By Rachel Bernasconi, Paul CutroneAmeena Majid, and Peter Talibart

Seyfarth Synopsis: This is the first in a series of blogs dealing with modern slavery where we explore how companies can get ahead of the curve of the quickly changing legal landscape by educating themselves on their connection to this issue. Seyfarth has been very active internationally in respect of the design of modern slavery transparency legislation since before the UK passed the groundbreaking Section 54 of the Modern Slavery Act. As an understanding of the nexus to basic employment, health and safety, corporate governance and host of other legal issues become clearer, stakeholders within companies will realize that, beyond compliance, they can create a competitive advantage that drives social impact, elevates their reputation, manages their reputational risk, and enhances engagement with employees and business partners.  

Modern slavery (which includes human trafficking within its broader ambit) is a concept marching steadily into the mainstream consciousness of global society. However, there are still many misconceptions over what modern slavery is, how it can happen, the sheer scale of the issue and how it can present not only a social risk but a risk to reputation and profit of honorable businesses. In this blog we set the stage by clarifying some of the myths and misunderstandings of modern slavery in the business context.

What is Modern Slavery?

Most people are not sure what “modern slavery” or “human trafficking” fully mean. These terms are often associated with prostitution rings and sex trafficking.  People then connect trafficking to stories similar to the movie Taken or to massage parlors that serve as a front for sex trafficking.  This actually represents only a minority of the persons affected by this global crime.

While sex trafficking is one form of modern slavery, the term encapsulates the breadth of the many forms in which human trafficking can occur.  Under international principles and laws, it covers, among other things, forced or compulsory labor, bonded labor, domestic servitude and child labor. We define it more simply as men, women and children who are either working against their will or working in circumstances that do not meet even minimum legal standards (if those standards exist). Our clients neither want to be associated with it nor want to inadvertently support it.

Modern slavery is a crime and a humanitarian issue that rivals the global arms and drug trades in breadth and profitability. It is illegal everywhere, but growing everywhere as is its detection. The commodity being sold is a human being who is preyed upon often because of vulnerability, which is not easy to identify. It is the fastest growing organized crime in the world and, after drugs, the second most profitable. The estimated illegal profits are upwards of USD $150 billion according to the International Labor Organization. Because this figure was based on a much lower estimate of affected people (21 million), nobody really knows how large the illegal profits actually are.

Of the International Labor Organization’s estimated 40.3 million trafficked human beings in the world, 81% of them are actually victims of labor trafficking, which is agnostic to gender or age, and the predominant aspect of modern slavery.  The US Department of Labor has identified 148 goods from 76 countries that have been produced by child labor or forced labor, which information is publicly available.

What Can it Look Like in Business? 

How, when and where modern slavery touches a business will vary.  For example, the hospitality industry (hotels, restaurants and casinos), agriculture and retail would appear to have a closer and more personal or obvious connection to it than a tech company. However, there are commonalities.  Every business sources materials, employs individuals and contracts with other businesses that do the same, creating some level of reputational human rights risk.

What many also do not realize is that modern slavery happens in the United States and other industrial nations.  It’s not just a third world issue.  Businesses get linked to it because of their supply chains and/or aspects of their own operations that may become complacent about the conditions that can facilitate labor trafficking.  Nor do most realize how legal systems are starting to become aligned against it, or how existing US laws may apply to them in relation to this issue.

Labor trafficking can take different forms. These forms include “bonded labor” where employees are essentially working off a debt (including to a recruitment agency) that may not be legitimate; child or underage labor; labor in unsafe working or living conditions; or where the employee is forced to turn over identity papers to the “employer” making it impossible to leave.  They all share the element of coercion.

What Should Companies Do or Start to Do?

Because modern slavery is a crime on many levels, responsibility for addressing it has traditionally been left to governments and law enforcement.  Non-governmental organizations—local, regional, national and international—have been very active in creating awareness campaigns and developing programs for victim rescue and recovery. Unfortunately, the global landscape and response to this crime has been, and continues to be, fragmented.

Over several years now, there has been a shift in focus on the role and responsibility of business and business leadership to identify, report and remediate modern slavery in their own operations and those of their suppliers (both downstream and upstream).  This focus is driven by the United Nations through its “Protect, Respect and Remedy” framework for governments and businesses in its Guiding Principles on Business and Human Rights that came out in 2011, followed by the UN Global Compact in 2011 (updated in 2014) and the UN’s Sustainable Development Goals in 2015.

National and regional governments are slowly starting to pass laws requiring the disclosure of modern slavery avoidance measures in a business’s operations and supply chain. To name a few, in 2012, California led the way with the California Transparency in Supply Chains Act, which the UK Parliament drew upon in passing Section 54 of the Modern Slavery Act in 2015.  In addition, both the Australian Commonwealth and the state of New South Wales adopted similar disclosure laws in 2018. France required certain large companies to publish a “vigilance plan” designed to identify and address risks relating to human rights in its Duty of Vigilance Law in 2017.  For some time now, the US government has imposed a strict human rights compliance regime for government contractors under the Federal Acquisition Regulations.  Federal procurement law has a storied history of influencing the development of the wider American legal system.

Senior management sign-off is typically required under these disclosure regimes, and the public disclosure model is likely to be replicated in other jurisdictions that are looking to pass laws in this area.  Even companies who are not subject to a law yet are voluntarily looking at ways to understand modern slavery because they may be asked to meet certain standards by their vendors or suppliers, or they are being rated for sustainability reasons and the ratings are premised, in part, on respect for global human rights.

Identifying and remediating human trafficking in business cannot be done by one department in an organization over a few-month implementation period. It also cannot be done by one company, no matter how big. It requires a different mindset. It requires a mindset that considers actions beyond compliance and a belief that when business can foster positive social impact through its operations and business relationships, profits will always be there.

In addition to a changing legal and conceptual landscape, consumers are demanding an elevated standard of ethics, conduct and transparency, while institutional and private investors are focusing on the impact of corporate ethics on the financial health and investor attractiveness of a company.  The link between business and modern slavery is fundamentally about a company’s reputation, how it conducts business, how and when it manages reputational risk, and engagement with its business partners, employees, consumers, investors and local communities.  Addressing this area is challenging, but it can also present opportunities for positive engagement with each of these parties. The first step for any business is awareness, education and understanding of its own and its industry’s connection to modern slavery.

There are many vanguard companies that have taken a deep look at developing their human rights position, assessing their human rights impacts and adopting systems for a human rights due diligence process.  These companies include the likes of Nestle, GE, Johnson & Johnson, Wal-Mart and many others who are leading the way with elevated standards of commitment.  They are demanding a level ethical playing field. Industry associations such as the Responsible Business Alliance, the Consumer Goods Forum, Better Cotton Initiative, and Ethical Trading Initiative, to name just a few, are also driving awareness, particularly of the fact that these issues cannot be effectively addressed in isolation, especially since. Addressing a topic like modern slavery requires coordinated industry and cross-industry responses and actions.

The forces of social media, investor and consumer ethical activism and the growing network of laws oriented to making supply chain transparency the price of market access will make it increasingly difficult for businesses to ignore the issue of modern slavery, whether or not they are subject to a law In their home jurisdiction.

Up Next

In our next blog post, we will cover how this issue is foremost about engagement and accountability.  Stay tuned for our next blog: The Company You Keep – Engagement and Accountability.

By Jean Wilson

Seyfarth Synopsis: Massachusetts Attorney General steps up enforcement of Massachusetts “ban-the-box” law citing 19 businesses for asking impermissible questions about an applicant’s criminal history on an employment application. 

Last week, Attorney General Maura Healey announced that she had cited 19 businesses for  violation of the state’s ban-the-box law.  This law prohibits employers from asking job applicants about their criminal history on initial employment applications, subject to very limited exceptions.  The AG announced a similar round of enforcement action in May 2018 that included the investigation of over 70 Massachusetts employers and resulted in 21 citations.  Of that group, 4 employers were fined $5,000 and were required to enter into an agreement with the AG’s office.

The current round of enforcement action targeted a wide range of businesses including a national clothing retailer, several restaurants, a product design and manufacturing company, grocery store, hardware store, liquor store, and shipping service.  The AG entered into agreements with two of the larger companies.  As part of those agreements, the Companies were fined $5,000 and were required to alter their application process to comply with the law’s requirements.  The AG’s office sent letters to the other 17 employers warning them that their employment applications contained improper questions in violation of the law and requiring them to come into compliance immediately.  The improper questions contained in the applications included whether the applicant (1) had ever been convicted of violating the law, (2) had ever been convicted of a felony, and (3) had ever been convicted of a felony or misdemeanor other than a minor traffic violation.  Since issuing these letters, all 17 employers have confirmed compliance with the law.

In addition to prohibiting employers from including criminal history inquiries on an initial employment application, MA law prohibits employers from asking applicants (either verbally or in writing) about certain criminal history at any time during the application process or employment.  This prohibition includes questions about:  (1) an arrest, detention, or disposition in which no conviction resulted, (2) a first conviction for any of the following misdemeanors:  drunkenness, simple assault, speeding minor traffic violations, affray or disturbance of the peace, or (3) any misdemeanor conviction where the date of conviction or completion of a period of incarceration, occurred 5 or more years prior.  Changes to the CORI law in October 2018 imposed additional requirements on employers to include a detailed statement about expunged records on any form that seeks information about an applicant’s criminal history, in addition to a statement about sealed records that has long been required.

The AG’s announcement noted the goal of the 2010 CORI law was to address high unemployment and barriers to re-entry for people with criminal records by improving their access to employment opportunities.  AG Healey stated that “[t]oo many people who have paid their debt to society still face barriers to even landing an interview.  These actions are an effort to give all job applicants a fair chance.”  These enforcement actions are a continued effort by the AG’s office to educate residents and businesses about the law and to ensure that a person’s CORI is not used improperly to deny employment.

The AG’s enforcement action serves as a reminder for employers to review their employment applications, hiring-related documents, and hiring process to ensure compliance with the law.

By James L. Curtis, Daniel R. BirnbaumPatrick D. JoyceMatthew A. Sloan, and Adam R. Young

Seyfarth Synopsis: The growth of the gig economy has transformed the modern workforce and upended traditional models for developing a workplace safety culture and worker safety training. New and inexperienced workers confront evolving safety hazards. Given this transformed environment, employers must address safety hazards proactively or face OSHA citations or other liability.

By 2018, 57 million American workers had joined a part of the gig economy, more than one third of the entire workforce. Gig economy workers range from traditional independent contractors to temporary workers who might work just a few hours a week. Some of these workers may use gig work as a supplement to a traditional job, while 29% had gig economy work arrangements as their primary source of income. Gig economy jobs offer informal employment arrangements, flexible work hours, desirable alternative work locations, and unique compensation structures. With employment opportunities for students and new workers, the gig economy workforce is disproportionately young. Given the lack of a formal employee/employer structure, gig economy jobs often lack traditional means of workplace training and supervision.

The rise in the gig economy has brought with it new, previously unknown occupational hazards. Labor groups, advocacy organizations, and state legislative bodies have concentrated their efforts to encourage gig companies to address safety risks in this changed environment. With little presence in the gig economy, traditional labor groups have expressed an interest in organizing gig workers. Government regulators are also scrambling to keep up with and adapt prior enforcement methods to the gig environment. Finally, aggressive plaintiff’s lawyers are finding new ways to hold gig companies liable for accidents and injuries to gig workers. Safety training, culture, practices, supervision, and enforcement must be adapted to meet the new economy.

Specific safety issues raised in the gig economy include:

  1. Many companies that exist in the gig economy operate in higher-risk industries. Gig businesses have transformed passenger transportation and freight delivery services, where workers utilize the public roads and highways. Transportation accidents in general comprise nearly half of all workplace fatalities.
  2. Many companies in the gig economy possess transient workforces that may not be experienced in the field or may be returning to the field after pursuing a different career. Absent proper new-hire and refresher safety training, these workers may lack the knowledge and skills necessary to perform their jobs adequately. Safety training may be necessary to ensure gig workers can do the job safely. Similarly, given their independent nature, these workers may need personal protective equipment or other traditional workplace protection designed to reduce workplace risk.
  3. Workers in the gig economy may not know who to contact to report safety concerns. It is also possible gig workers may choose not to report concerns at all. Unlike workers in a traditional workforce, who are taught to be the eyes and ears for their co-worker, the gig economy worker may not bring safety concerns to the company’s attention, which may result in unaddressed hazards. Gig companies may need to develop new methods for reporting safety concerns and injuries.
  4. The gig economy, characterized by flexibility and independence, has a tendency to attract younger workers. Younger workers often have less work history and less experience with occupational safety hazards. These workers can be at greater risk of exposure to safety hazards. Worse, young workers may have an unfounded sense of invincibility as it relates to workplace hazards. Absent an instilled safety culture, these workers may have a greater likelihood of sustaining an injury or illness.

Regulatory agencies have been slow to adapt to the gig economy. Interest groups like the National Council for Occupational Safety and Health have lobbied OSHA to enforce workplace safety issues in the gig economy under a “dual employer” theory. This would make the gig company responsible for safety compliance, even though the gig worker is not an employee of the gig company.

The gig economy also invokes safety concerns that impact the temporary workplace, and temporary workers have been an area of increasingly aggressive enforcement from OSHA. OSHA historically takes the position that staffing agencies and host employers are “jointly responsible” for maintaining a safe work environment for temporary workers, including training requirements. Since initiating its Temporary Worker Initiative, OSHA compliance officers give closer scrutiny to any onsite temporary workers to ensure that they are adequately protected. OSHA’s website explains employers’ responsibilities with regard to temporary workers and safety training.

OSHA has also expressed health and safety concerns related to young workers, including specific recommendations on young workers’ safety training, supervision, pressure to work quickly, and the ability of young workers to cope with stress. OSHA has identified food service and outdoor work as two industries that frequently employ younger workers and are prominent in the gig economy. As such, OSHA indicates it will continue to aggressively enforce its protection of younger workers.

The rise of the gig economy also intersects with the rise of OSHA’s aggressive use of the General Duty Clause to address workplace violence. Recent decisions, such as Integra Health Management, Inc., have highlighted workplace violence in the workforce. This is one of the most well-recognized and reported safety issues in the gig economy. Indeed, gig economy companies have focused on incident investigation and risk assessments to reduce workplace violence safety concerns.

Ultimately, companies looking to operate in the gig economy must understand the risks to their organizations and adopt procedures to meet these concerns. Gig companies should consult with counsel and safety professionals to learn how to address these hazards and mitigate risks and liabilities.

For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) Team.

 

By Becki Lee

Seyfarth Synopsis: Regular readers will recall that in March we blogged about cannabis-related trademarks.  We now have an update:

On May 2, 2019, the USPTO distributed an Examination Guide updating their practices after passage of the 2018 Farm Bill on December 20, 2018. The Farm Bill removes “hemp” from the definition of “marijuana” in the Controlled Substances Act (CSA), so now hemp-based products, like CBD, with less than 0.3% THC are no longer controlled substances.

Accordingly, for applications filed after December 20, 2018, the USPTO will not refuse applications on the basis of the goods being unlawful under federal law if the application covers hemp-related goods and services now legal under the CSA. If an application filed before December 20, 2018 for the applicable goods was refused but the application is still pending, the USPTO will allow the applicant to amend its filing date. Applicants should also note that some CBD products that are undergoing FDA testing are still unlawful under the CSA, and therefore applications covering those types of goods will still be refused.

If these guidelines apply to you, you can find more information in the Examination Guide from the USPTO, available at the link above.

 

By Ashley Laken

Seyfarth Synopsis: The NLRB’s Division of Advice recently released an Advice Memorandum finding that a security company’s work rules were unlawfully overbroad, but that the company did not violate the National Labor Relations Act by discharging one of its employees for posting an insidious Facebook video or by filing a defamation lawsuit against two former employees.

Earlier this month, the NLRB’s Division of Advice publicly released an Advice Memorandum that it had issued to Region 27 of the NLRB in August 2018 (the NLRB’s policy is to release Advice Memos at its discretion only after the disputes they concern end), in which the Division of Advice opined on the legality of a security company’s workplace policies, the discharge of an employee for posting a Facebook video, and the company’s filing of a defamation lawsuit against that employee and another former employee. In Colorado Professional Security Services, LLC (Case 27-CA-203915, et al.), the NLRB’s Division of Advice found the policies at issue were unlawful, but did not find the employee’s firing or the defamation lawsuit were unlawful.

The Facts

The company maintained the following policy: “Employees must refrain from engaging in conduct that could adversely affect the Company’s business or reputation. Such conduct includes, but is not limited to…publicly criticizing the Company, its management or its employees.”

In 2016, Charging Party 1, a former employee, filed federal and state court wage-and-hour lawsuits against the company; the lawsuits were joined by other former and current employees, including Charging Party 2, who was then a current employee. In May 2017, Charging Party 1 caused to be posted on Facebook two photos that appeared to show a company security guard sleeping on the job, including the captions, “Wow look at Colorado Professional security services hard at work.”

On several occasions in 2017, the company disciplined Charging Party 2 for being unkempt and not wearing the proper uniform. The disciplinary letters issued to Charging Party 2 included language prohibiting discussion of the discipline with coworkers or clients. After one such instance of discipline, Charging Party 2 posted a 23-minute live video on Facebook during work hours and while in uniform talking about the discipline for wearing improper shoes and the confidentiality provision in the disciplinary notice, referencing the wage-and-hour lawsuits, making crude and disparaging jokes and comments about a supervisor, and stating that by asking Charging Party 2 to sign something interfering with free speech, the conduct of the company’s officials was “against the United States Constitution and you need to be shot on sight.”

Soon after, the company discharged Charging Party 2, stating that Charging Party 2 was being discharged for insubordination, regularly being unkempt and not in the proper uniform, conflict of interest, and insidious remarks regarding the company name, business, and security officers while on duty and in uniform. The company also filed a state court lawsuit against Charging Party 1 and Charging Party 2, alleging that their Facebook posts constituted defamation and interference with business relations. Thereafter, Charging Party 1 and Charging Party 2 filed unfair labor practice charges with the NLRB.

The Division of Advice’s Findings

The Division of Advice concluded that the policy prohibiting employees from criticizing the company and the standard disciplinary letter language prohibiting employees from discussing their discipline with coworkers or clients violated the National Labor Relations Act. The Division of Advice found that under the NLRB’s Boeing decision, these were Category 2 rules that violated the Act because the impact on employees’ right under the NLRA to engage in protected concerted activity outweighed the company’s business justification. The Division of Advice found that by prohibiting any public criticism of the company or its management, the company was expressly interfering with any appeals by employees to the public in labor disputes, and the company did not have a legitimate business justification for that kind of total ban. Regarding the disciplinary letter language, the Division of Advice concluded that by prohibiting employees from discussing their discipline with coworkers and clients, the company was expressly interfering with the right of employees to communicate with each other or third parties on a central term of employment, without any legitimate business justification for doing so.

However, the Division of Advice found that the discharge of Charging Party 2 did not violate the Act. The Division of Advice found that although Charging Party 2 was discharged, at least in part, for violating the unlawfully overbroad rules, the discharge was not unlawful because the Facebook video did not constitute protected concerted activity and it was so egregious that other employees would not connect Charging Party 2’s discharge to the overbroad aspect of the rules. The Division of Advice found that although Charging Party 2 referred to subjects in the video that could have been relevant to employees’ mutual aid or protection, the comments were entirely individual complaints and there was no indication that Charging Party 2 was speaking for other employees or seeking to act in concert with others. The Division of Advice also noted that Charging Party 2’s crude and disparaging jokes and comments about the supervisor were so egregious that Charging Party 2’s coworkers would not connect the discharge to the overbroad aspect of the rules, thus mitigating any chilling effect on potential NLRA-protected activity by employees.

The Division of Advice also found that the employer’s defamation lawsuit against the Charging Parties did not violate the NLRA. The Division of Advice noted that the Supreme Court has held that the NLRB can enjoin as an unfair labor practice the filing and prosecution of a lawsuit only when the lawsuit lacks a reasonable basis in law or fact and was commenced with a retaliatory motive. Advice found that although the company’s lawsuit was baseless (Advice noted that the company had failed to plead in the lawsuit that the allegedly defamatory statements were made with malice or to plead any specific damages suffered by the company), the lawsuit was not unlawful because it was not directed at any protected concerted activity and had not been otherwise shown to retaliate against the Charging Parties’ protected conduct. In reaching this conclusion, Advice noted that the lawsuit came soon after the Charging Parties’ Facebook posts and almost one year after the wage-and-hour lawsuits were filed.

Takeaways for Employers

The Advice Memo drives home that point that employers would be well-advised to review their policies, handbooks, and standard disciplinary notice language to ensure that they do not contain any language that runs afoul of the National Labor Relations Act. The Advice Memo is also a reminder for employers that whether an employee’s actions constitute protected concerted activity is a highly fact-specific inquiry and is often a close question. The Memo also provides guidance on the circumstances under which a lawsuit filed against a current or former employee might be found to be an unfair labor practice charge. Employers with questions about any of these issues should contact labor counsel.

By Benjamin J. Conley, Erin Dougherty Foley, Sam Schwartz-Fenwick, Megan E. Troy, Kaley M. Ventura

Seyfarth Synopsis: Join us for our second Chicago Labor & Employment Breakfast Briefing of the year, “ERISA in 2019: What Employers Need To Know”.

Please join our interactive panel for an exciting high level discussion which will dive into the ERISA based issues that employers in Illinois need to be aware of.

Specifically, our panelists will address:

  • The pros and cons of including mandatory arbitration provisions in ERISA plans.
  • Developments relating to retirement plan design and administration, including new plan design opportunities (e.g., student loan benefits), recent audit experience relating to missing participants, and the updated IRS procedures for correcting operational errors.
  • The current legal landscape surrounding the Affordable Care Act.
  • Enforcement efforts surrounding HIPAA privacy and security.
  • The benefit implications of the Supreme Court analyzing whether current employment law extends to LGBT individuals.
  • Trends in retirement plan litigation including recent cases involving fiduciary breach and the duty to monitor.
  • Trends in welfare benefit litigation, including recent cases involving cross plan offsetting and mental health parity.

While there is no cost to attend, registration is required and seating is limited.

May 15, 2019, 233 S. Wacker Drive, Suite 8000, Chicago, IL, 60606
8:00 a.m. – 8:30 a.m. Breakfast & Registration
8:30 a.m. – 10:00 a.m. Program

Seyfarth Shaw LLP is an approved provider of Illinois Continuing Legal Education (CLE) credit.  This seminar is approved for 1.5 hours of CLE credit CA, IL, NY, NJ and TX.  CLE Credit is pending for GA and VA.  HR professionals: please note that the HR Certification Institute accepts CLE credit toward recertification.

If you have any questions, please contact Fiona Carlon at fcarlon@seyfarth.com and reference this event.

By Robert A. Fisher, James M. Hlawek, and Christopher W. Kelleher

Seyfarth Synopsis: On January 29, 2019, the Massachusetts Supreme Judicial Court held that the failure to grant a lateral transfer may be the basis of a discrimination claim under Massachusetts anti-discrimination law where an employee can show there are material differences between the two positions in the opportunity for compensation, or in the terms, conditions, or privileges of employment.

To bring a discrimination claim under Massachusetts law, an employee has to show that he was subjected to an “adverse employment action.”  Some actions, such as firing an employee, are obviously adverse employment actions.  But other actions are not.  In this case, the Massachusetts Supreme Judicial Court addressed whether a failure to grant a lateral transfer from one position to another can be an “adverse employment action,” even where the base pay and benefits of the two positions are the same.

Plaintiff Warren Yee is a Massachusetts State Police lieutenant who immigrated from China.  In December 2008, Yee requested a transfer from State Police Troop H in South Boston to Troop F at Logan Airport in East Boston.  State Police lieutenants earn the same base pay and benefits regardless of their station.  But Yee claims — based on the testimony of one trooper who earned more in Troop F than in Troop H — that the potential for compensation in Troop F is greater because there are more opportunities for overtime and paid details in Troop F.

Between 2008 and 2012, several troopers were either transferred or promoted to the position of lieutenant in Troop F, but Yee never received an interview despite his request for a transfer.  Yee brought suit in 2014 alleging that the failure to allow him to transfer to Troop F amounted to age, race, and national origin discrimination.  The State Police moved for summary judgment, arguing that no reasonable jury could find an “adverse employment action” where the State Police simply declined to provide Yee with a transfer that would not have changed his base pay or his benefits.

The Court acknowledged that the denial of Yee’s request for a transfer did not affect his base pay or his benefits.  However, the Court found that where an employee can show material differences between two positions in the opportunity for compensation or any other material differences in the terms, conditions, or privileges of employment, the failure to grant a lateral transfer between the two positions could be an adverse employment action.  Because Yee showed a higher opportunity for compensation in Troop F, the Court found that Yee could bring a discrimination claim based on the failure to transfer him.

Employers should proceed with caution on transfers just as they do on hiring, promotion and termination decisions.  Like those other decisions, a failure to grant a lateral transfer may be the basis of a discrimination claim if the employee is able to offer evidence that the positions differ in opportunities for compensation or in the terms, conditions, or privileges of employment.

If you have any questions regarding this or any related topic please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks or Labor & Employment Teams.

By Sam Schwartz-Fenwick and John Ayers-Mann

Seyfarth Synopsis: Today, the Supreme Court granted review to a trio of Title VII cases raising the issue of whether Title VII prohibits discrimination on the basis of sexual orientation and gender identity.  The Court’s decision in these cases could create a federal right of action for individuals discriminated against on the basis of sexual orientation and gender identity.

On April 22, 2019, the Supreme Court announced that it would review a trio of decisions questioning whether Title VII’s prohibition against discrimination “on the basis of sex,” includes sexual orientation and gender identity.

In Zarda v. Altitude Express, the plaintiff alleged that his employer violated Title VII for terminating his employment due to his being gay. Reviewing the matter en banc, the Second Circuit ruled for the plaintiff and held that Title VII’s prohibition against discrimination on the basis of sex necessarily prohibited discrimination on the basis of sexual orientation. In so ruling, it overturned prior Circuit precedent. In reaching this holding, the Second Circuit joined the Seventh Circuit in finding sexual orientation discrimination to be prohibited by Title VII.

Three months later, the Eleventh Circuit reached the opposite conclusion. In its decision, the Eleventh Circuit re-affirmed circuit precedent established  in Blum v. Gulf Oil Corp and Evans v. Georgia Regional Hospital that the protections of Title VII did not extend to claims of sexual orientation discrimination.

R.G. & G.R. Funeral Homes, a claim that arose from the Sixth Circuit, addresses the related issue of gender identity discrimination.  The claim involves a  transgender woman who was terminated from her job after transitioning from male to female. The Sixth Circuit found that a termination based on an employee’s gender identity falls squarely within Title VII’s prohibition against discrimination on the basis of sex and sex-based stereotypes. Accordingly, the Sixth Circuit held that Title VII prohibits discrimination on the basis of gender identity.

The Supreme Court’s review of the scope of Title VII comes at a pivotal point in history.  Amendments expressly including LGBT protections in Title VII have been introduced in every Congress since the 1990s, but none have passed.  Thus, Courts for over a generation have been grappling with the question of how broadly to construe the term “sex” in Title VII.

While the Supreme Court has never answered this question, many proponents of a broad reading of the word “sex” contend that its prior precedents lend some support to a broad reading of the term by finding that sex stereotypes (not acting how someone of your gender is supposed to act) give rise to a cognizable claim under Title VII.  See Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) and Oncale v. Sundower Offshore Servs., Inc., 523 U.S. 75 (1998). Opponents of such a broad view of the statute, in contrast, argue that the word “sex” must be given the limited historical view intended by the drafters of Title VII during the 1964 passage of the Civil Rights Act.

In its first gay rights ruling in a generation without the voice of Justice Kennedy it is unclear how the court will rule. The Supreme Court’s decision may create a federal right of action for individuals who suffer discrimination on the basis of sexual orientation or gender identity, the Court may rule that no such right exists under current law, or the Court may find that a right exists but must be balanced against an employer’s religious liberty interest. Stay tuned as we continue to follow this matter.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Labor & Employment Team.

By Kyla J. Miller and Tracy M. Billows

Seyfarth Synopsis: The Illinois Senate unanimously passed an all-encompassing sexual harassment bill, which hits all of the big ticket workplace sexual harassment hot topics, including imposing sexual harassment training and extensive reporting requirements, bans on non-disclosure agreements, arbitration clauses and non-disparagement clauses, and hefty penalties for non- compliance. Whether the House will now move forward with the bill is to be continued…

On Thursday, April 11, 2019, the Illinois Senate approved SB 1829, showing this bill has some teeth with unanimous support on a vote of 56-0. The bill–dubbed the Sexual Harassment Omnibus Bill– aims to provide additional protections to victims of sexual harassment in the workplace. At the same time, the legislation imposes strict requirements for employers, including requiring annual sexual harassment training, and banning any non-disclosure or similar agreements. If ultimately passed, this bill would bring Illinois in line with several other states–including New York, Vermont, and California, among others–that have passed sweeping sexual harassment legislation in response to the #MeToo movement.

Key Provisions

  • Bans the use of legal documents that could prevent an employee from reporting sexual harassment. This includes: (1) non-disclosure agreements, (2) arbitration clauses, and (3) non-disparagement clauses. Such provisions would be prohibited for any case involving harassment, discrimination, or retaliation.
  • Provides independent contractors with protection against harassment for the first time in Illinois history. Currently, only employees are protected.
  • Increases protection for employees who are merely perceived to be part of a protected class–i.e. gender, sexual orientation, ethnicity–even if they are not actually a part of the protected class.
  • Expands applicability of the Victims Economic Security and Safety Act (VESSA) to victims of sexual harassment. Currently, VESSA only covers victims of domestic or sexual violence. This expansion would allow sexual harassment victims to also take unpaid leave from work to seek medical help, legal assistance, counseling, safety planning, and other assistance.
  • Prevents union representatives from representing both a victim of sexual harassment and the alleged harasser in a disciplinary proceeding.
  • Requires employers, labor organizations, and units of local government to disclose the number of sexual harassment and discrimination settlements or actions against them to the Department of Human rights.
  • Mandates employers conduct annual, interactive sexual harassment training for employees. The Department of Human Rights would be tasked with creating a sexual harassment training program made available to all employers. Employers would need to either comply with the Department’s program, or create their own program that equals or exceeds the minimum standards in the model.
  • Imposes penalties for employers who fail to report sexual harassment data, or comply with training requirements.

Illinois Continues To Push For Sexual Harassment Reform

SB 1829 comes as no surprise. Both the House and Senate have been vocal about creating an all-encompassing bill to address the workplace concerns that surround the #MeToo movement. Last year, the Senate created a Bipartisan task force on sexual harassment. The group has been actively discussing the issue of workplace sexual harassment for the past year. The legislation will proceed to the House for consideration next month.

Employer Takeaways

While employers don’t need to take action yet–they should keep a close watch. Should this bill, or some variation pass, it would impose significant hurdles for employers, and hefty penalties for failure to comply. Consider taking a brief inventory now–what policies and practices do you have in place? If you do not currently require sexual harassment training–or if you do but it is not interactive–be prepared to adjust. Similarly, if you currently enforce non-disclosure agreements, arbitration, or non-disparagement clauses, be ready to make those cuts. Given the political pressure surrounding this reform, it is likely at least portions of this bill will eventually become law, but in exactly what form remains unclear.

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

By Jennifer Mora

Seyfarth Synopsis: Given this recent New Mexico medical marijuana law change discussed here, employers in all jurisdictions should review their current policies and practices addressing “weed at work” and continue to monitor developments in this evolving area of law.

Although New Mexico has had a medical marijuana law in place since 2007, it did not contain protections for job applicants and employees. However, all of that changed on April 4, 2019 when New Mexico Governor Grisham signed Senate Bill 406, which amends the Lynn and Erin Compassionate Use Act (the “Act”) to include changes that will impact New Mexico employers and their consideration and treatment of individuals using medical marijuana.

In addition to expanding the types of conditions for which an individual can use medical marijuana, employers now are prohibited from taking any “adverse employment action against an applicant or an employee based on conduct allowed under” the Act, including declining to hire, terminating, or taking any other adverse action against an individual because he or she is using medical marijuana or received a recommendation for such use by a provider.

There are some exceptions. Specifically, the employment protections do not apply:

  • If the employer would lose monetary or other licensing-related benefits under federal laws or regulations if it hires or employs individuals who use marijuana or test positive for marijuana.
  • If the employee will work in a “safety-sensitive position,” defined to mean “a position in which performance by a person under the influence of drugs or alcohol would constitute an immediate or direct threat of injury or death to that person or another.”
  • To employees who use or are impaired by medical marijuana while working, during “hours of employment,” or on premises. Indeed, the law is clear that employers can take adverse action against an employee for using or being impaired by marijuana “on the premises of the place of employment or during the hours of employment.”

Unlike a few other medical marijuana laws, SB 406 says nothing about what, if anything, an employer can do if an applicant or employee tests positive for marijuana. Moreover, while employers can take action against employees impaired by marijuana while working, on premises or during working hours, the law provides no clarity as to what it means for an employee to be “impaired by” marijuana. New Mexico employers will now need to consider how best to respond when a medical marijuana user tests positive for the drug.

More states are enacting medical marijuana laws with provisions protecting applicants and employees, and while the initial trend in the courts favored employers, courts have started issuing employee-friendly decisions addressing existing laws. The laws and court decisions are making it particularly challenging, yet critically important, for employers to stay ahead of this fast-moving trend and avoid being a test case in their state. This is especially true now that applicants and employees are bringing claims under state disability discrimination laws rather than medical marijuana laws. Employers in all jurisdictions should review their current policies and practices addressing “weed at work” and continue to monitor developments in this evolving area of law.