The 2018 edition of The Legal 500 United States recommends Seyfarth Shaw’s Workplace Counseling & Solutions group as one of the best in the country. Nationally, for the tenth consecutive year, our Counseling practice earned Top Tier.

Based on feedback from corporate counsel, Seyfarth partners Dave Baffa, Bill Perkinsand Larry Lorber were ranked in the editorial’s “Leading Lawyers” list, and 20 other Seyfarth Workplace Counseling attorneys were also recommended in the editorial.

The Legal 500 United States is an independent guide providing comprehensive coverage on legal services and is widely referenced for its definitive judgment of law firm capabilities. The Legal 500 United States recognizes and rewards the best in-house and private practice teams and individuals over the past 12 months. The awards are given to the elite legal practitioners, based on comprehensive research into the U.S. legal market.

By Ariel D. Cudkowicz, Anthony Califano and Timothy Buckley

On March 9, 2018, the Massachusetts Cannabis Control Commission (“CCC”) filed its much anticipated recreational marijuana Regulations with the Massachusetts Secretary of State.  According to the CCC, the Regulations are on track to be published in the Massachusetts Register on March 23, 2018.  The Regulations will become effective upon publication.  While the Regulations are comprehensive in many ways, for most employers the Regulations are most notable for what they lack, namely guidance regarding employer-employee rights and responsibilities.

Here is a link to the CCC’s website, where the final Regulations are available under the “Public Documents” tab.  The Regulations  will also be located in the Code of Massachusetts Regulations at 935 CMR 500.000, et seq.

What The Regulations Include

The copy of the final Regulations available at the CCC’s web site consists of 102 pages.  It reflects hard work, thoughtfulness, and input from a variety of stakeholders and experts.  Presumably by design, the Regulations focus heavily on licensing, manufacturing and sales, operations, and safety.  For example, the regulations detail how Marijuana Establishments (which include marijuana cultivators, manufacturers, retailers, and transporters, among others) must:

  • undergo a rigorous application and qualification process;
  • pay varying application and annual license fees;
  • apply for registration with the CCC for all of their directors, executives, managers, employees, and volunteers;
  • refrain from delivering marijuana products to consumers or allowing consumer consumption of marijuana on-site;
  • implement written operating procedures, including procedures regarding safety and sanitation;
  • package, label and transport marijuana responsibly;
  • train employees;
  • market and advertise responsibly, without appealing to individuals under the age of 21;
  • sell marijuana in certain limited amounts per transaction;
  • retain certain detailed records; and
  • allow CCC investigations and inspections.

What The Regulations Lack

Absent rom the Regulations is any specific, concrete guidance to most employers regarding employer-employee rights and obligations around recreational marijuana use.  Indeed, for employers who are not also Marijuana Establishments, the Regulations provide little clarification regarding the recreational marijuana law’s implications.  Readers may recall from our November 14, 2016 client alert about the Massachusetts recreational marijuana use law (available here) that the law states that it “shall not require an employer to permit or accommodate conduct otherwise allowed by this chapter in the workplace and shall not affect the authority of employers to enact and enforce workplace policies restricting the consumption of marijuana by employees.”  This language means that employers do not have to permit employee use of marijuana at work or while working.  But the Regulations–like the recreational use law itself–says nothing about employer-employee rights or obligations regarding off-site and off-duty employee use of recreational marijuana.  The Regulations do not state that:

  • employers must allow off-site or off-duty employee use of recreational marijuana;
  • employers cannot fire (or refuse to hire) someone because of recreational marijuana use;
  • employees or applicants can sue employers who take adverse action against them because of recreational marijuana use; or
  • employers are subject to penalties for taking adverse action against employees or applicants because of recreational marijuana use.

In fact, the word “employers” appears once in the Regulations in the text of the following statement:  “Nothing in [the Regulations] shall be construed to limit the applicability of other law as it pertains to the rights of . . . employers . . . , except as otherwise provided in [the Regulations].”

Of course, employers must be careful to distinguish between the Massachusetts recreational marijuana use law and the Massachusetts medical marijuana use law.  As noted in our July 20, 2017 post (available here), the Massachusetts Supreme Judicial Court ruled that, as a result of the Massachusetts medical marijuana use law, certain employers may have to accommodate employees’ disabilities by permitting off-site and off-duty use of medical marijuana.

Simply put, the Regulations offer little guidance, good or bad, to non-Marijuana Establishment employers.  At this point, it is unclear whether the Massachusetts recreational marijuana use law will result in employment litigation and, if so, how litigation will play out in the courts.  In the meantime, employers would be wise to proceed with caution, and with guidance from experienced employment counsel.

By: Christine HendricksonLisa L. SavadjianCameron A. SmithCourtney Stieber

Seyfarth Synopsis: The New York City Commission on Human Rights (the “Commission”) recently issued additional guidance in the form of “Frequently Asked Questions” on the Salary History Law that goes into effect on October 31, 2017.  

New York City’s Salary History Law goes into effect on October 31, 2017.  It will prohibit covered employers from inquiring about a candidate’s salary history, or relying on the salary history of candidates when determining their salary, benefits, or other compensation.  For more information regarding the law, see our prior alerts herehere, and here.

With the Halloween deadline fast approaching, many employers are revising their hiring practices to comply with the law.  Recently, the Commission issued guidance, which can be found on its website in a section entitled: “Frequently Asked Questions,” and here. The FAQs respond to some key concerns employers have about the law.

Key Takeaways

  • The FAQs provide guidance regarding deferred compensation and unvested equity. They clarify that, as part of a discussion about compensation expectations, employers can ask about the value and structure of deferred compensation or equity that would be forfeited.
  • The Commission takes an expansive view regarding the geographic scope of the law’s coverage, and will apply the law to job applicants that live in New York City and interview in New York City, even if they apply for a job outside of New York City.
  • The FAQs state that employers and consumer reporting agencies must comply with the law’s requirements even when running a background check, and suggest that it is a best practice to redact or exclude salary history from such reports.
  • Employers should remove all requests for current or prior salary on their job applications, particularly where it might be sent to a candidate for a job in New York City.
  • The Commission will conduct a case-by-case analysis regarding inquiries about the salary history of independent contractors and whether the employer may consider salary history when determining compensation for an offer of permanent employment in the same position or a comparable position. The Commission will primarily consider whether the temporary employee or subcontractor qualifies as an applicant for a new position or for internal transfer or promotion.

General Scope of Coverage

There were no big surprises on the scope of coverage.

  • The FAQs reaffirm that the law covers applicants for jobs in New York City.  The Commission acknowledges that the law will not apply where an applicant simply resides in New York City, but is interviewed and will work outside of New York City.  However, the FAQs indicate that the Commission is taking the position that if the employer asks a candidate about salary history during a job interview that occurs in New York City, even for a job based outside of the City, the law may apply.  Here, the Commission relies on the theory that the impact of the discriminatory conduct occurred in New York City.  Courts may take a narrower view when analyzing the locus of the impact of the challenged conduct and if the law applies in this situation.  Nonetheless, even employers without operations in New York City should exercise caution, particularly when interviewing in or considering applicants from New York City.
  • The law generally will not apply to former employers who disclose information about salary history to the hiring employer.  However, the Commission noted that others can be held liable if they intentionally aid and abet a violation of the law.
  • Applicants for internal transfer or promotion are not protected by the Salary History Law.
  • The salary history protections will go into effect on October 31, 2017, but they will not be retroactive to cover inquiries made prior to that date.  Nonetheless, employers should exercise caution if they are formulating or communicating offers after October 31st based on salary history obtained prior to that date.  Even if the information was lawfully obtained before the law went into effect, the law independently prohibits reliance on salary history in determining a candidate’s compensation, including the negotiation of a contract.

What Employers Can and Cannot Do to Learn About Applicants’ Salary Expectations

  • The Commission confirmed that a job application can ask an applicant to state his or her compensation expectations, as long as it does not request salary history.
  • Employers should review and revise their job applications, particularly where one might be sent to a candidate applying for a job in New York City, to remove all requests for current or prior salary.  Retaining or including a question on a job application that asks for salary history may violate the law.  Employers who use an application that requests salary history cannot avoid liability simply by adding a disclaimer stating that individuals in New York City or applying for jobs in New York City need not answer the application’s question about current or prior salary.
  • Inquiries made to a candidate’s current or former employers, or searching public records, for the purpose of learning an applicant’s salary history, are prohibited.  However, in cases of accidental discovery if, for example, an employer stumbles upon a candidate’s salary history while searching publicly available information for another purpose, the employer would not have violated the Salary History Law.  In such a situation, however, the employer may not rely on that accidentally discovered salary history to formulate the compensation details of an offer.
  • If an applicant volunteers information about his or her salary history without being prompted to do so, the employer may discuss and inquire about the applicant’s salary history, verify the applicant’s representations, and rely on the applicant’s salary history in determining an offer.
  • A voluntary disclosure of salary history is “without prompting” if the average job applicant would not think that the employer encouraged the disclosure based on the overall context and the employer’s words or actions.  While the Commission is articulating an objective “reasonable person” test, rather than a subjective standard, this “voluntary and without prompting” safe harbor remains vague.  Employers should exercise caution and train hiring managers and recruiting professionals not to prompt disclosure of salary history.

Background Checks and the Implications of the Credit Reporting Laws

  • In circumstances where an employer is legally permitted to perform a background check before a conditional offer has been made, or runs a background check after a conditional offer, the Commission recommends that employers specify to reporting agencies that information about salary history be excluded from the report.  Inquiries into salary history would violate the law regardless of whether such inquiries are made before or after a conditional offer, unless the employer makes the inquiry to verify information the applicant disclosed voluntarily and without prompting.
  • Consumer Reporting Agencies (“CRA”) should consider no longer verifying salary information for applicants in New York City or applicants for jobs in New York City.  In addition, where CRAs collect W-2 or other tax reporting forms from candidates, they should redact salary history.

Broad Definition of “Compensation”

  • The Commission has defined “salary” broadly.  The same is true of “benefits” and “other compensation,” which extend to various forms of remuneration, including, but not limited to, a car allowance, retirement plan, or bonus.  This also includes commissions an applicant earned.
  • An employer is allowed to ask about objective indicators of performance such as a book of business, or the volume, production, value, or frequency of sales.  However, an employer should not ask about an applicant’s current or former profit percentages, or information from which it can determine the applicant’s compensation earned on production or commissions (unless the applicant volunteered that information without prompting).
  • Employers may ask about the value of a counter offer or competing offer that the candidate might also be considering, because it is not “current or prior” salary.

Deferred Compensation

  • One of the most significant pieces of guidance contained in the FAQs concerns deferred compensation.  In September, the Commission’s policy counsel represented to us that it would take the position that employers should not affirmatively ask candidates whether they have deferred compensation or would forfeit deferred compensation.  The Commission stated that if the candidate offers information about deferred compensation as part of a discussion about compensation expectations, the employer can verify the value of the deferred compensation that would be forfeited, either with the prior employer or with the candidate.  However, when the Commission issued Fact Sheets in September, they were silent on deferred compensation.
  • The FAQs now state clearly that, in the context of a discussion with candidates to learn about their compensation expectations, employers may ask whether an applicant will have to forfeit deferred compensation or unvested equity upon resignation from his or her current employer, and may ask about the value and structure of the deferred compensation or unvested equity that would be forfeited.  Employers may request documentation to verify the applicant’s representations, and consider such information in making an offer.

Exemptions to the Law

  • There is no specific exemption in the law for actions taken by an employer pursuant to foreign or international law that specifically authorizes the disclosure or verification of salary history or requires knowledge of salary history.
  • Private positions for which compensation is set pursuant to procedures established by collective bargaining are not exempt. The only exemption in this area applies to public employees where compensation is set pursuant to a collective bargaining agreement.
  • Headhunters are not exempt.  Headhunters who qualify as employers, employment agencies, or agents of an employer may be liable under a direct or aiding and abetting discrimination theory.  The Commission recommends that headhunters obtain written confirmation from job candidates that they consent to disclosure of their salary history.  Employers working with headhunters should also obtain a copy of the applicant’s written consent before relying on a headhunter’s representations about an applicant’s salary history.
  • The Commission did little to clarify the debate surrounding independent contractors.  The law does apply to independent contractors.  However, the Commission hedged on whether an employer may consider the salary history of a temporary employee or a subcontractor in determining compensation for an offer of permanent employment in the same position or a comparable position.  The Commission stated that this must be assessed on a case-by-case basis. The Commission will consider whether the temporary employee or subcontractor qualifies as an applicant for a new position or for internal transfer or promotion.  The Commission suggests that if the employer is willing to concede that it is a joint employer of the subcontractor or temporary employee, then the application may be one for internal transfer or promotion, which would not be covered by the law.

Corporate Acquisitions

  • A company seeking to acquire another company may obtain salary information about the employees of the target company as part of the due diligence process because the employees of the target company are not “job applicants” under the law.
  • However, despite this corporate acquisition exemption, the FAQs explain that if employees of the target company are being asked to interview for new positions in the acquiring company, the law may apply.  Accordingly, in those circumstances, the Commission recommends that any salary information that may have been shared in the due diligence process not be shared with hiring managers making decisions about compensation.  Employers considering a corporate acquisition should assess the law’s potential applicability.

Best Practices

The Commission recommends as a best practice:

  • During the hiring process, focus questions on applicants’ salary demands, skills, and qualifications.
  • Employers and hiring managers change the tenor of the conversation around salary discussions in interviews, to move away from what the applicant is currently making, and instead focus on his or her salary demand. The Commission believes this is an important change to prevent current salary from being based on prior salary, which may be artificially depressed.
  • Ensure that job applications and other forms do not include questions about applicants’ salary history, even if such questions are framed as “voluntary.”
  • Modify written policies and educate interviewers and hiring staff to prohibit inquiries about applicants’ salary history.

Unintentional violations of the law may lead to imposition of civil penalties of up to $125,000, and the Commission may impose a penalty of up to $250,000 for a willful and malicious violation. Individual applicants may also file claims under the New York City Human Rights Law for violation of the Salary History Law, and seek compensatory damages and other relief including punitive damages and attorneys’ fees.

As always, we are available to answer any questions employers may have regarding the Salary History Law.  If they have not done so already, employers should evaluate and reassess their practices and procedures with respect to recruiting and hiring in light of this new law and guidance.

By Sam Schwartz-Fenwick and Michael W. Stevens

Seyfarth Synopisis:  The Texas Supreme Court held that the U.S. Supreme Court’s landmark marriage equality decision, Obergefell v. Hodges, did not dispositively address how far government employers must go in providing benefits to same-sex married couples.

In a provocative opinion, in Pidgeon v. Turner, No. 15-0688, the Texas Supreme Court held that Obergefell v. Hodges, 135 S. Ct. 2584 (2015), does not necessarily require state governments to extend marital benefits to same-sex married couples.

Procedural Background

In 2013, the city of Houston began extending benefits to same-sex spouses of city employees who were lawfully married.  Shortly thereafter, Pidgeon was filed. It alleged that the city’s actions violated Texas and Houston law. The law was enjoined by a state court. In July 2015, the Texas court of appeals reversed the injunction, holding that Obergefell represented a “substantial change in the law regarding same-sex marriage since the temporary injunction was signed,” and that Obergefell forbade states from refusing to recognize lawful same-sex marriages.  The appeals court also remanded to the trial court to issue opinions “consistent with” Obergefell . Plaintiffs then appealed to the Texas Supreme Court.

The Court’s Opinion

The Texas Supreme Court reversed. The Court wrote “The [U.S.] Supreme Court held in Obergefell that the Constitution requires states to license and recognize same-sex marriages to the same extent that they license and recognize opposite-sex marriages, but it did not hold that states must provide the same publicly funded benefits to all married persons.”  Slip op. at 19 (emphasis added). The Texas Supreme Court remanded the case, so the trial court could decide if the Constitution or Obergefell “requires citizens to support same-sex marriages with their tax dollars.” Id. at 20.

The decision rested on the proposition that Obergefell is “not the end” of the inquiry as to the “reach and ramifications” of the constitutional status of same-sex marriage.  Id. at 23.  Notably, the Texas Supreme Court acknowledged that the U.S. Supreme Court had, in the same week, decided Pavan v. Smith, No. 16-992, which rejected the state of Arkansas’ efforts to limit recognition of same-sex parents on birth certificates.  In Pavan, in a per curiam opinion, the Court held that same-sex couples are entitled to the same “constellation of benefits that the Stat[e] ha[s] linked to marriage.”  2017 WL 2722472, at *2 (citations omitted).

Despite the apparent inconsistency with Pavan, the Texas Supreme Court emphasized the purported uncertainty over the reach of same-sex marital benefits by noting that the U.S. Supreme Court has also granted certiorari in Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, No. 16-111, a case involving a baker who was sued after he refused to make a wedding cake for a same-sex wedding.

Next Steps

The trial court may now proceed to the merits of the case, and a ruling that is inconsistent with Obergefell and Pavan is a distinct possibility.  Should the case ultimately proceed to the U.S. Supreme Court, in light of Pavan, and assuming the current membership of the Court remains the same, it seems unlikely that a narrow reading of Obergefell, at least as to governmental actors, would be upheld.  Unlike Masterpiece Cakeshop, Ltd., Pidgeon does not raise any questions of freedom of speech or religious liberty.  Rather, as with Pavan and Obergefell, it addresses whether state actors can treat same-sex marriages differently than opposite sex marriage.

While the decision in Pidgeon may ultimately be vacated, that this decision was issued 2-years after a ruling by the Supreme Court legalizing same-sex marriage, underscores that opponents of marriage equality continue to use courts as a vehicle to limit or reverse marriage equality.

As Pidgeon and other challenges to marriage equality make their way through the courts, employers and benefit plans considering modifying their benefit offerings to exclude same-sex spouses should tread very carefully, especially given the EEOC’s position that differential benefit offerings to same-sex spouses violates Title VII of the Civil Rights Act.

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

Voting is open for the American Bar Association’s annual 100 Best Legal Blogs competition, though this year the contest is a “Web 100” and will include websites and social media along with legal blogs. We hope you will cast your vote today to help Seyfarth’s Employment Law Lookout blog get on the ABA’s list for 2017.

The Employment Law Lookout Blog is a resource for employers seeking intelligent discourse and updates on the today’s most pressing workplace issues. Our mission is two-fold: to provide critical, real-time updates on employment law matters to in-house counsel and HR executives, and to keep our audience apprised of new trends and developments on the horizon.

Seyfarth’s bloggers draw upon their own first-hand experiences counseling businesses large and small to provide you with their insights about the most cutting-edge issues on new regulations, guidance, and court decisions.

Help us gain some extra recognition by casting your vote in the ABA’s Web 100 competition!

Click here to vote. Simply provide a short explanation of why you like this blog.

The deadline to nominate the blog is Sunday, July 30, 2017, so don’t delay. Polls are open!

 

By Lorie E. Almon, Gerald L. Maatman, Jr., Ian H. Morrison

Seyfarth Synopsis:  As we face a new year, Seyfarth is pleased to offer strategic guidance through our 13th Annual Workplace Class Action Litigation Report.

Across all varieties of workplace litigation, class action dynamics increasingly have been shaped and influenced by recent rulings in the U.S. Supreme Court. This past year the Supreme Court issued several key decisions on complex employment litigation issues and accepted more cases for review that are posed for rulings this coming year. Some decisions may be viewed as hostile to the expansive use of Rule 23, while others are hospitable and strengthen the availability of class actions against employers.   In our workplace class action webinar, highlights from the Report will outline a number of key trends for employers in 2017, including:

  • The implications and fall-out from the Supreme Court’s key decisions on complex employment litigation and class action issues of 2016, and discussion of the cases accepted for review that are posed for rulings in 2017.
  • Lessons to be learned from the monetary value of the top employment-related class action settlements and why they declined significantly in 2016 after they reached all-time highs in 2014 and 2015.
  • The background on why more favorable class certification rulings for the plaintiffs’ bar were issued in 2016 than in past years.
  • How the private plaintiffs’ bar is likely to “fill the void” after the Trump inauguration and increase the number of wage & hour lawsuit filings in 2017, following case filing statistics reflecting that wage & hour litigation filings decreased over the past year for the first time in a decade.
  • Why there were more conditional certification and decertification decisions in the wage & hour space than in any other area of workplace class action litigation.
  • The dynamics behind the U.S. Department of Labor and Equal Employment Opportunity Commission’s continued aggressive litigation approaches in 2016 and what is in store for government enforcement litigation under the Trump Administration.

REGISTER

If you have any questions, please contact, events@seyfarth.com. *CLE Credit for this webinar has been awarded in the following states: CA, IL, NJ and NY. CLE Credit is pending for GA, TX and VA. Please note that in order to receive full credit for attending this webinar, the registrant must be present for the entire session.

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: A Seventh Circuit panel’s ruling that Title VII does not cover claims of sexual orientation discrimination will be heard en banc by the Circuit.  Whether an en banc ruling affirms or reverses the panel’s decision, it is likely that this issue will only be resolved with certainty by the Supreme Court.

On October 11, 2016, in response to a petition for rehearing filed by the Appellant, and as we predicted in our blog, the Seventh Circuit vacated its panel ruling that Title VII did not extend to claims of sexual orientation discrimination, and decided to hear the case before the entire Seventh Circuit en banc.

The panel decision, issued in August 2016, was controversial and for many inconclusive.  The Court was friendly to the reasoning of the EEOC, which has been arguing that sexual orientation discrimination is per se sex discrimination covered by extant law.  Despite negating the rationale for not covering sexual orientation discrimination, the panel held fast to stare decisis and upheld the district court’s decision that sexual orientation discrimination claims were not covered by Title VII.

Reading the tea leaves, many believe the Seventh Circuit may be poised to reverse the panel decision.  Judge Posner, most notably, has recently been outspoken in his opinions on LGBT issues.  He wrote a scathing dissent in a recent Seventh Circuit case, Fuller v. Lynch, No. 15-3487, lamenting an immigration judge’s denial of relief to an asylum seeker on, in Posner’s words, “a supposed lack of ‘proof’ of bisexuality.”  Posner also previously authored the opinion striking down Wisconsin’s ban on same-sex marriage in Wolf v. Walker, on the basis of equal protection.

Judge Posner is not, of course, the only Judge in play.  He is, however, singularly and vocally outspoken on the issue, acting as a correspondent on LGBT rights in the law in the media.  Between Judge Posner’s vocal position, the panel’s internally conflicted initial opinion, and the willingness of the Seventh Circuit to take the case up for rehearing, many see the case as a ripe opportunity for the Seventh Circuit to become the first Circuit Court of Appeals to endorse the EEOC’s outlook on Title VII’s protection on the basis of sexual orientation.

However the Circuit Court rules will hardly be the last word on this issue.  The rehearing may result in some stabilization of the law in the Circuit, but is unlikely to portend for consistent results nationwide.  A Circuit split is likely to emerge, a split that will only be resolved by legislative or Supreme Court action.

In this time of flux, employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards sexual orientation claims.

If you have questions regarding this topic, please contact the authors or your Seyfarth attorney.

 

shutterstock_267261659By Annette Tyman and Meredith Bailey

The White House announced a new Equal Pay Pledge for private sector companies as part of yesterday’s “United State of Women Summit” in Washington, D.C.  The Pledge is one of several initiatives announced at the Summit intended to tackle “gender-based discrimination” in the workplace.

By signing the voluntary Pledge, companies promise to conduct an annual gender pay analysis and reassess their hiring and promotion processes to ensure “wage fairness for all workers.”  In a statement, the White House said that the Pledge highlights “the critical role that businesses must play in reducing the national gender pay gap.”

The Equal Pay Pledge builds on the Obama administration’s focus on legislation and policies designed to promote fair pay.  The Lilly Ledbetter Fair Pay Act–which extended the limitations period for pay discrimination claims–was the first major bill President Obama signed into law in January 2009. Since then, the White House has championed Federal and state initiatives that further gender equality in the workplace, including equal pay and paid leave.

The Pledge highlights that equitable pay is more than a compliance issue — Companies must ensure fair pay practices to maintain a competitive advantage.

Seyfarth Shaw’s Pay Equity Group (PEG) has over 20 years’ experience counseling employers on best practices related to pay equity audits and fair pay analyses, such as those intended by yesterday’s Equal Pay Pledge.  If you have questions about the Equal Pay Pledge or other pay equity questions, please contact a member of Seyfarth’s PEG:  http://www.seyfarth.com/pay-equity-group.

By Maria Papasevastos and Nadia Bandukda

Seyfarth Synopsis:  New Jersey Governor Chris Christie has conditionally vetoed a pay equity bill that would have strengthened protections against pay discrimination in the workplace. The bill’s sponsors will now decide whether they want to override the veto, accept the Governor’s changes or rewrite the bill.

On Monday, Governor Chris Christie conditionally vetoed proposed amendments to the New Jersey Law Against Discrimination concerning equal pay for women in the workplace. As we reported previously, both the Assembly and Senate passed a bill that would impact New Jersey employers by making it an unlawful employment practice for an employer to discriminate on the basis of gender under a “substantially similar work” standard.  The bill also would have allowed employees to be compared even if they do not work in the same establishment, with no geographic limitation; and, unlike other recently-enacted fair pay laws in New York and California, would have permitted unlimited back pay.

Governor Christie has vetoed bills with similar language in the past, stating that their penalties and requirements were too broad.  However, he has now provided some additional insight in his conditional veto recommendation for this bill.  Specifically, Governor Christie criticized the bill’s allowance of unlimited back pay as going beyond what the Lilly Ledbetter Fair Pay Act provides, and recommended limiting back pay to two years.

The Governor also stated that while he supported an “explicit prohibition on wage discrimination on the basis of gender,” the bill in its current form went too far in changing the legal standard for establishing wage discrimination and “would require an oversimplified comparison of wages while ignoring any consideration of the employer’s practices or facilities,” thus making New Jersey “very business unfriendly.”  He recommended that the standard for comparing employees be whether they are performing “substantially equal” work, rather than “substantially similar” work, and that employees only be compared if they are performing such work “under similar working conditions,” among other changes.

Additionally, Governor Christie remarked on axing the bill’s treble damages provisions, which he believed would “make New Jersey a liberal outlier,” as well as his disagreement with – and suggested removal of – the bill’s reporting requirements for state contractors.

The bill’s sponsors can now attempt to override the veto, accept Governor Christie’s changes or rewrite the bill.

By Johanna T. Wise and Alexander Meier

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

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

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

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

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

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

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

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

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

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

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

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