Employment Law Lookout

Unworkable Employer Work Rules: The Board Once Again Makes Perfection the Enemy of the Good

Posted in NLRB, Workplace Policies and Processes

By Kyllan B. Kershaw, Esq.

Seyfarth synopsis: The Board majority holds firm to its standard for evaluating employer work rules despite Member Miscimarra’s vigorous dissent advocating for a new, clearer standard that takes into account an employer’s legitimate business justifications.

Last Wednesday, a split Board panel (Hirozawa, McFerran) held in William Beaumont Hospital and Jeri Antilla, 363 NLRB No. 162,  that several work rules promulgated by a Michigan hospital violated the National Labor Relations Act.  The Board’s analysis of the hospital’s work rules arose out of a dispute regarding whether the hospital acted lawfully in firing two nurses for bullying behavior following an investigation into the death of a newborn at the hospital.  The Board unanimously upheld the Administrative Law Judge’s finding that the terminations were lawful, but Member Miscimarra, in a scathing partial dissent, disagreed with the Board panel’s finding that certain work rules were unlawful. He called for the Board to adopt a new standard that would allow the Board to consider the degree of adverse impact a given rule might have on protected activity and the legitimate justifications an employer may have for maintaining such a rule.

The Board panel, in affirming the administrative law judge’s finding that several of the rules violated the Act, reached even farther–declaring two additional rules to be unlawful under the Board’s Lutheran Heritage standard.  Specifically, the Board panel found the hospital’s language prohibiting conduct that “impedes harmonious interactions and relationships” and “negative or disparaging comments about the…professional capabilities of an employee or physician to employees, physicians, patients, or visitors” to be unlawful because such language “would reasonably be construed to prohibit expressions of concerns over working conditions.”

In his dissent, Member Miscimarra called for the Board to abandon its Lutheran Heritage standard, under which he claimed that “reasonable work requirements have become like Lord Voldemort in Harry Potter: they are ever-present but must not be identified by name.”  In doing so, Member Miscimarra identified numerous defects with the Lutheran Heritage “reasonably construe” standard, including that the standard: (1) ignores legitimate employer justifications of particular rules; (2) invalidates facially neutral work rules solely because they are ambiguous;  and (3) prohibits the Board from differentiating among industries or taking specific events into consideration that may justify the work rule, noting that the hospital setting should have factored into the analysis of the rules in this case.  Member Miscimarra commented that the standard has resulted in extensive confusion and litigation, arguing that the application of the standard does not permit one to understand the difference between many “lawful” and “unlawful” rules.    Member Miscimarra noted that the Board’s standard stems from a misguided belief that unless employers correctly anticipate and carve out every possible overlap with NLRA coverage, employees are best served by not having employment policies, rules, and handbooks, claiming that “in this respect, Lutheran Heritage requires perfection that literally has become the enemy of the good.”

Employer Takeaways

Although Member Miscimarra’s dissent may offer some solace to employers frustrated by the Board’s recent rulings in the context of employer policies and work rules, unfortunately, the Board majority has chosen not to pursue a clearer standard for evaluating employment policies, once again leaving employers seeking guidance as to what constitutes a lawful work rule with confusion instead of answers. While the Board’s intense focus on workplace rules lingers, employers should consult their labor lawyers to ensure their work rules can withstand the Board’s scrutiny and to determine whether such narrowly-tailored lawful rules actually further the employer’s legitimate business interests.


Un-Mixing The Mixed-Motive Standard

Posted in EEOC, Employment Law Lookout, Uncategorized, Workplace Policies and Processes

By Johanna T. Wise and Alexander Meier

Seyfarth Synopsis. The Eleventh Circuit clarifies the framework in mixed-motive cases. Although damages are limited, a plaintiff can establish a mixed-motive claim by showing a protected characteristic was a motivating factor for an adverse employment action.

Historically, district courts in the Eleventh Circuit were loath to depart from the traditional McDonnell Douglas burden-shifting framework in all but the most egregious employment discrimination cases involving allegations of direct evidence.  That preference and the exclusivity of McDonnell Douglas is, however, showing signs of erosion.

In two recent decisions, the Eleventh Circuit reversed a district court’s grant of summary judgment and fashioned a new framework for Title VII causation determinations.  These decisions suggest that summary judgment will be more difficult to obtain in mixed-motive employment discrimination cases under a 1991 amendment to Title VII: 42 U.S.C. § 2000e-2(m). The provision allows an employee to establish an unlawful employment practice by demonstrating that a protected characteristic “was a motivating factor for any employment practice, even though other factors also motivated that practice.”

The Eleventh Circuit first hinted that employees could proceed under the more lenient “motivating factor” causation standard in Chavez v. Credit Nation Auto Sales, LLC.  That case involved alleged sex discrimination against a transgender auto mechanic.   The company owner allegedly made comments that he was “very nervous” that the mechanic’s gender transition could “negatively impact his business.”  The company owner disciplined the mechanic for various performance issues, and ultimately fired her when he found her asleep at work.

Chavez sued and the district court granted summary judgment based on the company’s legitimate, non-discriminatory reason for her termination, namely falling asleep on the job.  The circuit court reversed and indicated that an employer’s presenting a legitimate, non-discriminatory reason is not a complete defense to liability.  The circuit court reasoned that an employee could still recover declaratory relief and attorneys’ fees, though not damages, by establishing that discrimination based on a protected characteristic was a “motivating factor” for the adverse employment action.

The full impact of Chavez was not entirely clear.  The decision was unpublished, and there were some signs that the company owner deviated from the written disciplinary system to immediately terminate the mechanic.

But the Eleventh Circuit’s recent decision in Quigg v. Thomas County School District, issued just over a month after Chavez, clarified that alternatives to the McDonnell Douglas burden-shifting framework were not as narrowly available as past cases suggested.

Quigg involved an employee who claimed that the school district discriminated against her based on her sex and gender by failing to renew her employment contract.  The school district countered that the employee had performance issues and violated the school district’s ethics policies.

The district court granted summary judgment on all claims using the traditional McDonnell Douglas burden-shifting framework.  The district court found that the school district provided a legitimate, non-discriminatory reason for her termination and that the employee’s evidence was insufficient to establish that her performance issues were mentioned only as a pretext for discrimination.

The Eleventh Circuit reversed, holding that the McDonnell Douglas framework did not apply in mixed-motive cases. Rather, an employee could survive summary judgment by demonstrating that the protected characteristic was a motivating factor, even though the school district had legitimate issues with the employee’s job performance.  The circuit court held that, rather than examine the case under McDonnell Douglas, the proper framework on summary judgment should be to “ask only whether a plaintiff offered evidence sufficient to convince a jury that: (1) the defendant took an adverse employment action against the plaintiff; and (2) [a protected characteristic] was a motivating factor for the defendant’s adverse employment action.”  The decision brings the Eleventh Circuit in line with the majority of other circuits that addressed the issue, including the Second, Third, Fifth, Sixth, and Tenth Circuits. To date, only the Eighth Circuit persists in applying McDonnell Douglas to mixed-motive claims based on circumstantial evidence.

Significantly, an employer can still reduce the damages available to the employee by establishing that it would have made the same decision “in the absence of the impermissible motivating factor.” 42 U.S.C. § 2000e-5(g)(2)(B). This partial defense allows an employer to escape liability for actual damages and the potential for reinstatement but leaves a litigant’s ability to request declaratory relief and fees intact.

Given the limited nature of relief in mixed-motive cases, time will tell whether mixed-motive claims will begin to increase in the Eleventh Circuit or if McDonnell Douglas will continue to apply as the prevailing framework.


Nursing Manager, Removed from Patient Case, Seeks Supreme Court Review in Discrimination Case

Posted in EEOC, Workplace Policies and Processes

By Kevin A. Fritz, Andrew R. Cockroft, and Craig B. Simonsen

Seyfarth Synopsis: Petitioner to the Supreme Court claims that the Sixth Circuit engaged in a “separate but equal” rationale when it rejected her claim that her employer discriminated against her based on race after the employer allegedly acquiesced to a Caucasian family’s request that no African American caregivers provide care to their family member.

In a thought provoking case recently filed before the U.S. Supreme Court, the petitioner, Ms. Jill Crane, asks “whether a race discrimination claim exists under 42 U.S.C. § 1981 where a nursing supervisor has been excluded from providing care or direction concerning care to a patient based solely on her race?” Petition for Writ of Certiorari (Petition), Crane v. Mary Free Bed Rehabilitation Hospital, No. 15-1206 (March 24, 2016).

The underlying case concerns an employer who provides acute care rehabilitation for patients with brain and spinal injuries. Ms. Crane, an African-American, had been employed as a part-time nursing supervisor. In December 2010, another nursing supervisor allegedly told Ms. Crane that a “Caucasian patient’s family had requested that no African-American caregivers provide care for the patient.” Crane v. Mary Free Bed Rehabilitation Hospital, No. 15-1358 (6th Cir. December 11, 2015).

Ms. Crane claimed that, in enforcing the race-based caregiver request, the employer’s action constituted racial discrimination. The employer, while denying that it honored the request, also suggested that even if the request had been honored, no aspect of the Ms. Crane’s employment changed in any way because of the request. “She had the same work hours, responsibilities, duties, status, pay, and benefits after she heard of the request as she did before and, thus, suffered no adverse action.” Id. Also, as a supervisor, the employer claims, Ms. Crane was not responsible for direct patient care. Therefore, the argument continues, any such policy would not have affected her since she would not have been reassigned to accommodate the alleged request.

Subsequently, Ms. Crane applied for another position, which was awarded to different candidate who was White. The employer contended that the successful candidate’s “qualifications were objectively superior” to Ms. Crane’s. Ms. Crane alleged that she was denied the position “because of her race and in retaliation for engaging in certain protected activities.” Id. The District Court granted the employer’s motion for summary judgment.

The Sixth Circuit Court of Appeals agreed, finding that Ms. Crane suffered no adverse employment action. Indeed, it distinguished any potential “de minimis or temporary” impact on an employee from actionable discrimination. It found that “an adverse employment action is ‘a materially adverse change in the terms and conditions of [Ms. Crane’s] employment’… and generally involves material changes in employment status such as ‘hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.’” The Sixth Circuit Court cited to Hollins v. Atl. Co., Inc., 188 F.3d 652 (6th Cir. 1999) and Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998).

In the Nursing Supervisor’s Petition she states that the Sixth Circuit “accepted the District Court’s finding that while race-based assignments may be an adverse employment action, as to her, it wasn’t because the employment action was merely temporary and as a supervisor she did not have assigned responsibility to care for the patient.” The Sixth Circuit, Ms. Crane argues, is in conflict with the Seventh and Eleventh Circuit Courts, which “have held that the Civil Rights Act is violated where an employer makes an assignment excluding a protected class of employees based on [a] customer’s or patient’s preference.” Ms. Crane cited to Chaney v. Plainfield, 612 F.3d 908 (7th Cir. 2010), which involved an African-American certified nursing assistant that was prohibited from caring for a White resident, and Ferrill v. Parker Group, Inc.,168 F.3d 468 (11th Cir. 1999), that  involved a telephone marketing corporation that “would segregate employees, when requested by customers, by assigning separate calling areas and scripts according to race.”

Ms. Crane iterates that the Sixth Circuit engaged in a “separate but equal” rationale, which was provided in Plessy v. Ferguson, 163 U.S. 537 (1896), had long been overruled by cases such as Brown v. Board of Education, 347 U.S. 483 (1954), which held that “separate but equal does not mean there is no racial discrimination.” Indeed, Ms. Crane’s Petition argues that the decision is “contrary to the Civil Rights Act, where there is no circumstance in which segregation based on race is valid regardless of time.”

It may well be that the Sixth Circuit viewed this case as representing a onetime occurrence; the outcome of which might have been different if Ms. Crane had in fact had her duties changed because of the request. It will be interesting to see if the Supreme Court considers the Ms. Crane’s case and whether it is persuaded that an employer may have to litigate allegations of segregation based on race where the alleged segregation was temporary and did not impact the employee’s terms and conditions of employment.

Pay Equity Communications (AKA: What do I say?)

Posted in Diversity, Retention & Pay Equity, EEOC, Employment Law Lookout, SEC

By Kristina M. Launey with Christine Hendrickson

Seyfarth Synopsis.  Responding to inquiries regarding your company’s stance on pay equity can be dicey.  Having a strategy on how you address questions is important. 

Every time a client asks “what do I say” in response to employee inquiries about what the client’s company is doing to ensure fair pay, Justin Bieber’s song “What do you Mean” starts playing in my head as “What do I Say.” Luckily, while I am certainly not a Belieber, I find the song catchy rather than annoying, and appropriately thought-provoking.

It is a tricky question. I don’t think any company – at least not any of our clients (!) – would argue with the importance of treating all employees equally and paying them fairly.  But when an employee, or group of employees, ask pointed questions such as:

  • Has the company analyzed pay equity amongst employees or different genders (or any other protected group)?
  • If not, is there a plan to do so?
  • If so, can the results be shared?
  • Do we have any information on what other companies in our industry are doing on this front?

What do you say? This may be top of mind on the heels of Tuesday’s Equal Pay Day heightened publicity on these issues.  Perhaps your employee has seen one of the many articles on the issue, or read about the companies like that are taking very public positions on the topic (for example, here, here, and here). Or heard about the Pax Ellevate’s comment letter to the SEC requesting that publicly traded companies disclose “gender pay ratios” on an annual basis to their investors.  What if that is not your company’s style?  Or what if you are still getting your bearings about you with all the recent (and ongoing) changes in pay equity laws, and are not ready to make any pronouncements?  Or, what if you did an analysis but it was privileged?  What do you say?

Ultimately, this is something that depends heavily on your company structure and culture. But at its foundation – despite all the specific pay equity laws and regulations, new and old – pay inequality is a discrimination issue.  Reference to a company’s EEO and nondiscrimination policies and principles is an important start.  And letting the employees know the company is committed to treating all employees – regardless of gender, race, or any other status – fairly in all aspects of their employment, including benefits and pay.

Then it gets more complicated. Many factors are considered in making compensation decisions. It is therefore important to ensure that any pronouncement about the factors your organization considers in compensation decisions is not so targeted that it excludes factors that may be important to some but not all employees.  For example, certifications for IT professionals within your organization are likely to impact compensation for those employees, but being an Oracle Certified Master is unlikely to impact the pay of a welder within your organization.  Also, pay equity is a fragile concept – changes to pay can occur on an annual or often more frequent basis – so making a blanket statement that pay is fair for all employees can be risky because a few hires who are paid higher (or lower) than their peers can result in significant results that were not there even a month (or even a few days) earlier.

The law is moving quickly in this area. The way companies assess fair pay now and on a going-forward basis is changing due to recent changes in laws. Many companies are working quickly to perform assessments using new statutory frameworks and ensure pay practices and documentation line up with those laws going forward, and that all employees with any responsibility for pay decisions are appropriately trained.  Finally, and potentially most importantly, for companies that are conducting pay equity analyses – and as we’ve previously indicated (also here and here and here, and here . . . we won’t go on), conducting a proactive pay equity analysis is often the first and best step employers can take to ensure fair pay and diminish legal risk – privilege issues should also be a big consideration.  Speaking publicly about the results of an attorney-client privileged pay equity analysis may put those results at risk of disclosure.

Whether and what to communicate to employees or publicly about these processes and assessments is a decision that each company must make. But, remember that even California law – touted as the strictest in the country – does not require companies to disclose pay information (they just can’t prohibit employees from disclosing or discussing pay amongst themselves).

If there’s any solace, perhaps it’s that you are not alone in wondering “what do I say.” There is no one “right” answer.  There is no one-size fits all response, though we would caution you to carefully consider your company’s pronouncement so it does not unintentionally end up in the “no good deed goes unpunished” category.

*          *          *

Seyfarth’s Pay Equity Group leads the legal industry in fair pay analysis, thought leadership and client advocacy. For over twenty years, we have partnered with our clients to proactively address these developments, and minimize risk. Seyfarth also recently testified before the Equal Employment Opportunity Commission on behalf of the U.S. Chamber of Commerce, requesting the EEOC withdraw its proposal to require employers report data on compensation and diversity through the EEO-1 report.  For questions, contact the authors, Kristina Launey, Annette Tyman, Christine Hendrickson, or your Seyfarth attorney with whom you regularly work.

Bathroom Bills: What Employers Need To Know

Posted in EEOC, OSHA Compliance

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: The passage of “Bathroom” or “Religious Freedom” bills raises issues for employers operating in impacted states. Employers in these states may wish to consider taking proactive and affirmative steps in the wake of these laws.

The belief of many pundits that the issue of LGBT rights was settled following the Supreme Court’s June, 2015 same-sex marriage ruling, has proved false. Indeed, in the nine months since the Supreme Court’s ruling nearly 200 bills have been introduced in state legislatures that limit LGBT rights.  Recently, two of these bills have been signed into law, one in North Carolina and one in Mississippi.  These bills have far reaching implications for employers, both in these states and nationwide, as more states look to enact copycat bills.

In a special one-day session on March 23, 2016, the North Carolina legislature proposed, drafted, passed, and enacted the Public Facilities Privacy and Security Act. The Act directly restricts restroom and locker room usage in public facilities to individuals based on the sex listed on that individual’s birth certificate.  In addition, the Act provides that no city or municipality in North Carolina may enact any ordinance or regulation that would prohibit discrimination in employment or public accommodation on the basis of sexual orientation or gender identity.  The Act further expressly repeals all local anti-discrimination ordinances that extended protection on the basis of gender identity or sexual orientation.  The Act thus invalidated Charlotte’s discrimination ordinance, an ordinance which previously covered places of public accommodation rather than employment generally.  The ACLU has already filed a suit challenging North Carolina’s statute, including a Title IX employment claim against the University of North Carolina.  The Attorney General of North Carolina has stated he will not defend the Act as he considers it unconstitutional.

On April 4, 2016, the state of Mississippi enacted an even more restrictive law, titled the “Protecting Freedom of Conscience from Government Discrimination Act.”  The Mississippi Act states that it seeks to protect the “religious beliefs” that same-sex marriage is impermissible and that gender is immutable and determined at birth.  To effectuate this goal, the Mississippi Act protects employment decisions whose effect is to discriminate against LGBT individuals.  In addition, the Act provides a cause of action to any person against any “third party” that attempts to enforce a rule of the state, or any division thereof, that would grant protection on the basis of sexual orientation or gender identity.

Importantly, prior to these bills being passed, neither Mississippi nor North Carolina extended anti-discrimination protections to LGBT individuals. Indeed, it remains the case that state anti-discrimination laws cover LGBT individuals in only 20 states and the District of Columbia. Nevertheless, the decision to expressly exclude LGBT individuals from the law is sure to encourage and even incentivize discrimination against members of the LGBT community.

In addition, the express state attempts to limit the protections of the LGBT community, are in sharp contrast to the efforts by the federal government to interpret existing anti-discrimination laws as extending protections on the basis of gender identity and sexual orientation. Indeed, in previous blogs we have detailed the positions of the EEOC and the Department of Education that respectively Titles VII and IX, prohibit discrimination on the basis of both gender identity and sexual orientation.  In addition, OSHA has issued employer guidelines providing that employers are to provide restroom accommodations based upon gender identity.  Similarly, the Department of Health and Human Services is drafting forthcoming regulations under the Affordable Care Act barring transgender discrimination in healthcare plans by entities that receive federal funds.

Stay tuned to this blog, as we will be actively monitoring further developments in this evolving legal field. In the meantime, given the growing divide between federal and state interpretations of law, employers may specifically wish to consider revising internal equal employment, non-discrimination and anti-harassment policies to include sexual orientation as protected categories, incorporating the topic of sexual orientation into EEO and harassment training programs.  For help evaluating your benefit policies and practices, please reach out to one of the authors of this post, or another Seyfarth attorney.




The Blunt Truth – ADA, FMLA and Medical Marijuana, How Do They Mix?

Posted in ADA, FMLA

By Lawrence Postol

In Seyfarth’s continuing effort to stay on top of all topics relevant and interesting, several colleagues have started “The Blunt Truth” blog, which will address the legal and practical implications of cannabis laws across the U.S. and their impacts on the business community. Check out this week’s blog piece HERE.  And if you like what you see – don’t forget to subscribe to that blog as well!

A First: California Court Rules Retailer’s Inaccessible Website Violates ADA

Posted in ADA, Title III Access

By Kristina Launey

Last week, a California State Court became the first in the nation to rule that a retailer violated the Americans with Disabilities Act due to a website that is not accessible to individuals with vision-related disabilities.

As we have previously reported, courts have ruled on whether the ADA applies to websites, but have always stopped short – because the cases had usually settled at early stages – of reaching the dispositive factual issue of whether a website actually violated the ADA.

This ruling came on a motion for summary judgment filed by plaintiff Edward Davis’s attorneys, Scott Ferrell of The Newport Trial Group, Victoria Knowles, and Roger Borg. Judge Bryan Foster of the San Bernardino Superior Court ruled that the defendant luggage retailer violated the ADA and corollary California law – the Unruh Act – because plaintiff “presented sufficient evidence that he was denied full and equal enjoyment of the goods, services, privileges, and accommodations offered by defendant [via its website] because of his disability.”  The judge also found sufficient evidence that Title III of the ADA applied to the website because there was a sufficient nexus to defendant’s physical retail store and the website.

The judge ordered the retailer to pay $4,000 in statutory damages under the Unruh Act, finding it undisputed that plaintiff’s access to the website was prevented at the time it was designed. The judge ordered injunctive relief in the form of defendant taking steps necessary to make the subject website “readily accessible to and useable by individuals with visual impairments or to terminate the website”; but provided no detail on whether a certain standard would need to be met to have complied with this injunctive relief order. The plaintiff will also be entitled to attorneys’ fees as the prevailing party, which could be substantial given the discovery and briefing involved in the motion for summary judgment.

This order ironically came during the same week virtually all scientists, practitioners (including me), educators, government officials, companies, advocates, and interested individuals with disabilities were attending digital accessibility’s major annual conference – California State University, Northridge’s 31st Annual International Technology and Persons with Disabilities Conference– just a few hundred miles away from the court.

High Profile Pay Equity “Champions”: U.S. Women’s Soccer Players File EEOC Wage Discrimination Charge

Posted in EEOC

By Kristina Launey and Annette Tyman, Seyfarth Pay Equity Group

Today five members of the reigning World Cup and Olympic champion U.S. Women’s national soccer team filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging wage discrimination.  In the EEOC charge, the players contend that even though the women’s team is the driving economic force for U.S. Soccer, its players are paid far less than their counterparts on the men’s national team.  The players filing the complaint are some of the highest profile and most decorated: co-captains Carli Lloyd and Becky Sauerbrunn, forward Alex Morgan, midfielder Megan Rapinoe and goalkeeper Hope Solo, acting on behalf of the entire women’s team, saying they are all employees of U.S. Soccer through their national team contracts.

In a statement the players and their attorney released, Solo said: “The numbers speak for themselves.  We are the best in the world, have three World Cup championships, four Olympic championships, and the U.S.M.N.T. get paid more to just show up than we get paid to win major championships.” The players contend that they earned as little as 40 percent of what players on the U.S. men’s national team earned – despite the women’s team greater successes of late – and that they were shortchanged on bonuses, appearance fees, and per diems.

Whether the players will be successful remains to be seen.  Despite the success of the women’s team, other factors such as revenue streams, viewership, game attendance and sponsorships, to name just a few, may explain away any perceived wage gaps.   These factors, among others, demonstrate the complexity involved in setting and analyzing differences in pay.

Notably, U.S. men’s and women’s soccer pay were agreed to in separate collective bargaining agreements.  The players and U.S. Soccer are currently in separate litigation regarding whether the women’s CBA is still in effect or expired.

The soccer players’ current action is consistent with former U.S. Soccer star Abby Wombach’s personal pay equity “mission.”  She stated in a recent Sports Illustrated Interview: “True equality is what I’m after, and not just in sports either; I want to go to the big businesses and change the world.”

Change is happening.  States, led by California, New York, New Jersey, and Massachusetts, the federal government and administrative agencies are moving fast to update laws and to take action to more closely monitor pay equity and to make it easier for employees to take action against employers if they believe they are not paid fairly.  Employers across the country are rightfully paying attention – even those that have closely monitored pay equity for years – by re-evaluating their pay practices, policies, procedures, and training to ensure compliance with new laws, conducting pay equity audits, and ensuring they are best prepared to defend themselves if faced with an administrative or court action.

To learn more about emerging developments in this area, tune into Seyfarth’s Equal Pay Day 2016 webinar on April 12 – register by clicking here. Members of Seyfarth’s Pay Equity Group will bring you up to date on:

  • Developments in compliance and litigation, including state legislation, class action and other litigation
  • The EEOC’s proposed pay report and the OFCCP’s systemic case focus

This webinar will also provide you with information on best practices and critically important information about avoiding risk as you implement best practices.

Seyfarth’s Pay Equity Group leads the legal industry in fair pay analysis, thought leadership and client advocacy.  For over twenty years, we have partnered with our clients to proactively address these developments, and minimize risk. Seyfarth also recently testified before the Equal Employment Opportunity Commission on behalf of the U.S. Chamber of Commerce, requesting the EEOC withdraw its proposal to require employers report data on compensation and diversity through the EEO-1 report.  For questions, contact the authors, Kristina Launey and Annette Tyman, or your Seyfarth attorney with whom you regularly work.

Department of Labor Reveals Final Persuader Rule

Posted in Workplace Policies and Processes

By Brian M. Stolzenbach, Esq.

On March 23, 2016, the DOL revealed its final “persuader” rule — a regulation that has been in the works for years. According to the DOL, the rule “realign[s] the Department’s regulations with the text of . . . the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).”

Among other things, the LMRDA requires certain public reporting by employers and the third parties they retain to persuade their employees “to exercise or not to exercise, or . . . as to the manner of exercising, the right to organize and bargain collectively through representatives of their own choosing.”

The Final Rule, which will be published in the Federal Register tomorrow, is designed to be effective April 25th. In its press release, the DOL says the Final Rule will apply to covered agreements and arrangements with so-called “persuaders” that are entered into on or after July 1, 2016.

The Final Rule seeks to significantly expand the scope of what employers and “persuaders” must publicly report to the DOL. You can expect legal challenges to the Final Rule, with requests to enjoin implementation while that litigation proceeds and to permanently enjoin implementation at the conclusion of the litigation.

At present, however, all employers — not just those with unionized employees and not even just those who believe they are the target of actual or potential organizing by labor unions — need to familiarize themselves with the Final Rule and its potential effects on their businesses.

Alas, the Final Rule is more than 400 pages long! Seyfarth Shaw attorneys are already hard at work performing an in-depth analysis of the Final Rule, potential legal challenges to the Final Rule, and best approaches for compliance with the Final Rule.  As soon as we have conducted a thorough analysis, we will be prepared to provide further and more specific guidance.

In the meantime, you may wish to consider the DOL’s own basic summary of the Final Rule, which reads as follows:

Consultant activities that trigger reporting of an agreement or arrangement with an employer include direct contact with employees with an object to persuade them, as well as the following categories of indirect consultant activity undertaken with an object to persuade employees:

  1. Planning, directing, or coordinating activities undertaken by supervisors or other employer representatives   including meetings and interactions with employees;
  2. Providing material or communications for dissemination to employees;
  3. Conducting a union avoidance seminar for supervisors or other employer representatives; and
  4. Developing or implementing personnel policies, practices or actions for the employer.

Agreements are not reportable if the consultant merely advises or represents the employer. For example, agreements under which a consultant exclusively provides legal services are not to be reported.  Representation of the employer before a court or similar tribunal or during collective bargaining negotiations also does not trigger reporting.  Other examples of non-reportable agreements include:

  1. Guidance on employer personnel policies and best practices
  2. Seminars in which the consultant does not develop or assist the attending employers in developing anti-union tactics or strategies
  3. “Vulnerability Assessments,” including the use of surveys, in which a consultant evaluates an employer’s proneness to union-related activity and offers possible courses of action
  4. Sales pitches
  5. Sales of “off-the-shelf” materials
  6. Provision of information for use only in conjunction with an administrative, arbitral, or judicial proceeding
  7. Franchisor-franchisee agreements

The entire Final Rule and related information from the Department of Labor can be found here: http://www.dol.gov/olms/regs/compliance/ecr_finalrule.htm


Second Circuit Court Holds HR Director is Individually the “Employer”

Posted in FMLA, Workplace Policies and Processes

By Erin Dougherty Foley and Craig B. Simonsen

In an opinion last week, the Second Circuit ruled that a company’s human resources (HR) director could be held individually liable for Family and Medical Leave Act violations.

The Court said that the HR director had enough control over an employee’s job and enough input into her firing to qualify her as an “employer” under the statute!  Graziadio v. Culinary Institute of America, Shaynan Garrioch, and Loreen Gardella, No. 15-888-cv (March 17, 2016).

We have blogged previously on other important FMLA policy and case law, including Employer Beware: The FMLA Can Reach Further Than You May Think, New Guidance From The EEOC Requires Employers To Provide Reasonable Accommodations Under The Pregnancy Discrimination Act, Employer Intent Is Immaterial In FMLA Interference Claims, and The Family and Medical Leave Act: 10 Years Later.

In the facts of this case, as explained by the Court, the plaintiff took FMLA leave to care for her son, and then took additional leave a few weeks later when her second son broke his leg. During the plaintiff’s second term of absence, the employer took issue with the paperwork supporting the leave request, and refused to allow her to return until she provided new documentation. Communication between the plaintiff and the employer broke down, and ultimately the employer fired the plaintiff for abandoning her job. The plaintiff subsequently sued the employer and two of her supervisors alleging interference and retaliation under the FMLA, and discrimination under the Americans with Disabilities Act (ADA).

At the District Court, summary judgment was granted to the employer. The District Court found that the plaintiff could not establish that she was wrongfully denied FMLA leave, or that the employer’s actions were retaliatory or discriminatory. Importantly in this case, the District Court dismissed the plaintiff’s individual FMLA claims against the HR employees, finding that neither employee qualified as an “employer” subject to liability under the FMLA. Graziadio v. Culinary Inst. of Am., No. 13 Civ. 1082 (NSR), 2015 WL 1344327 (S.D.N.Y. Mar. 20, 2015).

The District Court also determined that the plaintiff could not sustain her claims of FMLA interference because she had “not been denied any leave to care for [her son] and, having failed to submit a medical certification form, had no entitlement to leave to care for [her second son].” In addition it rejected the plaintiff’s FMLA retaliation and ADA discrimination claims, finding that the employer had proffered legitimate reasons for the termination—namely, plaintiff’s failure to comply with FMLA certification requirements and her failure to contact her supervisor to return to work, and she had not shown these employer reasons to be pretextual.

Opposite, the Second Circuit concluded that the plaintiff had presented genuine disputes as to material fact with respect to her claims of FMLA interference and FMLA retaliation, but it agreed with the District Court that the plaintiff failed to provide evidence supporting a claim of discrimination under the ADA.

As to individual employee liability for the HR director, the Circuit Court noted that:

An individual may be held liable under the FMLA only if she is an “employer,” which is defined as encompassing “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer,” 29 U.S.C. § 19 2611(4)(A)(ii)(I); see also 29 C.F.R. § 825.104(d).

The Court indicated that the Second Circuit had not yet tested the “contours of this provision,” but that several of other circuits, as well as district courts within the Second Circuit, had observed that the “FMLA’s definition of ‘employer’ largely tracks the definition of ‘employer’ used in the Fair Labor Standards Act (FLSA), 29 U.S.C. § 203(d), and have come to the reasoned conclusion that the standards used to evaluate ‘employers’ under the FLSA should therefore be applied to govern the FMLA as well.” The Court cited to Haybarger v. Lawrence Cty. Adult Prob. & Parole, 667 F.3d 408 (3d Cir. 2012), Modica v. Taylor, 465 F.3d 174 (5th Cir. 2006), Wascura v. Carver, 169 F.3d 683 (11th Cir. 1999), and Santiago v. Dep’t. of Transp., 50 F. Supp. 3d 136 (D. Conn. 2014), and agreed “with these courts and apply the economic-reality test used to analyze individual liability in the FLSA to the FMLA case before us.”

While the employer’s Vice President of Administration and Shared Services (VP) retained “ultimate termination authority,” the Court found that the VP had merely “directed th[e] issue to [his subordinate] for handling.” In testimony the subordinate HR director described her role in the “termination as a joint ‘decision that was made between myself and [the VP].” Additionally, the HR director had exercised control over the plaintiff’s schedule and conditions of employment relating to her return from FMLA leave.

Specifically, the Court found that the HR director: (a) reviewed plaintiff’s FMLA paperwork; (b) determined its adequacy; (c) controlled plaintiff’s ability to return to work and under what conditions; and (d) sent nearly every communication regarding her leave and employment (including the letter that ultimately communicated her termination). As such, a “rational jury could find, under the totality of the circumstances, that [the HR director] exercised sufficient control over [plaintiff’s] employment to be subject to liability under the FMLA.”

As to the FMLA violation, the Court noted that “we cannot help but note, however, that in making this still rather oblique request, [the HR director] studiously avoided responding to any of [the plaintiff’s] pleas for clarification on ‘what [paperwork] you would specifically like me to obtain’ and for transmission of any 6 specific desired FMLA forms. And such unresponsiveness may itself run afoul of the FMLA’s explicit requirement that employers ‘responsively answer questions from employees concerning their rights and responsibilities under the FMLA’.”

The Court concluded that “in light of our conclusion that a jury can find that [the employer] interfered with [the plaintiff’s] leave, the first of the district court’s grounds no longer supports a grant of summary judgment.”

In light of this startling Circuit Court opinion, employers may wish to consider the ramifications of this case as they analyze their organizational structure, chain-of-command, policy, procedures, and training systems. It’s one thing to deliberately decide as a business to subject lower level managers to individual employer liability, but something quite else for it to happen accidentally.