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By Annette Tyman, Lawrence Z. Lorber, and Michael L. Childers

Seyfarth Synopsis: The Office of Federal Contract Compliance Programs (“OFCCP”) is closing the summer by issuing two new enforcement directives. The first, Directive 2018-03, clarifies the OFCCP’s enforcement of religious non-discrimination in light of recent court decisions and executive orders. The second, Directive 2018-04, creates focused reviews for Executive Order 11246 (“EO 11246”), Section 503 of the Rehabilitation Act (“Section 503”), and the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”). These two directives come just a week after the OFCCP released its much anticipated publication outlining what federal contractors can expect from the agency.

“What Contractors Can Expect”

On August 2nd, the OFCCP published the “What Contractors Can Expect” guidance which lays out the agency’s enforcement plans and echoes the message of transparency that the OFCCP announced when the new leadership took over and that Acting OFCCP Director Craig Leen recently reiterated to the contractor community during his opening address at the 2018 National Industry Liaison Group. In it the OFCCP assures contractors that they can expect:

  • Access to Accurate Compliance Assistance Material;
  • Timely Responses to Compliance Assistance Questions;
  • Opportunities to Provide Meaningful Feedback and Collaborate;
  • Professional Conduct by OFCCP’s Compliance Staff;
  • Neutral Scheduling of Compliance Evaluations;
  • Reasonable Opportunity to Discuss Compliance Evaluation Concerns;
  • Timely and Efficient Progress of Compliance Evaluations; and
  • Confidentiality

These expectations are consistent with the message of collaboration that the OFCCP has promised under the current administration. References to the neutral scheduling of compliance reviews and the opportunity to discuss concerns contained in the guidance echo previous actions taken by the agency in 2018.

The agency followed up on August 10th by issuing two new directives.

Directive 2018-03: Executive Order 11246 § 204(c), religious exemption

Directive 2018-03 clarifies the agency’s position on religious non-discrimination under EO 11246 in light of recent cases involving the relationship between federal regulation and the Free Exercise Clause, including Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, Trinity Lutheran Church of Columbia, Inc. v. Comer, and Burwell v. Hobby Lobby Stores, Inc. In its press release, the OFCCP noted that this Directive also serves to align the agency’s enforcement actions with recent executive orders issued by the White House protecting religious freedom and the ability of faith-based and community organizations to compete fairly for government contracts and grants. The Directive instructs OFCCP staff to take these policies into consideration when providing compliance assistance, processing complaints, and reviewing compliance with EO 11246.

In practical terms, this Directive may not impact the vast majority of interactions that occur between the agency and the contractor community, as it is directed to OFCCP staff. However, it does signal a change in the way that the agency reviews religious accommodations during compliance evaluations. It may also impact complaint investigations against certain employers which allege discrimination on the basis of religion or sexual orientation and gender identity. The Directive specifically notes that “[t]his Directive supersedes any previous guidance that does not reflect these legal developments, for example, the section in OFCCP’s Frequently Asked Questions: Sexual Orientation and Gender Identity regarding “Religious Employers and Religious Exemption.” See https://www.dol.gov/ofccp/LGBT/LGBT_FAQs.html.”

Directive 2018-04: Focused reviews of contractor compliance with Executive Order 11246 (E.O.), as amended; Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended; and Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), as amended

While the impact of Directive 2018-03 appears to be fairly limited, Directive 2018-04 represents a major change in the way that the OFCCP enforces affirmative action and non-discrimination requirements, particularly under Section 503 and VEVRAA. The Directive calls for the agency to direct a portion of future scheduling lists to “focused reviews” of EO 11246, Section 503 and VEVRAA. The Directive further notes that in these focused reviews, “OFCCP would go onsite and conduct a comprehensive review of the particular authority at issue.” The reviews would include “interviews with managers…as well as employees affected” by the particular regulation and also evaluations of “hiring and compensation data.” The Directive instructs the OFCCP staff to develop a standard protocol for conducting the focused reviews as well as staff training, contractor education and compliance assistance materials. This policy suggests that the agency will be increasing its focus on the enforcement of Section 503 and VEVRAA which have historically received less attention than EO 11246 during compliance reviews.

What This Means for Employers?

Neither the “What Contractors Can Expect” policy, nor the directive clarifying the religious exemption signal any significant change for contractors. The creation of the focused reviews, however, puts contractors on notice that the OFCCP will be scrutinizing policies and practices that relate to disability and protected veteran status much more closely. In anticipation of the first round of focused reviews, contractors should ensure that their current policies and practices comply with the 2014 updates to the Section 503 and VEVRAA regulations. Contractors should specifically focus on the following:

  • Implementing an audit and reporting system to measure the effectiveness of their affirmative action efforts and take any necessary remedial measures;
  • Documenting requests for accommodations;
  • Ensuring that an interactive process for requesting accommodations during the hiring process is in place;
  • Soliciting protected veteran and disability status from applicants and new hires;
  • Listing all job openings with state employment delivery services; and
  • Reviewing job descriptions and qualifications to ensure that they do not screen out protected veterans or individuals with disabilities.

Contractors should also remember that in connection with both current compliance reviews and the new focused reviews, they may be asked to provide their most recent VETS-4212 Report. The deadline for filing the 2018 VETS-4212 Report is fast approaching on September 30, 2018.

It is unclear how the introduction of the focused reviews may impact desk audit submissions or whether these reviews will necessitate additional analyses for hiring or compensation. We anticipate further announcements from the OFCCP given its promise to provide contractor education and compliance assistance materials. We will continue to monitor these changes and will alert you as more develops.

In the meantime, if you have questions about best practices for OFCCP compliance and audit defense, please contact a member of Seyfarth’s Organizational Strategy & Analytics Team or your Seyfarth relationship partner.

By Karla Grossenbacher and Jaclyn W. Hamlin

Seyfarth Synopsis: The Fourth Circuit revived the retaliation case of a former city employee who was terminated one day after expressing an intent to file a formal grievance against her supervisor for race-based harassment, finding the plaintiff’s belief that she was being subjected to unlawful harassment to be reasonable – and noting that the city was on notice of objectionable behavior by the supervisor for some time.

When Felicia Struthers interviewed for an administrative assistant job with the city of Laurel, Maryland, three out of four of her interviewers were persuaded that she was the best and “most qualified” applicant, and she was given a job offer. Unfortunately, the interviewer who disagreed was to become her immediate supervisor. According to Struthers’ second-level supervisor, her direct supervisor had wanted to hire “someone of a different race.” Strothers v. City of Laurel, Maryland, No. 17-1237 (4th Cir. July 6, 2018). Despite this opposition, Struthers was extended a job offer.

From the inception of her employment, Struthers experienced difficulty with her immediate supervisor. Prior to beginning employment, Struthers negotiated a 9:05 a.m. starting time to enable her to put her children on the school bus. On her very first day, her supervisor marked her tardy, then overruled management’s agreement to allow Struthers to start five minutes after the office opened – demanding instead that Struthers report to work at 8:55 a.m., before the office was officially open for the day. The clashes continued, with Struthers’ supervisor insisting that Struthers ask permission before every bathroom break and report how long she spent in the bathroom; reprimanding her for alleged lack of teamwork; giving her a negative performance evaluation; and on one occasion, grabbing Struthers’ pants in an attempt to establish a dress code violation. Struthers believed that she was being harassed because of her race – a belief bolstered by her second-level supervisor’s admission that the immediate supervisor had wanted to hire someone of a different race, and by the complaints of former employees, African-American like Struthers, who had also felt harassed by the supervisor.

Struthers complained internally about her supervisor’s behavior on several occasions. Finally, she requested a grievance form, indicating that she planned to file a formal grievance the next day – but before she could do so, the City discharged her for “tardiness.” Struthers filed claims of race discrimination and retaliation; while the EEOC dismissed her discrimination claim, her retaliation claim advanced to federal litigation, where the City prevailed on summary judgment.

Struthers appealed, and in a decision published in July, the Fourth Circuit overturned the District Court’s grant of summary judgment to the City. The District Court had based its decision on a conclusion that Struthers could not possibly had a reasonable belief that the conduct of which she complained was based on her race. The Fourth Circuit disagreed, noting that the City itself had injected Struthers’ race into the conversation when, during one meeting, Struthers’ second-level supervisor had admitted that her immediate supervisor wanted to hire a white applicant for her job. Struthers’ reasonable belief was further bolstered, the Fourth Circuit noted, by other African-American former employees who had told her that they themselves felt harassed by the same supervisor, also because of their race, and by the fact that Struthers knew that her supervisor had only ever surveilled and reported policy violations upon other African-American employees.

The Court concluded that a reasonable jury could find that Struthers’ belief that she was being harassed because of her race was indeed reasonable. The Court further found that a reasonable jury could find that the supervisor’s behavior – including requiring Struthers, and Struthers alone, to report all time spent in the bathroom, and on one occasion lunging at and grabbing Struthers’ pants – to be sufficiently severe or pervasive to support a hostile work environment claim, and that the City’s action in firing Struthers the very day after she expressed intent to file a grievance was so temporally close to her protected activity as to create an inference of retaliatory animus. Based on these findings, the Fourth Circuit concluded that the District Court had erred in dismissing the case, and remanded it for further proceedings.

Takeaway for employers: The Court noted that the City was on notice, and had been for some time, of a rogue supervisor who had already been the subject of multiple complaints by African-American employees. If there is a lesson for employers to learn from this case – which is still pending – it is that no employer can afford to bury its head in the sand. Where there is smoke, there is at least the possibility of fire, and to safeguard the interests of the organization, employee complaints should be taken seriously and addressed promptly.

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

By Minh N. Vu

Seyfarth Synopsis:  Is it a service animal or an emotional support animal?  Do I have to allow both?  How to tell one from the other, and the rules that apply.

We get a lot of questions about service and emotional support animals.  It’s obvious that there is a lot of confusion out there.  Here is how to tell one from the other, and the rules that apply to both.

Public Accommodations.  Under Title III of the federal Americans with Disabilities Act (ADA) and virtually all state laws, a service animal is an animal that has been trained to perform work or tasks for the benefit of a person with a disability.  Emotional support animals—also called therapy or comfort animals—have not been trained to perform work or tasks.  Instead, they provide a benefit just by being present.  Public accommodations (e.g. restaurants, theatres, stores, health care facilities), are allowed to ask only two questions to determine if an animal is a service animal:  (1) Do you need the animal because of a disability? and (2) What work or tasks has this animal been trained to perform?  The second question is the key:  If the person is unable to identify the work or tasks that the animal has been trained to perform, then the animal is not a service animal.

Under the ADA, only a dog or miniature horse (no, we are not joking) can serve as service animals.  The ADA requires public accommodations to allow service animals to accompany their owners anywhere the owners can go, although the Department of Justice made clear a few years ago that they can be prohibited from swimming pools (in the water) as well as shopping carts.  The ADA provides no protection for emotional support animals in public accommodations.  The Department of Justice has a very helpful FAQ about service animals, and the Washington Post recently published a story that is also useful.

When developing policies, public accommodations must comply with both federal and state law, and some states provide greater protections.  For example, in some states, any type of animal (not limited to dogs and miniature horses) can be a service animal provided it has been trained to perform work or tasks.  Some states may provide protection for emotional support animals as well.  Virtually all states protect service animals in training, which are not addressed by the ADA.  Thus, public accommodations must tailor their policies to account for state requirements, or adopt a policy that will comport with the broadest of all state laws nationwide.

Housing.  The federal Fair Housing Act (FHA) applies to residential facilities and provides protection for emotional support animals in addition to service animals.  Thus, property managers, condo associations, co-op boards, and homeowners associations need to keep this in mind when dealing with requests from homeowners and tenants relating to these types of animals.  The Department of Housing and Urban Development’s most recent guidance on this topic is here.

Airplanes.  The Air Carrier Access Act (ACAA), not the ADA, governs accommodations for people with disabilities on airplanes.  The Department of Transportation (DOT) is responsible for enforcing the ACAA rules.  Historically, the rules have required accommodations for emotional support animals, but recent abuses of the rules by passengers seeking to bring all manner of animals such as peacocks and pigs onto planes has caused the DOT to revisit this issue in a pending rulemaking.

Compliance Strategy.  All businesses should have a written policy concerning service and emotional support animals that takes into account federal law, state law, the nature of the business, and the ability of employees to make decisions about whether an animal should be allowed onto the premises.  Having a written policy and training employees on the policy is key to ensuring that they know how to respond when one of these animals shows up on the premises.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the ADA Title III Team.

By Kristin G. McGurn and Alison H. Silveira

Seyfarth Synopsis: Department of Labor Acting Administrator Bryan Jarrett issued Field Assistance Bulletin No. 2018-4 (“FAB”) on July 13, to guide Wage & Hour Division (“WHD”) field investigators on how to determine whether home care, nurse, or caregiver registries are employers under the Fair Labor Standards Act. A “registry” is “an entity that typically matches people who need caregiving services with caregivers who provide the services, usually nurses, home health aides, personal care attendants, or home care workers with other titles (collectively, caregivers).”

The notable FAB makes no negative reference to independent contractor status, shedding first light on the Trump administration’s approach to independent contractor classification following withdrawal of the DOL’s 2015 Administrator’s Interpretation last year. The guidance is welcome news to the growing number of companies that seek to match workers with individuals who seek in-home care, as well as to entities outside the healthcare sector that engage non-employed workers.

The DOL recognizes that “a registry that simply facilitates matches between clients and caregivers—even if the registry also provides certain other services, such as payroll services—is not an employer” under the FLSA. The FAB provides, however, “specific examples of common registry business practices which may, when the totality of factors is analyzed, establish the existence of an employment relationship under the FLSA.” The FAB reveals a return to DOL’s historical approach of reviewing employer status on a “case-by-case” basis, by assessing a totality of circumstances without allowing any single dispositive factor to dictate the outcome.

The FAB highlights factors that the WHD will analyze during investigations, illustrating that registries, as well as other staffing sources, should avoid becoming embroiled in a relationship with the workers, or unduly control their work, and should be aware in particular of the following:

  • Performance of basic background checks does not indicate employer status. If the registry actually interviews prospective workers or references, or pre-selects candidates for clients, however, it may be acting as an employer.
  • Providing clients or workers with information about typical pay rates in the area “to serve as a benchmark for negotiations” does not indicate employer status. If the registry “designates a set wage range,” or “offers tailored direction” concerning what should be charged for specific services, it appears more like an employer.
  • Performing certain administrative payroll-related functions, such as preparing tax documents or compiling time records, will not create an employment relationship. Direct payment of registry funds, or independent verification or adjustment of workers’ time records, however, may indicate employer status.
  • Charging a one-time fee for service, or ongoing fees for performing administrative functions like payroll, do not indicate employer status. However, charging ongoing fees to the client based on the number of hours a worker works, or based on the ongoing relationship, may indicate employer status, because “[t]he [workers’] pay . . . depends, in part, on the amount charged.”

Other factors to be analyzed by the DOL include the level of involvement in: hiring and firing; scheduling and assigning work (where the worker may “economically depend on … preferences and decisions”); controlling the worker’s work through trainings, setting policies, or monitoring and evaluating performance; and purchasing equipment and supplies, including licenses and insurance. According to DOL, requiring a worker to obtain an EIN, insurance, or bond in accordance with the law is “not relevant” to the analysis, nor is calling the worker an ‘independent contractor’ or issuing him a Form 1099.

The FAB’s focus exclusively on registries may indicate that the DOL intends to increase its scrutiny of employment relationships in the home health care industry. More broadly, however, the factors that the DOL highlights in this FAB translate across a wide variety of industries, and reveal insight into how the current administration views the employer/independent contractor analysis under the FLSA.

After withdrawing its formal guidance on independent contractor misclassification in June 2017, thereby abandoning the relatively strict “economic realities” test that was widely viewed to favor employer status, the DOL has been relatively silent on the topic — until now. The FAB’s return to a “totality of circumstances” analysis portends a more tolerant approach to independent contractor classification, indicating that certain entities, like traditional match-making registries, can liaise between independent workers and their clients without creating an employer relationship. Employers should note, however, that enforcement agencies and courts in various states continue to take a more restrictive view of independent contractor status.

In Dynamex Operations v. Superior Court the California Supreme Court recently held that a defendant disputing employee status must prove each of the three “ABC test” prongs: (A) the worker is free from control and direction of the hirer in connection with performing the work, both under contract and in fact; (B) the worker performs work outside the usual course of the hiring entity’s business; and (C) the worker customarily engages in an independently established trade, occupation or business of the same nature as the work performed for the hirer. Employers are well advised in light of the DOL’s FAB and such state court decisions to consider reviewing their independent contractor relationships under both state and federal evolving law.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Wage & Hour Litigation Group.

By Ameena Majid and Rachel Bernasconi

Seyfarth Synopsis: Over 40 million people around the world are trapped in conditions of modern slavery, according to research from the Walk Free Foundation and the International Labour Organization. Modern slavery—a term that encompasses various forms of servitude, forced labor, trafficking in persons, forced marriage, child trafficking, debt bondage, child labor and exploitation, and other slavery-like practices—exists both at home and abroad, across a range of local industries and in global supply chains.

The fight against modern slavery is fragmented. Governments, non-governmental organizations (NGOs) and law enforcement agencies are engaged in their own fights at various levels (local, regional, national) with little collaboration.

Now, in our increasingly globalized markets, there is growing regulatory and consumer pressure on businesses—domestically and internationally—to eliminate the exploitative practices of modern slavery that occur in their operations and/or their global supply chains.

Businesses have the chance to lead the way in the growing global effort to eliminate the exploitative practices of modern slavery; they are uniquely positioned to educate the largest constituency—their employees and business partners.  By taking action, businesses can meet increasing investor, shareholder and social expectations; manage legal, reputational, financial and operational risks; and demonstrate corporate leadership on an urgent moral issue.

However, they cannot do it alone and, to be effective, businesses will need to go beyond mere compliance efforts centered on due diligence/disclosure and focus on transparency and collaboration with government and NGOs. Technological advancements are now also providing real and substantial opportunities for improvement.

The Compliance Framework

There is a growing body of international laws and norms requiring corporate reporting and due diligence on modern slavery and human rights issues. These include the UK Modern Slavery Act, the French Corporate Duty of Vigilance Law, the Swiss Responsible Business Initiative, the U.S. Federal Acquisition Regulations, and the California Transparency in Supply Chains Act.

Legislatures in Canada and Hong Kong are also currently considering modern slavery laws. In addition, the Australian State of New South Wales has recently passed its own modern slavery legislation.  For any multi-national businesses who have operations in Australia, the Australian Government this month introduced draft Modern Slavery legislation, which is likely to come into effect later in 2018. This sets an imperative for global businesses with operations in Australia to know, and show, how they are identifying and addressing the risks of modern slavery.

The compliance steps for meeting legislative requirements will not be unfamiliar to businesses; the process will involve identifying the suppliers, mapping the supply chain and conducting risk assessments (industry, country, political).  These steps will be much like actions taken for compliance with anti-bribery laws.

Using Technology for Greater Transparency

Governments and NGOs are starting to take advantage of technology to spread knowledge and tools for those in the private sector and communities to educate themselves and learn how they can take action.

For example, the U.S. Department of Labor has created two apps—Sweat & Toil and Comply Chain—that each have a different focus.  Sweat & Toil is a resource companies can use in their risk assessments to identify whether goods used are produced with child or forced labor. It consolidates information on other countries’ legal and enforcement standards, among other things.  Comply Chain creates a standard of set practices to reduce the likelihood of goods being produced with child or forced labor.  It provides a blueprint for businesses to create or enhance a social compliance system.

NGOs like Stop the Traffik, a global organization focused on prevention of modern slavery, has created a Center for Intelligence Led Prevention, in partnership with IBM, to collect, analyze and disseminate information about modern slavery routes and risks.  With the dissemination of such information, the efforts in this fight can become less fragmented.

Likewise, for businesses to really make a difference as they embark—voluntarily or involuntarily—on responding to a new regulatory scheme, technological advancements will give them an opportunity to support their actions in working towards transparency and ethical supply chains. For example:

  • Worker Voices – Utilizing mobile platforms allowing two-way, real-time communication for workers throughout the supply chain;
  • Traceability of Materials and Supplies – Using blockchain to trace products along their journey from producer to consumer;
  • Supplier and Worker Engagement – Equip and use data analytics to monitor labor-related risks in real-time, creating more responsible global supply chains;
  • Risk Assessments – Mining data (for example, from mobile phones, media reports and surveillance cameras) which can be analyzed using artificial intelligence and machine learning to extract meaningful information and identify risks in the supply chain; and
  • Employee Engagement – Using internal communications tools to allow employees to engage and become educated, particularly in recruiting.

Technology can only be as good as the purpose for which it is used and how carefully the information acquired from it is leveraged.  If effective tools are used to educate and learn from the different actors within the supply chain, there is opportunity for businesses to work with governments and NGOs to build and share knowledge.

With this comes the potential for a new level of transparency and commitment, helping to build on efforts to fight modern slavery and more holistically bring this largely hidden crime to light.

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

By Jeffrey A. Wortman and Christopher Im

Seyfarth Synopsis: California Governor Brown signed into law last week Assembly Bill No. 2282 to clarify previously passed legislation that prohibits inquiries into an applicant’s salary history. Read on for a recap of Assembly Bill No. 2282.

When AB 168 was signed into law in October 2017, California prohibited employers from asking job applicants for “salary history information.” Under this legislation, California employers must provide “applicants” with the “pay scale” for a position upon “reasonable request.” The law was rather unclear, however, about what each of these three terms meant. On July 18, 2018, Governor Brown signed new legislation, Assembly Bill 2282, designed to clarify those terms and other items in AB 168.

For example, under AB 168, it was not clear whether the term “applicant” meant only external applicants for a position or also current employees applying for the position. AB 2282 clarifies that an “applicant” is an individual who seeks employment with the employer, not a current employee.

Next, it was not clear what information an employer would have to supply when a reasonable request was made for the “pay scale” of a position. AB 2282 defines “pay scale” as a salary or hourly wage range and clarifies that the definition of “pay scale” does not include bonuses or equity ranges.

AB 2282 also clarifies what constitutes a “reasonable request” for pay scale information. A “reasonable request” is defined as a request made after the applicant has completed the initial interview.

Additionally, AB 2282 clarifies that although AB 168 prohibits employers from asking for the applicant’s salary history information, employers may ask about an applicant’s salary expectations for the position.

The new legislation addresses aspects of the California Equal Pay Act as well. It was unclear under what circumstances an employer could use prior salary to justify a disparity in pay. The new legislation attempts to clarify this: “Prior salary shall not justify any disparity in compensation. Nothing in this section shall be interpreted to mean that an employer may not make a compensation decision based on a current employee’s existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors listed in this subdivision.” Those factors are (1) a seniority system, (2) a merit system, (3) a system that measures earnings by quantity or quality of production; and (4) a bona fide factor other than race or ethnicity, such as education, training, or experience.

For Seyfarth’s full 2018 California Legislative Update, please click here.

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

By Nick C. Geannacopulos, Timothy M. Hoppe, and Mark Casciari

Seyfarth Synopsis: The trend-lines describe employment-related litigation in the past 25 years: (1) the emergence of arbitration as a flexible and increasingly legally viable to resolve employment claims; and (2) the dangerous politicization of the judicial selection process in federal and state government. These trends should make arbitration in any state, whether red or blue, an even more attractive dispute-resolution device for employers and employees alike.

No decades-old federal legislation has experienced a legal resurrection like that of the Federal Arbitration Act. Passed in 1925, it now is the legal cornerstone of a quarter century of Supreme Court jurisprudence that permits most employers to require employees to arbitrate employment disputes. In Gilmer v. Interstate/Johnson Lane Corporation, the Supreme Court said that statutory age discrimination claims can be subject to mandatory arbitration agreements. Since then, courts have consistently held that employment claims of various varieties can be forced into arbitration. They have also held that the contracting parties can delegate questions of arbitrability to the arbitrator—in other words, the arbitrator decides whether claims fall under the arbitration agreement. If the arbitration agreement is properly written, this leaves courts with a simple, threshold analysis of determining whether the parties entered into a valid contract to arbitrate their dispute.

At the same time that arbitration has solidified its dispute-resolution status, the judiciary at the state, federal, and administrative level have seen continued politicization. More and more, it seems leaders from both major parties—at the state and federal level—have political litmus tests for judges, emphasizing party affiliation and ideology above other qualities. In California, for example, we recently saw attempts to unseat superior court judges, seemingly for little reason other than the political affiliation of the governor who appointed them. The four incumbents all survived the challenge, but the impact of politics on the California judiciary is a trend that won’t just go away. Other states—both liberal and conservative—have experienced similar efforts to reshape the judiciary to advance political agendas. And in Washington, the politicization of the judicial-selection process seems to be intensifying (including at the administrative level).

All of this is to say that arbitration may not be such a bad alternative for employers and individual employees alike. Unlike the court systems, arbitration agreements allow the parties to agree on the selection of the arbitrator, to arbitrate before a panel of adjudicators (as opposed to a single fact finder), and to provide for an appellate level of arbitration. Arbitration also allows the parties to agree on other efficiencies, such as streamlining the discovery process, allowing for dispositive motions, and ensuring a timely decision. As between the Federal Rules of Civil Procedure and arbitral procedural rules, the latter are leaner and more efficient. And states have put employee-focused safeguards in place. For instance, California requires employers to cover most of the cost of arbitration, and to allow adequate discovery.

To be sure, the plaintiff bar and some legislative bodies will try to curb the scope of mandatory arbitration. If the judicial selection process continues on its politicization path, however, it may be best for both employers and employees simply to “opt out” of our mainstream dispute-resolution system in favor of arbitration.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Arbitration Strategy & Litigation or Alternative Dispute Resolution Teams.

By Oluwafunmito (“Funto”) P. Seton and Linda Schoonmaker

Seyfarth Synopsis: The Fourth Circuit has issued a reminder of the boundaries of employer liability for defamation where there is no nexus between the employee’s offensive speech and the individual’s workplace responsibilities.

The theory of vicarious liability makes an employer responsible for an employee’s misconduct if that conduct falls within the scope of employment. Courts have interpreted this to include situations where the tortfeasor-employee was performing work assigned by the employer, engaging in a course of conduct subject to the employer’s control, or whose action could fairly and reasonably be traced to the execution of his workplace responsibilities.

The Fourth Circuit recently revisited this theory within the context of a defamation case to further clarify its boundaries. See Garnett v. Remedi Seniorcare of Va., LLC, No. 17-1890, 2018 U.S. App. LEXIS 15642 (4th Cir. June 11, 2018).

Case Background

Remedi SeniorCare of Virginia (“Remedi”) is an institutional pharmacy that ships medications to nursing homes and other long-term care facilities. Plaintiff, Ms. Garnett, was a Remedi employee who worked alongside Mr. Try, a night supervisor. Ms. Garnett requested medical leave to undergo a procedure and while she was absent, Mr. Try postulated that she: (i) “was having surgery on her vagina because she got [a sexually transmitted disease (“STD”] cause that’s the only reason a female gets surgery on her vagina;” and (ii) “was having a biopsy of her vagina.”

Understandably, Ms. Garnett found these statements offensive and sued for defamation. She alleged that Mr. Try’s employment duties included communicating with people at work. Since he made the offensive remarks while communicating with people at work, in her view, the remarks fell within the scope of his employment, making Remedi vicariously liable for defamation.

The district court’s analysis focused entirely on whether the statement about her having an STD was defamatory. It did not opine on whether Mr. Try made the statement within the scope of his employment, so as to trigger vicarious liability on Remedi. The district court ultimately concluded the offensive statement was not defamatory because it was based on Mr. Try’s faulty reasoning regarding the reasons why a female gets surgery on her vagina. Ms. Garnett conceded to the district court that the statements about having surgery and a biopsy were not actionable because they are not defamatory. According to the court, the listener was not required to share in this conclusion regarding the reason for her surgery.

Fourth Circuit Affirms Ruling but Provides a Different Rationale

The Fourth Circuit did not opine as to whether Mr. Try’s offensive statements were defamatory. Rather, its analysis focused on whether his conduct was within the scope of his employment. The Court concluded that it was not. Remedi could therefore not be liable for vicarious liability under these facts.

The court explained that an employer can avoid liability for its employee’s actions if an employee acts independently or in a manner that does not serve any plausible interest of the employer i.e. where there is no “nexus between the employee’s workplace responsibilities and the offensive act.” As such, the fact that an employee is at a particular location at a specific time as a result of his employment is not sufficient to impose respondeat superior liability on his employer.

Here, the court noted that plaintiff properly alleged in her complaint, that Mr. Try made the offensive remark while at work. But, this was only one factor in the scope of employment analysis. Plaintiff should also have connected his remarks to Remedi’s business interests or otherwise explained how the remarks fell within the scope of his employment. She did not.

In this case, Mr. Try’s job responsibilities included sending medications to long-term care facilities and managing Remedi’s employees. When he made the offensive remarks, he was not giving instructions to subordinates or having a conversation that related in any way to Remedi’s commercial interests. Rather, he simply was “gossiping.” Gossiping was not part of his workplace responsibilities and plaintiff did not allege in her complaint that there was any nexus between the gossiping and his workplace responsibilities. Remedi could, therefore, not be vicariously liable for Mr. Try’s conduct.

Takeaway for Employers

This is a significant win for employers in the Fourth Circuit as it reiterates the boundaries on vicarious liability. It also provides employers with strong persuasive language to cite when arguing to defend lawsuits alleging vicarious liability, including that:

  • “It would hardly be possible for an employer to [] police all employee interactions and [] ensure that employee conversation never crosses decorous lines.”
  • “There are literally millions of verbal workplace interactions, some of which may, unfortunately, be quite offensive. But to hold that such statements invariably give rise to vicarious liability admits of no limiting principle.”
  • “Employers . . . could hardly protect themselves from liability without proctoring the minutiae of a worker’s daily life or imposing draconian restrictions on employee speech.”
  • “It is difficult to see how employers could prevent all offensive or defamatory speech at the proverbial watercooler without transforming the workplace into a virtual panopticon.”
  • “For all its undoubted value, respondeat superior and the resultant fear of liability should not propel a company deep into the lives of its workers whose privacy and speech interests deserve respect.”

Going forward, these phrases will no doubt be cited repeatedly by employers seeking to limit liability for co-worker’s (and perhaps, even supervisor’s) offensive speech. Employers likely would also rely on these arguments to limit vicarious liability for sexual harassment and other offensive conduct in the workplace, not just offensive speech.

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

By Oluwafunmito (“Funto”) P. Seton and Linda Schoonmaker

Seyfarth Synopsis: In recent years, a body of law has developed surrounding pattern or practice lawsuits brought by the EEOC. This has helped to clarify, for example, when the 300-day filing cutoff applies, or whether the claimant is eligible for damages as opposed to just equitable relief. In a recent decision out of the Western District of Oklahoma, yet another court has expanded the breadth of knowledge surrounding EEOC pattern or practice lawsuits, explaining that the continuing violation exception can toll Section 706’s timely filing requirement.

Case Background

Horizontal Well Drillers (“HWD”), is an oil and gas drilling company. Between January 1, 2012, through June 30, 2014, job applicants to HWD were required to submit information on age, family and personal health history, doctors’ care status, prescription drug use, and other health inquiries. HWD also sought information regarding applicants’ workers’ compensation histories, preferring to hire people with no history of workers’ compensation injuries or claims.

Wilbert Glover (Plaintiff-Intervenor), applied for a drilling position with HWD on January 11, 2013. He passed the rigorous health and background screenings and the HWD doctor who conducted his new hire medical exam concluded that he was medically qualified to perform the job. HWD, however, terminated Mr. Glover’s employment shortly after completing his new hire medical exam because of his high blood pressure.

Mr. Glover filed a charge of discrimination with the EEOC on or around April 1, 2013, alleging that his termination violated the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”). The EEOC requested relevant records from HWD and expanded the scope of the investigation to include all applicants hired and not hired from January 1, 2012 through June 30, 2014. (Notably, June 30, 2014 was also when HWD removed the “Applicant and Family Health, Worker’s Compensation, and Disability Pension history questions” from its application.) After its investigation, the EEOC found reasonable cause to believe that HWD violated the ADA, GINA, Title VII, and the Age Discrimination in Employment Act (“ADEA”).

Consequently, the EEOC (as Plaintiff) filed a class action lawsuit against HWD alleging various claims, including (i) pattern or practice of discriminatory failure to hire in violation of the ADEA; (ii) pattern or practice of discriminatory failure to hire in violation of the ADA; (iii) unlawful disability inquiry in conducting workers’ compensation background checks, in violation of the ADA; and (iv) unlawful post-hire medical exam, in violation of the ADA. Thereafter, Glover intervened as a party, alleging claims under the ADA and GINA.

HWD filed a motion to dismiss on various grounds. Our discussion focuses on HWD’s argument that the 300-day limitations period should bar recovery for putative class members who allege ADA failures to hire before June 5, 2012 and from putative class members who allege ADEA failures to hire before February 7, 2014.

A primer on HWD’s limitations argument

Title VII — 42 U.S.C. § 2000e-5(e)(1) (“Section 706”) (and which the ADA and ADEA follow on this point) — states that a charge of discrimination shall be filed within 300 days after the alleged unlawful employment practice has occurred.

Because Mr. Glover filed his charge with the EEOC on April 1, 2013, HWD argued that to obtain relief, any purported class member must have experienced discrimination within 300 days of that date, i.e. June 5, 2012, at the earliest. According to HWD, any alleged discrimination occurring prior to that date was time-barred and argued a number of other procedural reasons why the EEOC’s claims were not appropriate. The EEOC took the opposite position, arguing that it was alleging a “pattern or practice” of discrimination on behalf of aggrieved individuals. And, because this was a continuing violation, the June 5, 2012 cutoff did not apply. [Recall that if the “continuing violation” doctrine applied, individuals who experienced discrimination prior to the 300-day cutoff could still obtain relief through the EEOC’s claim if part of the violation fell within the 300-day window.]

The Court’s analysis of HWD’s limitations argument

The District Court reached three distinct conclusions – all in favor of the EEOC:

First, the Court held that while Sections 706 and 707 were intended to address different forms of discrimination with unique remedies, the EEOC can use a pattern or practice theory to recover on behalf of aggrieved individuals under both Sections.

Second, the Court agreed with the EEOC that the continuing violation exception can toll Section 706’s timely filing requirement for pattern-or-practice claims.

Finally, although it was too early to determine whether the EEOC met its burden of proving that HWD’s conduct was indeed a continuing violation, the Court determined that the EEOC’s claim survived HWD’s motion to dismiss for two reasons:

  • The subject matter of the discrimination remain unchanged with regard to the ADA claim: the EEOC alleged that HWD used applicants’ workers’ compensation history to perpetuate a pattern or practice of discriminatory failure to hire based on disability. Similarly, the subject matter of the discrimination also remained unchanged with regard to the ADEA claim – the EEOC alleged that HWD subjected applicants to improper hiring practices based on their age (40 and above).
  • The discrimination occurred frequently – the EEOC alleged that HWD routinely performed these background searches on all applicants before the interview and hired applicants with significantly lower workers compensation injury and claims histories. The EEOC also alleged frequency with regard to HWD’s failure to hire applicants who were 40 or older.

It remains to be seen whether the EEOC would meet its burden to demonstrate that there was indeed, a continuing violation. But for now, the Court has denied HWD’s motions to dismiss claims of EEOC class members for ADA failures to hire before June 5, 2012 and for ADEA failures to hire before February 7, 2014.

Takeaways for Employers

This is an important decision for employers, especially those sued in the Tenth Circuit as this could result in a significant increase in the number of aggrieved individuals who claim membership in an EEOC pattern-or-practice class. Employers are also now potentially exposed to a wider range of relief (including compensatory and punitive damages) – not merely equitable relief – for pattern and practice suits brought by the EEOC.

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

By Ariel D. Fenster and Brett C. Bartlett

Seyfarth Synopsis: The Eleventh Circuit recently affirmed the district court’s grant of summary judgment to two Florida counties in an action brought against former sheriff deputies under the Fair Labor Standards Act (FLSA) and Florida Minimum Wage Act (FMWA). The court held that the deputies were not entitled to compensation for the time that they spent donning and doffing police gear at home or the time that they spent driving to and from work in marked patrol vehicles.

Should we be paying our employees before their shifts start?  The answer is highly fact dependent.  In recent weeks, the Eleventh Circuit affirmed the Middle District of Florida’s decision that the time deputies spent putting on their police gear at home and driving to and from work in their patrol cars was not compensable.  In Llorca v. Sheriff Collier County, Florida,  the Eleventh Circuit analyzed what type of pre-shift activities may qualify for hourly compensation.  The decision provided a deep analysis of the Portal-to-Portal Act of 1947, as amended by the Employee Commuting Flexibility Act of 1996.  In relevant part, the act states that an employer does not have to pay its employees for activities that are “preliminary or postliminary” to the “principal activity” of the job.   The U.S. Supreme Court has long interpreted the term “principal activity or activities” to include all activities that are an “integral and indispensable part of the principal activities.”

What Does “Integral and Indispensable” Mean?

In order to determine what activities are integral and indispensable, it is important to understand the definitions of these types of activities.  The United State Supreme Court’s decision in Integrity Staffing provides guidance on the matter and defines the words as follows.  An integral activity “forms an intrinsic portion or element of the principal activities as distinguished from an adjunct or appendage.”  An indispensable activity “means a duty that cannot be dispensed with, remitted, set aside, disregarded, or neglected.”  The test is tied to the productive work an employee is employed to perform.   Thus, the fact that an employer requires or benefits from the activity does not establish it integral and indispensable.   As you can imagine, cases analyzing whether activities are integral and indispensable are highly fact-dependent and there is no bright-line test.  A look at the facts in Llorca helps to illustrate the integral and indispensable test and build off of the Supreme Court’s decision in Integrity Staffing.

Llorca Facts

Plaintiffs are former deputy sheriffs in Florida.  As part of their job, Plaintiffs were required to arrive at work dressed in their uniforms and equipped with a number of protective gear items.  Plaintiffs contend it took them up to thirty minutes at home to get “suited up.”  Plaintiffs also commuted to and from work in marked patrol cars.  During their commute time, they were required to have their radios on and respond to any major calls or emergencies.  They were also told to observe the roads for traffic violations and engage in traffic law enforcement during their commutes.  Of note, Plaintiffs were paid for any time they spent actually responding to emergencies or enforcing traffic violations.  Plaintiffs filed suit alleging they should have been paid for: (1) the time they spent donning their uniform and protective equipment at home and (2) their commute time.

Getting Dressed: Is That Compensable Time?

After analyzing the facts of the case, the court held that uniform and protective gear may arguably be “indispensable,” but it is not “integral.”  The gear is arguably indispensable because the deputies need the items to perform their job.  The court held that the act of donning and doffing the gear, however, is not integral to the job activities.  The court’s reasoning hinged on the fact that the Plaintiffs were allowed to don and doff their protective gear at home and actually did so.  In relying on a DOL opinion, the court explained that dressing in uniform is akin to changing clothes under normal conditions and that time is not compensable.

An important takeaway: where an employee gets dressed matters.  In a slew of other decisions, courts have held that giving the employee the option to change at home is important.  Even if an employee chooses to get dressed at work, the option to change at home lends itself to the time not being compensable.

Commuting To Work: Is That Compensable Time?

With regard to the commute time, the court stated this is the very type of time excluded from the Portal-to-Portal Act.  The general rule is that the time a worker spends driving to and from work is not compensable, and the Federal and Sixth circuits have similarly held that a law enforcement officer’s monitoring of a police radio or observing the roads for emergencies while en route to work do not qualify as exceptions to that general rule.  The court noted, “it would be highly inappropriate for uniformed officers to drive to and from work in marked patrol vehicles without observing the road for traffic violations and other incidents.”  The court explained that while the commute time could be integral to the job, it is not indispensable.  While it would undermine the very essence of law enforcement to ignore traffic law violations during their commute, the deputy sheriffs could fully perform their job without observing the road to and from work.

Lessons Learned

These cases are highly fact-dependent and decided on a case-by-case basis.  Even so, there are still some lessons to be learned from the Eleventh Circuit’s recent decision.

  1. Review any uniform changing policies. If employees have the option of wearing clothes and equipment to and from work, a court is less likely to conclude that those employees are entitled to compensation for time spent donning and doffing such clothes and equipment.
  2. If you do need to require employees to change in and out of clothing or protective gear on your premises, keep track of the actual time each employee spends doing so.
  3. Think about what activities the employees are completing during their commute time. Are the activities indispensable to the position?  For example, think about whether the employee is making stops to and from work to complete job duties.