Employment Law Update

Presenters:Eric de los Santos, TrueBlue, Inc.John Nolan, Jackson Lewis, P.C.Marjory Robertson, Sun Life FinancialDavid Stringer, The Progressive

Which employment law trends/issues keep you up at night? (Choose up to 3)

FLSA Misclassification Issues Co-employment / Joint Employer Issues Recent NLRB Decisions Increased Agency Enforcement & Systemic Initiatives Leave Absence Management Class / Collective Action Waivers Proliferation of State Employment Laws Background Check Compliance Other

POLL QUESTION:

What’s New in 2016?• Recurring Themes

– Co-employment / Joint Employer Liability– Impact of Recent NLRB Decisions– Proliferation of State Laws– Increased Agency Enforcement & Systemic Initiatives

• What does this all mean and what should we be doing?

Top 3 Employment Law Trends / Issues:

POLL RESULTS:

WAGE & HOUR UPDATE

• Wage & Hour Issues– Wage & Hour claims represent over 90% of the employment

class actions filed every year– Federal wage & hour lawsuits filed nationally have increased

more than 400% since 2000, with a record high in 2015 of 8,781• Employee Misclassification

– Exempt v. Non-Exempt Status– New White Collar Exemption Regulation

– Resulting in the failure to pay overtime wages, failure to provide meal and rest breaks, and to account for off-the-clock work

• Expansion of joint employer liability• Pay Practices Issues Continue to Evolve Even at the State & Local

Level• Arbitration with Class Action Waiver to the Rescue?

Wage and Hour Legal Trends Update

• Salary basis test:Employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed.

• Salary level test:The amount of salary paid must meet a minimum specified in the regulations.

• Duties test:Primary duties must involve executive, administrative, or professional duties, as defined in regulations.

Rationale for white collar exemptions:

Typically earn salaries well above the minimum wage and enjoy other privileges that compensate them for longer work hours—fringe benefits, job security, advancement.

Work cannot be dispersed easily to other workers.

White Collar Exemptions

• New salary level for White Collar Exemptions: equal to the 40th percentile of weekly earnings for full-time salaried workers based on BLS data:– $913 per week or $47,476 a year. – BLS began tabulating data in 2015 at the request of the DOL.

• New salary level for Highly Compensated Exemption: equal to the 90th percentile of earnings for full-time salaried workers based on BLS data:– Final Rule is $134,004 per year--$2,577 per week. – HCE only requires employee to have one exempt duty, effectively amounting

to anyone making more than $134,004 is exempt.

Changes: Salary Level Will Increase

• Without automatic adjustment, DOL states it will be in perpetual rulemaking.

• Updates will occur every three years, the first to occur January 1, 2020.

• DOL will give 150 days notice prior to change—August 1, 2019.

• DOL estimates the first update will result in the salary level being set at $51,168.

Changes: Salary Level Will Increase Automatically Every 3 Years

• Franchisor-Franchisee relationships• DOL Focus on “Fissured” industries (i.e., industries

with high levels of independent contractors and franchisees)

• Independent Contractor v. Employee– NLRB and DOL “Economic Realities Test”

Expansion of Joint Employer Liability

JOINT EMPLOYER LIABILITY

Who are Contingent Workers? Anyone your organization engages to perform work but who is not your organization’s employee. Includes•Independent Contractors

– Consultants; Technical experts– You pay them directly, frequently by 1099

•Other Employer’s Employees– Staff augmentation; Outsourced labor– You pay a third-party supplier

What’s New This Year?

Joint Employment Risks Continue to Gain Visibility

Administrator’s Interpretation No. 2016-1 (Jan. 20, 2016) Fair Labor Standards Act and Seasonal Agricultural Worker Protection Act•Horizontal Joint Employment, Vertical Joint Employment•Potential for wage-and-hour joint liability

Wage and Hour Division Fact Sheet #28N (January 2016)Joint Employment and Primary and Secondary Employer Responsibilities Under the Family and Medical Leave Act (FMLA)•Labor supplier and purchaser each may have obligations under the FMLA•Both employers’ workers may count toward FMLA jurisdiction for the other’s workforce

What’s New This Year?

Joint Employment Risks Continue to Gain Visibility (cont’d)

Affordable Care Act (ACA) IssuesThe ACA’s definition of “employee” is expansive, resting on common law employment •Right to control work and working termsIt can sweep in contingent workers over whom an organization exercises sufficient control•Compare: janitorial service vs. IT staff augmentation

Why does this matter? •Applicable large employer status•Employer mandate compliance status

What’s New This Year?

Joint Employment Risks Continue to Gain Visibility (cont’d)

Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015)Setting joint employer standard under the NLRA; finding indirect and “reserved right” control sufficient for joint employer relationship

•Green JobWorks LLC/ACECCO, LLC, 05-RC-154596 (Oct. 21, 2015)Early post-Browning decision finding no joint employment; on appeal to Board.

Miller & Anderson, Inc., 364 NLRB No. 39 (July 11, 2016)Holding that employer consent not necessary to form bargaining units combining employer’s own employees and its joint employees (joint with labor supplier), overturning 2004 precedent.

What Should You Do Now?Assess your outsource staffing arrangements•Do you have control? Right to control? •Are there indicia of common law employment?

Assess your risks•Is there a bargaining unit risk? •Is there an ACA employer mandate risk? •Is there a risk of liability for employment practices?

Take responsive actions•Can you achieve similar results without control (or right of control)? •Can you negotiate indemnifications with your labor suppliers?

NLRB YEAR IN REVIEW

What’s New: NLRB Year in Review

ELECTIONS• Authorization Cards. Actual signatures no longer needed to support

petitions for election.

•Bargaining Units – Joint Employer Units. Employees of staffing companies and their customers may be joined together in a single bargaining unit (Miller & Anderson, 364 NLRB No. 39 (2016)).

•Bargaining Units – Micro-Units. Specialty Healthcare upheld allowing unions great discretion in selecting a bargaining unit that is most advantageous to winning an election. See e.g., NLRB v. FedEx Freight, Inc., 2016 U.S. App. LEXIS 14593 (3rd Cir. August 9, 2016), FedEx Freight, Inc. v. NLRB, 816 F.3d 515, 521 (8th Cir. 2016).

• Continued Application of NLRB’s “Quickie Election Rule”– NLRB’s revised election procedures decreasing the amount of time

between petition to election have been in effect for nearly 18 months– In the first year, average time from petition to election was decreased

from 38 days to 24 days. Union win rates in initial certification elections have not increased, however, and continue to hover around 70%.

Source: NLRB: https://www.nlrb.gov/news-outreach/news-story/annual-review-revised-r-case-rules

What’s New: NLRB Year in Review

POLICY ITEMS• Handbook Rules. NLRB continues its critique of what it believes to be overly-

broad work rules that allegedly chill protected activity. Spring Valley Hospital, 363 NLRB No. 178 (2016).

• Arbitration Agreements. Despite D.R. Horton and Murphy Oil, Board continues issuing decisions finding employer violations of the Act for maintenance of a mandatory arbitration policy requiring employees to submit employment-related claims to individual arbitration as a condition of employment.• Dozens of cases involving this issue are currently pending in the appellate

courts. In May 2016, the Seventh Circuit ruled in favor of the Board’s policy in Lewis v. Epic Systems, 823 F.3d 1147 (7th Cir. 2016). In August of 2016, the Ninth Circuit also sided with Board in Morris v. Ernst & Young, LLP, No. 13-16599 (9th Cir. Aug. 22, 2016) Because a circuit split exists, the issue is ripe for review in the Supreme Court.

CLASS / COLLECTIVE ACTION WAIVERS

What are they? •Agreements to waive the right to litigate on a representative basis, either in a class or collective action•Generally bundled with an agreement to arbitrate (rather than litigate) employment law claims

In short, these agreements substitute arbitration for courtroom litigation, changing the venue and setting the procedural rules, including the rule that claims must proceed individually.

Why Think About this Now? •AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) The FAA preempts any state law that otherwise favors class actions over individual arbitration. In the specific case, the Court held that the FAA preempted a California law that disallowed class action waivers. This cleared the way for class action waivers nationwide.)•American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013)

Class action waivers are enforceable even if the practical effect is to make any litigation unlikely because the costs of bringing an individual claim exceed the expected recovery. In short, the Court ruled that the FAA allows parties to substitute arbitration for court litigation and to set the terms of arbitration, even when those terms make it unlikely that a particular type of claim (a low-value individual claim) will be brought in the first place.

In combination, these recent cases made clear that employers (and businesses) could require employees to arbitrate and do so individually, not as a class.

Why Think About this Now?

(Source: PACER, as reported broadly by secondary sources).

What’s (Not) New This Year?The National Labor Relations Board (NLRB) continues to rule that class action waivers violate the National Labor Relations Act (NLRA).

•The NLRB’s argument: filing a class/collective action lawsuit is a form of “concerted activity” protected by Section 7 of the NLRA, so any restraint on such filings is an unfair labor practice in violation of Section 8 of the NLRA, which prohibits employers from “interfer[ing] with, restrain[ing], or coerc[ing] employees in the exercise” of Section 7 rights. See D.R. Horton Inc., 357 NLRB 184 (2012).

•The counterargument: the NLRA must yield to the Federal Arbitration Act (FAA), per U.S. Supreme Court precedent requiring enforcement of validly formed arbitration agreements. See Murphy Oil U.S.A., Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015); Richards v. Ernst & Young, LLP, 744 F.3d 1072, 1075 n.3 (9th Cir. 2013); D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013); Sutherland v. Ernst & Young LLP, 726 F.3d 290, 297 n.8 (2d Cir. 2013); Owen v. Bristol Care, Inc., 702 F.3d 1050, 1052 (8th Cir.

2013).

What’s New This Year?Lewis v. Epic-Systems Corp., No. 15-2997, --- F.3d ----, 2016 WL 3029464 (7th Cir. May 26, 2016) •First U.S. appellate court to accept the NLRB’s D.R. Horton line of argument, creating a Circuit split.

– Conflicts with Second, Fifth and Eighth Circuits•Accepted proposition that bringing class/collective actions is a Section 7 right; rejected argument that FAA controls.

So what’s next? •U.S. Supreme Court review is widely expected

Other Developments•Many state and lower federal courts have offered commentary on drafting particulars

What Should You Do Now?

If you have adopted an arbitration program with class/collective action waivers, you should:•Watch the developing law carefully, especially with respect to drafting fine points•Weigh the costs and benefits of seeking to enforce your waiver•If you’re in the Seventh Circuit, recognize that your waivers are not enforceable at this time

If you have not adopted an arbitration program with class/collective action waivers, you should: •Decide whether to jump in or wait and watch on sidelines•Monitor jurisdiction-specific law for drafting tips•Speak with colleagues before implementing, as there are a number of implementation issues and questions that many of us have addressed and answered already

LEAVE ABSENCE MANAGEMENT:YEAR IN REVIEW

https://www.dol.gov/whd/fmla/employerguide.pdf

1.Very user-friendly comprehensive discussion of employer obligations.2.Generally nothing “new” but good resource.3.DOL emphasizes that managers and HR must be able to recognize FMLA-qualifying reasons for leave and properly initiate required notifications and eligibility check – employee need not make formal FMLA leave request to trigger employer obligations.4. A number of cautions to employers about actions that can constitute unlawful interference, such as:

Requiring excessive proof of family relationship or in loco parentis status If a medical certification is complete, employer may not ask for more medical

information or require a doctor’s note for each absence

DOL’s 2016 FMLA Employer’s Guide Highlights

REVERSING JURY VERDICT FOR EMPLOYEE:• Hartmann v. Dow Chemical Co. (6th Cir. 8/16/16)

AFFIRMING SUMMARY JUDGMENT TO EMPLOYER:• Massey-Diaz v. University of Iowa Community Medical Services (8th Cir. 6/27/16) • Thomas v. Dolgencorp (“Dollar General”) (11th Cir. 3/15/16) • Massey-Diaz v. University of Iowa Community Medical Services (8th Cir. 6/27/16)• Curtis v. Costco Wholesale Corp. (7th Cir. 11/24/15) • Perry v. American Red Cross blood Services, TVA Reg. (6th Cir. 6/01/16)

GRANTING SUMMARY JUDGMENT TO EMPLOYER:• Chase v. United States Postal Service (D. Mass. 03/01/16) • Jones v. Gulf Coast Health Care of Delaware, LLC (M.D. Fla 02/18/16) • Disbrow v. Oticon, Inc. (E.D. Missouri 02/04/16)• Darden v. AT&T (E.D. Missouri 01/14/16)• Capps v. Mondelez Global LLC (E.D. Pa. 11/24/15)

FMLA Decisions – Employer Wins

Proof of retaliatory intent by Temporal Proximity:1.Some courts: Temporal proximity alone between the protected activity and the adverse action is not enough to establish an inference of animus. 2.Other courts: Employee can prove a causal link between protected activity and adverse employment action through “temporary proximity” of the 2 events. However, in order for timing alone to be enough, the temporal proximity must be “very close.”3.The temporal proximity must be between (1) the date of the adverse action and (2) the date an employer knew of an employee's use (or planned use) of FMLA leave --- not the date the leave ended.

Highlights from FMLA Pro-Employer Opinions

Pretext: Different treatment of similarly situated employees.

1.Employees can show that an employer’s proffered reason for an adverse action is “pretext”.2.One of the most common methods to prove pretext is to offer evidence that similarly situated employees were not treated as harshly as the employee who took FMLA leave.3.Courts have required exacting proof that “similarly-situated employees” were, in fact, similarly situated: Similarly situated individuals must have had the same supervisor, been subject to the same standards and engaged in the same conduct (or conduct of comparable seriousness) without any mitigating or distinguishing circumstances.

Highlights from FMLA Pro-Employer Opinions

Pretext: Discriminatory Statements.1.Isolated and ambiguous comments do not support a finding of animus. 2.Statements made by a non-decision-maker or a decision maker outside of the decision-making process cannot be the sole basis for providing pretext or retaliatory intent.3.Isolated or stray remarks are not probative of intent if not in “temporary proximity” to the adverse action.4.Distinction between comments about “taking” FMLA leave and potential “abuse” of FMLA leave. “Even assuming [employer] was skeptical of [employee’s] use of FMLA leave, ‘[n]othing in the FMLA prevents employers from ensuring that employees who are on leave from work do not abuse their leaves.’”

Highlights from FMLA Pro-Employer Opinions

Issues regarding “interference” with FMLA rights1.Employer’s intent is immaterial to an FMLA interference claim and Employer can interfere by discouraging an employee from taking an FMLA leave.2.An employee’s voluntary and uncoerced acceptance of a light duty assignment while recovering from a serious health condition does not constitute interference. 3.Nondisruptive “de minimis” communications such as short phone calls requesting the employee to pass on institutional knowledge are not interference but requiring the employee to complete work-related tasks or produce work product may be interference.4.Failure to comply with call-in procedures. Termination for “excessive absences” is not FMLA interference even though absences may have qualified for FMLA protection but employee did not follow call-in procedures and there were no “unusual circumstances” excusing her.

Highlights from FMLA Pro-Employer Opinions

“Honest Belief” issues1.Honest belief about misconduct will shield an employer from liability even if it is later discovered that its belief was incorrect.2.Examples of misconduct that justified termination:

• Employee took FMLA leave for shoulder surgery, and posted on Facebook photos of 2 trips to Busch Gardens in FLA and a trip to St. Martin while on leave.

• Employer uncovered evidence that Employee either falsified company records or worked other employees “off the clock.”

• Employer terminated Manager after subordinate employee told Employer that Manager said he was planning to take an FMLA leave to prevent demotion because of performance issues.

• Employee on Intermittent FMLA leave for degenerative bone disease/hip pain went to pub, became intoxicated and was arrested for DUI. Employer subsequently learned of arrest and terminated employee for dishonesty about purpose of leave and abuse of FMLA leave for drinking in a bar. Employee argued that drinking in a bar is not inconsistent with having severe and debilitating leg pain. Court: even if Employer was wrong, the reason was not discriminatory

Highlights from FMLA Pro-Employer Opinions

SLPC 27247 6/16 (exp. 6/17)

Individual liability of managers and HR• FMLA individual liability claims allowed against an HR Director because she “played an important role” in

and had “sufficient control” over the termination decision. Graziadio v. Culinary Institute of America (2nd Cir., 3/15/16)

FMLA worksite of telecommuter is office to which employee reports – not home. [FMLA Regs. 29 USC § 2611(2)(B)(ii)] 50 Employees at same site (or w/in 75 miles) satisfied for employee who worked offsite and from home through telecommunication and reported to out-of-state Corporate office.Donahoe-Bohne v. Brinkmann Instruments (E.D. La. 6/15/16)

Intermittent FMLA leave may be available to “sleep on the job” or to be relieved of mandatory overtime.-Lasher v. Medina Hospital (N.D. Ohio 02/05/16) (sleeping on the job)-Sweet v. County of Gloucester (D.N.J. 06/15/16) (Mandatory overtime)-Hernandez v. Bridgestone Americas Tire Ops. (8th Cir. 02/10/16) (Mandatory overtime)

“Chronic condition” protected before diagnosis-Smith v. AS America, Inc. (8th Cir. (07/14/16) (doctor’s visits can occur after leave commences)

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Other Notable FMLA Decisions

2016 ADA DEVELOPMENTS

https://www.eeoc.gov/eeoc/publications/ada-leave.cfm 1.Employers must consider unpaid leave as a reasonable accommodation so long as it does not create undue hardship – even if employee is not eligible for leave under the FMLA or other law or policy or has exhausted FMLA or other leave.2.“Maximum leave policies” may be permissible but employers must grant exceptions when necessary as an accommodation. (EEOC v. Lowe’s $8.5 million settlement for inflexible leave policy 05/2016)3.“100% healed policies” not allowed. Employer must engage in individualized analysis to determine whether or not employee can return to work with a reasonable accommodation without causing an undue hardship or resulting in a direct threat to the safety of the employee or others.4.Reassignment is a potential accommodation. Employer must place a disabled employee in a vacant position for which he or she disqualified and cannot require the employee to compete with other applicants for the open position. This rule does not apply to promotions or negate uniform seniority systems.5.Factors that may be considered in evaluating undue hardship include: (1) frequency of leave; (2) flexibility on when leave may be taken; (3) Whether intermittent leave is predictable or unpredictable; (4) impact on a company’s operations. 6.Indefinite leave is not a reasonable accommodation.

EEOC 2016 Employer’s Guide on Leaves Highlights

• DOJ Issued a Final Rule interpreting the ADAAA https://www.ada.gov/regs2016/adaaa.html

• Effective: 10/11/16.

• No surprises here: Confirms the intent of the ADAAA that the definition of disability should interpreted broadly.

• Expressly adds dyslexia and Attention-Deficit/Hyperactivity Disorder (ADHD) to the list of physical and mental impairments

DOJ Final Rule on ADA Amendments Act of 2008 (ADAAA)

REVERSING JURY VERDICT FOR EMPLOYEE: Vangas v. Montefiore Medical Center (2nd Cir. 05/19/16)AFFIRMING SUMMARY JUDGMENT TO EMPLOYER:

• Maat v. County of Ottawa (6th Cir. 08/10/16) • Stallings v. Detroit Public Schools (6th Cir. 07/28/16) • Felix v. Wisconsin Dept. Transp. (7th Cir. 07/06/16)• Perry v. American Red Cross Blood Services, TVA Region (6 th Cir. 06/01/16)• Deister v. Auto-Club Ins. Assoc. (6 th Cr. 05/11/16)• Wagner v. Sherwin-Williams Company (6th Cir. 05/10/16)• Frazier-White v. Gee (11th Cir. 4/7/16)• Lang v. Wal-Mart Stores East, PP (1st Cir. 03/02/16)• Minter v. District of Columbia (D.C. Cir. 12/29/15)

GRANTING SUMMARY JUDGMENT TO EMPLOYER:• Sloan v. Tate & Lyle Ingredients Americas, LLC (E.D. Tenn. 08/05/16)• Mdamu v. American Traffic Solutions, Inc. (D. Ariz. 06/28/16)• Geter v. Government Publishing Office (D.D.C. 06/23/16)• Williams v. AT&T Mobility Services (W.D. Tenn. 06/06/16)• Caporicci v. Chipotle Mexican Grill (M.D. Fla. 05/27/16)• Fiorillo v. United Technologies Corp. (D. Conn. 03/21/16)• Salazar v. Tribar Manufacturing, LLC (E.D. Michigan 03/01/16)• Fischer v. Pepper Hamilton, LLP (E.D. Pa. 01/29/16)• Green v. Bakemark USA, LLC (S.D. Ohio 01/20/16)

ADA Decisions – Employer Wins

• Where an employer has already provided an employee with lengthy period of medical leave, an extension to that leave can only be a reasonable accommodation when the duration is definite.

• Request for indefinite leave is not a reasonable accommodation as a matter of law

• Request for indefinite extension of light-duty status was unreasonable as a matter of law.

Requests for indefinite leave

• Teacher applied for disability benefits: “[A] plaintiff’s sworn assertion in an application for disability benefits that she is, for example, ‘unable to work’ will appear to negate an essential element of her ADA case – at least if she does not offer a sufficient explanation.” Teacher asked for 4 months leave but presented no evidence to explain inconsistency with Social Security Administration disability finding.

• Employee applied and was approved for disability benefits. Court said that while pursuit and receipt of disability benefits does not automatically estop an employee from pursuing an ADA claim an ADA plaintiff cannot simply ignore the inconsistency.

Impact of applications for Disability Benefits

• Employer is not required to accommodate an employee by exempting her from having to perform an essential job function.

• Whether a job function is essential is a question of fact that is typically not suitable for resolution on a motion for summary judgment. However, summary judgment granted where job description referred to driving as an essential function and employee admitted he spent 12-25% of his work week driving even though employer did not provide managers with company vehicles, gas allowances or liability insurance.

• Employee's request that a portion of her workload be reassigned to others is not a reasonable accommodation because reducing workload is not a reasonable accommodation and employee did not limit request to nonessential job functions.

• Reasonable accommodation does not include removing an essential function or shifting essential job functions onto others.

Reassignment/removal of job duties

• Court held that an essential function of any government job is ability to appear for work.

• “The ADA ‘does not endow all disabled persons with a job – or job schedule – of their choosing.’” (quoting EEOC v. Ford Motor Co. (6th Cir. 2015)

• Another court noted that the 6th Circuit has long held that an employee who cannot meet the attendance requirements of the job at issue cannot be considered a qualified individual under the ADA.

• Whether regular attendance is an essential function depends on the nature of the job itself. Does job involve teamwork, a high level of face-to face interaction, or immediate access to documents or other information located only in the workplace?

• An employee who excessively violates an employer's attendance policy is not qualified as a matter of law.

Regular attendance: An Essential function?

•Employee requested reassignment to another unspecified position. Court said Plaintiff did not support request with any evidence that there was a specific, full-duty vacant position she was qualified for and could have done given her medical condition.•Employers are not obliged to create a job opening so a disabled employee can work.•“Record is devoid of any request by [Employee] for reassignment to another position, let alone a vacant desk job.”

Transfers to other Positions

• No liability for failure to engage in interactive process where there is no evidence that a reasonable accommodation existed.

• Failure to participate in interactive process only actionable where a reasonable accommodation is identified.

• “In the absence of an accommodation request that was reasonable, [employer’s] duty to initiate the process was never triggered.”

• Employee bears the burden of proposing reasonable accommodations (saying she needed “an adjustment” insufficient)

• Statement by employee “you need to review my medical records” and that he “wanted a meeting to discuss [his] options regarding [his[condition and employment”, and “adjusting position with a different manager] not enough to constitute an accommodation request.

Liability for failure to engage in the interactive process?

• Courts are split as to whether termination based on conduct related to or caused by a disability constitutes unlawful discrimination.

• Good discussion of case law in Felix v. Wisconsin Dept. of Transportation (7th Cir. 07/06/16) and Caporicci v. Chipotle Mexican Grill, Inc. (M.D. Fla. 05/27/16), both of which ruled that when an employee engages in behavior that is unacceptable in the workplace, the fact that the behavior is precipitated by mental illness does not present an issue under the ADA – the behavior itself justifies discharge.

• Examples: Employee with mental health disabilities found screaming “you hate me”, “you all think

I’m crazy”, and “let me die” and with cut marks on right wrist, kicking and rolling on floor.(Felix)

Employee who appeared inebriated from effects of new medication for panic attacks.(Caporicci)

Termination for Conduct caused by disability

Pregnancy Accommodations• Pregnancy itself is not a disability – however, complications caused by pregnancy

can be.• Pregnancy Discrimination Act: prohibits discrimination but fall short of requiring

accommodation in all cases.• Young v. UPS: Complicated ruling. Employer not absolutely required to offer same

accommodation to pregnant employees that it offers to non-pregnant employees -- but must have a good reason for not doing so.

• State laws: Many states have – or are adopting – laws requiring pregnancy accommodations:– Most recent: Colorado; Ohio (bill pending).– Also: RI; Illinois; DE; NY; Alaska (public sector only), CT; LA; TX (public sector

only); MD; NJ; Dist. Col.; Minn.; WV; Nebraska; ND; Hawaii; Utah; Philadelphia.• EEOC v. Motel 6 (8/31/16) The EEOC filed suit after Motel 6 place pregnant

employee with high risk pregnancy on forced leave of absence. (https://www1.eeoc.gov//eeoc/newsroom/release/8-31-16.cfm?renderforprint=1) .

Medical Marijuana laws25 States and DC have medical marijuana laws:

•http://medicalmarijuana.procon.org/view.resource.php?resourceID=000881 (site has list of states that have adopted medical marijuana laws)

•States passing laws in 2016: Ohio and Pennsylvania (Illinois – 11/2015)•Marijuana is still an illegal controlled substance under federal law.•More than 50% of the laws prohibit marijuana use at work and/or provide that employers need not accommodate marijuana use at work. •Only some of the laws prohibit employment discrimination against employees who use medical marijuana (Arizona, Connecticut, Delaware, District of Columbia, Illinois, Maine, Nevada, New York, Minnesota, Pennsylvania, and Rhode Island).•Shepherd v. Kohl’s Department Stores,Inc. (E. D. Ca. August 2, 2016) (Employee who was medical marijuana cardholder tested positive for marijuana after work place accident – court granted summary judgment to employer on disability/failure to accommodate claims but not on breach of implied contract claims where employee handbook stated that employees in CA would not be discriminated against for valid medical use of marijuana)

Jurisdictions That Have Paid Sick Leave LawsStates Cities Counties/Districts/Territories

California

Connecticut

Illinois (effective 1/1/17)

Massachusetts

Oregon

Vermont (effective 1/1/17)

California: Emeryville, Los Angeles, Oakland, San Diego, San Francisco, Santa MonicaIllinois: ChicagoMinnesota: MinneapolisNew Jersey: Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Newark, New Brunswick, Passaic, Paterson, Plainfield, Trenton New York: New York CityPennsylvania: PhiladelphiaWashington: Seattle, Spokane, Tacoma

District of Columbia

Puerto Rico

Montgomery County (MD)

Paid sick leave laws are also being considered in Alaska, Arizona, Chicago, Florida, Hawaii, Louisiana, Maryland, Michigan, St. Paul (Minnesota), Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, South Dakota, Virginia, Washington, and West Virginia. In addition, the U.S. Department of Labor has issued a proposal that requires federal contractors and subcontractors to provide workers with seven days of paid sick leave on an annual basis for contracts starting on 1/1/17.

Jurisdictions That Have Paid Family Leave Laws

States Cities Pending legislationCalifornia

New Jersey

New York

Rhode Island

Washington (unfunded)

San Francisco Massachusetts

Connecticut

District of Columbia

The latest trend: Employers offering their own paid Family Leave Programs if when not legally required. Examples: Facebook; Netflix;Hilton; Patagonia; Etsy; Bank of America; Johnson & Johnson

Paid Family Leave was the topic of several speeches at the 2016 DNC.

Absences to Care for Disabled Family Member

• ADA is clear that employers do not have to provide a reasonable accommodation under ADA to someone who is associated with someone with a disability.

• However, an employee may be eligible for FMLA and/or local Sick Leave for this purpose.

• An employee in California may also be entitled to an accommodation under the CA anti-disability discrimination law. Castro-Ramirez v. Dependable Highway Express, Inc. (Ct. Appeal 04/04/16), further proceedings (Ct. Appeal 08/29/16)

• NYC: Caregiver nondiscrimination law effective 05/04/16

AGENCY UPDATES:YEAR IN REVIEW

EEOC UPDATE

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• Background Checks, Ban the Box • New Developments in Systemic Initiative and Handling

Position Statements, Investigations• EEO-1 Reports to Capture Pay Data, Pursuing Pay Disparity

Initiative

EEOC Update

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1. The nature and gravity of the criminal offense(s);2. The time that has passed since the conviction and/or completion of the sentence; and3. The nature of the job held or sought.

Convictions - should be subject to individualized analysis and dialogue

Arrests - as opposed to underlying conduct should not be considered in any employment decisions – no significant change – guidance respects employer’s right to make credibility determinations

Old Rules Still Apply

But Now There Is Stricter Scrutiny

• Narrowly Targeted Screens May Satisfy Business Necessity– Necessity – The Guidance contemplates that an employer may

satisfy its Title VII obligations by using an internal policy if it is “narrowly tailored.”

– Narrowly Tailored – a “demonstrably tight nexus to the position in question. Title VII thus does not necessarily require an individualized assessment in all circumstances.”

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The New Guidance

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The EEOC

Key ConceptsAreas of Particular Enforcement: Transgender Claims

• Discrimination on the basis of sex for failure to conform to gender norms or stereotypes

• No federal law protecting against discrimination based on gender identity or expression.

• Currently, the Employment Non-Discrimination Act (“ENDA”) prohibits sexual orientation discrimination and discrimination based on gender identity or expression.

• Title VII of the Civil Rights Act of 1964 prohibits discrimination “because of . . .sex.”• Examples of discriminatory and harassing conduct regarding transgender

employees:• Refusal to hire in a position requiring customer interaction;• Preventing appropriate restroom/locker/fitting room usage;• Repeated failure to address an employee by his/her recognized name and

pronoun (He/him; She/her; Zee/hir/hirs);• Invasive inquiries about medical history or genitalia;• Allowing teasing or intimidating behavior.

What is Discrimination Based on Gender Identity or Expression?

EEOC stated priority to expand “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions, as they may apply.”

•Sexual Orientation: 505 Receipts, 433 Resolutions Monetary Benefits: $971,908 Successful Collections: 2

•Gender Identity: 112 Receipts, 81 Resolutions Monetary Benefits: $119,674 Successful Conciliations: 4

2015 EEOC Enforcement Statistics

OSHA UPDATE

1. Reporting of workplace accidents2. Electronic record-keeping3. New Anti-Retaliation Provisions4. Post-accident Drug & Alcohol testing 5. Safety Incentive Programs6. New whistleblower investigations manual7. Increases in penalties

New OSHA Developments

• “Improve Tracking of Workplace Injuries and Illnesses” § 1904.35(b)(1)(iv).

• Referred to as “Electronic Reporting Rule” because effective 1/1/17 employers will be required to submit electronically their recordkeeping forms about injuries and illnesses.

• Employers with 10 or more employees must keep records of workplace injuries and illnesses.

• Before the new rule, employers only had to submit the records if OSHA asked. Now, employers with 250 or more employees must submit annually.

• OSHA will publish electronically submitted data (without personally identifiable information such as employee names, etc.)

OSHA: New Electronic Workplace Accident Reporting Rules

• As part of Electronic Reporting Rule, employers must ensure that reporting procedures are reasonable and do not deter employees from reporting job-related injuries and illnesses.

• Employer policies that discipline an employee for failing to repot an injury on a timely basis may violate the rule if its applied to workers whose injuries develop gradually over time.

• Employers must inform employees that they have a right to report work-related injuries and illnesses free from retaliation.

OSHA: New Requirements for Employer Reporting

• Employer may not discharge or discriminate against employee who for reporting a work-related injury or illness.

• Lawsuit filed 7/8/16 seeking declaratory judgment that the new rule is unlawful to the extent it prohibits or otherwise limits incident-based employee safety incentive programs and/or routine mandatory post-accident drug testing programs.

• OSHA delayed effective date of anti-retaliation provisions from 8/10/16 to 11/1/16

OSHA: Anti-Retaliation Provision of Employer Reporting

• In the Electronic Reporting Rule, OSHA commented that blanket drug testing policies may be retaliation.

• They should be limited to situations in which employee drug use is likely to have contributed to the incident and for which drug testing can accurately identify the impairment caused by drug use.

OSHA: Post-Incident Drug Testing

• In the Electronic Reporting Rule, OSHA has indicated that certain incentive programs that reward employees for remaining injury-free at work can be retaliatory and deter reporting of workplace injuries and illnesses.

• OSHA states that it is a violation of the anti-retaliation provision for an employer to sue an incentive program to take adverse action, including denying a benefit because an employee reports a work-related injury or illness.

• OSHA recommends adopting incentives for employees who follow legitimate safety rules, identify hazards, participate on safety committees or other similar activities.

OSHA: Safety Incentive Programs

• Investigations should be done where “OSHA has reasonable cause to believe a violation occurred.”

• Deleted from Manual: Statement that an investigation should not be conducted if the Employer demonstrates that it would have taken the same adverse action against the employee regardless of the protected activity.

New OSHA Whistleblower Investigations Manual

• Penalties increase by 78%• Maximum penalty for Serious and Other than Serious

violations increased from $7K to $12,471.• Maximum Penalty for Willful or Repeat violations

increased from $70K to $124,709. • Minimum Penalty for Willful violations increased

from $5K to $8,908.

OSHA: Increase in Penalties

OFCCP UPDATE

• Final Rule contains mandatory provisions targeted at prohibiting sex discrimination and advisory “best practices.”

• “Because of sex” includes gender identity, transgender status and sex stereotyping. Must allow transgender employees to use bathroom of gender with which they identify.

• Fair pay practices for similarly situated employees are required. • Prohibits discrimination because of pregnancy, childbirth or related medical

conditions and requires accommodation in circumstances where accommodations are provided for employees with occupational injuries or disabilities.

• Prohibits caregiver discrimination (different treatment based on stereotypical assumptions about caregiving responsibilities).

• Prohibits Dress Codes that are based on stereotyping.• Family leave must be made available to men on the same terms as women.

OFCCP Issues Final Rule on Sex Discrimination

7/1/16 Revised Scheduling Letter and Itemized Listing:“Please also be aware that OFCCP may use the information you provide during a compliance evaluation in an enforcement action. We may also share that information with other enforcement agencies within [the U.S. Department of Labor], as well as other federal civil rights enforcement agencies with which we have information sharing agreements.”

“Finally, the public may seek disclosure of the information you provide during a compliance evaluation. Under current law and regulations, OFCCP is required to comply with the Freedom of Information Acct, the Trade Secrets Act, the Privacy Act, and the 1987 Executive Order governing the disclosure of confidential commercial information.

Sharing of Information Provided to OFCCP

• What is an FAAP? Fed’l Contractors with 50 or more employees and a fed’l contract greater than $50K must maintain an AAP for each physical establishment unless the OFCCP approves developing an AAP based on business function or unit (an FAAP).

• Directive 2013-01 Revision 1 (4/28/16) (Formally rescinds all earlier guidance)

• Provides detailed guidance for how the OFCCP will evaluate a contactor’s application to use a FAAP.

• The functional business unit must: (1) currently exist and operate autonomously; (2) include at least 50 employees; (3) have its own managing official; and (4) have the ability to track and maintain its own personnel activity.

New OFCCP Enforcement Guidance on FAAPs

1. Contractors with seeking approval for FAAPs must now demonstrate compliance with affirmative action requirements of Section 503 of the Rehabilitation Act of 1983 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974

2. Contractors will now be required to undergo at least 1 compliance evaluation during the term of the FAAP agreement.

3. OFCCP will endeavor to eliminate the need for a conference with the OFCCP as part of the process.

4. More formal process for seeking renewal of the FAAP agreement, requiring certification and updated business information.

New Requirements of the New OFCCP FAAPs Directive

PAY EQUITY TRENDS

• What’s happening now – and coming soon?• EEOC proposal to collect pay data

• California and New York equal pay statutes

• 20+ other states have passed or proposed aggressive fair pay laws

• OFCCP aggressive pay investigations

• Activist investors demand companies achieve and publicly announce pay equality for employees

Base Salary/Wage Rate Overtime Bonuses Commissions Merit Increase Incentive Pay

Locality Pay Date of Hire Hours Worked Job Title EEO-1 Job Group

New OFCCP Pay RequirementsIn every audit for each employee

• Compares “substantially similar” employees, when viewed as a composite of skill, effort, and responsibility

• Compares employees across locations• Employers must explain the “entire wage

differential”• Attorneys’ fees for prevailing plaintiffs

• CA wage-hour plaintiffs’ bar ready to jump in

California Fair Pay Act

• New York Equal Pay Act• For first time, “disparate impact” recognized for

pay claims• So, no intent required to prove pay bias, just the

disparities• Massachusetts Pay Equity Bill

• Illegal to ask job applicants for prior salary• Affirmative defense of good faith “self-evaluation”

of pay in the past three years

. . . And 20+ States Follow

Federal Equal Pay Laws vs. State Laws:Federal Equal Pay Laws vs. State Laws:Key DifferencesKey Differences

CaliforniaFair Pay Act

New YorkFair Pay Act

Massachusetts Pay Equity

FederalEqual Pay Act

Title VII

Comparator “Substantially similar work” “Equal work”

“Comparable character” or “comparable operations”

Equal work

No requirement of substantially equal work; not limited to gender;

covers all protected classes

Same Establishment Defense

No Same geographic region, no larger than a county

No

Yes

No

Wage Difference to Be Explained

“Entire” wage difference No express “entire” difference requirement

No express “entire” difference requirement No express “entire” difference

requirement

No “entire” difference requirement

Affirmative DefensesNarrows definition of “bona fide factor other than sex” -must be “job-related” and “consistent with business necessity”

Narrows definition of “bona fide factor other than sex” -must be “job-related” and “consistent

with business necessity”

Seniority

Seniority, merit, quantity or quality of production, or a

factor other than sex

Legitimate, non-discriminatory basis for pay differential

DamagesWage differential, including

interest thereon, equal amount of liquidated damages, attorney’s

fees and costs

Wage differential, liquidated damages up to 300%, attorneys’

fees and costs

Wage differential, equal amount of liquidated

damages, attorneys’ fees and costs Wage differential, liquidated

damages, attorneys’ fees and costs

In addition to other relief provided under Title VII, back pay

for up to two years prior to the Charge.

Statute of Limitations Three years Six Years

One year

Three Years

360/180 days for Charge **but Ledbetter Fair Pay Act applies

U.S. SUPREME COURT CASES TO WATCH

Fisher v. University of Texas (Fisher II), 578 U.S. __ (2016)Holding: •The university’s race-conscious admissions program is lawful under the Equal Protection Clause, following Grutter v. Bollinger, though such programs will be evaluated under “strict scrutiny” standard.

Significance: •The significance to employers is limited because the constitutional analysis was highly fact-specific. Private employers still must proceed with extreme caution, but voluntary race-conscious corporate diversity and inclusion programs can be lawful in some circumstances.

Green v. Brennan, 578 U.S. __ (2016)Holding: •The statute of limitations for a Title VII constructive discharge claim begins to run on the date of the employee’s notice of resignation, not on the date of the last alleged discriminatory act by the employer.

Significance: •Employees have more time to file suit, exposing employers to claims filed long after a last discriminatory act. •But note: a constructive discharge claim should be less persuasive the longer an employee waits to resign.

CRST Van Expedited v. EEOC, 578 U.S. __ (2016)Holding: •Employers can be considered prevailing parties and entitled to fees even if they do not win “on the merits” of the claim. •This particular employer must show that the EEOC’s litigation conduct was so “frivolous, unreasonable, or groundless” as to support a fee award.

Significance: •Employers may rely on this opinion to seek recovery of fees from the EEOC even when the win on non-merits grounds, such as on the basis of a procedural defense.

Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. __ (2016)Holding: •When an employer does not keep detailed pay records, FLSA plaintiffs may use may use statistical sampling as evidence to help prove hours worked, so long as the experiences of the sample group are “probative as to the experiences of all” the plaintiffs.

Significance: •The court’s ruling was narrow and fact-specific, leaving open questions of how and when plaintiffs may rely on statistical evidence to prove in future cases.

Friedrichs v. Cal. Teachers Ass’n, 578 U.S. __ (2016)Holding: •None. Court split 4-4 on question of whether requirement that public school teachers contribute union dues violates the First Amendment, leaving intact 9th Circuit opinion upholding agency shop dues requirement.

Significance: •This tie was a win for unions but leaves open the possibility of future challenges. Commentators generally agree that the issue is critical to the viability of public sector unions.

Spokeo, Inc. v. Robins, 578 U.S. __ (2016)Holding: •A non-holding, as the Court remanded without substantive decision on the issue of what is needed to prove an “injury in fact” sufficient to have standing to bring a class action•Issue was whether FCRA plaintiff suffered “concrete” and “particularized” injury by errant Spokeo listing

Significance: •While not an employment case, a decision in Spokeo’s favor may cut down class/collective actions alleging technical violations but no actual harm.

NEW FEDERAL DEVELOPMENTS

SEC Issues Cease & Desist Order against Severance Agreement

• On 8/10/16, in BlueLinx Holdings, Inc. the SEC issued a cease-and-desist order preventing a publicly traded company from enforcing severance agreements with departing workers that require workers to waive recovery of any monetary damages or award form the SEC after filing a whistleblower complaint.

• The SEC said such a requirement violates SEC Rule 21F-17(a) because it would impermissibly impede a whistleblower's right to communicate directly with the SEC about a possible securities law violation.

• The SEC also objected to language that required the employee to notify the Company’s Legal Department prior to disclosing any financial or business information about he Company to third parties because the language did not expressly exempt the SEC from the restriction.

Notice Requirement of the Defend Trade Secrets Act of 2016

• In May 2016, President Obama signed the federal Defend Trade Secrets Act of 2016.

• The Act allows companies to bring trade secret theft acts under federal law.• Notice requirement: Agreements with any individual performing work as

an employee, contractor or consultant that govern the use of a trade secret or other confidential information, must set forth certain immunity provisions of the Act or provide a cross-reference to a policy document provided to the employee that sets forth the employer’s reporting policy for a suspect violation of law.

• An employer may not be awarded exemplary damages or attorneys fees under the Act if the employer failed to provide notice.

WHAT TO LOOK FORIN 2017

What’s New this Year?In general, states—and localities—have been legislating where the federal government has not, including with respect to•Paid Sick Leave•Fair Pay•Criminal Background Checks•Parental/Family Leave

Generally, seeing an expansionof employee rights.

What’s next? Predictable Scheduling laws

•San Francisco’s Fair Scheduling and Treatment of Formula Retail Ordinance took effect under new rules on 3/1/16.•On 8/9/16, Seattle’s Mayor’s office proposed a Secure Scheduling Proposal that would require certain large employers to give their hourly workers advance notice of their schedules and to pay workers extra for being required to work on call.•In District of Columbia on 12/1/15 the Hours and Scheduling Stability Act of 2015 was proposed.•Proposed laws vary but are intended to require certain large employers to, among other things, do the follow:

1. Provide workers with their schedules in advance; 2. Pay a certain minimum amount in the event that changes are made

without sufficient notice; and 3. Pay premiums for “on call” shifts when the employee is not called in.

What Should You Do Now?

Establish a Monitoring MechanismBe sure you have a way of tracking developments on a state and local basis

Engage Your Business Leaders and Human ResourcesBe sure your key clients know that change is likely and that compliance can be challenging

Consult Local ExpertsUse your ACC peers or your outside counsel; going it alone can be dangerous because it’s easy to miss local nuances