Kevin A. Fritz and Minh Vu

Seyfarth Synopsis: The Court of Appeals for the First Circuit says that an agreement to arbitrate presented visually to blind plaintiffs on a POS device and never read to the plaintiffs is not binding.

Season’s greetings! As the holiday season ramps up, retailers’ point-of-sale (“POS”) devices will again go into overdrive facilitating the holiday check out process and enrolling new loyalty program members. Retailers with POS devices that are not fully accessible to the blind should be aware that any loyalty program terms and conditions presented on these POS devices may not be binding on customers who are not able to read them because of a disability. Retailers should, at a minimum, put procedures in place to ensure that such terms are read to customers who are blind or have low vision, and make a contemporaneous record of this fact.

The First Circuit recently addressed this issue in National Federation of the Blind v. The Container Store, Inc. According to the Second Amended Complaint, The Container Store uses its touchscreen POS devices to enroll customers into its loyalty program. To enroll, customers must enter their phone number and email address. They must also enter this information to receive program benefits. The blind plaintiffs allege that The Container Store’s POS devices did not allow them to input this information independently. They allege that they should not have to reveal this private information to store employees and that The Container Store had violated the ADA and various Massachusetts state laws.

The Container Store filed a motion to dismiss arguing that the plaintiffs had agreed to an arbitration provision when they signed up for the program. This provision appeared on the POS device visually and there was no evidence that any employees read the provision to the plaintiffs or otherwise made them aware of it. Justice Souter, sitting by designation on the panel, wrote that “the in-store plaintiffs had no way of accessing the terms of the loyalty program, including the arbitration agreement, that appeared on the touch screen [and] no store clerk actually informed them that an arbitration agreement existed as a condition of entering the loyalty program.” As a result, there is no evidence that the plaintiffs “manifested their assent to arbitrate during enrollment.” The First Circuit also found that the agreement to arbitrate was not binding because it was part of an “illusory” contract. Specifically, the agreement said that The Container Store could “change, modify, cancel, add or remove any or all portions” of the contract terms “at any time,” which the Court found was really no contract at all.

With the arbitration issue resolved, this class action will continue and raises important questions about whether POS devices must be designed so that blind customers can independently input their email addresses and/or phone numbers, as opposed to just their debit card PINs. In the meantime, retailers that do use POS devices to present terms and conditions for loyalty programs should train their employees to read the terms and conditions to customers who are blind or have low vision, and refrain from imposing overreaching terms that may make the whole agreement illusory and unenforceable.

 

By Danielle M. Kays and Erin Dougherty Foley

Seyfarth Synopsis: For the first time since the enactment in 2008 of the ADA Amendments Act (ADAAA), which broadened the definition of a disability under the Americans with Disabilities Act (ADA), the Ninth Circuit addressed, and expanded, the definition of an individual who is “regarded-as” disabled under the act. The court held that a plaintiff establishes he is “regarded-as” disabled if he shows “an actual or perceived physical or mental impairment,” regardless of whether the impairment actually limits, or the employer perceives the impairment to limit, a major life activity. The decision reminds employers to proceed carefully when making personnel decisions regarding employees with injuries or impairments, even if they may not rise to the level of a disability.

Case Background

In Nunies v. HIE Holdings, Inc., the plaintiff Herman Nunies was a former delivery driver for HIE Holdings in Honolulu, who had requested a transfer to a part-time warehouse position. The parties disputed the plaintiff’s stated reason for his transfer request, but the plaintiff claimed he requested the transfer to a less-physical position because he had developed shoulder pain. Plaintiff alleged that the Company initially approved the transfer but subsequently denied it and forced him to resign after he reported his shoulder pain to his employer. The employer cited budget cuts as the reason for denying the transfer and advised plaintiff that his position no longer existed, but evidence showed the employer had an open warehouse position at the time of plaintiff’s termination.

Plaintiff filed a lawsuit asserting disability discrimination under the ADA and state law, alleging that his employer forced him to resign because of his shoulder injury. The employer moved for summary judgment, arguing that plaintiff could not assert a prima facie case of disability discrimination because he was not disabled under the ADA, among other arguments. The district court agreed, granting summary judgment to the employer. In its decision, the district court held that plaintiff did not have a disability and was not “regarded-as” having a disability under the ADAAA, because plaintiff did not provide any evidence that the employer subjectively believed that plaintiff “was substantially limited in a major life activity.” The district court further held that the plaintiff did not establish an actual disability because he “did not identify any major life activities that were affected by his impairment” — indeed, plaintiff had continued to work without apparent issue or limitation. As further evidence that plaintiff was not disabled, the district court held that plaintiff had not demonstrated that his shoulder pain substantially limited any activity compared to most people in the general population.

The plaintiff appealed, joined by the Equal Employment Opportunity Commission (“EEOC”) as amicus curiae. The EEOC explained it offered its position to the appellate court because other district courts in the circuit had “failed to heed” the broader “regarded-as” disability definition promulgated by the ADAAA.

The Ninth Circuit’s Ruling

The Ninth Circuit agreed that the ADAAA expanded the scope of the ADA’s “regarded-as” definition and that some district courts continued to rely on pre-ADAAA case law to apply the older, narrower “regarded-as” disabled definition. Specifically, the district court in the Nunies case had erroneously concluded that Plaintiff had failed to meet his burden of presenting evidence that his employer “subjectively believed that Plaintiff is substantially limited in a major life activity.” Based on the plain language of the ADAAA, the appellate court held that plaintiff was not required to present evidence that the employer believed that plaintiff was substantially limited in a major life activity. Instead, the plaintiff could simply show that the employer terminated plaintiff “because of” his knowledge of the shoulder pain, regardless of whether the employer actually perceived the shoulder pain as a disability, and regardless of whether or not the shoulder pain amounted to an actual disability. Notably, the Ninth Circuit’s expansion of the scope of the “regarded-as” disability definition follows decisions in the First, Fifth, Sixth and Tenth Circuits which similarly defined the definition under the ADAAA.

Additionally, although the employer had argued that the ADAAA “regarded-as” disabled definition does not apply to “transitory and minor impairments,” the appellate court noted that this exception is an affirmative defense with the burden of proof on the defendant, and not the plaintiff. The court held that the employer had not set forth evidence to establish plaintiff’s shoulder pain was transitory and minor.

Therefore, the appellate court held that Plaintiff had established a genuine issue of material fact as to whether the employer regarded him as having a disability.

The Ninth Circuit further reversed the circuit court’s holding that the plaintiff could not establish his shoulder pain was an actual disability. Specifically, the appellate court found that because plaintiff could neither work nor lift more than 25 pounds nor lift his arm above chest height without pain, he had identified two major life activities affected by his impairment. The court noted an impairment “need not prevent, or significantly or severely restrict the activity” in order to substantially affect a major life activity. Therefore, the court found an issue of fact as to whether plaintiff had an actual disability.

Takeaways for Employers

The protections under the ADA, the ADAAA, and state law are ever-evolving and sometimes nebulous. As disability-related issues continue to increase in the workplace, employers should proceed carefully when considering personnel decisions involving individuals with potential injuries or impairments, as they may meet the “regarded-as” disabled definition. This decision is an important reminder to employers to ensure that any adverse actions taken against such employees are based on legitimate, non-discriminatory and non-retaliatory reasons, and to carefully document the business reasons for those adverse actions.

If you have any questions regarding this area or need assistance evaluating personnel decisions relating to employees with medical afflictions, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Absence Management and Accommodations or Workplace Policies and Handbooks Teams.

 

By Adam R. Young and Craig B. Simonsen

Seyfarth Synopsis: New state and federal laws and rules require employers to have compliant phones systems for 911 direct dialing and E-911.

Most large employers maintain multiline phone systems at their workplaces.  Along with emergency action plans and evacuation procedures, employers must take affirmative steps to ensure that employee phones provide adequate safety protections in the event of an emergency.  Some jurisdictions impose numerous regulations on those systems and their ability to dial 911, requiring onerous notifications, procedures, labels, and 911 dialing features.  And those requirements are constantly evolving, as 2018 marked a seminal shift in 911 regulations.

The federal government has passed a new law requiring that phones dial 911 directly, and has directed the Federal Communications Commission to undertake a rulemaking on Enhanced 911 regulations, also called “E-911.”  These federal and state developments may require employers to take action to ensure compliance, and revamp their emergency safety equipment and procedures.

New Federal Law Requires Direct Dialing of 911

In recent years, nine states and New York City have adopted rules requiring phones to be able to directly contact 911.  This means that any caller who dials 9-1-1 will be connected with emergency services, without a prefix (such as dialing 9 first) or going through an operator.  In 2018, President Trump signed a bipartisan new law which requires any phone to be able to directly contact 911, 47 U.S.C. § 623(b).  The federal law applies to all types of newly installed multiline phone systems.  State and local laws may require existing systems to be revamped by a compliance date.  Accordingly, employers replacing their phone systems or installing new systems will need to comply with these requirements.  Employers who operate phone systems that require an operator or dialing to get an outside line should review their systems and ensure that they comply.

Federal E-911 Legislation May Be Forthcoming

Federal and state governments have begun to require Enhanced 911 services for employers who use multiline phone systems.  States have enacted Enhanced 911 or E-911 requirements to multiline phone systems.  E-911 means that the telephone system automatically will transmit phone number information or specific location information (building, floor, office number) to emergency services when a caller dials 911.

These restrictions vary by state, but can require employers to notify employees regarding E-911 capabilities, train employees on 911 dialing procedures, and provide written instructions near phones.  Some also require that the phones provide E-911 capabilities in terms of number and/or location information.  The President signed H.R. 4986 § 506 (March 7, 2018), which requires the Federal Communication Commission to consider adopting rules that ensure a “dispatchable location” is conveyed with 911 calls.  The statute requires the FCC to conclude a proceeding to consider adopting rules E-911 location rules by September 23, 2019.  Employers should monitor this process closely, as it could result in another unfunded mandate for employers to comply with E-911.

Employers should begin work now to ensure that their phone systems comply, and that their employees are properly trained on the new and pending federal and state laws and regulations.  For additional information on workplace safety, emergency procedures, and emergency equipment, please follow our blog, or feel free to contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) or Workplace Policies and Handbooks Teams.

By Renate Walker and Erin Dougherty Foley

Seyfarth Synopsis: Plaintiffs often have difficulty producing evidence of comparators when attempting to prove unlawful discrimination because records contained in personnel files are confidential, but any attempts to gather such evidence must be lawful. An employee’s unauthorized review and disclosure of confidential personnel files, in violation of state law, was recently ruled not to be protected activity under Title VII.

The Fourth Circuit recently held that Title VII does not protect an employee from being terminated for conduct that violates a state law, even when that action is taken in furtherance of a Title VII claim, so long as the state law does not pose a direct conflict with Title VII. Netter v Barnes, No. 18-1039 (4th Cir. 11-15-2018).

Catherine Netter, a Black and Muslim woman, worked as a detention services supervisor for the Guilford County Sheriff’s Office in North Carolina. After receiving a disciplinary sanction that barred her from testing for a promotion, she filed complaints with her human resources department and the EEOC, alleging that similarly situated officers of other races and religions were not disciplined. When asked if she had evidence to support her claims, Netter reviewed and copied five employees’ confidential personnel files, without the employees’ consent or her own supervisor’s permission. Netter provided copies of the files to the county human resources investigator, the EEOC, and her lawyer. Upon learning of these events, Sheriff BJ Barnes terminated Netter’s employment, a decision based in part on her violation of a state law prohibiting “knowingly and willfully examin[ing] . . . , remov[ing], or copy[ing] any portion of a confidential personnel file” without authorization.

Netter argued that her termination constituted illegal retaliation because her copying and distributing the files was a protected participation activity, or alternatively, protected opposition activity, under Title VII. Protected opposition activity requires an employee to show (1) that she reasonably believed that the action she opposed violated Title VII and (2) that her conduct was reasonable. As such, the court quickly disposed of Netter’s alternative argument, noting that “unauthorized disclosures of confidential information to third parties are generally unreasonable,” and that even if she reasonably believed the county investigator had a right to access the files, Netter’s own unauthorized review was unreasonable.

Protection for participation activities is much broader and includes activities that are unreasonable or irrelevant; however, the plaintiff still bears the burden of proving that the retaliation (here, Netter’s termination) would not have occurred but for the protected activity. The court held that Netter’s conduct was not a protected participation activity because her actions violated a valid, generally applicable state law. In so doing, the court rejected Netter’s argument that the state law was preempted by Title VII because the state law has a valid purpose of protecting county employees’ personal information, and it neither contradicts Title VII nor impedes the pursuit of a Title VII claim. Furthermore, Barnes clearly established that Netter would have been terminated based solely on her violation of state law, so even if the other grounds for her discharge were invalid, Netter failed to prove that she would not have been terminated but for her participation in a protected activity.

Takeaways for Employers

While many employee activities can qualify as protected activity under the various discrimination statutes, they are not blanket protection statutes. Should you be faced with conduct that might otherwise violate an employee conduct standard or some other established law or public policy, disciplinary action can be considered for the underlying, unprotected conduct. Consider those actions carefully, in consultation with your Human Resources professional and/or legal counsel.

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 Dawn Reddy Solowey and Latoya R. Laing

Seyfarth Synopsis: The 8th Circuit recently held that while a request for a religious accommodation  may qualify as a protected activity, it is not necessarily “oppositional” so as to give rise to an opposition-clause retaliation claim under Title VII. Employers considering requests for religious accommodation should, despite this Circuit’s narrow decision, proceed carefully when considering any request.

Last year we blogged about a Minnesota District Court’s decision holding that a religious accommodation request did not constitute a protected activity under Title VII. The plaintiff appealed the ruling.  On November 13, 2018, the Eighth Circuit Court of Appeals affirmed, holding that it could not “categorically” resolve whether a request for religious accommodation is oppositional activity for a retaliation claim, but that it would affirm the ruling for the employer on the summary judgment record in this case.

Case Background

The case is EEOC v. North Memorial Health Care, Civ. No. 17-2926 in the U.S. Court of Appeals for the Eighth Circuit. The Equal Employment Opportunity Commission (EEOC) sued the employer hospital, claiming that the employer had retaliated against an applicant by withdrawing a conditional job offer because she asked for a scheduling accommodation for her religious beliefs as a Seventh Day Adventist. On March 15, 2017, the employer moved for summary judgment. The employer argued that the retaliation claim failed on grounds including that a religious accommodation request did not amount to protected activity as a matter of law. The District Court agreed, granting summary judgment in favor of the employer.  The EEOC appealed, joined by amicus curiae that included the American Civil Liberties Union (ACLU).

What Did the Court Rule?

The 8th Circuit explained that it was considering an “issue of first impression,” namely whether “requests for religious accommodation are protected activity under Title VII’s anti-retaliation provision.”  The Court held that “the issue cannot be resolved categorically,” but affirmed the district court’s ruling on the summary judgment record in this case, holding that the applicant’s simple request for a religious accommodation was not “oppositional” activity as required for Title VII retaliation claims.

Title VII makes it unlawful for an employer to discriminate against an employee or an applicant for employment because the employee opposed an unlawful employment practice. To establish a prima facie case of retaliation, the EEOC was required to show that the applicant opposed an unlawful practice.

The Court relied on the Supreme Court case Crawford v. Metro. Gov’t of Nashville and Davidson Cty. 555 U.S. 271 (2009), emphasizing that when an employee communicates to the employer a belief that the employer had engaged in discrimination, that communication almost always constitutes the employee’s opposition to the activity.

However, in this case, the Court held that the applicant’s actions were not oppositional because “merely requesting a religious accommodation is not the same as opposing the allegedly unlawful denial of a religious accommodation.”

While the Court generally construes the statute “broadly to cover opposition to employment actions that are not unlawful,” the plaintiff’s request for religious accommodation, by itself, “did not reflect, much less communicate, any opposition or resistance to any North Memorial employment practice.”

The Court explained that at least for religious accommodation claims, “protected activity” is not always “oppositional activity.”  The Court held that in some circumstances, a religious accommodation request could form the basis for a retaliation claim, such as if an employer denied an accommodation on the grounds that it was not in fact based on a religious practice and fired the employee for making the request.  However, when the employee or applicant requests a religious accommodation, and the request is denied on the grounds that it cannot reasonably be accommodated absent undue hardship, there is no basis for an opposition-clause retaliation claim.  Instead, the employee or applicant’s exclusive claim is a disparate impact or disparate treatment claim under Title VII.

Finally, the Court noted that the applicant’s original EEOC charge had included a claim of disparate treatment.  However, the EEOC’s enforcement action alleged only unlawful retaliation.  Thus, while the Court held that the applicant’s “Title VII remedy as an unsuccessful job applicant was a disparate treatment claim under [the statute] for failure to reasonably accommodation,” there was in this case no disparate-treatment claim before the Court.

What Does This Case Signal for Employers Defending Retaliation Litigation?

In defending a retaliation claim, an employer should consider whether, in the relevant jurisdiction, there is a viable argument in its jurisdiction that a request for religious accommodation is not sufficient to establish protected activity as a matter of law.  This issue was one of first impression in the Eighth Circuit, and different courts are likely to reach different conclusions.  As always, it is important to keep in mind that the law governing retaliation claims under Title VII may differ from that under state and local laws.

What Does This Case Signal for Employers Managing Accommodation Requests?

Employers should follow a conservative approach in responding to religious accommodation requests.  Employers would be wise to assume — until there is settled, binding law to the contrary in the relevant jurisdiction on identical facts  — that a request for religious accommodation may be construed as protected activity under Title VII.  As a practical matter, this means that an adverse action that an employer takes against an employee, and that post-dates a religious accommodation request from the employee, may be challenged as retaliatory by the employee and/or the EEOC.  Further, an unlawful denial of a religious accommodation request can give rise to a disparate-treatment discrimination claim, even if there is no available retaliation claim.

Best Practices for Responding to Religious Accommodation Requests

Best practices for employers to respond to religious accommodation requests, and minimize the risk of retaliation liability, include:

  • Set up a policy and process for managing religious accommodation requests in a manner that is consistent and compliant with the jurisdiction’s law. Ensure that managers and HR are trained in the policy and process, and that employees know how to request a religious accommodation.
  • Review each religious accommodation request individually on a case-by-case basis. You can read our Roadmap for Responding to a Request for Religious Accommodation here. Given the complexities of this area of the law, it is wise to enlist the help of counsel who specializes in this area.
  • Ensure that any adverse actions taken against an employee, including those subsequent to a religious accommodation request, are based on legitimate, non-discriminatory and non-retaliatory reasons, and that the business reasons for those adverse actions are well-documented.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of the Firm’s Absence Management and Accommodations Team.

By Tracy M. Billows, Benjamin J. Conley, Erin Dougherty Foley, Sara Eber Fowler, Jason Priebe, Michael Rechtin, Suzanne L. Saxman, Ryan M. Tilot, Jordan P. Vick, and Kevin A. Woolf

Seyfarth Synopsis: Please join us at our Chicago Willis Tower office on Thursday, December 6th, for breakfast along with a Seyfarth Legal Forum and Continuing Legal Education (CLE): 2018 Highlights and a Look Ahead to 2019.

About the Program

Providing our clients with a multidisciplinary overview of Legal Hot Button issues and Best Practice:  Featuring:

  • Biometric Information Privacy Act: What a long, strange year it’s been (and there’s more on the way!)
  • Legalize it: will Illinois go from medical to recreational marijuana and what would that mean to the real estate industry?
  • Affordable Care Act Update & Enforcement Activities, 401(k) Student Loan Repayment Arrangements, Socially Responsible Investments, and HIPAA Privacy & Security Audits
  • Mergers and Acquisitions: Current State of the Market and Post-Merger Integration Strategies
  • The “Cloud”…is in a building?: Data Centers are the newest, and maybe most important, type of real estate
  • Latest Developments in Pregnancy Accommodation (Illinois’ New Lactation Law and Nationwide Trends)
  • Litigation Hot Topics for 2019, including: Developments in trade secret and non-compete law; New laws affecting threshold issues such as forum selection and choice of law; Frontloaded discovery in federal court: Mandatory Initial Discovery Pilot Programs; Best practices for protecting the attorney-client privilege for in-house counsel
  • Welcome to the Future: It arrived yesterday – The intersection of Technology and Legal Services
  • Bots, bits and bytes… Artificial Intelligence and its leading role in recent legal projects

The program will feature a panel of Seyfarth Chicago subject matter experts — with an eye toward preparing for the developments in the coming year. Our overview will be targeted at highlighting issues for the General Counsel, Chief Information Officer, Chief Human Resource Officer, and other members of their teams.

The program will consist of an engaging ninety minute presentation with speakers from each of Seyfarth Chicago’s practice groups: Benefits, Corporate, Labor & Employment, Litigation, and Real Estate, as well as an exciting presentation on the use of technology in law. Then, we will offer 30 minute break-out sessions on hot topics warranting a deeper dive that companies are facing when looking at their legal compliance needs. The break-out sessions will address Privacy/Data Security, Managing in the #metoo Environment, and Blockchain/Cryptocurrency in business.

The program is on Thursday, December 6, 2018, at 8:00 a.m. – 8:30 a.m., for breakfast and registration, 8:30 a.m. – 10:00 a.m., for the panel presentations, and 10:00 a.m. – 10:30 a.m., for the breakout sessions.  Our offices are at 233 S. Wacker Drive, Suite 8000, in Chicago, IL.

While there is no cost to attend, registration is required and space is limited.  If you have any questions, please contact Fiona Carlon at fcarlon@seyfarth.com and reference this event.

Also, for those that need the credits, note that Seyfarth Shaw LLP is an approved provider of Illinois 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.

The Employment Law Lookout blog is taking a holiday break this week, but will resume delivering insightful discourse and updates on the day’s most pressing workplace issues next week.

As a reminder for employers we have previously posted these blogs on holiday safety topics and behaviors: Have Yourself a Safe, Undistracted, and Accident Free Holiday, Don’t Let Too Much Eggnog Ruin Your Office Holiday Party: Tips to Limit Employer Liability at Company Parties , and Ring in the New Year, But Don’t Invite the Constable.

In the meantime, we want to wish all of our readers, contributors, and editors a safe and happy (and warm) Thanksgiving holiday.  We hope you are able to spend time with family, friends, and loved ones and rest assured knowing that we’ll be on the lookout for more management insights to bring you as we move into the year end and into 2019.

Thank you and Happy Holiday.

By Abigail Cahak and Noah Finkel

Seyfarth Synopsis: The DOL has reissued a long-awaited opinion letter withdrawing its previous 20% tip credit rule and making clear that “no limit is placed on the amount of [related but non-tipped] duties that may be performed,” so long as they are performed “contemporaneously with the duties involving direct service or for a reasonable time immediately before or after” direct service.

For about a decade, restaurant employers have faced the daunting prospect of collective and class action litigation by their servers and bartenders paid under the tip credit claiming that they spent more than 20% of their time on so-called side work that didn’t directly produce tips Without incredibly detailed time records showing exactly when each server engaged in each of their various duties, restaurants have had a hard time rebutting such claims. Further, because servers and bartenders at restaurants usually are asked to perform somewhat similar duties, restaurateurs usually have not fared well in defeating certification efforts in such cases.

Those collective and class actions all stem from DOL guidance that the tip credit may not be used to the extent an employee spends more than 20% of their time on non-tip producing work.

Late last week, however, the DOL’s Wage-Hour Division issued a long-awaited opinion letter intended to clear up “confusion and inconsistent application” stemming from guidance contained in its Field Operations Handbook (“FOH”) regarding use of the tip credit to pay regularly tipped employees. The opinion letter provides clarity as to when and how often a tipped employee may perform non-tipped tasks and is welcome guidance to many employers.

Under the FLSA regulations, an individual employed in dual occupations–one tipped and one not–cannot be paid using the tip credit for hours worked in the non-tipped occupation. The regulations clarify, however, that “[s]uch a situation is distinguishable from that of a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee[,] and occasionally washing dishes or glasses. . . . Such related duties in an occupation that is a tipped occupation need not by themselves be directed toward producing tips.” Yet, DOL guidance interpreting the regulations, contained first in the DOL’s FOH and then set forth in an amicus brief, imposed time and duty-based limitations not present in the regulations themselves: the tip credit may not be used if an employee spends over 20% of hours in a workweek performing duties related to the tipped occupation but not themselves tip-generating. Deference to the DOL’s guidance and enforceability of the 20% rule has caused a circuit split, with the Eighth and Ninth Circuit Court of Appeals following the rule, and the Eleventh Circuit refusing. (We previously blogged on the Eighth and Ninth Circuit decisions.)

On November 8, the DOL reissued an opinion letter it had previously handed down in the final days of the Bush Administration, but subsequently withdrew in the first months of President Obama’s first term. The letter provides clarity as to the DOL’s position on the 20% rule, stating that “no limit is placed on the amount of [related but non-tipped] duties that may be performed, whether or not they involve direct customer service, as long as they are performed contemporaneously with the duties involving direct service or for a reasonable time immediately before or after performing such direct-service duties.” (emphasis added)

With respect to whether a particular duty is related to the tipped occupation, the opinion letter refers readers to O*NET, an occupational database created under the sponsorship of the DOL. O*NET provides reports of the tasks involved for various occupations, including servers and bartenders. O*NET’s task list is often very detailed and includes, for example, many tasks plaintiffs’ counsel regularly argue are completely outside a server’s occupation (e.g., “[p]erform cleaning duties, such as sweeping and mopping floors, vacuuming carpet, tidying up server station, taking out trash, or checking and cleaning bathroom”). The opinion letter further states, however, that if a task is not on the O*NET list, an employer may not take the tip credit for time spent performing the duty (while nonetheless acknowledging that such time may be subject to the FLSA’s de minimis rule).

The reasoning of those courts that followed the 20% rule was deference to the DOL’s expertise in interpreting its own dual jobs regulation. Now, however, that rule is gone (indeed, the opinion letter states that a revised FOH is “forthcoming”), leaving it unlikely (but not impossible) that courts will continue to follow the FOH. And although state laws may differ, because many court interpretations of state wage and hours laws have depended on analogy to the federal FLSA, it also is unlikely that the 20% rule will continue to apply to such claims under the majority of state minimum wage laws.

Of course, it is possible that the rule could reemerge under a future Democratic administration, but even so, courts may no longer defer to a re-instituted 20% rule because they often reject administrative agency guidance that changes with the political winds.

By Mark A. Lies, II,  Adam R. Young, and Daniel R. Birnbaum

Seyfarth Synopsis: The flu and cold season is now approaching. Employers face concerns about how to respond to highly infectious diseases when an employee reports such illness. Seasonal illnesses have the potential to infect employees and shut down operations because of employee absence due to illness. Employers must consider methods to keep their employees healthy and productive while not running into legal pitfalls.

With the return to winter weather, the cold and flu season is once again upon us. This creates challenges for employers. Seasonal illnesses have the potential to spread throughout the workforce, and negatively impact operations. Companies should create a plan to respond to infectious diseases, including how to limit the spread of the disease within the workplace without violating any applicable laws or regulations. Employers should also encourage employees to get flu shots and practice good hygiene at work. Please click on this article for more detailed guidance for employers on dealing with infectious diseases during flu and cold season.

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 or the Workplace Policies and Handbooks Team.

By John Ayers-Mann and Patrick J. Bannon

Seyfarth Synopsis: Although an employee can prove discrimination by showing that an employer’s reasons for adverse action are pretextual, the Eleventh Circuit finds that an employee must do more than merely contest the proffered reasons to survive summary judgment.

A recent Eleventh Circuit decision illustrates that Plaintiffs in discrimination cases face a difficult path to trial. Hornsby-Culpepper pointed to the fact that male employees were given raises around the same time as when she was denied a raise and that her male predecessor was paid more despite being less qualified to show pretext. But, the court concluded that she was merely quibbling with defendant’s business judgment and that none of her evidence sufficed to create an issue of fact as to pretext.

In Hornsby-Culpepper v. Ware, D.C. Docket No. 1:15-cv-00347-SCJ (Oct. 19, 2018), the Eleventh Circuit held that an employee’s efforts to dispute her employer’s non-discriminatory reason for terminating her were insufficient absent evidence that the reasons offered were false.

Avis Hornsby-Culpepper, an African-American woman, served as the Clerk of Court for the Fulton County Juvenile Court from 2009 to 2011. In April 2011, she was terminated. The County hired Edwin Bell, an African-American man, to replace Hornsby-Culpepper. Bell earned $90,000 annually, which was similar to Hornsby-Culpepper’s salary at termination. In July 2012, the position became vacant.

Following a reduction in force, Omotayo Alli, Chief Administrative Officer for the court, submitted a request to hire a Clerk of Court. Interim County Manager David Ware approved Alli’s hiring request at a salary of $71,172. Alli hired Hornsby-Culpepper for the position and told her that she would receive her prior salary. Alli requested that the salary for the position be supplemented from the “professional services” budget. Ware denied the request.

After the denial, Hornsby-Culpepper approached Ware. She asked him why her salary increase was denied when he previously paid Bell more despite him being less qualified. Ware responded that it was because she was previously terminated. Hornsby-Culpepper believed that he denied the request because she was an African-American woman. She filed an EEOC charge in 2013 and a subsequent complaint in 2015 alleging sex discrimination and Equal Pay Act violations.

In February 2015, Hornsby-Culpepper applied for an Associate Judge position with the court, but was not selected. She believed that this was because Ware was friends with Judge Lovett, who was on the selection panel. In May 2015, Hornsby-Culpepper was terminated from her position. Hornsby-Culpepper amended her complaint, claiming that her non-selection and termination were retaliation against her for filing suit.

After discovery, defendants moved for summary judgment. Defendants claimed that plaintiff’s salary request was denied because the County Board of Commissions wanted Ware to stop supplementing salaries from non-salary budget items. Regarding plaintiff’s non-selection, defendants explained that a more qualified candidate was selected. As to plaintiff’s termination, defendants contended that she was terminated due to her performance as Clerk of Court. The district court found that plaintiff could not refute the offered reasons and granted the motion.

On appeal, plaintiff argued that defendant’s reasons were pretextual. She claimed that Ware had increased salaries for white employees, that it was questionable whether the county wanted him to stop using non-salary budgetary items for salaries, and that her prior termination was an improper consideration because it was without cause. The Eleventh Circuit rejected plaintiff’s contentions, explaining that she must do more than “merely dispute the wisdom of Ware’s reasoning.” Plaintiff also claimed that Ware was facing suit from other African-American women for sexual harassment, but the court declined to find those lawsuits to be a basis to infer discriminatory animus.

The court also rejected plaintiff’s Equal Pay Act claims. Although plaintiff disagreed with Ware’s reasons for paying her less, the court required her to show affirmative evidence that his reason was pretextual. As to plaintiff’s retaliation claims, the court found that she had adduced no evidence that the panel’s decision was retaliation due to Ware and Judge Lovett’s friendship. The court found plaintiff’s contentions surrounding her termination equally unpersuasive because plaintiff had failed to indicate evidence that contradicted Alli’s position that plaintiff was not a good fit. Accordingly, the court affirmed the district court’s decision.

Despite the evidence Hornsby-Culpepper produced, the court found that she had not met the quantum of evidence required to show pretext. In the Eleventh Circuit, the plaintiff’s evidence must do more than simply undermine defendant’s reasons, it must establish pretext itself.

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