The Equal Employment Opportunity Commission (EEOC) requires employers with at least 100 employees (and federal contractors with at least 50 employees) to file an EEO-1 Report with a count of employees by establishment and job category with race, ethnicity, and gender information for each employee.  This part of the EEO-1 is now referred to as Component 1. In 2016, the EEOC implemented a pay data requirement for the EEO-1 Report, referred to as Component 2.  Component 2 requires the disclosure of the total number of full- and part-time employees by demographic category divided into 12 pay bands for each EEO-1 job category, and hours worked by all employees in each band. Before the original deadline for Component 2 pay data, the Office of Management and Budget (OMB) paused the U.S. Equal Employment Opportunity Commission’s collection of Component 2 pay data. A lawsuit initiated by both the National Women’s Law Center and the Labor Council for Latin American Advancement followed, arguing that the OMB’s decision halting the expanded data collection was without cause. National Women’s Law Center v. Office of Management and Budget, Case No. 1:17-cv-02458-TSC. This case remains pending in the U.S. District Court for the District of Columbia.  The Court’s August 25, 2018 ruling in this case reinstated the requirement to collect Component 2 data. What now? Employers must report Component 1 gender, race and ethnicity information for all covered employees on a single payroll date between October 1, 2018 and December 31, 2018. The portal will remain open for filing Component 1 data until May 31, 2019.  Employers who need an extension to meet the Component 1 deadline may contact the EEOC for a one-time 2-week extension by contacting E1.EXTENSIONS@EEOC.GOV.  An employer requesting a longer extension must provide the EEOC with a rationale therefor. Requests for extensions will not be accepted after May 31, 2019. When is Component 2 pay data due?  Following the Court’s ruling in National Women’s Law Center, the EEOC first indicated it would likely begin collecting Component 2 data for both calendar years 2017 and 2018 starting sometime in mid-July. Further, the current published deadline for submission Component 2 data is September 30, 2019. EEOC Chair Victoria Lipnic acknowledged that these “first-ever pay data collections,” which are now required in a relatively short time frame, will be difficult to accomplish. However, the EEOC is “committed to meeting the Court’s order, working with employers, and making this happen by the end of September.” On May 3, 2019, the Department of Justice filed a Notice of Appeal in the National Women’s Law Center case, which does not stay the current district court orders or alter EEO-1 filers' obligations to submit Component 2 data. What now? Employers should review our previous post for additional insights on EEO-1 reports, and how to avoid common pitfalls when preparing employer Component 1 data. Employers should also consider hiring experienced counsel to assist with filing their Component 1 and 2 data, in light of these new requirements. Polsinelli will continue to provide updates on the filing of Component 2 data when as it becomes available.

On April 30, 2019, the U.S. Court of Appeals for the Tenth Circuit in United State ex rel. Reed v. KeyPoint Government Solutions affirmed the dismissal of an employee’s False Claims Act (FCA) whistleblower retaliation claim.  In its ruling, the Tenth Circuit confirmed that employees with compliance responsibilities bear a heightened burden to show that their alleged protected activities were not simply the performance of their assigned job responsibilities. Ms. Reed, the plaintiff, worked as a Senior Quality Control Analyst for KeyPoint Government Solutions, a company that conducted federal background check investigations.  Amid a series of scandals that rocked the broader background investigation industry, Ms. Reed claimed that she observed systemic violations of KeyPoint’s federal government contract as investigators allegedly made false background check reports, omitted information from reports, and failed to follow proper background check procedures.  Ms. Reed alleged that these violations formed the basis of fraudulent requests for payment from the government.  Ms. Reed claimed that she discussed the issues with several people within the company, but ultimately her efforts were unsuccessful and KeyPoint terminated her employment. The Tenth Circuit affirmed the dismissal of Ms. Reed’s FCA whistleblower retaliation claim.  The court noted that to face FCA whistleblower liability, an employer must know that the relator-employee’s actions were connected to a claimed FCA violation.  Where the employee’s job involves compliance and fraud investigations, it must be clear that the employee is engaging in FCA protected activity and “not just doing her job” to report suspected fraud internally.  Critically, the court found that the requirement for this heightened showing from compliance employees was not affected by the 2009 and 2010 amendments to FCA that expanded whistleblower protections.  Because Ms. Reed’s allegations did not show that she went outside of the established chain of command or beyond the scope of KeyPoint’s ordinary reporting procedures, the court held that she could not establish KeyPoint’s knowledge of her claimed FCA protected activity. Compliance employees are in a prime position to report corporate activities that may trigger whistleblower protection under FCA or other statutes.  However, their internal reports of fraudulent activities should not be protected under the FCA whistleblower protections unless they go beyond their job duties and either report the alleged violation outside of her ordinary chain or tie their concerns to violations of the FCA.  Employers should exercise caution when taking adverse action against employees in their compliance, HR, legal, contracting and finance departments to ensure that (1) the action is justified, well-documented, consistent with policy and prior actions against employees; and (2) the employee did not “blow the whistle” through means or mechanisms outside of their normal job duties.

On May 8, 2019, Washington Governor Jay Inslee signed into law a bill that prohibits employers from entering into noncompetition covenants with employees whose W-2 earnings are less than $100,000, and with independent contractors paid less than $250,000 per year. In addition to the above, employers should be aware of the following five provisions in the new law: The law creates a presumption that any covenant longer than 18 months is unreasonable and unenforceable as a matter of law.  A party to the covenant may rebut the presumption by showing through clear and convincing evidence that a duration longer than 18 months is necessary to protect the party’s business or goodwill. A covenant will be unenforceable unless the employer discloses its terms to a prospective employee in writing. If a covenant is entered into after employment begins, the employer must provide consideration in addition to employment to support the covenant. If an employee subject to a noncompetition covenant is terminated in a layoff, the covenant is void unless the employer pays the terminated employee base salary for the remainder of the covenant’s terms, less compensation earned through subsequent employment. If a court determines a noncompetition covenant violates the new law, the party seeking enforcement must pay the aggrieved person the greater of the actual damages or $5,000, plus reasonable attorneys’ fees and costs. The new law will take effect January 1, 2020.  Employers with questions regarding Washington’s new law – or that wish to review or implement noncompetition covenants – would do well to consult with competent counsel.

Colorado appears poised to join a number of states that prohibit employers from inquiring into a job applicant’s criminal history on an initial employment application.  On April 30, 2019, the Colorado legislature sent House Bill 19-1025 (the “Bill”) to Governor Polis’ desk.  Assuming Governor Polis signs the Bill, Colorado will join a number of other states and “ban the box.”  If the Bill is signed into law, Colorado employers will be prohibited from: Stating in an employment advertisement that a person with a criminal history may not apply for the position; Stating on any form or application for employment that a person with a criminal history may not apply for the position; and Inquiring into or requiring an applicant to disclose any criminal history on an initial employment application. Employers may still obtain a publicly available criminal background report on a job applicant at any time. The above-listed prohibitions will not apply if: Federal, state, or local law or regulations prohibit employing a person with a specific criminal history to the position; The position is designated by the employer to participate in a federal, state, or local government program to encourage the employment of people with criminal histories; or The employer is required by federal, state, or local law or regulation to conduct a criminal background check for the position, regardless of whether the position is for an employee or an independent contractor. Critically, the Bill does not create a private cause of action or a new protected class under existing anti-discrimination laws.  However, the Bill does include staged penalties after the first violation. If signed into law as expected, the Bill’s provisions will become effective September 1, 2019 for employers with 11 or more employees, and September 1, 2021 for all other employers.

The Equal Employment Opportunity Commission (EEOC) has announced that employers covered by the EEO-1 reporting obligation must submit pay data broken down by job category, pay band, race, ethnicity and sex for both calendar years 2017 and 2018.  This pay data, which is referred to as Component 2 of the EEO-1, is due on September 30, 2019. As previously reported, on April 25, 2019, the U.S. District Court for the District of Columbia issued a ruling requiring employers to file Component 2 pay data for 2018 and left it up to the EEOC to also require one additional year of pay data from either 2017 or 2019.  The Court has now published its Order. The EEOC stated on its website that it expects to begin collecting Component 2 data for calendar years 2017 and 2018 in mid-July and will give notice when it has a more precise date. Covered employers should begin planning collection of pay data by race, ethnicity and sex for both 2017 and 2018. Polsinelli will continue to monitor this issue and provide updates on reporting requirements.

On April 25, 2019, the U.S. District Court for the District of Columbia gave an oral ruling from the bench reportedly accepting the EEOC’s proposal to make employers submit their 2018 pay data by September 30, 2019.  This is consistent with the proposal the EEOC submitted on April 3, 2019 on which we previously reported. The pay data is referred to as Component 2 of the EEO-1 report and includes detailed data on employee compensation and hours worked from covered employers sorted by job category, pay band, race, ethnicity, and gender. The pay data is required to be from the 2018 calendar year. All employers who are required for 2018 to file an EEO-1 report will be required to submit pay data. This includes: All private employers with 100 or more employees that are subject to Title VII of the Civil Rights Act of 1964, as amended. Some private employers with fewer than 100 employees, if the employer is owned or affiliated with another employer -- or there is centralized ownership, control or management -- so that the employers together legally constitute a single enterprise, and the entire enterprise employs a total of 100 or more employees. Federal contractors that employ 50 or more employees and are prime contractors or first-tier subcontractors and have a single contract, subcontract or purchase order amounting to $50,000 or more. According to the Court’s docket, a written order is forthcoming. It is also expected that the EEOC will be updating its website to provide instructions on the collection and reporting of this pay data. Polsinelli will continue to monitor this issue and provide updates on reporting requirements.

On April 24, 2019, the Federal Court that reinstated the EEO-1 pay data reporting requirement accepted the EEOC’s recommendation that employers must submit the EEO-1 form for 2018, including pay data, by Monday, September 30, 2018.  Employers with at least 100 employees and federal contractors and first-tier subcontractors with at least 50 employees must file the EEO-1 survey annually with the Equal Employment Opportunity Commission (“EEOC”). The EEOC has expanded the survey to require the disclosure of a wide range of employee pay data, in addition to employee demographics.  The pay data reporting requirement mandates disclosure of the total number of full- and part-time employees by demographic category in each of 12 pay bands for each EEO-1 job category, as well as the aggregate hours worked by all of the employees in each pay band. Employers subject to the EEO-1 reporting requirement for 2018 presently have two deadlines to meet: May 31, 2019: Deadline to submit Component 1 (demographics) data through the EEOC online portal; and September 30, 2019: Deadline to submit Component 2 (pay) data through the EEOC online portal. It is unclear at this time whether the EEOC will remove or alter the existing May 31 deadline.  Adding to the burden, and potential future confusion, the Court ordered the EEOC to collect either 2017 or 2019 pay data at a future time.   The EEOC has yet to choose.  Employers subject to EEO-1 reporting requirements should retain all 2017 employee pay data, pending further guidance from the EEOC. Employers that have not taken preparatory steps to comply with the enhanced EEO-1 reporting requirements should do so now.  In addition, employers with questions regarding their EEO-1 obligations would do well to consult with able counsel.

On April 12, 2019, the OFCCP submitted new forms of its scheduling, compliance check, and Section 503 focused review letters to the Office of Management and Budget (OMB) for approval.  OFCCP also sought OMB’s approval of a new scheduling letter for VEVRAA focused reviews.  OMB’s authorization of the current versions of the scheduling and compliance check letters is scheduled to expire on June 30, 2019.  Government contractors and other interested parties have until June 11, 2019 to submit comments to OMB regarding the new form letters. If approved, the changes to the OFCCP’s letters will impose significant new data reporting requirements on contractors.  Some of the major changes are described below: Scheduling Letters Contractors must identify their three largest subcontractors to OFCCP. In addition to the percentage of minority and female incumbents within each job group, contracts must also submit the specific race of each employee within the job group. In addition to placement goals for minorities and women generally, contractors must submit data from which OFCCP can determine disparities in the utilization of particular minority groups, or men or women of particular minority groups, to create separate goals for these groups. Significantly, OFCCP will require contractors to submit the results of their most recent compensation system analysis. Contractors must identify the pool of candidates from which promotions were selected by gender and race/ethnicity. In submitting data regarding terminations, contractors must state whether terminations were voluntary or involuntary. Section 503 Focused Review Letter Contractors must submit information provided by each applicant or employee who self-identifies as an individual with a disability. Contractors must submit applicant and employee-level employment activity data concerning applicant flow, hires, promotions, and terminations of disabled and non-disabled employees and applicants. Contractors must submit employee-level compensation data of disabled and non-disabled employees. In addition, all of the data required to be submitted to OFCCP must now be submitted electronically to facilitate OFCCP’s analysis. OFCCP’s supporting statement for the proposed letters reveals that OFCCP intends to increase the number of audits it conducts.  For fiscal year 2018, OFCCP audited 3,500 contractor establishments, divided between full compliance audits, compliance checks, and Section 503 focused reviews.  In its submission to OMB, OFCCP stated that it anticipates conducting 2,500 full compliance audits and 1,000 compliance checks, and that the number of Section 503 and VEVRAA focused reviews will increase from 500 in fiscal year 2019 to 1,500 by fiscal year 2021. OFCCP’s submission shows that the agency intends to seek increasing amounts of data, at an increasingly granular level, from an increasing number of contractor establishments and functional units.  Contractors would be well served to reevaluate their data collection and analysis and other compliance procedures with the assistance of experienced counsel to ensure that they are meeting all applicable requirements and identify and address potential issues before they are discovered in an OFCCP audit.

Recently, the U.S. District Court for the Southern District of Alabama issued a decision reminding employers to take care when reviewing and responding to charges of discrimination. In Payne v. Navigator Credit Union, the defendant employer moved to dismiss the plaintiff employee’s claim for disability retaliation on the grounds that the plaintiff failed to exhaust her administrative remedies. Specifically, the employer argued that the plaintiff failed to allege in her EEOC Charge that she was retaliated against, and was precluded from pursuing a retaliation claim in court. When making its argument, the employer pointed out that the plaintiff had not “checked the box” for “retaliation” on her EEOC Charge nor did she use the word “retaliation” when describing how she had allegedly been harmed.  Nevertheless, the court ruled that the plaintiff’s allegation in the charging document that she was terminated shortly after informing her employer of her need to take medical leave for cancer treatment was sufficient to place the employer on notice of the a claim for  retaliation. This decision suggests that some courts will grant plaintiffs wide latitude to define their claims in litigation.  Employers facing an agency charge, or that have questions regarding responding to inquiries from administrative employment agencies, should consult with competent counsel.

On April 22, 2019, the U.S. Supreme Court heard argument in Food Marketing Institute v. Argus Leader Media.  Polsinelli attended the oral arguments to provide insight concerning the potential implications for federal government contractors that submit data to OFCCP. In that case, a grocery store trade association challenged lower court decisions requiring the disclosure through Freedom of Information Act (FOIA) of data concerning food stamp purchases at the individual store level.  Although the case does not involve disclosures by OFCCP, a victory for the challenger would enhance the ability of contractors to protect confidential workforce data submitted to OFCCP from FOIA disclosure. Contractors facing OFCCP audits are required to provide sensitive employment-related data, including compensation data.  To prevent this data from being disclosed to competitors or others pursuant to a FOIA request, contractors and their counsel typically rely on FOIA’s Exemption 4, which prevents the disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” In the Food Marketing Institute case, the trade association is challenging lower courts’ rulings concerning Exemption 4, which require that a party resisting the disclosure of confidential information under it show that the disclosure would cause “substantial competitive harm.”  If the Supreme Court rules that such a showing is not required, a contractor submitting data to OFCCP would only be required to show that it takes steps to protect its compensation and other workforce data from disclosure to fall within the exemption. Although it is difficult to forecast the Supreme Court’s ultimate decision based on the justices’ questions and comments, several justices appeared skeptical of the “substantial competitive harm” requirement, noting that it lacks support in Exemption 4’s text.  The questioning also suggested that several of the justices believe that Exemption 4 requires the information holder to take affirmative steps to maintain confidentiality, rather than simply deeming or labeling it as confidential without more. Polsinelli will continue to monitor the case in anticipation of the Supreme Court’s decision.  In the meantime, contractors should consult with experienced counsel to ensure that they are implementing best practices to safeguard sensitive data and support a claim of confidentiality under Exemption 4.

Does the adage “no good deed goes unpunished” apply to employers that fail to pay wages to hourly employees during volunteer events? Not necessarily, according to a recent U.S. Department of Labor (DOL) Opinion Letter. Per the Opinion Letter, to avoid a finding that an employee’s volunteer time is compensable, the employer must refrain from directly or impliedly coercing its employees to participate. In other words, participation must be voluntary and devoid of any undue influence. The DOL’s Opinion Letter clarifies that notifying employees of the volunteer event or asking for participation is not coercive. Conversely, if consequences exist for failing to participate, such as changes to working conditions, the employee’s time spent volunteering would likely be considered compensable, as participation would not be considered “voluntary.” The Opinion Letter also addresses whether offering certain benefits for participation would be considered “coercive.” Critically, an employer may consider an employee’s volunteer activities when determining a bonus, without converting volunteer time to compensable hours, as long as: volunteering remains optional; non-participation is not punished; and the bonus is not guaranteed. Employers that wish to ensure volunteer time is non-compensable would do well to remember two things: (1) employers should not punish an employee’s lack of participation in volunteer activities; and (2) bonuses for participation cannot be guaranteed.  Employers with questions about whether volunteer time should be compensated should consult with competent counsel.

On March 28, 2019, the U.S. Department of Labor (“DOL”) announced a proposed rule to update the regular rate requirements under 29 CFR part 778 and section 7(e) of the Fair Labor Standards Act (“FLSA”). The FLSA requires employers to pay non-exempt employees overtime compensation for any time worked over 40 hours in a workweek. The overtime rate equals one and one-half times the “regular rate,” which is defined as “all remuneration for employment paid to, or on behalf of, the employee,” with some exceptions. More specifically, the regular rate must include wages, bonuses, commissions, and any other forms of compensation. Court decisions interpreting what must be included in the calculation of the “regular rate” have caused confusion for employers, who may be unsure whether offering non-exempt employees extra perks could increase the regular rate and, by extension, overtime pay. In addition, the uncertainty stemming from what must be included in the “regular rate” could lead to costly wage and hour actions by employees. When announcing the new proposed rule, the DOL opined that the current regulations “do not sufficiently reflect … developments in the 21st-century workplace,” and stated that the following forms of compensation would be excluded from an employee’s regular rate: the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services; payments for unused paid leave, including paid sick leave; reimbursed expenses, even if not incurred “solely” for the employer’s benefit; certain reimbursed travel expenses; discretionary bonuses; benefit plans, including accident, unemployment, and legal services; and tuition programs, such as reimbursement programs or repayment of educational debt. The proposed rule also seeks to clarify whether other forms of compensation, such as payments for meal periods, call-back pay, and others, must be included in the regular rate. The proposed rule will remain open to comments until May 28, 2019. Employers with questions regarding the calculation of the “regular rate” (or other compensation-related issues) would do well to consult with able counsel.

“Glaring,” “concerning,” “troubling,” “problematic,” and “systemic” were some of the words used by OFCCP Director Craig Leen to describe the underrepresentation of women, minorities, and individuals with disabilities at large law firms at an April 10, 2019 town hall meeting in New York City.  Director Leen announced that representation and pay equity issues at law firms and other professional services providers will be an area of focus for OFCCP as early as next fiscal year. Director Leen indicated that OFCCP will focus on investigating and redressing disparities in the promotion of law firm associates to partner.  OFCCP is also expected to examine whether law firm billable hours policies act as an impediment to the advancement of female lawyers and the ability of employees of all genders to take family leave.  OFCCP also plans to issue guidance regarding its ability to police practices involving attorneys who are equity partners. OFCCP’s 2019 listing of contractors selected for audit included five AmLaw 100 law firms for compliance audits.  Law firms that are not government contractors may also unexpectedly fall within OFCCP’s jurisdiction if they provide services to government contractor clients that are deemed “necessary” to the performance of a federal government contract. Director Leen’s announcement comes against the backdrop of several high-profile lawsuits filed by female attorneys, both partners and associates, against some of the nation’s largest firms.  These developments show that pay equity and gender discrimination at law firms are in the crosshairs of both private litigants and government agencies.  Rather than wait to be the target of a government investigation or lawsuit, law firms should retain outside counsel and undertake comprehensive compliance audits, including reviewing pay equity and promotion rates reviews.

Mergers and acquisitions can be complicated transactions, particularly when the entity to be acquired has employees covered by a collective bargaining agreement with a union.  In a recent case, a federal court in Chicago ruled that a successor owner of a business unlawfully terminated health benefits for retired employees under a collective bargaining agreement entered into by the business it acquired. The plaintiffs were two retired employees who worked for a packaging company for more than 35 years and were members of the union.  After retirement, they continued to receive health care benefits under a collective bargaining agreement (CBA) their union negotiated in 1994.  The packaging company went into bankruptcy and it negotiated new CBAs with the union in 2001 and 2002, which were approved by the bankruptcy court.  After emerging from bankruptcy in 2003, the packaging company was acquired by the first successor, which closed the plant where the retirees had worked.  After the plant closed and the CBA expired, the first successor continued to provide benefits under the expired CBA’s terms.  In 2014, the first successor sold part of its business and transferred its obligations under the relevant CBA to the second successor.  Shortly thereafter, the second successor terminated the CBA. The retirees and the union filed suit against both the first and second successor to enforce the health care benefits provided under the CBA.  The case focused on two provisions in the CBA.  Specifically, Section 6 of the CBA provided:  “any Pensioner or individual receiving a Surviving Spouse’s benefit who shall become covered by the Program established by the Agreement shall not have such coverage terminated or reduced (except by the Program) so long as the individual remains retired from the Company or receives a Surviving Spouse’s benefit, notwithstanding the expiration of this Agreement, except as the Company and the Union may agree otherwise.”  In addition, Section 7 stated the CBA “shall remain in effect until February 29, 2014, thereafter subject to the right of either party on [120] days written notice served on or after November 1, 2003 to terminate the [agreement].” The court noted that “unlike pension benefits under ERISA, insurance benefits, such as the benefits at issue in this case, do not automatically vest” and an employer “may create vested welfare benefits by contract.”  The defendants argued that Section 6 of the CBA limited lifetime health benefits because the phrase “except as the Company and the Union may agree otherwise” incorporated Section 7’s language permitting unilateral termination.  The court disagreed, noting that Section 7 referred only to termination of the CBA, and did not apply to health benefits under Section 6. The defendants also argued that the U.S. Seventh Circuit Court of Appeals had previously ruled that “lifetime” benefits were limited to the term of the CBA.  The court readily distinguished the defendants’ authority because the agreements at issue therein expressly limited the duration of the benefits to the duration of the contract.  But in the current case, the court ruled that the “provision of lifetime benefits without provision for their termination constitutes vested benefits.”  As a result, the court granted summary judgment for the plaintiffs. When a merger or acquisition involves a collective bargaining agreement, employers would do well to perform a thorough legal analysis of the terms and history of existing and predecessor collective bargaining agreements and contract negotiations (as well as pending and past grievances and unfair labor practices).  Doing so is critical to understanding (and minimizing or avoiding) any potential risk.  Employers with questions should consult with able counsel. Stone v. Signode Industrial Group, LLC, No. 17 C 5360, (N.D. Illinois) March 13, 2019.

On April 3, 2019, the EEOC announced in a court filing that it will require employers to submit 2018 EEO-1 pay and hours data by September 30, 2019.  With EEO-1 reports currently due by May 31, 2019, this announcement gives employers four additional months to collect and submit this information.  The extension of the EEO-1 deadline appears only to apply to Component 2 pay and hours data because EEOC’s website still lists the deadline for submission of the Component 1 demographic data as May 31, 2019.  The EEOC’s filing states that employers will not be required to report 2017 pay and hours data at this time. The EEOC’s filing came in response to a March 19, 2019 order from Judge Chutkan of the U.S. District Court for the District of Columbia requiring the agency to state its position on the filing of the Component 2 submission in light of her prior summary judgment ruling reinstating the Component 2 obligation.  A link to our blog summarizing the March 4, 2019 summary judgment order is included here.  The plaintiffs in the case will now have until April 8, 2019 to respond to the EEOC’s announcement. In another development in the case, a coalition of employer advocacy groups (including, among others, the U.S. Chamber of Commerce, Society for Human Resources Management, and Associated Builders and Contractors) on April 4, 2019 filed an amicus curiae brief requesting that employers be provided at least 18 months to comply with the reinstated pay and hours data submission requirement.  The coalition also raised concerns about the EEOC’s ability to maintain the confidentiality of Component 2 pay data it receives. Polsinelli will continue to monitor these developments closely.

On April 1, 2019, the U.S. Department of Labor (“DOL”) announced proposed changes to its joint-employer test. Specifically, the DOL set out a four-factor balancing test, which inquires whether an entity that does not directly employ an individual employee: 1. hires or fires the employee; 2. supervises and controls the employee’s work schedule and/or conditions of employment; 3. determines the employee’s rate and method of payment; and 4. maintains the employee’s employment records The proposed changes clarify that merely having the ability, power or contractual right to affect the other employer’s employees’ terms and conditions of employment is not relevant to the analysis.  Rather, the putative joint employer must actually exercise or exert control over the other employer’s employees to be considered a joint employer.  In addition, certain business models, such as a franchisor relationship, do not make a finding of joint-employment more likely.  And if adopted, the proposed changes would also provide examples to assist with determining joint employment status. Once the proposed changes are published in the Federal Register, the public will have 60 days to submit comments. These proposed changes mark the first time since 1958 that the DOL has meaningfully revised the joint-employer regulations.  According to the DOL, the proposed changes are meant to provide courts with clear guidance when considering joint employer status and reduce litigation.  Notably, the DOL’s proposed changes to the joint-employer test come on the heels of  the National Labor Relations Board’s proposed joint employer rule, which provides that  joint employment turns, in part, on whether a putative joint employer actually exercises control over the other employer’s employees’ terms and conditions of  employment. The DOL’s proposed changes would bring welcome clarity and certainty to employers that make use of another entity’s employees or that operate under certain business models.  We will keep you posted as the proposed changes move through the notice and comment period.

While the U.S. Supreme Court’s recent decisions have generally supported the enforceability of employment-related arbitration agreements, mandatory employment arbitration remains under fire in other contexts.  The latest example  came on March 21, 2019, when a National Labor Relations Board (NLRB) administrative law judge (ALJ) ruled in Pfizer, Inc., Case 10-CA-175850 that an employer’s arbitration agreement requiring employees to engage in  confidential  arbitration proceedings and prohibiting disclosure of arbitration-related submissions and materials constituted an unfair labor practice prohibited by the National Labor Relations Act (NLRA). The ALJ’s decision comes in the wake of the Supreme Court’s Epic Systems decision, which rejected a similar argument that the NLRA prohibits employers from requiring employees to arbitrate their claims on an individual basis and waive the ability to bring claims on a class or collective basis.  In an attempt to distinguish Epic Systems, the ALJ reasoned that while the Epic Systems Court endorsed an arbitration agreement’s limitation of the procedural right to litigate as a class or collective, it did not permit limitations on substantive rights, such as an employee’s right under the NLRA to engage in “concerted activity” by discussing his or her terms and conditions of employment with co-workers and others. The ALJ also ruled that a limiting clause in the arbitration agreement stating that the confidentiality requirement did not “prohibit employees from engaging in protected discussion or activity relating to the workplace, such as discussions of wages, hours, or other terms and conditions of employment,” was insufficient to save the agreement because it did not explicitly permit disclosure of arbitration-related materials in furtherance of NLRA-protected activity. The ability to maintain the confidentiality of arbitration proceedings is one benefit that employers may seek through mandatory arbitration.  However, the ability to compel confidential arbitration is being challenged by legislative action, public awareness campaigns, in agency proceedings, and in the courts.  As the ALJ’s decision may be subject to further review before the NLRB and a federal court of appeals, employers that rely on confidential arbitration agreements should consult with counsel to stay abreast of any developments and ensure that their agreements do not run afoul of the NLRA or other federal and state statutes.

On March 27, 2019, the Office of Federal Contract Compliance Programs (OFCCP) announced that it was lowering the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark again this year.  Effective March 31, 2019, the new benchmark is 5.9 percent, down from 6.4 percent the previous year.  This marks the fifth consecutive year that the benchmark has been lowered since its inception in March 2014, when it was set at 7.2 percent. VEVRAA is designed to provide equal opportunity and affirmative action for Vietnam era veterans, special disabled veterans, and veterans who served on active duty during a war or in certain campaigns.  Contractors are required to establish annual hiring benchmarks for protected veterans and assess their progress against that benchmark.  Contractors have the option of establishing their own benchmark or adopting OFCCP’s annual national benchmark. Contractors should be especially diligent in ensuring compliance with VEVRAA and retaining related documentation in light of OFCCP’s announcement in August 2018 that it would begin conducting focused reviews. Moreover, this documentation may also be requested during other scheduled compliance evaluations. Additional information regarding VEVRAA compliance and the national benchmark can be found on the OFCCP website.

On March 21, 2019, in a 9-3 en banc decision, the U.S. Eleventh Circuit Court of Appeals clarified the “similarly situated” standard for comparator evidence in employment discrimination cases.  Lewis v. City of Union City, Georgia, 15-11362, 2019 WL 1285058, at *2 (11th Cir. Mar. 21, 2019) (en banc).  Specifically, the Court ruled that a comparator will only be found to exist where they and the plaintiff are “similarly situated in all material respects.” This “all material respects” standard focuses on “substantive likeness,” and should be resolved on a case-by-case individual basis. Critically, the Court observed that this standard should provide employers with the “necessary breathing space to make appropriate business decisions.” In what many consider to be a win for employers, the Court also ruled that comparator evidence should be analyzed during the prima facie stage of the McDonnell Douglas burden shifting analysis. Indeed, the Court flatly rejected the plaintiff’s argument that comparator analysis should “be moved into the pretext stage,” stating that “doing so would effectively shift to the defendant the burden of disproving discrimination – which is precisely what the Supreme Court has forbidden.” The Lewis decision may lead to a review by the United States Supreme Court to resolve an apparent Circuit split on the issue of the similarity of comparators, as the Eleventh Circuit expressly rejected the more lenient standard adopted by the Seventh Circuit.  Stay tuned to Polsinelli at Work for further updates.

Colorado’s 2019 legislative session began on January 4 and concludes May 3, 2019.  Several proposed bills may affect employers, including these two: HB19-1025 HB19-1025 is Colorado’s 2019 “Ban the Box” proposal. Formally known as the Colorado Chance to Compete Act, the bill would prohibit employers from stating in job advertisements or on employment applications that a person with a criminal history may not apply for a position. Employers also would be prohibited from inquiring about an applicant's criminal history on an initial employment application form. However, an employer may obtain a job applicant's publicly available criminal background report at any time. The bill contains several exceptions, such as for particular jobs that require criminal background checks or prohibit people with certain criminal histories from holding the position. Note the bill does not create a private cause of action for a violation of its provisions; rather, the Colorado Department of Labor and Employment would be charged with enforcing the bill’s requirements through issuance of warnings and orders of compliance for violations, as well as the imposition of civil penalties for subsequent violations. If enacted, this measure would become effective September 1, 2019 for employers with 11 or more employees, and effective September 1, 2021 for all other employers. SB19-085 SB19-085 concerns the creation of the “Equal Pay for Equal Work Act” in Colorado and expands current Colorado law prohibiting employers from discriminating in rate of pay based on sex. Significantly, the proposed bill, applicable to all Colorado employers, would create a private right of action in district court. Further, it would prohibit an employer from (1) seeking the wage rate history of a prospective employee, (2) relying on a prior wage rate to determine a wage rate, (3) discriminating or retaliating against prospective employees for failing to disclose their wage rate histories, and (4) discharging or retaliating against employees for asserting their rights under the bill. Moreover, the bill would require employers to demonstrate that any wage differentials are based on one or more of the following factors: ·         a seniority system; ·         a merit system; ·         a system that measures earnings by quality or quantity of production; ·         geographic location; ·         relevant education, training or experience; or ·         regular and necessary travel. Additionally, the bill would require employers to announce promotion opportunities to all employees, as well as the pay range for job openings. Stay tuned for developments on these and other 2019 Colorado bills that may impact employers.

On March 25, 2019, the OFCCP released its Corporate Scheduling Announcement List (CSAL) online for public access.  Contractors can access the CSAL here.  The CSAL identifies 3,500 contractor establishments that will be audited by OFCCP, with a portion of those audits being Section 503 focused reviews. Historically, contractors receiving a CSAL received a scheduling letter formally initiating the audit after about 45 days.  The advance notice provided by the CSAL can be a valuable opportunity for contractors to prepare for an upcoming audit, collect the data and documents the contractor will be required to submit to OFCCP within a relatively short period after receipt of the scheduling letter, and identify any potential compliance vulnerabilities that may need to be addressed during the audit process.  Contractors named in the CSAL should consider consulting with experienced counsel to assist in preparing for the forthcoming scheduling letter.

Many employers offer paid leave, including sick leave or paid time off, as a benefit beyond the unpaid leave entitlements of the Family and Medical Leave Act (“FMLA”).  State or local laws may also require paid leave beyond FMLA entitlements.  Seeking to maximize time off work, employees may ask to take paid leave before commencing 12 weeks (or 26 weeks, in the case of military caregiver leave) of unpaid FMLA leave.  While generous employers may consider approving such a pro-employee arrangement, by Opinion Letter dated March 14, 2019, the United States Department of Labor (“DOL”) prohibited this approach. The DOL’s March 14, 2019 Opinion Letter requires the FMLA entitlement period to run from the earliest possible date, regardless of employers’ paid leave policies or employees’ preferred sequencing of leave.  In addition, employers “may not designate more than 12 weeks of leave (or 26 weeks of military caregiver leave) as FMLA leave.”  The DOL’s March 14, 2019 Opinion Letter departs from DOL Opinion Letter No. 49 (1994), which authorized employers to “extend” FMLA benefits by delaying the start of the FMLA leave period until after employees exhausted paid leave benefits. With appropriate notice in written policies and in the FMLA-required Rights and Responsibilities Notice, employers may continue to require employees to take paid leave concurrently with unpaid FMLA leave.  Alternatively, employers may let employees choose whether to take paid leave concurrently with FMLA leave, or take FMLA leave as unpaid and save paid leave for later use.  In all cases, according to the DOL, the first 12 (or 26) weeks of FMLA-qualifying leave in the calendar year must be designated as FMLA leave. The many procedural requirements of the FMLA can be a trap for the unwary.  Guidance from experienced counsel can help to avoid interference with employees’ FMLA rights, while minimizing the risks of FMLA fraud and misuse.

On March 4, 2019 the U.S. District Court for the District of Columbia issued a ruling that immediately reinstated the EEO-1 pay data reporting requirement. The government has not yet appealed or sought to stay the ruling, leaving employers unclear about their EEO-1 reports, which are due by May 31, 2019. On March 18, 2019 the EEOC issued a statement that it would only require the submission of Component 1 data regarding the demographics of employer workforces. Regarding Component 2 pay and hours data addressed in the Court’s ruling, the EEOC has stated only that it “is working diligently on next steps in the wake of the court’s order” and “will provide further information as soon as possible.” After the EEOC issued its statement, the National Women’s Law Center and Labor Council for Latin American Advancement, the plaintiffs in the case challenging the withdrawal of approval for the collection of Component 2 data, filed a motion with the Court asserting that the EEOC’s statement was not compliant with the March 4, 2019 decision and requesting an emergency hearing. The Court requested further briefing from the parties, which must be filed by April 8, 2019. Accordingly, the EEOC is not requiring the submission of Component 2 data for now, but we await further guidance from the Court. With EEO-1 submissions due by May 31, 2019, we will continue to follow these developments closely.

On March 4, 2019 Judge Chutkan of the U.S. District Court for the District of Columbia issued a ruling that immediately reinstated the EEO-1 pay data reporting requirement.  The government has not yet appealed or sought to stay the ruling, leaving employers unclear about their EEO-1 reports, which are due by May 31, 2019. On March 18, 2019 the EEOC issued a statement that it would only require the submission of Component 1 data regarding the demographics of employer workforces.  With respect to the Component 2 pay and hours data addressed in the Court’s ruling, the EEOC has stated only that it “is working diligently on next steps in the wake of the court’s order” and “will provide further information as soon as possible.” After the EEOC issued its statement, the National Women’s Law Center and Labor Council for Latin American Advancement, the plaintiffs in the case challenging the withdrawal of approval for the collection of Component 2 data, filed a motion with the court asserting that the EEOC’s statement was not compliant with the March 4, 2019 decision and requesting an emergency hearing.  At the hearing this morning (March 19, 2019), Judge Chutkan required further briefing from the government and the plaintiffs, which must be filed by April 8, 2019. Accordingly, while the EEOC is not requiring the submission of Component 2 data for now, it is unclear whether the Court will find this approach to be compliant with its prior order.  Nor is it clear what action the Court would take if it finds the EEOC’s statement non-compliant.  With EEO-1 submissions due by May 31, 2019 and seemingly little chance of clarity before April 8, 2019, at the earliest, we will continue to follow these developments closely. UPDATE: While no written order has yet issued, some sources have reported that Judge Chutkan required that the EEOC provide guidance by April 3, 2019 as to whether, when, and how employers will have to submit pay data as part of the 2018 EEO-1 submission.  The plaintiffs will then have until April 8, 2019 to respond to the EEOC’s guidance.

Since 2011, the number of Fair Credit Reporting Act (FCRA) lawsuits filed annually has continued to climb. The data demonstrates that employers struggle with compliance, especially regarding the FCRA’s disclosure requirements. Under the FCRA, an employer must provide an applicant or an employee with a “clear and conspicuous” disclosure that a “consumer report” -- commonly referred to as a background check -- may be obtained for employment purposes.  Importantly, before running the background check, the disclosure must be provided in a document that consists solely of the disclosure.  These disclosure requirements have proven problematic for employers in practice. In 2017, the U.S. Ninth Circuit Court of Appeals clarified that a FCRA disclosure cannot contain a liability waiver. Just last month in Gilberg v. California Check Cashing Stores LLC, the Ninth Circuit ruled that the FCRA disclosure cannot contain any additional disclosures that may be required by applicable state law. In that case, the Court reinstated class claims that the employer’s disclosure violated the FCRA because the disclosure provided to job applicants was not clearly written, nor was it contained in a “standalone” document. The Gilberg case makes clear that a court will closely scrutinize any extraneous information contained in the FCRA-required disclosure, regardless of the purpose for its inclusion. The offending language in Gilberg contained disclosures mandated by separate state laws. Stated simply, if the language included in the disclosure is not necessary to clearly and conspicuously advise an applicant or employee of FCRA rights, it likely should be excluded. Employers should take care to review any FCRA disclosures with legal counsel to ensure compliance, as any mistake, no matter how small, may expose the employer to liability on an individual or class-wide basis. Employers with questions regarding the FCRA would do well to consult with able counsel.

Employers who thought that they had received a respite from the U.S. Equal Employment Opportunity Commission’s proposed requirement to report information about employees' pay and hours worked when submitting their annual EEO-1 forms received a surprise on March 4, 2019, when the U.S. District Court for the District of Columbia resuscitated the revamped EEO-1 reporting obligation. The additional data reporting requirement — which was first proposed by the EEOC in 2016 — had been stayed since Aug. 29, 2017, after the Office of Management and Budget vacated its prior approval of the new EEO-1 form. U.S. District Judge Tanya Chutkan vacated that stay and reinstated the reporting obligation. Although the EEOC filing portal has not yet opened for the current filing period, this ruling may leave employers scrambling to meet the upcoming May 31, 2019, EEO-1 submission deadline. EEO-1 Pay and Hours Worked Data Collection: On and Off Again Title VII of the Civil Rights Act of 1964 requires employers to keep and preserve records relevant to a determination of the occurrence of unlawful employment practices and authorizes the EEOC to mandate that employers produce reports of such records. Since 1966, the EEOC has required that employers with 100 or more employees file an EEO-1 form on an annual basis reporting the number of employees by job category, race, sex and ethnicity. Certain government contractors and first-tier subcontractors with 50 or more employees and a contract in excess of $50,000 are also subject to this requirement. Employers subject to the EEO-1 requirement who do business at one single establishment are required to submit a single EEO-1 report, while multi-establishment employers must submit separate reports for the headquarters and each establishment and a consolidated report including all employees. In 2016, as part of an interagency initiative to combat pay discrimination, the EEOC announced that it would add a second “component” to the EEO-1, pursuant to which employers would be required to report the total number of full- and part-time employees by demographic category in each of 12 pay bands for each EEO-1 job category and also the aggregate hours worked by all of the employees in each pay band. The OMB approved the new EEO-1 data collection, as required by the Paperwork Reduction Act, or PRA, just over a month before the 2016 presidential election and one day after the EEOC submitted it to the OMB for review. In doing so, the OMB disregarded a groundswell of comments from employers contending that the cost of assembling and reporting this information would be burdensome and the utility of the information for its stated purpose of investigating potential pay discrimination would be limited. Under the PRA, the OMB can revisit and stay prior approvals of agency data reporting requirements under certain circumstances. On Aug. 29, 2017, the OMB initiated a review of the new EEO-1 reporting requirement and stayed its prior approval. The OMB justified its change of course by noting the EEOC’s post-approval publication of data file specifications for employers to use when submitting the EEO-1 data and also asserted that the data collection would be “unnecessarily burdensome” and “lack practical utility.” Two public interest groups that advocate for pay equity, the National Women’s Law Center, or NWLC, and Labor Council for Latin American Advancement, or LCLAA, subsequently filed suit in the U.S. District Court for the District of Columbia challenging the OMB’s action. Legal Challenge to the Stay: Revised EEO-1 On Again? The NWLC and LCLAA, filed suit against the OMB, EEOC and other federal defendants asserting that the OMB’s 2017 decision to stay the new EEO-1 reporting requirement was arbitrary and capricious and should therefore be overturned. Judge Chutkan agreed. After finding that the NWLC and LCLAA had standing and that the 2017 stay was a final agency action subject to judicial review, the court analyzed whether the OMB’s decision comported with its PRA regulations. The court found that the data file specification published by the EEOC after the new EEO-1 form’s approval did not meaningfully affect the nature or burden of the data collection and had in fact been expressly contemplated by the EEOC’s notices and prior submissions to the OMB. Accordingly, the court dismissed this justification as a mere “technicality.” Similarly, the court found that the OMB’s second justification for its revocation of its approval of the EEO-1 form — that the initial burden estimate had been incorrect — was speculative and not supported by any reasoned analysis. The court further criticized the OMB for departing from the reasoning behind its prior, 2016 approval of the new EEO-1 form without providing any factual or legal analysis to explain its change in position. For these reasons, the court found the OMB’s decision to be arbitrary and capricious. The court then turned to the question of the proper remedy its decision required. Rather than remanding the issue to the OMB to repair the identified deficiencies in its analysis, the court vacated the stay issued on Aug. 29, 2017, effectively reinstating the OMB’s prior approval of the revised EEO-1 form. What Happens Next? So where does this leave employers? Originally, the additional EEO-1 requirements had been slated to commence in March 2018, but prior to the court’s decision, the requirements had been indefinitely stayed from going into effect. On Feb. 1, 2019, the EEOC extended the deadline for submission of 2019 EEO-1 data until May 31, 2019 due to the recent government shutdown. According to the EEOC’s website, the 2018 EEO-1 survey will open for submission on March 18, 2019, but as of March 14, 2019, the EEOC had not provided any guidance regarding the effect of the court’s decision or what information employers will be required to submit by May 31, 2019. Because the EEO-1 salary and hours reporting requirements never went into effect prior to the OMB’s 2017 stay, many if not most employers have not been preparing to collect this data for submission in the 2018 EEO-1 report. As commentators noted during the EEOC’s and OMB’s 2016 approval of the new EEO-1 form, many employers do not maintain the types of demographic data traditionally collected by the EEO-1 and the newly required wage and hour data in the same systems. If employers must comply with the new EEO-1 reporting requirements by May 31, 2019, there will be a scramble to collect and collate data from disparate human resources and payroll databases. Employers would be well advised to begin this process immediately, in light of the challenges of identifying, collecting and preparing wage and hour data for production to the government. Aside from the practical burden of compiling this data and preparing the required report, employers now also face renewed risk that the data reported on an EEO-1 form will be used in support of discrimination claims. While this risk has always been at least notionally present, as EEO-1 reports are always requested and reviewed by the Office of Federal Contract Compliance Programs in its compliance reviews and can be requested in discovery by employees, the inclusion of compensation data increases the threat that these reports can pose in the hands of an adversarial government agency or plaintiff. The district court’s decision may not be the final word in this matter, however. The government could appeal the decision and seek a stay of the decision while the case is before the U.S. Court of Appeals for the D.C. Circuit. Given that the EEO-1 filing period opens in mere days and the deadline is only a few months away, any delay by the government in seeking or obtaining a stay would heighten the present uncertainty. Another possibility is that the EEOC could delay the onset of the requirement for employers to provide the additional information in recognition of employers’ reliance on the OMB’s 2017 stay and the fact that the EEOC itself may be unprepared to begin accepting this information. With no guidance to date, however, it is uncertain whether the EEOC will postpone the deadline for both components of the EEO-1, only the new reporting requirement, or would allow the new requirement to remain in place as scheduled. Notably, the EEOC only has two of its five commissioners in place and lacks a quorum to take certain actions. The court’s decision is surely a shock to the system for employers who are subject to the EEO-1 reporting requirement. Regardless of what happens next, such employers would be wise to begin collecting the required EEO-1 pay and hours data immediately and preparing for the new requirements to remain in place beyond the 2018 reporting period.

On December 1, 2018, the amendments to Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”), which governs class actions, went into effect.  The amendments codify certain procedures the courts have been requiring or permitting over the last 15 years in class actions.  Below are five important takeaways from the Rule 23 amendments: Before directing notice to a certified or not-yet-certified class, the parties’ submissions must demonstrate that the court will likely: (1) be able to approve the settlement after a final hearing; and (2) be able to certify the class for purposes of judgment on the proposal. The amendments establish a standard set of factors to assess the fairness, reasonableness, and adequacy of a proposed settlement.  These enumerated factors are not designed to displace the various analyses used in each circuit, but instead are intended to bring focus to the most germane factors. The notice sent to members of a class certified for purposes of settlement should be the same as notice sent to members of a class that is certified by the Court in a litigated context. Email is now an expressly approved method for delivering notice to members of the class.  However, no single delivery method of notice is preferred, leaving it to the court’s discretion to select the appropriate means (or combination of means) most likely to be effective in a particular case.  As such, the parties may wish to advocate for their preferred method of service when seeking approval of notice. Objections (and appeals) now can be withdrawn without court approval, unless a payment or other consideration is “associated with” the withdrawal.  The purpose of this amendment is to tackle objections and threats of appeal advanced for personal gain, as opposed to those advanced to assist the settlement-review process. Moreover, notes to the amendments emphasize that notices be in “plain, easily understood language,” and that the “means, format, and content” of a notice appropriate for one group may not be appropriate for another.  Parties should be prepared to address concerns over classes with members whose first language may not be English, or who may have other impediments to comprehending (or even seeing) typical notices.

Building off the two town halls it held for the tech industry last month, the OFCCP has announced that it will hold two more town halls in New York City in April.  The first will focus on the financial industry and will be held on April 9, 2019.  The second will focus on the legal industry and will take place on April 10, 2019. Like the previous town hall meetings, these meetings are open to the public and tickets are available by registering through OFCCP's website.  Tickets are limited to two per organization on a first come, first served basis. The town halls will be of particular interest to human resource managers, equal employment opportunity specialists, chief compliance officers, and other personnel in the legal and financial industries who are directly involved with ensuring their company’s compliance with OFCCP’s requirements.  These events are designed to ensure that contractors have the resources needed to comply with their obligations, and also provide the contractor community with an opportunity to be heard and express valuable opinions on how OFCCP can help contractors achieve compliance.

In Wallace v. Andeavor Corp., the U.S. Fifth Circuit Court of Appeals affirmed the grant of summary judgment to an employer on a former vice president’s Sarbanes-Oxley Act (SOX) whistleblower claim, finding that he could not have reasonably believed that the employer was misreporting its revenue in its 10-K filings with the Securities and Exchange Commission (SEC). Plaintiff was the Vice President of Pricing and Commercial Analysis of Andeavor, an operator of petroleum refineries.  He suspected that the Company was erroneously booking certain sales and excise taxes it collected from customers and remitted to federal and state governments as revenue in  internal reports.  However, he represented in e-mails that he believed external reporting was proper, and certified Company 10-K reports and financial statements.  The 10-K report explicitly disclosed that excise and other taxes were recognized in both the “revenue” and “costs of sales and operating expenses” categories, but its disclosures were arguably ambiguous as to whether it included sales taxes. At the same time, Plaintiff was the subject of a human resources investigation, which found that he had fostered a hostile work environment and engaged in other unacceptable behavior.  As a result of this investigation, his employment was terminated.  Plaintiff filed suit under SOX’s anti-retaliation provision, claiming that he was terminated because he reported the alleged problems with the tax and revenue recognition.  The district court granted summary judgment to the employer on his SOX claim, finding that Plaintiff had not engaged in SOX protected activity because he did not report conduct that he believed to constitute shareholder fraud. The Fifth Circuit assessed the evidence presented to the district court on whether Plaintiff’s purported belief that his employer was misreporting its revenue was objectively reasonable.  SOX requires not only that the employee have reported certain types of misconduct, but also that they both subjectively and objectively believed that misconduct actually occurred.  In this case, the Fifth Circuit focused on evidence that Plaintiff had considerable training and experience in business and accounting, and also noted his specific expertise in SEC financial reporting practices. Based on this background, the court reasoned that Plaintiff “should be capable of understanding disclosures in SEC filings.”  The court also pointed to evidence that Plaintiff was one of the employees who certified the Company’s financial statements, and stated Plaintiff should have conducted an investigation to ensure that his claim that the public disclosures contained a reporting violation was reasonable.  The court found that, if such an investigation had occurred, he would have determined that the Company consistently disclosed its treatment of sales and other taxes to its shareholders.  Accordingly, the Fifth Circuit affirmed the grant of summary judgment to the employer. This decision makes clear that a SOX retaliation claimant must have a reasonable basis for reporting wrongdoing, considering the claimant’s education, background, and experience.Employees with business and accounting experience will likely be held to a higher standard regarding the basis for their allegations when seeking to invoke SOX’s retaliation protections.Publicly traded companies would do well to clearly identify in the job descriptions of employees with accounting, finance and compliance roles their compliance, reporting, investigation and certification responsibilities.

Employers have been waiting for the U.S. Department of Labor (“DOL”) to respond to the injunction halting the implementation of its 2016 proposal increasing the minimum salary threshold for the white collar exemptions. On March 7, 2019, the DOL issued its replacement proposal to the minimum salary requirement, raising the current $23,660 annual salary requirement to $35,308 annually (i.e., $679 weekly). This increase is in line with feedback presented at the DOL listening sessions and consistent with predictions of where the DOL would land on the salary increase. As a reminder, in 2016, the DOL proposed an increase that would have more than doubled the Fair Labor Standards Act’s (“FLSA”) minimum salary threshold for the white collar exemptions from $455 per week (i.e., $23,660 annually) to $913 per week (i.e., $47,476 annually). On November 22, 2016, a federal judge in Texas issued a nationwide injunction halting implementation of the DOL’s proposed rule. Appeals followed; however, the DOL eventually indicated that it intended to revisit the increase. In the fall of 2018, the DOL held numerous listening sessions to receive public feedback regarding the minimum salary requirements, in which Polsinelli attorneys participated. In addition to this proposed increase, the DOL is seeking public comment regarding its proposed language concerning automatic increases to the salary threshold. Under the newly proposed rule, periodic increases would only be implemented after notice-and-comment periods. The automatic increases (without notice-and-comment) included in the 2016 proposed rule were a factor that led to injunctive relief being granted It is estimated that this new increase will result in over a million workers being reclassified as non-exempt and, thus, entitled to overtime.  While the salary increase certainly impacts fewer workers than the 2016 proposed increase, employers should work with experienced counsel to evaluate modifications (including pay adjustments or reclassification) to blunt the impact of the new rule on labor budgets and operational capabilities. As always, we will continue to monitor developments regarding these new rules and will keep you updated.

On March 4, 2019, the United States District Court for the District of Columbia caught the employer community by surprise by ordering the EEO-1 pay data reporting requirement immediately reinstated. Background In September 2016, the U.S. Equal Employment Opportunity Commission (EEOC) announced plans to collect employee pay data from covered private employers and contractors, as an additional component to the annual Employer Information Report, or EEO-1 report.  According to the EEOC, collecting W-2 wage information and total hours worked by gender, race, and ethnicity will enable the Commission to evaluate employers’ pay practices and ultimately to “prevent pay discrimination and strengthen enforcement” of federal anti-discrimination laws. However, on August 29, 2017, the White House Office of Management and Budget (OMB), which had previously approved the EEOC’s rule changes in 2016, put an immediate stay on the EEOC’s plans to collect the additional pay data. The OMB indicated that some aspects of the expanded collection were unnecessarily burdensome for employers, and it needed time to further review the change (citing the Paperwork Reduction Act, which directs federal agencies not to overload business with paperwork).  In November 2017, the Labor Council for Latin American Advancement and the National Women’s Law Center (NWLC) sued OMB, alleging that it violated the Administrative Procedure Act by moving to review a rule it had already approved. What is happening now? Now, just 12 weeks before employers’ submissions are due to the EEOC, the district court found the OMB provided inadequate reasoning to support its decision to stay the data collection and ruled that the previously approved revised EEO-1 form “shall be in effect.” Unless the ruling is stayed pending appeal, employers will be required to collect not only W-2 wage information and total hours worked by gender, race, and ethnicity, but also the number of employees falling within each of 12 pay bands for each job category, ranging from $19,239 and under to $208,000 and over. Employers have been providing race and gender information, but have not been required to provide the pay data. The looming question is whether the pay data will be required for this year’s reporting period. The EEO-1 reporting deadline is currently set for May 31, 2019 following a delay due to the government shut down. As of now, the EEO-1 survey portal has not yet been opened, and the EEOC has not issued any new instructions or guidance that is typical with the opening of the report. It remains to be seen whether OMB will appeal the district court’s decision and seek a stay of the use of the form by EEOC pending the appeal.  The EEOC could seek to further revise the reporting guidelines, but the EEOC does not currently have a quorum to act. Polsinelli will continue to monitor developments in this area.  In the meantime, employers should continue to prepare to file their 2018 EEO-1 report including taking steps to be prepared to file the pay data components required by the revised form.

On March 1, 2019, in a long-awaited and unsurprising 3-1 decision, the National Labor Relations Board (“Board”) ruled lobbying expenses are not chargeable to employees who work in a union setting and choose not to join or remain a member of the union under the National Labor Relations Act (“NLRA”).  See Kent Hospital, 367 NLRB No. 94 (2019).  In addition, the Board further held unions must verify to such employees – known as Beck objectors – that financial information disclosed to them has been independently audited. The case arose in 2009, when several employees of Kent Hospital resigned their memberships with the union and objected to paying union dues for activities unrelated to collective bargaining, contract administration, or grievance adjustment.  By letter, the union provided the resigning employees with their new reduced fee amounts, as well as several charts outlining the major categories of expenses spent by the union both internationally and at Kent Hospital locally.  The letter further stated that the categories of expenses disclosed therein were verified by a certified public accountant.  However, the union did not provide the objectors with the actual verification letter from the auditor because it believed it was not required to do so.  Critical to the Board, the union continued to deduct dues from the Beck objectors for lobbying expenses.  Thereafter, the Board’s Acting General Counsel filed unfair labor charges against the union, alleging the union violated Section 8(b)(1)(A) of the NLRA by 1) failing to provide the objectors with evidence “beyond a mere assertion” the financial data the union disclosed was based on an independent audit; and 2) charging the Beck objectors dues it used to fund its lobbying efforts.  The Administrative Law Judge dismissed the Acting General Counsel’s charge relating to the audit verification and partially sided with the union relating to its decision to charge the Beck objectors for lobbying expenses. The case was appealed to the Board.  On appeal, the Board first held “private-sector unions subject to the ‘basic considerations of fairness’ inherent in the statutory duty of fair representation are required to provide Beck objectors verification that the financial information disclosed to them has been independently verified by an auditor.”  The Board reasoned, since financial information provided to Beck objectors must be independently verified, unions “must take the modest additional step of supplying verification that the provided financial information has been independently verified.” The Board then discussed whether a union’s lobbying efforts were chargeable to Beck objectors, and concluded they were not.  When making its ruling, the Board explained unions may not spend funds collected from Beck objectors on activities “not germane” to its duties relating to collective bargaining, contract administration, or grievance processing.  The Board acknowledged, in certain circumstances, a union’s lobbying efforts may touch on workers’ terms and conditions or “incidentally affect” collective bargaining.  Even so, the Board held, lobbying efforts are not part and parcel of a union’s duty to bargain collectively, and, thus, Beck objectors cannot be compelled to pay for political lobbying: “Lobbying activity is not a representational function simply because the proposed legislation involves a matter that may also be the subject of collective bargaining.” Stay tuned to Polsinelli at Work for further updates regarding this case.

Polsinelli shareholder Erin Felix will moderate the upcoming Ethical Restrictions on Federal Employees/Counsel panel at the American Bar Association Public Contract Law Section’s Federal Procurement Institute at 3:15 pm EST on March 15, 2019.  The panel will explore pre- and post-departure restrictions on the conduct of federal employees from both the government employee as well as the private sector perspective.  These restrictions are significant to government contractors because while contractors frequently seek to hire agency personnel to gain their insight on agency procurement processes, the failure to abide by applicable civil service and conflict of interest laws can invite bid protests and agency investigations.  The high-profile, ongoing protest of Amazon’s proposal to provide cloud computing services under the Defense Department’s $10 billion Joint Enterprise Defense Initiative (JEDI) competition is but one example of the high stakes that contractors face in ensuring that their employees comply with these restrictions.  Register for the Federal Procurement Institute here.

In Wadler v. Bio-Rad Laboratories, Inc., the U.S. Court of Appeals for the Ninth Circuit adopted a limited, plain meaning construction of the types of reports that are protected by the Sarbanes-Oxley Act’s (SOX) whistleblower provision and in the process partially reversed an $11 million jury verdict in favor of a corporate general counsel. In Wadler, a corporation’s general counsel believed that the corporation was violating the Foreign Corrupt Practices Act’s (FCPA) bribery prohibition and recordkeeping requirements and reported his findings to the corporation’s board.  After an outside investigation found no evidence of an FCPA violation, the corporation terminated the general counsel’s employment.  The general counsel filed SOX and other claims against the corporation alleging, among other things, that he was retaliated against for reporting the suspected FCPA violation.  The general counsel subsequently prevailed at trial. The Ninth Circuit reversed the judgment in favor of the general counsel as to his SOX claims because his reporting of alleged FCPA violations was not protected activity under SOX.  The Court found that SOX only protects employees who report violations of specific statutes, of which FCPA is not one.  The district court had ruled that FCPA fell into the category of “any rule or regulation of the Securities and Exchange Commission,” which is identified in SOX, because FCPA is an amendment of and codified in the Securities and Exchange Act and is enforced by the SEC.  But, the Ninth Circuit held that under plain meaning construction of SOX, an SEC “rule or regulation” encompassed only administrative rules or regulations and not a statute like FCPA.  The Ninth Circuit also rejected the general counsel’s argument that the remedial purpose of SOX – i.e., to clamp down on corporate misconduct – required a broader interpretation of what constituted protected activity. Since Section 806 of SOX was enacted in 2002, federal courts have generally adopted expansive interpretations of the scope of protected activities. This Ninth Circuit decision is one of several recent federal decisions which instead limit protected activities to complaints concerning the specific statutes, rules, and regulations enumerated in SOX.Stay tuned to Polsinelli at Work for further updates.

The Equal Employment Opportunity Commission (“EEOC”) recently announced that EEO-1 Reporting will open in early March 2019, and covered employers must submit their EEO-1 reports on or before May 31, 2019.  The EEO-1 filing deadline was extended due to the lapse in the EEOC’s appropriations.  According to the EEOC, more specific information about EEO-1 filing will be published “in coming weeks.” What is the EEO-1 report? The EEO-1 report is conducted annually under the authority of Title VII of the Civil Rights Act of 1964 (as amended). Covered employers must file this report annually, which includes, among other things,  a count of employees by establishment and job category, with race and gender information for every employee. Which employers must file an EEO-1 report? All private employers with 100 or more employees that are subject to Title VII of the Civil Rights Act of 1964, as amended. Some private employers with fewer than 100 employees, if the employer is owned or affiliated with another employer -- or there is centralized ownership, control or management -- so that the employers together legally constitute a single enterprise, and the entire enterprise employs a total of 100 or more employees. Federal contractors that employ 50 or more employees and are prime contractors or first-tier subcontractors and have a single contract, subcontract or purchase order amounting to $50,000 or more. Who are considered “Employees”? The EEO-1 instruction booklet defines “Employee” as any individual on the payroll of an employer who is an employee for purposes of the employer’s withholding of Social Security taxes. This includes full and part-time employees. The definition of “Employee” does not include individuals who are temporarily hired on a casual basis for a specified time, or for the duration of a specified job. How is this data used? The Office of Federal Contract Compliance Programs (OFCCP) reviews EEO-1 data when selecting employers to audit, and may further cross-reference EEO-1 data with a contractor’s affirmative action plan.  Accordingly, federal contractors and subcontractors should pay careful attention to how their EEO-1 is completed. What are common errors with EEO-1 reports? Not preparing a separate report for each establishment, or reporting all employees in the “Headquarter Report.” Not providing notice to the EEO-1 Joint Reporting Committee that the filing employer experienced a merger, acquisition, or spinoff. Failing to include employees who chose not to self-identify race or gender.  An employer is required to report on all “Employees.”  Even if an employee declines to self-identify, the employer must still report both race and gender for that employee.  There is no “unknown” race or gender category.  While self-identification is the preferred means for obtaining race and gender information, employment records or visual identification may be used. Polsinelli continues to monitor the opening date for the EEO-1 and whether there are modifications to the report.Stay tuned to Polsinelli at Work for further updates.

With the H-1B cap season upon us, the government continues to churn out substantial updates and changes that impact how this year’s H-1B cap season will progress, including new impacts on the foreign workers’ family members. As discussed in greater detail in our recent blog post, U.S. employers seeking to fill a position requiring a bachelor’s degree (or higher) in a specific field can file an H-1B visa application with U.S. Citizenship & Immigration Services (USCIS) on behalf of a foreign worker who meets those credentials. The number of H-1B visas issued annually is limited to 65,000, with 20,000 additional visas for those with U.S. master’s degrees.  The filing window opens on April 1 each year for an October 1 start date, and USCIS runs a random lottery selection system in early April to select cases for processing. Traditionally, USCIS selected 20,000 cases from the U.S. master’s degree pool and then selected another 65,000 cases from the pool at large.  Beginning this year, however, USCIS will reverse the order in which applications are drawn, choosing 65,000 cases from all applications first, and then picking 20,000 cases from U.S. master’s degree only cases.  This change is mostly welcomed by U.S. employers, especially those with many U.S. master’s degree applicants, as it is intended to increase the number of master’s cases selected. The selection reversal is a result of the newly promulgated H-1B rules, which include a new electronic pre-registration system for H-1B cap cases.  USCIS has postponed the roll-out of the registration process until after this cap season, to the relief of many employers and immigration practitioners throughout the country. However, still in time for this year’s H-1B lottery, USCIS has announced changes to the process by which spouses and children of H-1B workers (those applying for H-4 status) file for their immigration status.  This development has been met with less optimism, and the changes signal longer processing times and expected delays for dependent spouses and children of H-1B workers. Effective March 11, 2019, all H-4 applicants (as well as others using Form I-539) must use the new version of Form I-539, which will be released that day.  The new version of Form I-539 will include a separate I-539A supplement for each additional applicant (e.g., minor child).  In addition, each family member must attend a biometric screening appointment and pay an additional fee of $85.  The new biometric screening requirement means that H-4 spouses and children will have to wait for appointments for fingerprints/photographs/iris scans before their applications can progress.  Moreover, those H-4 spouses who are eligible to work may experience corresponding delays in their applications for employment authorization (EADs). These new changes bring more uncertainty to the timeline and process by which these cases will be adjudicated, and may also bring about travel and work delays. As a result, working with legal counsel to navigate these issues is strongly recommended.

The H-1B season is in full swing.  Although U.S. Citizenship and Immigration Services (“USCIS”) has proposed changes to the H-1B, the process remains largely the same for this year.  As in past years, the filing window for H-1B both opens and closes on April 1.  Employers looking to hire or retain talented foreign national professionals should begin the application process as soon as possible. Which employees qualify for an H-1B? The H-1B is available to fill a “specialty occupation,”  defined by regulation as a position that requires “(a) theoretical and practical application of a body of highly specialized knowledge, and (b) attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States.” The H-1B is the main work visa for highly skilled professional foreign workers, and the H-1B slots are in short supply. A total of 85,000 H-1B visas are available each year, with certain preference given to foreign nationals with Masters Degrees or higher from US colleges. Employers may file H-1B applications six months before the start of the new fiscal year, which means the filing window for H-1B applications opens each year on April 1.  Each year the demand for H-1B visas greatly outweighs the supply, with approximately 200,000 applications filed on April 1.  As more applications are filed than visas are available, USCIS conducts a random lottery to select the applications for consideration. Why begin the application process now?  A proper and well-considered H-1B application takes time to prepare.  First, employers must file a labor condition application (“LCA”) with the U.S. Department of Labor (“DOL”).  The LCA requires the employer to attest 1) to the wages to be paid to the foreign worker; 2) that the employer is providing working conditions that will not adversely affect the working conditions of workers similarly employed; 3) that there is not a strike or lockout in the occupational classification at the place of employment; and 4) that the employer has provided notice of the filing of the LCA.  Although the DOL typically processes LCA applications within seven days, delays can occur, particularly at this time of year when so many employers are preparing to file H-1B applications in the lottery. After the LCA is certified by the DOL, the employer must file a petition with USCIS seeking approval to employ the foreign worker in H-1B status.  An employer cannot file the H-1B petition without first obtaining DOL certification of the LCA. The H-1B application process has become more challenging for employers over the last two years. Under the Administration’s Buy American Hire American Executive Order, USCIS is more likely to question the merits of H-1B filings, particularly focusing on whether a position truly qualifies as a specialty occupation.  This increased level of scrutiny means that employers should take care when preparing and documenting an H-1B application.  Care is needed when analyzing if a position reasonably is a specialty occupation, and then determining the best information and documentation available that an employer may provide to persuade USCIS. The H-1B lottery system, along with a more difficult adjudications environment, present continuing obstacles for employers looking to hire key talent. Although time is running short for this year’s lottery, interested employers have not yet reached closing time. For more information on the H-1B process, contact your Polsinelli attorney or a member of the Polsinelli Immigration practice group.

On February 13, 2019, the OFCCP issued Directive 2019-04, which provides the framework for the agency’s new Voluntary Enterprise-Wide Review Program (VERP). The program is designed to incentivize federal contractors to complete voluntary compliance evaluations. It is part of a broader effort by OFCCP to find innovative ways to ensure that federal contractors comply with equal employment opportunity laws company-wide. While the requirements for the program have not yet been finalized, VERP is worth monitoring because it may prove to be a useful vehicle for contractors with strong, corporate-wide diversity and inclusion programs to obtain certainty and avoid random audits through OFCCP’s neutral compliance evaluation selection process. Although the directive does not provide the final details of the program, it provides a framework of what federal contractors can expect. OFCCP will conduct compliance reviews of the contractor’s headquarters location as well as a sample or subset of establishments. Contractors will be required to demonstrate that they meet established criteria that not only basic compliance with OFCCP’s requirements, but also a demonstrated commitment to and application of successful equal employment opportunity programs on a corporate‐wide basis. The promise of the program to contractors is that if a contractor is accepted into VERP, OFCCP will enter into an agreement that removes the contractor from OFCCP’s neutral scheduling process for the duration of the agreement. VERP will recognize two tiers of contractors. Contractors that are found to be OFCCP compliant will be removed from OFCCP’s list for random compliance evaluations for a period of three (3) years. Top‐performing contractors with model corporate‐wide diversity and inclusion programs will be receive five (5) years of relief from random compliance evaluations. The directive promises individualized compliance assistance to contractors in VERP’s second tier to assist them in becoming top performers. Applicants who are not accepted into the program will return to the pool of contractors that OFCCP may schedule for compliance evaluations through OFCCP’s neutral selection process. The directive states that OFCCP will not automatically place rejected applicants on a scheduling list for a compliance evaluation. That being said, contractors should not expect OFCCP to ignore perceived violations identified during the VERP application process, so it is critical for contractors who seek to take advantage of VERP to rigorously self-audit their compliance with the assistance of experienced counsel prior to submitting an application. This new program presents federal contractors with a significant cost-saving opportunity, particularly for those contractors with multiple establishments. Contractors with strong diversity and inclusion programs can potentially achieve cost-stability and predictability by submitting to a single audit through the VERP process, rather than being selected multiple times through OFCCP’s neutral selection criteria for separate audits at different establishments. OFCCP plans to begin accepting applications from federal contractors in fiscal year 2020. Polsinelli will keep the contractor community updated as OFCCP releases additional details about the VERP process.

In February 2019, the New York Commission on Human Rights (the “Commission”) issued guidance regarding employment discrimination based upon natural hair or hairstyles. Specifically, the Commission announced its position that “grooming or appearance policies that ban, limit, or otherwise restrict natural hair or hairstyles associated with Black people generally violate the New York Commission on Human Rights Law’s (“NYCHRL”) anti-discrimination provisions.” The Commission further stated that harassment based on aspects of an employee’s appearance associated with his/her race is also prohibited. According to the Commission, Black hairstyles are a protected racial characteristic under the NYCHRL “because they are an inherent part of Black identity” and because “there is a strong, commonly-known racial association between Black people and hair styled into twists, braids, cornrows, Afros, Bantu knots, fades, and/or locs.” Pursuant to the Commission’s guidance, examples of policies or practices that may violate the NYCHRL include: Prohibiting twists, locs, braids, cornrows, Afros, Bontu knots, or fades; Requiring employees to alter the state of their hair, e.g., through the use of chemicals or heat, to adhere to company appearance standards; Limiting the number of inches hair can grow from the scalp, thereby limiting Afros; Requiring that only Black employees obtain supervisory approval before changing hairstyles; Informing only Black employee that they risk losing their jobs if they do not change or alter their hair; Prohibiting Black employees with locs from positions that are customer facing; Refusing to hire Black applicants with cornrows because the style is contrary to the employer’s “image”; Requiring Black employees to hide their hairstyle under hats or visors; and Restricting natural hair styles or styles associated with Black people to promote a cultural image, appeal to a customer, or “under [a] speculative health and safety concern.” Though the guidance focuses largely on hairstyles closely associated with Black people, the Commission further advised that policies that implicate religious groups or other protected classes may also violate the NYCHRL. For example, policies that prohibit employees from wearing “uncut hair or wearing untrimmed beards. . . may impact Rastafarians, Native Americans, Sikhs, Muslims, Jews, and other religious or cultural minorities.” Importantly, the guidance does not state that employers cannot have policies that require a neat and orderly appearance. In addition, employers may impose hair bans or restrictions because of a legitimate health and safety concern, but only after other alternatives, such as a hair nets, head coverings, and hair ties, are considered and deemed unworkable. The Commission has announced its intention to investigate claims of racial discrimination based on this guidance. Thus, employers with four or more employees in New York City would do well to evaluate any current grooming and/or appearance policies to assure compliance and minimize legal risk.

As we have reported in previous blog entries, enactment of the Federal Civil Penalties Inflation Adjustment Act of 2015 required federal agencies to make annual inflation adjustments to civil monetary penalties imposed by the federal government.  These adjustments are to be made no later than January 15 of each year and are effective upon publication in the Federal Register.  Of course, the federal government was in the throes of a partial shutdown on January 15, 2019, so no penalty adjustments were published in the Federal Register by the deadline.  But when the government reopened, the Occupational Safety and Health Administration (OSHA) wasted little time publishing the increased penalties, which appeared in the Federal Register on January 23, 2019.  The chart below reflects the changes in the adjusted penalty levels per violation since the 2015 law went into effect. While the increased civil monetary penalties may impact an employer’s bottom line, OSHA did provide welcome relief to employers just two days later.  On January 25, 2019, OSHA published a final rule, which substantially changed the requirements for electronically reporting injury data to OSHA. As we reported in an earlier blog, OSHA modified its reporting regulations, effective January 1, 2017, to require electronic reporting of injury data to OSHA.  Employers with 20 to 249 employees were required to electronically file  Form 300A (Summary of Work-Related Injuries and Illnesses) and businesses with 250 or more employees, to electronically file  Form 300A, OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and  Form 301 (Injury and Illness Incident Report).  There was an outcry amongst employers when the rule was initially proposed raising a concern that the electronic reporting of specific and detailed injury data reflected on Forms 300 and 301, which would be available to the public, labor unions and competitors, could place an employer at a competitive disadvantage or portray them in a false light. On January 25, 2019, OSHA published its final rule rescinding the obligation to electronically file OSHA Forms 300 and 301.  Covered employers are still required to keep and maintain Forms 300 and 301 at the worksite for at least five years, but employers are no longer required to electronically file these reports with OSHA.   However, the requirement to electronically file Form 300A for all employers with 20 or more employees remains in place.  For calendar year 2018 data, this Form must be filed with OSHA on or before March 2, 2019.  Employers with questions regarding the final rule and OSHA reporting requirements would do well to consult with competent counsel.