By Danielle R. Rabie, Megan P. Toth, and Erin Dougherty Foley

Seyfarth Synopsis: On February 19th and 26th, 2021, Illinois legislatures introduced new bills that, if passed, would get rid of at-will employment, only allowing employers to terminate employees for just-cause, and require severance pay for terminated employees, effective January 1, 2022.

On February 19th and February 26th, 2021, the Illinois House (HB 3530) and Senate (SB 2332) respectively introduced twin bills titled the Employee Security Act (“the Act”). If passed, the Act would abrogate the long-standing doctrine of at-will employment in Illinois, effective January 1, 2022.

Currently, Illinois — like most states — is an “at-will employment” state, which means employers have the right to terminate an employee at any time for any reason, except an illegal one, or for no reason at all and employees are free to leave a job at any time for any or no reason without adverse legal consequences. The proposed legislation, if passed, however, would impose at least two new significant obligations on employers when terminating Illinois employees, including: (1) only allowing employers to terminate employees for just-cause and (2) requiring employers to provide mandatory severance to employees upon termination.

Termination for “Just Cause” — What Does That Mean?

The proposed law defines “just-cause” as a termination where: (1) the employee failed to satisfactorily perform his or her job duties or comply with employer’s policy and the employer utilized a progressive discipline schedule; (2) the employee’s misconduct was egregious; or (3) the employer had a “bona fide economic reason[i]” for termination. The Act, as drafted, further explains that just-cause cannot be based on off-duty conduct unless there is a nexus between the conduct and the employee’s job performance or legitimate business interests.

Further, in order to justify terminations resulting from an employee’s failure to comply with employer policy or failure to satisfactorily perform job duties as “just cause” under the new law, employers will be required to use a progressive discipline system under which they may not terminate an employee within 15 days of a first warning, nor rely on a disciplinary action issued more than one year prior to justify termination. This effectively creates a one year mandatory “refresh” on the employee’s disciplinary record. Even under a progressive discipline scheme, however, the Act would allow an employer to immediately terminate an employee for “egregious misconduct.” While many employers use progressive discipline as a means to termination already, this proposed legislation imposes strict (and very employee-friendly) requirements for what progressive discipline must look like before termination is allowed, rather than allowing employers the discretion to define and impose their own progressive discipline standards.

Required Severance

In addition to requiring that terminations must be for just cause, the proposed legislation would also impose severance pay requirements upon termination in certain situations. Under the Act, as currently drafted, terminated employees will be entitled to one hour of severance pay for every 12.5 hours worked during the employee’s first year of employment and one hour for every 50 hours worked thereafter paid at the employee’s normal rate of pay. Under the current version of the bill, it is unclear precisely how these total hours would be calculated. This severance calculation could be based on actual hours worked, scheduled hours worked, and could or could not include compensated time off. Additionally, these calculations could also vary depending on whether the employee was exempt or non-exempt, hourly, or salaried. Without further guidance, it is unclear how each of these variables will play into the final calculation.

What this Means for Employers with Illinois Employees

While this bill is still in its early stages, if passed, would take effect January 1, 2022, and would substantially change the landscape of at-will employment in Illinois. Employers should be on the lookout for status updates on this bill as it progresses through various stages of committee review. Employers who feel strongly opposed to this bill may wish to consult with a lobbyist or their state legislative representative regarding their concerns. Should this Bill become law, Illinois employers need to be prepared to review and revise their termination practices, from progressive discipline terminations to reductions in force and everything in between.  We will continue to monitor the progress of this Bill and report back with any future developments.

[i] The proposed legislation provides that a discharge as a result of staff redundancies caused by merger or acquisition are not bona fide economic reason and that a discharge will not be presumed to be based on a bona fide economic reason if the employer hires another employee to perform substantially the same work within 90 days of the employee’s termination.

By Jaclyn GrossPatrick D. JoyceBernard Olshansky, and Chantelle C. Egan

Seyfarth Synopsis: During the COVID-19 pandemic, California grocery, drug store, and other front-line workers have continued to sell essential products, stock shelves, clean buildings, and otherwise keep our economy moving. Several cities and counties have taken action—often in hap-hazard ways—to force the employers of these workers to provide them with premium pay, commonly called “hazard pay” or “hero pay.” Within the last week alone, ordinances took effect in six jurisdictions, including San Jose, San Francisco, and Irvine.

The Broad Landscape

Roughly 47 cities and counties in California have considered ordinances providing additional pay to grocery and drug store employees, as well as some other essential workers, such as maintenance workers and security guards. So far, roughly 25 have enacted hazard pay ordinances. That number is anticipated to grow, with ordinances in American Canyon, Coachella, Daly City, Irvine, San Francisco, and San Jose most recently going into effect.

Hazard pay is not something that politicians ask taxpayers to fund. Rather, the pay is in the form of an immediate (and sometimes retroactive) hourly wage increase ($3, $4, or $5) that local governments impose on local businesses. The California Grocers Association has launched legal challenges to the hazard pay ordinances, arguing that they violate the affected employers’ right to equal protection and that they are preempted by the National Labor Relations Act.

Hazard Pay Ordinances Currently In Effect

As of March 29, 2021, the following cities or counties have hazard pay ordinances in place, requiring additional wages ranging from $3 to $5, effective as of the dates shown:

Hazard Pay Ordinances That Have Passed But Are Not In Effect

As of March 29, 2021, the following cities or counties have adopted ordinances that will become effective on the dates indicated:

The Basics

Common elements among the ordinances include the scope of coverage (which employers are covered), the amount of required hazard pay, and the duration of the ordinance. Additional provisions often prohibit retaliation, provide credits for employer-initiated hazard pay, require employers to post notice of the ordinance at the workplace, and require certain record-keeping standards.

Who and What is Covered

The City of Los Angeles’s Premium Hazard Pay for On-Site Grocery and Drug Retail Workers Ordinance has served as a template for other local jurisdictions (with some exceptions noted below). The Los Angeles ordinance has these key terms:

“Premium Hazard Pay.” Los Angeles premium pay ($5 per hour) is in addition to all other forms of compensation (from hourly wages to bonuses) and reimbursement.

“Employer.” A Los Angeles covered “employer” is

  • a grocery, drug, or retail store, with more than 300 employees nationwide and more than 10 employees on-site at a Los Angeles store that
  • eitherprimarily sells grocery items (including both food and household goods) or sells various prescription and nonprescription medicines, along with other sundries or is a retail store with over 85,000 square feet of retail space, 10% of which is dedicated to either groceries or drug retail.

“Employee.” A Los Angeles covered “employee” is any individual who, during a particular week,

  • performs at least two hours of work for a covered employer within the city and
  • is entitled to the California minimum wage.

Depending on the ordinance, salaried managerial workers may or may not be entitled to hazard pay. For example, exempt managers are ineligible for hazard pay in Los Angeles. Likewise, Daly City expressly excludes managers, supervisors, and confidential labor relations employees from receiving this premium pay. But San Francisco employees, both hourly and salaried, are entitled to hazard pay to the extent that they earn less than $35 per hour (whether paid hourly or by an equivalent salary, based on a 40-hour workweek).

Other Common Requirements

Anti-retaliation: Most hazard pay ordinances state that employers cannot discharge employees, reduce their compensation, or otherwise discriminate against them for asserting their rights under the ordinances.

Credit for previous employer-initiated hazard pay: The ordinances typically allow employers who are voluntarily providing hazard pay to offset the amount already being paid against the mandated additional pay. The credit typically must be clearly identified on wage statements.

Enforcement: Most ordinances empower not only local enforcement officials but also employees to sue the employer for violations of the ordinance.

Notice: The ordinances usually require employers to post a notice in a conspicuous spot at the workplace, to provide a copy of the notice to employees, or both. San Francisco provides the requisite poster for employers online, and Irvine promises to do so soon. In locales that do not provide a sample, employers must create the notices.

Sunset: Most ordinances are set to expire 90 or 120 days after the ordinance takes effect. But some cities, such as South San Francisco, have linked the effective dates of the ordinance to California’s Blueprint for a Safer Economy: once a pre-designated reopening tier applies, the ordinance sunsets.

Individual Quirks

While most hazard pay ordinances are similar, a few have special quirks. For example:

  • South San Franciscorequires employers to pay employees up to four hours for time spent obtaining a COVID-19 vaccine. (California has passed a statewide 2021 COVID-19 SPSL law, effective March 29, 2021, which also covers paid leave for vaccinations and which we blogged about here.) South San Francisco’s ordinance (effective February 25, 2021) also makes hazard pay retroactive to February 11, 2021.
  • San Franciscoimposes a cap on the mandated hazard pay. Covered San Francisco grocery and drug store employers must pay all employees an additional $5 per hour, up to a maximum of $35 per hour. So an employee who already earns $33 per hour is entitled to hazard pay of only $2 per hour. San Francisco more narrowly defines Covered Employers than does Los Angeles, requiring only eligible grocery and drug stores with at least 500 employees nationwide and at least 20 employees in San Francisco to provide hazard pay. But the San Francisco ordinance also covers third-party janitorial and security contractors whose employees work in covered grocery and pharmacy retail stores, regardless of how many employees the contractor has. So if a small security contractor services a large grocery store, then the security contractor must comply with the ordinance.

Keep an Eye Out

These ordinances pass at the local level, often with little advance notice and with little statewide or national fanfare. And each jurisdiction often has its own idea of what obligations should fall on the grocery, drug, and retail stores operating in the area. We anticipate the number of localities with these laws to grow, confronting larger employers operating in multiple California locations with a bewildering patchwork of local obligations.

Workplace Solutions

If you have applicable operations in any of the above mentioned localities, please reach out to Seyfarth’s Workplace Solutions Team with questions about the applicability of hazard/hero pay ordinances to your company.

Edited by Coby Turner

Seyfarth Synopsis: On Equal Pay Day 2021, Seyfarth’s Global Pay Equity Group is pleased to release three reference guides: the 2021 U.S. 50-State Pay Equity Desktop Reference, the 2021 Developments in Pay Litigation Report, and introducing the Global Pay Equity Desktop Reference.

It’s Equal Pay Day 2021.  What a year it has been.

Equal Pay Day 2020 landed on the heels of stay-at-home orders. We, like many of you, were working from make-shift home offices with our new two- and four-legged co-workers  (some of whom were, ahem, roller-skating down the hallway during prep sessions).  While many of us are still working at home in offices that now feel a little less makeshift, the world seems like a completely different place from those early days of the pandemic. Both the pandemic and the murder of George Floyd have changed the world. Those changes have also had a significant impact on the pay equity landscape.

As look forward to the new world that 2021 and beyond presents, we see three key trends which are captured in Seyfarth’s Fifth Annual 50-State Pay Equity Desktop Reference, the 2021 Developments in Pay Litigation Report, and our Global Pay Equity Desktop Reference:

  • An acceleration of employer focus on equal pay.
    • Many employers redoubled efforts to address issues of systemic racial inequity and focus on diversity, equity, inclusion, and justice. Within that framework, more employers than ever before have undertaken pay equity analyses. It has been our honor to stand with employers in taking these steps.
    • This work will also support employers’ efforts in the post-COVID world. Many workers who left the workforce due to the pandemic will hopefully return in droves. As setting starting pay is the most impactful decision that employers make, ensuring that new and returning hires are placed and paid equitably will be mission critical for employers who are committed to equal pay.
  • More pay reporting and disclosure, both in the U.S. and around the globe.
    • We have seen the passage of major pay equity laws both in the U.S. and around the globe. Seyfarth’s Fifth Annual 50-State Pay Equity Desktop Reference captures these changes. In the U.S., there have been major new pay equity laws passed in California, Colorado, and just yesterday, in Illinois.  Both the California law and the brand new Illinois law will require that employers report pay data.
    • We expect that pay equity laws and enforcement will accelerate in the Biden Administration. Our partner, Camille Olson, recently testified before the U.S. House of Representatives Education & Labor Committee; Workforce Protections Subcommittee on H.R. 7, the “Paycheck Fairness Act.”  A substitute “Paycheck Fairness Act” will be re-introduced today.  We will keep you informed as these major developments continue.
    • We have also seen the growth of pay laws around the globe. Our Global Pay Equity team examined the pay equity reporting laws in over 60 countries. Of those 64 countries, a remarkable 21 have pay equity reporting requirements. The dates and reporting requirements vary by country, but many of the countries have requirements within the first quarter of the year. We prepared the Global Pay Equity Desktop Reference to help identify the applicable timing requirements.
    • We are also seeing an uptick in international legislative initiatives aimed at pay equity, particularly in the EU. Most notably, the EU Commission recently proposed a directive that would require all EU employers across the EU’s 27 member states to adopt various measures to help foster gender pay equity. These measures include sharing workforce compensation information with employees and job applicants and requiring public gender pay gap reporting for companies with 250+ employees.
  • More litigation
    • We still see and have seen an increase in litigation under the federal Equal Pay Act and analogous state laws with noticeable focus on state law claims proving that wage disparity has been a big issue this year. Similarly, pay transparency raises questions about how to value or compare different compensation schemes for various positions when factoring in benefits, bonuses, commissions and other forms of compensation. Seyfarth’s 2021 Developments in Pay Litigation Report, details these developments.

All of the members of the Pay Equity Group look forward to working with you and partnering with you in navigating these issues in 2021 both in the U.S. and around the globe. We stand with you to support these efforts and look forward to seeing you — hopefully even in person — soon.

Christine Hendrickson and Annette Tyman, co-chairs of Seyfarth’s Pay Equity Group.

Seyfarth Synopsis: On Wednesday, March 24 at 12:00 p.m. Eastern, Seyfarth attorneys will present a webinar entitled Equal Pay Day 2021: US and Global Outlook and Trends.

Please join Seyfarth on Equal Pay Day for a presentation of Seyfarth’s Global Pay Equity Group, as we share our updated Annual 50-State Survey and Developments in Equal Pay Litigation reports, and introduce our Global Pay Equity Reporting Desktop Reference.

Topics covered will include:

  • Major US Law Changes
    • State Law Changes
    • What to Expect in the Biden Administration
  • Global Pay Equity Reporting Requirements
  • Developments in Equal Pay Litigation

There is no cost to attend, but REGISTRATION is required.

The Speakers will be:

Marjorie Culver, Partner, Seyfarth Shaw
Matthew Gagnon, Partner, Seyfarth Shaw
Christine Hendrickson, Partner, Seyfarth Shaw
Jeremy Corapi, Associate, Seyfarth Shaw

If you have any questions, please contact Kelly Sokolowski at ksokolowski@seyfarth.com and reference this event.

By Brent I. ClarkJames L. CurtisAdam R. YoungA. Scott HeckerPatrick D. Joyce, and Craig B. Simonsen

Seyfarth Synopsis: On March 12, 2021, OSHA published its COVID-19 National Emphasis Program – Coronavirus Disease 2019 (COVID-19), DIR 2021-01(CPL-03) (3-12-21).  The Directive lays-out OSHA’s policies and procedures implementing a National Emphasis Program (NEP) for ensuring that employees in perceived “high-hazard industries” or work tasks are protected from the hazard of contracting COVID-19.

Days before President Biden’s deadline for OSHA to issue a COVID-19 emergency temporary standard (“ETS”), the Agency instead announced an NEP allegedly designed to protect employees from the spread of COVID-19.

The NEP “augments OSHA’s efforts addressing unprogrammed COVID-19-related activities, e.g., complaints, referrals, and severe incident reports, by adding a component to target specific high-hazard industries or activities where this hazard is prevalent.” The NEP purportedly targets establishments that have workers with increased potential exposure to contracting COVID-19 and that put the largest number of workers at serious risk. But with vaccination numbers increasing, one might question the targeted industries in OSHA’s NEP.

For example, with many frontline workers in the healthcare industry already vaccinated and therefore at lower risk of contracting COVID-19, how does increasing inspections in this arena keep workers safe or reduce transmission of the virus?  OSHA does not appear to have incorporated the efficacy of  vaccinations into its analysis of worker safety and health, especially as new data show the efficacy of the vaccines on asymptomatic COVID-19 and transmission.

As part of the NEP, OSHA stated it will emphasize anti-retaliation by distributing anti-retaliation information during inspections and taking advantage of outreach opportunities, as well as promptly referring allegations of retaliation to the Whistleblower Protection Program. The Principal Deputy Assistant Secretary of Labor for Occupational Safety and Health, Jim Frederick, explained this dual purpose, stating that the “program seeks to substantially reduce or eliminate coronavirus exposure for workers in companies where risks are high, and to protect workers who raise concerns that their employer is failing to protect them from the risks of exposure.”

In a related action, OSHA updated its Interim Enforcement Response Plan to prioritize the use of on-site workplace inspections where practical, or a combination of on-site and remote methods. OSHA will only use remote-only inspections if the agency determines that on-site inspections cannot be performed safely.

While we all wait to see whether OSHA will issue an ETS, employers in target industries should be acutely aware that OSHA plans to use its current tools to address perceived COVID-related violations. To this point, OSHA has cited employers primarily under its respiratory, reporting/recordkeeping, and PPE standards. While President Trump’s OSHA referenced the OSH Act’s “General Duty Clause” as another enforcement avenue, OSHA’s COVID-19 citation tracker suggests that there have been few citations issued pursuant to that provision. It is possible that the Biden Administration could turn to the General Duty Clause more often under its NEP.

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

By Anne Dana, Loren Gesinsky, Julia Gorham, John Tomaszewski, and Kevin Young

Seyfarth Synopsis: “I can’t wait for things to return to normal.” We’ve all heard (and most of us have spoken) those words since the COVID-19 pandemic began over a year ago. Now, as the employer community inches closer to the time we longed for, many have realized that the journey from here to a new normal may present nearly as many questions as we’ve encountered on the road to here. Few questions have generated more buzz in recent weeks than COVID passports—a method to track an individual’s COVID-related metrics (e.g., vaccine status, antibodies, negative tests). In this post and the series that will follow it, we address the opportunities and risks the passport presents for private employers.

Private employers are at the vanguard of economies reopening. The impact of their success (or failure) in safely returning workers to “normal” will stretch beyond their respective walls and financial statements. With the enormous burden they shoulder, it is only natural that many employers will consider whether a COVID passport—and the opportunity it presents to ensure a vaccinated or otherwise COVID- and transmission-resistant workforce—is a proper checkpoint to place in front of certain in-person interactions.

Will employers be permitted to add the passport to their COVID safety tool belt? The answer, like so many these days, is that it depends. Due to differences between states, countries, and business sectors, as well as varying individual beliefs surrounding privacy and health, there is almost certainly no one-size-fits-all approach to a passport solution. Each organization’s unique circumstances, as well as the shifting COVID-19 landscape in which it operates, will likely warrant a tailored touch in deciding whether to implement, and then monitor and update, a passport program, with consideration given to factors such as sector, jurisdiction, workforce makeup, and the degree to which onsite work is essential or beneficial.

So, what should private employers be doing to prepare for the potential use of COVID passports? In this series, Seyfarth will walk private employers through the main elements of COVID passports, outlining the key areas for immediate action, those where adopting a “wait and see” approach may be preferred, and the central questions that should be asked as part of an internal dialogue with relevant stakeholders.

The state of COVID passports is rapidly evolving, so we will adapt this series as necessary to bring you the most recent updates on this issue.

What is clear is that every private employer needs to identify the extent to which it might voluntarily require COVID passport use by employees, contractors, business partners, and the like (where not mandated by government), and how it will approach difficult issues where those persons are hesitant or unwilling to participate. These discussions may require organizations to attempt to align their approach with their values on other important matters such as privacy, immigration, and corporate culture.

In this series, we will address the following:

  1. Designing your organization’s approach. Might requiring a COVID passport be a good option for your business? If so, to whom should those requirements apply? How do you deal with the proliferation of different forms of COVID passports that may be needed? Is a COVID passport required for certain methods of transport? Or do you adopt a program simply as part of good corporate citizenship?
  2. Technology and data privacy. Will you be using an app, QR code, or more simple form of passport? What role could Blockchain-facilitated identifiers play? What should / can you ask your staff to share with you, how will you use it, and what are your compliance obligations after that point? What are the rules on storage / retention and transmission of data? How do you manage that data flow across jurisdictions in which the expectations and requirements regarding the treatment of health-related data differ greatly?
  3. How might governmental and organizational passport requirements apply and interplay for businesses with cross-border relocation and travel requirements.
  4. Equity and accommodations. Will accommodations be needed for religious, disability, and other grounds? What are the other potential impacts on diversity, equity, and inclusion initiatives? With uneven vaccine distribution and roll-out, how does an organization that spans socioeconomic boundaries manage to demonstrate equity via the matters that are within its control?
  5. Liability, risk, and insurance. Does a passport program give a false sense of security? Nothing is 100% effective, so how do you manage latent risk? Does it matter that efficacy standards of vaccines differ by brand and by individual reaction? Recognizing the continued relative scarcity of vaccines in some areas, how might anti-body or other immunity passports help you manage risk? Moving into the next phase, how do you manage evolving variants and the potential need for continual re-vaccination?

Keep an eye out for the next installment in this series, which we expect to post in around a week or two. And please do not hesitate to reach out to the authors or your favorite Seyfarth counselors to discuss these issues in a more personalized manner.

By Jennifer L. Mora and Jeffrey A.  Berman

Seyfarth Synopsis: When a new President is about to shift the balance of power at the National Labor Relations Board, a Board dissent can foreshadow how the newly constituted Board will consider a similar issue. Such is the case in Stericycle, Inc., a February 17, 2021 divided Board decision addressing unilateral implementation of an employee handbook.

In Stericycle, the employer had a collective bargaining relationship with the Teamsters. In February 2015, the employer distributed a company-wide handbook at one of the union facilities. The handbook was inconsistent with several provisions in the parties’ collective-bargaining agreement, including those involving attendance, overtime, time off, work rules, discipline, grievance procedures, and the employee probationary period.

However, the first page of the handbook stated that “[s]ome benefits may not apply to union team members and in some cases these policies may be impacted by collective bargaining agreements.” The last page of the handbook required employees to sign and return to human resources a statement attesting that they “understand it is [our] responsibility to know and abide by its contents.” The employer had not applied the nationwide employee handbook in a manner inconsistent with the collective bargaining agreement.

The administrative law judge (ALJ) found the employer was obligated to provide the union advance notice and an opportunity to bargain over the handbook before distributing it. According to the ALJ, the handbook “contained numerous Company policies and practices that affected numerous mandatory subjects of bargaining.” The ALJ also ruled that the disclaimer language on the first page referring to union-represented employees “did not provide . . . clear guidance as to the applicable policies affecting certain terms and conditions of employment.”

A majority of the three Member panel, Members Emanuel and Ring, disagreed. While the handbook undoubtedly conflicted with some mandatory subjects in the labor agreement, the majority concluded the employer did not represent to employees that the handbook trumped the labor agreement and did not profess to make any changes to the collective bargaining agreement. The majority found it telling that the handbook stated on the first page that the labor agreement affected the policies in the handbook, and that some terms in the handbook might be different for the union-represented employees. Thus, the majority found no evidence of an intent to “modify, alter or change the existing contract” – – essentially, the employer’s disclaimer carried the day.

But it is Chairman McFerran’s dissent which, in the end, may be the most important part of the decision as it likely provides a roadmap for how the Biden Board will consider employer efforts to implement employee handbooks. Starting with the undisputed premise that the handbook conflicted in some respects with the labor agreement, the dissent took issue with the Board’s conclusion that the employer did not purport to change the labor agreement or represent to employees that the handbook superseded the agreement. The problem with this argument, according to McFerran, was that union-represented employees were required to sign an acknowledgement of their receipt of the handbook. Thus, the employer was essentially telling employees that it “was free to sidestep the Union and supplant, expand, or alter terms and conditions of employment that the parties had reached through bargaining and impose additional terms and conditions of employment without bargaining.”

Chairman McFerran also found the disclaimer lacking for several reasons. First, the disclaimer did not communicate to employees with “the clarity or the specificity required by the duty to recognize and bargain with the Union as employees’ exclusive representative.” Next, the handbook should have advised employees that the labor agreement trumped the handbook (rather than the opposite). This failure meant that employees were left to guess which handbook provisions were impacted by the labor agreement. And the disclaimer was silent about the application of new terms and conditions in the handbook that were not in the collective bargaining agreement. Ultimately, according to the dissent, the message the employer communicated to unit employees was that “it did not respect the Union as their exclusive representative.”

While employers with a mix of union and non-union workforces might understand that their employee handbooks do not supplant or alter a collective bargaining agreement with their employees’ bargaining representative, the Biden Board will ask in future cases – – do union-represented employees share this same understanding? The lesson for employers with mixed workforces is take a fresh look at their handbook disclaimers to make it extremely clear to unionized workforces that, if conflicts exist, the labor agreement always wins. However, depending on the composition of the new Biden Board, even this may not be sufficient.

By Gerald L. Maatman, Jr.Christopher DeGroffMatthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis: The EEOC recently released its enforcement and litigation statistics for Fiscal Year 2020. Notably, the statistics indicate that 2020 saw a dramatic drop in filed charges, with the lowest number of charges filed in over 20 years. For example, despite the #MeToo movement remaining an enforcement priority for the Commission in 2020, the number of gender discrimination charges fell even lower than last year, which was the lowest number since 1997. However, monetary benefits recovered by the Commission in FY 2020 surged. Given the flip of the White House from red to blue and the commitment of the Biden Administration to enhanced enforcement of workplace bias laws, the EEOC’s enforcement data is a “must-read” for all employers.  

On February 26, 2021, the EEOC released its comprehensive enforcement and litigation statistics for Fiscal Year 2020 (available here). In addition to enforcement and litigation activity, the data breaks down charge statistics by allegation and state – showing which charges are being filed and where. The dip in the number of charges that employers saw in 2018 and 2019 continued through 2020, with the number of charges reaching its lowest point since 1997. The prominence of gender discrimination charges seen in 2018 due to the #MeToo movement has all but disappeared, with sex discrimination charges remaining in the fourth-place position and dropping to their lowest number in over 20 years.

Charges Were Down Overall

In total, 67,448 charges were filed in FY 2020, down from 72,675 charges filed in FY 2019 and 76,418 charges that filed in FY 2018. FY 2019 previously saw the fewest charges filed for all fiscal years going back to FY 1997 (the second lowest, 75,428 charges, occurred in FY 2005). Putting these numbers in perspective, the number of charges filed exceeded 80,000 per year in every year from FY 2007 until FY 2018, sometimes by wide margins.

Consistent with this overall decline, there was a decrease in almost every category of charges in FY 2020 as compared to FY 2019, with the exception of a modest increase in charges alleging claims under the Americans with Disabilities Act (“ADA”), charges alleging claims of color discrimination under Title VII,  and, most notably, charges alleging claims under the Genetic Information Non-Discrimination Act (“GINA”), which doubled since FY 2019 and reached the highest number of charges filed since the Act was passed in 2008. The categories that decreased the most were race and sex discrimination. That this does not necessarily mean that fewer individuals are reaching out to the EEOC. This dip could be attributed, at least in part, to the agency’s implementation of new charge intake procedures in an effort to increase efficiencies or as a result of the COVID-19 pandemic. The dramatic change in workplace environments could have also contributed to the charge drop.

Texas And Florida Are Still Hot Spots, And Illinois Falls From The Top Five

Looking at the states where the most charges were filed, the hot spots largely remained the same in FY 2020 as in FY 2019 and 2018. Like FY 2019, Texas (with 10.2 % of all charges filed) and Florida (with 8.7%) were the top two states for charges in FY 2020.

Texas and Florida are no surprise, given their relative populations.

But population is still not everything when it comes to charges. For example, Pennsylvania (at number 3) and Georgia (at number 5, behind California) have more charges filed than New York. Notably, Illinois remained out of the top five states this year, at sixth place with 5.5% of all charges filed.

Retaliation Charges Remain Predominate, With Disability Discrimination Charges Remaining At Second

In total, 37,632 retaliation charges were filed with the EEOC in FY 2020. As has been the case for over six years, this made retaliation the most frequently filed charge in FY 2020. Behind retaliation were disability, race, and sex discrimination charges, each alleged in approximately 32%-36% of the charges filed with the EEOC. As the EEOC’s report noted, the percentages total more than 100 because some charges allege multiple bases of discrimination.

Disability discrimination was again the second-most-often alleged theory of discrimination, seeing the highest percentage of charges filed since 1997 at 36.1%. Race discrimination came in a close third. Interestingly, sex discrimination charges (which would include pregnancy discrimination, gender discrimination, and sexual harassment) remained as the fourth most frequently filed charge, which was where it was in FY 2017, despite continued media attention on such issues.

EEOC Saw A Surge in Overall Recoveries

As we reported here, during FY 2020, the EEOC recovered a record amount of $535.4 million on behalf of alleged discrimination victims. By comparison, the EEOC recovered approximately $486 million in FY 2019; approximately $505 million in FY 2018; and approximately $484 million in FY 2017. However, despite the EEOC’s efforts to enhance and improve its mediation and conciliation programs during FY 2020, the amount recovered through mediation, conciliation, and settlement dropped again from $354 million in FY 2019 to $333.2 million in FY 2020. Conversely, litigation recoveries increased from $39.1 million in FY 2019 to $106 million, the highest in 16 years. The EEOC credits this surge in litigation recovery to its resolution of 165 lawsuits in FY 2020 and states that it achieved “favorable results” in approximately 96% of district court resolutions.

Implications For Employers

Despite the dips in the overall number of charges, the EEOC’s enforcement efforts should not be considered as waning. Employers should treat these statistics as an early warning system that shows where the Commission’s enforcement efforts may be heading next – to that end, it is notable that retaliation and disability discrimination issues are firmly in the forefront, particularly in light of the issues caused by the COVID-19 pandemic. By continuing to set the culture in their workplaces with sound human resources practices, employers can guard against these issues and avoid hefty settlements and litigation with the EEOC.

By Karla Grossenbacher, Thomas E. Ahlering, and Andrew R. Cockroft

Seyfarth Synopsis: Both Portland and New York City have followed the example set by Illinois’ Biometric Information Privacy Act (“BIPA”), a statute that has spawned thousands of cookie-cutter class action suits regarding the alleged collection of biometric information. Like BIPA, these new ordinances create a private right of action for individuals that could subject local businesses to potentially millions of dollars in liability. Businesses in these cities should carefully review these new ordinances as well as any technology they be using that has the potential to collect biometric information.

For several years now, businesses operating in Illinois have become well accustomed to the myriad lawsuits being filed, and harsh and unwavering penalties being imposed, under Illinois’ Biometric Information Privacy Act (“BIPA”). Despite the toll on businesses imposed by the ever-increasing class action and appellate litigation brought on by the statute, other jurisdictions have enacted similar legislation.

As of January 1, 2021, Portland, OR and New York City have become the newest jurisdictions to pass laws placing restrictions on the collection and/or use of biometric technology by businesses. Although the Portland and New York City ordinances differ from each other (as well as BIPA) in significant ways, they each share a common feature: a private right of action. Accordingly, these new laws have the potential to bring on a rash of high-stakes class action litigation in each of these cities.

The specifics of each ordinance are detailed below:

Portland, OR

Portland’s ordinance bans private entities from using any “facial recognition technology” in any “places of public accommodation,” with limited exceptions, such as when it is necessary to comply with federal, state, or local laws, for individuals to access their smart devices (like facial recognition on iPhones) and for use in social media applications.

The ordinance creates a private right of action “against the Private Entity in any court of competent jurisdiction for damages sustained as a result of the violation or $1,000 per day for each day of violation, whichever is greater and such other remedies as may be appropriate,” as well as attorneys’ fees to a prevailing party.

While at first reading it may appear that the law only covers the use of facial recognition in public places, the ordinance is not so narrowly drafted. Private entities are subject to the ordinance if they constitute a “place[] of public accommodation,” which is defined in the ordinance to include “any place or service offering to the public accommodations, advantages, facilities, or privileges whether in the nature of goods, services, lodgings, amusements, transportation or otherwise” but excludes “an institution, bona fide club, private residence, or place of accommodation that is in its nature distinctly private.”

Accordingly, if a facility constitutes a “place of public accommodation,” then it could be liable for facial recognition technology employed anywhere in the facility regardless of whether it is public facing. Although a narrower reading of the statute may be more reasonable, courts in Illinois have routinely broadened the scope of BIPA and it is possible Portland courts would do the same.

New York City

New York City’s newly passed biometric privacy legislation has been pending before the city council for several years. Indeed, Seyfarth previously detailed this ordinance while it was still pending legislation.

The ordinance orders that “[a]ny commercial establishment” that collects biometric information from “customers” must disclose such collection “by placing a clear and conspicuous sign near all of the commercial establishment’s customer entrances notifying customers in plain, simple language” that customers’ biometric information is being collected. The ordinance further makes it “unlawful to sell, lease, trade, share in exchange for anything of value or otherwise profit from the transaction of biometric identifier information.”

The law provides that individuals “aggrieved by” a violation of the ordinance may file a private right of action, but places some conditions on this right.

  • If the individual alleges the business collected their biometric information without making the required disclosures, the individual can only initiate a private action if they first provide written notice to the business of their intent to sue and provide the business 30 days to cure the violation by placing clear and conspicuous notice at their establishment. If the business does not cure within 30 days, the individual may sue and recover $500 for “each” violation.
  • If the individual alleges the business shared their biometric information in exchange for something of value or otherwise profited from the “transaction,” then the individual may sue without any prior notice to the business. The individual may recover $500 for “each” negligent violation of this section and may recover $5,000 for “each” intentional or reckless violation of this section.

Only the biometric information of “customers” is protected under the law and the law also makes clear that “‘customer’ means a purchaser or lessee, or a prospective purchaser or lessee, of goods or services from a commercial establishment.”

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Businesses in Portland, OR, and New York City should be mindful of these new laws and act accordingly. Such businesses with compliance questions should contact a member of Seyfarth’s Biometric Privacy Compliance & Litigation Practice Group.

By Linda C. Schoonmaker and Brian A. Wadsworth

Seyfarth Synopsis: The Sixth Circuit recently sided with employer Fresh Products, LLC and its HR Manager, Dawn Shaferly, in an age, race, and disability discrimination lawsuit. In doing so, the Court helpfully clarified when an employer can contractually shorten the limitations periods with respect to certain discrimination claims. In addition, the Court provided a helpful discrimination analysis that employers in the Sixth Circuit may want to rely on in any future litigation.

Factual Background

Plaintiff Cassandra Thompson, a 52 year old African American, worked for Defendant Fresh Products, LLC at its production facility in Ohio. Plaintiff suffered from arthritis, which affected her ability to lift heavy objects. When hired by Fresh, Thompson signed a “Handbook Acknowledgment,” which in relevant part provided that Thompson would file “any claim or lawsuit arising out of [her] employment … no more than six (6) months after the date of the employment action that is subject [sic] of the claim or lawsuit.”

After she began working for Fresh, Thompson asked Fresh if she could move to a part-time role based on her medical condition. This never happened. Instead, towards the end of 2016, Fresh suffered from reduced sales and sought to move from three eight-hour shifts to two ten-hour shifts to reduce the number of workers it employed. To facilitate the transition and determine which employees to retain, Fresh asked each of its employees to complete a survey and note whether they could work the ten-hour shift and, if so, which shift they preferred. Thompson responded to the survey and indicated that she could not work the ten-hour shift, but did not provide a reason. She later testified that the reason she could not perform the shift was due to her obligations to look after her grandchildren and was not related to her medical condition.

While Fresh determined how it would implement the new shift schedule and which employees it would retain, Thompson reiterated her desire to work part-time and never indicated she could work a ten-hour shift, nor did she indicate which ten-hour shift she preferred. Fresh subsequently terminated Thompson’s employment because she only wanted to work part-time and Fresh did not have any part-time work for employees in Thompson’s position, though it did have one part-time employee in another group. Fresh also terminated Thompson because she never said she could perform the ten-hour shift and never chose a shift preference, unlike any of the other employees that it retained.

Despite this, there were four other employees who, like Thompson, initially indicated that they could not work the ten-hour shift did not choose a shift preference in response to the survey. However, unlike Thompson, those employees subsequently chose a shift preference. Ultimately, two of these four employees were not fired and did not quit before the transition to ten-hour shifts. Thompson was the only employee who never indicated she could work the ten-hour shift and never selected a shift preference.

In all, Fresh terminated four other employees besides Thompson, all of whom were above the age of 45 years.

Based on this record, the District Court granted Fresh summary judgment as to all of Thompson’s claim and Thompson appealed.

Shortening of the Limitations Period

The Sixth Circuit held that the limitations period cannot be shortened for an ADA or ADEA claim. In doing so, the Court noted its recent decision in Logan v. MGM Grand Detroit Casino, 939 F.3d 824 (6th Cir. 2019), which held that the statutory limitations period to a Title VII claim could not be shortened. The Court found that when a statute, such as Title VII, has an explicit limitations period or extensive pre-suit procedure, the limitations period cannot be shortened by contract. Thus, because the ADA incorporates Title VII and the ADEA contains a self-prescribed limitations period and pre-suit procedures, the Court held “that the limitations periods in the ADA and ADEA give rise to substantive, non-waivable rights,” such as the limitations period.

In contrast to Title VII, the ADA, and ADEA, the Ohio Civil Rights Act does not have a self-contained limitations period. Instead, it relies on Ohio’s general limitations statute. Thus, the Court reasoned that the limitations period could be contractually shortened and, in Thompson’s case, was shortened.

Discrimination Analysis

While the Court found that Thompson demonstrated at least a fact issue as to whether she had a disability and whether she was qualified for her position (despite never claiming she could work the ten-hour shift), it found she could not present a prima facie case of disability discrimination because she had not shown that Fresh singled her out for impermissible reasons. In reaching this conclusion, the Court emphasized that the reason Fresh terminated Thompson was due to the way she responded to the survey asking if she could work the ten-hour shifts and, if so, asking her shift preference. While the Court found “[i]t is possible the process was completed sloppily … it is not enough to ‘tend to indicate that [Fresh Products] singled out [Thompson] for discharge for impermissible reasons.’” Indeed, the Court highlighted that “Thompson was the only employee who stated she could not work either shift, never selected a preference for one of the shifts … , and did not voluntarily quit.” Thus, the Court found that Thompson could not meet her prima facie case.

As to Thompson’s failure-to-accommodate claim, the Court found that Thompson’s claim failed because her accommodation request was unreasonable in that it required Fresh to eliminate an essential function of the job—working the ten-hour shift. In reaching this conclusion, the Court noted that there were no other employees in Thompson’s position who were permitted to work part-time. Fresh’s representatives also testified that part-time work for those positions would be unmanageable. Moreover, the fact that Fresh allowed an employee in another position to work part time was immaterial because part-time work was more manageable in that position. Accordingly, Thompson’s requested accommodation was unreasonable.

Thompson supported her age discrimination claim with statistical evidence, noting that “1) all employees laid off as part of the RIF were over 40, and their average age was 50; 2) the average age of those considered for termination was 45.76; and 3) the average age of those retained was 35.66.” The Sixth Circuit made short work of these statistics, noting that the sample size of five people was insufficient to serve as competent evidence. Moreover, the fact that Fresh retained a younger employee who had also asked for part-time work, but had not received it, was alone insufficient evidence of discrimination. Thompson was required to show that she was more qualified than the younger employee or present evidence of discriminatory animus, such as discriminatory comments, but she could not meet this burden.

Lastly, as to Thompson’s race discrimination claim, the Court similarly found that Thompson’s statistical evidence was insufficiently predicated on the same small sample size. Her statistics also did not account for Fresh’s demographics, which had a high percentage of minority employees. Moreover, as with her disability discrimination claim, the retention of the same younger employee, who was also white, was alone insufficient to demonstrate discriminatory intent.

Dissenting Opinion

Circuit Judge Helen White lodged a concurring opinion, in part, and dissenting opinion, in part. She joined the majority regarding its opinion in full with the exception of Thompson’s disability discrimination claim. Judge White disagreed that Thompson had failed to present a prima facie case of discrimination. She also found that Thompson met her obligations to demonstrate pretext. Thompson had shown that another employee had asked to work part time but retained her position with Fresh. In addition, there were four other employees, like Thompson, who stated on the survey that they would be unable to work the new schedule and did not state a shift preference and two of the employees were not laid off and did not quit. Thus, Judge White would find that Thompson’s disability discrimination claim survived summary judgment.

Learning Points

The Sixth Circuit’s clarification on instances when an employer may contractually reduce the statute of limitations is a beneficial guidepost for employers. Employers in the Sixth Circuit should be cognizant of whether the states in which they operate have a statute that specifies a specific limitations period or, like Ohio, is silent on the issue and relies on the state’s general limitations statute. Employers in states like Ohio should contemplate implementing a handbook that reduces the statute of limitations for state-based claims. However, before doing so, employers should contact an employment attorney to discuss the pros and potential cons of such a policy. As always, Seyfarth Shaw attorneys are available to assist.