Session #106: Employment Law Update
Wednesday, October 29, 2014 (9:00 am – 10:30 am)
Presenters:
Hon. Harry I. Johnson, III, Member, National Labor Relations Board
Vincent A. Cino, Chairman, Jackson Lewis P.C.
Danitra T. Spencer, Senior Staff Attorney for Labor & Employment,
Consolidated Edison Co. of New York, Inc.
Greg Watchman, Managing Associate General Counsel, Freddie Mac
Q&A With NLRB Member
Harry Johnson
2
Q&A With NLRB Member Harry Johnson
• Noel Canning (Invalidation of Recess
Appointments)— A “Blockbuster” Decision?
– In June, the Supreme Court affirmed the DC
Circuit decision invalidating President Obama’s
recess appointments to the NLRB.
– What impact has this had on the many decisions
previously rendered by these recess appointees?
– How is the Board addressing these decisions?
3
Q&A With NLRB Member Harry Johnson
• In the Board's Fresh & Easy decision on August 11, an
employee pursuing an internal individual harassment claim
asked some of her colleagues to provide statements in
support of her claim.
• In previous cases the Board had said similar actions were
not concerted activity, because the employee was seeking
to benefit only herself. But in Fresh & Easy, the majority
reached the opposite conclusion.
• You agreed with the result in this case, but not with the
majority's rationale generally.
• Can you briefly summarize the majority and minority views
on this issue? What practical advice would you have for
employers based on this decision?
4
Q&A With NLRB Member Harry Johnson
• D.R. Horton (Validity of Class Action Waivers Under NLRA)
– The NLRB held in DR Horton that class action waivers violate §7
of the NLRA. But the Fifth Circuit subsequently rejected that
ruling in DR Horton v. NLRB. The Second, Ninth and Eighth
Circuits have reached a similar conclusion.
– Nevertheless, the NLRB’s General Counsel continues to
authorize complaints against class action waivers, and in July an
NLRB ALJ held again that an employer’s arbitration agreement
violated the NLRA, relying on the NLRB’s original decision in DR
Horton. The ALJ said he was “required to follow Board
precedent unless and until it is reversed by the Supreme Court.”
– Can you shed light on the NLRB’s lack of deference to the
federal courts of appeals and to the Federal Arbitration Act?
5
Q&A With NLRB Member Harry Johnson
• Joint Employer Relationship
– The NLRB General Counsel has indicated a desire
to redefine more broadly when a host employer
may be deemed a “joint employer” of a
contractor’s employees for collective bargaining
purposes.
– Can you update us on the status of this issue?
6
Q&A With NLRB Member Harry Johnson
• Confidentiality in Investigations
– The Board held in Banner Health (2012) that
employers adopting a blanket policy requiring
confidentiality in internal investigations are in
violation of the NLRA.
– Some contend that there should be a presumption
that requiring confidentiality is lawful—since it serves
a host of legitimate business purposes as well as
employee interests—unless a charging party can show
some evidence that it is being used to circumvent §7
rights.
– Can you share your perspective on this issue, or offer
any practical tips?
7
Q&A With NLRB Member Harry Johnson
• Accelerated Elections Procedures
– After its first effort was overturned in the courts,
the NLRB is back with the same proposal to
reduce the time for a representation election in
significant ways. Can you outline the concerns you
have raised publicly about this proposal, which
you have labeled “vote now, learn later”?
– What is the likely timetable for finalizing these
procedures?
8
Q&A With NLRB Member Harry Johnson
• Use of employer email systems
– In the 2007 Register Guard decision, the Board
limited union access to employer email systems,
finding no statutory NLRA right of access.
– Can you update us on the efforts by some at the
Board to overturn Register Guard in pending
cases?
9
Q&A With NLRB Member Harry Johnson
• Social Media Policies
– The Board has struck down a number of corporate
social media policies, concluding that they violated
employees’ §7 rights. In the Kroger case, for example,
an ALJ struck down the company’s requirement that
employees identifying themselves as Kroger
employees in social media must state that they do not
represent the opinions of Kroger.
– What practical guidance would you give employers on
drafting their social media policies?
10
Supreme Court Wrap-Up
11
Sandifer v. U. S. Steel Corp., ___ U.S. ___, 134 S. Ct. 870,
187 L. Ed.2d 729 (2014)
• Plaintiff-employees claimed they were unlawfully
denied compensation for time spent putting on
and taking off protective gear needed to do their
jobs and required by their employer.
• Section 3(o) of the Fair Labor Standards Act
allows a collective bargaining agreement to
exclude from pay “clothes”-changing time. Such a
provision was in the plaintiff-employees’
collective bargaining agreement.
12
Sandifer v. U. S. Steel Corp., ___ U.S. ___, 134 S. Ct. 870,
187 L. Ed.2d 729 (2014)
• Employees need not be paid under the Fair Labor
Standards Act for their pre-shift and post-shift
donning and doffing of clothing required for work
where the employer and the workers’ union have
agreed in a collective bargaining agreement that such
activity would not be compensated.
• Adopts majority view of Circuit Courts.
13
Sandifer v. U. S. Steel Corp., ___ U.S. ___, 134 S. Ct. 870,
187 L. Ed.2d 729 (2014)
• The Supreme Court ruled “clothes,” for the purposes of the FLSA,
means “items that are both designed and used to cover the body
and are commonly regarded as articles of dress.” It rejected the
plaintiffs’ argument that items designed to protect against
workplace hazards (e.g. glasses, earplugs) could not be “clothes.”
• Court rejected the employer’s argument that “clothes” were
“anything worn on the body” (e.g. respirators kept and put on as
needed at job locations).
• Court ruled the time workers spent donning and doffing these
items was not compensable because the statutory exclusion for
“time spent” changing clothes was broad enough to include items
that were not “clothes,” so long as the vast majority of the time in
question is spent donning or doffing clothes as opposed to nonclothes items.
14
Burwell v. Hobby Lobby Stores, Inc., ___ U.S. ___, 134 S. Ct.
2751, 189 L. Ed.2d 675 (2014)
• Regulations promulgated under the Affordable Care
Act (“ACA”) require group health plans to provide
preventive care for women without cost sharing. The
regulations also specified 20 contraceptive methods
approved by the FDA that must be provided, including
four methods that may have the effect of preventing a
fertilized egg from implanting in the uterus.
• Hobby Lobby, a Christian-owned arts and crafts store
chain, challenged the contraceptive mandate on the
grounds that it violated its religious freedom under the
Religious Freedom Restoration Act of 1993 (“RFRA”).
15
Burwell v. Hobby Lobby Stores, Inc., ___ U.S. ___, 134 S. Ct.
2751, 189 L. Ed.2d 675 (2014)
• Supreme Court ruled 5-4 that closely-held corporations cannot be
required to provide contraceptive coverage as mandated by the
ACA.
• The RFRA prohibits the federal government from “substantially
burdening” a person’s exercise of religion, except where the burden
is both in “furtherance of a compelling governmental interest” and
is the “least restrictive means” of furthering the interest.
• The Supreme Court found that closely held corporations are
“persons” within the meaning of the RFRA and, therefore, the
protections of that statute apply.
• Additionally, the Court held that the ACA’s penalties for failure to
comply with the contraceptive mandate (estimated at close to $475
million a year for Hobby Lobby) were a “substantial burden” within
the meaning of the RFRA.
16
Burwell v. Hobby Lobby Stores, Inc., ___ U.S. ___, 134 S. Ct.
2751, 189 L. Ed.2d 675 (2014)
• Four justices dissented from the majority opinion.
• The dissenters sharply criticized the majority for essentially
concluding that commercial entities could opt out of almost
any law considered incompatible with their owners’
religious beliefs.
• Found the ACA’s contraceptive coverage requirements did
not substantially burden the exercise of religion, because
covered employers merely directed money into
undifferentiated funds to finance a wide variety of benefits.
• ACA’s contraceptive coverage requirements furthered the
compelling interests of public health and the well-being of
women.
17
Supreme Court: Lawson v. FMR LLC (3/4/14)
•
•
•
Does SOX §806 Extend to Contractor Employees Working on Behalf of Public
Companies?
• Mutual funds: public companies covered by SOX – but no employees
• Plaintiffs: former employees of private consulting firms that advised the
mutual funds
District Court: YES; First Circuit: NO
Supreme Court (6-3): YES—SOX §806 Extends to Contractor Employees
• Concern that mutual fund wrongdoing could never be safely reported
unless §806 is extended–given that funds often have no employees.
• Rule subject to “various limiting principles”; precise bounds uncertain
• Majority: only extends to contracts lasting “a significant period of time”
• Plurality: protected activity must relate to work for public company
• Doesn’t address self-employed independent contractors working for public
companies
18
Supreme Court: U.S. v. Quality Stores (3/25/14)
• IRS Rule: Under the Internal Revenue Code, severance pay tied to the
receipt of unemployment benefits is a “supplemental unemployment
compensation benefit” (“SUB”) not traditionally considered as taxable
wages.
• Quality Stores paid taxes on severance pay, then sought refund
• Bankruptcy court, district court, and 6th Circuit agreed: no taxes owed
• Supreme Court reversed:
•
•
•
FICA broadly defines “wages”
Here the severance pay was not tied to the receipt of unemployment benefits
In addition, the severance pay varied by position and tenure, and was deemed
remuneration for employment under the FICA definition
• Court did not consider whether IRS position is consistent with the broad
definition of wages under FICA.
19
Supreme Court: Fifth Third Bancorp v. Dudenhoffer (6/25/14)
• Fifth Third’s 401K plan included an ESOP option
• The company’s stock declined by 74% from 2007 and 2009
• Participants brought a “stock drop” class action claiming the plan’s
administrators breached their fiduciary duties by maintaining the
ESOP option, given their alleged knowledge that stock was
overvalued and excessively risky
• Holding: No “presumption of prudence” for ESOP fiduciaries
• Under ERISA, ESOP fiduciaries not required to diversify
• But still subject to ERISA’s general duty of prudence
• May rely on stock’s market value as accurate absent “special
circumstances” that suggest the market price is unreliable
• ESOP fiduciaries not expected to act on insider information
20
EEOC Developments
21
What’s Happening at the EEOC?
Overall charges remain steady
• Biggest contenders
• Race (33,068 charges in FY 2013 – 35.34% of all charges filed)
• Sex (27,687 charges in FY 2013 – 29.5% of all charges filed)
• Retaliation (38,539 charges in FY 2013 – 41.1% of all charges filed)
• Age (21,396 charges in FY 2013 – 22.8% of all charges filed)
• Disability (25,957 charges in FY 2013 – 27.7% of all charges filed)
22
EEOC’s Wild Ride
• Of late, the EEOC has been experiencing an unprecedented
series of losses, fee awards and harsh criticism from the
federal courts
• District Court Slams EEOC for Background Check Lawsuit
– EEOC sued employer for criminal & credit check process
– Testimony of EEOC’s expert was “an egregious example of scientific
dishonesty”
– EEOC failed to identify a specific practice within the criminal and
credit check process that caused a disparity
– Court: EEOC itself conducts criminal checks (all hires) and credit
checks (90% of new hires)
EEOC v. Freeman, No. RWT 09cv2573 (D. Md. 8/9/13)
23
EEOC’s Wild Ride
More Trouble on Background Checks . . .
• Kaplan Higher Learning (6th Circuit 4/9/14) (dismissing EEOC’s
disparate impact claim based on employer’s credit checks;
unreliable data used to demonstrate disparate impact; noting
that EEOC was challenging the same practice it uses itself)
– Rejects EEOC’s “homemade methodology” of “eyeballing”
drivers license photos to identify employees’ race;
approach was “crafted by a witness with no particular
expertise to craft it, administered by persons with no
particular expertise to administer it; tested by no one, and
accepted only by the witness himself.”
• Peoplemark (6th Cir. 2013) (upholding fee award of $750,000
against EEOC; agency continued to litigate case after learning
that company did not have a blanket “no felons” hiring policy)
24
EEOC’s Wild Ride
Even more trouble on background checks . . .
• The State of Texas has filed suit to invalidate the
EEOC’s enforcement guidance on background
checks, issued in April 2012. Texas v. EEOC (N.D.
Texas 11/4/13) (dismissed for lack of case or
controversy, 8/20/14)
• Nine state attorneys general (WV, AL, KS, MT, CO,
GA, NB, SC, UT) wrote to the EEOC calling the
background check suits “misguided and a
quintessential example of gross federal
overreach.” (7/24/13)
25
EEOC’s Wild Ride
More trouble on other fronts:
• EEOC v. CRST Van Expedited (N.D. Iowa 8/1/13) (awarding
employer $4.7 million in fees against EEOC in long-running
sexual harassment lawsuit; “the EEOC’s actions in pursuing
this lawsuit were unreasonable”)
• Case New Holland v. EEOC: Company suing EEOC for
sending over 1,000 emails to its employees & managers
without prior notice to company and without finding of
reasonable cause.
• Romero v. Allstate (E.D. Pa. 3/13/14) (dismissing EEOC claim
that employer’s mere offer of release in exchange for
additional severance or a right to rehire was retaliatory)
26
EEOC’s Wild Ride
Even more trouble on other fronts:
• EEOC v. HomeNurse (N.D. Ga. 2013) (refusing to enforce EEOC subpoena
due to EEOC’s “highly inappropriate” misuse of authority)
• EEOC v. Womble Carlyle Sandridge & Rice, LLP, 13-CV-46 (M.D.N.C. 1/6/14)
(EEOC failed to ensure that relevant job search records were preserved by
individual on whose behalf the agency brought suit; finding “negligence, if
not gross negligence” on EEOC’s part; awarding fees and costs to employer
but delaying resolution of adverse inference issue)
• EEOC v. Sterling Jewelers (W.D.N.Y. 3/10/14) (EEOC’s largest systemic
pattern & practice lawsuit dismissed because EEOC failed to conduct a
pre-litigation investigation of the pay & promotion discrimination claims it
asserted; mere gathering of information from others was insufficient
without independent analysis; labeled by commenters as a “stunning
defeat” for EEOC)
27
“Bronies”: A New Protected Class?
• Since 2010, Hasbro’s “My Little Pony” cartoon TV show about candycolored ponies, targeted at 6-year-old girls, has attracted a large following
of adult heterosexual males, who call themselves “Bronies”.
• Recently, a Brony was terminated from his job because of his Brony status.
He displayed “Applejack the Pony” as his screen saver, and talked with his
colleagues about his love for the show.
• His boss told him it was weird that he had a TV show for little girls as a
background, and that his Brony status made others uncomfortable.
• His posting about the termination spawned debate over whether firing a
Brony should be unlawful.
• Was the termination a case of unlawful gender stereotyping?
28
“Bronies”: Three Million Men Can’t Be Wrong
• Bronies are part of “the New Sincerity”, which is
heralded as a response to the age of cynicism,
because Bronies watch My Little Pony “un-ironically.”
• Bronies are associated with the motto,
“Be More Awesome.”
29
EEOC
DEVELOPMENTS
30
EEOC v. CVS Pharmacy, Inc., 14-cv-00863 (N.D. Ill.)
• On February 7, 2014, the Chicago office of the EEOC filed an action in
the U.S. District Court for the Northern District of Illinois challenging a
release agreement as improperly limiting an employee's ability to file
EEOC charges and to participate in an EEOC investigation.
• Filed as a Section 707(a) action alleging that certain language in the
release deterred the filing of charges and interfered with employees'
ability to communicate with the EEOC and state human rights
agencies.
• Significantly, the agreement in question contained specific language
advising the employee that nothing in the agreement restricted
him/her from filing a charge.
• It is the EEOC's position that this language does not insulate the
company's release from challenge.
31
Potential Release Provisions Impacted
• Language regarding the employee's right to participate in proceedings by federal,
state or local government agencies enforcing discrimination laws.
• Non-disparagement provisions.
• Non-disclosure provisions, particularly those that cover information on personnel,
skills, abilities, duties of employees, wages and benefits and affirmative action
plans and planning.
• General release language that includes a release of "charges."
• Affirmation of no pending claims.
• Language providing for attorneys' fees to the employer in the event of a breach of
the agreement by the employee.
• Language requiring notification to the employer in the event of a subpoena
• Covenants not to sue.
32
EEOC v. CVS Pharmacy, Inc., 14-cv-00863 (N.D. Ill.)
• The District Court granted CVS’ motion to dismiss on
September 18, 2014.
• The Court based the dismissal on its finding that the EEOC
had not attempted to secure a conciliation agreement
acceptable to the Commission prior to filing the District
Court complaint.
• The Court did not reach the key legal issues under Title VII
in the case.
• Since the matter was dismissed on a procedural issue, it
will likely not affect the EEOC’s scrutiny of employer
separation agreements.
33
Employee Release Agreements
•
•
•
A number of EEOC offices – including Manhattan – are reviewing private
agreements as a condition of granting withdrawal requests from Charging Parties.
Some common release provisions that may present issues to the EEOC include:
– non-disparagement
– cooperation
– covenants not to sue
– Ledbetter affirmations (if applicable)
– no reemployment
– confidentiality clauses which prohibit discussion of the underlying facts
leading up to the agreement.
At least one EEOC office, Manhattan, is refusing to grant a withdrawal request if
the submitted agreement includes a general release that was negotiated directly
with a Charging Party who was not represented by legal counsel.
34
EEOC Guidelines on Religious Garb and
Grooming in the Workplace
• Set forth EEOC’s position that employers are required to
accommodate an employee’s reasonable request for modification
of uniform and dress policies unless granting the request would
impose an undue hardship.
• Employee request must be grounded in sincerely-held religious
belief
• Employers are permitted to request information from the employee
in order to evaluate the sincerity or religious nature of a particular
belief or practice.
• Requires accommodation for religious practices that may deviate
from commonly-followed tenets of the religion.
• Recognizes that an individual's religious beliefs or degree of
adherence may change over time.
35
EEOC Enforcement Guidance on Pregnancy
Discrimination and Related Issues
• First comprehensive update on the subject since 1983 and
supersedes earlier guidance.
• Guidance is in four parts:
– Part One - Discusses the prohibitions under Title VII of the Civil
Rights Act, as clarified by the Pregnancy Discrimination Act of
1978 (PDA).
– Part Two - Discusses the application of the ADAAA’s
accommodation and non-discrimination requirements and the
definition of disability to pregnancy-related impairments.
– Part Three discusses other legal requirements affecting
pregnant workers, including the FMLA.
– Part Four describes “Best Practices” for employers.
36
EEOC Enforcement Guidance on Pregnancy
Discrimination and Related Issues
The Guidance’s more controversial requirements include the following:
– An employer policy of providing light duty only to employees with onthe-job injuries violates the PDA (Commissioner Lipnic noted that this
position has not been adopted by any federal circuit court);
– An employer must provide accommodations to an employee with a
normal and otherwise healthy pregnancy;
– Certain employer inquiries, comments or discussions regarding an
employee’s pregnancy or potential pregnancy are indicative of
discrimination; and
– An employer health insurance plan must cover prescription
contraceptives on the same basis as prescription medications that
prevent medical conditions other than pregnancy.
37
EEOC v. Mach Mining – Federal Split Over
Judicial Review of EEOC Conciliation
• Conciliation is important in Equal Employment Opportunity
Commission matters, occurring in cases in which the EEOC finds
reasonable cause to believe an employer has violated a statute it
enforces.
• The EEOC may file a lawsuit only if the Commission has been unable
to secure a conciliation agreement acceptable to the Commission.
• Most circuit courts (Second, Fourth, Fifth, Sixth, Tenth and Eleventh
Circuits) have decided that courts may engage in a searching review
of the EEOC’s conciliatory efforts.
• Provides employers the opportunity to cite flaws in the agency’s
conciliation process as a defense to the lawsuit and seek dismissal
of the lawsuit based on the failure of the conciliation process.
38
EEOC v. Mach Mining – Federal Split Over
Judicial Review of EEOC Conciliation
• U.S. Court of Appeals for the Seventh Circuit in EEOC v.
Mach Mining, LLC, 738 F.3d 171 (7th Cir. 2013), took
the opposite view.
• Employer argued circuits have long found that the
EEOC’s efforts to conciliate are subject to “good faith”
review as to whether the EEOC:
– provided sufficient information to the employer,
– gave it a meaningful opportunity to respond,
– exhibited a reasonable attitude in light of the employer’s
response.
• U.S. Supreme Court granted certiorari on June 30, 2014
39
EEOC Suits Regarding Transgender
Discrimination
• Another focus of the EEOC SEP is the area of coverage of lesbian, gay,
bisexual and transgender individuals under Title VII’s sex
discrimination provisions, “as they may apply.”
• In September 2014, the EEOC filed two separate actions involving
discrimination claims by transgendered individuals:
• EEOC v. Lakeland Eye Clinic, 14-cv-2421-T35, in the U.S. District Court for the
Middle District of Florida.
• EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., Civ. No. 14-cv-13710 in the U.S.
District Court for the Eastern District of Michigan.
• The lawsuits allege the employers fired the transgendered employees
because they were transitioning from male to female, and/or because
they did not conform to the employer's “gender-based expectations,
preferences, or stereotypes.”
• These are the first two lawsuits ever filed by the EEOC alleging sex
discrimination against transgender individuals.
40
Class Actions and
Waivers
41
Impact of Wal-Mart Stores Inc. v. Dukes
• In 2010 (the year prior to the Wal-Mart decision),
the top 10 employment discrimination
settlements totaled $346.4 million.
• In 2012 (the first year after Wal-Mart), the top
ten employment discrimination settlements
totaled $48.65 million.
• In 2012, filings of employment discrimination
claims remained relatively constant, a trend that
continued into 2013.
42
American Express Co. v. Italian Colors Restaurant,___
U.S. ___, 133 S. Ct. 2304, 186 L. Ed.2d 417 (2013)
•
Arose out of antitrust claim brought by merchants against American Express.
•
Held: A class-action waiver in an arbitration agreement is enforceable, even if the
plaintiffs are able to demonstrate that the cost of proving their claims individually
would deter litigation.
•
Justice Scalia’s opinion noted the following factors supporting this holding:
– Arbitration is a matter of contract which courts must “rigorously enforce”
according to their terms unless the Federal Arbitration Act (FAA) mandate has
been expressly overridden by Congress;
– The “effective vindication” exception does not guarantee class arbitration
simply because the expense of individual vindication of a statutory right would
be expensive.
43
American Express Co. v. Italian Colors Restaurant,___
U.S. ___, 133 S. Ct. 2304, 186 L. Ed.2d 417 (2013)
The American Express decision built on other recent decisions
by the Court which upheld arbitrability of claims:
• CompuCredit Corp. v. Greenwood, ___ U.S. ___, 132 S. Ct.
665, 181 L. Ed.2d 586 (2012)
– Court held that FAA presumption in favor of arbitration is so strong that another
federal statute could only bar arbitration if expressly stated by the other statute.
• AT&T Mobility, LLC v. Concepcion, ___ U.S. ___, 131 S. Ct.
1740, 179 L. Ed.2d 742 (2011)
– Court held California state law invalidating class action waivers in consumer
arbitration agreements was preempted by FAA.
44
Regulatory Changes to Strengthen
Diversity & Inclusion
Expanding Support for Individuals with
Disabilities and Veterans
• Office of Federal Contract Compliance Programs (OFCCP) enforces
the contractual promise of affirmative action and equal
employment opportunity
• OFCCP monitors thousands of federal contractors each year to
ensure that they are meeting their legal obligation to provide equal
employment opportunities for women, minorities, individuals with
disabilities, and protected veterans
• The OFCCP is responsible for:
– Enforcing laws and order - Executive Order 11246, Section 503 of the
Rehabilitation Act of 1973, and Vietnam Era Veterans Readjustment Assistance
Act of 1974
– Conducting audits of AAPs to ensure contractors are providing effective equal
employment opportunities
46
New Regulations Promulgated by the
OFCCP
• These new regulations enhance Federal Contractor’s affirmative
action obligations for protected veterans and individuals with
disabilities
• The regulations require:
– changes to how Company’s collect and report data
– An assessment of the Company’s outreach, recruiting, and
retention of individuals with disabilities and protected
veterans
– new language to be used when incorporating the equal
opportunity clause into a subcontract by reference
47
EEO LAWS & Affirmative Action Programs
(AAPs)
• Employers who have 50+ employees and $50,000+ in government
contracts must have AAPs
• AAPs require contractors to maintain data that tracks/analyzes
participation of protected groups; and identify potential issues with the
contractors’ recruitment and treatment of these groups
• Issues identified by AAPs may require contractors to enhance efforts in
outreach, recruitment, and training to help members of the protected
groups compete for jobs and other opportunities on equal footing
48
Individuals with Disabilities
Section 503 of the Rehabilitation Act
• Section 503
– Requires federal contractors to take affirmative action to employ and
promote qualified individuals with disabilities
– ADAAA (Americans with Disabilities Act Amendments Act): A disability is
a “physical or mental impairment that substantially limits one or more
major life activities; or (2) a “record of” such an impairment; or (3) being
“regarded as” having such an impairment
– 2012 unemployment rate for individuals with disabilities was 15.0%
(general unemployment rate 7.9%)
– The regulations provide employees with the opportunity to voluntarily
self-identify as an individual with a disability in a confidential manner
49
Voluntary Self-Identification of Disability
50
51
Vietnam Era Veterans’ Readjustment
Assistance Act (VEVRAA)
• VEVRAA
– Prohibits federal contractors and subcontractors from discriminating in
employment against protected veterans, and requires these employers
to take affirmative action to recruit, hire, promote and retain these
veterans
• OFCCP Findings
– Increasing number of veterans returned from Iraq and Afghanistan
– 2012 veteran unemployment rate was 9.5% (general unemployment
rate 7.9%)
– VEVRAA regulations revised to address the higher unemployment rate
for veterans
52
Unemployment Rate
53
New Requirements
Requirement
Section 503 – IWD
VEVRAA
Hiring Percentage
(Outreach, Recruitment
and Workforce)
Establish disability goals by job
group and monitor progress
toward goal attainment –
7% utilization goal
Establish hiring
benchmark for
veterans – 8%
Self Identification
(Required Invitation)
3 Phases: Applicants (Pre-offer), Hirees (Post-offer) and
Workforce (1st year, every 5 years thereafter)
Data Collection
Implement new ways to track whether hiring and utilization
goals are being met
Quantitative Comparison:
• Applicants:
Number of protected applicants, total
number of job openings, the number of jobs filled and
total number of applicants for all jobs
• Employees:
Total number of protected applicants hired
and total number of applicants hired
54
New Requirements
Requirement
Section 503 – IWD
VEVRAA
Annual Assessment
Determine effectiveness of outreach and recruitment
activities and document yearly evaluation. Affirmative
obligations to make changes, if necessary
Record Retention
3 years – must retain information to identify trends
in recruitment and hiring and assess success
of outreach and recruitment
EEO Clause
Revise contracts, subcontracts and purchase orders (not
retroactive); mandated Language
Job Listings
Required notice to applicants and employees
of our efforts to recruit veterans and individuals
with disabilities
55
Implementation Dates for Requirements
Effective March 24, 2014
Effective for New AAP Cycle
Update EEO policy
New voluntary
self-identification requests
Update language in contracts
and purchase orders
Utilization goals
and hiring benchmarks
Update language to be included
in job advertisements, postings
Enhanced data collection
Record retention
Annual written assessment of outreach
and requirements efforts
Notification to labor organizations of
company EEO policies and commitment to
taking affirmative action
56
Sample Data Collection
2014
2015
2016
Number of applicants who
self-identify as individuals
with disabilities before an
offer of employment is made
Total number of job openings
Total number of jobs filled
Total number of
applicants for all jobs
Number of applicants with
disabilities hired
Total number of applicants hired
57
OFCCP Directive 2014-02 & Executive Order 13672 Gender Identity & Sex Discrimination
• On June 30, 2014, the Secretary of Labor (“SOL”), announced that
the DOL would ensure that individuals with claims of gender
identity and transgender status discrimination receive the full
protection of federal nondiscrimination laws.
• On August 19, 2014, the OFCCP issued directive to 2014-02, Gender
Identity and Sex Discrimination.
– The directive clarifies that under Executive Order 11246, as amended,
sex discrimination includes discrimination on the basis of gender
identity and transgender status.
– The new directive is consistent with the EEOC’s April 20, 2012 decision
in Macy v. Holder.
• Executive Order 13672: along with Directive 2014-02, Executive
Order 13672 prohibits discrimination on the basis of gender
identity. Executive Order 13672 specifically prohibits discrimination
on the basis of gender identity and sexual orientation, as separate
protected categories.
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Challenges
OFCCP guidance
and procedures
continue to
evolve
Encouraging
voluntary self
identification
Challenges
Review of
physical and
mental
qualifications
standards of jobs
Labor market
competing for
same applicants
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Executive Order 13665 - Non-Retaliation For Disclosure of
Compensation Information
•
•
•
•
On April 8, 2014, which is National Equal Pay Day, President Obama signed Executive Order
13665, the Non-Retaliation Executive Order. EO 13665 amends Section 202 of Executive Order
11246 of September 24, 1965.
EO 13665 prohibits discrimination by federal contractors against employees making inquiries
about compensation or who disclose compensation information.
On September 15, 2014, the OFCCP issued a notice of proposed rule making for EO 13665, and
announced a public comment period which runs until December 16, 2014.
EO 13665 expressly states:
“The contractor will not discharge or in any other manner discriminate against any employee
or applicant for employment because such employee or applicant has inquired about,
discussed, or disclosed the compensation of the employee or applicant or another employee
or applicant. This provision shall not apply to instances in which an employee who has access
to the compensation information of other employees or applicants as a part of such
employee’s essential job functions discloses the compensation of such other employees or
applicants to individuals who do not otherwise have access to such information, unless such
disclosure is in response to a formal complaint or charge, in furtherance of an investigation,
proceeding, hearing, or action, including an investigation conducted by the employer, or is
consistent with the contractor’s legal duty to furnish information.”
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A Balancing of Free Speech Rights and Protected
Activity with Employer’s Rights
• The NLRB has long held that employees who discuss the
terms and conditions of their employment – including
compensation information – are engaging in protected
concerted activity.
• Recognizes employers may still protect their confidential
business information by requiring employees not to disclose
the compensation of co-workers.
• On August 8, 2014, the DOL issued its Notice of Proposed
Rule Making for “Government Contractors, Requirement to
Report Summary Data on Employee Compensation.” Public
comments must be received by November 6, 2014.
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Presidential Memorandum Regarding Employee
Compensation
• On April 8, 2014, President Obama also signed a
Presidential Memorandum to the U.S. Secretary of Labor
titled “Advancing Pay Equity Through Compensation.”
• Secretary of Labor must issue a rule that “would require
federal contractor and subcontractors to submit to DOL
summary data on the compensation paid to their
employees, including data by sex and race.” (120 Days)
• Cited U.S. Census Bureau figures showing that annual
earnings for women were only 77 percent of what men
earned. (2012)
• When measured by hourly earnings, the difference narrows to 86
percent, according to the Federal Bureau of Labor Statistics.
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Equal Pay Report – Requirement for Federal
Contractors to Report Summary Pay Data
• On August 6, 2014, the DOL announced a proposed rule requiring federal
contractors and subcontractors to submit an annual Equal Pay Report on
employee compensation to the OFCCP.
• This requirement applies to Company’s that have more than 100 employees,
and hold federal contracts or subcontracts worth $50,000 or more.
• The proposed Equal Pay Report will help the OFCCP direct its enforcement
resources towards contractors whose summary compensation data suggests
potential pay violations.
• The proposed rule has a public comment period which runs until November
6, 2014.
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Wage & Hour
Developments
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March 13, 2014 Presidential Memorandum
• On March 13, 2014, President Obama directed the Secretary of the
Department of Labor to proposed revisions to modernize and
streamline overtime regulations to:
•
•
•
Update existing protections consistent with the FLSA;
Address the changing nature of the workplace; and
Simplify the regulations for employers and employees to
understand.
• President Obama specifically stated that the minimum salary threshold
for white collar exemptions needs to be updated. The current weekly
threshold of $455 ($23,660 annually) was established in 2004.
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Executive Order 13658
• On February 12, 2014, President Obama signed Executive Order
13658 - Establishing a Minimum Wage for Contractors.
• Raises the hourly minimum wage paid by federal contractors to
workers on covered contracts to $10.10 per hour beginning January
1, 2015. The minimum wage on federal contracts will be increased
on January 1 each subsequent year by an amount determined by
the Secretary of Labor.
• The Department of Labor issued a Notice of Proposed Rulemaking
in connection with the Executive Order on June 3, 2014. The DOL
must issue final regulations by October 1, 2014.
66
Minimum Wage Developments
• July 24, 2009 – Federal minimum wage increased from
$6.55 to $7.25 per hour.
• Twenty-one states have minimum wages higher than the
federal rate.
• In his 2014 State of the Union Address, President Obama
called for raising the minimum wage. Raising the minimum
wage is a key component of the administration’s “year of
action” on the economy. The President’s plan calls for tying
the minimum wage increase to the rate of inflation and
increasing the minimum wage for tipped workers.
67
Minimum Wage Developments
• In March 2014, Sen. Tom Harkin (D-Iowa) and Rep. George
Miller (D-Calif.) introduced legislation to increase the
minimum wage to $10.10 and tie increases to an inflation
index.
• A DOL report released in July 2014 found that the 13 states
that raised their minimum wages January 1, 2014 actually
saw faster job growth than those that did not.
• The Congressional Budget Office predicted raising the
federal minimum wage to $10.10 would result in the loss of
500,000 jobs.
68
State Law Developments
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Paid Sick Leave
• 2006 - San Francisco became the first municipality to provide for
guaranteed paid sick days to employees.
• 2009 - Washington D. C. enacted legislation that required paid sick days
including the use of paid time off for victims of domestic violence, sexual
assault and stalking.
• 2011 – Connecticut becomes the first state to pass legislation requiring
paid sick days for employees.
• 2014 – CA enacted Healthy Workplaces, Healthy Families Act of 2014 in
September.
• Legislation or campaigns to enact legislation exist in at least 21 states
including NY and NJ and a number of major cities including Chicago, San
Diego and Philadelphia.
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Ban The Box Legislation
• Legislation designed to remove unfair barriers to employment.
• Requires public and/or private employers (depending on the jurisdiction
and legislation) to remove questions on job applications concerning an
applicant’s criminal convictions and to defer background checks until later
in the hiring process.
• In 2013 and 2014, eight states (CA, DE, IL, MD, MN, NE, NJ and RI) passed
“ban the box” legislation bringing the total to 12 states that have passed
“ban the box” legislation (CO, CT, HI, MA, NM). Washington, D.C. also
enacted a “ban the box” law on August 21, 2014.
• Over 60 cities and counties, including New York City, Philadelphia, Seattle,
San Francisco, Baltimore and Rochester, NY, have passed some “ban the
box” legislation.
71
Social Media Passwords
• Beginning in 2012, states began to introduce
legislation designed to prevent employers from
requesting passwords to employees’ and
applicants’ personal email accounts and other
social media accounts.
• In 2014, legislation has been introduced or is
pending in 28 states. LA, ME, OK, TN and WI
enacted legislation in 2014.
72
Pregnancy Accommodation Laws
•
15 states and two cities (NYC and Philadelphia) have enacted laws requiring employers
to provide reasonable accommodations to pregnant workers.
•
In February 2014, New Jersey amended the Law Against Discrimination to include
pregnancy as a protected category and require employers to provide reasonable,
pregnancy –related accommodations to pregnant employees.
•
In April 2014, the Florida Supreme Court ruled held that the Florida Civil Rights Act’s
ban on discrimination based on gender can cover claims for pregnancy discrimination,
resolving a conflict among appellate courts in the state. Delva v. The Continental
Group, Inc., 137 So. 3d 371 (Fla. 2014).
•
In May 2014, Minnesota enacted the Women’s Economic Security Act which, inter alia,
requires employers with at least 22 employees to provide reasonable minor
accommodations (water, food, and a stool) or a reasonable, temporary position
transfer for pregnant women.
73
Pregnancy Accommodation Laws
• In June 2014, the City of Houston enacted the Houston
Equal Rights Ordinance expanding protected characteristics
to include a number of categories including pregnancy.
• In July 2014, New York amended the New York State
Human Rights Law to protect unpaid interns against
workplace discrimination and retaliation. The prohibitions
include compelling a pregnant intern to take a leave of
absence unless the pregnancy prevents her from
performing the activities associated with her position in a
reasonable manner.
• California enacted similar protections for unpaid interns,
volunteers and apprentices effective January 1, 2015.
74
Marijuana
• 23 states and the District of Columbia have laws
legalizing marijuana in some form (i.e., legalizing
medicinal use, decriminalizing possession of small
amounts).
• Colorado and Washington are the only states to have
legalized the recreational use of marijuana.
75
Marijuana
• Some states (AK, CA, CO, HI, MA, MI, MO, NH, NJ, OR, RI, WA) have
pro-employer laws regarding the use of marijuana.
For example:
• Colorado’s Amendment 64 includes language that states the
legalization of marijuana is not intended to require an employer to
permit or accommodate use or affect the ability of the employers
to have policies restricting the use of marijuana.
• Coats v. DISH Network, L.L.C., 303 P.2d 147 (Colo. Ct. App. 2013):
Colorado Court of Appeals reinforced an employer’s ability to
discharge employees who test positive for marijuana finding that
for an activity to be lawful it must be permitted by and not contrary
to both state and federal law.
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Marijuana
• Some states (AZ, Ct, DE, IL, ME, MN) provide for employee
protections.
For example:
• On May 29, 2014, Minnesota enacted the Medical Cannabis Act
provided that an employer may not discriminate against a person in
the terms or conditions of employment based upon the employee’s
status as a qualified patient or a qualified patient’s positive drug
test for medical marijuana.
• Other states (D.C., MD, NV, NM, NY) are silent as to employment
issues.
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California Abusive Conduct Training
• On September 9, 2014, the CA governor signed Assembly Bill 2053 modifying
California state law AB1825 which requires mandatory sexual harassment
training for any employee who performs supervisory functions within a
company of 50 employees or more.
• AB2053 requires the mandatory training to include training on “abusive
conduct.”
• Abusive conduct means:
• Conduct of an employer or employee in the workplace, with malice, that a
reasonable person would find hostile, offensive, and unrelated to an
employer’s legitimate business interests.
• May include repeated infliction of verbal abuse, such as the use of
derogatory remarks, insults, and epithets, verbal or physical conduct that
a reasonable person would find threatening, intimidating, or humiliating,
or the gratuitous sabotage or undermining of a person’s work
performance.
• A single act shall not constitute abusive conduct, unless especially severe
and egregious.
78