass Group USA, Inc. Compass Group USA, Inc. (Compass), a hotel and hospitality services establishment, will pay a total of $29,921.16 to resolve allegations of hiring discrimination at its Morrison Sector @ Mobile Infirmary, #1055 facility located in Mobile, Alabama. Through a compliance review, the OFCCP determined that from March 1, 2012 through January 31, 2013, the federal contractor discriminated against 189 qualified black applicants who applied for “Service Worker” positions and were not hired. Under a conciliation  agreement, signed between February 15 and March 2, 2017, the contractor will also extend 8 job opportunities to eligible class members as positions become available.

John W. Stone Oil Distributor, LLC. In a conciliation agreement, signed between March 14 and 21, 2017, John W. Stone Oil Distributor, LLC, a company that supplies dockside, midstreaming and offshore fueling, agreed to pay $271,444 in back pay and $28,556 in interest to resolve allegations that it discriminated against 51 qualified minorities who applied for “Deckhand” positions at its Gretna, Louisiana, facility and were not hired. Pursuant to the agreement, JW Stone will also extend 10 job opportunities. The period of alleged discrimination is August 28, 2012 through August 27, 2014.

Land O’ Lakes, Inc. Settling allegations of gender-based pay discrimination at its facility in Shoreview, Minnesota, Land O’Lakes, Inc. has agreed to pay $42,000 to 14 female “Livestock Production Specialists” whom the OFCCP asserts, as of May 29, 2009, were paid less than their male counterparts. The OFCCP determined that there was a pay disparity through a multiple regression analysis. Workers in those positions sell feed and related products and, according to the agency, the pay disparity was caused by discriminatory duty assignments, sales incentive pay programs, and pay increases that negatively affected females. Under a conciliation agreement signed between March 6 and 20, 2017, Land O’ Lakes also agreed to revise relevant policies, and complete a regression analysis of compensation data as of December 31, 2016, for workers in the position at issue. In addition, the contractor will complete a study to evaluate whether promotion decisions, performance evaluations, work assignments, training opportunities, and transfer opportunities are having a disproportionately negative effect on pay equity.

Nebraska Medical Center. Nebraska Medical Center, a complex of hospitals, medical clinics and healthcare colleges, will pay $275,000 to resolve OFCCP allegations that it discriminated against 137 qualified black applicants who applied for “Psych/Clerk Patient Care Tech” and “Clerk/Patient Care Technicians (CNAs)” positions at the contractor’s Omaha, Nebraska facility. The agency alleges that this discrimination occurred from January 1, 2007 through June 30, 2008. Under a conciliation agreement, signed between April 28 and May 9, 2017, the contractor will also extend 23 job opportunities as well as review and evaluate policies affecting hiring selection process.

Oil State Skagit Smatco, LLC. Through a conciliation agreement signed February 8 and 15, 2017, Oil States Skagit Smatco, LLC has agreed to pay $65,000 in back pay and interest that it discriminated against minority applicants for “Mechanic I” positions at its Houma, Louisiana establishment between August 15, 2011 through April 4, 2013. The contractor, which provides offshore equipment and services, also agreed to extend job offers to seven eligible class members and remedy other specified deficiencies with its hiring process, including failing to maintain records, to set a placement goal, and to list job openings with the state workforce agency or local employment service delivery system as required under VEVRAA.

Setex Inc. Manufacturer Setex, Inc., will pay $293,760 to resolve hiring allegations against 63 qualified applicants for “Assembly Technician” positions at its Saint Mary’s, Ohio facility. The conciliation agreement, signed on May 1st and 2nd, 2017, also provides that Setex will extend job offers until 10 eligible class members are placed into the assembly technician positions and that the contractor will revise its selection procedures. The period of alleged discrimination is January 1, 2012 and December 31, 2013.

Sno–White Linen & Uniform Rental. Pursuant to a conciliation agreement signed April 17 and 20, 2017, Sno–White Linen & Uniform Rental, a privately owned industrial laundry and uniform rental company, will pay $90,000 to resolve allegations that it discriminated against 103 whites who were not hired into “Laborer” positions, and 15 whites and 8 females who were not hired into “Route Driver” positions at its Colorado Springs, Colorado facility. Sno–White has also agreed to extend 30 job offers to white class members for Laborer positions, as well as 3 job offers to white class members and 1 job offer to a female class member into the Route Driver position. The OFCCP alleges this discrimination occurred between November 2011 and July 2014.


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.