Workplace Policies and Processes

By Erin Dougherty Foley and Craig B. Simonsen

In a recent Eleventh Circuit opinion, the Court found that the insurance carrier was responsible, under Georgia law, for the harm caused by an intoxicated employee’s vehicle usage. Great American Alliance Ins. Co. v. Anderson, No. 15-12540 (11th Cir., February 8, 2017).

In this case, the Court explained, the appellant was involved in a car accident with an intoxicated driver who was driving a company vehicle with his employer’s permission. “After a jury found the driver liable and awarded the appellant one million dollars, the employer’s insurance company, the appellee, filed this suit for a declaration that the driver was not a permissive user – and thus not covered under the applicable insurance policies – because he broke internal company policies.”

The Court found that the Georgia Supreme Court has held that inquiries into permissive use should extend only to whether a vehicle is used for an approved purpose. Citing to Strickland v. Georgia Cas. & Sur. Co., 224 Ga. 487, 162 S.E.2d 421 (Ga. 1968).  “A subsequent decision by the Georgia Court of Appeals, however, held that a company’s internal rules can govern the scope of permissive use, and that violations thereof can negate an individual’s status as an insured.” See Barfield v. Royal Ins. Co. of Am., 228 Ga. App. 841, 492 S.E.2d 688 (Ga. Ct. App. 1997).  Because the District Court followed Barfield, and thereby narrowed the scope of permissive use beyond what was permitted by Strickland, The Court found that it erred, and reversed and remanded.

Strickland, the Eleventh Circuit found, holds that the only inquiry relevant to determining the scope of a generic permissive use clause is whether a vehicle is used for an approved purpose. See 224 Ga. at 492, 162 S.E.2d at 425. In that case the Georgia Supreme Court found that where a vehicle is used for an approved purpose, an employee’s violations of explicit company policies do not foreclose status as a permissive user. See id. at 492, 162 S.E.2d at 425. “We conclude that the “actual use” contemplated and intended by the policy refers only to the purpose to be served and not the operation of the vehicle.”  The Court concluded that the purpose test set forth in Strickland controlled the inquiry into permissive use. Because the District Court extended its analysis further (to include Barfield), it was reversed.

This opinion, for Georgia employers especially, but for employers generally as well, raises important concerns about employee vehicle usage. Employer liability for employee vehicle usage can come from numerous circumstances, but most generally including injuries or accidents caused by employees acting within the scope of their employment.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Teams.

By Anne S. Bider, Robert A. Fisher, and James M. Hlawek

Seyfarth Synopsis: On February 5, 2017, in M.C.A.D. v. Country Bank for Savings, the Massachusetts Commission Against Discrimination (“MCAD”) held that an employer engaged in unlawful disability discrimination when it terminated an employee whose medical leave had ended and who could not provide a definite return to work date. The MCAD found that the employer had an obligation to engage in the interactive process to determine if extending the requested leave was a reasonable accommodation for the employee’s disability.

What should an employer do when an employee whose medical leave has ended cannot provide a return to work date? Fire the employee?  Not so fast.  The MCAD recently found that it was unlawful for an employer to terminate such an employee without engaging in the interactive process to determine if an extension of the employee’s leave would be reasonable.

The Facts

The Complainant was a loan coordinator for Country Bank for Savings. In September 2009, she went on an approved 12-week FMLA leave to give birth.  The leave was scheduled to end on November 30, 2009.  In October, following delivery of her child, Complainant was diagnosed with post-partum depression and notified the Bank that she would not be able to return to work on November 30, as planned.  She provided the Bank with documentation from her medical providers stating that, due to her condition, she would be out of work indefinitely.

On December 11, the Bank advised Complainant that, because her latest documentation did not provide a return date, her employment would be terminated if she did not return to work by December 21. In response, on December 17, Complainant called the Bank and told her supervisor that she hoped to return to work by mid-January.  The same day, Plaintiff’s attorney addressed a letter to the Bank requesting a short extension of Complainant’s leave as an accommodation to her post-partum depression, pending upcoming evaluations from Complainant’s medical providers in mid-January.  The letter stated that after Complainant’s mid-January appointments, she would advise the Bank whether a definite return date could be set.

On December 22, the Bank terminated the Complainant’s employment without further discussion with Complainant because she had not returned to work by December 21 and had not provided a return to work date.

The MCAD’s Decision

The MCAD held that in terminating Complainant’s employment without engaging in dialogue about her return to work date, the Bank discriminated against Complainant on the basis of disability in violation of state law. The MCAD found that once Complainant identified her disability and requested an extended leave, the Bank was obligated to engage in a dialogue with Complainant to determine if the extended leave was a reasonable accommodation.  Here, the Bank mistakenly relied on the 12-week period required by the FMLA as a measure of reasonableness and assumed that all requests for leave beyond the 12-week period were automatically unreasonable.  In addition, the Bank failed to produce any evidence that an extension of Complainant’s leave until mid-January would impose an undue burden on its operations or finances.

What This Decision Means For Employers

This decision reminds employers not to be rigid in administering medical leave. In some circumstances, an extended leave — even beyond the FMLA’s 12-week limit — may be a reasonable accommodation.

Further, the decision demonstrates the importance of the interactive process. Even when an employee is unable to provide a return to work date following exhaustion of medical leave, employers have an obligation to continue the interactive process to determine if a reasonable accommodation is possible.  In this case, the employer should have extended the Complainant’s medical leave for a couple of weeks because there was at least a suggestion that she could have provided a return date by then, unless doing so would have imposed an undue burden.  As the MCAD acknowledged, if the Complainant could not provide a return date by then and had no prognosis for improvement, the obligation to extend her leave likely would have ended.

In short, the decision shows the importance of flexibility, reasonableness, and interaction in dealing with employees who are unable to return from medical leave.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Absence Management & Accommodations Team or the Workplace Policies and Handbooks Team.

By Sam Schwartz-Fenwick and Lucas Deloach

Seyfarth Synopsis: To the surprise of many, the EEOC is not retreating from the argument first made by the Obama administration that Title VII forbids employment discrimination based on gender identity.

In EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., Aimee Stephens, a transgender woman, informed her employer, a funeral home, of her gender identity and intention to transition.  Although she intended to abide by the funeral home’s gender-specific dress code and wear clothing approved for female employees, she was terminated.  She filed a charge of sex discrimination with the EEOC, and ultimately, the EEOC during the Obama administration brought suit against the funeral home in federal district court alleging that the funeral home terminated Ms. Stephens “because [she] is transgender, because of [her] transition from male to female, and/or because [she] did not conform to [the funeral home’s] sex- or gender-based preferences, expectations, or stereotypes.”

The district court rejected the funeral home’s motion to dismiss, holding the complaint stated a claim for relief based upon unlawful sex-stereotyping but not gender identity discrimination. The district court subsequently granted the funeral home’s motion for summary judgment, in which the funeral home relied in part upon the Religious Freedom Restoration Act (“RFRA”) as a defense.  In its order, the district court found that the RFRA did, in fact, operate as a defense to Ms. Stephens’ wrongful termination claim.

In its opening brief to the Sixth Circuit, the EEOC continues to advance arguments originally made during the Obama administration.  The EEOC argues that, “[c]ontrary to the court’s ruling below, Title VII’s prohibition on discrimination ‘because of … sex’ encompasses discrimination based on transgender status and/or transitioning.”  The EEOC also maintains that the “RFRA does not provide what Title VII omits: a defense in this case that exempts the Funeral Home from complying with Title VII’s prohibition on sex discrimination based on the sincere religious beliefs of its owner.”

Many observers had expected the EEOC to reverse its stance, and the agency may still do so. After all, the full impact of President Trump’s administration on the makeup and enforcement agenda of the EEOC remains to be seen.  Additionally, the administration’s position on a range of LGBT issues is not clear.  The EEOC’s actions here are aligned with President Trump’s statements on preserving President Obama’s Executive Order prohibiting discrimination against LGBT individuals employed by the federal government and by federal contractors.  However, that position is at odds with the DOJ’s and Education Department’s withdrawal of Obama-era guidance advising federally-funded educational institutions that Title IX prohibits discrimination based on gender identity.  (The EEOC’s current position is further complicated by the fact that the stated protections for transgender individuals, found in Section 1557 of the Affordable Care Act, derive in part from Title IX.)

Currently, it appears the EEOC is poised to maintain its position, in the context of Title VII. But it is unclear whether the EEOC will continue to prioritize sex discrimination claims on behalf of transgender employees.  Additionally, although unsettled, a growing number of courts have held that discrimination on the basis of gender identity violates Title VII.  For these reasons, employers are wise to consider how their policies, practices, and procedures impact transgender employees and whether they are sufficiently inclusive.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Team.

By Steve Shardonofsky and Brian A. Wadsworth

Texas Law Legal System ConceptSeyfarth Synopsis:  In a decision that is sure to increase the costs and complexity of litigation, the Texas Supreme Court recently held that a former employee’s common law assault claim was not preempted by the state’s anti-discrimination statute. The Court reasoned that if the gravamen of an employee’s claim is that the employer committed assault through a “vice principal”–as opposed to sexual harassment–the employee may pursue the common law claim directly and would not be preempted.

Recently, in B.C. v. Steak N Shake Operations, Inc., the Texas Supreme Court held that an employee could sue her employer for assault where the gravamen of the claim was sexual assault by the employer’s “vice principal”, and not sexual harassment. In doing so, the Court narrowed its previous holding in Waffle House, Inc. v. Williams, 313 S.W.3d 796 (Tex. 2010) that common law torts predicated on the same or similar facts as a sexual harassment claim are preempted by the Texas Commission on Human Rights Act (“TCHRA”).

In a somewhat bizarre twist of logic, the decision suggests that employees subject to a single, severe instance sexual assault by a “vice principal” may bring a common law claim against the employer; but employees subject to a pattern sexual harassment involving sexually suggestive comments and conduct (including less violent or offensive touching constituting assault) may only bring a claim under the TCHRA (subject to administrative exhaustion requirements and damages caps). Until the courts resolve this open question, employers will likely be forced to defend both types of claims at the same time, while also having to litigate factually-intensive questions regarding who qualifies as a “vice principal” under Texas law.

Plaintiff B.C. worked as a server in the Steak N Shake restaurant in Frisco, Texas. During a shift in October 2010, she claimed that her supervisor assaulted her in the bathroom, pushing her against the wall and sink, groping her, and exposing his genitals. She was able to escape the attack only after the supervisor lost his balance and fell to the ground. Steak N Shake conducted an internal investigation after B.C. reported the incident, but was unable to confirm B.C.’s story. Steak N Shake extended an unqualified offer to B.C. to return to work at any Steak N Shake location of her choosing. B.C. declined the offer and instead resigned. She later sued Steak N Shake for a variety of common law claims, including assault, on the basis that her supervisor was a “vice principal” and therefore Steak N Shake was directly liable for his tortious actions. Steak N Shake moved for summary judgment arguing, in part, that the TCHRA preempted B.C.’s common law claims. The trial court granted summary judgment without explanation and B.C. appealed. The Dallas Court of Appeals, relying on Waffle House decision, affirmed the trial court’s ruling on the grounds that the TCHRA preempted B.C.’s assault claim.

In reversing, the Texas Supreme Court distinguished the facts in Waffle House, noting that the plaintiff in that case (Williams) had asserted a common-law negligent retention and supervision claim based on the employer’s alleged failure to prevent a pattern of sexual harassment by co-workers over six months that included inappropriate comments, suggestive winks, and arguably sexual assault (the employee allegedly held the plaintiff’s arms with his body pressed against hers and rubbed against the plaintiff’s breasts with his arms). Because sexual harassment under the TCHRA based on co-workers harassment is predicated on the employer’s alleged negligence and because it was the employer’s continued negligent supervisor and retention of the harasser that constituted the factual basis of Williams’ claims, the Texas Supreme Court held in Waffle House that the gravamen of the Williams’ complaint was a TCHRA-covered claim and not the negligence claims.

The Court then distinguished its holding in Waffle House from the claim raised by B.C. First, the factual basis for Williams’ common law claim in Waffle House was Waffle House’s continued supervision and retention of the harasser. B.C., on the other hand, only alleged a single instance of violent assault. Second, the Court reasoned that Williams improperly repackaged the assault portions of her sexual harassment claim in terms of negligence. Yet the gravamen of her complaint was sexual harassment by co-workers. Conversely, unlike Williams, B.C. did not allege a pattern or practice of sexual harassment by co-workers. Instead, she alleged that on a single occasion, Steak N Shake, acting through her supervisor, sexually assaulted her. Third, Williams alleged that a co-worker physically harassed her, whereas B.C. alleged that her employer was directly responsible for the alleged assault of a “vice principal” (i.e., her supervisor). Therefore, the Court reasoned, the gravamen of B.C.’s complaint was assault, not sexual harassment under the TCHRA. The Court also noted that there is no indication that the Texas legislature intended for the TCHRA to preempt assault claims against individual assailants (whether a corporate entity or an individual).

The Court’s holding here is likely to cause confusion and lead to strange outcomes. With little guidance, courts will be forced to decide whether the gravamen of a complaint is assault or sexual harassment. Because the Court did not draw a bright line, employees subject to a pattern of non-physical harassment and only one incident of assault may be limited by the TCHRA, whereas employees subject only to sexual assault (but no ongoing harassment) may be free to assert common law claims. Regardless of the final outcome, in the short term employers will likely be forced to defend both claims at the same time, particularly in cases involving sexual harassment by supervisors, managers, or executives. Litigating assault claims and questions about who qualifies as a “vice principal” will also likely increase the costs of litigation in this context.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Teams.

By Mark Casciari and Meredith-Anne Berger

Seyfarth Synopsis:  The 2016 elections had the effect of hardening the Red-Blue divide in the country.  A number of Blue cities in Red States are enacting ordinances that implement the progressive political agenda, which of course includes pay equity.  Be prepared to see that the Red states in which they lie may attempt to preempt local ordinances.  Red State preemption of Blue city ordinances is yet another battle that is likely to be resolved in court.

The 2016 Presidential, state and local elections across the country reinforced the Red-Blue divide simmering for years.  As a consequence, many Red State legislatures have rushed to enact their agendas before Republican dominance wanes.  In reaction, Blue cities and counties in Red States have enacted their own progressive ordinances or rules.  One area of progressive activism is pay equity — the broad idea that employers need to do more to ensure equal pay for equal work.

Examples of Blue city/Red State progressive activism are plenty. For example, a Philadelphia ordinance bans inquiries into prospective employee salary histories.  Austin, Texas has enacted protections for prospective employees with criminal histories, in an effort to augment job earnings by enhancing equality among applicants.  St. Paul, MN, and Minneapolis, MN have recently passed employee-friendly paid sick leave laws.  It is reasonable to expect more Blue city/Red State activism in the pay equity and broader discrimination context in the Trump era.

There is, however, a movement afoot to counter Blue city and county legislation enacted to further progressive goals that conflict with the political agendas of the Red States in which the Blue cities lie. For example, Arkansas’s Act 137 prohibits a county, municipality, or any other political subdivision from adopting or enforcing any ordinance or rule that creates a “protected classification or prohibits discrimination on a basis not contained in state law.”  On February 23, 2017, the state’s highest court struck down a Fayetteville anti-discrimination ordinance that sought to extend Arkansas’s anti-bullying statute to prohibit discrimination in the workplace on the basis of sexual orientation and gender identity.  The court, however, did not address whether Act 137 is constitutional.  In North Carolina, the Public Facilities Privacy and Security Act (“HB2”) prohibits any city or municipality in the state from enacting a law that would prohibit discrimination in employment or in public accommodations on the basis of gender identity or sexual orientation.

Not to be outdone, on February 8, 2017, the Pennsylvania Senate passed S.B. 241, which seeks to preempt Philadelphia’s law prohibiting salary inquiries and further prohibitions on discrimination in pay on the basis of gender.  Proposed legislation in Minnesota, H.F. 600, seeks to preempt local laws which provide employees with paid or unpaid leave time and other employment protections.  Proposed HB 577 in Texas would preclude a city or county from adopting or enforcing ban the box legislation applicable to private employers.  Proposed legislation in Arizona would permit the State Legislature to rescind funding to local governments that passed legislation which, in the Attorney General’s view, violated state law or the state constitution.

This article does not address whether state preemption laws will be upheld after court challenge, but simply exposes that a Blue city/Red State preemption issue might arise in future pay equity litigation. Readers should be aware that a Blue city or county law mandating pay equity could be preempted by Red State law, and that such a State preemption statute may itself be subject to challenge in court.  This issue might be rendered moot, of course, if the Congress of the United States enacts further national pay equity standards, and in the course of doing so preempts all related state and local law.  ERISA includes a similar preemption provision in the private sector employee benefit plan context. See 29 U.S.C. § 1144 (a) (absent specified exceptions, ERISA preempts all state law, defined to include the law of its political subdivisions, merely “relating to” an employee benefit plan covered by ERISA).  But don’t expect the current administration in Washington to be in the mood to broaden existing preemption of the authority of the States.  A more sound expectation is further litigation in the Blue city/Red State context over Blue city ordinances addressing such progressive concerns as pay equity.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Teams.

 

By Erin Dougherty Foley and Craig B. Simonsen

Seyfarth Synopsis: Employer is caught by WHD investigator instructing its employees to lie during interviews, and provides falsified records, containing whited-out and edited time records, in order to conform to the Federal Fair Labor Standards Act standards.

In a recent opinion, the Tenth Circuit ruled that a restaurant chain instructed its employees to lie during interviews, and provided falsified “whited-out” and “edited” employee time records, impeding a Department of Labor investigation, and found that the violation was willful (Perez v. El Tequila, LLC, No. 16-5002 (10th Cir., February 7, 2017).

This case provides a rather stunning look at what, as an employer, you don’t want to do during an official government workplace investigation. In this case the employer edited and changed time records, and then he lied about it, and then directed his employees to lie about it. The Court found that “the records Mr. Aguirre provided during the … Investigation, known as middle sheets, were based on his false summaries of how many hours employees worked, rather than actual clock-in and clock-out times…. Mr. Aguirre withheld [the actual] time sheets during the … Investigation, and many time entries had been “whited-out” and edited to conform with the Federal Labor Standards Act (FLSA).”

In addition, “employees revealed that Mr. Aguirre instructed them to lie in their interviews during the … Investigation.” Subsequently,  “employees told the WHD investigator that they had been working from 60 to 70 hours per week and were paid a salary…. They said the time sheets were not accurate, and ‘that they were forced to sign’ them.” During the litigation, Mr. Aguirre admitted that the time sheets and middle sheets were not correct, and that he “told his employees what to say in their interviews.”

In its post-trial motion, the government argued that the owner willfully violated the FLSA by: (1) falsifying payroll records, (2) withholding records requested by the WHD investigator, (3) lying to the WHD investigator and instructing his employees to lie, (4) recklessly disregarding his duty to determine whether it was violating the FLSA, (5) recklessly disregarding FLSA requirements, (6) and recklessly disregarding his duty to keep accurate records.

The Court concluded that the “evidence indicates that Mr. Aguirre took affirmative steps to create the appearance that El Tequila complied with the FLSA, including adjusting records to suggest that workers were properly paid, withholding documents, misrepresenting how employees were paid, and instructing employees to do the same. A reasonable jury could not conclude El Tequila’s violations were negligent” but willful.

In light of this Circuit Court opinion, employers may wish to consider the ramifications of this case as they analyze their management systems, policies, procedures, and training systems. While this is an extreme case, to the extent that FLSA rules apply to your operations, make sure that all employees understand the requirements, and are following company policies and procedures to ensure FLSA compliance. (And don’t lie during a government agency’s interview – they really, really, don’t like that!)

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Teams.

 

By Minh Vu

Seyfarth Synopsis:  An executive order from President Trump will likely halt the Justice Department’s public accommodations website rulemaking.

President Obama’s Department of Justice (DOJ) had stated that proposed regulations for public accommodations websites would be issued in 2018—eight years after the agency began its rulemaking process.  The likelihood of such a proposed regulation being issued now is virtually non-existent.

Among the flurry of executive orders President Trump signed this week was one entitled “Reducing Regulation and Controlling Regulatory Costs”.  This EO virtually obliterates any chance that the DOJ will issue any website regulations for public accommodations websites during Trump’s Administration.

The EO directs all federal agencies to:

  • Identify at least two existing regulations to be repealed for each new regulation;
  • Ensure that the total incremental cost of all new regulations, including repealed regulations, to be finalized in 2017 be “no greater than zero;”
  • Offset any new incremental costs associated with new regulations by eliminating existing costs associated with at least two prior regulations.

The EO exempts regulations relating to: (1) military, national security, or foreign affairs functions of the United States; and (2) agency organization, management, or personnel.  It also vests the Director of the Office of Management and Budget with the authority to grant additional exemptions.  The stated purpose of this EO is to “manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations”.  We therefore assume that the EO would not apply to regulations applicable to state and local governments that the DOJ has been working on and could issue under Title II of the ADA.  It is unclear what, if any, impact this EO may have on the Title II regulatory effort.

While our prediction may seem dire, we cannot fathom what two regulations the DOJ would repeal to make way for new public accommodations website regulations and offset their associated cost.  Though some may think that businesses are better off with no regulations on this subject, we disagree.  The current tsunami of lawsuits and demand letters about allegedly inaccessible websites is the result of uncertainly and absence of regulations that impose reasonable rules that provide adequate time for businesses to comply.  This is one issue upon which virtually all who practice in this space – on the legal, technological, or advocacy side – agree.

Edited by Kristina Launey.

By Annette Tyman and Michael L. Childers

Seyfarth Synopsis: Federal Contractors should immediately update the Disability Self-ID Form to include the new expiration date.  The OFCCP is allowing a 10-day grace period, until February 10th to update the form.

Last week we updated contractors on OMB’s renewal of the disability self-identification form (see post here).  Note that there were no substantive changes to the form and that the only change was an update to the effective date from January 31, 2017 until January 31, 2020. Since that update, we have learned that the OFCCP is expecting contractors to “immediately” take steps to update the form to reflect the new effective date.  For those contractors who need additional time to update the expiration date, the National Office has implemented a 10-day “grace period.” For unexplained reasons, the OFCCP has not publicized this deadline on its website. Nonetheless, contractors should take immediate steps to update the disability self-ID form with the new effective date and implement the change by February 10th.

To ensure the updated form is in use, contractors should take the following steps: 

  • Update online application systems to ensure that they are displaying the self-ID form with the new effective date.
  • Update new hire onboarding systems to ensure that these materials include the updated form, including updating paper copies that may be utilized.
  • Ensure that the updated form is used in interim reminders to employees of their option to update their disability status.
  • Ensure that the updated form is used in any resurvey of the workforce.
  • For those contractors who are currently subject to a compliance review, ensure that you can demonstrate that you have implemented the updated form or readily show the steps that  you have taken to transition to the updated form.

The new form can be located using the following link:

https://www.dol.gov/ofccp/regs/compliance/sec503/Self_ID_Forms/VoluntarySelf-ID_CC-305_ENG_JRF_QA_508c.pdf

Seyfarth Shaw’s OFCCP and Affirmative Action Compliance team leads the legal industry in thought leadership, affirmative action plan preparation, compliance review representation and employer advocacy on issues relating to contractor compliance.  We have a long track record of experience and we are ready to help assist with all of your affirmative action compliance needs.

By Benjamin J. Conley, Shad C. Fagerland, and Joy Sellstrom

Seyfarth Synopsis: Within hours of his inauguration, President Trump issued an Executive Order labeled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal”.  As described in greater detail below, the immediate impact of this executive order is uncertain and affected parties would be best advised to await further guidance before reacting to the order. 

Executive Order and Impact

The Executive Order directs regulatory agencies to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

The Order’s broad directive could be viewed in many ways as an extension of the President’s campaign promises to minimize the burden of ACA regulations pending the law’s ultimate repeal.

In some respects, the Order sows greater confusion than it provides clarification. Notably, unanswered questions include:

  • Does this directive imply a complete or partial enforcement hiatus?
  • Was the absence of reference to employers/businesses intentional or inadvertent?
  • How quickly can the relevant agencies (notably, HHS, IRS and DOL) react to this directive with more meaningful guidance, considering many of the incoming heads of those agencies will not be confirmed for several weeks?
  • Does the Order provide any relief to employers who are preparing Form 1094/1095-C tax filing forms due in roughly one month?

In the absence of more explicit agency guidance or Congressional action, the Order, in and of itself, does not appear to offer any specific relief from penalties to employers, individuals or other affected parties. So employers who decide to disregard existing agency guidance proceed at their own risk based on certain presumptions.

With regard to the most pressing issue for many employers — Form 1094/1095-C filing — we recommend that until official guidance from the IRS indicates otherwise, employers should assume that the current filing deadline continues to apply.

The Order may pave the way for future agency actions, such as non-enforcement policies, filing extensions, hardship waivers, etc. It is difficult to anticipate precisely what form such actions may take, but agencies are generally bound by the terms of the governing statute as well as the final regulations published through the notice-and-comment rulemaking process.  That said, there is precedent for use of discretion to announce a delay in enforcement (e.g., the unilateral delay of enforcement of the “employer mandate” from 2014 to 2015).

Patient Freedom Act of 2017

Earlier today, Senators Susan Collins (R-Maine) and Bill Cassidy (R-Louisiana) introduced one of what will likely be many “replacement” options for the Affordable Care Act. Sens. Collins and Cassidy were undoubtedly attempting to quell some of the concerns expressed both inside and outside of the Republican party that repealing (in whole or in part) the ACA without a replacement could have practical and political implications.

The details of the Patient Freedom Act are not yet immediately available, but the press briefing indicated states would be provided greater choice in implementing healthcare reform, generally through allowing states to choose among the following alternatives:

  • Retain the ACA
  • Create a new alternative
  • Adopt the Patient Freedom Act’s plan (which generally involves greater use of health savings accounts and automatic enrollment into a health policy with opt-out rights).

Seyfarth Shaw will continue to monitor developments and provide updates as more information becomes available.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Employee Benefits & Executive Compensation Team, Workplace Counseling & Solutions Team, or Workplace Policies and Handbooks Team.

 

By Erin Dougherty Foley and Craig B. Simonsen

Seyfarth Synopsis: These new regulations require federal agencies to be “model employers” of individuals with disabilities. As such, they now must take specific steps that are “reasonably designed” to gradually increase the number of employees who have a disability.

We had blogged previously about the Equal Employment Opportunity Commission’s Advance Notice of Proposed Rulemaking (ANPR), inviting the public to comment on how it should amend its regulations implementing Section 501 of the Rehabilitation Act of 1973, and to clarify the federal government’s obligation to be a model employer of individuals with disabilities. 79 Fed. Reg. 27824 (May 15, 2014).

The regulations — which apply only to federal agencies — that previously implemented the Section 501 affirmative action requirement simply stated that the federal government shall be a “model employer of individuals with disabilities,” and that federal agencies shall “give full consideration to the hiring, placement, and advancement of qualified individuals with disabilities.”

While the “model employer” of individuals with disabilities provisions of Section 501 require affirmative action and non-discrimination in employment only by federal agencies, what the EEOC determines to be best practices for federal agencies may be a preview of how it will handle private sector disability claims and charges. The regulations imposed an obligation on federal agencies to be “model employers” of individuals with disabilities, but did not explain what federal agencies needed to do to comply with the obligation.

Now the Final Rule, 82 Reg. Reg. 654 (January 3, 2017), requires those federal agencies to take specific steps that are “reasonably designed to gradually increase the number of employees who have a disability as defined under Section 501, and the number of employees who have a ‘targeted disability,’ which is defined for purposes of this Rule to mean a disability that is either designated as ‘targeted disability or health condition’ on the Office of Personnel Management’s (OPM’s) Standard Form 256, or that falls under one of the first 12 categories of disability listed in Part A of Question 5 of the EEOC’s Demographic Information on Applicants form (Applicant Flow Form), until they meet specific goals set by the EEOC.”

Targeted disabilities are defined as “disabilities that the government has, for several decades, emphasized in hiring because they pose the greatest barriers to employment, such as blindness, deafness, paralysis, convulsive disorders, and mental illnesses, among others.”

The EEOC indicates that the New Final Rule is similar to the approach taken by the DOL’s Office of Federal Contract Compliance Programs in regulations issued to implement the obligation of federal contractors to engage in affirmative action for individuals with disabilities pursuant to Section 503 of the Rehabilitation Act of 1973, 29 U.S.C. 793 (Section 503). See for instance, 41 CFR pt. 60-741.45(a), establishing a 7% utilization goal for employment of qualified individuals with disabilities in each job group in the contractor’s workforce.  According to the EEOC news release, the regulations “set goals for federal agency workforces of 12% representation for individuals with disabilities, and 2% for individuals with ‘targeted’ disabilities.”

In addition, this New Rule requires agencies to provide personal assistance services (PAS) to employees who, because of targeted disabilities, require assistance in order to be at work or participate in work-related travel. PAS are services that help individuals with disabilities are to perform activities of daily living, including assistance with removing and putting on clothing, eating, and using the restroom.

The EEOC has also published a question-and-answer document for the new regulations.

The Rule provides federal agencies one year to make any necessary changes in policy, staff, or other aspects of their operations. The Rule is effective on March 6, 2017, and applicable on January 3, 2018.

The Rule specifically applies to federal employers. However, as noted above, this may also impact the EEOC’s handling of disability claims generally. The EEOC continues to make protecting individuals with disabilities a top priority. Employers that work on or seek to contract for government projects should vigilantly review their policies, procedures and practices to ensure that they are also acting as a “model” employer as that has been defined by the agency.

If you have questions regarding this New Rule or the topic of this post, please contact the authors, a member of Seyfarth’s OFCCP & Affirmative Action Compliance Team, or your Seyfarth attorney.