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.

On January 22, 2019, a new rule went into effect providing much-needed guidance on the definition of “recruitment fees” under the FAR human trafficking prohibition.  Many government contractors may be surprised to learn that a wide range of seemingly-innocent policies requiring employees or applicants to pay (whether upfront, through deduction, or in any other way) the employer for costs relating to hiring, recruitment, or training may now qualify as impermissible “human trafficking” and subject the contractor to potentially rigorous penalties under the FAR. Since March 2015, all federal government contracts and solicitations have included a clause prohibiting human trafficking pursuant to FAR 22.1705 and 52.222-50.  One of the proscribed forms of trafficking-related conduct is charging “recruitment fees” to employees or potential employees.  While “recruitment fees” were previously undefined in the FAR, the new rule makes clear that the term has a sweeping definition, encompassing “fees of any type” that are “associated with the recruiting process.” The rule takes a functional approach and makes clear that the manner, form, or timing of the payment is not relevant.  Charges can be recruitment fees if they are paid up front by the employee or potential employee, deducted from the person’s wages, or even if they are collected by a third-party such as a labor broker, recruiter, staffing firm, or agent.  The rule and its agency commentary are clear, however, that contractors may require employees or applicants to incur charges themselves in connection with the recruiting process, so long as the payment is not made to the contractor or any of its agents. The new rule lists several categories of exemplary recruitment fees, including fees for: Soliciting, identifying, considering, interviewing, referring, retaining, transferring, selecting, training, providing orientation to, skills testing, recommending, or placing employees or potential employees; Advertising; Obtaining labor certifications, visas, or processing applications or petitions; Acquiring photographs and identity or immigration documents, such as passports; Medical examinations and immunizations; Background, reference, and security clearance checks and examinations; The employer’s recruiters, agents, or attorneys; Language interpretation or translation; Government-mandated fees such as border crossing fees, levies, or worker welfare funds; Transportation and subsistence costs; Security deposits, bonds, and insurance; and Equipment charges. Contractors should note that the listed categories are only examples, and other charges “associated with the recruiting process” qualify even if the specific type of charge is not listed. Because every federal government contract prohibits contractors from charging these fees and some require annual certifications and compliance plans, contractors should review their hiring processes to ensure that no such fees are being charged to employees or potential employees, including applicants.  The penalties for non-compliance with the human trafficking clause can range from the suspension of contract payments to contract or subcontract termination or even debarment. Because contractors are responsible under the rule for fees charged by agents like recruiters (or even sub-recruiters), contractors should ensure that their contracts with recruiters, staffing agencies, or others prohibit passing along any recruitment costs to employees or applicants. The need to audit the recruitment process is only the tip of the iceberg of new issues created by the new rule.  In a subsequent blog, Polsinelli will analyze some potential contractor responses to the new, broad definition of “recruitment fees” and other, less obvious implications of the rule.

Recently, the U.S. Ninth Circuit Court of Appeals ruled in Robles v. Domino’s Pizza that an employer’s websites and mobile applications, or “apps,” are subject to the strictures of the Americans with Disabilities Act, as amended (“ADA”). In Robles, a man with visual impairments filed a proposed class-action lawsuit against Domino’s, alleging violations of the ADA because its website and app were not compatible with screen reading software. The district court dismissed the lawsuit, holding that while Domino’s website was a “place of accommodation” subject to Title III of the ADA, applying the ADA to the website violated Domino’s due process rights because the U.S. Department of Justice (DOJ) had failed to provide helpful guidance concerning the ADA’s application to websites, despite promising to do so since as early as 2010. On appeal, the Ninth Circuit reversed and sent the case back to the district court for further proceedings.  Significant to employers with a website or mobile app, the Court held: 1.    Domino’s is a “place of public accommodation” subject to Title III of the ADA; 2.    “Places of public accommodation” are required, under the ADA, to provide auxiliary aids and services to individuals with disabilities. This requirement applies to Domino’s website and mobile app; and 3.    Domino’s received fair notice that its website and mobile app must comply with the ADA, and thus its due process rights were not violated. Specifically, the Ninth Circuit ruled that despite the DOJ’s failure to provide guidance, Domino’s had sufficient notice that its website and mobile app should comply with the ADA because the ADA itself articulates “comprehensive standards” for compliance. Problematically for employers, the Court did not adopt any specific guidelines for compliance, such as the Web Content Accessibility Guidelines 2.0 (“WCAG 2.0”).  Rather, the Court concluded that Domino’s website and mobile app “must provide effective communication and facilitate full and equal enjoyment of Domino’s goods and services to its customers who are disabled.” Note that the Roblesdecision may lead to more litigation regarding whether an employer’s website and/or mobile apps are ADA-compliant.To minimize litigation risk, employers may wish to work with an accessibility expert and/or competent counsel to analyze and potentially remediate any ADA compliance issues.

With the posting of 2019 CSAL notices possibly imminent, government contractors should prepare for the fact that a portion (approximately 500 out of 3,500 total) of the OFCCP’s FY 2019 compliance evaluations will be Section 503 focused reviews.  Attached is the scheduling letter that will be used for OFCCP’s focused reviews. Unlike the typical OFCCP audit, a focused review will audit contractor’s compliance with the protections for individuals with disabilities under Section 503 of the Rehabilitation Act.  Because Section 503 compliance has not been the focus of many of OFCCP’s recent compliance audits, it is important that contractors should proactively self-audit to ensure they are in compliance with all of the various requirements of Section 503. If a contractor receives a Section 503 focused review scheduling letter, it will have 30 days to collect and provide OFCCP with an array of information about its Section 503 compliance efforts.  In order to effectively respond to and avoid violations, covered government contractors should review their Section 503 compliance to ensure they have the following for their current affirmative action plan year: ·         A current Section 503 affirmative action plan for individuals with disabilities. ·         An assessment of outreach and recruitment efforts for qualified individuals with disabilities.  This assessment is typically prepared separate from the contractor’s affirmative action plan and some vendors and firms do not include this assessment with the Section 503 affirmative action plans they prepare. ·         The actions taken to audit and measure the effectiveness of the contractor’s Section 503 affirmative action plan.  Like the assessment of outreach and recruitment, this usually is separate from the affirmative action plan and may not have been prepared by your vendor or firm. ·         The statistical data collected and retained by the contractor for the total number of job openings and jobs filled, the total number of applicants hired, the total number of applicants with disabilities hired, and the total number of applicants who identify as individuals with disabilities. ·         The contractor’s utilization analysis, evaluating the representation of individuals with disabilities across its job groups or workforce. ·         The contractor’s reasonable accommodation policies and documentation of any accommodation requests received and how the requests were resolved. ·         The contractor’s assessment of its personnel processes and use of physical and mental qualifications. Also, contractors should be prepared to demonstrate, through a walkthrough, that its facilities comply with federal accessibility requirements. We recommend that contractors contact qualified counsel to make sure they are fully prepared to respond to these focused reviews.

Recently, the United States Eighth Circuit Court of Appeals reaffirmed that regular and reliable attendance is an essential function of most jobs under the Americans with Disabilities Act (“ADA”).  Lipp v. Cargill Meat Solutions Corp., 911 F.3d 537 (8th Cir. 2018). In that case, the parties agreed that the employee had a disability.  Even so, the employer terminated her employment after she accumulated 195 violations of the employer’s attendance policy. The employee sued, alleging intentional discrimination and failure to accommodate under the Iowa Civil Rights Act and the ADA.  The district court granted summary judgment to the employer, and the employee appealed. The Eighth Circuit affirmed the district court’s holding, reasoning that the employee failed to establish that she was a qualified individual with a disability who was entitled to the ADA’s protection because she could not regularly and reliably attend work—an essential function of her position. Important to the decision, the employer actively maintained a written attendance policy that expressly stated “regular attendance is crucial” to its operations, and specified that excessive violations of the policy could result in termination of employment. The Eighth Circuit’s decision in Lipp aligns with several other recent decisions from the Second Circuit (Vitti v. Macy’s Inc., 2018 WL 6721091, No. 17-3493 (2d Cir. Dec. 21, 2018)), the Fifth Circuit (Credeur v. State of Louisiana, 860 F.3d 785 (5th Cir. 2017)) and the Ninth Circuit (Ogden v. Public Utility District No. 2 of Grant Cty., 722 Fed. App’x 707 (9th Cir. 2018)), which all held that individuals who are unable to regularly attend work are not qualified individuals with a disability for purposes of the ADA.  In some instances, employers may have to provide qualified workers with leave as a reasonable accommodation.  However, the ADA does not require employers to 1) provide unlimited leave; 2) allow employees to work from home indefinitely; or 3) abandon their work attendance policies when the employer determines regular work-site attendance is an essential function of a given position. These rulings counsel that employers would do well to maintain written attendance policies that provide for progressive discipline, and should also review job descriptions to ensure they reflect the employer’s need for regular, physical on-site attendance (if attendance is indeed job-related and consistent with business necessity). Employers with questions regarding the ADA and attendance policies or job descriptions should consult with competent counsel.

The OFCCP recently announced that it will hold two town hall meetings in the coming weeks to provide compliance assistance to federal government contractors in the tech industry.  The town halls are free and open to the public, and are intended to ensure that contractors have the tools and resources needed to comply with their equal employment opportunity and affirmative action obligations.  These events also provide the contractor community with an opportunity to be heard and express valuable opinions on how OFCCP can help contractors achieve compliance. The meetings will be held in San Jose, California on February 26, 2019 and Seattle, Washington on February 28, 2019.  Tickets are available on a first come, first serve basis, and are limited to two tickets per organization.  Registration is available on the OFCCP’s website.   Based on attendance at recent town hall meetings held by OFCCP, it is advisable to register soon. Federal contractors in the tech industry should consider whether it would be valuable to attend these meetings.   The meetings may be of particular interest to human resource managers, diversity and equal employment opportunity specialists, chief compliance officers, and other personnel in the technology industry who are directly involved with ensuring compliance with OFCCP’s requirements.

On January 23, 2019, the U.S. 7th Circuit Court of Appeals handed employers a welcome ruling and held that the Age Discrimination in Employment Act of 1967 (the “ADEA”) does not protect outside job applicants from disparate impact age discrimination.  Kleber v. CareFusion Corp., No. 1:15-cv-1994 (7th Cir. Jan. 23, 2019).  By way of background, disparate impact claims arise where an employer’s actions are facially neutral, but in practice adversely affect individuals in a protected class. Disparate treatment claims, on the other hand, focus on an employer’s intent to discriminate against an individual.                    When making its ruling, the 7th Circuit thoroughly examined the plain language of the statute and observed that the ADEA prohibits a covered entity from subjecting “any individual” to disparate treatment based on age. The Court further pointed out that the ADEA prohibits a covered entity from subjecting “employees” to discrimination based upon disparate impact.  This difference in language was dispositive; the Court held that the plain language of the ADEA demonstrated that only employees, and not individuals (i.e., applicants), are protected from disparate impact discrimination. Indeed, per the Court: The plain language of § 4(a)(2) makes clear that Congress, while protecting employees from disparate impact age discrimination, did not extend that same protection to outside job applicants.  This decision is good news for employers.  However, employment-law watchers suspect that the issue will ultimately come before the U.S. Supreme Court.  Stay tuned to Polsinelli at Work for further updates

On February 1, 2019, the Equal Employment Opportunity Commission (“EEOC”) announced that it would postpone the opening of the submission period for EEO-1 survey responses until “early March 2019” and extend the deadline for submission of EEO-1 data until May 31, 2019.  According to the EEOC, more specific information about the EEO-1 filing schedule will be published “in the coming weeks.”  The full EEOC announcement can be found here. The reason for these postponements is the lapse in the EEOC’s appropriations due to the partial government shutdown.  Because the January 25, 2019 agreement to end the partial government shutdown only funded the affected agencies (including the EEOC) through February 15, 2019, it is possible that the EEO-1 period could again be pushed back if President Trump and Congress cannot reach a longer-term agreement to fund the federal government. The EEO-1 seeks demographic data regarding the workforces of large employers.  Government contractors or first-tier subcontractors with 50 or more employees and a federal contract, subcontract, or purchase order exceeding $50,000 are required to file an EEO-1 report, as are all private employers with more than 100 employees.

Employers may choose to implement arbitration programs to manage the costs and risks of employment-related litigation. Arbitration may minimize negative publicity, and may further assist employers to keep costs low and reduce the availability of class or collective actions. A recent District of Columbia federal court decision shows how implementing a workplace arbitration program can be tricky.  In Jin v. Parsons Corp., 2019 WL 356902 (D.D.C. Jan. 29, 2019), the employer instituted a mandatory arbitration program, and e-mailed all of its employees to ask them to acknowledge receiving the arbitration agreement. The e-mail stated that if the employee did not sign the agreement, continuing employment with the employer would constitute acceptance of the arbitration agreement’s terms. The employer sent the plaintiff employee this e-mail and three follow-up reminders, but he never responded.  Thereafter, the employee sued the employer, alleging age discrimination, and claimed he had never read the e-mails or agreed to arbitrate his claims. The court refused to send the case to arbitration, finding that while a signed arbitration agreement is not necessarily required, the employer needed to offer some evidence that the employee had agreed to arbitrate his claims.  Mere continuing employment was not sufficient evidence of such an agreement where the employer could not prove that the employee knew that his agreement to arbitrate was a condition of employment.  In that situation, the court reasoned, the employee’s failure to dispute the agreement to arbitrate could be explained by his testimony that he did not know that such an agreement even existed. The Jin case highlights some of the challenges employers face when implementing arbitration programs.  The employer tried to implement its program by sending an e-mail and claiming that lack of action would constitute an agreement to arbitrate any claims against the employer.  However, avoiding confronting the employee about his failure to sign the arbitration agreement left the employer without the evidence of consent it needed to enforce the agreement. Implementing a workplace arbitration program can be tricky to get right. Employers with questions regarding arbitration policies – and the risks and benefits associated therewith – would do well to consult with competent counsel.

Although it may seem counterintuitive that an employer should keep time for an exempt employee, there may be sound reasons at times for doing so.  In a recent case in California, Furry v. East Bay Publishing, LLC (January 4, 2019), the Court of Appeals of the State of California ruled that the consequences for failure of the employer to keep time records required by statute falls on the employer and not the employee.  In that situation, the Court indicated that imprecise evidence of time can provide a sufficient basis for damages. In Furry, the employee alleged, among other things, that his employer failed to pay minimum and overtime wages. After a bench trial, the trial court concluded the employer did not keep detailed records of the hours worked by the employer and failed to meet its burden of proof that the employee was exempt from the laws pertaining to overtime and minimum wage.  However, the trial court found the employee’s testimony regarding his work hours to be “uncertain, speculative, vague and unclear” and refused to award any damages for overtime and minimum wages. When reversing the trial court’s decision on the issue of damages, the Court of Appeals agreed with the employee that a relaxed standard of proof applies when the employer fails to keep time records.  The Court observed that “once an employee shows that he performed work for which he was not paid, the fact of damages is certain; the only uncertainty is the amount of damage.”  Under those circumstances, an employee can use “imprecise evidence,” such as time estimates from memory, to meet the relaxed standard that was applicable. The Court explained the shifting burdens of proof: “[A]n employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of the work as a matter of just and reasonable inference.  The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence.  If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.” The Bottom Line When an employer properly classifies employees as exempt, then time records and timekeeping do not seem important. However, if the exemption is challenged and not proper, then the employer may need evidence of the time worked or some other evidence or approximation of time worked. Without this evidence, the employer may be exposed to liability based on the testimony of the employee. Employers with questions regarding time recording or wage and hour laws would do well to consult with competent counsel.

It has been reported that the Office of Federal Contract Compliance Programs (OFCCP) will be issuing Corporate Scheduling Announcement Letters (CSAL) in February. A CSAL is a notice to an establishment that it has been selected to undergo an audit by the OFCCP. CSALs do not initiate an audit – only a scheduling letter can do that.  In the past, a CSAL gave recipients at least 45 days’ notice before receipt of an audit scheduling letter. While in prior years CSALs were mailed to contractor establishments, there is information that new this year the CSAL list will be posted on the OFCCP website only.  Federal Contractors will then need to check the posting to determine whether they have an establishment on the list. In 2018, 1,000 CSAL letters were mailed in February, with audit scheduling letters following in March.  Then a second wave of 750 CSAL letters were sent in September.  It is unknown whether the 2019 CSAL notice will be announced in waves or all at once. The OFCCP website currently has prior year CSAL lists only.  Polsinelli will continue to monitor whether 2019 CSAL list been posted.

On January 25, 2019, the National Labor Relations Board (“NLRB” or “Board”) in SuperShuttle DFW, Inc. (367 NLRB No. 75), overruled the Obama-era 2014 FedEx Home Delivery (361 NLRB 610) decision and returned to its traditional common-law independent contractor test, one more aligned with the test utilized by other federal agencies and courts nationwide. SuperShuttle arose when the Amalgamated Transit Union (“ATU” or “Union”) sought to represent franchisee drivers who worked for SuperShuttle Dallas Fort Worth (“DFW”).  DFW contended the ATU could not represent the franchisee drivers because they were independent contractors, not employees, and thus were barred from unionizing pursuant to Section 2(3) of the National Labor Relations Act (“NLRA” or “Act”). On August 16, 2010, the Board’s Region 16 Acting Regional Director issued a Decision and Order holding, based on the Board’s traditional common-law agency analysis, that the driver franchisees in the petitioned-for bargaining unit were independent contractors and, thus, not covered by the Act.  Accordingly, the Acting Regional Director dismissed the representation petition. The union appealed the Acting Regional Director’s decision to the Board. While the ATU’s appeal was pending, the Board issued its decision in FedEx, wherein the Board sought to “more clearly define the analytical significance of a putative independent contractor’s entrepreneurial opportunity for gain or loss.”  Specifically, the FedEx Board held that entrepreneurial opportunity was but “one aspect of a relevant factor that asks whether the evidence tends to show that the putative contractor is, in fact, rendering services as part of an independent business.” Thereafter, the Board, now a Republican-majority, rendered its SuperShuttle decision, overruling FedEx.  The SuperShuttle Board explained the FedEx Board “impermissibly altered” the NLRB’s common-law agency analysis, overruled FedEx’s pronounced test, and returned to the “traditional common-law test that the Board applied prior to FedEx (and that the Acting Regional Director applied” in the case below).  Stated another way, the SuperShuttle Board held “entrepreneurial opportunity” is but one of several principles by which to evaluate a given worker’s employment relationship with the employer as part of a broader analysis, and should not be the “overriding factor” when analyzing the employment relationship. The Board then applied its common-law agency analysis to the franchisee drivers and affirmed the Acting Regional Director’s decision.  In pertinent part, the Board held the franchisee drivers were “free from control by” DFW regarding most aspects of their work and could set their own schedules, decide whether to accept dispatch requests, and set their own routes.  Further, the franchisee drivers were required to purchase and supply their own vehicles, could accept tips (which they need not share with other franchisees or DFW), and were not supervised “in any meaningful way.” Thus, the franchisee drivers were properly held to be independent contractors and were not subject to the Act.  The Board’s return to its traditional independent contractor analysis should come as welcome news to employers. Moreover, the SuperShuttle decision clarifies the role “entrepreneurial opportunity” plays in the Board’s determination of independent-contractor status, and provides employers that make use of contingent workforces or franchisees with greater certainty regarding the employment status of their workforces.Employers with questions regarding the employment status of their workers should consult with outside labor counsel.

Super Bowl LIII is fast approaching.  The Big Game always brings excitement, and can stoke friendly rivalries between employees rooting for different teams.  To ensure Super Bowl fever doesn’t cause the office to boil over, employers should consider the below tips to keep the workforce cool, calm, and productive as game day draws near. 1. Revisit and Communicate Time-Off Policies Super Bowl LIII kicks off at 6:30 p.m. eastern time, and the game will likely last until (at least) 10 p.m.  Couple the late end time with the eating and celebrating that accompanies most Super Bowl parties, and odds are good that some employees will show up late to the office the next day (or will call out). To that end, employers may wish to take the opportunity, early, to revisit with employees the organization’s workplace vacation or paid time off (PTO) policy. Additionally, management officials should communicate the employer’s time-off policies and process/system for time-off requests and approvals, paying attention to communicating any first-requested, first-approved, workplace coverage and seniority requirements, before employees (and HR) find themselves confronted with denied requests, disappointments, and morale issues. 2. Address the Dress Code Workplace dress codes vary across professions, industries and even specific company/office cultures. For some employers, the big game may provide a great – and sometimes, needed – opportunity to reiterate to employees attire that is, and is not, appropriate in a particular workplace. Maybe team jerseys, hats, and tees are encouraged in some workplaces, but in others, they are considered too casual for business casual. Remind employees, again, of the organization’s dress code policy. If the employer has not implemented a formal dress code policy, consider taking the opportunity to work with management to develop, and communicate, a policy that informs employees of appropriate attire in the particular workplace. At a minimum, communicate the employer’s expectations for workplace attire. Finally, always review applicable federal, state and local laws and guidance for applications of dress code requirements among certain protected classes. 3. Remind Employees of Standards of Conduct Playful banter between employees rooting for opposing teams has the potential to turn sour quickly.  Employers may wish to take the opportunity to remind their workforce of the employer’s standards of conduct and to treat all employees, customers, and vendors with courtesy and respect.

There is a growing trend to use biometric data for business purposes.  For employers, this often includes using fingerprints or facial recognition software for employees to clock-in and out.  Using an employee’s unique biometric data in this way helps reduce common problems, like one employee clocking-in for another.  However, it is not a panacea, as many states have begun to place restrictions on the use of biometric information.  Illinois is one of those states, and its Supreme Court just issued an opinion that should make all employers sit up and take notice. The Illinois Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/1 et seq., places restrictions on the collection of “biometric identifiers,” which includes retina or iris scans, fingerprints, voiceprints, scans o hand or face geometry, or biometric information.  These restrictions extend to employers, and require specific compliance steps, including: Notice and Consent. BIPA prohibits any private entity, including employers, from collecting, capturing, purchasing, or otherwise obtaining a person’s biometric identifiers or information without (i) informing the person in writing of the collection or storage (including the specific purpose and length of term for which a biometric identifier or biometric information is being collected, stored, and used); and (ii) obtaining a written release from the person to do so. 740 ILCS 14/15(b). Written Retention & Destruction Policy.  A private entity in possession of biometric identifiers or biometric information must develop a written policy, made available to the public, establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or within 3 years of the individual’s last interaction with the private entity, whichever occurs first. Absent a valid warrant or subpoena issued by a court of competent jurisdiction, a private entity in possession of biometric identifiers or biometric information must comply with its established retention schedule and destruction guidelines.  740 ILCS 14/15(a). Prohibition on Disclosure or Redisclosure. BIPA prohibits any private entity in possession of biometric identifiers or information from disclosing, redisclosing or otherwise  disseminating such information unless (i) the person consents to the disclosure or redisclosure; (ii) the disclosure or redisclosure completes a financial transaction requested or authorized by the person; (iii) the disclosure is required by state or federal law or municipal ordinance; or (iv) the disclosure is required pursuant to a valid warrant or subpoena issued by a court of competent jurisdiction.  740 ILCS 14/15(d). Safeguarding. BIPA requires any private entity in possession of biometric identifiers or information to “store, transmit, and protect from disclosure all biometric identifiers and biometric information using the reasonable standard of care within the private entity’s industry,” which must be at least “the same as or more protective than the manner in which the private entity stores, transmits, and protects other confidential and sensitive information.” 740 ILCS 14/15(e). The failure to comply with BIPA creates a private right of action for the “aggrieved” party that, if successful, can result in monetary damages, attorneys’ fees and costs, and injunctive relief.  In evaluating what it meant to be “aggrieved” under BIPA in Rosenbach v. Six Flags Entertainment Corp., the Illinois Appellate Court held that while the “injury or adverse effect need not be pecuniary…it must be more than a technical violation of the Act.”  The Illinois Supreme Court disagreed. In Rosenbach, the plaintiff was required to submit a thumbprint in order to utilize a season pass and alleged that Six Flags collected and used that thumbprint without complying with BIPA’s requirements.  While there was no evidence that the plaintiff’s thumbprint had been improperly used or disclosed, the Illinois Supreme Court nevertheless held that the plaintiff qualified as an aggrieved party under the statute because his legal right was “invaded by the act complained of.” In other words, a technical violation of BIPA entitles a plaintiff to the remedies available under the statute, including the lesser of liquidated or actual damages.  BIPA provides for liquidated damages of $1,000 for negligent violations and $5,000 for intentional or reckless damages.  Given that violations of BIPA are likely to by systemic, claims under the statute lend themselves to class actions.  Consequently, any employer with Illinois employees using biometric data should audit its procedures to ensure BIPA compliance.

In October 2016, the American Association of Retired Persons (AARP) sought an injunction against the implementation of the Equal Employment Opportunity Commission’s (EEOC) final rules on wellness programs, alleging that the final rules did not effectively protect the privacy of AARP’s members, among other things. On December 20, 2017, the United States District Court for the District of Columbia agreed with the AARP and ordered that the EEOC regulations governing wellness programs incentives be vacated effective January 1, 2019.  Now that the D.C. Circuit’s decision has taken effect, employers who wish to consider moving forward with wellness programs will want to keep a watchful eye for new regulations. Commentators anticipated that the EEOC would submit new proposed wellness program rules by June 2019.  However, by motion to the D.C. Circuit dated January 15, 2019, the U.S. Department of Justice, on the EEOC’s behalf, provided that, “[i]t would also be permissible for the EEOC to decide never to issue such regulations, or for the EEOC to study the issue for several years before commencing  new rulemaking.”  In other words, the EEOC advised the court that it may take a “wait and see” approach to forming new corporate “wellness rules,” and also signaled its position that the court does not have the power to direct the agency to adopt any new rules. Given the uncertainty surrounding the EEOC’s wellness rules, employers should review whether any wellness program incentives comply with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).  Employers with questions regarding their wellness programs would do well to consult competent counsel. Stay tuned to Polsinelli at Work for further updates.

On January 11, 2019, the National Labor Relations Board (“Labor Board” or “NLRB”) overturned an Obama-era Labor Board decision that held that complaints made in front of colleagues always constitute protected concerted activity.  By doing so, the NLRB reverted back to decades-old precedent, which held that employers may discipline employees who “griped” about their working conditions in front of their coworkers, so long as the gripes were not an inducement to unionize or engage in other protected activity. In Alstate Maintenance, LLC, the Labor Board upheld an Administrative Law Judge’s decision that the employer’s termination of a skycap at JFK International Airport did not violate Section 8(a)(3) of the National Labor Relations Act (the “Act”).  The skycap complained, in front of several coworkers, to his supervisor that he did not want to move a traveling soccer team’s equipment because he did not receive any tips when he assisted the same team with their luggage the previous year.  Even though he initially refused to perform the work until inside baggage handlers first attended to the large party, he ultimately relented and did his job.  Regardless, the employer terminated the skycap, along with three other employees, due to his stated objections about last year’s failure to tip. In a 3-1 decision, the Labor Board held that the employee’s griping was not protected concerted activity.  Specifically, the Labor Board held that levying complaints in front of colleagues, even if the subject matter of the complaint relates to the terms and conditions of employment (in this case tipping), does not rise to the level of concerted activity if the complainant is not acting on behalf of a the group and/or trying to induce group action.  Had these complaints been made in a meeting called by the skycap with his colleagues or if the protest affected all of the employees (instead of just the individual skycap), the Labor Board may have found differently.  However, these stated objections were personal in nature and not made in furtherance of “mutual aid or protection.”  Hence, the employer’s decision to terminate the employee did not violate the Act, even though the complaints were made in front of others. In so ruling, the Labor Board overruled its 2011 decision in Worldmark by Wyndham, which held that complaints about terms and conditions of employment in a group setting are per se protected and concerted activity.  Going forward, "[t]he fact that a statement is made at a meeting, in a group setting or with other employees present will not automatically make the statement concerted activity." With this decision, employers, once again, may be able to discipline employees who make employment-related gripes in front of their coworkers. However, employers should consider carefully whether to do so, as the line between whether a complaint is personal in nature or intended to induce others to action remains a fact specific inquiry and is based on the totality of circumstances. If the complaint pertains to the terms and conditions of employment, it is recommended that a thorough investigation, including review by a legal professional, be conducted before discipline is imposed.

With the New Year, employers should make sure that they are up to date on the minimum wage laws applicable to their employees.  As of January 1, 2019, the minimum wage has increased in the following 19 states: *Listed minimum wage rate is for most large employers in the corresponding state.  In California, the minimum wage for employers with 25 employees or fewer is $11.00/hour.  In Minnesota, the minimum wage for employers with annual gross revenues of less than $500,000 is $8.04/hour.  In New York, the minimum wage for employers in New York City and Nassau, Suffolk, and Westchester counties is higher.  On April 1, 2019, the minimum wage in Michigan will increase to $9.45/hour.  On July 1, 2019, the District of Columbia’s minimum wage will increase to $14.00/hour, and Oregon’s standard minimum wage will increase to $11.25/hour (with a minimum wage of $12.50/hour applicable to Portland workers, and a minimum wage of $11.00/hour applicable to rural workers in the state). In addition, the minimum wage in multiple counties and cities across the United States has increased as of January 1, 2019 or will increase later in the year.  Employers should be aware of any local laws that may apply. Finally, employers should note that Senator Bernie Sanders plans to introduce legislation in 2019 that, if passed, would increase the federal minimum wage to $15.00/hour by 2024.  Stay tuned to Polsinelli at Work for further updates.

In New Prime Inc. v. Oliveira, -- U.S. – (2019), the Supreme Court made two primary holdings: First, notwithstanding its recent decision affirming the ability of parties to an arbitration agreement to delegate issues of arbitrability to an arbitrator through contractual agreement, there are still limits on that ability.  Second, the Federal Arbitration Act’s (FAA) “transportation” exception applies to transportation workers, regardless of their classification as employees or independent contractors.  As such, employers should be wary of relying on form arbitration agreements and the FAA to default disputes with transportation workers to arbitration. New Prime is an interstate trucking company that entered into an operating agreement with truck driver Oliveira.  The operating agreement classified Oliveira as an independent contractor and contained a mandatory arbitration provision whereby the parties agreed that any disputes arising out of the parties’ relationship, including disputes over the scope of the arbitrator’s authority, should be resolved by an arbitrator.  Oliveira believed that he and other drivers were employees entitled to minimum wage, and, thus, the arbitration provision could not be enforced because they were covered by the FAA’s “transportation” worker exception.  New Prime argued that, due to the parties’ delegation of gateway issues to an arbitrator, an arbitrator should decide whether the “transportation” exception applies, and that it should not apply because it applies only to employees, not independent contractors like Oliveira. The Court first held that before it can use the FAA’s power to enforce a contractual agreement of the parties to delegate issues of arbitrability (also called “gateway” questions) to an arbitrator, the Court (not an arbitrator) must decide whether the FAA applies to the contract at all.  Thus, the Court was required to consider whether Oliveira falls into the FAA’s “transportation” worker exception.  This holding is not inconsistent with the Supreme Court’s decision last week in Henry Schein Inc. v Archer & White Sales, Inc., which reaffirmed the right of parties to delegate gateway questions to an arbitrator. The Court next decided whether Oliveira, who very well might be an independent contractor, falls into the “transportation” exception.  The “transportation” exception provides that “nothing” in the FAA “shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  The parties did not dispute that Oliveira was a “worker[] engaged in . . . interstate commerce,” leaving the Court to decide the term “contracts of employment.”  After reviewing the plain meaning and usage of the word when the FAA was enacted in 1925, the Court concluded that at that time it usually meant “nothing more than an agreement to perform work,” and held that the FAA’s transportation worker exception applies to employees and independent contractors. While the trend of court decisions has favored enforcement of arbitration agreements, employers cannot assume that delegation provisions in arbitration agreements will immediately remove an arbitration dispute from a court to an arbitration proceeding under the FAA.  For classes of workers excluded from the FAA, like employee and contract truck drivers, it will not.  Employers should seek counsel to help maximize the enforceability of arbitration agreements under the FAA, if applicable.  Such agreements must evidence a transaction involving commerce and not trigger an exception to the FAA.  Alternatively, employers may be able to use state arbitration laws or state contract common law to help funnel disputes to arbitration.