Key Highlights: A recent amendment expressly codifies disparate impact liability under the New York State Human Rights Law (NYSHRL) for employment discrimination claims. This comes as the U.S. Equal Employment Opportunity Commission has backed away from disparate impact theories in enforcing federal employment discrimination statutes. The increasing use of Artificial Intelligence (AI) tools in personnel processes and decision-making has the potential to raise disparate impact issues to the extent that AI processes have varying effects on specific groups. New York employers may face increased potential exposure from neutral employment practices, underscoring the importance of proactive review and documentation. New York Governor Kathy Hochul signed Senate Bill S8338 on Dec. 19, 2025, which codifies that a facially neutral employment practice may violate the New York State Human Rights Law (NYSHRL) based on its discriminatory effects, even absent discriminatory intent. While the amendment largely clarifies existing law, it comes at a time when federal enforcement of disparate impact theories has become less certain as the U.S. Equal Employment Opportunity Commission has taken a more restrained approach to pursuing disparate impact claims under federal employment discrimination statutes. Against that backdrop, the amendment underscores the continuing importance of state-law compliance and employer attention to outcome-based employment practices, as well as the purportedly neutral decisions of their AI tools. What the Amendment Does The legislation adds a new subdivision to New York’s Executive Law § 296, providing that, in NYSHRL employment discrimination cases, an unlawful discriminatory practice may be established where an employer uses a policy or practice that actually or predictably results in a disparate impact based on a protected characteristic. The statute makes clear that proof of discriminatory motive is not required. After the employee demonstrates that a particular employment practice causes, or predictably will cause, a disparate impact on a protected class, the employer then bears the burden to establish that the practice is job-related for the position in question and consistent with business necessity. Even if that showing is made, an employee may still prevail by showing the employer’s business necessity could be satisfied by a less discriminatory alternative. The statute also requires that an employer’s justification be supported by evidence and not based on hypothetical or speculative considerations, reinforcing the need for objective validation and documentation of employment criteria. Although disparate impact liability is not a new concept, the amendment injects ambiguity into the analysis by prohibiting policies and practices that “actually or predictably” yield disparate results. This raises the specter of challenges to practices that do not “actually” cause a disparate impact but can be argued to “predictably” do so. Given the litigation climate in New York, this additional language creates another reason for employers to be intentional in assessing the effect, or event "predicted" effect, of personnel practices and policies. Why This Matters Now, Especially as AI Gains Ground in Employment Practices By codifying disparate impact liability, New York has increased scrutiny of ostensibly neutral employment practices — such as hiring criteria, screening tools, promotion standards and compensation structures — that may produce statistically significant disparities. AI tools are often adopted to promote efficiency and consistency and typically would not be viewed as intentionally discriminatory. However, these tools present disparate impact risks to the extent that the data inputs, models or selection criteria underlying those tools have varying effects on specific groups. For example, even in the relatively early phases of AI’s adoption, there have been claims in litigation that an employer’s use of AI training datasets disproportionately composed of one protected group (for example, males) results in an adverse disparate impact to members of other groups (for example, females). The beefed-up disparate impact liability under NYSHRL, combined with New York City’s 2023 regulations on AI use in personnel processes, guide in favor of an intentional approach by employers in using these tools for employment decisions. Looking Ahead This amendment applies to employment discrimination occurring on or after its effective date of Dec. 19, 2025, making proactive compliance efforts particularly important. Employers should consider reviewing key employment practices to assess disparate impact risk, ensure that job-related criteria are well supported, and evaluate whether alternative approaches could achieve business objectives with less discriminatory effect. If you have questions about how this amendment may affect your organization, or would like assistance evaluating existing policies and practices, contact your Polsinelli Labor & Employment attorney.

On July 28, 2025, the United States Office of Personnel Management (“OPM”) issued a memorandum endorsing federal employees expressing their religious beliefs in the workplace. Specifically, OPM Director Scott Kupor instructed government agencies to “allow personal religious expression by Federal employees to the greatest extent possible unless such expression would impose an undue hardship on business operations.” Although this memorandum does not directly contemplate any new direction for private employers, it raises questions about whether this guidance signals impending changes in the private sector. What Does This Mean for the Federal Workplace? The OPM memorandum directs federal employers to permit religious expression in the workplace to the same extent as other non-religious, private expression. Stated otherwise, the OPM is encouraging federal employees to fully express their religious beliefs. This is a unique policy stance that has not been observed in recent memory. The OPM offered a handful of “categories” to demonstrate what religious conduct should be permitted, including: Display and use of items used for religious purposes or religious icons Expressions by groups of federal employees Conversations between federal employees Expressions among or directed at members of the public Expressions in areas accessible to the public The OPM memorandum clarifies that the “undue hardship” exception remains but avoids discussing it in much detail. Absent evidence to the contrary, it is expected that the OPM will utilize the standard endorsed by the Supreme Court in 2023. Groff v. DeJoy, 143 S. Ct. 2279 (2023). In Groff, the Supreme Court held that “undue hardship is shown when a burden is substantial in the overall context of an employer’s business,” “tak[ing] into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, size and operating cost of an employer.” What Type of Belief Is “Religious” According to the OPM? Notably, the OPM memorandum defers to traditional Title VII analyses for determining what would constitute a “sincerely held religious belief” warranting protection. The EEOC has been abundantly clear that protections are not just reserved for traditional, organized religions such as Christianity, Judaism, Islam, Hinduism or Buddhism, but rather a realm of “moral or ethical beliefs as to what is right and wrong which are sincerely held with the strength of traditional religious views.” Further, the Supreme Court has made it clear that it is not a court’s role to determine the reasonableness of an individual’s religious beliefs, and that “religious beliefs need not be acceptable, logical, consistent, or comprehensible to others in order to merit First Amendment protection.” In sum, the best practice for federal employers is to take a broad approach to defining religion in the workplace to avoid any semblance of discriminatory conduct, so long as the expression of these beliefs does not constitute a true “undue hardship.” What About Private Employers? While this memorandum does not apply to private employers, Title VII does. Thus, it raises serious questions about whether the EEOC will follow suit by taking inspiration from the new OPM memorandum. In the past, the EEOC has issued guidance cautioning private-sector supervisors from engaging in religious expression that might reasonably appear coercive due to their supervisory role. The OPM’s memorandum, however, takes a different stance, explaining supervisors should not be treated any differently than non-supervisors on the basis of their workplace roles. It is expected this change of tune will work its way into the private sector sooner rather than later, whether it be through EEOC guidance or private employer policy changes attempting to mimic OPM guidance. Another possibility on the horizon could include whether the federal government issues similar requirements for all federal contractors, which would drastically increase the impact of expansion of religious expression. As with everything in the practice of law between different administrations, time will tell. What Should Private Employers Do Next? As these changes are implemented at the federal level, private employers should take a look in the mirror to see whether their current policies and procedures align with current guidance on religious expression in the workplace. For assistance in reviewing internal policies and procedures on religious expression in the workplace, be sure to contact your Polsinelli attorney.

What You Need to Know: Equal Protection Under Title VII: On June 5, 2025, the U.S. Supreme Court unanimously ruled that Title VII’s protections apply equally to all individuals, regardless of whether they are in a majority or minority group, reinforcing a plain-language interpretation of the statute. DEI Implications and Legal Scrutiny: The decision comes amid increasing scrutiny of employer DEI initiatives, highlighting the need for programs to comply with Title VII’s equal treatment requirements for all protected groups. More Changes on the Way? A concurring opinion questions whether the longstanding McDonnell Douglas standard should govern at summary judgment in Title VII cases, possibly foreshadowing more changes to come. In Ames v. Ohio Department of Youth Services, the U.S. Supreme Court unanimously rejected a rule requiring that Title VII discrimination claims brought by “majority-group” plaintiffs meet a heightened evidentiary standard to establish a prima facie case of discrimination. In doing so, the Court held that Title VII applies equally to all groups within its protected classes based on the plain language of the statute that does not differentiate amongst groups. This decision is significant in light of the shifts in the Equal Employment Opportunity Commission’s position on employer diversity, equity, and inclusion (DEI) initiatives. In Ames, a heterosexual woman plaintiff alleged that she was denied a promotion and subsequently demoted due to her sexual orientation. The district court granted summary judgment to the employer on the grounds that the plaintiff failed to meet the Sixth Circuit’s "background circumstances" rule. Plaintiffs who are members of a majority group are required to establish “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.” Multiple other Circuits similarly imposed heightened evidentiary burdens on majority group plaintiffs. The Supreme Court unanimously rejected the background circumstances rule, holding that Title VII's text does not support imposing a heightened standard on majority-group plaintiffs. Justice Ketanji Brown Jackson, delivering the unanimous opinion for the Court, stated that Title VII's protections apply equally to all individuals; they do “not vary based on whether or not the plaintiff is a member of a majority group.” While the decision is not necessarily unexpected, the impact of the Ames decision could be heightened given the recent focus on employer DEI initiatives. In recent guidance finding that employer DEI programs that provide benefits to employees based on race or other protected group status may be unlawful, EEOC has similarly expressed that Title VII’s protections and requirements are equally applicable to all protected groups. Also notable is a concurring opinion issued by Justices Clarence Thomas and Neil Gorsuch. In addition to noting their agreement with the majority, Justices Thomas and Gorsuch questioned the lower court’s use of the McDonnell Douglas burden-shifting standard in awarding summary judgment to the employer. The concurring opinion expressed that requiring employees to meet the McDonnell Douglas standard at the summary judgment stage was an excessive burden, and invited future challenges to the standard’s application. The Ames decision underscores the importance of treating all employees fairly under Title VII. Further, the decision emphasizes the need to assess workplace programs for vulnerabilities in light of the EEOC’s DEI focus. For questions or guidance regarding compliance, please contact Valerie Brown, Jack Blum, Earl Gilbert, or your Polsinelli attorney.

Key Takeaways Disparate impact liability holds employers accountable for policies that appear neutral, but disproportionately harm a particular race, sex or a protected group, even without discriminatory intent. This EO significantly reduces federal agency enforcement of disparate impact claims, but importantly, does not impact the risk of a class or individual claim under federal or state laws. Businesses should continue to review hiring and promotion policies for unintentional bias, ensure compliance with federal law and any applicable state laws, and await updated federal guidance from the EEOC. On April 23, 2025, President Trump issued an Executive Order entitled “Restoring Equality of Opportunity and Meritocracy” (“EO”) mandating the elimination of disparate impact liability within Title VI and VII of the Civil Rights Act of 1964. The EO further emphasizes the importance and focus of this administration on the concept of equal employment opportunity. Disparate impact liability is a means by which employers can be held liable for discrimination when their facially neutral policies or practices result in a disproportionate adverse impact on a particular race, sex or a protected class. This theory of liability was recognized by the Supreme Court in 1971 in the case of Griggs v. Duke Power Co., and was later codified by Congress in the Civil Rights Act of 1991. This EO seeks to eliminate the use of this theory of liability to the “maximum degree possible.” To effectuate this goal, the order takes several key steps. First, it revokes several former presidential actions that approved of disparate impact liability. Second, it directs all agencies to deprioritize enforcement of statutes and regulations to the extent that they include disparate impact liability. This order directs the Attorney General to initiate appropriate action to repeal or amend the implementing regulations for Title VI of the Civil Rights Act of 1964 for all agencies to the extent they contemplate disparate-impact liability. In addition, within 30 days of the date of the EO, the Attorney General is to report to the President, in coordination with the chairs of all other agencies, all existing regulations, guidance, rules or orders that impose disparate impact liability and detail steps for their amendment or repeal. This EO also directs the Attorney General and EEOC Chair to assess all pending investigations, civil suits or positions taken in ongoing matters that rely on a theory of disparate impact liability and to take appropriate action consistent with this EO. Further, the Attorney General is to determine whether Federal Authority preempts State laws that impose disparate impact liability. Finally, the EO directs the Attorney General and the EEOC Chair to issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate. Practically, this EO signals a continued shift in enforcement at the EEOC. It seems unlikely the EEOC will bring any new litigation relying on disparate impact. However, a private right of action for disparate impact still exists under the precedent of Griggs and similar cases, allowing employees to bring claims of discrimination relying on a disparate impact theory. Moreover, state laws may also provide for disparate impact liability. Employers should monitor further guidance that is expected to be issued following this EO. If you have any questions about how these changes may impact you or your organization, please feel free to reach out to Erin Schilling, Gabriel Gomez, Polsinelli’s Executive Action Working Group or your regular Polsinelli attorney.

As Polsinelli has discussed, President Donald Trump issued two Executive Orders, No. 14151 and No. 14173 (the “Orders”), targeting DEI (Diversity, Equity and Inclusion) programs and race- or gender-based preferences. The legal landscape surrounding these Orders continues to evolve. The Orders were initially blocked by a District Court in Maryland. However, the U.S. Court of Appeals for the Fourth Circuit reversed and allowed the Orders to remain in effect while the case was resolved on the merits. Accordingly, employers may want to evaluate whether their workplace practices, policies and/or procedures align with these Orders to mitigate potential legal risks. Additionally, employers need to stay mindful of the rights of employees who raise concerns about a business’s DEI initiatives. Employees who report potential perceived violations may be protected from retaliation, even if the Orders are eventually overturned. Employers should respond to whistleblower complaints carefully, documenting actions and maintaining communication with the reporting employee, while ensuring that any adverse employment actions are based on legitimate reasons, not retaliation. Employers should consider reviewing their complaint reporting procedures and consulting legal counsel to ensure compliance with evolving laws, fostering a workplace that supports both legal and business objectives. Read the full update.

On March 20, 2025, the Equal Employment Opportunity Commission (EEOC) released two key guidance documents focusing on DEI-related discrimination in the workplace. These documents are written as guidance for employees and outline ways the EEOC believes initiatives could lead to unlawful discrimination, including disparate treatment, reverse discrimination, segregation and harassment. The guidance stresses the importance of regular policy reviews, comprehensive training and legal consultation to navigate DEI-related challenges effectively and remain compliant with Title VII protections. Read the full update. 

On March 14, 2025, the Fourth Circuit Court of Appeals allowed the Trump administration to enforce executive orders (EOs) aimed at restricting Diversity, Equity and Inclusion (DEI) programs while litigation continues. These EOs have sparked legal challenges, with the National Association of Diversity Officers in Higher Education arguing they violate constitutional rights. Federal agencies like the Department of Education (DOE), Department of Health and Human Services (HHS) and the Equal Employment Opportunity Commission (EEOC) are actively investigating and issuing guidance to ensure compliance with the new rules, such as prohibiting the use of race in admissions and hiring decisions. Despite this, 14 state Attorneys General have pushed back, asserting that race can still be considered in admissions if it relates to a student’s personal experiences. Organizations, especially federal contractors, should consider carefully reviewing and updating their DEI policies and practices in light of these ongoing legal developments. Read the full update.

On January 21, 2025, President Trump issued an Executive Order revoking Executive Order 11246, which imposes anti-discrimination and affirmative action requirements on federal government contractors and subcontractors. This action, part of the new administration’s broader assault on DEI efforts in the federal government and private sector, may eliminate a significant compliance obligation for federal contractors. However, much remains uncertain about the going forward status of affirmative action requirements in federal contracting.  The new Executive Order requires the Office of Federal Contract Compliance Programs (OFCCP), which administers Executive Order 11246 among other laws, to immediately cease promoting diversity, stop federal contractors and subcontractors from taking affirmative action and end workforce balancing by federal contractors based on race, color sex, sexual preference, religion or national origin. The Executive Order also states that federal contractors shall not consider race, color, sexual preference, religion or national origin “in ways that violate the Nation’s civil rights laws” when making employment, procurement and contracting decisions. The Executive Order states that federal contractors may continue to comply with the regulatory scheme required by Executive Order 11246 until April 20, 2025. OFCCP did not immediately issue guidance on how the new Executive Order impacts contractors’ obligations. Given that OFCCP’s regulations provide that affirmative action goals are not quotas or set-asides, do not supersede merit selection and do not justify making employment decisions in a discriminatory manner, it is unclear how they conflict or would interact with the Executive Order’s prohibition of illegal discrimination and workplace balancing.  With that said, the now-revoked Executive Order 11246 is the source of those OFCCP regulations and contractor race and gender affirmative action obligations. It does not appear that the Executive Order would affect veteran affirmative action plan obligations under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) or disability affirmative action plan obligations under Section 503 of the Rehabilitation Act, given the statutory basis for those requirements. In addition to eliminating Executive Order 11246, the new Executive Order requires that every federal contract or grant award must now include a term certifying that the contractor or award recipient will not operate any programs promoting DEI that violate federal anti-discrimination laws, and a term requiring compliance “in all respects with all applicable Federal anti-discrimination laws.” The Executive Order states that this term is material to the government’s payment decision. This raises the specter of potential whistleblower actions under the False Claims Act against contractors operating allegedly discriminatory programs. The revocation of Executive Order 11246 underlines the extent to which DEI efforts are in the Trump administration’s crosshairs. On the same day as the new Executive Order, the Office of Personnel Management issued a memorandum immediately suspending with pay all federal employees working in agency DEI offices. As other agencies continue to take actions based upon President Trump’s DEI-related executive orders, companies that do business with the federal government will need to pay close attention. While much remains unclear, the new Executive Order will undoubtedly be a sea of change for federal contractors and subcontractors. Polsinelli is available to assist contractors in navigating the changing landscape surrounding affirmative action and other DEI requirements.

Governor Hochul signed legislation titled the “New York State Fashion Workers Act” (the “Act”), which has a widespread impact on the modeling industry as it relates to compensation, contractual restrictions, and other workplace protections. The Act takes effect on June 19, 2025. Applicability The Act is geared towards protecting models, regardless of employee or independent contractor status. The Act aims to close any loopholes by placing affirmative requirements and restrictions on model management companies and their clients. Model management companies include those persons or entities engaged in the management, procurement, or counseling of models. The Act applies to clients of model management companies, including retail stores, manufacturers, clothing designers, advertising agencies, photographers, publishing companies or any other person or entity that receives modeling services. Requirements and Prohibitions for Model Management Companies All model management companies must register with the New York Department of Labor within one year of the effective date of the Act, by June 19, 2026. After the registration is complete, the model management company must post their certificate of registration in a conspicuous place within their physical office and on their website. Model management companies may file a request for exemption if it: 1) submits a properly executed request for exemption; 2) is domiciled outside of New York and is licensed or registered as a model management company in another state that has the same or greater requirements as the requirements under this Act; and 3) does not maintain an office in New York or solicit clients located or domiciled within New York. The registration and exemption status only lasts for a two-year period. Notably, if the management company employs more than five employees, then it must post a surety bond of $50,000. The Act broadly imposes a fiduciary duty upon model management companies that is owed to their models. Acting in good faith, model management companies must, inter alia, conduct due diligence, procure opportunities, provide final agreements to models at least twenty-four hours prior to the start of modeling services, disclose any financial relationship with a client, and identify their registration number in any advertisement (including social media). The Act seeks to provide transparency to models’ compensation by requiring the management companies to clearly specify costs that the model must reimburse and providing the model with supporting documentation of those costs on a quarterly basis. The management companies must ensure that employment of a sexual nature or involving nudity complies with state civil rights law. The Act also considers the management company’s past and future use of images. For former models, the Act requires the management companies to send a written notification to the models informing them if the company continues to receive royalties. For future use of a model’s image, the management company must obtain a written consent separate from the representation agreement that details the creation, use, duration, scope and rate for that digital replica. The Act also prohibits management companies from engaging in certain activities. Among prohibitions related to compensation and fees, the Act prohibits a contractual term greater than three years and prohibits the contract from automatically renewing without affirmative consent from the model. The model management companies are prohibited from taking more than twenty percent of a commission fee. Model management companies are prohibited from discrimination, harassment and retaliation. A new topic of interest is the Act’s prohibition on altering the model’s digital replica using artificial intelligence. Finally, the Act specifies that a management company cannot present a power of attorney agreement as a necessary condition to working with the management company. Requirements of Clients The language of the Act establishes client responsibilities owed to models as it relates to compensation and safety. Clients should be aware that if a model works over eight hours in a twenty-four-hour period, they must receive overtime pay and they must receive at least one thirty-minute meal break. Clients must only offer opportunities that do not pose an unreasonable risk of danger, ensure that work opportunities of a sexual nature or involving nudity comply with civil rights law, and allow the model to be accompanied by a representative to any work opportunity. Causes of Action and Penalties Under the Act, models have a private right of action in addition to the enforcement authority of the commissioner and attorney general. The Act provides a six-year statute of limitations. The commissioner may impose penalties of $3,000 for the initial violation and $5,000 for subsequent violations. Before a court of competent jurisdiction, a plaintiff may obtain actual damages, reasonable attorneys’ fees and costs, and liquidated damages up to 100% for non-willful violations and up to 300% for willful violations. Conclusion In anticipation of the Act going into effect, model management companies should thoroughly review and update their policies and practices and prepare to register or seek an exemption. Likewise, businesses that hire models should review their practices and revise policies as necessary to ensure compliance with the Act. Polsinelli attorneys are available to assist with any questions that may arise in anticipation of the June 19, 2025, effective date and any questions that may arise thereafter.

In April, the U.S. Supreme Court unanimously held in Muldrow v. City of St. Louis, that to sustain a prima facie case of employment discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”), plaintiffs do not have to show that a discriminatory transfer to another position caused “material” or “significant” harm to the plaintiff; rather plaintiffs only have to show that “some” harm occurred because of the job transfer. In its opinion, the Court did not explicitly articulate how “some” harm is defined. Regardless, the reduced “harm” standard will invariably increase the number of claims that survive early dismissal at the trial court level. Indeed, Justice Kavanaugh opined that a plaintiff “should easily be able to show some additional harm – whether in money, time, satisfaction, schedule, convenience, commuting costs or time, prestige, status, career prospects, interest level, perks, professional relationships, networking opportunities, effects on family obligations, or the like.” Pre-Muldrow, federal circuits disagreed on how much harm a plaintiff must show to have suffered an actionable “adverse employment action” under Title VII. Some circuits previously held that no showing of harm necessary beyond the discriminatory act itself was required, while other circuits generally applied a heightened standard of harm for claims to be actionable under Title VII. Post-Muldrow, employers will be forced to grapple with a lowered, undefined standard of “harm,” which will likely require additional litigation to sort out. Further, while the Court’s holding was focused on job transfers, the decision might encourage employees to challenge other types of employment actions, (i.e., scheduling changes, work assignments, training and mentorship, or other opportunities) in an attempt to lower the legal standards for actionable discrimination claims altogether. However, it is not time to panic (yet). Employers still have the well-known defense in their arsenal that the job transfer was made for legitimate, non-discriminatory reasons. As such, thorough documentation for the reasons supporting an employee’s job transfer have just become even more critical to shield employers from increased discrimination claims under Title VII. Contact your Polsinelli attorney to ensure your policies, programs, and employment decisions are structured to mitigate increased risk surrounding the new Muldrow job transfer standard.

On April 29, 2024, the Equal Employment Opportunity Commission (“EEOC”) issued final guidance on workplace harassment. The guidance is effective immediately and is the first time the EEOC has updated its workplace harassment guidance since 1999. It reflects changes in the law in the last two decades, including making clear that federal law prohibits discrimination on the basis of sexual orientation and gender identity. The guidance provides an overview of anti-harassment laws but does not change legal requirements currently applicable to employers. While the guidance is not law and not binding on a court, it is intended to serve as a resource for employers, employees, and others, and provides insight into how the EEOC views various topics related to workplace harassment. Employers should review the guidance because it provides 75+ examples, as well as other information, that can be helpful in understanding the nuances of anti-harassment laws. For example, the guidance notes that “[n]ot all harassing conduct violates the law, even if it is because of a legally protected characteristic,” and it provides several examples of unlawful harassment. The guidance also covers topics such as establishing causation, hostile work environment, liability for harassment claims, and remote work. If you have any questions about workplace harassment, contact your Polsinelli attorney.

Late last year, the EEOC quietly announced its most recent Strategic Enforcement Plan, covering 2024–2028. To no surprise, the EEOC has indicated that it will implement a concerted effort to focus its resources on employment practices that often result in class and collective action lawsuits. More specifically, the EEOC announced the following “subject matter priorities” for the next four years: “Eliminating Barriers in Recruitment and Hiring” (including use of artificial intelligence for hiring, apprenticeship/internship programs, online-focused application processes, screening tools for hiring—such as pre-employment tests and background checks, and the underrepresentation of women and workers of color in industries such as manufacturing, tech, STEM, and finance, for example); “Protecting Vulnerable Workers and Persons from Underserved Communities from Employment Discrimination” (including immigrant workers, persons with mental or developmental disabilities, temporary workers, older workers, and workers traditionally employed in low-wage jobs); “Addressing Selected Emerging and Developing Issues” (including the use of qualification standards or other policies that negatively affect disabled workers, protecting workers affected by pregnancy, childbirth or related medical conditions, preventing discriminatory bias towards religious minorities or LGBTQIA+ individuals, and the use of artificial intelligence or automated recruitment tools for hiring); “Advancing Equal Pay for All Workers” (including a focus on employer policies that prevent or attempt to limit workers from asking about pay, inquiring about applicants’ prior salary histories, or prohibiting workers from sharing their compensation with coworkers); “Preserving Access to the Legal System” (including the use of overly broad releases or nondisclosure agreements, the implementation of unlawful mandatory arbitration provisions, and any failure to keep records required by statute or EEOC regulations); and “Preventing and Remedying Systemic Harassment.” The EEOC has indicated that it will focus on Charges that touch on the above topics while also intentionally prioritizing systemic enforcement actions and impact litigation to eradicate what it perceives to be discriminatory employment practices. As demonstrated briefly above, the EEOC has a keen interest in scrutinizing artificial intelligence and mass hiring practices via automatic recruitment tools, in addition to a renewed focus on employment practices that could have an adverse impact on those with intellectual or health-related disabilities, among other things. This could directly lead to an increase in Commissioner Charges, systemic investigations, pattern or practice lawsuits, and class action litigation regarding the topics listed in its Strategic Enforcement Plan. Employers should be vigilant in monitoring these key areas of risk related to the EEOC’s new Strategic Enforcement Plan, as EEOC investigations can quickly escalate to regional or even nationwide systemic investigations and corresponding litigation. Contact your Polsinelli attorney for further guidance on how you can bolster your employment practices to minimize the risk of potential EEOC enforcement actions, as well as class and collective actions, in your workplace.

Earlier this month, the Fifth Circuit Court of Appeals (covering Texas, Mississippi, and Louisiana) issued an en banc decision in Hamilton v. Dallas County holding employees no longer have to show they were subject to an “ultimate employment decision” in pleading Title VII discrimination claims. Previously, Title VII discrimination claimants in the Fifth Circuit had to establish an “ultimate employment decision” such as hiring, firing, granting leave, promoting, or unfairly compensating employees. Now, plaintiffs need only allege discrimination affecting “terms, conditions, or privileges of employment.” This brings the Fifth Circuit standard in line with many other circuits, including the Fourth, Sixth, Eleventh, and D.C. Circuits. Hamilton involved a Dallas County policy allowing male detention center officers to have full weekends off while female officers were not. The Fifth Circuit was not persuaded that this sex-based scheduling policy was acceptable under Title VII’s statutory text. Hamilton broadens the types of personnel actions providing the basis for a cognizable Title VII discrimination claim in the Fifth Circuit. However, the Court did not define a particular standard for “terms, conditions, or privileges of employment,” other than reminding us that “de minimis workplace trifles” are not enough. At the very least, this decision serves as a worthwhile reminder that “[n]owhere does Title VII say, explicitly or implicitly, that employment discrimination is lawful if limited to non-ultimate employment decisions.” Employers with operations in the Fifth Circuit should review their policies to ensure (1) they are consistent with the new standard and (2) they are being neutrally applied. If you have any questions or need assistance in revising your company’s policies, consult your Polsinelli attorney.

In May 2022, the EEOC filed an age discrimination lawsuit against a group of affiliated companies employing English-language tutors. According to the EEOC, for a brief period in the spring of 2020, those companies programmed application software to automatically reject female applicants over 55 years old and male applicants over age 60. The lawsuit alleged this screening process affected over 200 applicants that were above the programmed age thresholds. The parties have now reached a settlement. The settlement itself is expansive. As is typical with many EEOC settlements, the provisions extend beyond monetary payments. Here, in a consent decree filed in federal court, the employers agreed to various non-monetary obligations, including providing notice of the lawsuit to high-level executives and HR employees, retaining a third-party group to conduct extensive training on all federal equal employment opportunity laws, and inviting the rejected applicants to re-apply (with reporting obligations to the EEOC). This lawsuit and the subsequent settlement is likely just the first of many of its kind, but it highlights the need to proceed with caution when relying on automated decision-making processes, as well as AI usage generally. Employers should accordingly critically assess the use of technology – such as the application software at issue in the EEOC’s lawsuit – and ensure that its use complies with applicable employment laws. For additional guidance regarding the use of AI in the workplace, contact your Polsinelli attorney.

Governor Greg Abbott recently signed House Bill No. 567, also known as the CROWN Act, into law. Following the bill’s enactment on September 1, 2023, Texas law will prohibit race-based hair discrimination in employment, schools, and housing. Under the new law, Texas Labor Code provisions referring to racial discrimination include “discrimination because of or on the basis of an employee’s hair texture or protective hairstyle commonly or historically associated with race.” A “protective hairstyle” includes braids, locks, and twists. Additionally, the CROWN Act makes it unlawful for employers, labor unions, and employment agencies to adopt or enforce grooming policies with race-based hair discrimination. Texas joins twenty-one other jurisdictions in prohibiting such discrimination: Alaska, California, Colorado, Connecticut, Delaware, Illinois, Louisiana, Maine, Massachusetts, Maryland, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, Oregon, Tennessee, Virginia, Washington, and the U.S. Virgin Islands. Texas employers should review their dress and grooming policies for compliance before the CROWN Act goes into effect on September 1, 2023.  If you have any questions regarding these new protections or need assistance in revising your company’s policies, please consult your Polsinelli attorney.

On June 29, 2023, the United States Supreme Court issued its ruling in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (along with Students for Fair Admissions, Inc. v. the University of North Carolina, et al.), bringing an end to a near decade long legal battle regarding affirmative action at universities. The Court struck down affirmative action policies that provide a “plus” or a “tip” to applicants based on race, holding instead that the Constitution and Title VI of the Civil Rights Act (applicable to federally-funded programs) require colorblindness. As it relates to private-sector employers, the decision is only indirectly applicable because such employers are generally not subject to the Constitution’s equal protection clause and are governed by Title VII of the Civil Rights Act, rather than Title VI.  Generally speaking, Title VII case law does not permit the use of race in employment decision-making in the same fashion as universities have used race in admissions decisions.  However, the decision’s strong language regarding the application of Title VI’s language – which is nearly identical to Title VII’s – to affirmative action programs that arguably seek to benefit certain minority groups, will likely bleed over into Title VII case law. Despite the decision, however, affirmative action is not banned, so long as it is not a quota or determining factor.  Employers may continue to focus their affirmative action efforts on increasing the pipeline of qualified applicants from underrepresented groups.  Employers are not required to abandon their ongoing DEI efforts, but should be mindful of the potential for discrimination claims (which may include reverse discrimination claims). It would be prudent to review your company’s DEI commitments and initiatives, along with hiring policies, to ensure they are encouraging diversity while not crossing the line into discrimination.  This is particularly true given the publicity the Supreme Court’s decision has generated. Polsinelli has experience advising employers on crafting compliant affirmative action programs.  If you need assistance with such programs, or have any questions about the decision, including the potential impact on your company, or need assistance in reviewing your initiatives and policies, contact your Polsinelli attorney.

So far in 2023, artificial intelligence (AI) has been at the leading edge of the technological revolution, as the potential applications for tools like ChatGPT have drawn considerable buzz.  In April 2023, we reported on New York City’s first-in-the-nation ordinance imposing notice and audit requirements on the use of artificial intelligence tools by employers.  More recently, the Equal Employment Opportunity Commission (EEOC) issued two guidance documents addressing AI in the HR context, specifically tackling the issues of adverse impact and disability accommodations. Employers are increasingly using AI and machine learning (ML) tools to help optimize employment decisions like hiring, promotions, and terminations.  Some examples of these tools identified in the EEOC guidance include resume scanners to identify promising candidates, employee monitoring software that rates employees based on productivity metrics, virtual assistants or chatbots that question applicants about their qualifications, video interviewing software that evaluates facial expressions and speech patterns, and testing software that provides job or cultural fit scores.  Generally, an AI/ML tool is one that wholly or partially relies on a computerized analysis of data to make employment decisions.  As with many new technologies, however, in some cases, technological advancement may jeopardize legal compliance.  Employers will have to consider the implications of these tools under both new laws (like New York City’s) and older laws like those administered by the EEOC. EEOC’s first guidance document assessed the employer’s obligation to ensure that AI/ML tools used in employment selection procedures do not adversely impact protected classes under Title VII (e.g., gender, race).  An AI/ML tool that has a “substantial” disproportionate impact on a protected class may be discriminatory if it is not job-related and consistent with business necessity or if more favorable alternatives are available.  An adverse impact can occur if a tool awards higher ratings or is more likely to select or reject, members of a certain protected class in comparison to other protected classes.  A few important takeaways from EEOC’s guidance on adverse impact: Employers may be responsible for the effect of third-party software.  EEOC’s guidance signals the agency will look to hold employers responsible for adverse impact even if the AI/ML tool in question is third-party software the employer did not develop.  The guidance states that this responsibility can arise from either the employer’s own administration of the software or a vendor’s administration as an agent of the employer. Employers rely on vendor assurances at their own risk.  Although EEOC encourages employers to “at a minimum” ask their AI/ML software vendors about steps taken to assess adverse impact, EEOC’s position is that reliance on the vendor’s assurances is not necessarily a shield from liability.  Employers still face liability “if the vendor is incorrect about its own assessment.” Self-audits are advisable.  Given the inability to rely on a vendor’s assurances, employers are best served by periodically auditing how the AI/ML tools they use impact different groups.  To do such an audit, employers need access to the AI/ML tool’s underlying data, which is best ensured at the time the tool is implemented. EEOC’s second guidance document addressed the impact of AI/ML tools on individuals with disabilities under the Americans with Disabilities Act (ADA).  The ADA guidance makes clear that this is an altogether different analysis than the Title VII adverse impact analysis described above.  Moreover, because of the individualized nature of the impact of disabilities and the ADA reasonable accommodation analysis, validation of an AI/ML tool, or a statistical finding that the tool does not adversely impact individuals with disabilities generally, are not sufficient to ensure ADA compliance.  Instead, EEOC anticipates a more individualized process in which the employer assesses whether the limitations of a particular employee or applicant’s condition would cause the employee or applicant to be “screened out” or unfairly rated by the AI/ML tool.  EEOC’s guidance anticipates that employers, as a best practice, would provide relatively in-depth notice of the operation of AI/ML tools and the availability of alternative processes in order for the accommodation process to occur. AI/ML offers the potential to transform the workplace, among other business processes, by allowing employers to sort through vast quantities of data and quickly glean actionable insight.  However, EEOC and jurisdictions like New York City have identified the potential for discriminatory biases to be built into AI/ML algorithms, or for these algorithms to disadvantage individuals with disabilities.  In order to avoid running afoul of new laws designed to address AI/ML, and existing laws like Title VII and ADA that went into effect decades ago but nonetheless govern AI/ML use, employers should carefully review their processes for using these tools in the human resources and recruitment context.

On June 24, 2022, the United States Supreme Court issued its long-anticipated ruling in Dobbs v. Jackson Women’s Health Organization. In Dobbs, the Supreme Court upheld Mississippi’s abortion restrictions making most abortion procedures illegal after 15 weeks of pregnancy, and, in the process, overturned Roe v. Wade and Planned Parenthood v. Casey, which established a federal constitutional right to abortion. By holding there is no constitutional right to an abortion in the United States Constitution, the Supreme Court has left to the states policy related to abortion. Although the Dobbs decision itself did not outlaw the procedure, several states have “trigger laws,” designed to go into effect upon Roe’s and Casey’s reversal, or pre-Roe laws that outlaw or limit abortions. Other states are expected to implement additional restrictions and bans in the coming months. This leaves employers to grapple with a patchwork of state laws addressing abortion and related issues. At the same time, several federal laws remain in place that impact employers addressing abortion-related issues in the workplace. Included in the issues that should be on employers’ minds are the following: Anti-discrimination laws Leave laws Speech issues Privacy Employee benefits Travel assistance / relocation policies Criminal liability Updating policies Join us on July 12 as we discuss the employment law and employee benefits issues that arise out of the Dobbs decision. You may RSVP to the Webinar via the link here. In the meantime, if you have any questions or would like to discuss how the Dobbs decision impacts your workforce and company, contact your Polsinelli attorney.

In a rare showing of bipartisanship, the Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which allows employees or others to escape mandatory arbitration clauses in connection with any case raising issues of sexual harassment or assault. President Biden previously expressed support for the bill and is expected to quickly sign it into law. Specifically, the bill gives employees and others alleging a “sexual assault dispute” or “sexual harassment dispute” the ability to elect to render a mandatory arbitration clause invalid or unenforceable.  Because this ability is phrased as an “election,” it appears that the person resisting arbitration must affirmatively challenge the arbitration agreement, rather than the arbitration agreement being entirely unenforceable. The bill defines a “sexual assault dispute” as a “dispute involving a nonconsensual sexual act or sexual contact”. A “sexual harassment dispute” is defined as a dispute relating to any of the following conduct directed at an individual or group of individuals: Unwelcomed sexual advances. Unwanted physical contact that is sexual in nature, including assault. Unwanted sexual attention, including unwanted sexual comments and propositions for sexual activity. Conditioning professional, educational, consumer, health care, or long-term care benefits on sexual activity. Retaliation for rejecting unwanted sexual attention.” The bill applies not only to federal claims under Title VII of the Civil Rights Act of 1964, but also to state and tribal law claims as well.  Employees can also avoid class, collective, or multi-plaintiff action waivers in connection with sexual harassment or sexual assault disputes.  In addition, the bill provides that the validity and enforceability of an agreement is to be decided by the court, rather than an arbitrator, which will likely increase the probability that disputes will be resolved in favor of court litigation rather than arbitration. Employees frequently bring a sexual harassment, also referred to as hostile work environment, claim as part of a broader action with other employment-based claims.  Although the bill does not explicitly address how mandatory arbitration would apply to such a mixed action, it provides that it reaches actions that “relate to” sexual harassment or assault claims.  This broad language raises the prospect that employees alleging sexual harassment along with other, potentially unrelated claims will be able to litigate the entire dispute in court. The new bill, once signed, will undoubtedly have far-reaching implications given the millions of individuals subject to arbitration clauses.  Numerous recent Supreme Court decisions giving broad construction of the scope and applicability of the Federal Arbitration Act (“FAA”) may be called into question. Polsinelli attorneys will continue to monitor for related developments. Arbitration has long been a key tool in employers’ playbooks to manage their risk and potential liability under the plethora of federal, state, and local laws governing their personnel practices.  This bill deals a blow to employers’ ability to mandate arbitration in the context of sexual harassment claims.  Employers who rely on mandatory arbitration as part of their risk management programs should consult with counsel to adjust their practices in response to this bill and other recent developments.

Texas Governor Greg Abbott recently signed two new bills, effective September 1, 2021, which will arm employees with new tools and protections for asserting sexual harassment in the workplace claims. Here is what Texas employers need to know: The definition of an “employer” has expanded. Currently, an employer must have 15 or more employees to be covered by the Texas Labor Code’s anti-sexual harassment laws. As of September 1st, Senate Bill 45 (Tex. Lab. Code § 21.141), will define an “employer” as a person who (1) employs “one or more employees;” and (2) “acts directly in the interests of an employer in relation to an employee.” First, the new definition means that all employers, including those with only one employee, could be held liable for damages as a result of sexual harassment claims. Second, supervisors, managers, and co-workers may also be named as defendants in sexual harassment lawsuits and held personally liable for damages. This is a major change because it creates the potential for individual liability against the alleged harasser (which previously only arose within the employment context when there was a common law claim for assault). As a result, far more Texas employees are now able to sue for unaddressed sexual harassment than before, in state court, and removing cases to federal court will be more difficult. It is also conceivable that the plaintiff’s bar will attempt to argue that independent contractors, vendors, clients, and other third-parties may qualify as “employers” under this new statute. This underscores the importance of employer’s not only reviewing their own internal policies and procedures, but also their vendor and service agreements with contract partners. The definition of “sexual harassment” is more detailed. The new law provides a clear, detailed, description of prohibited behavior. Specifically, sexual harassment is defined as “an unwelcome sexual advance, a request for sexual favor, or any other verbal or physical conduct of a sexual nature if: (a) submission to the advance, request, or conduct is made a term or condition of an individual’s employment, either explicitly or implicitly; (b) submission to or rejection of the advance, request, or conduct by an individual is used as the basis for a decision affecting the individual’s employment; (c) the advance, request, or conduct has the purpose or effect of unreasonably interfering with an individual’s work performance; or (d) the advance, request, or conduct has the purpose or effect of creating an intimidating, hostile, or offensive working environment.” This definition gives employers further direction when analyzing employee behavior and investigating complaints. Employers must act quickly after receiving a complaint of sexual harassment. Employers should always take sexual harassment complaints seriously and investigate allegations immediately. However, in light of the recent #MeToo movement and influx of sexual harassment claims, Senate Bill 45 (Tex. Lab. Code § 21.142) appears to intensify the pressure on employers to look for concerning employee activity and act swiftly upon receipt of a sexual harassment complaint. The new law specifically provides that an unlawful employment practice occurs if an employee is subjected to sexual harassment and the “employer or employer’s agents or supervisors (1) know or should have known that the conduct constituting sexual harassment was occurring; and (2) fail to take immediate and appropriate corrective action.” Although immediate and appropriate corrective action is not defined, which makes it difficult to predict how the courts will interpret and apply the new language, employers should avoid any delays in addressing concerns and complaints. Employers often rely on the Faragher-Ellerth affirmative defense to defend their actions by establishing that the company took reasonable care to prevent harassing behavior and prompt corrective action when presented with complaints about a supervisor in federal court. This new Texas law appears to codify those expectations of employers and their agents in the workplace. Employees have more time to file charges of discrimination for sexual harassment. Historically, Texas employees who believe they have been subjected to unlawful employment practices (e.g., discrimination based on race, nationality, color, age, etc. or retaliation) have 180 days from the date of the alleged event to file a charge of discrimination with the Texas Workforce Commission. House Bill 21 (Tex. Lab. Code § 21.201(g)) extends that time to 300 days. The change in Texas is consistent with the broader national shift to expand protections against sexual harassment. In short, the speed and accuracy of investigations, as well as effective remedial measures, are more important than ever. Employers should also review their employee handbooks, policies, and procedures to ensure the language appropriately reflects the new laws. Polsinelli attorneys will continue to monitor further developments related to these amendments and provide updates. If you have any questions about the changes, including the potential impact on your company’s operations, contact your Polsinelli attorney.

On the one year anniversary of the Supreme Court’s decision in Bostock v. Clayton County, the EEOC has issued new guidance to clarify whether employers can segregate workplace restrooms by gender or sex. While not law, this guidance instructs employers how the EEOC will handle sex discrimination charges under its purview. In Bostock, the Court held that the “because of sex” language in Title VII extends protections to sexual orientation and transgender status. However, in the majority opinion, Justice Gorsuch made clear that the Court was not taking a position on the use of “private spaces” and left unresolved the question of whether employers could segregate restrooms by gender or sex. The EEOC’s guidance seeks to clarify confusion stemming from the Bostock decision. The new guidance directs employers that they must allow employees to use the bathroom, locker room, and/or shower that corresponds with their gender identity. Employers may not use anxiety, confusion, or discomfort on behalf of other coworkers as grounds to justify discriminatory policies. If an employer has unisex or single-use facilities, then the individuals can continue to use those as they currently do.  The EEOC has also created a consolidated webpage for resources addressing sexual orientation and gender identity. Interestingly, the guidance was not issued by the full Commission. Rather, the guidance was issued by the Chair of the EEOC and is considered non-binding guidance at the moment. However, employers should expect that the guidance will likely become binding in July 2022 when President Biden will be able to nominate a Democrat to the Commission, thus tilting the ideological majority of the Commission. The new majority may even expand upon Chair Burrows’ guidance. Employers should consult their Polsinelli attorneys for assistance in interpreting and implementing the EEOC guidance.

Warning/Apologies: This video contains multiple references to poop and may be offensive to fans of the Dave Matthews Band or Governor Andrew Cuomo of New York. Workplace bullying has not diminished during the pandemic. The Workplace Bullying Institute (WBI) recently released its 2021 U.S. Workplace Bullying Survey: https://workplacebullying.org/2021-wb... . Promoting civility in the workplace - and interrupting jerk behavior - is critical to building a respectful workplace culture and to our having a healthy return to normal life after the pandemic. The 2004 Poopgate bridge incident in Chicago is a vivid example of how one jerk can impact others.

This is the first in a new “rethink work” video series. This video aims to rethink how we approach sexual harassment training. As with our prior COVID videos, this is a video that employers can share with their broader workforce. The EEOC’s Task Force on Harassment found that employer harassment training programs are often ineffective and “too focused on simply avoiding legal liability.” These programs tend to dwell on legal claims and costs while simply walking employees through a checklist of things that they should not do (and which most people already know are wrong). There is little evidence that such training programs have a significant impact on employee attitudes --- people who engage in harassing conduct do not generally suffer from a lack of knowledge about what is right or wrong, they have a behavior problem that needs to be confronted and stopped. Fortunately, there is evidence that training programs can boost internal reporting and complaints, giving employers the chance to confront and stop bad behavior. That is the focus of this video. This initial, 5-minute video is not intended to be a comprehensive harassment training video, but can be incorporated into a larger training effort. Future videos in this series will address other challenges employers face in stopping workplace harassment. Please feel free to pass along this video to your workforce and do not hesitate to contact us if you should have any questions. Polsinelli’s L&E Department offers a full range of counseling, training and investigation services to help employers with workplace harassment issues.

On October 1, 2020, the Kansas City, Missouri City Council unanimously voted to enact the “Creating a Respectful and Open World for Natural Hair” Act (“CROWN Act”).  The CROWN Act addresses discrimination based on natural hair or particular hairstyles traditionally tied to race.  In short, the CROWN ACT sets forth that “hair discrimination targeting hairstyles associated with race is racial discrimination.” The CROWN Act, Ordinance No. 200837, modifies the definition of “Race” to include “traits historically associated with race including, but not limited to, hair texture and protective hairstyles.”  The CROWN Act further defines “protective hairstyles” to include, though not limited to, “such hairstyles as braids, locks, and twists.”  In its preamble, the CROWN Act also identifies afros, making it clear that they are a protected hairstyle as well. While Kansas City may be one of the first cities in the country to pass such an ordinance, it is just one of many jurisdictions passing similar expansions of race discrimination protections — including state laws in California, Virginia, New York, Colorado, Washington, and Maryland. The CROWN Act goes into effect on November 1, 2020.  If you have any questions regarding the CROWN Act or expanded race discrimination protections in other jurisdictions, please contact your Polsinelli attorney.

Missouri Governor Mike Parsons recently signed Senate Bill 591, which impacts Missouri employers by significantly restricting the availability of punitive damages.  Beginning August 28, 2020, plaintiffs in Missouri will face a higher pleading requirement and standard of proof for claims of punitive damages. Key Changes To recover punitive damages, plaintiffs must now prove “by clear and convincing evidence that the defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.”  This change represents a departure from the previous burden which required only a showing of “complete indifference to or conscious disregard for the safety of others.” In addition to raising the punitive damages standard, plaintiffs will now face a more onerous pleading standard related to punitive claims.  Claims for punitive damages are no longer permitted in initial pleadings.  To assert a claim for punitive damages, a party must seek leave of the court no later than 120 days before the final pre-trial conference or trial date.  Only if the court then determines that the trier of fact could reasonably conclude standards for awarding punitive damages are met, can a party file a pleading seeking punitive damages.  Likewise, discovery of an employer’s assets is only allowed if the court grants plaintiff leave to seek punitive damages. S.B. 591 also contains specific provisions that limit employer exposure where a plaintiff seeks punitive damages against an employer because of an employee or agent’s actions.  Punitive damages are now only recoverable for an employee’s conduct if (1) the principal or a managerial agent of the principal authorized the doing and the manner of the act; (2) the agent was unfit and the principal or a managerial agent of the principal was reckless in employing or retaining him or her; (3) the agent was employed in a managerial capacity or was acting in the scope of employment; or (4) the principal or a managerial agent of the principal ratified or approved the act. Employer Takeaways Missouri’s new limitations on punitive damages will greatly impact if, when, and how claims for punitive damages in employment cases filed under Missouri law are pursued.  Plaintiffs now face a standard that makes them work to not only prove, but even to seek punitive damages.  And these changes come shortly after the new damage caps now in place under the Missouri Human Rights Act.  If you have questions about S.B. 591’s new limitations on punitive damages in Missouri, contact your Polsinelli attorney.

Today marks 57 years since the August 28, 1963 March on Washington for Jobs and Freedom. The March has become a touchstone in American history and helped bring about the passage of the landmark Civil Rights Act of 1964, prohibiting discrimination in the American workplace against millions of Americans. With this year's United States Supreme Court ruling in the case of Bostock v. Clayton County, the Civil Rights of 1964 continues to help move the American workplace from exclusion to inclusion. One month after the Bostock ruling, the last surviving speaker at the March, John Lewis, passed away. He left behind a final essay that offers a message of hope in a challenging time for how Americans can continue the work he dedicated his life to and which is embodied in the 1963 March. Our latest video, “August 28, 1963: Continuing the March from Exclusion to Inclusion,” was created for employers and employees to share to help support their inclusion efforts and mark the anniversary of the 1963 March.

On July 8, 2020, the United States Supreme Court expanded the “ministerial exception” – a legal doctrine that exempts religious employers from certain discrimination laws in Our Lady of Guadalupe School v. Morrissey-Berru.  The decision broadened the reach of the exception, which was previously validated by the Court in 2002 in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC.  Given the broad reach of the recent decision, various religious institutions will now have a strong defense against discrimination claims brought by employees who perform faith-based functions. By way of background, in 2012, the U.S. Supreme Court held in Hosanna-Tabor that the First Amendment barred a court from entertaining an employment discrimination claim brought by a teacher against her religious school employer.  The Court held that the school’s First Amendment right protected religious institutions from state interference on matters of church government as well as those of faith and doctrine. Adopting the “ministerial exception,” the Supreme Court articulated factors for when the ministerial exception should apply. These factors included: whether the employer held the employee out as a minister with a formal religious title; whether the employee’s title reflected ministerial substance and training; whether the employee held herself out as a minister; and whether the employee’s job duties included “important religious functions.” In Morrissey-Berru, two elementary school teachers at Roman Catholic schools in the Archdiocese of Los Angeles filed claims of discrimination.  Agnes Morrissey-Berru sued her employer under the Age Discrimination in Employment Act of 1967 and Kristen Biel sued her employer under the Americans with Disabilities Act.  Both religious employers asserted the ministerial exception and prevailed on summary judgment at the district court level.  However, the Ninth Circuit reversed both decisions, reasoning that, the employers did not satisfy the Hosanna-Tabor factors.  The Ninth Circuit found that the religious entities could not invoke the ministerial exception against these teachers because the teachers did not maintain the title of “minister,” had limited religious training, and only sporadic experience in ministerial activities. On appeal, the Supreme Court held that the Ninth Circuit misapplied the Court’s Hosanna-Tabor ruling.  The Court explained that the previously promulgated four factors were not meant to impose a “rigid formula.”  The Court further held that in deciding whether the ministerial exception is to be applied, a court must “take all relevant circumstances into account and determine whether each particular position implicate(s) the fundamental purpose of the exception.” In finding that the two teachers fell within the ministerial exception, the Supreme Court looked at the teachers’ employment agreements and handbooks.  The respective records unambiguously showed that the teachers were expected to carry out the school’s mission of developing and promoting the Catholic faith. Further, the record showed that the religious employers imposed commitments regarding religious instruction, worship, and personal modeling of the faith and explained that their performance would be reviewed on those bases. Lastly, the Court looked at the fact that the teachers taught religion in the classroom and worshipped and prayed with the students.  Given these circumstances, the Court held that the employers were covered by the ministerial exception, and therefore, their discrimination claims were barred. The Morrissey-Berru decision provides religious organizations a valuable defense that may apply in employment claims alleging discrimination, harassment, or retaliation. Religious organizations should review and update their policies, employee handbooks, and employment offers in light of the ruling and work with counsel to understand the nuanced use of the defense. If you have any questions or need assistance related to the ministerial exception, contact your Polsinelli attorney.

In Bostock v. Clayton County, Georgia, the United States Supreme Court heldthat “an employer who fires an individual merely for being gay or transgender violates Title VII.”  With its decision, however, the Supreme Court left unanswered the question of how protections for religious beliefs and expression intersect with its expansion of Title VII’s protections. Notably, the employer in R.G. & G.R. Harris Funeral Homes, Inc. (one of the three cases consolidated by the Court in the Bostock decision) abandoned its defense based on the Religious Freedom Restoration Act of 1993 (RFRA) at the Supreme Court.  In doing so, the Sixth Circuit’s opinion regarding the RFRA claim remains the only circuit court of appeals decision to have addressed the application of the RFRA in this setting. The RFRA protects an individual’s sincerely held religious beliefs by prohibiting the federal government from substantially burdening an individual’s free exercise of religion, unless it establishes that doing so is the least restrictive means of furthering a compelling government interest.   In Harris Funeral Homes, the Sixth Circuit determined that the EEOC enforcing a transgender employee’s Title VII rights did not substantially burden sincere religious exercise because “tolerating [an employee’s] understanding of her sex and gender identity is not tantamount to supporting it.” In other words, complying with Title VII did not endorse the employee’s transgender status.  The Sixth Circuit also ruled that presumed customer biases could not constitute a substantial burden.  Finally, the Sixth Circuit held that enforcing Title VII was the least restrictive means of achieving the compelling goal of eradicating workplace discrimination. For now, the Sixth Circuit’s opinion will continue to apply in Kentucky, Michigan, Ohio, and Tennessee, and suggests that, at least under certain sets of facts, the RFRA may not shield employers from liability for claims of discrimination based on homosexuality or transgender status in suits brought by the federal government.  If and when a different circuit court of appeals answers the question differently, it is possible this issue could be addressed by the Supreme Court.  The question of whether the RFRA may be asserted as a defense by a private (i.e., non-governmental) party may also eventually arrive at the Supreme Court because there is currently a split of opinion by the circuit courts of appeals on that issue. Outside of the RFRA, the “religious organization exemption” provision of Title VII, 42 U.S.C. § 2000e–1(a), precludes liability for religious organizations and schools from denying employment to workers of other faiths.  This exception has been extended to allow a religious organization to terminate an employee who was no longer in good standing with the church.  With certain religions having sincere beliefs on sexuality, it is likely that courts will have to decide how this specific provision applies to employment decisions based on sexual orientation or transgender status, which is now protected under Title VII. The Supreme Court recognized in Bostock that certain employers may feel burdened by its decision and fear that compliance may require them “to violate their religious convictions.”  Recognizing the questions left open by its decision and the likelihood of such cases, the Supreme Court noted that “other cases may raise free exercise arguments that merit careful consideration.”  Until these cases come to fruition, however, employers should consult counsel and be cautious when relying on largely untested and narrow religious-based exceptions.  Employers should also be cognizant of the potential impact such defenses may have on public and workforce perceptions of the organization. If you have questions regarding the Supreme Court’s expansion of Title VII protections and its implications, contact your Polsinelli attorney.

Today, the United States Supreme Court issued its much-anticipated ruling as to whether Title VII of the Civil Rights Act of 1964 protects employees from discrimination based on sexual orientation and gender identity.  The Supreme Court’s ruling came on three separate cases—two addressing sexual orientation and one addressing gender identity, all consolidated by the Supreme Court in its decision in Bostock v. Clayton County, Georgia [1].  The Supreme Court’s decision was that the answer to these questions was clear.  In a 6-3 opinion written by Justice Neil Gorsuch, the Supreme Court held that an employer who fires an employee for being gay or transgender violates Title VII because “[s]ex plays an necessary and undisguisable role in the decision.” Sexual Orientation In Altitude Express v. Zarda and Bostock, the Court addressed the issue of whether Tile VII’s prohibition of discrimination on the basis of “sex” extends to include sexual orientation. Altitude Express involved a male sky-diving instructor who habitually disclosed his sexual orientation to female clients to alleviate concerns about being strapped to a man for tandem dives.  The instructor alleged he was fired solely because of his sexual orientation in violation of Title VII after a female client complained of inappropriate touching and claimed he informed her of his sexual orientation to excuse his behavior.  While the district court ruled that Title VII does not prohibit discrimination on the basis of sexual orientation, the Second Circuit Court of Appeals held that sexual orientation discrimination is motivated, at least in part by “sex,” and is thus covered under Title VII’s prohibition of sex discrimination. Along similar lines, in Bostock, a male child welfare services coordinator who received criticism for participating in a gay softball league and for his sexual orientation, was terminated for “conduct unbecoming of its employees.”  The employee filed a lawsuit under Title VII, alleging sex discrimination based on sexual orientation.  The district court dismissed for failure to state a claim, and the Eleventh Circuit affirmed in accordance with its rule that it cannot overrule prior Eleventh Circuit panel precedent. Gender Identity In R.G. & G.R. Harris Funeral Homes v. EEOC, the Supreme Court addressed Title VII’s coverage of gender identity, as an extension of its prohibitions of “sex” discrimination (including sex stereotyping).  In Harris Funeral Homes, the employer terminated an employee shortly after the employee, who had previously presented as male, notified her employer that she intended to transition to and present as female.  After the district court granted summary judgment in favor of the employer, the Sixth Circuit reversed, holding that the termination based on the employee’s transgender status and gender identity violated Title VII. The Decision In these three cases, long-term employees were fired shortly after revealing they were homosexual or transgender, and the employers did not dispute that they were fired for that reason.  In deciding the scope of Title VII’s protections, the Supreme Court relied on ordinary public meaning of Title VII’s prohibition of discrimination because of sex to determine that an employer who discriminates on the basis of sexual orientation or transgender status violates Title VII.  The Court explained that homosexuality and transgender status are inextricably linked to sex and that discrimination on such bases thus requires an employer to treat an individual differently because of their sex.  Put another way, the Court articulated that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”   The Supreme Court’s decision brings federal law in line with the more than 20 states (and numerous additional municipalities) that currently prohibit discrimination on the basis of sexual orientation and gender identity.  With this new ruling, employers should review, and potentially revise, policies to ensure coverage of sexual orientation and gender identity as protected characteristics to comply with new federal law.  Employers should also consider engaging their employees with renewed anti-discrimination, harassment, and retaliation training.  Finally, all employers should also recognize the potential for additional charges of discrimination and lawsuits, and be prepared to respond to the same. If you have any questions or need assistance related to employment decisions in light of this new ruling and the Supreme Court’s expansion of Title VII protections, contact your Polsinelli attorney.  Polsinelli is prepared to assist with questions; updating policies, procedures, and training materials; and providing workplace training. ___________ [1] Bostock v. Clayton County, Georgia, October 2019

As employers begin seeing rays of light at the end of the tunnel and start thinking of reopening, a question at the forefront of those preparations is whether they can test their employees for COVID-19. Such a test would qualify as a medical examination subject to restrictions under the Americans with Disabilities Act (“ADA”). Specifically, an employer would need to be able to establish that the test was job related and consistent with business necessity. The Equal Employment Opportunity Commission (“EEOC”) has now provided guidance making clear that employers can take this step. Before COVID-19 broke onto the scene, the EEOC had provided guidance for employers regarding how to respond in the face of a pandemic. That guidance served as the basis for employer decisions as they attempted to navigate a myriad of novel situations created by the novel coronavirus, but it did not specifically address COVID-19 testing. In its original guidance regarding COVID-19, the EEOC acknowledged that the spread of COVID-19 is a “direct threat,” and that temperature screenings were therefore appropriate. In guidance released on April 23, 2020, the EEOC expanded that guidance to clarify that employers may choose to administer COVID-19 testing to employees before they enter the workplace to determine if they have the virus. Nevertheless, employers must still ensure that any testing is consistent with ADA requirements, including that the tests being used are accurate and reliable. On this issue, the EEOC pointed employers to guidance from the U.S. Food and Drug Administration about what may or may not be considered safe and accurate testing. Additionally, while testing evaluates whether an employee is infected at the time of the test, it is really only a snapshot of that moment in time and employees who test negative could subsequently become infected. As a result, employers must still continue to implement other safety measures, such as social distancing and other hygiene requirements. In addition to ensuring accurate testing methodologies, employers should also receive written consent from employees before requiring mandatory testing. Polsinelli has worked with a number of testing providers, and can assist employers in implementing effective testing regimens.

On April 11, 2020, Virginia Governor Ralph Northam signed the Virginia Values Act (“Act”), which significantly strengthens the Virginia Human Rights Act’s prohibition on employment discrimination.  Some of the major changes include: Greatly expanding the class of employers who can be sued under state law; Removing limitations on the relief employees may obtain; and Adding sexual orientation, gender identity, and status as a veteran as new protected classes. These changes show that Virginia’s new Democratic majority is not hesitant to flex its muscles in the area of employment law, and could herald additional changes that may further erode Virginia’s relatively pro-employer legal climate. The most important change is the Act’s dramatic expansion of employees’ rights to seek relief for employment discrimination under the Virginia Human Rights Act.  Prior to the Act, Virginia Code § 2.2-3903 limited employees to bringing claims against employers who employed five to fifteen employees, or five to twenty employees for claims of age discrimination.  These size limitations meant that employees could only bring a claim under the Virginia Human Rights Act if their employer was too small to be covered by the federal employment discrimination statutes.  Employees whose employers were large enough to be covered by the federal statutes could only bring a federal claim.  The remedies available to employees under the Virginia Human Rights Act were also limited.  Employees were limited to recovering twelve months of back pay in most circumstances, and could not recover punitive damages or obtain reinstatement to their former position.  Attorney’s fee awards were capped at 25% of the employee’s recovery. The Act repeals all of Section 2.2-3903’s limitations.  Now, employees may bring state law employment discrimination claims against any employer with more than fifteen employees.  If the employee claims unlawful discharge, that threshold is reduced to five.  Employees can now recover compensatory and punitive damages, as well as attorney’s fees, with no cap on recovery.  Virginia employees now have a state law employment discrimination claim that is more generous than the federal Title VII (which caps compensatory and punitive damages, but not back pay, at up to $300,000).  Virginia employees bringing claims under the new state law may also now be able in some cases to avoid federal court jurisdiction and thereby escape the “rocket docket” in the Eastern District of Virginia, which is regarded by some as pro-employer. The Act also broadens the Virginia Human Rights Act by adding “sexual orientation,” “gender identity,” and “status as a veteran” as new protected classes.  “Sexual orientation” is defined as “a person’s actual or perceived heterosexuality, bisexuality, or homosexuality,” which apparently incorporates an Americans with Disabilities Act-type “regarded as” analysis.  Notably, courts hold that such “regarded as” claims are not cognizable under Title VII.  “Gender identity” is defined as “the gender-related identity, appearance, or other gender-related characteristics of an individual with, or without regard to the individual’s designated sex at birth.” The Act’s dramatic expansion of the Virginia Human Rights Act may be a signal that Virginia’s Democratic majority intends to enact additional employment protections akin to those in neighboring Maryland and Washington, D.C.  Polsinelli will continue to monitor these developments.

According to the Centers for Disease Control and Prevention (“CDC”), there are currently tens of thousands of reported cases of the disease (recently named “COVID-19”) in China, with a growing number of cases in various international locations. In the United States, the CDC has confirmed 14 cases and has tested a total of 426 individuals. Another 39 people infected with the disease have been repatriated to the United States. Although most of these illnesses are associated with travel from Wuhan, the United States has reported at least two instances of person-to-person spread of COVID-19. The COVID-19 outbreak presents a host of employment law concerns for U.S. employers across all industries, but in particular, those in high-risk environments (such as healthcare) and those with employees engaged in international travel. The following are some guidelines to help employers respond to the outbreak: Educate Employees For employers that might be impacted by the disease, reassure employees that management is monitoring the outbreak, including travel restrictions and guidance, and supply employees with reputable resources regarding COVID-19, its transmission, and how to prevent exposure. Employers should avoid offering medical opinions or unreliable information that might create unnecessary fear and anxiety among employees. Advise employees to check the CDC’s most recent guidance and recommendations before any international travel. Actively encourage and flexibly permit employees to stay at home if they have symptoms of acute respiratory illness, and remind employees of applicable sick leave or paid time off that might be available to them. Remind employees of applicable policies and procedures for reporting concerns and requesting leaves of absence and other accommodations. Train supervisors and managers on how to respond to such requests. To ensure consistent messaging and uniform application of company policies, appoint a dedicated individual in human resources to field and respond to questions, concerns and requests related to COVID-19. Ensure a Safe and Healthy Workplace Encourage respiratory etiquette, hand hygiene and routine cleaning of commonly touched surfaces in the workplace. Employers should also provide appropriate health and sanitation supplies around the workplace. Comply with Occupational Safe and Health Administration (“OSHA”) regulations for maintaining a safe and healthy workplace. Although all industries should follow OSHA’s recommendations and industry-specific guidance, precautionary measures are required for certain industries (such as healthcare) with a high risk of exposure to infectious disease. If an employee is confirmed to have COVID-19, inform fellow employees of their possible exposure to COVID-19 in the workplace, but maintain confidentiality about an employee’s health so as not to run afoul of the Americans with Disabilities Act (“ADA”) or similar state laws. Healthcare providers may also need to take into account any obligations under the Health Insurance Portability and Accountability Act (“HIPAA”) and consider public health reporting requirements, public safety needs, and the protection of its employees and patients. Review and Implement Policies If possible, temporarily suspend work travel to affected areas and stay abreast of current travel guidance from reputable health organizations. Requiring travel to high risk areas could expose employers to liability under OSHA or other employment laws. If an employee refuses to work or travel because of concerns related to COVID-19, carefully consider whether such concern is reasonable and consistent with current CDC guidance before insisting on travel or taking any disciplinary action. Consider implementing a temporary policy requiring employees that have traveled to affected regions (or are in direct contact with people who have traveled to affected regions) to stay at home for 14 days following their return (the suspected incubation period). This policy should be applied uniformly and not targeted at specific employees based on race, country of origin, or any other protected characteristic. Consider any request for accommodation arising from or related to COVID-19 just as the company would any other request for disability accommodation. An employee infected with COVID-19 (or even “regarded as” having the illness) could be protected under the ADA or similar state law as a “qualified individual with a disability.” Provide all necessary leaves required under state and federal law and/or company policy. A COVID-19 diagnosis will almost certainly qualify as a “serious health condition” under FMLA or equivalent state law. Once an employee has exhausted all leave, employers may still need to consider affording additional time off as a reasonable accommodation. Review any telecommuting policy and facilitate remote working where applicable. Employers should use caution in requiring employees to work from home simply because they display certain symptoms, as many of the early symptoms of COVID-19 share similarities with the common cold. If faced with telecommuting requests by employees with concerns of potential exposure, employers should assess whether such concern is reasonable before refusing this accommodation. Avoid making any medical inquiries or requiring medical examinations of employees absent a reasonable belief that an employee’s medical condition poses a “direct threat” to the workplace, as required by the ADA. “Direct threat” is defined as “[a] significant risk of substantial harm to health or safety of self or others that cannot be eliminated or reduced by reasonable accommodation.” 29 C.F.R. § 1630.2(r). In determining potential risk of COVID-19 infection, employers should rely only on guidance from reputable public health agencies and avoid making any determinations of risk based on race or country of origin. Failure to do so could violate state and/ or federal discrimination laws. To read the CDC Interim Guidance for Businesses and Employers to Plan and Respond to COVID-19, click here. Five Takeaways for Employers The impact of COVID-19 is constantly evolving and will continue to present a host of legal issues for employers. Regardless of industry or location, employers should take the following action: 1.     Closely monitor and communicate developments from U.S. public health authorities. 2.     Implement appropriate policies and procedures to respond to and manage the concerns of employees. 3.     Ensure a safe and healthy workplace in compliance with all federal and state regulations and guidelines. 4.     Protect the privacy of employees. 5.     Consult legal counsel to navigate the various OSHA and employment laws implicated by the outbreak. For more information, please contact one of the authors or your Polsinelli attorney.

Recently, Illinois amended its Equal Pay Act to include a ban on salary-history inquiries, with the stated goal of reducing gender pay inequities.  Specifically, the amendments prohibit employers from asking questions regarding job applicants’ pay history either in the job interview or on the job application. Further, an employer may not screen applicants based on their salary history, or request salary history information from applicants’ previous employers.  The amendments are effective September 29, 2019. While a job applicant may voluntarily disclose their salary history, this information cannot be considered when deciding whether to hire the job applicant, or when determining the salary of an applicant who has been hired.  However, employers may ask job applicants about compensation expectations for a given role.  In addition, the amendments provide that employees may talk about their compensation with their colleagues without fear of retaliation.  Note the amendments grant individuals a private right of action, and allow prevailing plaintiffs to recover special damages up to $10,000, civil penalties up to $5,000 for each violation, injunctive relief, and attorney’s fees and costs. Given these amendments, employers may wish to consider assessing the role compensation history plays in their hiring processes (if any).  Employers with questions regarding the Equal Pay Act, or salary inquiries generally, would do well to consult with competent counsel.

On August 12, 2019, New York Governor Andrew Cuomo signed a law which strengthens further the state’s Human Rights Law (NYSHRL). The new legislation further amends anti-harassment laws enacted in 2018, discussed here, expanding the individuals covered and making it easier for covered individuals to state viable harassment claims. The legislation contains several significant changes, which are highlighted below: Extension of the Statute of Limitations Starting August 12, 2020, the statute of limitations for sexual harassment claims filed with the Division of Human Rights will be extended from one year to three years. Expansion of Coverage and Notice All employers, regardless of size, with employees in the state are now subject to claims for sexual harassment under the NYSHRL and are required to adopt sexual harassment prevention policies. Moreover, domestic workers and non-employees, such as independent contractors, subcontractors, vendors, and consultants, will receive the same protections against harassment as employees under the NYSHRL. Expansion of Covered Discriminatory Conduct The legislation also expands coverage of the state’s anti-harassment laws to include harassment based on any of the following protected characteristics: age, race, sex, creed, color, national origin, sexual orientation, gender identity or expression, military status, disability, genetic characteristics, familial status, marital status, and domestic violence victim status. Elimination of the “Severe and Pervasive” Standard Significantly, the requirement that claimants prove that the purportedly harassing behavior was “severe or pervasive” has been eliminated.  Now, a claimant may maintain a claim for harassing conduct under the NYSHRL unless the employer shows that the alleged conduct was what a “reasonable victim” of harassment would consider “petty slights or trivial inconveniences.” Elimination of the “Faragher/Ellerth” Defense For two decades, employers have relied upon the “Faragher/Ellerth” affirmative defense to avoid liability for harassment by supervisors.  This defense is available if the employer exercised reasonable care to prevent and correct promptly any harassing behavior, and the claimant did not take advantage of the employer’s established complaint procedure to report the conduct.  The legislation expressly provides that an employee’s failure to use the employer’s complaint procedure is not a defense to liability in a harassment case. Prohibition of Non-Disclosure and Mandatory Arbitration Agreements Extending beyond the restrictions recently imposed by other states, the new law prohibits employers from including non-disclosure provisions in any settlement of discrimination or harassment claims, unless expressly requested by the employee.  Also, mandatory arbitration clauses are prohibited in agreements releasing or settling such claims. A Sea-Change for Employers This legislation overhauls the state’s anti-harassment laws.  Moreover, given the legislation provides that it should be construed liberally and any exceptions or exemptions are “to be construed narrowly in order to maximize deterrence of discriminatory conduct,” employers with employees in New York would do well to consider taking action to comply with the law’s expanded protections and prohibitions, including updating handbooks and policies (among other things).  Employers with questions regarding the new law should consult with competent counsel. We will continue to monitor developments in New York and other state anti-harassment laws.Stay tuned to Polsinelli at Work for additional developments!

On July 11, 2018, New York State enacted a sweeping new law aimed at combating sexual harassment in the employment context.  A year later, on July 22, 2019, the U.S. District Court for the Southern District of New York ruled that the law’s prohibition from requiring employees to submit sexual harassment claims to mandatory arbitration was preempted by the Federal Arbitration Act (FAA). The court’s decision is a straightforward application of the FAA.  Section 2 of the FAA provides that arbitration agreements are enforceable except on grounds that would invalidate any type of contract.  The U.S. Supreme Court has consistently applied the FAA to invalidate state laws that target the enforceability of arbitration agreements and do not apply generally to all types of contracts.  As New York’s prohibition on mandatory arbitration clauses was clearly targeted at arbitration agreements, it fell squarely within the type of prohibition that is preempted by Section 2 of the FAA. This decision comes as welcome news to employers, and shows that the FAA remains a powerful tool to ensure that arbitration agreements are enforced even in the face of state legislation.  Employers with questions regarding arbitration agreements would do well to consult with able counsel.

In a recent decision, Marshall v. Montaplast of North America, Inc., the Supreme Court of Kentucky reaffirmed that a cause of action for wrongful termination based on a violation of public policy may proceed only if the public policy at issue is: (a) found in an existing law; and (b) has an “employment related nexus.” In Marshall, the plaintiff filed a complaint against her former employer for wrongful discharge in violation of public policy, claiming that she was terminated in retaliation for informing her co-workers that their supervisor was a registered sex offender. The plaintiff argued that her termination for disseminating information from the sex offender registry is against public policy because, pursuant to the Kentucky Sex Offender Registration Act (“Act”), the sex offender registry should be open and accessible to everyone.  In contrast, the employer argued that the plaintiff’s claim must fail because no such public policy could be divined from the Act. The Supreme Court sided with the employer.  When ruling, the Court made clear that “the public policy involved must have an employment related nexus.” Specifically, the public policy must be “clearly defined by statute and directed at providing statutory protection to the worker in his employment situation.”  And in this case, the Act did not meet the employment-related nexus requirement because its primary purpose was to protect the public generally, and not “the worker” specifically.  While the Act did provide criminal and civil immunity for anyone who disseminated information from the registry in good faith, it did not create a private right to disseminate information from the registry in a private workplace. This decision comes as good news to Kentucky employers.  Nevertheless, employers in Kentucky that are considering terminating an employee would do well to consult with competent counsel to minimize the risk of a possible public policy claim.

On July 3, 2019, Governor Gavin Newson signed Senate Bill 188, styled “Create a Respectful and Open Workplace for Natural Hair” (the CROWN Act), updating California’s anti-discrimination law, the Fair Employment and Housing Act (FEHA).  Specifically, the bill modifies the FEHA’s definition of race to include “traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.”  The new law takes effect January 1, 2020. Notably, the new law provides: “Workplace dress code and grooming policies that prohibit natural hair, including afros, braids, twists, and locks, have a disparate impact on black individuals as these policies are more likely to deter black applicants and burden or punish black employees than any other group.” Employers may notice this language is similar to guidance issued by the New York City Human Rights Commission in February 2019 that “grooming or appearance policies that ban, limit, or otherwise restrict natural hair or hairstyles associated with Black people generally violate [New York City’s] anti-discrimination provisions.” While the new law does not eliminate an employer’s ability to make and enforce grooming policies, California employers should consult with competent counsel to ensure that any grooming policies are imposed for non-discriminatory reasons, are uniformly applied and do not have a disparate impact on certain employees.

On May 8, 2019, the U.S. Seventh Circuit Court of Appeals reaffirmed its test to determine whether a worker qualifies as an “employee” as defined by and subject to Title VII protections. In this case, the plaintiff was a physician who maintained practice privileges at defendant Hospital.  Most of her revenue came from the work she performed at the Hospital, and the Hospital subjected her to peer-review proceedings.  Nevertheless, the Court ruled that she was not an “employee” of the Hospital for purposes of Title VII, but was instead an independent contractor. In its decision, the Court reaffirmed that the following factors are relevant to determining an individual’s employment status under the statute: the extent of the employer’s control and supervision over the worker, including directions on scheduling and performance of work; the kind of occupation and nature of skill required, including whether skills are obtained in the workplace; responsibility for the costs of operation, such as equipment, supplies, fees, licenses, workplace, and maintenance of operations; method and form of payment and benefits; and length of job commitment and/or expectations. The Court emphasized that the most important factor is the employer’s right to control the worker’s conduct and performance. While acknowledging that a physician who enjoys hospital staff privileges could share an indirect employer-employee relationship with a hospital sufficient to invoke Title VII protection, the Court ultimately held that subjecting the plaintiff to peer review did not meet the necessary control threshold to create an employee-employer relationship with the Hospital. The Seventh Circuit’s decision comes as welcome news for employers, as the employee/independent contractor distinction is currently in flux.  Employers with questions regarding the proper classification of its workers would do well to consult with competent counsel.

On June 3, 2019, the U.S. Supreme Court in Fort Bend County, Texas v. Davis unanimously held that Title VII’s charge-filing requirement is mandatory for claimants, but not jurisdictional.  Stated plainly, employees can still file and proceed with Title VII lawsuits without first filing a charge of discrimination, absent a timely-asserted exhaustion defense by employers. In Davis, the claimant filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) alleging sexual harassment and retaliation for internally reporting the harassment.  The claimant was later terminated for reasons she believed to be based on her religion.  Although the claimant amended her intake questionnaire with the EEOC to add religion-based claims, she never amended her EEOC Charge of discrimination.  After receiving a right to sue notice, the claimant filed a lawsuit asserting the claims of harassment and retaliation as stated in her charge, and also included discrimination based on religion.  The case proceeded on the merits on all of claimant’s claims and summary judgment was entered in the employer’s favor on all claims.  The U.S. Fifth Circuit Court of Appeals reversed on the claimant’s religious discrimination claim.  On remand, the district court granted the employer’s motion to dismiss, wherein the employer asserted for the first time that the claimant failed to assert religious discrimination claims in her EEOC charge and, therefore, the court lacked jurisdiction over those claims.  The Fifth Circuit reversed, holding that a failure to exhaust administrative remedies under Title VII is not a jurisdictional bar to sue, but rather is an affirmative defense, which is subject to waiver.  The court further held that the employer waived the affirmative defense by not asserting it in its answer or moving on it earlier in the case. The U.S. Supreme Court agreed with the Fifth Circuit and held that Title VII’s charge-filing instruction is not jurisdictional, but rather a mandatory, nonjurisdictional claim-processing rule that must be “timely raised to come into play.” This case should remind all employers to timely assert all applicable or potentially applicable affirmative defenses.  Employers are encouraged to have thoughtful discussions with their counsel to review waivable defenses that should be asserted as early as possible in litigation.

On May 22, 2019, Colorado’s Governor Polis signed the Equal Pay for Equal Work Act (the “Act”), which brings significant changes to the existing Wage Equality Regardless of Sex Act. C.R.S. § 8-5-101 et seq.  Effective January 1, 2021, the Act will prohibit employers from paying an employee of one sex less than an employee of a different sex for substantially the same work. Employers will also be required to announce or post all opportunities for promotion to all current employees on the same calendar day, and include the hourly or salary compensation, prior to making a promotion decision. Additionally, employers will be required to keep records of job descriptions and wage rate history for each employee for the duration of employment plus two years after the end of employment. Note that wage differentials between employees of different sexes who perform substantially similar work are allowed where the employer can demonstrate that the difference in wages is based upon one or more factors, including: A seniority system; A merit system; A system that measures earnings by quantity or quality of production; The geographic location where the work is performed; Education, training, or experience to the extent that they are reasonably related to the work in question; or Travel, if the travel is a regular and necessary condition of the work performed. Also, the Act will prohibit an employer from: Seeking the wage rate history of a prospective employee or relying on a prior wage rate of a prospective employee to determine a wage rate; Discriminating or retaliating against a prospective employee for failing to disclose the employee’s wage rate history; Discharging or retaliating against an employee for asserting the rights established by the Act; Prohibiting employees from disclosing their wage rates; and Requiring an employee to sign a waiver that prohibits an employee from disclosing their wage rate information. Importantly, the Act will remove the authority of the Colorado Department of Labor and Employment to enforce wage discrimination complaints based on sex and permit aggrieved employees to file a civil action in district court, where a prevailing employee may recover liquidated damages and attorneys’ fees. Employers may wish to consider auditing their existing pay structures to make sure employees are receiving equal pay for equal work in compliance with the Act and would do well to post all opportunities for promotion to all current employees at the same time. Employers with questions regarding the Act, or pay audits generally, should consult with competent counsel.

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

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

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

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.

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.

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

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.

Earlier this year, the U.S. Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”) issued new guidance and rules pertaining to retirement plans.  Now is a good time for employers to audit their plans to ensure compliance with applicable laws and, if not, to take corrective action. On April 1, 2018, the DOL’s final regulations updating the Employee Retirement Income Security Act’s (“ERISA”) claim and appeal requirements for disability-related benefit determinations went into effect. Importantly, the new rules apply to any retirement plan – including a 401(k) plan – that makes a determination of disability.  Employers that sponsor a retirement plan should ensure that their plan documents have been updated by the end of this plan year (December 31, 2018 for calendar year plans) to reflect these new disability-related claims procedures. Additionally, the IRS, through the EP Team Audit (“EPTA”) Program, issued helpful guidance regarding the “Top Ten” issues found in EPTA Audits, which are: 1.       Termination of Partial Termination – Potential Vesting/Distribution Issues 2.       Acquisitions 3.       Deferral Percentage Tests 4.       Compensation 5.       Plan Document 6.       Vesting 7.       Distributions and Loans 8.       Assets 9.       Limits 10.   Miscellaneous This “Top Ten” list telegraphs to employers which issues the IRS would likely focus on during an EPTA audit.  Thus, employers would do well to conduct self-audits on their plans to determine whether they are in compliance and avoid potential penalties. The IRS also updated its Employee Plans Compliance Resolution System (“EPCRS”) effective January 1, 2019. Although there are no significant changes to the Self-Correction Program or the Audit Closing Agreement Program, the updated system will require, beginning April 1, 2019, that all Voluntary Correction Program (“VCP”) submissions and payments be made electronically (there will be a three month transition period from January 1, 2019 – March 31, 2019 where online submissions and payments will be optional, but not mandatory).  Employers should review their fiduciary insurance policies to ensure they include attorney and filing fees associated with any and all corrections, and should file a claim should errors requiring a correction filing be uncovered. Employers with questions regarding the above issues would do well to consult with competent counsel.

On November 15, 2018, the United States Fourth Circuit Court of Appeals affirmed the decision of the Middle District of North Carolina in the case of Netter v. Barnes, et al, upholding dismissal of Netter’s case because her removal of other employees’ personnel files from the workplace is not “protected activity” and is a legitimate non-discriminatory reason for her termination.[1] A longtime employee of the Sheriff’s Department, Catherine Netter believed she was being discriminated against on account of her race and religion and removed several coworkers’ personnel files without permission, presumably “fishing” to determine whether said employees were being treated more favorably than her. Then, Netter copied the files and shared them with the Equal Employment Opportunity Commission (“EEOC”) when attempting to support her charge of discrimination. Eventually, Netter sued her employer for discrimination when she was passed over for a promotion. Netter (through her attorney) subsequently produced the files to the Sheriff in discovery. When deposed, Netter conceded that she had obtained the files as described above. In response, the Sheriff’s Department terminated her employment, citing, in addition to violations of internal policy, Netter’s violation of N.C. Gen. Stat. § 153A–98, which imposes criminal penalties for reviewing or disseminating information in county personnel files without authorization. Netter amended her lawsuit to include a retaliation claim under Title VII’s “participation clause,” which protects “participat[ion] in any manner in an investigation, proceeding, or hearing…” 42 USC § 20000e-3(a). Netter argued that her theft of personnel files fell under the participation clause, and even conceded that her actions violated the law. The Sheriff argued that any disclosure of information in violation of an employer confidentiality policy would fall outside of the scope of the participation clause, even if the employee had permission to access the information and disclosed it only to the EEOC in connection with a Title VII claim. The Court took a middle path, holding that the participation clause “does not protect a violation of a valid state law that poses no conflict with Title VII.” The Court did leave some breadcrumbs regarding the types of laws that could conceivably conflict with Title VII. Specifically, the Court noted in dicta the importance of personnel files to show evidence of disparate treatment. One can imagine that courts might take a closer look at a state law that, for instance, placed limits on the ability of the EEOC (or a corresponding state agency) to seek the information contained in personnel files. In any case, employers should ensure that access to personnel files and other confidential information is strictly monitored. [1] http://hr.cch.com/ELD/NetterBarnes111518.pdf

On Tuesday November 6, 2018, the U.S. Supreme Court unanimously ruled that the Age Discrimination in Employment Act (“ADEA”) applies to state and local government employers with fewer than 20 employees.  The Supreme Court’s decision, in Mount Lemmon Fire District v. Guido, affirmed the U.S. Ninth Circuit Court of Appeal’s ruling and resolved a Circuit Court split regarding the ADEA’s coverage of public employers. Due to budgetary shortfalls, the Mount Lemmon Fire District, a political subdivision in Arizona, terminated its two oldest full-time firefighters, John Guido and Dennis Rankin, who sued alleging discrimination under the ADEA. Mount Lemmon sought dismissal of the case on the grounds that it was not an employer as defined and  covered by the ADEA. Upon enactment in 1967, the ADEA covered only private sector employers.  However, in 1974, Congress amended the ADEA to redefine an employer as “a person engaged in an industry affecting commerce who has twenty or more employees…[t]he term also means (1) any agent of such a person, and (2) a State or political subdivision of a State…”  (emphasis added). The statutory language proved pivotal in the case, as the Supreme Court held the phrase “also means” created an entirely new, separate category of employer covered under the ADEA. The Supreme Court reasoned that because Congress did not apply the numerosity requirement of private sector employers to the political subdivisions, small state and local government subdivisions need not have 20 or more employees to fall within the ADEA’s scope. While Mount Lemmon warned that this interpretation would too broadly extend the ADEA’s scope, potentially causing increased litigation and legal costs and threatening necessary public services, the Supreme Court ultimately disagreed. Justice Ruth Bader Ginsburg, who authored the opinion, acknowledged that this interpretation would give the ADEA “a broader reach than Title VII. But this disparity is a consequence of the different language Congress chose to employ.”  The Court was further unconcerned with the risk of emergency service shrinkages, noting that the Equal Employment Opportunity Commission has followed this same interpretation for 30 years without problematic public services cuts.  The Court concluded that the ADEA’s definition of employer left “scant room for doubt” that state and local governments are employers under the ADEA, regardless of their number of employees. With its broader reach, state and local employers should be mindful of the ADEA’s coverage and requirements. The Polsinelli Labor and Employment attorneys are here to address and assist with any ADEA questions or cases.

Recently, California Governor Jerry Brown signed a series of Bills that add additional protections to victims of sexual harassment and may make it more difficult for employers to defend those claims.  Specifically, on or before January 1, 2019, the following laws will take effect: SENATE BILL NO. 1300 Senate Bill 1300 provides the most numerous and far reaching changes to the harassment landscape in California.  It adds a number of new provisions to the government code which broaden the definition of harassment and may diminish the ability of an employer to defend itself in court.  Specifically, the Bill adds a new Section, 12923, to the Government Code which: Substantially broadens the definition of a hostile work environment to include any conduct that "sufficiently offends, humiliates, distresses, or intrudes upon its victim, so as to disrupt the victims emotional tranquility in the work place, affect the victims ability to perform the job as usual, or otherwise interfere with and undermine the victims personal sense of wellbeing." Indicates that a single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment if the harassing conduct has unreasonably interfered with the plaintiff's work performance or created an intimidating, hostile, or offensive working environment. Rejects the "stray remark" doctrine and instructs that "the existence of a hostile work environment depends on the totality of the circumstances and a discriminatory remark, even if not made directly in the context of an employment decision or uttered by a non-decision maker, may be relevant, circumstantial evidence of discrimination.” Instructs that the legal standard, except in very limited circumstances, for sexual harassment should not vary by type of workplace. Instructs that harassment cases are rarely appropriate for disposition on summary judgment. In addition, Senate Bill 1300 also: Codifies case law that an employer may be responsible for the acts of non-employees with respect to harassment of employees, applicants, unpaid interns, or persons providing services pursuant to a contract in the workplace. Adds Section 12964.5 to the Government Code, which restricts the ability of an employer to require an employee to sign a release of a claim or right under certain circumstances.  Note a "release of claim or right" includes requiring an individual to execute a statement that he or she does not possess any claim or injury against the employer or other covered entity, and includes the release of a right to file and pursue a civil action or complaint. Prohibits an employer from requiring an employee to sign a non-disparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.   Any agreement or document in violation of this section is contrary to public policy and shall be unenforceable. Significantly, this section does not apply to a negotiated settlement agreement to resolve an underlying claim that has been filed by an employee in court, before an administrative agency, alternative dispute resolution forum, or through an employer's internal complaint process.  Critically, a settlement agreement will only be considered to have been “negotiated” if the employee received notice and an opportunity to retain counsel. CONFIDENTIALITY OF SETTLEMENT AGREEMENTS In addition to the restrictions imposed by new Government Code Section 12964.5, Senate Bill 820 adds Section 1001 to the Code of Civil Procedure and relates to the confidentiality of settlement agreements.  Specifically, this new section outlaws provisions in a settlement agreement that prevent the disclosure of factual information related to a claim filed in a civil or administrative action regarding sexual harassment or other forms of harassment.  However, the prohibition does not apply to the identity of the claimant, if they requested it to be confidential, nor does it prohibit the confidentiality of the amount paid in settlement of a claim.  That provision, however, must be read in light of the new federal tax provision that precludes the deductibility of payments in connection with the settlement of sexual harassment or sexual assault claims that are subject to a confidentiality provision. ASSEMBLY BILL NO. 3109 In keeping with the concerns underlining new Government Code 12964.5 and Code of Civil Procedure Section 1001, Section 1670.11 is added to the Civil Code and makes a provision in a contract or settlement agreement void and unenforceable if it waives a party's right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment. LESSONS TO BE LEARNED The California legislature has greatly expanded the protection of employees and other individuals in connection with sexual harassment.  As a result of these changes, it is even more imperative for employers to train their employees to recognize and report allegations of sexual harassment and to affirm that they have been trained on these issues and they are not aware of any such circumstances.  Additionally, employers need to be careful when requiring an employee to forego legal claims or to restrict their ability to disclose facts relating to sexual harassment by either preventing such disclosure in a settlement agreement or trying to prevent their testimony in an official proceeding.

In Exby-Stolley v. Board of County Commissioners, No. 16-1412, 2018 WL 4926197 (10th Cir. Oct. 11, 2018), the Tenth Circuit Court of Appeals held that for an individual to succeed on a failure to accommodate claim under the Americans with Disabilities Act (“ADA”), he or she must establish an adverse employment action, i.e., one that materially adversely affects the terms, conditions, or privileges of employment. See 42 U.S.C. §12112(a). When reaching its decision, the Tenth Circuit relied on two principles: first, read the statutory language and second, do not rely on dictum. Analyzing the ADA, the Court first reviewed the language in 42 U.S.C. § 12112(a), which states: No covered entity shall [1] discriminate against a qualified individual on the basis of disability [2] in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. The Court then noted that subsection (b) states the term “discriminate against a qualified individual on the basis of disability” includes “not making reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability.” 42 U.S.C. § 12112(b)(5)(A). Based on the plain meaning of the statute, the Tenth Circuit concluded that failure to make a reasonable accommodation was a type of discrimination which, to be actionable, must be “in regard to” an adverse employment action. Rejecting the cases cited by the dissent, the majority opinion relied on another familiar principle: courts are not bound by dicta, which are “statements and comments in an opinion concerning some rule of law or legal proposition not necessarily involved nor essential to determination of the case at hand.” TAKEAWAYS To employers, the case is important in that, at least under federal law in the Tenth Circuit, for an employee to have an actionable failure-to-accommodate claim, he or she must prove the failure to accommodate resulted in an adverse employment action.

Throughout the month of September, 2018, the U.S. Department of Labor (“DOL”) held five listening sessions across the United States to receive feedback from the public on the minimum salary requirements for the white collar exemptions of the Fair Labor Standards Act (“FLSA”).  These sessions were held in Atlanta, Seattle, Kansas City, Denver, and Providence.  Another listening session is scheduled for October 17, 2018, in Washington, DC. As a reminder, in 2016, the DOL proposed an increase to the FLSA’s 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. Polsinelli attorneys participated in the DOL’s listening sessions in multiple cities to ascertain the concerns raised by employers. Summary of employers’ comments The vast majority of the comments were from employers. In general, employers did not oppose an increase to the salary threshold, but advocated that the DOL adopt the 2004 methodology of calculating the minimum salary, which would put the salary threshold for purposes of the exemption at approximately $32,000/year. Employers large and small raised several concerns regarding the DOL implementing a threshold salary level that is too high. Indeed, employers argued that small business would have to hire and schedule more employees, engage expensive HR and payroll consultants, and contend with morale issues associated with people losing the salaried stature.  Employers further advocated against automatic increases in the salary threshold and argued the DOL should engage in a notice and comment period prior to implementing any additional increases.  Employers further stated that the jump in salary threshold as proposed in 2016 would have caused wage compression, budget issues, and impacted the regular salary/raise structures employers already had in place. Employer representatives also advocated for the DOL to make the duties test for the administrative exemption clearer to avoid misclassification and avoid future litigation. Summary of comments from other institutions Additionally, several speakers pointed out that the current workforce desired and enjoyed the flexibility that comes with being an exempt employee, and that raising the salary threshold too high could disqualify individuals and restrict this freedom. Moreover, several financial institutions advocated for a larger percentage of the threshold salary to be satisfied through incentive and bonus payments to employees. Publicly funded education institutions advocated for the salary threshold to be tied to local conditions as they rely on public funds and budgets. They also raised concerns that the salary threshold did not include “in kind” compensation. There was also a concern that any increase to the salary threshold needed to be phased in over time so educational institutions could comply with the federal grants which had been granted under prior salary requirements. The DOL did not make any responsive comments or engage with speakers during the listening sessions. Only time will tell if employers’ concerns were heard and will be considered by the DOL when formulating the new salary threshold for the FLSA’s white collar exemptions.  Stay tuned to Polsinelli at Work for further updates.

On July 13, 2018, the U.S. Department of Labor (“DOL”) issued a Field Assistance Bulletin (“FAB”) to provide guidance to field-office staff regarding whether caregivers, such as nurses and health aides, qualify under the Fair Labor Standards Act (“FLSA”) as employees of registries that connect caregivers with people who need their services, such as senior citizens or individuals with disabilities and/or certain medical conditions, or are independent contractors. The majority of the FAB summarizes previous guidelines issued by the DOL, such as Conducting a background check and/or verifying references and credentials, does not make a caregiver an employee of the registry.  Note, however, that screening for subjective characteristics, such as likeability, would indicate an employment relationship. Facilitating matches between clients and caregivers based on their parameters and preferences does not establish an employment relationship, so long as the registry does not maintain control over hiring and firing of the caregiver. Facilitating communication between clients and caregivers is acceptable and does not create an employment relationship, so long as the registry does not directly assign specific caregivers based on subjective factors (i.e., likeability). Allowing the caregiver unrestrained profit/loss opportunities (e.g., no maximum number of hours, no limitations on the engagement in other ventures, etc.) tends to show that there is not an employment relationship. Informing the client or caregiver about normal pay rates in the area is not sufficient to create an employment relationship, nor is relaying communications on preferred rates of pay. However, the below factors are indicative of an employment relationship between a registry and a caregiver: The registry maintains the ability to hire or fire a caregiver. Taking extra steps to evaluate “subjective factors that the registry values” rather than “performing basic quality control and verification checks” such as consideration as to whether a prospective caregiver is a likeable person or interviewing the caregiver’s references. Charging “fees that fluctuate based on the number of hours that a caregiver works” for the client indicates an “ongoing interest in the employment relationship, including in the number of hours the caregiver works and whether those hours are tracked accurately.” This type of fee arrangement “may indicate that the registry is the caregiver’s employer.” Conversely, if the fees are issued on an initial basis, as well as “per service” fees for administrative activities, rather than on an hourly basis, it is more likely the parties have entered into an independent contractor relationship. Requiring the creation and confirmation of a caregiver’s hours worked may indicate the existence of an employment relationship. Mandating how services must be provided. Critically, “the analysis does not depend on any single factor” and the Wage and Hour Division of the DOL “will consider the totality of the circumstances to evaluate whether an employment relationship exists between a registry and a caregiver.” As we have previously reported, the standards governing employment and independent contractor classification are constantly changing.  Businesses, especially in labor intensive industries and the sharing economy, should closely track these standards and consult competent counsel with any questions.  We will track how the FAB affects future DOL Wage & Hour investigations and whether it is cited persuasively by courts interpreting the FLSA.

The #MeToo movement has sparked an increase in sexual harassment investigations and focused attention on the potential liability of employers for the actions of third parties with whom their employees interact for business purposes. We previously noted the importance of employers maintaining policies and providing training on proper responses to complaints about third-party harassment in the hostile environment context.  Two recent decisions underscore the importance of awareness of potential liability from third party harassment claims outside the area of sexual harassment and in potential quid pro quo situations. In a recent case involving racial harassment, the U.S. District Court for the Northern District of Alabama, found that the company could be liable for the harassment endured by a former employee subjected to the use by a customer of the "n word" toward him for a number of years.[1]  The court noted that despite the fact that the company had a “strict policy” against unlawful harassment, including acts of “clients, customers, and outside vendors,” the former managerial employee was told by his supervisor that if the company “fired" the customer, then the employee would be held responsible for the budgetary impact of the loss of the customer, likely resulting in a loss of bonus for years to come. In a case out of the U.S. Fifth Circuit Court of Appeals, the court recently cautioned employers about potential liability arising from a supervisor’s comments in the sexual harassment context.  In this case, the employee alleged that her supervisor's request that she date a wealthy potential customer in exchange for a "big bonus" constituted "quid pro quo" harassment.  Although the employer argued the request could not form the basis of a quid pro quo claim because the supervisor requested that the employee engage in a relationship with a third party – and not with the supervisor himself -- the court held that the situation could constitute quid pro quo harassment because the supervisor conditioned the payment of a bonus on the employee's agreement to engage in a sexual relationship with the potential customer.  The court noted that quid pro quo liability exists when an employee can show that a tangible employment action arises out of acceptance or rejection of a supervisor's "sexual harassment," a term which is generally defined as including "unwelcome sexual advances," "requests for sexual favors," or "other verbal or physical conduct of a sexual nature." It did not matter whether the supervisor requested the sexual favors on his own behalf or on behalf of a third party. To avoid potential liability, employers should not only review and update anti-harassment policies to ensure they provide the strongest possible protection against claims of third-party harassment but also train employees and managers to report and address any instances of alleged harassment by third parties #third party harassment #policies #sexual harassment #metoo

Beginning on June 7, 2018, four new Washington laws will go into effect and place new restrictions on employers in the state.  These laws, discussed in detail below, expand the rights and protections afforded to Washington employees, and may require employers to review and revise their employment advertisements and applications, pre-hiring materials, and arbitration agreements. Washington Fair Chance Act The Washington Fair Chance Act prohibits employers from posting advertisements for employment openings that exclude employees from applying.  Employers also may not implement any policies or practices that automatically exclude individuals with a criminal record from consideration before determining whether the applicant is otherwise qualified.  Additionally, employers may not ask about -- or obtain information about -- an applicant’s criminal record until after the employer determines that the applicant is otherwise qualified for the position.  Finally, employers may not reject applicants for failing to disclose a criminal record prior to the determination that the applicant is otherwise qualified. The bill excludes a number of employers from its scope, including, for example, employers hiring individuals who will have unsupervised access to children under the age of 18, or vulnerable adults or persons; employers required by law to inquire into, consider, or rely on information about an employment’s criminal record for employment purposes; and law enforcement agencies. Senate Bill 5996 Senate Bill 5996 provides that, as a general rule, an employer may not require an employee “as a condition of employment” to sign a nondisclosure agreement, waiver, or other document that prevents the employee from disclosing sexual harassment or sexual assault “in the workplace, at work-related events coordinated by or through the employer, or between employees, or between an employer and an employee, off the employment premises.”  Moreover, the law prohibits retaliation against an employee for disclosing or discussing (rather than simply complaining about) such harassment or assault. Notably, the law only applies to agreements into which an employee has entered “as a condition of employment,” and expressly excludes from its coverage settlement agreements between an employer and an employee or former employee who has alleged sexual harassment.  The law also excludes human resources managers, supervisors, or managers who are expected as part of their job duties to maintain confidentiality, as well as individuals requested to maintain confidentiality during an open and ongoing sexual harassment investigation. Senate Bill 6313 Senate Bill 6313 seeks to limit the enforceability of arbitration agreements between employers and employees.  The law provides that an arbitration provision contained in, for example, a contract of employment, is void and unenforceable if it requires an employee “to resolve claims of discrimination in a dispute resolution process that is confidential” or to waive the right to “publicly pursue” a cause of action, or publicly file a complaint with an agency, under state or federal antidiscrimination laws.   Given the amount of federal law that provides for preemption of state legislation of arbitration agreements under the FAA, this law, like many other state laws, is subject to challenge.  In the meantime, Washington employers need to be aware of its passage. Senate Bill 6471 Senate Bill 6471 requires the Washington Human Rights Commission to convene a working group to develop model policies and best practices to keep workplaces free of sexual harassment.  The work group will consider the creation and protection of anonymous channels for reporting workplace misconduct, ways to hold human resource departments accountable for enforcing harassment policies, protection against retaliation, required classroom training for all employees, and other issues. The work group must adopt model policies and best practices by January 1, 2019, which will be posted on the Commission’s website within thirty days.  Employers should keep an eye on these policies and practices as they are posted, as they suggest minimum requirements to which employers should hold themselves accountable.  They also provide strong indications of limitations and requirements that may be employed by the Washington legislature in future bills, thereby allowing employers to plan for future adjustments that may need to be made to their employment practices and procedures. Employer Takeaways Given the host of new laws set to become effective June 7, employers should revisit their policies, procedures, and reporting mechanisms to ensure they remain in compliance.  In addition, employers with questions regarding these new laws would do well to consult with able counsel.

Employers may regulate the length, style, and neatness of employees’ hair in the workplace through so-called grooming policies, unless the hair style is a matter of sincere religious observance posing no more than a minimal burden on the employer.   A more complicated issue arises when grooming policies prohibit certain hairstyles that are culturally associated with race, such as dreadlocks.  Untangling this issue, on which few courts have spoken, the U.S. Eleventh Circuit Court of Appeals (binding in Alabama, Georgia, and Florida) held that employers may enforce a grooming policy that prohibits dreadlocks, despite a close cultural association to race. In Equal Employment Opportunity Commission v. Catastrophe Management Solutions, 852 F.3d 1018 (11th Cir. 2016), the Eleventh Circuit affirmed that Title VII protects against discrimination based on certain immutable characteristics, including race and sex.  On the other hand, Title VII’s mandate of equal employment opportunity does not prohibit discrimination based on practices that are culturally associated, even closely, with race or sex.  This reasoning aligns with the long-standing authority that employers may impose different hair-length and other grooming requirements for men and women. The employer in Catastrophe Management Solutions did not violate the law by denying a job offer to an African-American applicant who refused to cut her dreadlocks in order to secure a job.  Thus, in Alabama, Georgia, and Florida, grooming policies that explicitly prohibit dreadlocks or other hairstyles with a cultural significance closely tied to race may be enforced. This issue is complicated by the fact that Title VII does not define “race.”  Courts outside the Eleventh Circuit may interpret Title VII differently, by taking a different view of the breadth of Title VII, or a different functional definition of race.   The hairy issue of hair in the workplace in many states presents yet another reason to have an employee handbook regularly reviewed by experienced legal counsel.

The Missouri legislature enacted sweeping changes to the Missouri Human Rights Act (“MHRA”) in 2017, which we previously reported on here. Since the amendments went into effect in August 2017, trial courts have grappled with whether and which amendments apply retroactively. To date, no controlling authority has issued from Missouri appellate courts on this issue.  However, trial courts have reached differing conclusions on retroactivity.  For instance, in Billingsley v. Rich Logistics, LLC, No. 4:17 CV 2834 SNLJ, 2018 WL 1924339 (E.D. Mo. Apr. 24, 2018), the U.S. District Court for the Eastern District of Missouri concluded the amendment regarding individual liability was substantive, rather than procedural, and, thus does not apply retroactively.  Similarly, in Hurley v. Vendtech-SGI, LLC, No. 16-01222-CV-W-ODS, 2018 WL 736057 (W.D. Mo. Feb. 6, 2018), the U.S. District Court for the Western District of Missouri determined the Missouri Legislature’s directive to apply the McDonnell Douglasburden-shifting framework was also a substantive change and does not apply retroactively. Conversely, in Gaylor v. Kemco Tool & Mach. Co., No. 14SL-CC00054 (St. Louis Cty. Cir. Ct. Oct. 13, 2017), the St. Louis County Circuit Court determined the amendments applying “the motiving factor” standard and the business judgment instruction applied retroactively because these amendments were of a procedural nature. The majority of courts to address the issue have determined the MHRA amendments do not apply retroactively.  We will continue to monitor these decisions and will provide updates when the issue is addressed by an appellate court.  Stay tuned.

On April 9, the Ninth Circuit Court of Appeals issued its decision in Rizo v. Yovino, which held that salary history may not be used by an employer as a factor when defending gender disparities in initial wages, whether considered exclusively or in conjunction with other factors.  The decision, which overruled a previous decision interpreting the Equal Pay Act, has caused some confusion and created a circuit split. Where is the confusion? In concurring opinions, some of the judges seem to question the strict nature of the majority’s holding.  Specifically, they agree that salary history should not be the sole factor when defending initial wages, but they take the position that salary history may be considered – along with other factors (such as education, experience, past performance) – so long as the other factors are job- or business-related and may justify the use of salary history as unrelated to sex.  For example, the concurring judges explain that the majority’s opinion could prevent prospective employees from using their past salary to negotiate higher pay, or could prevent employers from luring away top talent from competitors with more attractive compensation offers. To be sure, the majority’s ruling does not foreclose the use of salary history in individualized pay decisions, such as those resulting from negotiations with prospective employees.  However, it remains unclear how employers are supposed to refrain from considering prior pay on the one hand, while allowing prior pay to play a role in individualized pay negotiations on the other.    Although the true target for the Ninth Circuit’s ruling was a written compensation policy that based initial wages exclusively on salary history, which all the judges agreed violated the Equal Pay Act, it is difficult to not read the holding expansively despite the disclaimer. The Circuit Split In 2005, the Seventh Circuit Court of Appeals ruled that prior pay alone can justify pay differentials, and that the burden is on the employee to prove that the use of salary history was a disguise for discrimination.  Meanwhile, other Circuits have taken a middle of the road approach more in line with the concurring judges in Rizo. Employer Considerations While these cases are addressed to the issue of factors other than sex under the Equal Pay Act, employers cannot forget state law or county and city ordinances as well.  States, like California, have enacted laws restricting an employer’s ability to request or use prior pay information.  Employers in such states, counties, and cities must evaluate local laws and federal law to determine how to comply with both. Employers must remain vigilant regarding pay equality and should avoid relying solely on historical salary information when setting initial pay.  Employers must also consider carefully whether and when they can elicit prior salary information from applicants.  Until the Supreme Court weighs in, employers should err on the side of caution and consult with counsel regarding current pay-setting practices and plans to implement widespread changes.

On March 5, 2018, in a decision styled Shell v. Burlington Northern Santa Fe Railway Company, Case No. 15-cv-11040 (N.D. Ill. Mar. 5, 2018), the U.S. District Court for the Northern District of Illinois suggested liability could attach where an employer regarded an obese individual as disabled, in violation of the Americans with Disabilities Act, as amended (“ADA”). As previously reported in this blog, courts have held that obesity is not a disability under the ADA.  To qualify as a disability, a physical or mental impairment must substantially limit a major life activity. However, the Equal Employment Opportunity Commission has issued interpretive guidance providing physical characteristics, such as weight, do not qualify as disabilities unless they are (a) outside of a “normal” range and (b) result from a physiological disorder. In this case, BNSF Railway (“BNSF”) maintained a policy prohibiting employees with a body mass index (“BMI”) over 40 from holding safety-sensitive positions based on its belief that such individuals are at a substantially higher risk of developing medical conditions that “can manifest as a sudden incapacitation or a serious impairment of alertness or cognitive ability.”  Ronald Shell applied for the position of the intermodal equipment operator, a job category that BNSF classified as safety-sensitive because it involves using heavy equipment.  However, a post-offer physical established that Shell’s BMI was 47.5 and his conditional job offer was withdrawn.  Shell filed suit, alleging discrimination under the ADA, and BNSF moved for summary judgment. In support of its Motion for Summary Judgment, BNSF argued that Shell was not protected by the ADA because obesity -- by itself -- is not a disability.  The Court acknowledged controlling precedent on this point and further found that BNSF did not regard obesity as a disability.  However, the Court pointed to the fact that BNSF’s policy is based on concerns that someone with a BMI over 40 “would develop sleep apnea, diabetes, or heart disease” and become incapacitated.  All of these conditions, the Court noted, are disabilities.  As a result, the Court held that BNSF was “acting based upon an anticipated worst case scenario derived from precisely the sort of myth, fear, or stereotype which the ADA is meant to guard against,” and denied summary judgment under the “regarded as” prong of the ADA. While this issue is likely to receive additional consideration from the appellate courts, in the meantime employers should continue to use caution when dealing with employment issues related to obesity. Shell v. Burlington Northern Santa Fe Railway Company, Case No. 15-cv-11040 (N.D. Ill. Mar. 5, 2018).

On February 26, 2018, the U.S. Second Circuit Court of Appeals held that sexual orientation is covered by Title VII of the Civil Rights Act of 1964, aligning with a previous decision issued by the Seventh Circuit.  The Second Circuit’s decision further amplifies the existing Circuit split, as the Eleventh Circuit previously held that Title VII’s protections do not extend to sexual orientation. The plaintiff in the case presented was a skydiving instructor who claimed he was terminated after his employer learned of his sexual orientation from a customer.  The District Court dismissed Plaintiff’s Title VII claim on summary judgment, ruling in pertinent part that, as a matter of law, sexual orientation is not a characteristic protected by Title VII.  The plaintiff’s New York claim for sexual orientation discrimination went to trial, where the employer prevailed.  After final judgment was entered, the plaintiff appealed the dismissal of his Title VII sex discrimination claim to the Second Circuit. On appeal, the Second Circuit vacated the district court’s decision and held that sexual orientation discrimination is a form of sex discrimination actionable under Title VII.  Judge Robert A Katzman, writing for the majority, explained: “[S]exual orientation discrimination is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted, making it impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account.” While the Second Circuit further noted that sexual orientation was not originally intended to be included under Title VII’s protections, it reached the ultimate conclusion that the reach of the law should be expanded to encompass sexual orientation as a “reasonably comparable evil.” Employers should continue to monitor the law in each Circuit wherein it maintains operations and remain diligent in this evolving area of federal law given the current Circuit split on this issue.  Court watchers expect this issue to eventually be resolved by the U.S. Supreme Court.  Stay tuned to the blog, where we will continue to keep you updated regarding this and other major employment law issues. A link to the Second Circuit’s recent opinion can be found here: Zarda et al. v. Altitude Express, dba Skydive Long Island, et al., Case No. 15-3775 (2nd Cir. 2/26/18).

By now, most employers are familiar with their obligations under the Americans with Disabilities Act of 1990 (ADA) to not discriminate against, and possibly provide accommodations for, qualified individuals with disabilities. However, these same employers may not be aware of the newest frontier of plaintiffs’ lawsuits — claims that company websites do not comply with the ADA. Title III of the ADA prohibits discrimination on the basis of disability in the activities of places of public accommodations. Places of public accommodations include businesses that are generally open to the public, such as restaurants, movie theaters, schools, day care facilities, recreation facilities, hospitals, and doctors’ offices. Title III of the ADA also requires newly constructed or altered places of public accommodation, as well as commercial facilities (privately owned, nonresidential facilities, including factories, warehouses or office buildings whose operations affect commerce), to comply with ADA standards. At the time of the ADA’s passage, the internet was not a consideration in the ADA’s provisions or implementation. However, given the internet’s now prevalent use for consumer applications, the ADA’s requirements now extend to include company websites. The growing consensus of the courts and the United States Department of Justice (DOJ), the agency responsible for enforcing Title III of the ADA, is that websites are places of public accommodation that must comply with the ADA. State laws may also impose similar compliance obligations on companies. The DOJ is reviewing websites for compliance. In actions brought by the DOJ, monetary damages and civil penalties may be awarded. Civil penalties may not exceed $50,000 for a first violation or $100,000 for any subsequent violation. Private parties may also file suit to obtain court orders to compel companies to bring their websites into compliance with the ADA’s public accommodation provisions. No monetary damages are available in such suits under federal law; however, reasonable attorneys’ fees may be awarded — making these attractive potential class actions for plaintiffs’ attorneys. State laws may also provide for monetary damages. The DOJ has not yet established binding regulations governing website ADA compliance, and is not expected to do so until 2018 However, it appears to be a near certainty that the DOJ will adopt the current “Web Content Accessibility Guidelines (WCAG-2.0) Level AA” (WCAG) as the relevant regulations. The WCAG explain how to make web content more accessible to people with disabilities. Web content generally refers to the information in a web page or web application, including natural information such as text, images, and sounds and code or markup that defines structure, presentation, etc. Until the adoption of binding regulations, the plaintiffs’ bar and the DOJ seem to be treating WCAG as the de facto standards for ADA compliance. Therefore, compliance with WCAG is highly recommended. Evaluating reasonable accommodation issues for applicants and employees is complicated enough. To keep pace with companies’ ever-growing list of compliance obligations, companies are strongly encouraged to seek counsel to determine whether their websites comply with the ADA and any applicable state laws.

In 2017, the Centers for Disease Control reported that more than one-third of U.S. adults are obese.  But does that mean that one-third of U.S. adults are disabled?  Not necessarily.  The California Supreme Court decided twenty-five years ago in Cassista v. Community Foods, Inc. that obesity can qualify as a disability under the state anti-discrimination statute if it results from a physiological condition affecting a basic bodily system, and limits a major life activity.  However, the California Court of Appeal’s recent decision in Cornell v. Berkeley Tennis Clubseems to have eased a plaintiff’s burden of proving obesity qualifies as a disability. The plaintiff in the case, Ketryn Cornell, who was objectively obese, was employed by the Berkeley Tennis Club (the “Club”) for more than 15 years, holding positions as a life guard, tennis court washer and pool manager during her tenure.  She received positive performance reviews, raises, and bonuses until she was terminated for allegedly concealing a recording device when attempting to record a board meeting.  Recording a private conversation without every participant’s consent is a crime under California law.  Ms. Cornell denied planting the recording device and sued the Club under the Fair Employment and Housing Act (FEHA) alleging, among other things, that the Club discriminated against her and harassed her because of her disability -- obesity.  In support of her claims, Cornell produced evidence that her supervisor made several insensitive remarks and took several actions regarding her weight, including 1) suggesting that she undergo weight-loss surgery; 2) directing the kitchen staff not to give her extra food because “she doesn’t need it;” and 3) refusing her request that the Club special order a uniform that would fit as an accommodation.  The trial court granted the Club’s motion for summary judgment, holding that Cornell failed to produce evidence that her obesity qualified as a disability. The Court of Appeal reversed as to the discrimination and harassment claims.  On the discrimination claim, the Court held that the Club failed to show that Cornell could not establish that her obesity had a physiological cause. Importantly, the Court found that a physiological cause could include a genetic cause and, to defeat summary judgment, it was sufficient for Cornell’s doctor to find a genetic cause based on nothing more than her body mass index.  The Court also determined that the Club’s failure to adequately investigate the recording allegations and the discriminatory comments of her supervisor were sufficient evidence to defeat summary judgment.  As to the harassment claim, the Court found a triable issue as to whether the alleged harassment was sufficiently severe and pervasive.  Although the supervisor’s inappropriate comments about Cornell’s weight, standing alone, were too isolated to preclude summary judgment, the Court also considered evidence that the supervisor reduced Cornell’s hours, passed her over for internal jobs, and paid her less.  Taken together with the weight-based comments, the Court concluded this evidence was sufficient to preclude summary judgment on the harassment claim. In light of Cornell, California employers should take complaints of obesity discrimination and requests for accommodation based on obesity seriously.  As with other bases of discrimination and harassment, California employers should consult with experienced employment counsel to ensure that effective policies are in place to prevent disability discrimination and harassment and to investigate obesity-based complaints when they arise.

Employers take note: a provision contained in the recently-passed Tax Cuts and Jobs Act of 2017 (the “Act”) now limits tax deductions for certain types of settlement agreements. Specifically, Section 13307 of the Act, styled “Denial Of Deduction For Settlements Subject To Nondisclosure Agreements Paid In Connection With Sexual Harassment Or Sexual Abuse,” (“Section 13307”) prohibits employers from taking income tax deductions for: Any settlement or payment related to sexual harassment or sexual abuse if the settlement or payment is subject to a nondisclosure agreement; or Attorney’s fees related to such settlements. Previously, when the parties in a dispute involving allegations of sexual harassment or misconduct settled those claims, they agreed to a nondisclosure provision in the settlement agreement. In other words, both parties would be prohibited from disclosing the terms and amount of the settlement (with corresponding penalties resulting from any violation of the provision). The nondisclosure provision did not affect whether any monies paid pursuant to the terms of the settlement agreement were tax-deductible. Now, however, if a settlement agreement subject to Section 13307 of the Act contains a nondisclosure provision, then the parties to the settlement agreement may not take a tax deduction for the amount of the settlement or any corresponding attorneys’ fees. Another potential problem that employers may face relates to settlements that resolve multiple claims. Indeed, instances arise where employees and employers settle matters that resolve sexual harassment claims and non-sexual harassment claims in one fell swoop. Section 13307 does not define the terms “related to sexual harassment or sexual abuse” so careful drafting of the settlement agreement and/or ancillary agreements is recommended to maximize opportunities to deduct payments that are not subject to Section 13307. Furthermore, a portion of attorney’s fees attributable to non-Section 13307 claims may also be deductible. Stated simply, the scope and breadth of Section 13307 remains murky, and it will take time before clear answers to the above-listed questions emerge. Thus, employers defending against allegations of misconduct covered by Section 13307 would do well to discuss the implications of settling such claims with competent counsel.

Earlier this year, we reported that the San Francisco Board of Supervisors passed legislation to assist working mothers by requiring employers to provide additional accommodations for lactation. On January 1, 2018, the Lactation in the Workplace Ordinance (the “Ordinance”) takes effect. The City of San Francisco’s Office of Labor Standards and Department of Public Health (collectively, the “City”) has published sample forms and guidance for employers to consider when preparing such policies. As a brief refresher, the Ordinance requires virtually all employers (there is no minimum employee threshold) to provide employees a lactation location that is (1) not a bathroom, (2) free of intrusion, (3) clean and safe, (4) available as needed and (5) that has a surface (e.g., a counter or table), electricity, and a chair. There must also be a sink and refrigeration nearby. The space provided may be the employee’s normal work area or a multipurpose room to the extent it meets these requirements. Because of ambiguity regarding the Ordinance’s key terms, the City also has published a “Best Practices and Legal Requirements Checklist” for employers to consider when developing lactation policies. To be clear, the information contained on the checklist goes beyond the legal requirements, and the City advocates that employers—to the extent possible—dedicate a permanent, private room or space for lactation, to include the following: Internal lock, clock, adjustable temperature control, footstool, Wi-Fi, telephone, mirror, lockers, partition, hospital grade breast pump, tape and pen for labeling containers, amongst other things; Reservation system to use the room; External signage; Regular janitorial servicing; and Access to educational literature and resources. The City also proposes several “best practices” for employers to consider when accommodating lactation breaks requested by employees. These include providing employees, upon request, with temporary reduced hours or modifications to job duties, job sharing, flex time, alternative work schedules, and/or telecommuting. If practicable and not otherwise prohibited, the City also encourages employers allowing caregivers to bring the child to the workplace for feedings. While not expressly required by the Ordinance, these “best practices” shed light on how City regulators may interpret the Ordinance’s provisions when determining whether an employer is in compliance with the Ordinance. Please contact your local Polsinelli employment lawyer if you have questions about this Ordinance or would like us to review your company’s policy and approach to compliance with this new law.

Medical leaves pose operational and legal challenges for employers. As we have previously addressed, those challenges multiply when the employee’s medical leave stems from a workplace injury and workers’ compensation laws are added to the employer’s compliance challenges. Indeed, such injuries can result in the employee seeking leave for an indefinite amount of time. To avoid the uncertainty and difficulties caused by employee absences of indefinite duration, some employers have implemented a “maximum leave” policy – a policy that limits the total amount of leave (from all laws and policies) that an employee can take in a given period of time. However, even a very generous maximum leave policy could violate the Americans with Disabilities Act (ADA), as some courts have held that extended leave can be considered a “reasonable accommodation” of an employee’s disabling condition. Similarly, the U.S. Equal Employment Opportunity Commission has taken the position that “maximum leave” policies are subject to exceptions in the interactive process and that an employer should reasonably accommodate an employee seeking an exception unless doing so will cause an undue hardship. Below are three steps that an employer can take to reduce the risk of an ADA violation when implementing a “maximum leave” policy. 1. Maintain Flexibility The EEOC has recently obtained multi-million dollar consent decrees and settlements from employers that sought to enforce maximum leave policies with respect to disabled employees.  An employer that implements a maximum leave policy may need to consider granting an employee leave beyond the “maximum” allowed leave as an accommodation under the ADA. Accordingly, employers may wish to consider including a statement in any maximum leave policy which provides that there are situations where leave time beyond the stated limit will be granted. 2. Communicate Carefully with Employees Some employers send form letters to employees who are approaching the end of the maximum leave period, which state that the employee must either return to work at the end of the maximum leave period or face termination. The EEOC’s guidance on maximum leave policies suggests that it may consider these communications to violate the ADA. Employers may wish to consider tempering those letters and adding a request that the employee advise the employer by a date certain if the employee believes they may need further leave as an accommodation. 3. Train Employees Employers may wish to train employees that leave may be granted as an accommodation under the ADA and that a maximum leave policy does not prohibit such an accommodation. In particular, employers would do well to train human resources officials, other employees who implement the policy, and all managers on the need to maintain flexibility regarding maximum leave policies to avoid running afoul of the ADA.

Neither Title VII nor the Missouri Human Rights Act (the “MHRA”) expressly prohibits discrimination on the basis of sexual orientation. In a prior post, we discussed a developing theory adopted by courts and administrative agencies that extends Title VII protections of sex discrimination to LGBTQIA individuals on the basis of nonconformance to gender stereotypes. The Missouri Court of Appeals recently held for the first time that the MHRA similarly supports a sex-stereotyping theory and that “[s]ex-based stereotyping can give rise to an inference of unlawful discrimination.” In Lampley v. Missouri Commission on Human Rights, an employee filed a Charge of Discrimination alleging that his employer discriminated against him on the basis of sex. The employee alleged that, as a gay male, his behavior and appearance contradicted the stereotypes of maleness held by his employer, and the employer treated him differently from employees who conformed to gender stereotypes. The Missouri Commission on Human Rights (“MCHR”) terminated its investigation into the employee’s complaints and did not issue a right to sue letter on the grounds that it lacked jurisdiction over the claims because they were based on sexual orientation. The employee petitioned the trial court for administrative review, which granted summary judgment in favor of the MCHR on the grounds that sexual orientation and gender stereotyping are not recognized under the MHRA. The Court of Appeals for the Western District of Missouri acknowledged that claims of discrimination based on sexual orientation are not covered by Missouri law. Reversing the trial court, the Court of Appeals held that the MHRA does, however, prohibit sex-based stereotyping that deprives persons of rights based on traits unique to one’s sex (real or perceived). The Court of Appeals found that the employee’s sexual orientation was merely incidental to the underlying claim of sex discrimination. Whether the employee is “gay neither precludes nor insures his MHRA protections.” The Court of Appeals further held that: "If an employer mistreats a male employee because the employer deems the employee insufficiently masculine, it is immaterial whether the male employee is gay or straight. . . . a sex stereotyping analysis does not create a new suspect class, but simply recognizes the manifold ways sex discrimination manifests itself. The MCHR seems to fear that gay and lesbian employees will assert sex stereotyping in lieu of a sexual orientation claim. That is, the MCHR fears sex stereotyping will be a mere pretext. But the issue before this court is simply whether material issues of fact prevent the entry of judgment as a matter of law. Whether the claim is mere pretext is a question for the trier of fact." The case was remanded to the trial court with instructions for the MCHR to issue a right to sue letter, which will allow the employee to pursue his claims in court. The MCHR may request rehearing or transfer to the Missouri Supreme Court for further review. This ruling potentially broadens the scope of actionable claims under the MHRA. Employers should review and consider revising their policies and procedures regarding non-discrimination, harassment, equal employment, and benefits to conform to recent decisions regarding sex-stereotyping and other legal developments.

On September 7, 2017, the U.S. Court of Appeals for the Eleventh Circuit determined that different treatment based on an employee’s breastfeeding is prohibited by the Pregnancy Discrimination Act (“PDA”). In Hicks v. City of Tuscaloosa,No. 16-13003, the plaintiff worked for a police department, and only eight days after she returned from job-protected pregnancy leave, the plaintiff was reassigned from the narcotics task force to the patrol division. Along with a reduction in pay and different job duties, the plaintiff’s new position as a patrol officer required that she wear a ballistic vest all day, which was not required in her prior position in the narcotics task force. Before plaintiff began work in the patrol division, her doctor wrote a letter recommending that she be considered for alternative duties because the ballistic vest was restrictive and could cause breast infections that would lead to an inability to breastfeed. The police chief offered the plaintiff a safe beat with access to lactation rooms and priority in receiving breaks. However, the police chief refused to consider the request for alternative duty and informed the plaintiff that she could either wear a specially fitted vest or not wear a vest at all. The plaintiff viewed specially fitted vests as ineffective because of the gaping holes they left, and believed that not wearing a vest was too dangerous. Accordingly, she resigned that day and subsequently filed suit. Among other issues, the Eleventh Circuit addressed whether the plaintiff was constructively discharged when presented with alternative options for ballistic vests. The court observed that Title VII of the Civil Rights Act, as amended by the PDA, prohibits discrimination “on the basis of pregnancy, childbirth, or related medical conditions.” The court was tasked with determining whether breastfeeding qualified as a “related medical condition[],” and found that it did. The court explained that the PDA includes a broad catchall phrase, and that it is “a common sense conclusion” that breastfeeding is a gender-specific condition covered by that phrase. Indeed, breastfeeding “clearly imposes upon women a burden that male employees need not – indeed, could not, suffer.” The court also emphasized the U.S. Supreme Court’s prior conclusion that the entire purpose behind the PDA is to guarantee women the basic right to participate fully and equally in the workforce, without being denied the right to full participation in family life. When holding that the PDA covered physiological conditions post-pregnancy, the court observed that the PDA would be rendered a nullity if women were protected during pregnancy, but could be thereafter terminated for breastfeeding attendant to that pregnancy. The Eleventh Circuit added the caveat, however, that its ruling did not require that employers provide special accommodations to breastfeeding workers. The plaintiff in Hicks had not sought a special accommodation, but rather “alternative duty,” which her employer had previously granted to employees with temporary injuries. This decision is a critical reminder to employers to act with caution when pregnant or breastfeeding employees request job-related accommodations. Failure to act in conformance with the PDA risks exposure to legal liability, so employers would do well to consult with counsel during the interactive process.

Recently, the Equal Employment Opportunity Commission (“EEOC”) has focused on filing lawsuits relating to an employer’s obligations under the Americans with Disabilities Act (“ADA”) when using pre-employment medical exams. During the month of September, the EEOC filed suit against Huntington Ingalls Industries in the U.S. District Court for the Eastern District of Virginia,* and against Consolidated Edison Company of New York, Inc. in the U.S. District Court for the Southern District of New York.** These cases concern different aspects of the ADA’s requirements: Huntington Ingalls focuses on providing an accommodation during the medical exam itself; Consolidated Edisonrelates to the use of a medical exam to deny employment. The EEOC’s growing interest in this area of law makes clear that employers would do well to revisit their obligations under the ADA. Employers often make use of pre-employment medical exams to determine an applicant’s suitability for employment. Employers should take caution, however, because their obligations under the ADA differ based on the stage of the employment process.*** First, an employer is prohibited from requiring an applicant to undergo a medical examination prior to an offer of employment, even if the examination is job-related. The employer may conduct a medical exam after the employer has extended the individual a contingent offer of employment – regardless of whether the exam or inquiry is related to the job in question – so long as the employer does so for all prospective employees in that particular job category.  Critically, an employer can only revoke an offer of employment based on the results of a medical examination if the reasons for the revocation are “job-related and consistent with business necessity.” Employers should exercise caution when seeking to revoke an offer of employment based on the results of a medical examination, as a misstep can create legal liability. When doing so, employers should be able to (1) provide evidence that all applicants in the job category in question are subject to examination; and (2) explain, with documentation, the specific ways in which revocation of the offer is job-related and consistent with business necessity (i.e. the individual is unable to perform the essential job functions or he or she poses a “direct threat” to himself, herself, or others). With the EEOC’s increased focus on such cases, employers would be wise to review their medical examination procedures to ensure they comply with the ADA.  Failure to do so could result in costly and protracted litigation. * U.S. Equal Opportunity Employment Commission v. Huntington Ingalls Industries, Civil Action No. 4:17-cv-00113 (E.D. Va. 2017). ** U.S. Equal Opportunity Employment Commission v. Consolidated Edison Co. of New York, Inc., Civil Action No. 17-cv-7390 (S.D.N.Y. 2017). *** See generally 29 CFR § 16430 et seq.

In 2011, the United States Supreme Court issued its landmark decision in Wal-Mart Stores, Inc., v. Betty Dukes, et al., decertifying a putative class of approximately 1.6 million current and former female Wal-Mart employees who claimed gender discrimination in wages and promotions in violation of Title VII. 564 U.S. 338 (2011). The Court reversed the Ninth Circuit’s affirmation of class certification and determined the plaintiffs failed to meet the class “commonality” standard set out in Federal Rule of Civil Procedure 23. Id. at 349-60. The Dukes decision set in motion a number of spinoff regional cases, one of which – barring another grant of certiorari to the high court – met its end somewhat anticlimactically, when the Eleventh Circuit issued its August 3, 2017 order in Love, et. al. v. Wal-Mart Stores, Inc. No. 15-15260. The Love plaintiffs included a sub-group of the Dukes plaintiffs who worked in the southeastern United States. These holdover Dukesplaintiffs were able to refile their claims because of the requirement that federal court discrimination plaintiffs first file with the Equal Employment Opportunity Commission. This rule effectively tolled the statute of limitations during the pendency of Dukes. But critically, under the Eleventh Circuit’s “no piggybacking rule”, tolling is limited to individual claims only, not class claims, which has also been adopted by the Fifth and Sixth Circuits. The Lovecourt previously left little room for argument when it noted in a 2013 order that “[t]he Eleventh Circuit categorically refuses to toll the limitations period for subsequent class actions by members of the original class once class certification is denied in the original suit.” Thus, on October 16, 2015 the individual named plaintiffs and Wal-Mart settled and jointly filed a “stipulation of voluntary dismissal.” On November 6, 2015, the Love appellants, made up of unnamed members of the would-be class, filed a motion to intervene solely to appeal the dismissal of class claims. This motion was denied 13 days later as moot, which, to make matters worse for the appellants, took them outside of their 30-day deadline to appeal the October 16 stipulated dismissal. The Eleventh Circuit thus found the appeal jurisdictionally barred, providing a rather sudden end to the winding multi-year litigation. In light of this tangled and technical history, employers and their counsel should be sure to understand the differences in treatment of class actions and individuals under the relevant rules, regulations, and statutes. Though it can be tempting to move immediately to the standard substantive arguments against numerosity, commonality, typicality, and adequacy of the proposed class, the Wal-Mart cases show that knowing your way around the procedural thicket is another useful skill in avoiding or minimizing the cost of class litigation.

In the past two weeks, the San Francisco Board of Supervisors passed bills to assist working mothers who are nursing their infants and to address gender pay disparities. Lactation Locations The first bill, passed on June 20, 2017, requires San Francisco employers to create lactation policies, including a written policy that provides for employees to request a lactation accommodation, and provide a space for mothers to express breast milk. Employers also will be required to provide working mothers a break for lactation. The break may run concurrently with the employee’s normal paid breaks.  However, any additional needed break time may be paid or unpaid at the employer’s discretion. Under this bill, which imposes additional space requirements beyond those called for in the California Labor Code, San Francisco employers must provide employees a location for lactation that is not a bathroom, is free of potential intrusion, is clean and safe, and has a surface (e.g., a counter or table), electricity, and a chair. There must also be a sink and refrigeration nearby. The room or location may be the employee’s normal work area provided it meets these requirements. The location may also be used for other purposes, provided the primary function of the room is designated as a lactation location for the duration of an employee’s need to express breast milk. If an employer uses a multi-purpose location, it must provide notice to employees that the primary use of the location is for lactation, which will take priority over other uses. In multi-tenant buildings where an employer cannot provide a lactation location in its own workspace, an employer can meet the requirements of this ordinance by providing a location shared by multiple employers, so long as that location will accommodate the number of employees who desire to use it. To be exempt from the proposed law, an employer must show that a lactation accommodation presents an “undue hardship,” which would require demonstrating that the requirement would cause “significant expense or operational difficulty when considered in relation to the size, financial resources, nature, or structure of the Employer’s business.” This Ordinance becomes effective on January 1, 2018. Equal Pay The second bill, first passed on June 27, 2017, and finally passed on July 11, 2017, prohibits San Francisco employers from considering the current or past salary of an applicant when determining whether to hire an applicant or the salary to offer the applicant. The law prohibits employers from asking applicants about current or prior salary, and further prohibits employers from disclosing a current or former employee’s salary unless that person’s salary history is publicly available or if the employee consents. An employer may consider an applicant’s current or past salary only if the applicant discloses his or her salary information voluntarily and without prompting. As a reminder, even if this information is voluntarily disclosed, salary history alone cannot be used to justify paying any employee of a different race, sex, or ethnicity less for doing substantially similar work under similar working conditions under California Labor Code Section 1197.5. Employers may still discuss with applicants salary expectations and any unvested equity or other deferred compensation/bonuses forfeited by the applicant resigning from his or her current employer. This Ordinance becomes effective on July 1, 2018. Upon the effective date, employers are required to post a notice in the workplace advising employees of their rights under the ordinance. San Francisco Mayor Ed Lee is expected to sign both bills. For San Francisco employers, both ordinances will require a careful review of existing policies and procedures for: (1) employees to make a request for a lactation accommodation and (2) hiring managers and recruiters to review job applications, interview candidates, and make salary determinations.

Recently, top level executives in the media and tech industries have departed from their positions in the midst of investigations into allegations of workplace conduct that involved comments that were construed to create a hostile environment.  Two cases decided this month, one by a New York court and one by an Illinois court illustrate the potential liability to an employer if a supervisor utters comments that are seemingly race or gender neutral when correcting the behavior of an employee who is not performing his or her duties in a manner consistent with company culture or policies. In Wooding v. Winthrop University Hospital,  the employer hospital asked the trial court to dismiss a lawsuit filed by a former physician’s assistant, who was the only African-American employee in his department.  The hospital asserted that it discharged the plaintiff for disclosing patient information in violation of HIPAA.  However, the employee alleged that several of his supervisors treated him differently because of his race, including three who disciplined him for engaging in conduct that was "disrespectful" and "overbearing," terms he contended were "code words" for racial discrimination.  The trial court refused to dismiss the lawsuit as to these three supervisors, noting that while the words used by the supervisors "are typically used in an innocent fashion," some words that are facially non-discriminatory "can invoke racist concepts that are already planted in the public conscious." Consequently, a jury could determine that the words, when used toward the plaintiff, were motivated by racial animus. A week after the court's decision in Wooding, an Illinois federal court judge reached a similar result in Young v. Control Solutions, LLC.  The employee in Young alleged she was discharged because of her race, while her employer asserted that the discharge was a result of Young's failure to correct performance issues that were documented through a performance improvement process.  Specifically, the employee claimed she had presented evidence of discriminatory intent because the performance improvement plan repeatedly described her as "angry," which she contended was "an attempt to invoke the stereotype of the 'angry black woman.'"   There was no evidence that anyone at the employer ever referred to Young as an "angry black woman," or that the anger was attributed to her race.  However, the trial court allowed the case to proceed to a jury trial, finding that certain words have a long history "as part of a stereotypical depiction of black women," and could be interpreted by a jury as racially motivated. These decisions serve as a reminder to employers that care should be taken to train all employees regarding proper workplace conduct, how best to document employee behavior when providing discipline,   as well as on issues of implicit bias.  As the EEOC noted in a report issued last year on harassment in the workplace,  simply training employees that an anti-harassment policy exists may not be sufficient to avoid liability.  Words, even facially neutral ones, do matter -- and employers who fail to train their employees as to best practices in a rapidly changing legal environment may find themselves in litigation.

The U.S. Equal Employment Opportunity Commission’s (“EEOC”) broad-ranging jurisdiction covers, in short, claims of age, disability, equal pay, gender/pregnancy, genetic information, national/ethnic origin, race/color, and religious/creed discrimination. The EEOC typically sends notice of a charge of discrimination and requests a response, but can exercise subpoena power to enforce requests for information. When an employer receives a charge of employment discrimination, what should you do? The five steps outlined below are designed to help you respond to the charge of discrimination effectively. 1. Promptly contact legal counsel with whom you work on employment matters.Legal counsel may have specific ideas for next steps, overall strategy, and priorities, based on your company’s culture or the particular facts of a charge. 2. Promptly notify any applicable insurance carrier.Coverage may be available through employment practices liability insurance (“EPLI”). General commercial policies may also be of some assistance. Check the charge to see if any individuals are named as respondents so the insurer can be informed. You may need to discuss this with counsel. Individuals can be held liable, depending on the jurisdiction or statute involved. 3. Notify applicable personnel to preserve documents as soon as possible.Be sure they understand the need to carefully save any and all pertinent documents (emails, text messages, hard copy items – everything - even calendar entries and sticky notes). Destroying or deleting documents can land your organization in severe legal difficulties. 4. Notify individuals in the chain of command that any proposed discipline or other negative job action toward the person who filed the charge should be discussed with you prior to any action being taken against them.Adverse actions based upon an employee’s decision to file a charge of discrimination are prohibited by law. 5. Prepare an effective and accurate response to the charge.

On May 12, 2017, a divided Tenth Circuit addressed the level of detail that must be contained in an EEOC charge when a plaintiff alleges quid pro quo harassment. In Jones v. Needham, No. 16-6156 (10th Cir. May 2, 2017), the plaintiff alleged he was fired because he would not have sex with his direct supervisor, who was also a shareholder of the business. The plaintiff completed an EEOC intake questionnaire, checking the boxes for “Sex” and “Retaliation” as the basis for his discrimination claims and also writing out “sex har[as]sment.” In response to questions seeking further details on his claims, the plaintiff wrote: “[s]ee attached.” The referenced document included a six-paragraph statement, which concluded with the following: “I was terminated because I refused to agree to [the supervisor]’s sexual advances and I rejected all such efforts by her.” However, the document referred to as the attachment was not submitted to the EEOC, and the EEOC never alerted plaintiff that the document was not attached. Instead, the EEOC prepared a generic charge that, while referencing that the plaintiff was sexually harassed and terminated at some point after complaining about harassment, the charge did not specifically mention Qi. The plaintiff subsequently filed a lawsuit alleging he was subjected to both hostile work environment and quid pro quo forms of sexual harassment. The district court subsequently dismissed the plaintiff’s quid pro quo harassment claim, finding that he failed to exhaust his administrative remedies. The Tenth Circuit observed that, before filing suit, a plaintiff must file an administrative charge with the EEOC that generally determines the scope of the claim the plaintiff may eventually file in federal court. Yet the court further explained that quid pro quo and hostile work environment claims are not wholly distinct and that both “lead to the same place: sexual harassment that violated Title VII’s proscription against sex discrimination in the workplace.” While the elements needed to prove these claims differ, the facts of —and investigations into—the two scenarios could overlap. Turning to the contents of the plaintiff’s charge form, the court noted that the plaintiff stated he was subjected to sexual remarks, indicated the alleged harasser terminated his employment and alleged that no reason was given for the termination. The Tenth Circuit found these statements were sufficient to alert the employer to the sexual harassment allegations and to trigger an investigation into whether the sexual remarks and plaintiff’s firing were connected. Accordingly, the court reversed the district court’s dismissal of the plaintiff’s quid pro quo claim, remanding the matter to the district court for further proceedings. The Jones decision serves as a reminder that courts often express a willingness to construe EEOC charges liberally when assessing whether a plaintiff has met his administrative obligations under Title VII.

On May 8, 2017, the Missouri House gave final approval to a much anticipated, heavily debated, and still highly controversial bill that will significantly modify the law applicable to “unlawful employment practices” in the state. Governor Eric Greitens has until July 14, 2017, to sign or veto the bill. So long as he does not veto, the bill will become law on August 28, 2017. Among other things, if the bill becomes law, employers may expect: More stringent proof in discrimination cases:The amendments require employees who allege employment discrimination (or retaliation) under the Missouri Human Rights Act (MHRA) to prove unlawful discrimination or retaliation was “the motivating factor” in a complained-about adverse employment action. To qualify as “the motivating factor,” unlawful discrimination or retaliation must have “actually played a role” in and “had a determinative influence” on the adverse action. This change is a significant departure from the current requirement that plaintiffs need merely prove unlawful discrimination or retaliation “contributed” to an employer’s decision. No individual liability: Individual supervisors and other employees will no longer be personally at risk for liability in a discrimination or retaliation case under the new law. A "Business Judgment Rule” jury instruction:Jurors sometimes want to substitute their judgment for an employer’s. The new law’s requirement that courts give jurors a “business judgment rule” instruction counters this tendency, mandating that jurors not return a verdict in favor of an employee simply because the jurors disagree with an employer’s judgment in making an employment decision or believe the employer’s decision was harsh or unreasonable. Reduced damage awards:The MHRA currently allows juries to award a plaintiff uncapped emotional distress damages and up to “five times the net judgment” in punitive damages. While a jury might award a moderate amount in damages to a plaintiff-employee, Missouri courts interpreted “net judgment” to include the frequently higher amount courts awarded in attorneys’ fees. The new law continues to allow employees to recover back pay, plus interest on back pay, but limits the calculation for future pecuniary losses, emotional distress, and punitive damages to: $50,000 for employers with 6 to 100 employees; $100,000 for employers with 101 to 200 employees; $200,000 for employers with 201 to 500 employees; or $500,000 for employers with 501 or more employees. Codified whistleblower protections for employees:Codifying, in part, existing common law exceptions to the employment-at-will doctrine, the amendments create a “Whistleblower’s Protection Act,” which makes it unlawful for employers to fire certain employees who, for example, report their employer’s unlawful acts or serious misconduct or refuse to carry out illegal employer directives. The Act allows successful plaintiffs to recover only limited actual damages, plus an additional liquidated damages award equal to actual damages provided the plaintiff proves an employer’s conduct was outrageous. Finally, the bill specifically identifies the MHRA, Missouri Workers’ Compensation Law, and new Whistleblower’s Protection Act as the exclusive remedies for all claims of unlawful employment practices in Missouri, effectively stopping Missouri courts from creating new employment-related causes of action.

On May 4, 2017, Mayor de Blasio signed a bill passed by the New York City Council that prohibits private employers from asking applicants how much money they make or otherwise making salary history inquiries. The legislation, which will go into effect on October 31, 2017, amends the New York City Human Rights Law by adding a provision that makes it an “unlawful discriminatory practice” for an employer to make a salary inquiry of the applicant. Employers may not ask the applicant, the applicant’s current or former employer, or even someone the employee works with about the applicant’s current wages, benefits, or bonus compensation. However, if an applicant provides their salary history “voluntarily and without prompting,” then this information can be used lawfully by the employer. The legislation leaves the terms “without prompting” undefined and begs the question as to whether voluntary waivers would violate this law. The legislation does, however, explicitly permit the employer and applicant to discuss the salary offered, including any deferred compensation that the applicant would forfeit if they left their current employer. Following the lead of Massachusetts and Philadelphia, New York City will be the third jurisdiction to enact legislation banning private employers from making prior-salary inquiries. Other states, including Illinois, Maine, Maryland, New Jersey, Pennsylvania, and Rhode Island, are considering similar measures; however, none have passed to date. Massachusetts’ state law will take effect on July 1, 2018. The Philadelphia ordinance has temporarily stayed in litigation filed by the Chamber of Commerce of Greater Philadelphia. Private employers will need to stay alert and assess whether to modify their employment applications and interview practices as this area continues to develop.

Equal Pay litigation continues to cause angst for employers doing business in California. In addition to the federal Equal Pay Act, employers operating in California must comply with laws requiring equal pay for men and women for substantially similar work unless a statutory defense applies. The landscape of the equal pay protections is ever-changing, having been recently expanded in California to include not only sex but also race and ethnicity. Additionally, the new amendments to the California Fair Pay Act preclude employers from using prior salary as the sole justification for a pay differential. State and local jurisdictions are also considering and passing more legislation prohibiting prospective employers from even asking applicants about salary history as a way to minimize historical pay disparities. Despite legislative efforts to curb inquiries into salary history, employers may be feeling more confident after a recent win in Rizo v. Yovino, where the Ninth Circuit confirmed that prior salary can be a “factor other than sex” under the Equal Pay Act for pay differences, provided that the employer shows that prior salary “effectuate[s] some business policy” and the employer uses prior salary “reasonably in light of [its] stated purposes as well as other practices.” However, the employer has the burden of proof on this defense. They also must exercise caution on whether they can inquire about prospective or current employees’ prior salaries depending on the application of local and/or state laws that preclude such an examination. And under California’s amended Fair Pay Act, relying on prior salary history alone to justify a pay differential is prohibited. In Rizo v. Yovino, a female math consultant for a school district sued the superintendent, claiming a violation of the Equal Pay Act because she was paid less than the other math consultants in the School District, all of whom were male. The superintendent argued that the School District’s pay schedule was based on the previous salaries of the employees, and the difference in pay between Rizo and her male counterparts was based on a factor other than sex. The District Court denied the superintendent’s Motion for Summary Judgment and concluded that “when an employer bases a pay structure ‘exclusively on prior wages,’ any resulting pay differential between men and women is not based on any other factor other than sex.” On appeal, the Ninth Circuit found that the superintendent offered four business reasons for using a standard pay structure that was based primarily on salary history. Indeed, the superintendent contended the policy to use prior salary (1) was objective; (2) encouraged candidates to seek employment with the County because they would receive a 5% pay increase over current salary; (3) prevented favoritism and ensured consistency in application; and (4) was a judicious use of taxpayer dollars. Upon remand, the superintendent would have the burden of proving the business reasons articulated and that the use of prior salary was reasonable. Despite this recent ruling in Rizo v. Yovino, employers doing business in California should continue to be vigilant in their compensation practices to ensure that they are not paying employees differently based on sex, race, or ethnicity, or basing the new compensation solely on prior salary. Keeping up to date on the hot issue of whether and how employers can ask about and use prior salary information is critical to compliance.

After millions of Americans celebrated Easter and Passover this month, the National Labor Relations Board (NLRB or the “Board”) provided a “celebration” of sorts to labor unions. In four decisions—three from the Board and one at the Baltimore regional office—the NLRB lowered the bar for organizing employees of religious institutions. In Saint Xavier University, the Democratic members of the Board allowed a Service Employees International Union (SEIU) local to organize the University’s housekeepers, notwithstanding the University’s religious mission. Characterizing their jobs as “wholly secular,” the majority held: “The housekeepers do not have any teaching role or perform any specific religious duties or functions but are confined to the secular role of providing cleaning services to the university.” The NLRB concluded that it could properly assert jurisdiction over the matter because the housekeepers’ duties were not related to the University’s “possible religious mission.” Less than a week later, the NLRB rejected an appeal from Duquesne University, which asserted that the school’s Catholic affiliation deprived the Board of jurisdiction. Taking the rationale in Saint Xavier University a step further, the Democratic majority distinguished part-time professors who taught theology and those who pursued more secular disciplines, and held that the latter can be organized. The same reasoning was applied in a case involving Manhattan College, where the Board held that it had jurisdiction over adjunct faculty, except those in the religious studies department, notwithstanding the college’s affiliation with the Roman Catholic Church. The distinction between religious and secular activities was further highlighted when the Baltimore regional office directed an election over a group of employees working for the Council on American-Islamic Relations (CAIR). There, the Regional Director held, “The evidence establishes that the employer’s purpose is a secular one – to promote a greater understanding of the Islamic faith and Muslim people to people, organizations, and governments, regardless of creed.” Despite its religious message and distribution of publications featuring verses of the Quran and a “glossary of Muslim terms,” CAIR’s commitment to “protecting the civil rights of all Americans, regardless of faith” was held not to further a religious mission. The lone Republican member, Acting Chairman Philip Miscimarra dissented in the Saint Xavier University, Duquesne University of the Holy Spirit, and Manhattan College cases. In those cases, Acting Chairman Miscimarra argued that distinguishing between secular and religious activities raised First Amendment concerns between the separation of church and state. His dissents focused on the Supreme Court’s NLRB v. Catholic Bishop of Chicagodecision, which held that the Board could not assert jurisdiction over the non-religious teachers at religious schools because doing so would create “a significant risk that the First Amendment will be infringed.” Acting Chairman Miscimarra further opined that the individuals in the proposed bargaining units play a role in maintaining their respective school’s religious educational environment, and consequently, the NLRB lacked jurisdiction in each case. These decisions should give religious organizations pause. While it may take several more months for the Board’s composition to transition to a Republican majority, the NLRB currently remains in activist mode. Certain organizations should not take for granted the fact that because they are a religious organization; they are for all purposes outside the Board’s jurisdiction. As secular aspects of a religious entity now seem ripe for organizing, religious entities concerned about the Board’s rulings should prepare to undertake legal challenges in the courts to challenge Board decisions extending jurisdiction into their workforces.

This past year has seen an increase in gender discrimination and sexual harassment claims. More recently, these claims have not only been brought by women, but also by individuals using Title VII’s “sex” protected class to bring claims for harassment and discrimination based on sexual orientation, being transgender, and other LGBTQ classifications. With these claims becoming more prevalent, employers should review their current policies and train their employees on these policies. Below are four steps employers can take to avoid these types of claims. 1.    Be Specific Many well-intentioned employers assume that their employees know the actions that constitute “harassing” behaviors. In an effort to capture all harassing behaviors, many policies speak to harassment in general terms while giving few specific examples. Speaking of “harassment” in general terms may not properly educate employees regarding the behaviors the employer specifically considers discriminatory and/or harassing. Accordingly, employers should take a pragmatic approach and spell out exactly the conduct that is prohibited and/or may result in disciplinary action. While a policy does not have to be exhaustive, it should provide real life examples of discriminating and harassing conduct the company will not tolerate. Some examples include: Forwarding emails with derogatory/harassing jokes, memes, website links, images, etc. Negative jokes or comments based on sex, gender or other protected classes (including LGBTQ) at any time. Repeatedly asking a co-worker for dates, etc. Using derogatory slang terms relating to a person’s sex or sexual orientation. 2.    Training While it is important to have a policy in place that prohibits discrimination and retaliation, the policy is only one part of the equation. Another important aspect to enforcement is proper training. The majority of employers review their discrimination and harassment policies with employees during orientation. However, this training alone is not enough. Employers should review these policies with all their employees with some reasonable frequency. This is particularly true when there are changes, revisions, or new interpretations of protected categories (e.g., the increased protection for LGBTQ employees) or prohibited practices. Also, managers should be regularly trained and reminded about the conduct that constitutes discriminating and harassing conduct, how to appropriately address complaints of harassment and/or discrimination, how to properly document complaints, how to properly investigate complaints (e.g., how to interview witnesses, take notes, etc.), and how to make a proper determination at the end of an investigation and implement any corrective action. This also includes instructing managers on how to properly discipline and evaluate all employees honestly and consistently. 3.    Encourage Reporting An employer should be very clear that it takes all complaints of harassment and discrimination seriously and does not retaliate or tolerate retaliation against employees who make a complaint and/or participate in an investigation. This includes making it very clear to all employees that there is no such thing as a “formal” or “informal” complaint. If an employee makes a complaint to management – whether it is in writing, in passing, etc. – that complaint will be investigated thoroughly and addressed appropriately. Employees cannot avoid an investigation by making a request that the employer ignores the complaint or by stating they “don’t want to get anyone in trouble.” The employer must be clear that it has a strict stance against harassment and discrimination, fully investigates all complaints, and does not tolerate retaliation. 4.    Consistency Employers must be consistent when disciplining and evaluating their employees, applying their policies to employees, and when addressing and investigating all complaints of harassment and discrimination. Indeed, consistent application of policy helps to insulate employers from claims brought by employees alleging the employer treated employees who fall under a protected class in a discriminatory manner. Demonstrating that an employer is consistent in its treatment of employees also assists the employer when defending discrimination and harassment actions brought by employees through the EEOC, state administrative agencies, and litigation. Harassment and discriminatory claims can cost a company not only dollars in defending but time and business disruption. An employer that creates a culture that prohibits harassment and discrimination clearly communicates such policies and practices to its employees, and provides proper training to its management, will have a workforce that feels appreciated and protected and has a better chance of avoiding litigation.

The employment and labor law cases we previously reviewed have now been resolved by the eight Justices. Despite the possibility of deadlock, a majority ruling was issued by the Court in most of the cases. A brief update: The Court affirmed and remanded with a 6-2 vote Tyson Foods v. Bouaphakeo, finding the district court did not err when certifying and maintaining a class of employees who alleged the employer’s failure to pay them for the additional time required to don and doff protective gear violated the Fair Labor Standards Act; The Court vacated and remanded in a 7-1 vote Green v. Brennan, holding the filing period for a constructive discharge claim begins to run when the employee resigns; The Court affirmed in a 6-2 vote Gobeille v. Liberty Mutual Insurance Company, finding ERISA pre-empts Vermont state law that requires certain entities – including health insurers – to report payments to the state, a program designed “to provide comprehensive state-level information about the distribution of health care services provided in the state and the costs of providing them.”; The Court vacated and remanded Spokeo v. Robins in a 6-2 vote, finding the Ninth Circuit failed to consider both aspects of the injury-in-fact requirements of the Fair Credit Reporting Act; The Court vacated and remanded CRST Van Expedited v. EEOC in an 8-0 vote, a case involving the EEOC’s conciliation obligations, holding that a favorable ruling on the merits is not a required predicate to find the defendant is a prevailing party for purposes of an award of attorney’s fees; The Court was deadlocked 4-4 in In Friedrichs v. California Teachers Association, which involved whether public employees who do not join a union can be required to pay an “agency” or “fair share” fee to cover costs that the union incurs. The case was affirmed by an equally divided court per curiam, which means the decision of the court below is affirmed, but the case is not considered to be binding precedent; The Court also vacated and remanded Zubik v. Burwell, a case involving religious freedom and contraception, in a per curium opinion; and The much anticipated MHN Government Services, Inc. v. Zaborowski, which involved California’s arbitration-only severability rule, settled. Perhaps this was in light of the Court’s recent resolution of DIRECTV, Inc. v. Imburgia, which rejected the California Supreme Court’s refusal to enforce the arbitration agreement in the case. Notably, in early February of this year, the Court informed litigants in Epic Systems Corp. v. Lewis that the Court will defer hearing argument in that case until the October 2017 term. The Epic Systems case involves the question of whether an employer’s use of mandatory arbitration clauses in employment contracts violates the National Labor Relations Act. In spring 2016, the Seventh Circuit determined such class action waivers were unlawful and unenforceable, in contravention of rulings from the Second, Fifth, and Eighth Circuits.

Reversing prior Seventh Circuit precedent, an en banc opinion from the United States Court of Appeals for the Seventh Circuit held that Title VII of the Civil Rights Act of 1964 extends to discrimination based on sexual orientation.  In doing so, the court did not add a protected class to the litany set forth within the statute; rather, it held that “discrimination on the basis of sexual orientation is a form of sex discrimination.”  The opinion acknowledges that it is reversing prior Seventh Circuit precedent on this issue, and is at odds with opinions from almost every other circuit on the issue, including an Eleventh Circuit opinion from March of this year.  The Seventh Circuit’s opinion is based on two Supreme Court opinions interpreting the protections of gender discrimination under Title VII.    In Price Waterhouse, a 1989 case, the Supreme Court held that making decisions based on gender stereotypes is sex discrimination under Title VII.  A decade later, in Oncale, the Supreme Court held that same-sex harassment is actionable under Title VII as gender discrimination.  Resting its analysis on these opinions, the Seventh Circuit held that while a policy that discriminates on the basis of sexual orientation would not impact every woman, or every man, equally, it would nevertheless arise out of the assumptions based on the proper behavior for someone of a given sex.  Specifically, “[a]ny discomfort, disapproval, or job decision based on the fact that the complainant—woman or man—dresses differently, speaks differently, or dates or marries a same-sex partner, is a reaction purely and simply based on sex,” and is therefore prohibited by Title VII. The Seventh Circuit also found support for its opinion under the associational theory, which holds that “a person who is discriminated against because of the protected characteristic of one with whom she associates is actually being disadvantaged because of her own traits.” Here, the court focused on the Supreme Court’s opinion in Loving v. Virginia, in which the Supreme Court invalidated a miscegenation statute under the Equal Protection Clause.  The Seventh Circuit extended the logic of Loving to establish that if changing the sex of one of the partners in a same-sex relationship would lead to a different result, it follows that the challenged action is because of sex and thereby discriminatory under Title VII. The Seventh Circuit’s opinion directly conflicts with established precedent from other Courts of Appeals.  However, it is consistent with the position currently taken by the Equal Employment Opportunity Commission (“EEOC”).  As a result, it may soon find its way before the Supreme Court.  The Supreme Court’s Oncale opinion, which held that any discrimination because of sex violated Title VII, was unanimous, and authored by the late Justice Scalia.  Additionally, even if the opinion were to split along the traditional conservative-liberal divide on the Court, Justice Kennedy’s opinions in Windsor and Obergefell, two recent same-sex marriage cases from the Supreme Court, suggest that the Seventh Circuit’s reasoning might be persuasive to him if he once again finds himself as the swing-vote.  Until the Supreme Court decides, however, given the EEOC’s position on the matter and the many state and municipal laws prohibiting discrimination based on sexual orientation, employers would be wise to view Title VII’s prohibition of discrimination based on sex as encompassing sexual orientation. Hively v. Ivy Tech Comm’y College of Indiana, No. 15-1720, --- F.3d --- (7th Cir. Apr. 4, 2017)

On April 3, the U.S. Supreme Court held that a district court’s decision whether to enforce or quash an Equal Employment Opportunity Commission (EEOC) subpoena should be reviewed only for an abuse of discretion, not de novo, by the Circuit Courts. The decision,  in McLane Co, Inc. v. Equal Employment Opportunity Commission,  explains that a reviewing court cannot reverse a district court’s decision regarding whether to enforce an EEOC subpoena absent a definite and firm conviction that the district court committed a clear error of judgment. BACKGROUND INFORMATION   Title VII of the Civil Rights Act of 1964 permits the EEOC to issue subpoenas to obtain evidence from employers that is relevant to pending investigations. If an employer believes that the information sought is too broad or indefinite, is being issued for an illegitimate purpose, or is unduly burdensome, the employer may petition the EEOC to revoke the subpoena.  If the EEOC declines to revoke the subpoena and the employer refuses to comply, the EEOC may then request that the district court issue an order enforcing the subpoena. THE COURT’S DECISION The case arose when McLane Co., a supply-chain services company, refused to comply with EEOC subpoenas seeking “pedigree information” such as names, Social Security numbers, addresses and telephone numbers of employees as part of its investigation into age and sex discrimination. The district court declined to enforce the subpoenas, finding that the pedigree information was not relevant to the charges.  The Ninth Circuit reversed after conducting a de novo review of the lower court’s decision. When deciding that abuse of discretion was the proper standard of review, the U.S. Supreme Court looked at the history of appellate practice when reviewing subpoenas and considered whether the district or appellate court was better positioned to decide the issue. The Court found that Title VII confers on the EEOC the same authority to issue subpoenas that the National Labor Relations Act (NLRA) confers on the National Labor Relations Board (NLRB), and that “[d]uring the three decades between the enactment of the NLRA and the incorporation of the NLRA’s subpoena-enforcement provisions into Title VII, every Circuit to consider the question had held that a district court’s decision whether to enforce an NLRB subpoena should be reviewed for abuse of discretion.” Moreover, the Supreme Court found that district courts have judicial expertise determining relevancy and are better suited to resolve the “fact-intensive, close calls” that subpoena enforcement cases raise.

A recent decision by the United States District Court for the District of Delaware serves as an important reminder that employers may be held liable for acts of harassment by individuals with whom their employees come in contact, even when those individuals are not employees. In Poe-Smith v. Epic Health Services, Inc., a home health care worker filed suit against her employer alleging that the relative of one of the home health patients to whom she was assigned had created a hostile environment. Specifically, the plaintiff alleged the family member of the home health patient directed sexual innuendos and other inappropriate comments toward her and, on one occasion, physically assaulted her. When she complained to her supervisor about the conduct, the supervisor acknowledged that the family member had made inappropriate comments to her over the phone previously. The home health care agency responded to the complaint by speaking with Plaintiff about the situation and immediately removed her from the assignment. The agency also offered her another assignment located further from her home. When she refused that assignment, the agency continued to offer her other opportunities, one of which she ultimately accepted. The employer attempted to have the case dismissed on the ground that it immediately responded to the complaint and addressed the situation. The trial court refused to dismiss the case, finding instead that because the supervisor acknowledged that the same family member had made inappropriate comments over the phone during approximately the same time period, it was plausible that the health care company had constructive knowledge of a hostile environment that it had failed to promptly correct. The court’s decision underscores the importance of employers ensuring that they have policies and practices in place which protect employees from harassment by third parties. While the possibility of third-party harassment exists in many industries, employers in health care, retail, and hospitality and service industries are vulnerable to such claims because their employees come in direct contact with customers, vendors and other outsiders on a regular basis. Like cases involving direct employment relationships, employers may be liable for third-party harassment if an employee can establish that the company “knew or should have known” of the possibility that a customer or other third party was engaged inappropriate behavior. 29 C.F.R. §1604.11(e). To minimize the risk of liability for the actions of non-employees, employers should take the following steps: Review the company’s anti-harassment policy for specific references to third-party harassment and instructions for reporting it. Provide regular training to all employees, and especially to supervisory personnel, regarding the appropriate steps to take if they become aware that a non-employee is making inappropriate comments in the workplace or engaging in conduct that would otherwise violate the employer’s anti-harassment policies. Proactively consider how to respond if a vendor or customer is accused by an employee of inappropriate conduct without taking action that may be considered retaliatory against the employee (such as removing the employee from the account or workplace in order to avoid interaction with the alleged harasser).

On January 19, 2017, the U.S. Court of Appeals for the Eighth Circuit determined that a claim for compensatory damages under the Americans with Disabilities Act (“ADA”) survives the death of the aggrieved party. In Guenther ex rel. Guenther v. Griffin Construction Co., an employee learned that cancer had spread throughout his body and informed his employer that he would need three weeks’ leave to undergo radiation therapy. Rather than accommodate this request, the employer terminated him and immediately cancelled his insurance policies. The employee then filed a timely charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”). While the EEOC charge was still pending, the employee passed away. The special administrator of the employee’s estate subsequently received a right-to-sue letter from the EEOC and filed suit on the employee’s behalf. The district court dismissed the suit, adopting the state tort survival statute as the federal rule of decision and holding that the employee’s ADA claim abated at his death. The Eighth Circuit reversed. After determining that the issue of claim abatement under the ADA is governed by federal common law, the Eighth Circuit faced the question of whether it should adopt a uniform rule of survivability under the ADA or instead utilize state law. The Guenther court first looked to Congress’s purpose in passing the ADA, which was to provide a comprehensive national mandate with clear, strong, consistent, and enforceable standards for addressing disability-based discrimination. Against that backdrop, the court made two salient observations: First, the abatement of ADA claims would pose a special threat to the ADA’s enforcement. Indeed, unlike other civil rights protections, the very nature of the ADA is a matter that could lead to the death of a party before a case is complete, as a result of the same health issue that provided him with protections under the statute. Second, a uniform federal rule would ensure consistent and evenhanded application of the ADA’s provision, while the application of state law may present an absolute barrier to a plaintiff (or his estate), irrespective of his diligence in asserting his rights, depending on his residency. Consequently, the Guenther court held that federal law did not incorporate state law to determine whether claims for compensatory damages under the ADA survive upon the death of the aggrieved party. Instead, the court held that an individual’s estate could bring such claims in the place of the decedent.

Following the 2016 election of Missouri’s Republican governor, Eric Greitens, the majority Republican legislature wasted no time reviving amendments to the Missouri Human Rights Act (MHRA) that were vetoed by then Governor Nixon in 2011. One of three separate bills filed this year, each identical to the bill passed and vetoed in 2011 (SB43, HB550, and HB552), is expected to pass and be signed into law by Gov. Greitens this year. The legislation generally modifies the MHRA causes of action to mirror those under Title VII. More specifically, the legislation amends the MHRA and key Missouri Supreme Court rulings as follows: Changes the burden of proof from the current “contributing factor” to a higher burden that will require the plaintiff to establish that the claimed act of unlawful bias was a “motivating factor” in any challenged employment decision. Imposes the following caps on damages for a prevailing plaintiff: $50,000 for employers with 6-99 employees; $100,000 for employers with 100-200 employees; $200,000 for employers with 201-500 employees; $300,000 for employers with more than 500 employees. Excludes supervisors and others from individual liability by expressly removing them from the definition of “employer.” Requires Missouri courts to “rely heavily upon judicial interpretations” of Title VII, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. If requested, the court must give a business judgment instruction to the jury which states that, when considering the employer’s reason for the challenged employment decision, it is not the jury’s role to second-guess a business decision by the employer so long as it was not made for a discriminatory reason. Encourages Missouri courts to utilize the summary judgment mechanism to remove “factually insubstantial cases [] from crowded dockets.” When considering summary judgment motions, courts are to analyze the cases following the U.S. Supreme Court’s shifting burden framework used in Title VII cases. Precludes the award of punitive damages against the state or political subdivisions of the state. The pending legislation also contains a section to be known as the “Whistleblower’s Protection Act,” which has the stated purpose of “codify[ing] the existing common law exceptions to the at-will employment doctrine and limit[ing] their future expansion by the courts.” This section, along with the discrimination provisions of the MHRA, provide the sole remedies for any and all unlawful employment practices articulated in their respective chapters of the Missouri Revised Statutes and “abrogates any common law causes of action to the contrary.” Should the pending legislation become law in August 2017 as expected, it will be more difficult for plaintiffs to prove their claims of discrimination and retaliation, and severely limit their remedies.

Mediation of employment matters is on the rise. When faced with an employment case, your company may be ordered to mediation or the court rules may require it. It is also common to receive a letter from the Equal Employment Opportunity Commission (EEOC) or state agency advising the company that by choosing to mediate, the company will not be required to go to the time and expense of a charge investigation or submit a position statement. Below are four issues to know before considering whether mediation is right for your case. 1. Cost EEOC mediations are typically no-cost, so long as the parties use an EEOC mediator. The same is true with respect to state agencies. If, however, the parties choose to use a private mediator, then they will be required to pay for the mediator’s time, which the parties then must agree at the outset as to the split of payment by the parties. If the case is settled, mediation costs may be shifted to one party as part of any settlement. 2. Formalities   Mediation is sometimes confused with arbitration. Mediation is usually – even if it is not EEOC or state-sponsored mediation – non-binding. By contrast, an arbitration proceeding is usually a binding proceeding on the merits of the claims and similar to a “mini-trial.” At an arbitration, there will be a person, or a panel of persons, acting in a capacity similar to a judge, who hears and evaluates the evidence and then renders a decision the claims. In mediation, the mediator listens to the parties discuss their positions in an informal setting, but does not render a decision on the claims. Instead, the mediator serves in the role of a facilitator, pointing out the strengths and weaknesses of both sides’ cases and attempting to reach an agreed upon resolution of the claims. 3. Mediation Framework The ground rules for the mediation will typically be available, in writing, for review before the mediation. This document will include privacy considerations for the mediation. A mediator will often ask the parties to submit a mediation position statement in advance of the actual session to become familiar with the issues. An opening session, with all parties present, may be part of a mediation. At this time, the parties, generally through counsel, summarize the strengths of their cases. Thereafter, the mediator will move forward with the primary focus of the mediation, which is private sessions with each side, often called caucuses. During these private sessions, the mediator will generally work with each side to help them understand the strengths and weaknesses of their positions. Mediators use a variety of techniques in these sessions to help the parties understand the risks of continued litigation and to reach an agreed resolution. 4. Requirement of Settlement? There is no requirement that a case settle at mediation, but many times cases settle or reach a point where settlement negotiations can be more readily pursued later. Even if the case is not resolved, mediation can sometimes provide the parties with input that helps them look at the case differently, such that with some additional evidence, the case will be resolved shortly thereafter. Should your company be presented with an offer of mediation, contact your employment lawyer to discuss your options. In certain circumstances, a well-timed mediation could save you time and resources.

The Americans with Disabilities Act of 1990 (“ADA”) treats mental illness the same as physical disabilities for purposes of coverage. However, dealing with an employee’s mental health condition can be particularly challenging for employers because the traits that confer protected status are not always visible or otherwise noticeable. An employee’s diagnosis of depression or other mental illness can easily subject a well-meaning employer to potential liability. According to charge data from the Equal Employment Opportunity Commission (“EEOC”), the number of charges of discrimination filed with the EEOC based on mental health conditions are on the rise. During the 2016 fiscal year, the EEOC resolved almost 5,000 charges of discrimination based on mental health conditions, obtaining approximately $20 million for individuals with mental health conditions who were discriminated against based on a disability. The EEOC has responded by issuing a publication on the rights of job applicants and employees with mental health conditionsto raise awareness about the protections the ADA affords individuals with mental health conditions and using its enforcement power to protect individuals with mental health conditions. The EEOC continues to aggressively pursue such cases. For example, on November 30, 2016, the EEOC filed suit against Stevens Transport, Inc. (“Stevens Transport”), alleging that Stevens Transport discriminated against a U.S. Air Force veteran because of his bipolar disorder. Specifically, the EEOC alleges that the individual was a qualified candidate and Stevens Transport unlawfully refused to hire him in violation of the ADA. According to the EEOC’s complaint, the candidate applied to be a commercial truck driver with Stevens Transport. As part of the application process, candidates are required under Federal Motor Carrier Safety Administration (“FMCSA”) regulations to take a physical exam, submit a sample for drug testing, and fill out a medical history questionnaire. The EEOC alleges the candidate was told he could not be hired as a truck driver for Stevens Transport “per company policy” because of the medicine he takes to control his bipolar disorder, even though he presented a report from his medical provider indicating he was safe to drive. However the physician with whom the company contracted to conduct FMCSA-required medical examinations advised that he not be hired because of his medications. Given the rising number of charges of discrimination filed with the EEOC based on mental health conditions, the EEOC’s interest in protecting individuals with mental health conditions, and the challenges posed by mental illnesses, employers should consider the following steps to minimize liability: Remind Managers and Supervisors to involve human resources personnel when employees indicate they may need an accommodation for a mental health condition, and/or exhibit behavior affecting their work such as difficulty concentrating, interacting with others, communicating, eating or sleeping; Document objective concerns regarding an employee’s behavior; and Engage in one-on-one discussions with the employee to determine if the nature of the employee’s mental health condition impacts the employee’s ability to perform the essential functions of their job, with or without an accommodation.

In this series, we consider changes that President-elect Trump’s administration could effect through federal agency action (or inaction), including at the Equal Employment Opportunity Commission (EEOC), the Department of Labor (DOL), the Occupational Safety and Health Administration (OSHA), and the National Labor Relations Board (NLRB). Our first post focused on changes at the DOL. This second blog focuses on changes that might be made at the Occupational Safety and Health Administration (“OSHA”) and the Equal Employment Opportunity Commission (“EEOC”). Occupational Safety and Health Administration (OSHA) The Trump administration could appoint new OSHA leadership with officials who are less enforcement-minded. In addition, these new appointments could advocate for the adoption of less stringent regulations, and could direct their focus on compliance assistance as opposed to enforcement and litigation. The Obama administration’s Severe Violator Enforcement Program (SVEP), launched in 2010,  currently concentrates “OSHA's resources on inspecting employers who have demonstrated indifference to their OSH Act obligations by committing willful, repeated, or failure-to-abate violations.” Pursuant to the SVEP, enforcement actions for severe violator cases include, among other things, mandatory follow-up inspections, corporate-wide agreements (where appropriate), and enhanced settlement provisions. Given President-elect Trump’s repeated campaign promises to decrease regulation and create a “business-friendly” atmosphere, OSHA may not prioritize follow-up inspections, and could impose lower fines or less severe penalties upon employers that violate the Act. Equal Employment Opportunity Commission Similarly, the Trump administration could alter the EEOC’s current employment priorities regarding systemic discrimination, binding arbitration agreements, and LGBT rights. Systemic Discrimination Enforcement Currently, one of the EEOC’s major priorities is to investigate and file systemic discrimination cases as a means to enhance recoveries to larger groups. Systemic investigations increased by 250 percent from 2011 through 2015, and the EEOC has successfully prosecuted 94 percent of its systemic lawsuits over the past ten years. In addition, the EEOC tripled the amount of monetary relief recovered for victims of systemic discrimination from 2011 through 2015, compared to the relief recovered from 2005 through 2010. However, President-elect Trump’s nomination of Andrew Puzder to the position of Secretary of Labor suggests that he will also appoint individuals to the EEOC who are less concerned with investigation and enforcement, and more focused on compliance assistance. Binding Arbitration Agreements The EEOC currently takes the position that forcing an employee to agree to arbitrate any discrimination claims against their employer is unlawful. The commission’s position stems from a policy statement issued in 1997, which provides that “agreements that mandate binding arbitration of discrimination claims as a condition of employment are contrary to the fundamental principles evinced in [the employment discrimination] laws.” In a bid to appear more “employer friendly,” the Trump administration may de-emphasize the EEOC’s focus on binding arbitration agreements, which would allow employers more freedom to determine the best way to resolve disputes with their employees. LGBT Rights The EEOC’s Strategic Enforcement Plan makes clear that applying the protections of Title VII to lesbian, gay, bisexual and transgender individuals is a “top Commission enforcement priority.” Over the last eight years, the EEOC’s attorneys have repeatedly litigated cases in support of this position, and have had success at the ALJ level. For example, in Macy v. Holder, the EEOC ruled that transgender bias is a form of gender discrimination prohibited by Title VII. In addition, in Baldwin v. Foxx, the EEOC “issued an administrative opinion that held for the first time that Title VII extends to claims of employment discrimination based on sexual orientation.” Moreover, the EEOC filed its first-ever federal court Title VII suits over transgender rights in 2015, asserting that Title VII’s prohibition on sex discrimination include discrimination based on gender stereotyping. While President-elect Trump has not made his enforcement priorities clear, it is possible that he could direct the EEOC to temper its focus on LGBTQ protections in the workplace, particularly because at least one Circuit court is currently considering whether Title VII’s protections apply to LGBTQ individuals.

While it remains to be seen what effect a Trump presidency will have on federal employment laws, the EEOC has made clear that it will continue to emphasize protections afforded to individual employees based on their national origin. The Agency’s updated Strategic Enforcement Plan, issued in October 2016, noted that immigrant rights will be a priority for the agency over the course of the next five years, with a focus on recruitment and hiring practices that affect members of ethnic groups (among others). The Enforcement Guidance on National Origin Discrimination, issued on November 21, 2016, is the Agency’s first interpretation of the law surrounding national origin discrimination. The Guidance on National Origin Discrimination contains a broad definition of “national origin discrimination,” which includes discrimination or harassment because an individual (or his or her ancestor) is from a certain place or shares the physical, cultural or language characteristics of a national origin or ethnic group. Under this definition, national origin can include a particular country or a group of individuals who share a common language, culture or social characteristics. While the definition does not include citizenship or immigration status, the Guidance contains a reminder that the protections of Title VII apply to all individuals, regardless of their citizenship, immigration, or foreign national status. In addition, the Guidance notes that individuals may receive the protections of the law if they are discriminated against or harassed because they associate with someone of a particular national origin. Employers should consider the following aspects of their policies and practices which may be under increased scrutiny as a result of the Guidance: whether English-only or fluency policies exist for legitimate business reasons; are applicants for positions sought through diverse sources or only through word of mouth, increasing the possibility of a non-diverse applicant pool; how dress code policies are enforced and whether they disproportionately affect individuals from particular ethnic or national backgrounds; and are job duties distributed without regard to customer preferences and/or perceived to segregate employees by national origin In addition, employers should review the Agency’s Q&A on the guidance, as well as the Fact Sheet for Small Employers, both of which contain high level summaries of the key points of this document.

With some of the strongest equal pay laws in the country, California recently expanded its equal pay protections with the passage of two new bills which will take effect on January 1, 2017:  (1) The Wage Equality Act of 2016 (California SB 1063) and (2) AB 1676, Concerning the use of prior salary to justify wage disparities. (1)  Wage Equality Act of 2016—California SB 1063 California’s Fair Pay Act (CFPA) provides that employers must not pay employees of the opposite sex less wages for “substantially similar work, when viewed as a composite of skill, effort and responsibility and performed under similar working conditions.” Effective January 1, 2017, Senate Bill 1063, also known as the “Wage Equality Act of 2016,” will extend the equal pay requirements of the Fair Pay Act amendments to Labor Code §1197.5 to cover race and ethnicity, in addition to gender. With these recent amendments, employers must not compensate employees at a rate less than that paid to employees of a different race or ethnicity for “substantially similar work.” These new amendments supplement existing protections under the Fair Employment and Housing Act (FEHA) for potential claims of discrimination for race and ethnicity. However, similar to last year’s amendments to the CFPA, employers may utilize a successful defense if they can establish that any wage differential is based upon a seniority system, merit system, or system that measures earnings by quantity or quality of production, or bona fide factor other than sex, race or ethnicity, such as education, training or experience.  Employers relying on a bona fide factor other than sex, race or ethnicity must demonstrate that the factor is: (1) not derived from a differential in compensation based on the protected category; (2) job related to the position at issue and; (3) consistent with “business necessity.” The employer has the burden of proof, so employers should retain statistics and give thought to how they will prove and can justify pay differentials, both on an individual and systemic basis. (2)  AB 1676—California’s Twist on Salary Inquiries Not for lack of trying, California has not been able to match Massachusetts’s recent law prohibiting employers from inquiring as to an applicant’s salary history. In fact, AB 1017, a predecessor bill to AB 1676, attempted to prohibit such inquiries only to be vetoed by California Governor Brown last year on the grounds that the bill prohibited employers from obtaining relevant information with “little evidence” that it would result in more equitable compensation. Accordingly, as a compromise, the Legislature passed AB 1676 which amends Labor Code §1197.5 to prohibit employers from using prior salary as the sole justification for a current pay disparity. While in California, employers can technically still request salary history information from applicants, they should tread carefully and err on the side of open ended questions to the applicant about their salary expectations as opposed to history. Employers who utilize a nationwide application form will still need to review in light of the recent prohibition in Massachusetts. Next Steps With the enactment of the Fair Pay Act and the anticipated rise in equal pay litigation in California, many employers have been conducting reviews of their compensation structures and written policies to ensure compliance. Such reviews should be continued and these additional amendments to the Fair Pay Act should also be considered for compliance as these new laws go into effect on January 1, 2017. Companies that have already completed equal pay audits and/or reviews regarding gender should now review their policies and practices with a focus on race and ethnicity to ensure compliance and that any wage disparities are justified under these newest amendments to the CFPA. Employers should conduct these reviews with the assistance of counsel in order to protect the results under the attorney work product doctrine and attorney client privilege.

On October 17, 2016, the U.S. Equal Employment Opportunity Commission issued an update to its strategic enforcement plan (SEP), thereby unveiling the areas upon which it intends to focus over the next five years. Although the EEOC continues to enforce all of the federal employment anti-discrimination statutes, the EEOC will likely flag and pay particular attention to charges of discrimination that fall within the prioritized areas. The areas identified in the SEP are: Eliminating barriers in recruitment and hiring; Protecting vulnerable workers, including immigrant and migrant workers, and underserved communities from discrimination; Addressing selected emerging and developing issues; Ensuring equal pay protections for all workers; Preserving access to the legal system, and Preventing systemic harassment. The SEP places special emphasis on protecting “persons who are Muslim or Sikh, or persons of Arab, Middle Easter or South Asian descent” from “backlash discrimination” and on issues posed by “complex employment relationships and structures in the 21st century workplace, focusing specifically on temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy.” Typically, a worker who believes that his or her employer has violated one of the laws under the EEOC’s purview files  a charge of discrimination against his or her employer with the EEOC. The EEOC then decides whether to investigate the charge of discrimination based upon the allegations. The EEOC may, either without investigating or after an investigation, dismiss the charge without finding cause to believe that the employer violated the implicated statute, or the EEOC may find cause to believe the statute was violated. If cause is found, the EEOC may file a civil lawsuit against the employer. Even though a charging party may still bring suit against the employer on his or her own within 90 days of a dismissal by the EEOC, the prospect of an EEOC cause finding and the possibility of litigating against the federal government with all of the resources that it can bring to bear, as opposed to a private litigant, renders the possibility of a cause finding daunting. Charges that implicate one of the areas identified in the SEP, especially those that allege “backlash discrimination” or relate to the employment structures recited above will draw additional scrutiny from the EEOC, are more likely to be thoroughly investigated than charges that do not implicate the SEP’s areas of emphasis. Consequently, although it is wise for employers to avoid situations that give rise to any claims of unlawful discrimination, employers would be wise to be particularly vigilant when addressing workplace situations that might implicate the areas of interest identified in the SEP. Employers should also consider assessing their employment policies to ascertain whether any of those policies implicate the SEP’s areas of interest.

For obvious reasons, reductions in force (“RIFs”) are never a happy topic. A company’s decision to lay off a substantial number of workers is a somber one. That being said, RIFs are most often undertaken to secure the long-term health of a business. Appropriate restructuring can help turn a struggling business into a growing one, thereby creating more jobs and opportunity in the long run. Employers faced with a RIF should plan carefully, to reduce the risk of litigation brought by former employees affected by the RIF. Litigation may arise when employees affected by layoffs allege that the company’s RIF was actually a pretext for discrimination. Although there is no ‘magic bullet’ to ensure a litigation-free RIF, employers who consider the below points will be at a significant advantage. Create a Business Justification Memorandum. Any employer engaging in a RIF should, in advance, create a  ‘business justification memorandum.’ The purpose of this document is to establish—in writing—the business related and objective reasons for implementing the RIF. This document should provide contemporaneous (as opposed to after the fact) proof that the company considered alternatives and demonstrate the RIF was undertaken for purely business (as opposed to discriminatory) reasons. The document should, at minimum, contain answers to the following questions: Why is the RIF happening? What are the company’s future goals? How will a RIF help achieve these goals? What alternatives to a RIF were considered? Why were those alternatives unworkable? How will the RIF be implemented? Consider a Voluntary Reduction Program (“VRP”). Employers should first consider a VRP as an alternative to mandatory layoffs. In doing so, businesses should discuss the structure of such a plan with benefits counsel, as any such plan may be subject to ERISA. A VRP can be a helpful tool to limit litigation via employee releases containing waivers of claims. Businesses should also be cautious of the risks that come with a VRP, however. These include (i) less employer control over who stays and who leaves, (ii) the risk that, if too few employees participate, the business may have to engage in layoffs anyway, and (iii) litigation exposure from ill-considered choices when offering the VRP to employees. Get Workforce Statistics. Employers should involve counsel and experts early in any RIF process. This is crucial because—before any RIF is undertaken—an employer must know how its workforce looks now, and how it will look post-RIF,  to ensure employees who are members of a protected class are not disproportionately affected (and, if they are, why). Data points should include age brackets of employees, as well as the gender and racial makeup of the workforce.   Ideally, these reports should be prepared by and with counsel  to maintain privilege over the results of any analysis.  Develop Appropriate Selection Criteria. Deciding which employees will be let go is the most important—and most dangerous—part of any RIF. Errors here can and will result in expanded litigation and exposure to significant liability. Consequently, employers must use permissible selection criteria when deciding how the RIF will be implemented. Such criteria include: Seniority Skill sets Performance level Geographic location Positions that are no longer needed Notably, employers should be careful when basing any RIF-related decisions on purely subjective performance criteria. This is particularly crucial because the subjective judgment of individual supervisors—whose performance reviews of employees may be the determining factor in layoff decisions—may be called into question if evidence emerges that a particular supervisor is biased against employees of certain protected classes. Consequently, employer performance metrics that underlie any RIF should be clearly identified, uniformly applied, measurable, and written. Ideally, these metrics should be generated by multiple evaluators in order to bolster the credibility of the process and protect against the single “bad apple” manager, whose could embroil the company in litigation by former employees. Provide Advance Notice of Layoff. The federal Worker Adjustment and Retraining Notification Act (“WARN Act”) requires many employers with 100 or more employees to provide 60 days advance notice of plant closings and mass layoffs of employees. There are many qualifications and exceptions to WARN notice requirement. Employers should confer with legal counsel to understand any WARN notice obligations under a contemplated layoff in advance of the 60 day notice window. Employers that violate WARN may be liable to each affected employee for back pay and benefits for the period of the violation, up to 60 days. In addition, several states (including California, Illinois, New York, and Tennessee) have laws that require advance layoff notices in situations not covered by the federal WARN Act.

In an en banc decision issued October 5, 2016, the Eleventh Circuit Court of Appeals ruled that job applicants cannot bring disparate impact claims under the Age Discrimination in Employment Act (“ADEA”). (Villarreal v. R.J. Reynolds Tobacco Co., October 5, 2016) This decision departs from previous Eleventh Circuit decisions and decision of other courts nationwide, which have held without much analysis that job applicants can pursue disparate impact claims under the ADEA. Although this ruling favors employers, it only applies to employers within the States of Georgia, Florida, and Alabama, and it seems likely to be reviewed by the United States Supreme Court. In Villarreal, a divided en banc Eleventh Circuit strictly construed the text in Section 4(a)(2) of the ADEA when deciding that job applicants lack status as an “employee” to bring disparate impact claims. The text in Section 4(a)(2) of the ADEA states in relevant part that “[i]It shall be unlawful for an employer…to limit, segregate, or classify his employees in any way which would deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.” The Eleventh Circuit is the only Circuit to interpret the ADEA in this manner. No other Circuit currently prohibits prospective employees and/or job applicants from pursuing disparate impact claims under the ADEA. Indeed, the EEOC’s interpretative guidance allows prospective employees and job applicants to pursue disparate impact claims under the ADEA. The United States Supreme Court will no doubt have to clear up this newly created split between Circuits. Until this happens and at least for now, employers in the Eleventh Circuit cannot be sued for disparate impact by prospective employees and/or job applicants under the ADEA for any hiring practice, policy, or criteria that disparately impacts a class of prospective employees and/or job applicants over 40 years old. Stay tuned for future updates and developments in this rapidly changing area of the law.

In a prior post, we discussed the building momentum for “ban the box” regulations (i.e., prohibiting a criminal history check-box on an employment application) seeking to eliminate racial disparities in hiring. New research by Amanda Agan, a Princeton economist, and Sonja Starr, a legal scholar at the University of Michigan, suggests that, at least in some cases, “ban the box” rules may result in the use of race as a proxy for criminal history. This may increase racial disparity in hiring – even in the absence of criminal histories. For their research paper titled “Ban the Box, Criminal Records, and Statistical Discrimination: A Field Experiment,” Ms. Agan and Ms. Starr sent out 15,000 fictitious applications to employers in New Jersey and New York City, before and after ban the box laws took effect in those jurisdictions. Some applications were randomly assigned a criminal history and some were not; some were assigned stereotypical white names (like Scott and Cody), while others were given stereotypical black names (like Tyree or Daquan). The racial gap in callbacks before the ban the box laws was 7% at companies that asked applicants about criminal history. After the laws were enacted, it went up to 45%, suggesting that black applicants were presumed to have a criminal past if the prospective employer was not permitted to inquire. Regardless of these employers’ motives, this data is potential evidence that selection decisions have a disparate racial impact. Employers who maintain a strong internal Equal Employment Opportunity policy and train their managers, supervisors, and employees on Equal Employment Opportunity laws should be less vulnerable to attempts to use race as a screening criterion to compensate for the lack of criminal history information at the initial stages of the hiring process. Nevertheless, this research presents an occasion for all companies affected by ban the box laws to revisit their hiring practices. Employers should consider these best practices: Develop and maintain standardized recruiting and hiring processes focused on job-related qualification standards; Ensure that job selection criteria do not disproportionately exclude certain racial groups, unless the criteria are valid predictors of successful job performance and meet the employer’s business needs; and Monitor hiring data for EEO compliance to determine whether current employment practices disadvantage people of color or treat them differently.

On August 1, 2016, Massachusetts became the latest State to pass a so-called “pay equity” law. Massachusetts’ new law, which is modeled after pay equity statutes already implemented in other states, also amends the Massachusetts Equal Pay Act (MEPA). Even though this new legislation only applies to employers with employees working in Massachusetts, all employers should take notice, as “pay equity” legislation is being enacted in an increasing minority of states. Below are three key takeaways for employers with respect to Massachusetts’ new law, which goes into effect in July 2018. 1.    Equal Pay For “Comparable Work” The currently-drafted version of MEPA prohibits employers from paying employees of a given gender less than employees of another gender for “comparable work,” which  term was not previously defined. Massachusetts’ new pay equity law fills in this gap, defining “comparable work” to include “work that is substantially similar” with respect to “skill, effort and responsibility” that is performed under similar working conditions. Whether two employees perform “comparable work” under the new statute will be based upon the facts and circumstances of a given case. 2.    No More “Pay Secrecy” Rules The new law also prohibits employers from enacting or enforcing “pay secrecy” rules, which typically prohibit employees from discussing their compensation with each other. However, companies will not be forced to reveal salary information to an employee who asks about another employee’s salary. Furthermore, an employee is not required to divulge her or his salary to another employee if asked. 3.    No More Questions About “Past Salaries” Once this legislation is effective, employers in Massachusetts will be prohibited from asking job candidates about their salary history. Massachusetts is the first state in the country to pass such a law, which is purportedly designed to “end the wage gap.” Note that employers can still ask a job candidate how much money they are hoping or expecting to earn if they receive an offer, but an employer cannot ask a prospective employee about their previous salaries. This provision creates a new limitation for Massachusetts employers, and employers should train interviewers and hiring managers to avoid impermissible inquiries about past salaries. Employers with employees in Massachusetts should review their hiring, pay, and confidentiality policies and should make any necessary changes in order to comply with the new law prior to its implementation in July 2018. Other employers should also take notice, as these provisions are popping up in state legislative sessions across the country.

The U.S. Equal Employment Opportunity Commission (EEOC) and several other federal agencies recently participated in a series of roundtable meetings through the Combating Religious Discrimination Today initiative. In July, the initiative released a report containing several recommendations which may impact employers. The roundtable participants’ recommendations in the report include: Improving education and awareness for employees. The agencies suggest outreach to employees about the process of filing charges with the EEOC and other government agencies; ensuring that posters in the workplace notifying employees about their rights are prominently displayed, and the use of multi-media platforms. Improving education and awareness for employers. Ideas included outreach by the EEOC to employers with additional materials to ensure that employers fully understand their obligation to comply with existing non-discrimination and civil rights laws. Improving processing times for EEOC charges and increasing transparency. Following the report, the EEOC released a new resource document to assist workers in better understanding their rights and responsibilities under laws prohibiting religious discrimination in the workplace and announced its plans to improve data collection and outreach on religious discrimination.  The EEOC announced that it will implement changes to its collection of demographic data from individuals who file charges of religious discrimination to collect more precise identification data about the religion of such individuals. In an online press release on July 22, 2016, the EEOC also referenced its historical guidelines to educate employers, employees, and the public about religious discrimination, including Questions and Answers: Religious Discrimination in the Workplace and Best Practices for Eradicating Religious Discrimination in the Workplace. It also reiterated its guidance for employees and employers focusing on discrimination against people who are or are perceived to be Muslim or Middle Eastern and reminded readers of its technical assistance publications regarding the proper handling of religious garb and grooming in the workplace. With the EEOC’s renewed interest and emphasis on religious discrimination in the workplace, employers would be well-served to review their training materials and policies to ensure that they conform with the applicable law. Employers should also ensure that posters outlining employees’ rights are properly displayed.

In January 2016, the U.S. Equal Employment Opportunity Commission (EEOC) proposed revising the Employer Information Report EEO-1 (otherwise known as the EEO-1 Report) to require all employers with 100 or more employees, including federal contractors, to also provide a summary of data on wages paid to their employees, categorized by gender, race and ethnicity beginning with the September 2017 report. The January 2016 proposal involved reporting this information across 10 job categories and by 12 pay bands. Based upon comments submitted on the EEOC’s proposed changes, on July 13, 2016, the EEOC amended its proposed revisions to the EEO-1 Report. As revised, the EEOC has proposed a calendar year reporting schedule and moved the 2017 EEO-1 reporting due date from September 30, 2107 to March 31, 2018. This change will allow employers to use annual W-2 wage data, already compiled for tax purposes, which would reduce costs for employers to compile the reportable pay data, and would provide a full 18 months for the transition to the new reporting requirements. Employers would provide this data through an online form. The revised proposal will be subject to a 30-day comment period that ends on August 15, 2016.  As the EEOC may not issue a final proposal until this winter and the new deadline a few months to follow, it may be advisable for covered employers to review and become familiar with the sample EEO-1 form to anticipate the pay data that may need to be gathered.

Although no federal statute explicitly prohibits employment discrimination based on gender identity, the Equal Employment Opportunity Commission has actively sought out opportunities to ensure coverage for transgender individuals under Title VII’s sex discrimination provisions under its Strategic Plan for Fiscal Years 2012-2016. After the EEOC issued its groundbreaking administrative ruling in Macy v. Bureau of Alcohol, Tobacco, Firearms and Explosives, EEOC Appeal No. 012012081 (April 23, 2012), where it held that transgendered employees may state a claim for sex discrimination under Title VII, some courts have trended to support Title VII coverage for transgendered employees. To address potential challenges and lawsuits that may arise, employers should consider updating codes of conduct as well as non-discrimination and harassment policies. While policies may differ based on an employer’s business, there are some key features to consider: Include “gender identity” or “gender expression” in non-discrimination and anti-harassment policies. Gender identity refers to the gender a person identifies with internally whereas gender expression refers to how an employee expresses their gender—i.e.how an employee dresses. The way an employee expresses their gender may not line up with how they identify their gender.  Establish gender transition guidelines and plans. A document should be established and available to all members of human resources and/or managers to eliminate mismanaging an employee who is transitioning. The guidelines may identify a specific contact for employees, the general procedure for updating personnel records, as well as restroom and/or locker room use.  Announcements. After management is informed, and with the employee’s permission, management should disseminate the employee’s new name to coworkers and everyone should begin using the correct name and pronoun of the employee. Misuse of a name or pronouns may create an unwelcome environment which could lead to a lawsuit.  Training and compliance. Employers should review harassment and diversity training programs and modules to ensure coverage of LGBTQ issues. All employees should be trained regarding appropriate workplace behavior and consequences for failing to comply with an organization’s rules. In addition to the potential liability under federal law, some state laws provide a right of action for transgendered employees who are discriminated against at work; therefore, employers should review the laws of the jurisdictions in which they operate to ensure compliance.

A few ambitious lawyers in Arizona have been hitting commercial property owners and tenants with lawsuits for not complying with the Americans with Disabilities Act (ADA), specifically alleging that the properties have certain barriers that restrict access for disabled individuals. Something as seemingly inconspicuous as the height of a parking lot handicap accessibility sign could constitute a violation and form the basis of a lawsuit. In the past few months alone, more than 500 Arizona businesses have been sued under the ADA for an assortment of accessibility violations, most commonly for lack of compliance with the ADA’s standards for parking lots and bathrooms. One particular firm has been filing lawsuits against Arizona companies for parking lot violations. In most instances, the lawsuits focus on whether the business has sufficient handicapped designated parking spaces, and whether the location, dimension, and signage for those spaces are up to the ADA’s accessibility standards. In many of these lawsuits, the only violation alleged is that one or more of the parking lot signs is posted a few inches lower than what is set forth in the statute. Two particular individuals are most often bringing lawsuits against Arizona restaurants and bars for bathroom accessibility and other violations. In most instances, the lawsuits focus on the height and placement of urinals, mirrors, soap and toilet paper dispensers, and grab bars. The plaintiffs also commonly object to the height of service counters and lack of seating for those with disabilities. Arizona businesses with facilities not meeting ADA accessibility requirements, risk an ADA claim by affected patrons. While there is a “safe harbor” provision in the ADA for businesses complying with earlier ADA standards, it seldom applies. Businesses in doubt about ADA accessibility compliance should consider hiring an ADA compliance specialist or attorney to inspect the premises and promptly make any necessary changes.

On August 10, 2016, a new pregnancy provision of the Colorado Anti-Discrimination Act (“CADA”) will take effect. While the CADA had previously been interpreted as prohibiting pregnancy discrimination and requiring accommodations for pregnancy, the new provision strengthens and clarifies those protections. Indeed, the amendment will require more of employers and will make it easier for plaintiffs to prevail than federal anti-discrimination law. This greater pregnancy protection, combined with the fact that the CADA was amended in 2013 to allow successful plaintiffs to collect compensatory and punitive damages (remedies previously unavailable under the CADA), make it more likely that employers will face lawsuits under the CADA. Accordingly, employers need to be especially careful to comply with the new amendment. Accommodation The bill requires an employer to provide reasonable accommodations to an applicant or employee for health conditions related to pregnancy or the physical recovery from childbirth under the following conditions: (1) an accommodation is necessary to perform the essential functions of the job, (2) the employee has requested an accommodation, and (3) the accommodation would not impose an undue hardship on the employer. As in the disability context, once an employee requests an accommodation, the employee and employer are required to engage in an interactive process. Importantly, an employer may also require a note from a licensed health care provider before providing an accommodation. While accommodations are to be tailored to the employee, the bill does give examples of reasonable accommodations, including, more frequent or longer break periods, more frequent restroom and refreshment breaks, limitations on lifting, light duty, and modified work schedule. An employer is not required to create a new position or hire additional employees to provide a requested pregnancy accommodation. However, if an employer provides or is required to provide a particular accommodation to another group of employees, the bill creates a rebuttable presumption that the same accommodations for a pregnant employee would not impose an undue hardship on the employer. Employers should also note that to preserve a pregnant employee’s ability to work, the bill prohibits an employer from requiring an employee to accept an accommodation that has not been requested or is not necessary. Similarly, the bill prohibits an employer from requiring an employee to take leave if the employer can provide another reasonable accommodation. Adverse Action The bill also prohibits taking adverse action against an employee who requests or uses a pregnancy accommodation. Significantly, the bill prohibits more employment practices than other sections of the CADA. Other sections of the CADA specifically make it improper to “refuse to hire, to discharge, to promote or demote, to harass during the course of employment, or to discriminate in matters of compensation, terms, conditions, or privileges of employment . . . ” For pregnancy, adverse action is defined as “an action where a reasonable employee would have found the action materially adverse, such that it might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” Accordingly, the bill likely covers a broader range of conduct than the other sections of the CADA. Notice To help educate employees about their rights under the new law, the bill requires employers to give new employees notice of their rights under this section at the start of employment. Further, employers are required to give current employees notice by December 8, 2016. Moreover, employers are required to post a notice in the workplace (along with the other employment law posters). Although the bill does not provide a remedy for an employer’s failure to provide notice to existing or new employees, employers should comply with those provisions. Remedies Before filing a lawsuit, an employee who believes she has suffered an adverse action or improperly denied an accommodation under the new bill must file a charge with the Colorado Civil Rights Commission within six months of the conduct. Once the employee has exhausted the administrative remedies, she may sue for back pay (up to two years reduced by what the employee could have earned with reasonable diligence), front pay, compensatory damages, and punitive damages. Action Plan In anticipation of the new bill taking effect on August 10, 2016, employers should: Review all job descriptions to ensure that they clearly identify the essential functions of each job. Review handbooks and policies to ensure that they clearly define the procedures for an employee to request a pregnancy-related accommodation. Draft the required notice of rights for distribution to current employees on or before December 8, 2016. Draft the required notice of rights for distribution to new employees. Update on-boarding policies and procedures to include providing the required notice of rights. Review the accommodations provided to other classes of employees to understand the accommodations that may be presumed reasonable for pregnancy-related accommodations. Train the employee or employees who will respond to pregnancy-related accommodation requests on the requirements of the bill. Train managers on the requirements of the new bill, including the prohibitions on taking adverse actions against employees who request or use accommodations and the prohibitions on requiring employees to accept accommodations that are unwanted or unnecessary. Update employment law postings to include a notice of rights under the bill.

The EEOC continues to provide protections from discrimination for the LGBT community. Last week the EEOC issued a new fact sheet on bathroom access rights for transgender employees under Title VII of the Civil Rights Act of 1964 (“Title VII”). The EEOC’s fact sheet follows guidance from the Occupational Safety and Health Commission on this issue, which we addressed last year. The new fact sheet reminds employers of the EEOC’s position that discrimination against a person based on their transgender status violates Title VII, and further, that denying an employee equal access to a common restroom corresponding to the employee’s gender identity is sex discrimination. The fact sheet also states that contrary state law is not a defense under Title VII. While the EEOC’s fact sheet is a statement of the EEOC’s position (not a regulation or statute), employers should consider the EEOC’s position when making policy decisions on restroom availability for transgender employees. The EEOC has filed a number of lawsuitsseeking to protect transgender employees from discrimination, and this new fact sheet indicates the EEOC will continue to enforce such protections. The issuance of the EEOC fact sheet follows passage of a North Carolina law, known as H.B. 2, that limits transgender people’s access to public restrooms. The state law was enacted to invalidate a Charlotte city ordinance that, as of April 1, 2016, would have extended anti-discrimination protections to LGBT individuals and allowed transgender people to use the bathroom of their choice. The battle over this North Carolina law continues to heat up. On Monday, May 9, 2016, the state of North Carolina filed a lawsuit against the federal government seeking a declaratory judgment that H.B. 2 is not discriminatory. That same day, as promised, the U.S. Department of Justice filed a lawsuit alleging that H.B. 2 violates Title VII. You can find a copy of the EEOC’s fact sheet here and further information from the EEOC on enforcement protections for LGBT workers here.

On April 1, 2016, California will institute amended anti-discrimination regulations as part of the Fair Employment and Housing Act (“FEHA”). The new regulations broaden the scope of FEHA, including the definition of covered employers and the legal requirements for those employers. The new regulations also expand the categories of employees protected by FEHA. Compliance with these amended regulations will require employers to put additional resources and effort towards training employees and preventing discrimination. At first blush, employers may consider these new FEHA requirements onerous, but implementing the 5 steps below may provide an employer with stronger legal defenses. Step 1: All Employers, Including Those Outside California, Should Check to See if They are Covered by the FEHA Amendments The amended FEHA regulations expand the definition of “covered employer” by including companies who have a total of five employees, even if they have less than five employees in the State of California. This change will impact out of state employers with five or more employees who have any employees within California. All employers, including those who are headquartered outside of California, should check whether they fall within this new definition. Step 2: Identify Additional Individuals Now Protected Under These Amendments FEHA protections against discrimination and harassment now apply to unpaid interns and volunteers. While the revisions do not go as far as to designate these individuals as employees, for the purposes of FEHA, they must receive the same information and treatment as employees. Step 3: Broaden Your Definitions for Gender Discrimination FEHA now includes additional types of gender discrimination, including: Gender Expression - a person’s gender-related appearance or behavior, whether or not stereotypically associated with the person’s sex at birth; Gender Identity - a person's identification as a gender different from the person’s sex at birth; Transgender - a general term for a person whose gender identity differs from the person’s sex at birth; Sex Stereotyping - or making assumptions about an individual’s ability or inability to perform certain kinds of work based on appearance, myth, social expectation, or generalization about the individual’s gender. Step 4: Employers Must Update and Redistribute Their Policies Historically, in California, only sexual harassment policies have had to be in writing. Now, all anti-discrimination and anti-harassment policies must be in writing and must include: Categories of individuals protected by the FEHA; All employees and third parties are prohibited from engaging in discrimination, harassment or retaliation; A confidential, internal complaint procedure that includes specific remedial measures and provides an alternative method to file a complaint other than contacting a direct supervisor; Instructions to supervisors on how to report complaints of misconduct; Assurances that allegations of misconduct will be addressed through a fair, timely and thorough investigation; and Guarantees that the company will not retaliate against employees for lodging a complaint or participating in an investigation. Once the policies have been updated, ensure that the new policies are distributed to all employees, unpaid interns and volunteers. If appropriate, post on the company intranet site.  Provide a signature page or acknowledgment of receipt to ensure receipt by all individuals and retain such records If more than 10% of the company workforce speaks a primary language other than English, employers should translate and distribute the policies in that language. Step 5:  Training is the Cornerstone of Prevention Employers should make sure to provide training to all employees regarding these new policies and issues raised by the FEHA amendments, including proper complaint and investigation procedures. Further, employers should include all written new policies in new-hire paperwork during the onboarding process and train appropriate personnel to respond to potential complaints. For more information or to initiate a review of your own employment policies and procedures, please contact the authors or your Polsinelli attorney.

The scope of the Americans with Disabilities Act (“ADA”) was broadened through the ADA Amendments Act of 2008 (the “Amendments”). Prior to the Amendments, various Supreme Court holdings had narrowed the scope of what qualified as a disability under the ADA. The Amendments rejected a number of these rulings and expanded what qualified as a disability.  Since then, it had been an open issue as to whether obesity, in and of itself, could qualify as a disability under the ADA. The EEOC Compliance Manual has indicated that the EEOC believed extreme obesity could be a disability in and of itself. This was the issue presented to the Eighth Circuit Court of Appeals in Morriss v. BNSF Railway Company. Mr. Morriss, who was conditionally hired as a machinist for BNSF, was 5’10” tall and weighed over 270 pounds. As part of BNSF’s standard medical review, Mr. Morriss participated in two medical examinations, which resulted in findings that his body mass index (“BMI”) was 40.9 and 40.4, respectively. As a result, BNSF revoked the conditional offer of employment based on its policy of not hiring individuals for the machinist position who have a BMI of 40 or greater. Mr. Morris subsequently filed suit against BNSF alleging that his obesity was a disability under the ADA. Ultimately, the case hinged on the meaning of the term “disability” under the ADA. Rejecting Mr. Morriss’ claim that his obesity was a stand-alone disability, the Eighth Circuit noted that Mr. Morriss admitted that his obesity was not caused by an underlying condition, and that it did not result in any physical limitations. As a result, the Court focused on the EEOC’s interpretive guidance, which states that physical characteristics like weight do not qualify as disabilities unless they are (a) outside a “normal” range and (b) result from a physiological disorder. As a result, the court held that even severe obesity does not qualify as a disability unless it results from an underlying physiological disorder. The Eighth Circuit’s holding provides some much needed clarity on this issue following the Amendments. Nevertheless, the ruling is narrow. Specifically, whether extreme obesity is the product of an underlying physiological condition generally requires inquiry of the affected employee or a medical examination. As a result, employers must still use caution before making employment decisions based on an individual’s weight.

With the recent death of Supreme Court Associate justice Antonin Scalia, the highest court has lost its most staunch conservative voice.  His absence will likely impact the outcome of pending cases, including several employment law cases. There are several labor and employment cases that remain ripe for a decision before this new Court. Any opinion that Justice Scalia voted on but had not formally released as of his death is void and must be reconsidered. The remaining members of the court will be tasked with reconsidering those cases, and entering a new era (at least at the outset) of potential deadlock on galvanizing issues.  These likely 4-4 decisions, could result in the lower court’s decision standing. Or, if it chooses to follow historical precedent, the Court could order the cases reargued when a new justice is confirmed.  Of course, if the vote was not a “tie,” then the decisions will be issued this Term. Here is a look at several cases the Court has in store in the employment and labor context: Tyson Foods v. Bouaphakeo. Oral argument was already heard in this case, which involves whether differences among individual class members may be ignored and a class certified under Federal Rule of Civil Procedure 23(b)(3) (or a collective action certified under the Fair Labor Standards Act)  when statistical modeling is used that presumes all members are alike, or where the class contains hundreds of members that were not injured or have no legal right to damages.  Tyson is attempting to overturn a verdict of nearly $6 million in damages awarded to workers in a pork processing plant in Iowa, filed by a group of six plaintiffs on behalf of a class of current and former hourly workers. With Justices Kennedy and Kagan leading the discussion during oral argument, the outcome may not turn on a missing Justice Scalia vote.   Friedrichs v. California Teachers Association. More recently the Court heard argument on whether public employees who do not join a union can be required to pay an “agency” or “fair share” fee to cover costs that the union incurs, for example, for collective bargaining. This has been the law since the Court last ruled on the issue in its 1977 decision in Abood v. Detroit Board of Education finding such fees permissible. After oral argument, public employee unions were feeling nervous – the Court’s more conservative justices had appeared ready to overrule the Court’s Abood decision. Green v. Brennan. The question in this case is straight forward: whether under federal employment discrimination law the filing period for a constructive discharge claim begins to run when an employee resigns – which has been held by five circuits – or at the time of an employer’s last alleged discriminatory act that gave rise to the resignation – which three circuits have held. Following oral argument some found the Court’s focus to have shifted to what qualifies as a resignation, which is an answer the Court is expected to provide in resolving the circuit split. Gobeille v. Liberty Mutual Insurance Company.  Following oral argument in this case the consensus was there would notbe a unanimous opinion from the Court. The case presents a question of preemption under the Employee Retirement Income Security Act of 1973 (ERISA), but the focus of oral argument was on the Affordable Care Act. The Second Circuit invalidated Vermont’s all-payer database as preempted by ERISA. Now the question before the Court is whether ERISA preempts state statutes that provide for “all payer” health care databases which are “designed to provide comprehensive state-level information about the distribution of health care services provided in the state and the costs of providing them.” Spokeo v. Robins. This case involves a Virginia man who alleges that the internet “people search engine” published inaccurate information about him. The question is whether Spokeo having violated the Fair Credit Reporting Act, without more, gives a legal right (standing) to sue. Here again the Court was expected to be closely divided. There are additional cases that have yet to be heard by the Court but are on the docket this spring.  CRST Van Expedited v. EEOC involves the EEOC’s conciliation obligations, and is a closely watched case because of the largest fee sanction award that has ever been issued against the Commission in favor of an employer, at approximately $4.7 million.  Zubik v. Burwell is expected to see a split decision, as it addresses whether the government places an undue burden on religious nonprofits by requiring contraceptive-coverage.  Finally, not yet set for argument, MHN Government Services v. Zaborowski involves California’s arbitration-only severability rule and whether it is preempted by the Federal Arbitration Act. To see the outcome of these matters, please refer to our updated post from April 2017,here.

Individuals who identify as transgender are protected under California’s Fair Employment & Housing Act (Cal. Govt. Code §12940)(“FEHA”).  FEHA protection was extended in 2012 to include gender identity and gender expression categories, and defines “gender expression” to mean a “person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.”  Transgender worker rights have received increased attention in recent months as employers attempt to put into place compliant procedures that are sensitive to transgender workers.  On February 17, 2016, the California Department of Fair Employment and Housing (“DFEH”) issued guidelines on transgender rights in the workplace.  As this cutting edge area of law continues to develop, employers would be wise to follow the DFEH common sense recommendations which are summarized below: Do Not Ask Discriminatory Questions Finding the right employee can be a challenge for employers.   Interviews of prospective candidates can provide helpful insight as to whether the particular candidate is right for the position.  Employers may ask about an employee’s employment history, and may still ask for personal references and other non-discriminatory questions of prospective employees.  However, an employer should not ask questions designed to detect a person’s sexual orientation or gender identity.  The following questions have been identified by the DFEH as off-limits: Do not ask about marital status, spouse’s name or relation of household members to one another; and Do not ask questions about a person’s body or whether they plan to have surgery because the information is generally prohibited by the Health Insurance Portability and Accountability Act (HIPAA). Apply Dress Codes and Grooming Standards Equally The DFEH reminds employers that California law explicitly prohibits an employer from denying an employee the right to dress in a manner suitable for that employee’s gender identity.  Any employer who requires a dress code must enforce it in a non-discriminatory manner.  For example, a transgender man must be allowed to dress in the same manner as a non-transgender man.  Additionally, transgender persons should be treated equally as are non-transgender persons. Employee Locker Rooms/Restrooms According to the DFEH, employees in California have the right to use a restroom or locker room that corresponds to the employee’s gender identity, regardless of the employee’s assigned sex at birth.  Where possible, employers should provide an easily accessible unisex single stall bathroom for use by any employee who desires increased privacy.  This can be used by a transgender employee or a non-transgender employee who does not want to share a restroom or locker room with a transgender co-worker.  Summary It is important to note that FEHA protects transgender employees and those employees who may not be transgender, but may not comport with traditional or stereotypical gender roles. The DFEH’s guidance reminds California employers that a transgender person does not need to have sex reassignment surgery, or complete any particular step in a gender transition to be protected by the law.  An employer may not condition its treatment or accommodation of a transitioning employee on completion of a particular step in the transition. Ultimately, while not the binding authority, the DFEH’s message is clear—employers should avoid discriminatory conduct, apply procedures consistently, and follow transgender employee’s lead with respect to their gender identity and expression.  The DFEH guidelines are consistent with the Equal Employment Opportunity Commission’s interpretation that Title VII prohibits discrimination based on sexual orientation and gender identity. Employers should continue to monitor PolsinelliAtWork.com and the DFEH website for updates, and to consult with an experienced labor and employment attorney for further guidance in complying with these cutting-edge issues.

On January 21, 2016, the EEOC issued for public comment its proposed enforcement guidance on retaliation, which has not changed since 1998.  Upon a close look, the EEOC is doing much more than “updating” its guidance based upon recent court opinions.  The guidance takes an interpretive and liberal view, consistent with the EEOC’s efforts to expand protections for employees, well beyond case law precedent. Here are five things the proposed guidance does that employers should be prepared to address: 1.  Expands the definition of “participation” protected activity.  According to the EEOC’s proposed guidance, internal complaints and participating in internal investigations will be treated as protected “opposition” to unlawful activity and protected “participation” in an EEO proceeding.  The Supreme Court in Crawford v. Metro. Gov’t of Nashville and Davidson Cnty., Tenn. declined to answer whether such activity is protected under the “participation” clause.  And, despite listing courts that have rejected this interpretation, the EEOC plans to apply it.  To be protected under the “opposition” clause, an employee must have a reasonable good-faith belief that the conduct complained about is unlawful.  By contrast, the “participation” clause does not have such a requirement.  By interpreting internal complaints and investigations to constitute “participation,” the EEOC has essentially removed this important distinction. 2.  Instructs that employer-side employees are protected.  The proposed guidance maintains that employees who give information in support of employers (i.e., do not oppose unlawful conduct) are protected by the participation and opposition clauses.  Employers should be on guard because it is counterintuitive to reasons an employee might seek protection from retaliation. 3.  Lowers the bar for harassment complaints.  The EEOC’s guidance seeks to lower the bar for when harassment complaints constitute protected activity.  Now, “reporting even a single incident” of alleged harassment is protected if the employee reasonably believes that a hostile work environment may occur in the future—i.e., a complaint does not have to rise to the level of “severe or pervasive.”  It may behoove employers to investigate such complaints as well, as the EEOC’s guidance explains that failure to investigate can constitute a materially adverse action. 4.   Rejects the “manager rule.”The proposed guidance rejects what has been adopted by some courts as the “manager rule.”  This concept requires that managers who are responsible for investigating EEO violations or enforcing EEO policies step outside of their management role to engage in protected activity.  The EEOC’s interpretation requires employers to be more alert when handling personnel issues for managers in such roles. 5.  Promotes agency comingling. The EEOC’s proposed guidance encourages cooperation with other enforcement agencies, such as the Wage and Hour Division of the DOL, the OFCCP, and the NLRB.  Employers should be prepared to handle inquiries from other agencies if charge allegations develop beyond EEO matters, and narrowly respond to charges and requests for information. Although the EEOC’s guidance is not binding law, it instructs the EEOC’s personnel when processing and investigating charges, including making cause determinations and pursuing litigation.  If this guidance is officially adopted, employers should review their retaliation policies, procedures, and training and balance this new guidance with well-established legal precedent.

When an employee threatens a discrimination claim, many fundamental questions immediately come to mind.  What type of discrimination is alleged?  Is this discrimination under federal or state law, or is it a claim that derives from contractual language?  What is the proper venue to resolve this claim?  And, what if there is a contract, policy or industry-specific statute that provides a mechanism for discrimination dispute resolution? This last question is of significant importance and can sometimes be rather complex in its analysis.  To address these issues, we will break down the analysis over the course of multiple blog entries.  We begin with how a contract, such as a Collective Bargaining Agreement (“CBA”), can impact the resolution of a federal statutory discrimination claim.  As can be anticipated, most employees will solidly insist on the right to file his or her federal discrimination claim in a court of competent jurisdiction, but under certain circumstances, CBA language to the contrary may trump that right. For an employer to require an employee to follow the CBA dictated dispute resolution procedure for a federal discrimination claim, specific contractual requirements must be met.  In the landmark 2009 U.S. Supreme Court case 14 Penn Plaza v. Pyett, the Court concluded that a CBA’s discrimination resolution provision is enforceable as long as the CBA’s language “clearly and unmistakably” requires the employee to resolve his or her federal statutory discrimination claim by other dispute resolution techniques in lieu of a judicial remedy. What does it mean to “clearly and unmistakably” require an employee to waive his/her right to judicial recourse and instead submit to alternative resolution?  Many federal courts have concluded that for a CBA’s waiver of an employee’s right to a judicial forum for federal statutory discrimination claims to be clear and unmistakable, the CBA must at least identify by name the specific federal statutes the CBA purports to incorporate in its dispute resolution clause.  Regardless, federal courts across the country have set the bar high when enforcing a CBA’s dispute resolution clause over an employee’s right to file in federal court, and have demanded that a CBA have a high level of specificity in exactly what is being waived by an employee. Employers with a CBA should ensure that the dispute resolution language is clear with respect to the types of claims it seeks to address, including specific reference to the applicable federal statutes.  We will continue to explore how this principle relates to state law discrimination claims and how other industry-specific statutes may impact discrimination dispute resolution. 

When employers consider potential discrimination claims to avoid, the analysis should not stop with Title VII, the Age Discrimination in Employment Act (“ADEA”) and the Americans with Disabilities Act (“ADA”).  Hiding in plain sight, but not to be overlooked, is ERISA Section 510, 29 U.S.C. § 1140. ERISA Section 510, 29 U.S.C. § 1140, provides: “[i]t shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan…” ERISA Section 3(7), 29 U.S.C. § 1002(7), defines a “participant” as “any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit.” Discrimination claims under ERISA Section 510 occur most often when an employer has terminated an employee, and the employee claims that the termination was to prevent the employee from making a claim under a benefit plan or becoming eligible for benefits under a benefit plan. Although discrimination claims brought under ERISA Section 510 face different substantive requirements than discrimination claims brought under Title VII, the ADEA, and the ADA, they are similarly analyzed under the familiar McDonnell Douglas three-stage burden-shifting paradigm. To prevail under ERISA Section 510, an employee must prove that the employer’s adverse employment action was taken with the specific intent to interfere with the employee’s rights or benefits under an ERISA plan.  This means that the loss of benefits was the reason behind the adverse employment action, not merely a consequence of the action.  As with other employment discrimination causes of action, if the employee can make an initial showing of a prima facie case for intentional interference, then the employer must come forward  with a legitimate, non-discriminatory basis for their action.  If the employer succeeds, then the ERISA Section 510 plaintiff is “required to present evidence that [an employer] acted with ‘specific intent’ to interfere with their rights” to overcome an employer's legitimate, non-discriminatory reason.  This specific intent can be shown with circumstantial evidence, but must be more specific than mere conjecture. ERISA Section 510 claims have become more prevalent.  Employers contemplating layoffs or terminations of employees with benefits subject to ERISA should consult with counsel to identify and mitigate the risk of ERISA Section 510 claims.

In December 2012, the EEOC adopted its Strategic Enforcement Plan for Fiscal Years 2013-2016 (the “SEP”), in which it highlighted the agency’s enforcement priorities for the coming three years.  Now two years into the plan, the EEOC continues to refine its strategic enforcement efforts and employers are responding to them. The EEOC’s SEP identified six priorities: Eliminating Barriers in Recruitment and Hiring. Protecting Immigrant, Migrant and Other Vulnerable Workers. Addressing Emerging and Developing Issues. Enforcing Equal Pay Laws. Preserving Access to the Legal System. Preventing Harassment Through Systemic Enforcement and Targeted Outreach. In 2015, the EEOC continued its effort to pursue these stated priorities through systemic investigations and litigation arising from those investigations, despite a mixed record of success in the courts.  For example: Background Check Litigation: Despite some notable setbacks, such as the Fourth Circuit’s affirmance of summary judgment against the EEOC and scathing rebuke of its litigation conduct in EEOC v. Freeman, the EEOC has continued to pursue cases involving background checks in furtherance of its stated priority of eliminating barriers in hiring.  Pregnancy and Disability Discrimination:Following the United States Supreme Court’s decision in Young v. UPS, the EEOC reissued its pregnancy discrimination guidance, noting that the “Court explained that employer policies that are not intended to discriminate on the basis of pregnancy may still violate the Pregnancy Discrimination Act if the policy imposes significant burdens on pregnant employees without a sufficiently strong justification.”  The EEOC also noted that the ADAAA does not require an impairment to “last a particular length of time to be considered substantially limiting,” thereby potentially including pregnancy.  The EEOC filed numerous ADA lawsuits in 2015, particularly focusing on reasonable accommodation issues. Equal Pay: Although the EEOC continues to assert its pronounced attention to alleged violations of the Equal Pay Act, it has not expended litigation resources commensurate with its statements.  The EEOC may well monitor developments in equal pay protection under state law (e.g.,California’s Equal Pay Act, effective January 1, 2016) to assess the value of its own litigation efforts. Sexual Orientation or Gender Identity Discrimination:In an effort to address “emerging and developing issues,” the EEOC continues to include sexual orientation or gender identity discrimination in its definition of discrimination based on sex.  In its August 2015 fact sheet, the EEOC identified numerous private sector lawsuits initiated by the EEOC or in which the EEOC filed amicus briefs, addressing LGBT-discrimination-related issues. The EEOC appears poised in 2016 to continue pursuing the SEP aggressively through the use of systemic investigations.  Employers can expect the EEOC to seek to expand investigations of individual charges, particularly in substantive areas aligning with the SEP.  Although the United States Supreme Court ruled in Mach Mining, LLC v. EEOC (2015) that the EEOC’s pre-suit obligation to attempt to conciliate alleged unlawful workplace practices is subject to judicial review, the EEOC will continue to test the limits of judicial review of EEOC’s investigations and attempts to conciliate.  As the new year begins, employers must remain vigilant when challenging failures by the EEOC to conciliate or properly investigate charges and pay particular attention to charges alleging disability, pregnancy and sexual orientation or gender identity discrimination.

One “casual” Friday afternoon, one of your employees walks by wearing a cap emblazoned “America: Love it or Leave it.”  You groan inwardly; not another supporter of “that” candidate, you ask yourself.  You can’t resist and blurt out, “Great hat.; why do you hate immigrants?”  The employee casts you a shocked look but walks away silently.  You then proudly boast on your candidate’s Facebook page how you “stood up” to an oppressor. The following Wednesday, you have to write up that same employee for her third unexcused absence in six months.  But, when you ask her to sign the warning, she accuses you of singling her out unfairly because she is a “proud white woman Tea Partier.”  She refuses to sign the warning, storms out of your office and files a complaint against you with HR. Should you be concerned?  Did you cross a legal line?  Are you now at risk?  The short answer: Possibly. “Political activity” and “political affiliation” are only protected statuses for certain employees and in certain locations.  Courts have held the First Amendment protects public employees from their employers using political affiliation on which to base employment decisions.  The Civil Service Reform Act of 1978 expressly prohibits political affiliation discrimination toward federal employees.  Moreover, some states (such as California, Louisiana, New York) and the District of Columbia, as well as cities (such as Lansing, Michigan; Madison, Wisconsin and Seattle, Washington), protect political affiliation similar to protections afforded race, sex, age and disability, even—importantly—for private sector employees. Well, that’s good, you think.  You don’t work in any of those locations, so you’ll probably not have to worry about what you said.  Not necessarily.  Just because you don’t work in the federal sector or in the private sector in a state or municipality that protects private sector employees from political affiliation discrimination doesn’t mean you have carte blanche to speak your mind freely whenever a subordinate employee declares her support for a political candidate, party or cause. Looming even for non-unionized employers is the National Labor Relations Act.  Under the NLRA, even non-unionized employees have the right to discuss workplace terms and conditions of employment.  Where a conversation between employees about a particular political candidate or party, for instance, turns to how that candidate or party might improve or degrade terms or conditions of employment, such a conversation may rise to the level of that protected by the NLRA. Beyond that, expressing any type of political opinion to subordinate employees may leave supervisors and managers exposed to claims they are biased against employees on the basis of other protected statues, such as race, national origin, sex or religion.  As this current election cycle illustrates, political candidates have races, nationalities, religions and other protected characteristics; most, as we have already seen, whether at the national, state or local level, also voice strong opinions about race relations, foreign policy, religious freedom, Second Amendment rights, immigration, LGBT rights and issues and other political issues directly related to characteristics protected by federal, state or local workplace discrimination laws. So, dropping into a political debate with a subordinate employee about a candidate, party, cause or political issue risks allowing the employee to associate your expressed opinions with some type of prohibited discriminatory bias.  Doing so during the heat of a presidential election cycle only increases that risk. How can you limit exposure to such claims?  Foremost, ensure you know whether any federal, state or local law specifically protects your employees from political affiliation or activities discrimination.  If such a law applies to your organization, ensure you understand what it covers (only political activities, expressed political beliefs, or more broadly protecting political affiliation or ideology) and what it does not. Further, be sure to educate supervisors and managers. Training can be an important line of defense, by limiting potential exposure before it even has a chance to evolve. Even where no such laws apply to your workplace, remind yourself and your supervisors and managers how easily a stated political opinion can be viewed as a form of prohibited workplace animus or bias (“She supports that candidate who opposes immigrants, so she must want to fire me so I can be deported.”).  Encourage supervisors and managers (and yourself) to resist the siren call of being drawn into workplace political discussions, specifically with subordinate employees.  Perhaps take the opportunity to ask HR to conduct additional supervisor/manager workplace training.  It’s a long time until the next election.  It always is.

As we head into 2016, it is a good time to review and revise leave and certification policies under the Family and Medical Leave Act (“FMLA”), to limit the risk of FMLA abuse by employees.  Below are nine tips to consider: Conduct an FMLA Audit. Identify FMLA abuse concerns from managers. Give policies, practices and forms to legal to review to make sure your company is following best legal practices. Enforce consequences if the initial certification is not returned within 15 days. All medical certifications are required to be returned within 15 calendar days (unless the leave is unforeseeable and it is not practicable to do so). If the employee fails to return the certification, the employer may deny FMLA leave so long as the employer has advised the employee in writing at the time of the employer’s request for the certification of the consequence of failing to return the certification on time.  Be sure this is enforced uniformly.   Second (and third) opinions. Unfortunately, sometimes an employee’s health care provider will sign off on fraudulent leave requests. In that situation, an employer has the option to seek a second opinion at its own expense. If there is a conflict between the first and second opinions, the employer may require the opinion of a third medical provider at the employer’s expense. Require periodic updates. Managing FMLA leave is easier when employers maintain a line of communication during leave. The regulations allow employers to require “periodic” updates from employees while on leave regarding their intent to return to work, so long as the company communicates this obligation to the employee. Consider implementing a requirement that employees update the employer on their intent to return to work every 30 days. Call-in policies. Implement a policy requiring employees to call-in for time off (including intermittent FMLA leave) in a certain manner. Enforce consequences for failure to follow such policies. Re-Certifications. The FMLA regulations generally allow employers to obtain re-certifications every 30 days, but employers may request them sooner if an employee requests an extension of FMLA leave, the circumstances contemplated in the certification have changed (for example duration or frequency of absences), or the employer receives information that casts doubt on the employee’s need for leave. While an employer may have to wait longer to obtain a re-certification if the duration provided on the previous certification is longer than 30 days, an employer is able to request a re-certification at least every six months. Pay. The FMLA regulations make clear that employees (including exempt employees) need not be paid for periods of FMLA leave, even for partial days.  Consider using a private investigator.  There have been numerous cases where courts have found for an employer when they uncovered abuse through use of a private investigator.   Consider seeking advice of counsel. When in doubt about how to proceed with an employee’s questionable request or exercise of leave, seek advice of counsel. Missteps can be costly and subject employers to claims of interference and retaliation.

An estimated nine million people in the United States identify as lesbian, gay, bisexual, or transgender, and many of these individuals are in the workforce.  Despite Americans’ growing acceptance and support for LGBT rights, many LGBT individuals risk facing discrimination in the workplace.  Title VII of the Civil Rights Act of 1964, which protects employees from discrimination based on sex, race, color, national origin, and religion, does not explicitly protect employees from discrimination based on sexual orientation or gender identity.  The United States Equal Employment Opportunity Commission, however, has advanced the position that Title VII’s prohibitions on employment discrimination encompass sexual orientation and gender identity discrimination (and has instituted multiple lawsuits targeting LGBT discrimination pursuant to a strategic enforcement plan). Although the status of employment discrimination protections for LGBT individuals is not settled under federal law, employers should be aware of the many state laws and local ordinances that do explicitly protect LGBT individuals from employment discrimination.  In many cases, these state laws and local ordinances apply to a greater number of employers than Title VII, which applies to employers with fifteen or more employees.  For example, the California Fair Employment and Housing Act protects California employees from discrimination based on sexual orientation and gender identity and applies to employers with five or more employees in the state. Over 200 cities and counties prohibit discrimination based on sexual orientation and/or gender identity in private employment. These local ordinances provide protection to employees, even in states that have traditionally been hostile to LGBT individual rights.  For example, in Texas, where the state legislature recently considered over 20 bills that would have curtailed LGBT rights in some fashion (none of which were actually passed), the cities of Austin, Dallas, Fort Worth, Houston, and Plano have passed ordinances protecting employees from discrimination based on sexual orientation and gender identity.  These city ordinances protect approximately 21% of the Texas population.  Although employees generally cannot institute lawsuits against employers based on violations of local ordinances, an employer can be subject to fines and even jail time for such violations. Even though federal law does not explicitly prohibit sexual orientation and gender identity discrimination in employment, employers should be cognizant of the state laws and local ordinances that apply to them.  Employers may consider adding “gender identity” and “sexual orientation” as protected categories in employee handbooks and other employment policies to ensure compliance with any applicable state and local law.

On August 31, 2015, the California Senate unanimously passed (39-0) Senate Bill 358, the California Fair Pay Act (CFPA), and sent the bill to the desk of Governor Jerry Brown, who intends to sign it into law.  The purpose of the CFPA is to strengthen the 1949 California Equal Pay Act by closing gaps in the existing law, which have resulted in a significant differential in pay for women as opposed to men. As of 2013 in California, women made only 84 cents for every dollar earned by a man. The CFPA substantially broadens and strengthens protections for women in the workforce.  The bill’s primary provision calls for women to be paid the same as men for “substantially similar work” rather than the “same” job, subject to a few limited exceptions.  Now, employers (and courts) will be required to look more critically at factors such as the similarities in skill, responsibility, and effort required to perform a job when determining whether men and women should be paid the same when engaged in similar jobs.   Other changes to the law include increasing recording keeping requirements from two to three years and adding an anti-retaliation provision to protect employees who inquire about how much their co-workers earn.  Importantly, the CFPA also does away with the same location requirement. Specific Amendments to Law The CFPA amends a number of sections of the 1949 Act, California Labor Code section 1197.5, which generally attempts to prohibit employers from paying women less than men to do the same job.  Over the past several decades, ambiguities in section 1197.5 have been relied on to justify different pay for men and women who performed substantially similar, if not identical, jobs.  For example, section 1197.5 applies only to individuals working “in the same establishment,” which means that women working at a company’s Sacramento facility is not able to compare her pay to a man working in the same job at the company’s Long Beach location.   Section 1197.5 also does not expressly prohibit retaliation against employees who ask how much money other employees make.  This has prevented many women from learning whether they are being paid comparably to men holding the same job. Critical to getting employer (and employer-friendly legislators) support was retaining a form of the “business necessity” exception.  This provision provides employers necessary flexibility, enabling them to adjust pay for men and women when the specific nature of a particular job has requirements that differ for men and women.  Employers are likewise still permitted to differentiate pay based on seniority and merit.  However, they must evaluate employees performing substantially similar work in a nondiscriminatory way and maintain gender-neutral metrics to determine merit, productivity, and other bonuses.  Gone is the former ambiguous “bona fide factor other than sex” justification to pay different wages.  It has been replaced by a number of specific affirmative defenses that employers must meet in order to justify different pay. Moving Forward Because California has had gender pay protections since 1949, many employers have already taken steps to ensure that male and female employees are compensated equally for the same work.  The CFPA does, however, broaden and expand same-pay protections to employees in a range of differently titled jobs provided the duties they perform are substantially similar to other jobs.  This means that employers will need to do diligence and confirm, or update, their current policies and practices. Wage Audits: Employers should review job descriptions and audit wages paid to male and female employees with “substantially similar” jobs, as determined through a review of job descriptions, to ensure that all employees with similar responsibilities are being compensated equally. Handbooks: Employers should update employee handbooks with an appropriate non-discrimination provision relating to wages and include language that informs employees that they will not be retaliated against for inquiring about wages paid to them or other employees. Retention Policies: Records retention policies should be updated to reflect a three year hold on pay-related records for employees. HR Training: Training should occur for all decision makers, particularly for those who make hiring decisions, to inform and educate them as to the details of these amendments. A copy of the legislation is available here.  Polsinelli’s Labor & Employment practice will report on additional updates after this law goes into effect. For more information on how these amendments may impact your business, please contact the authors or your Polsinelli attorney.

Wearable technology in the workplace has evolved far beyond 20th-century relics such as wireless headsets and walkie-talkies. Employers now can track and analyze proprietary measures of worker productivity and other results-driven metrics through devices worn on the wrist or elsewhere on the body. Leveraging robust streams of real-time data can implicate various employment laws and associated legal responsibilities to employees. In addition, collected data may be subject to a preservation duty, discoverable in litigation, and, in some cases, relevant to legal claims by employees. Wearable technology can both foster and challenge employment law compliance. The Americans with Disabilities Act (ADA) requires employers to engage in an interactive process with qualified employees, to identify appropriate disability accommodations. Employers who aggregate data on employee productivity through wearable technology may use such metrics to assess whether an employee’s desired accommodation or any accommodation, is reasonable. Data could also be used to document that a desired accommodation poses an undue burden on business operations. On the other hand, an employee may rely on productivity data to argue that a termination decision for poor performance was pretext for unlawful discrimination or retaliation. Employers that rely on objective productivity data to make day-to-day personnel decisions should do so consistently and document any deviations by identifying other legitimate business reasons.  Moreover, should an employer rely on an employee’s objective data for a personnel decision, the employer may be obligated to preserve and produce the data of other employees for comparison purposes. Technology that tracks employee movements is potentially problematic in the context of protected concerted activities. Employees have the right to gather to discuss unionization, or other terms and conditions of work, on breaks and outside working hours, without employer interference or coercion. To reduce the risk of a claim of interference or chilling of protected activities, employers should disable or require employees to surrender wearable technology outside of working time. Finally, employers should exercise extreme caution before using wearable technology to assess employee productivity by gathering biometric data. Such data most likely must be gathered and stored in accordance with HIPAA regulations governing protected health information, and its use in employment decisions may trigger the requirements of the ADA and the Genetic Information Nondiscrimination Act (GINA). While there are endless possibilities for leveraging technology to assess employee productivity, care must be taken to implement advancements without discriminating against or disparately impacting protected individuals. For an additional examination of wearable technology and the implications on cybersecurity from the perspective of Polsinelli’s Privacy and Data Security attorneys, please visit the Polsinelli on Privacy blog here.

One of your most valued employees walks in the door of your office and announces that she is transgender, and is starting the process of transitioning from a male to a female.  Of course, you want to support your employee.  You don’t have any intention to treat your employee any different as she goes through the transition process.  You already know from reading recent blog posts by Mary Kathryn Curry and Chris Johnson that the Equal Employment Opportunity Commission is expanding its definition of what constitutes illegal sex discrimination under Title VII, and that momentum is gathering behind the EEOC’s view, underscored by the Supreme Court’s ruling in Obergefell v. Hodgesthat legalized same sex marriage nationwide.  Plus, you know that there are numerous states and local jurisdictions that prohibit discrimination on the basis of gender identity. But how do you address the questions that may be raised by other employees?  More importantly, how do you handle the basic question of which restroom your employee is supposed to use – the men’s or ladies’ restroom? The Occupational Safety and Health Commission attempted to answer this question recently when it issued “A Guide to Restroom Access for Transgender Workers.”  OSHA announced the core principle that “All employees, including transgender employees, should have access to restrooms that correspond to their gender identity.”  According to OSHA, a biological male who identifies as a female should be allowed to use the ladies’ restroom and a biological female who identifies as a male should be allowed to use the men’s room.  OSHA makes clear, however, that restroom selection should not be viewed as a requirement but, instead, should be the employee’s choice. OSHA offers additional options for employers.  One option is to provide single-occupancy, gender-neutral (unisex) restroom facilities.  Another option is multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.  However, OSHA warned that the transgender employee must not be forced to use any one particular restroom.  In fact, OSHA noted that forcing employees to use a gender-neutral or other specific restroom “singles those employees out and may make them fear for their own physical safety.”  According to OSHA, if an employee is not comfortable using the restroom of his/her choice, he/she may refrain from using any restroom at work which could result in health problems for that employee. The Guide notes that OSHA’s Sanitation Standard, 29 C.F.R. 1910.141, requires employers to provide their employees with restroom facilities and protects employees from health effects created when none are available.  Simply telling your employee to use a specific restroom or forcing the employee to use a segregated restroom is not sufficient and would violate the standard. OSHA’s guide is also helpful as it describes other federal, state and local laws that address transgender equality.  You can access OSHA’s guide at https://www.osha.gov/Publications/OSHA3795.pdf.

Your company has been served with a putative employment discrimination class action. You know the named plaintiff signed an arbitration agreement, but it is silent as to whether class arbitration is permitted or prohibited. Does this mean that your company is still faced with the risks and higher costs inherent in class arbitration? Some initial good news – silence on the issue of whether class arbitration is permitted or prohibited does not automatically result in class arbitration. The Supreme Court held inStolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010), that class arbitration is not proper unless there is a “contractual basis” in the relevant agreement showing that the parties agreed to class arbitration. However, the Supreme Court did not explain what it meant by “contractual basis.” In other words, the Supreme Court unfortunately did not hold in Stolt-Nielsen that class arbitration is permitted only where there is an express provision for such a procedure in the arbitration agreement. This ambiguity has resulted in a case-by-case review by courts and arbitrators to decide whether class arbitration is permitted, with unpredictable results. Indeed, in 2013 the Supreme Court upheld an arbitrator’s decision to allow class arbitration despite the subject arbitration agreement’s silence on the issue. Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013). The Court seemed skeptical of the merits of the arbitrator’s decision, but because of the incredibly narrow standard of judicial review of arbitrators’ decisions, class arbitration was upheld in that case. Does the Court or the arbitrator decide whether your silent arbitration agreement allows class arbitration?  The two circuit Courts of Appeal to address the issue both have held that the availability of class arbitration is a question for a court to decide, unless the parties have clearly agreed to submit the question to the arbitrator.Opalinski v. Robert Half Int’l Inc.,761 F.3d 326 (3d Cir. 2014); Reed Elsevier, Inc. ex rel. LexisNexis Div. v. Crockett, 734 F.3d 594 (6th Cir. 2013). Also, though unpublished and devoid of in-depth analysis, the Ninth Circuit likewise upheld a district court’s decision to prohibit class claims from being arbitrated. Eshagh v. Terminix Int’l, Co., 588 F. App’x 703 (9th Cir. 2014). Nevertheless, the remaining Circuits have not addressed the issue, so in those Circuits, concern remains regarding not only whether class arbitration will be permitted, but also who makes that decision for you. Generally, an arbitration agreement should not empower the arbitrator to decide whether class arbitration is permissible.  This is not to denigrate arbitrators, or suggest that arbitrators always allow class arbitration. Rather, if an arbitrator is empowered to make this crucial decision, there is no real option for appealing a decision permitting class arbitration. Note that if your arbitration agreement states that the parties agree that any arbitration will be conducted pursuant AAA’s Commercial Rules, your company has agreed to submit the availability of class arbitration to the arbitrator, per Rule 3 of the AAA’s Supplementary Rules for Class Arbitration. Reed v. Florida Metro. Univ., Inc.,681 F.3d 630 (5th Cir. 2012). Of course, the uncertainty of class arbitration in the face of a silent arbitration agreement can be avoided by including an express class arbitration waiver in the Agreement. This decision involves a host of considerations. Stay tuned!

The term transgender – and the public’s understanding of gender reassignment – has become more commonplace since Diane Sawyer’s April 2015 interview with former Olympian and TV personality, Bruce Jenner and the more recent Vanity Fair coverage of Caitlyn Jenner. Employers should take note that transgender status is subject to increasing legal protections. Title VII of the 1964 Civil Rights Act prohibits gender discrimination, but does not expressly include transgender status a defined protected class. However, the Equal Employment Opportunity Commission has recently brought its third transgender discrimination lawsuit under the existing Title VII framework prohibiting gender stereotyping: EEOC v. Deluxe Financial Services, Inc. In this case, the EEOC alleges that the Minnesota check-printing company illegally discriminated against a transgender employee by prohibiting her from using the women’s restroom, as well as subjecting her to a hostile work environment. The employee had performed her job satisfactorily for two years before presenting herself as a woman. At that time, as the EEOC alleges, coworkers began using hurtful epithets and would intentionally use the wrong gender pronouns to refer to her. This case follows two previous suits filed by the EEOC, EEOC v. Lakeland Eye Clinic and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. In the first lawsuit the EEOC filed of this type, the EEOC claimed that Lakeland Eye Clinic, a Florida-based organization of health care professionals, improperly fired its Director of Hearing Services after she began to present as a woman, despite having performed her job duties satisfactorily throughout her employment. The case recently settled, with the employer agreeing to pay $150,000 in damages and adopting a new gender discrimination policy that prohibits discrimination because an employee is transgender, is transitioning from one gender to another, or because the employee does not conform to the organization’s gender-based preferences or stereotypes. The lawsuit against R.G. & G.R. Harris Funeral Homes, Inc. alleges that, despite having adequately performed her duties, a funeral director was fired for undergoing a gender transition from male to female. The funeral home moved to dismiss the complaint arguing, among other things, that “gender identity disorder” is not protected by Title VII. The Michigan district court, however, found a transgender person, just like anyone else, can bring a sex stereotyping gender discrimination claim under Title VII. Applying well-settled gender stereotyping precedent, the court noted there is no distinction between the employer that acts on the basis of a belief that a woman must not be aggressive, and an employer that acts on the belief that a man should not wear a dress and makeup. In addition to these recent federal cases, nineteen states have enacted prohibitions on transgender discrimination. These developments highlight the need for employers to set a tone of tolerance and mutual respect when dealing with transgender issues. Employers should also consider including prohibitions on sex stereotyping and gender nonconformity in their non-discrimination policies. Counsel can assist with the implementation of guidelines that address dress and appearance rules, the use of the name and pronouns appropriate to the gender of the employee going through a transition, and provide for adequate access to restrooms and locker room facilities consistent with the employee’s gender identity.

“If you don’t read the newspaper, you’re uninformed; if you read the newspaper, you’re misinformed.”  – Mark Twain Facebook, Twitter, Google, and other tech companies have acknowledged the gender gap in their industry and have demonstrated efforts to close it.   Much work remains, particularly at the university pipeline, where only 19% of computer science majors are female, and yet, female programmers comprise 20% of the workforce. Rather than commend tech companies for their candor and commitment to equality, media outlets have been quick to indict tech companies based upon their own voluntary demographic disclosures and have spotlighted the recent filing of a few gender discrimination lawsuits by former employees.  No commentary—by this blog or any media outlet—should presume as fact (or fiction) allegations in lawsuits, especially to march in step with stereotypes and political agendas.  No matter how many reports seek to vilify an entire industry on the basis of a handful of unproven claims (perhaps just to collect hits and sell advertising), the truth seeking process will always belong to our judicial system. A recent lawsuit filed by Tina Huang, a former Twitter software engineer, alleges not only discrimination and retaliation against Huang individually, but also company-wide gender discrimination against women seeking promotions to a number of senior technical positions.  Judgment must be reserved on such a sweeping indictment. According to Huang, promotions at Twitter are by “managerial fiat” within a “black box.”  Huang alleges that promotions are subjective decisions made “predominantly” (i.e., not exclusively) by men and are “tainted with conscious or unconscious prejudices and gender-based stereotypes.”  Huang claims that she was not promoted due to her gender and was subject to retaliation for voicing a complaint. Huang also alleges that “Twitter promotes women to upper rungs of the technical ladder in fewer numbers and at a significantly slower rate than would be expected based on the number of women in the pool of lower positions from which promotions to those rungs are made.”  However, what is “expected” is unclear (particularly given existing gender demographics), and whether such “expectation” constitutes credible evidence of class-wide discrimination remains to be adjudicated. It remains to be seen whether Huang can prove facts to support her claims of individual and company-wide gender discrimination, and whether Twitter can support its defenses.   We will follow these developments and immediately report the factual developments in the Silicon Valley.

The MTV Generation is well-familiar with the hooks of Rockwell’s 1984 hit, “Somebody’s Watching Me:” I'm just an average man, with an average life. I work from nine to five; hey hell, I pay the price. All I want is to be left alone in my average home; But why do I always feel like I'm in the Twilight Zone, and I always feel like somebody's watching me. And I have no privacy. Whoa, I always feel like somebody's watching me. Tell me is it just a dream? Flash forward to 2015 – and the advent of Global Positioning System (GPS) devices – and Rockwell’s lyrics strike an eerie, though paranoid, prophecy for the 21st Century Workplace. Today’s GPS technology, imbedded in employer-issued property such as smart or mobile phones, navigation systems or GPS devices installed on company cars, allows employers to monitor employees’ movements and locations in real-time almost anywhere. However, simply because GPS technology exists for employers to track employees, wary employers should balance their use of such technology with employees’ privacy rights. With the current paucity of pertinent case law, employers tracking employees through GPS devices may be vulnerable to litigation. Recently, a California-based employee, Myrna Arias, filed suit against her former employer, Intermex Wire Transfer, LLC, in California state court alleging Intermex fired her after she removed a job management app from her phone that tracked her GPS location while she was off duty. In her complaint, Arias alleges that her supervisor bragged that he knew how fast she was driving because of the app. Within weeks of Arias complaining about what she believed to be an intrusion onto her privacy, Intermex terminated her. Arias alleges Intermex violated her right to privacy and California labor laws, committed unfair business practices and wrongfully terminated her against public policy. At least 28 states and the District of Columbia have enacted statutes protecting employees from discrimination or retaliation based on the employee’s participation in lawful recreational or leisure activities during personal, off-duty time. For unionized employers, GPS monitoring might be challenged as an unfair labor practice under the National Labor Relations Act. Balancing business-related reasons for tracking employees with those employees’ privacy rights (which may be statutorily protected) should prove food for thought for the wary employer. Prior to implementing a GPS monitoring program on company-issued devices or company cars, an employer should consider: Is surveillance of employees via GPS devices business-related and truly necessary? What effect, if any, may GPS surveillance have on employee morale? How should implementation of a GPS surveillance program be communicated to employees? How should expectations of the proper use of GPS surveillance be communicated to management? What details of a surveillance program should be included in a GPS monitoring policy? In the end, employers should review their privacy policies regarding employee privacy issues and seek answers to such questions before implementing GPS surveillance of on- and off-duty conduct. Rockwell’s 1984 reflections on paranoia perhaps ring more true today.

Yesterday in EEOC v. Abercrombie & Fitch Stores, Inc. the Supreme Court held that making employment decisions based on assumptions related to religion (or any other protected class for that matter) can trigger liability under Title VII.  In an 8-1 opinion, the Supreme Court ruled in favor of the EEOC and held that actual notice to the employer is not required to trigger a religious accommodation obligation under Title VII. Rather, the plaintiff need only show that his or her need for an accommodation (even if the employer “has no more than an unsubstantiated suspicion that accommodation would be needed) was a motivating factor in the employer’s decision not to hire. Takeaways for Employers: Ultimately, the Court's holding is not a surprise. Since its 1989 holding in Price Waterhouse v. Hopkins, the Court has made clear that decisions based on stereotypes and assumptions can get employers into trouble. In light of the Abercrombie holding, employers should ensure that its hiring managers understand not only religious discrimination is prohibited, but also that there may be an affirmative duty to adjust a facially neutral policy as an accommodation to the religious beliefs of an applicant or employee. For a more in-depth analysis on the ruling, please click here. Previous intelligence on the case:      Abercrombie & Fitch Drops "Look Policy"      Headscarf Heartache: Supreme Court Considers EEOC Case Against Abercrombie

In EEOC v. Abercrombie and Fitch Stores, Inc., argued before the United States Supreme Court in February, 17-year-old Samantha Elauf applied to work as a sales representative at Abercrombie.  During the interview, she wore a traditional Muslim headscarf but said nothing about her faith.  Abercrombie did not hire Ms. Elauf because her headscarf violated the company’s “Look Policy,” but denied knowing that the garment was, in fact, religious. While we await the Supreme Court’s decision as to whether Abercrombie’s actions violated the religious discrimination prohibitions of Title VII of the Civil Rights Act of 1964, this case presents an opportunity to review the basic obligations of employers concerning religious accommodations, which may include clothing, in the workplace. Title VII prohibits discrimination, harassment, and retaliation based on an employee’s religion. “Religious belief” is defined as a belief that is both “religious” in the employee’s own view and sincerely held by the employee. Thus, the law’s protection extends beyond mainstream religions. Title VII also requires employers to “reasonably accommodate” religious beliefs, practices, and observances unless “undue hardship,” meaning more than a minimal effort or expense, would result. The law requires employers to accommodate only sincerely held religious beliefs that conflict with work requirements.  Although courts rarely question the sincerity or religiosity of a particular belief, it is important to remember that Title VII was intended only to protect individuals with sincere religious beliefs, and therefore does not apply to requirements of personal preference rooted on non-theological grounds, such as politics, culture, or heritage. As long as an employer has reasonably accommodated an employee’s religious needs, the employer does not need to consider or adopt an employee’s own alternative or suggested accommodation—even if it is preferred by the employee.  Examples of reasonable accommodations vary, but have included such things as scheduling changes, modification of certain job duties, use of private company spaces for prayer, and excused absences from employer programs that include conflicting religious expression. If the accommodation requested requires anything more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employee’s job rights or benefits, impairs workplace safety, or conflicts with other laws or regulations, it is likely an undue hardship.  Examples of possible undue hardships may include training part-time employees at substantial cost to cover for another employee who cannot work on Saturdays or paying premium or overtime costs to accommodate the religious needs of employees. Note: listen to a previous podcast on this matterhere.

In Mach Mining, LLC v. EEOC, No. 13-1019, 575 U.S. ____ (2015), the United States Supreme Court ruled that the Equal Employment Opportunity Commission’s pre-suit obligation to attempt to conciliate alleged unlawful workplace practices is subject to judicial review.  When credible evidence suggests that the EEOC has failed to comply with its statutory conciliation obligations, courts are empowered to stay any litigation filed by the EEOC until the EEOC attempts conciliation.  The Mach Miningruling confirms that any exercise of the EEOC’s expansive powers to investigate and litigate against employers must fall within the express statutory limits. Rejecting the EEOC’s position that its conciliation actions are not subject to judicial review, Justice Kagan’s unanimous opinion held that the conciliation process “necessarily involves communication between the parties, the exchange of information and views.”  At a minimum, the EEOC must: tell the employer about the claim, essentially what practice has harmed which person or class; and provide the employer with an opportunity to discuss the matter in an effort to achieve voluntary compliance. The Mach Mining decision underscores that there is “a strong presumption” favoring judicial review of administrative action.  Just this term, we have seen the Supreme Court interpret and reject the Government’s position that DHS regulations are “the law” in Department of Homeland Security v. MacLean,  reaffirm the distinction between legislative and interpretive DOL rules in Perez v. Mortgage Bankers, and cast doubt on the EEOC’s Guidelines for Pregnancy Discrimination in Young  v. UPS.  The Mach Mining conciliation requirement may benefit employers in several ways.  First, it underscores the importance of confidentiality when employers negotiate with the EEOC and charging party, in an attempt to resolve the dispute without public or costly litigation.   The Court addressed the need for the parties to rely on the non-disclosure provisions of the statute to promote candor in settlement discussions, and noted that conversely that “minimum results will be achieved if a party can hope to use accounts of the discussions to derail or delay” the matter. Second, the employer can obtain information about the claim from the EEOC and charging party during conciliation.  Although “[n]othing said or done during” conciliation may be used as evidence in a subsequent proceeding, such information can be helpful when assessing risk and determining whether and how to litigate. Third, if the EEOC’s conciliation efforts are essentially nonexistent, the employer may move to stay the litigation.   To that end, an employer may consider filing a motion to stay an EEOC lawsuit pleading a “pattern or practice” claim implicating a group of employees where the EEOC attempted conciliation of only individual claims. More broadly, Mach Mining teaches that the EEOC’s expansive powers to investigate and litigate are not limitless and are subject to review.  Those limits are defined by statute and the allegations made in the charge of discrimination.

Abercrombie & Fitch announced this week it is discontinuing its iconic "Look Policy" The former policy banned French-tip manicures and certain hair-styling products, as well as extreme makeup or jewelry. The Supreme Court of the United States is expected to decide a case in June involving a teenager who applied for a job at a Tulsa, Oklahoma store while wearing a headscarf. The store manager declined to hire the applicant because of the headscarf, not knowing whether the hijab was worn for religious reasons. The EEOC claims that by not asking, the manager violated EEOC guidelines and may have created a loophole for religious discrimination. Click here to listen. Click here to read previous coverage on the matter.

On March 25, 2015, in a case that garnered significant attention from employers prior to hearing, the U.S. Supreme Court created by a 6-3 vote a new approach for proving and defending against pregnancy discrimination and accommodation cases. The Court's ultimate question – "Why, when the employer accommodated so many, could it not accommodate pregnant women as well?" – and subsequent ruling should provide insight for employers today. To view the full alert, click here. To receive L&E alerts direct to your email, click here to subscribe.