EMPLOYMENT LAW
UPDATE
June 3, 2015
Keith Weddington
PARKER POE ADAMS & BERNSTEIN LLP
AGENDA
I. Judicial Decisions
 U.S. Supreme Court
 4th Circuit
 N.C. Appellate Courts
II. Legislative and Regulatory
Update
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SUPREME COURT DECISIONS
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NLRB RECESS APPOINTMENTS
INVALIDATED
NLRB v. Noel Canning
(Decided June 26, 2014)
 Obama’s “recess” appointments of
NLRB commissions invalidated
 Little to no substantive impact
 New properly appointed
commissioners are making essentially
the same substantive decisions
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ACA’S CONTRACEPTIVE MANDATE
Burwell v. Hobby Lobby
(Decided June 30, 2014)
 Affordable Care Act’s contraceptive
mandate violates the religious rights
of owners of closely held corporations
 Mandate is contrary to Religious
Freedom Restoration Act (“RFRA”)
 Private corporations can exercise
religious beliefs
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ACA’S CONTRACEPTIVE MANDATE
Burwell v. Hobby Lobby
(Decided June 30, 2014)
 Narrow decision – does not apply to
publicly-held companies or private
companies with dispersed ownership.
 RFRA will only supplant other
legislation where there is no
compelling governmental interest or
if the law in question is not the least
restrictive means of furthering that
interest
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NO OVERTIME PAY FOR
SECURITY CHECKS
Integrity Staffing Solutions v. Busk
(Decided December 10, 2014)
 FLSA does not require employers to
pay employees for time spent in
security checks
 Security check is not the principal
activity or an intrinsic element of
employees’ jobs
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NO OVERTIME PAY FOR
SECURITY CHECKS
Integrity Staffing Solutions v. Busk
(Decided December 10, 2014)
 Even if submission to security checks
are part of your employees’ daily
routine, do not list it in a job
description
 Compensability of preliminary and
postliminary activities continue to be
a case by case determination
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SHIFTING AGENCY
INTERPRETATIONS
Perez v. Mortgage Bankers Association
(Decided March 15, 2015)
 DOL reversed its position on FLSA
exempt status of mortgage brokers
 Court distinguished between
“legislative or substantive rules” and
“interpretive rules”
 Legislative/substantive rules require
notice and comment
 Interpretive rules do not
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SHIFTING AGENCY
INTERPRETATIONS
Perez v. Mortgage Bankers Association
(Decided March 9, 2015)
 So what can an employer do to
challenge interpretive changes?
➤ Agency rule is subject to challenge as
arbitrary and capricious
➤ Courts are not required to grant agencies
unfettered discretion
 Mortgage brokers are once again
non-exempt
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LIGHT DUTY FOR PREGNANCYRELATED RESTRICTIONS?
Young v. UPS, Inc.
(Decided March 25, 2015)
 Pregnancy Discrimination Act
(“PDA”): “Women affected by
pregnancy, childbirth, or related
medical conditions shall be treated
the same for all employment-related
purposes…as other persons not so
affected but similar in their ability or
inability to work.”
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LIGHT DUTY FOR PREGNANCYRELATED RESTRICTIONS?
Young v. UPS, Inc.
(Decided March 25, 2015)
 PDA does not establish “most favored
nation” status for pregnant employees
 Court refused to follow EEOC’s
recently issued guidelines
 Employers must do more than refrain
from active discrimination
 Light duty/alternative positions not
required if employer does not offer
these for other employees
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LIGHT DUTY FOR PREGNANCYRELATED RESTRICTIONS?
Young v. UPS, Inc.
(Decided March 25, 2015)
 If employee shows that employer
accommodated others “similar in
their ability or inability to work,”
employer must show legitimate,
nondiscriminatory reasons for
excluding pregnant employees
 Expense and inconvenience not a
sufficient defense.
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LIGHT DUTY FOR PREGNANCYRELATED RESTRICTIONS?
Young v. UPS, Inc.
(Decided March 25, 2015)
 Employers can be liable under PDA if
they accommodate a large
percentage of non-pregnant
employees, but fail to do so for
pregnant employees
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LIGHT DUTY FOR PREGNANCYRELATED RESTRICTIONS?
Young v. UPS, Inc.
(Decided March 25, 2015)
 Employee can prevail by showing that
employer’s policy puts a “significant
burden” on female employees and the
policy is “not sufficiently strong” to
justify that burden
 In the end, test measures negative
impact on female workers, rather than
an intentionally biased policy
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EEOC CONCILIATION SUBJECT TO
LIMITED REVIEW
Mach Mining, LLC v. EEOC
(Decided April 29, 2015)
 Courts have authority to review EEOC
conciliation efforts
 EEOC must take two steps in conciliation:
1. Provide employers with specific information
about its conclusions re: employer’s conduct
and effect of such misconduct on employees
2. Try to engage employer in a discussion that
would result in employer remedying the
alleged discrimination
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EEOC CONCILIATION SUBJECT TO
LIMITED REVIEW
Mach Mining, LLC v. EEOC
(Decided April 29, 2015)
 Reviewing court would evaluate only
whether EEOC attempted to confer
about a charge, not what happened
during the negotiations
 Remedy for EEOC’s failure to conciliate
is an order that EEOC undertake
conciliation process, not dismissal of
the lawsuit
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RELIGIOUS DISCRIMINATION
EEOC v. Abercrombie & Fitch
(Decided June 1, 2015)
 Retailer rejected hijab-wearing
applicant because of apparent conflict
with its dress code/”Look Policy”
 Applicant did not identify headscarf as
part of religious beliefs
 Employer did not ask, but at least
suspected that it was part of
applicant’s religious beliefs/practices
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RELIGIOUS DISCRIMINATION
EEOC v. Abercrombie & Fitch
(Decided June 1, 2015)
 Title VII prohibits employers from
refusing to hire applicant in order to
avoid accommodating religious belief
 Issue: Does prohibition apply only
where applicant has informed
employer of need for accommodation?
 To establish a Title VII violation,
applicant need only show that need for
accommodation was a motivating
factor in employer’s decision
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RELIGIOUS DISCRIMINATION
EEOC v. Abercrombie & Fitch
(Decided June 1, 2015)
 Employer seeking to avoid an
accommodation violates Title VII even
if it has no more than an
unsubstantiated suspicion that
accommodation would be needed
 Employer may not make an applicant’s
religious practice, confirmed or
otherwise, a factor in employment
decisions
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RELIGIOUS DISCRIMINATION
EEOC v. Abercrombie & Fitch
(Decided June 1, 2015)
 If need for accommodation is
suspected, employer may need to
consider engaging in interactive
process
 Update training regarding hiring
practices
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WATCH THIS ONE NEXT TERM
Green v. Donahoe
 Issue: When does statute of
limitations begin to run on
constructive discharge discrimination
claims?
 At time of discriminatory conduct or at
time of resignation?
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FOURTH CIRCUIT DECISIONS
The
The march to the left continues…
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VERBAL CONDUCT ALONE CAN BE
ACTIONABLE HARASSMENT
Walker v. Mod-u-Kraf Homes
(Decided December 23, 2014)
 Verbal conduct can rise to level of
actionable harassment, even in the
absence of threats or physical conduct
 Frequency and severity of the comments
are key
 Despite several prior 4th Circuit decisions
upholding SJ where seemingly more
severe conduct was present, court
reversed and ordered jury trial
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SOX WHISTLEBLOWER CLAIMS
Jones v. SouthPeak Interactive
(Decided January 26, 2015)
 Federal catch-all 4 year statute of
limitations applies to SOX
whistleblower retaliation claims (not
the 2 year SOL for claims of fraud
under securities laws)
 Emotional distress damages are
recoverable as part of “make whole”
relief
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ADA CONTINUES TO EXPAND
Jacobs v. NC Admin. Office of the Courts
(Decided March 12, 2015)
 Question of whether plaintiff has a
qualifying disability is subject to only a
perfunctory analysis
 Social anxiety disorder is ADA disability
 “Substantially limits a major life
activity” – as compared to most people
in the general population
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ADA CONTINUES TO EXPAND
Jacobs v. NC Admin. Office of the Courts
(Decided March 12, 2015)
 Reasonable accommodation may
require job restructuring
 In the post-ADAAA world, employers
should focus on reasonable
accommodation, not whether a
disability exists
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ADA CONTINUES TO EXPAND
Jacobs v. NC Admin. Office of the Courts
(Decided March 12, 2015)
 Emphasis re: SJ standard – all
reasonable inferences must be
drawn in favor of the non-moving
party – REALLY, REALLY
 Piling on reasons for adverse action
– after the fact – is proof of pretext
 Failure to document is evidence of
pretext
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SINGLE INCIDENT CAN SUPPORT
TITLE VII CLAIM
Boyer-Liberto v. Fontainbleau Corp.
(Decided May 7, 2015)
 4th Circuit (en banc) reversed its own
precedent
 Single workplace incident can be
“severe” enough to trigger Title VII
claim for hostile work environment,
especially where alleged harasser
asserts supervisory authority and
threatens to get employee fired
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SINGLE INCIDENT CAN SUPPORT
TITLE VII CLAIM
Boyer-Liberto v. Fontainbleau Corp.
(Decided May 7, 2015)
 Employee is protected by Title VII's
anti-retaliation section when
complaining about race harassment,
even if the offending conduct has not
yet risen to the level of a hostile work
environment
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SINGLE INCIDENT CAN SUPPORT
TITLE VII CLAIM
Boyer-Liberto v. Fontainbleau Corp.
(Decided May 7, 2015)
 Employers must be careful not to be
dismissive of employee complaints that
supervisor’s comment created
hostile/offensive work environment
 Supervisor training and strong
enforcement of harassment policies
are critical
 Employers may not get a second
chance to avoid liability
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NORTH CAROLINA
STATE COURT DECISIONS
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COURT REWRITES NONCOMPETE
Beverage Systems of the Carolinas, LLC
v. Associated Beverage Repair, LLC
(Decided August 5, 2014)
 Court not limited by “blue pencil rule”
in sale of business context, where
contract expressly gives court ability to
rewrite terms
 Appeal to N.C. Supreme Court pending
 If your contract includes a
noncompete, include provision that
court can rewrite/modify to make it
enforceable
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Legislative and Regulatory
Activity
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NLRB
 Section 7 of the NLRA:
“other concerted activities for the
purpose of collective bargaining or
other mutual aid or protection.”
 Section 8(a)(i) of the NLRA makes it
an unfair labor practice for employer
to “interfere with, restrain or coerce
employees in the exercise of rights
guaranteed in Section 7
35
NLRB REASSERTS POSITION IN
NOEL CANNING
 NLRB affirms the position taken in
Noel Canning case
 Employers’ use of mandatory
arbitration agreements that waive
right to arbitrate as a class violate
Section 7
 But, federal courts have approved
such arbitration agreements
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COMPANY POLICIES UNDER
SCRUTINY BY NLRB
 Increasingly aggressive approach
 Key: Policies that could potentially have a
chilling effect on discussions by employees
of terms and conditions of employment are
unlawful
 Policy in question is often not even used
as the basis for adverse action
 Case by case determinations
 Consequences: rescind policy, remedy
adverse action
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SOCIAL MEDIA AND THE NLRB
 Clicking the “Like” button on Facebook
in response to another employee’s
post about a workplace complaint is
protected activity
 No distinction between employee who
directly complains and one who
echoes such opinions.
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SOCIAL MEDIA AND THE NLRB
 Employee’s profane Facebook rant not
grounds for termination
 Employee’s post re: his supervisor
included:
-“Bob is such a NASTY M__ F___...”
-“F__ his mother and his entire f____
family
 NLRB said comment was impulsive; did
not interrupt work in any way.
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SOCIAL MEDIA AND THE NLRB
(Employers have won a few cases…)
 Termination of counselors at a teen center
for FB chatter re: intent to engage in
insubordination and ignore management
instructions was justified
 Policy stating expectation of civility re:
postings involving coworkers did not
restrict content or violate Section 7
 But, mind you, the NLRB General Counsel
brought these claims in the first place
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EMPLOYEE HANDBOOKS
AND THE NLRB
Policies challenged by NLRB include:
 Standard confidentiality provisions
that define confidential information to
include financial matters,
compensation, personnel matters, etc.
 Prohibitions against photography,
taping or recording
 English only rules
 Prohibitions re: employees discussing
their rates of pay or disciplinary action
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EMPLOYEE HANDBOOKS
AND THE NLRB
 Handbooks need to be reviewed with a
fresh eye, specifically considering
Section 7 issues
 Consider using specific examples of
prohibited behavior
 Include disclaimers emphasizing that
policy is not intended to interfere with
rights to engage in concerted activity
 Location and context of disclaimer
matter
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YOUR EMAIL SYSTEM
AND THE NLRB
 Policy prohibiting use of company
email systems for anything other than
“business purposes” may be unlawful
 Employees given access to email
system for business communications
are presumptively entitled to use
employer’s email for Section 7
activities
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YOUR EMAIL SYSTEM
AND THE NLRB
 Employer can require that Section 7
activities only take place outside of
working time – but, consistent
application and enforcement is a must
 Very limited exceptions for employers
to avoid allowing Section 7 activity on
company email systems
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DOL EXPANDS DEFINITION OF
“SPOUSE” UNDER FMLA
 FMLA rights extended to all legally
married spouses, regardless of their
state of residence
 FMLA now follows the “state of
celebration” rule
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PROPOSED EEOC REGS RE: WELLNESS
PROGRAM ADA COMPLIANCE
 Wellness program participation must be
“voluntary”
 Employees cannot be denied coverage,
terminated or subject to adverse action
for not participating
 Maximum wellness program incentives
or penalties capped at 30% of
employer’s total cost of employee-only
group medical coverage
 Comments due by June 19
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Office Locations
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•
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Charleston, SC
Charlotte, NC
Columbia, SC
Raleigh, NC
Spartanburg, SC
Keith Weddington
Direct Dial 704-335-9035
keithweddington@parkerpoe.com
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