Although the Board’s decision may usher in more frequent remote hearings in the future, it’s not all bad. The same day as the Board’s decision in William Beaumont Hospital, the NLRB’s Division of Advice published 5 new advisory memos addressing COVID-19 related questions posed by different Regional Offices. In each case, the Division applied established law and recommended dismissal. Although, each advisory memo was written in response to an individual unfair labor practice charge and the Division’s conclusions are binding only as to the parties involved in that particular case, they provide some insight as to how similar cases might be handled and make it clear that COVID-19 pandemic or not – the same rules apply.
Below is a summary of those advisory memos each of which recommended dismissal to the Regional Office:
Protected Concerted Activity
Duty to Provide Information
For more information on the Division’s advisory memos see here.]]>
How exactly did we get here? Let’s turn back the clock to September 2019 when California first signed Assembly Bill 5 (“AB5”) into law. AB5 codifies the California Supreme Court’s decision known as Dynamex. In that decision, the Court imposed a stricter three-prong test on employers seeking to classify their workers as independent contractors. We previously reported on this decision here back in May 2018.
In short, the test, known as the “ABC test,” places a heavy burden on companies to prove the independent contractor status of their workers. The test’s starting presumption is that all workers are employees, and the employer must prove, by satisfying all three factors, that the worker is performing work “outside of the hiring entity’s business.” Under the test, employers must show:
A) The worker is free from control and direction of the company – This was the previous legal standard, and fairly uncontroversial. The same cannot be said of the other two prongs.
B) The worker performs work outside the usual business – A strict reading of this standard limits independent contractors to workers who perform services completely unrelated to the company’s core function. The Dynamex court used the examples of a retail store that “hires an outside plumber to repair a leak in a bathroom on its premises or hires an outside electrician to install a new electrical line.”
C) The worker is regularly engaged in the trade, occupation, or business they are hired to do, independent of the work for the company – The Dynamex court explained this prong prevents “unilateral determin[ations]” by companies that workers are independent contractors simply by assigning the label. The point is to identity whether individuals have actually “made the decision to go into business for himself or herself.”
AB5 took effect January 1, 2020, and empowered state attorneys to seek injunctions to force businesses to comply with the law. Fast forward to May 2020 when California Attorney General Xavier Becerra and city attorneys for San Francisco, San Diego and Los Angeles brought suit against Uber and Lyft, seeking an order forcing the companies to reclassify their workers.
The debate as to whether the ride-hailing companies meet the three prongs has centered on whether the companies meet the “B” prong: whether their workers perform work outside the usual business. Uber and Lyft have maintained that they satisfy this prong because they do not provide rides, but rather provide a platform that connects independent drivers to customers.
For San Francisco Superior Court Judge Ethan Schulman, this argument was of no moment. In a ground-breaking decision on August 10, 2020, Judge Schulman granted the state a preliminary injunction, reasoning, in a sort of axiomatic, conclusory fashion, “it’s this simple: defendants’ drivers do not perform work that is ‘outside the usual course’ of their businesses.” As such, Judge Schulman concluded Uber and Lyft could not possibly meet prong “B” of the test and therefore, there is a strong argument that the drivers are not independent contractors under AB5, warranting the injunction.
Judge Schulman did however stay the order for a 10-day period in order for Uber and Lyft to appeal the decision, which they intend to do.
AB5 is proving to be a powerful weapon in California’s crusade against juggernaut tech companies, and this latest decision may only be the beginning. California’s labor commissioner, Lilia García-Brower, also recently brought a pair of lawsuits under the law against Uber and Lyft for allegedly committing wage theft by willfully misclassifying drivers.
The swift enforcement of AB5 may force a tectonic shift in the way California companies will have to conduct business going forward, especially companies that have founded their business models on utilizing large independent contractor workforces. Such companies may be forced to reclassify large portions of their workforces, which will come at an enormous cost.
Reclassifying workers as “employees” means companies may have to pay certain payroll taxes and afford these employees certain labor protections and benefits, including guaranteed minimum wage, overtime pay, paid rest breaks, paid parental leave, unemployment insurance, health care subsidies and workers’ compensation. The list goes on and on. Importantly, as employees, “gig” workers have the right to unionize.
What are California companies to do? To the extent they have not already, companies need to start reviewing their classification practices now and modify them accordingly, or prepare to defend them under the new standard.]]>
Bob is such a NASTY MOTHER F***ER don’t know how to talk to people!!!!!! F*** his mother and his entire f***ing family!!!! What a LOSER!!!! Vote YES for the UNION!!!!!!
(See National Labor Relations Board v. Pier Sixty, LLC, Nos. 15‐1841‐ag (L), 15‐1962‐ag (XAP) (April 21, 2017).
If you have nothing nice to say, don’t say anything at all, right?
Right. The poster was fired, unsurprisingly. The thing was, as the NLRB held at the time, this rant was protected speech under the National Labor Relations Act because it related to working conditions, and because—seriously—there was usually a lot of swearing at this particular workplace anyway. The bottom line, according to the NLRB, is that his employer was not entitled to fire him, his vitriol towards Bob—and, sadly, Bob’s mother—was motivated by his support for the union. The Second Circuit upheld the NLRB’s order that the employee be reinstated to his job.
In a return to something like decency, if not sanity, the NLRB’s recent decision in General Motors LLC, 14-CA-197985 369 NLRB No. 127 (2020), overturned three employee-friendly standards governing confrontations between employees and management in the workplace, and clarified—if this point needed any real clarification—that a worker can be suspended for lobbing the F-word at his supervisor. The NLRB’s recent decision upends three disparate, context-specific standards—one for outbursts with management in the workplace, another for exchanges between employees and postings on social media, and a third for offensive statements and conduct on a picket line.
The NLRB upended these standards and reinforced the older Wright Line test. Under that older, simpler test, the NLRB General Counsel must first demonstrate that the employee’s protected activity was “a motivating factor” in the discipline or adverse action taken against that employee. The burden then shifts to the employer to demonstrate that it would have fired the worker absent the protected activity, such as by showing it disciplined other employees involving the same offensive conduct. In other words—back to Bob’s nemesis—if the employee would have been fired for using incredibly abusive language, the National Labor Relations Act is not violated, even if the employee can show that he was motivated in part by his support for the union.
The NLRB eliminated the three context-specific standards, noting that they often clash with anti-discrimination laws. The standards often resulted in employees being permitted to say a range of vulgarities at the workplace, as was the case in Pier Sixty. As applied to cases like that, the relevant test applied in decisions such as Pier Sixty “often resulted in reinstatement of employees discharged for deeply offensive conduct,” according to the agency.
As the Chairman of the Board explained: “The Board has protected employees who engage in obscene, racist, and sexually harassing speech not tolerated in almost any workplace today. Our decision in General Motors ends this unwarranted protection, eliminates the conflict between the NLRA and antidiscrimination laws, and acknowledges that the expectations for employee conduct in the workplace have changed.”
The decision in General Motors not only changes the law applied to offensive conduct in the workplace, but also sends a message to employees that they cannot state whatever they feel like in the workplace or on social media, regardless of how upsetting or heated the situation may be. The takeaway: employers may insist on respectful workplace communications, even if an employee later says that the communication, F-bombs included, was more or less about union issues.]]>
How much risk is too much risk? What risks should we ask our employees to accept? Where is the line between ordinary risk — the kind that employees undertake when they walk out the door every day to go to work — and the extraordinary risks posed by a pandemic from which, in the end, employers cannot entirely shield their workforces?
A seemingly more mundane novelty is the plethora of new COVID-19 laws and regulations. Compliance should just be a matter of reading a statute and, well, complying. But even there, an evolving real-world pandemic potentially makes compliance just as complicated.
One example we have helped our clients wrestle with involves exactly this kind of straightforward-on-paper, tricky-in-practice complexity.
One requirement of the Families First Coronavirus Response Act appears to be simple: When an employee working for an employer with under 500 employees gets sick with COVID-19, is seeking a COVID-19 diagnosis, or is subject to a quarantine order of a doctor or a government, they are entitled to up to 80 hours of emergency paid sick leave.
And that made perfect sense when the law was hurriedly drafted: You get sick once, and you do not get sick again, right?
Wrong. Mounting evidence now shows that contracting COVID-19 does not confer absolute immunity and that many individuals have now contracted the novel coronavirus more than once. So what happens when an employee exhausts his or her 80-hour emergency paid sick leave entitlement, recovers from COVID-19, and then contracts it again?
We have created checklist of general tips to help companies navigate return-to-work privacy and data security issues. In addition to designing COVID-19 testing and screening data collection programs that fit local and state reopening conditions, companies may also wish to consult key sources of federal guidance, including the following:
For more information on returning to work, COVID-19, and other topics, please visit:
Under Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (2016), an employer, with limited exceptions, was required to provide a union with notice and opportunity to bargain about discretionary elements of an existing disciplinary policy before imposing “serious discipline” on any union-represented employee who was not yet covered by a collective bargaining agreement. An employer’s failure to engage in such bargaining would violate Section 8(a)(5) of the National Labor Relations Act even when the employer did not change a preexisting disciplinary policy or practice but, instead, merely continued to exercise discretion consistent with that policy or practice when determining whether and how to discipline employees. The usual remedy for this violation would include reinstatement and backpay for disciplined employees, unless the employer could prove that the discipline was imposed “for cause.”
The issue presented in 800 River Road was whether to follow to the holding of Total Security, and to thus affirm the judge’s finding that the employer violated the Act by disciplining four employees without first providing the Union with notice and an opportunity to bargain. River Road overruled Total Security and reinstated the law as it existed for 80 years prior to Total Security, holding that an employer does not have a duty to bargain over discipline with a union prior to reaching a first contract. The Board applied this decision retroactively to all pending cases.
The decision can be found here.
First, OSHA distinguishes between cloth face coverings, surgical masks, and respirators.
Cloth face coverings may be commercially produced or homemade garments, scarves, bandanas, etc. They are worn in public over the nose and mouth to contain the wearer’s potentially infectious respiratory droplets and limit the spread of COVID-19 to others. They will not protect the wearer against airborne transmissible infectious agents due to loose fit and lack of seal or inadequate filtration.
Cloth face coverings are not considered personal protective equipment (PPE). As such, OSHA’s PPE Standards do not require employers to provide cloth face coverings to employees. Still, employers may choose to ensure that cloth face coverings are worn as part of a control plan to address COVID-19. Indeed, OSHA recommends that employers encourage workers to wear face coverings at work. Cloth face coverings are not a substitute for social distancing, and employers must still ensure social distancing measures in the workplace.
Surgical masks are typically cleared by the U.S. Food and Drug Administration (“FDA”) as medical devises (though not all devises that look like surgical masks are actually medical-grade, cleared devises). They are used to protect workers against droplets containing potentially infectious materials and may also be worn to contain the wearer’s respiratory droplets. Surgical masks will not protect the wearer against airborne transmission of respiratory infections that spread by large droplets.
According to OSHA, if surgical masks are being used only as source control (i.e., not to protect workers against droplets containing potentially infectious materials), OSHA’s PPE Standards do not require employers to provide them to workers. However, employers do have a general duty under Section 5(a)(1) of the Occupational Safety and Health Act to furnish their employees employment and a place of employment free from recognized hazards that are causing or likely to cause death or serious physical harm.
Respirators are used to prevent workers from inhaling small particles, including airborne transmissible or aerosolized infectious agents. Respirators must be provided and used in accordance with OSHA’s Respiratory Protection Standard. Respirators must be certified by the National Institute for Occupational Safety and Health (“NIOSH”), need proper filter material (e.g., N95 or better), require proper training, and require a respiratory protection program that is compliant with OSHA’s Respiratory Protection standard. If an employer permits voluntary use of filtering face piece respirators, employees must receive the information contained in Appendix D of OSHA’s Respiratory Protection standard.
As always, please contact a Kelley Drye attorney for guidance on these and other matters when returning your workforce to the workplace.]]>
The Obama NLRB issued rules for expedited union elections (disparagingly referred to by management-side opponents as “quickie election” rules) in 2014. Those rules deprived employers resisting unionization of many of the tools they had used for years to delay elections and vote counts, and to challenge election results they didn’t like. That all changed, unsurprisingly, with a Trump NLRB—but the NLRB’s own rulemaking process seemed pretty “quickie” itself, which became exactly the thing that labor unions challenged.
The NLRB first issued its new rule in December 2019 without releasing a proposed rule for public comment. Consistent with many of the NLRB’s recent pro-employer decisions, which we have reported on here, the amendments reverse the Obama-era election process by extending certain procedural deadlines and permitting more time between the date a union files a petition for an election and the date when the workers vote on unionization. This time period is crucial for employers to communicate with the workforce prior to a vote on unionization. The new rule also affords more opportunities for employers to challenge the process.
In March, the AFL-CIO brought suit against the NLRB, claiming that portions of the new rule, including changes to the election timeline, were substantive in nature, and thus the NLRB improperly issued the rule without going through the required notice and comment rulemaking process under the Administrative Procedure Act. On May 30, 2020, one day before the rule was supposed to go into effect, U.S. District Court Judge for the District of Columbia, Ketanji Brown Jackson agreed and issued an order enjoining the NLRB from implementing these provisions. However, the court’s order did not strike the new rule’s remaining procedural provisions, which include extensions of time to the election process and pre-election hearing procedures, and instead remanded the rule to the NLRB for reconsideration.
Well, it looks like the NLRB quickly “reconsidered.” Two days later, on June 1, 2020, the NLRB announced that the procedural portions of the rule that were unaffected by the court’s order were effective immediately. A guidance memorandum from the NLRB General Counsel regarding implementation of the rule can be found here.
So, what does this mean for the future of the new rule? It is still unclear what will become of the provisions subject to the court’s order. The court has not issued a full opinion yet, and after, the order is subject to appeal by the NLRB. However, based on the NLRB’s quick implementation of the unaffected provisions, it is clear that despite court-imposed hurdles, the NLRB is intent on dialing back the “ambush” election rule, even if it has to be done on a piecemeal basis.]]>
We all know that retail has been hit hard by the pandemic. When retail employees paid on a commission basis do go back to work, fewer of them will qualify for overtime, thanks to a Department of Labor (DOL) rule promulgated on Monday, May 18, 2020. While this sounds like a bad deal for employees, there’s a silver lining: the DOL issued another rule just today that will make compensating employees for staggered shifts and fluctuating workweeks easier—practices that are likely going to be critical components of a safe COVID-19 return-to-work plan in retail.
Monday’s final rule withdraws 60-year-old interpretive rules that limited employers’ ability to invoke Section 7(i) of the FLSA, which exempts certain commission-based employees in “retail or service establishments” from overtime eligibility. To qualify for the exemption, a business needs to show: (i) it is a retail or service establishment, as defined by the regulations; (ii) the employee’s regular rate of pay exceeds one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked; and (iii) more than half the employee’s total earnings in a representative period must consist of commissions.
Prior to the new rule, the DOL’s old interpretive rules set forth lists of businesses that either did not not qualify, or only possibly qualified, as “retail or service establishments.” The first list identified businesses that were categorically excluded from the exemption because they had “no retail concept,” which included real estate companies, construction contractors, and our personal favorite, tree removal firms. The second list identified businesses that “may be recognized as retail,” which included department stores, restaurants and auto repair shops.
Commentators and courts have often criticized these archaic and seemingly arbitrary catalogues because they contained internal inconsistencies, created confusion and failed to offer any real reasoning or analysis. The DOL’s new rule takes a more rationalized and consistent approach by eliminating these rigid lists and affording all businesses an equal chance at proving they are retail or service establishments and that they meet the other exemption requirements. The new rule takes into account that modern businesses are multi-faceted and may possess some retail characteristics, which would qualify them for the exemption, even if the outdated lists previously excluded them.
As mentioned above, the DOL likewise issued a final rule today, Wednesday, May 20, 2020, amending Section 114 of the FLSA to allow employers to pay bonuses or other incentive-based pay to salaried, nonexempt employees with varying workweek schedules. The final rule clarifies that payments in addition to a fixed salary are compatible with the use of the fluctuating workweek method of calculating overtime pay under the FLSA.
The FLSA’s fluctuating workweek method dictates that employees with fluctuating workweeks, and who agree to receive a fixed weekly salary that covers all hours worked, are entitled to halftime premium for hours worked in excess of 40 per week. These employees are not entitled to time and a half premium because the fixed salary covers the “straight-time” component of pay for the hours worked over 40. However, Section 114’s requirement of a “fixed salary” has led to confusion over whether additional compensation, such as commission or bonuses, are compatible with Section 114’s method of pay.
The new rule amends Section 114 to clarify that employers are able to provide additional pay to fluctuating workweek employees beyond the “fixed salary,” including commissions, bonuses, premium payments and hazard pay. Such additional compensation must nevertheless be included in the regular rate of pay, unless otherwise excluded under the regulations.
The DOL’s stated purpose in amending the overtime rules is to “allow employers and employees to better utilize flexible work schedules.” Flexible schedules are imperative in the modern workforce. This becomes a particularly acute need given the COVID-19 crisis, when staggered shifts will form part of the inevitable solution to reducing employee “density” at work (code for social distancing at work). The new rule allows employers and employees to agree to these flexible schedules, while still guaranteeing that employees have access to bonuses and other incentive-based pay provided to them by their employers.
Identify a Return-to-Work (RTW) planning team or task force:
Develop a RTW Plan – must address:
Consider how will you deal with key issues, including:
Develop a communication plan
Develop Employee Health Questionnaire
Develop workplace screening policies
Develop safety policies and notices:
Amend existing policies
Establish a COVID-19 disclosure protocol
Direct sick employees to stay home
Develop Notice of Post-Exposure workplace clean-up
Develop standard training plan for handling sick employees and exposure
Revise existing sick leave and FMLA policies to reflect changes in state and federal legislation
Update Accommodation Policies to account for COVID-19 related requests
Revise or implement teleworking policies, including:
Develop standard matrix to evaluate telework accommodation requests
Implement teleworking guidelines for managers:
Develop NEW workplace policies:
Communicate regularly with employees regarding the issues that matter:
Establish a central source (website, weekly email, call-in) for employee check-ins
Based on the investigatory findings, the DOL ordered Discount Tire Centers to pay the employee’s full wages of $2,606 for two weeks of leave covering the hours the employee spent at home after the company received documentation of his doctor’s instructions to self-quarantine. Discount Tire Centers also agreed to fully comply with the Families First Coronavirus Response Act (FFCRA)—the main legislation that includes the EPSLA and expands the Family and Medical Leave Act—which went into effect on April 1, 2020.
The DOL’s ruling underscores the importance of employers staying abreast of the ever-unfolding regulatory landscape during the COVID-19 pandemic. Companies must adapt their payroll and personnel policies and procedures to ensure real-time compliance with the new legislation while remaining vigilant in their adherence to long-standing laws governing employer-employee relations.]]>
This post briefly addresses issues employers should consider when bringing employees back. For a deeper dive of the issues covered in this post and more, check out a recording of Kelley Drye’s Part 1: Getting Back To Work: Preparations and Considerations for Employers webinar, and register for Part 2: Getting Back To Work: When the Rubber Hits the Road. Part 2 is scheduled for April 30, 2020 at 12:30 PM ET, click here to register.
Go slow, and let “safety first” be the controlling consideration for employers when bringing employees back to work. This principle has the virtue of being altruistic, but leading with a “go slow, safety first” attitude also puts an employer in the position to avoid serious missteps in the future. For example, bringing back employees too early or all at once can lead to a COVID-19 office outbreak, which will set employers back even further than they are now. While some workplace transmission will likely continue to be unavoidable given the nature of COVID-19, employers can maximize the chances of a comeback success story by considering a few fundamental questions:
First, if you do implement temperature checks, be careful not to obtain more information than is necessary. You don’t need an employee’s entire medical history; rather the goal is to determine whether the employee is symptomatic or at risk of infecting others and is healthy to return to work. Just get the facts, and only the ones that are necessary to make that determination.
Second, remember that “employee privacy” is still a concept. An employer must keep all medical information (yes, including employees’ temperatures) confidential, and screening should be conducted in a separate room, or at least in a screened-off area, away from other employees. This also makes good sense from an employee relations perspective: the last thing you want is a line of employees watching John, who is also in line, get told that he has to go home for 14 days to self-quarantine.
Third, remember that a temperature check reveals someone’s temperature, not the presence of a virus. Don’t let your supervisors or HR professionals “play doctor.” If an employee has an elevated temperature, immediately send them home and tell them to seek a medical diagnosis. If you’re an employer with fewer than 500 employees, an employee will also get two weeks of Families First Coronavirus Response Act paid leave for that reason, the costs of which will ultimately come back to you as a tax credit.
Employers must rely upon neutral factors in deciding who to bring back first (as they should with every employment decision). In fact, employers should be focused on one thing—business needs. Employers should figure out which employees need to be in the office more than others. Those employees should be selected to come back first. After that, selection criteria can be further broken down by other neutral factors such as skills, knowledge, and experience.
Employers should also develop a considered, detailed, and neutral decision making process in deciding which employees come back first, and to document those rationales, which becomes critical when an employer is second-guessed later. Be wary of seemingly arbitrary decisions about who to bring back when considering the same positions and offices. For example, if Mary (an admin) was diagnosed with COVID-19 on March 1 and has had no symptoms for months, yet, is not chosen to come back, while her co-worker (also an admin) is allowed to come back, this scenario creates a risk that Mary will think you’re refusing to bring her back for an unlawful, non-COVID-related reason (race? sex?). On the other hand, if Mary was sick last week, her employer has a concrete, objective reason to tell her to stay at home for now. So avoid irrational bias: make employment decisions based on objective, provable rationales.
The short answer: yes, because terminating an employee for any non-discriminatory or non-retaliatory reason is lawful. However, let’s face the facts: terminations are “adverse employment actions” that could be unlawful–or could be alleged to be unlawful–unless the employer can demonstrate an objective, legitimate business reason for its decisions.
We recommend that employers review existing documentation to justify termination decisions. If Manager Moe wants to bring back Fred and Harry but not Sally, make sure there is written documentation as to why. Look to performance reviews, communications, or any other contemporaneous documentation to objectively justify termination decisions.
The employment world as we know it has radically changed, maybe forever in some ways. Some employers, for example, are already examining whether office space–once a “given” –is really needed. And many employers will face requests from employees to continue to work from home. Can employers have a remote workforce? Does that even work?
Ultimately, it depends on your business needs. If the answer to that question is a resounding “no” (i.e., employees must be in the office), an employer can, and should, refuse a request to work from home if the request is being made for reasons that are not related to medical needs or workplace safety. Mere convenience or preference is not a justification. We certainly recognize that good employee relations demands that employers be sensitive to the reasonable fears and continuing concerns of employees, but in the end: (1) make your workplace safe to return to; (2) communicate very transparently about all you’ve done to ensure the safety of your employees and their families, and, having done that; (3) run your business and get back to work.
There is no “one size fits all” approach to bringing back employees. Employers should focus on safety and minimizing legal risk—but those two main considerations will mean different things depending on your workforce, your operations and your business needs. The usual tagline at the end of legal blogs couldn’t be more appropriate here: consider consulting employment law counsel, as an ounce of prevention is worth a pound of cure (pun intended).]]>
Companies considering using these devices should review the article, Finding Fevers: FDA Relaxes Rules On Temperature-Detecting Cameras, written by Kelley Drye partner, Kristi Wolff and consider the associated employment and privacy issues.
Temperature-taking, according to a pre-COVID-19 Equal Employment Opportunity Commission (EEOC), was once the province of “medical testing” that raised tricky issues for employers under the Americans with Disabilities Act and similar state laws. With the nation and world now in a pandemic crisis, the EEOC has adopted a more permissive enforcement stance. However, employers must still be aware of, and navigate, the legal issues despite the obvious utility and even necessity of temperature tests:
Below is a summary of key points:
The definition of “healthcare providers” under the FFCRA includes a wide variety of medical professionals and workers.
Please give us a call if you have any questions regarding the regulations and any specific scenarios related to your workforce.]]>
Among other things, the CARES Act amends Section 7(a) of the Small Business Act creating the “Paycheck Protection Program (the “Program”). The Program broadens relief to a segment of small businesses other than those that would otherwise be ineligible to receive SBA 7(a) loans. The Program will apply retroactively from February 15, 2020 until June 30, 2020. Below are some highlights:
The CARES Act also amends several provisions of the FFCRA. In addition to a number of technical corrections, the CARES Act made several substantive amendments to the FFCRA that employers should be aware of:
Kelley Drye’s Labor and Employment group will continue to closely monitor developments surrounding the FFCRA and the CARES Act. As questions arise, we encourage employers to reference Kelley Drye’s COVID-19 Response Resources Center, and contact Barbara Hoey at 212-808-7628 or email@example.com or Mark Konkel at 212-808-7959 or firstname.lastname@example.org, before making any employment decisions.]]>
In keeping with that guidance, the DOL’s temporary rule confirms our understanding of the eligibility requirements under the exemption. Employers with fewer than 50 employees may be exempted from providing leave to employees requesting leave due to a COVID-19 related school closure or unavailable caregiver if an authorized officer of the company determines that providing leave would “jeopardize the viability of the small business.” A more detailed analysis of these eligibility requirements can be found in our previous post.
However, the temporary rule also places renewed emphasis on the importance of documenting. For every instance that an authorized officer determines leave should be denied based on the criteria set forth in the exemption, the business must document “the facts and circumstances that meet the criteria . . . to justify such denial” and must retain such documentation for four years.
Further, regardless of whether a small business chooses to exempt one or more of its employees through the exemption, businesses are still subject to the FFCRA’s notice posting requirements.]]>
The FFCRA failed to address whether employees were entitled to take intermittent leave either under the emergency paid sick leave provision or the expanded FMLA provision. The FAQs clarify that employees are not entitled to intermittent leave in either case. However, employers have the discretion to approve requests for intermittent leave, but only under certain circumstances, which depend upon whether an employee works remotely or onsite.
For employees who work remotely, as long as an employer approves and the employee and employer agree on a schedule, an employee can take intermittent emergency paid sick or expanded FMLA leave in any increment.
For employees who work onsite, intermittent leave is only available if an employer approves, the employee and employer agree on a schedule, and the intermittent leave is being taken to care for a child whose school has closed. Intermittent leave is not available for employees who are sick or caring for sick family members, as that would defeat the purpose of providing employees with paid sick leave in the first place-to keep employees from spreading the virus to others.
Furloughs and Worksite Closures
The FAQs provide welcome reassurance to employers who furlough workers or close worksites on or after April 1. In both cases, employees are not entitled to FFCRA benefits. Further, if an employee is on leave and an employer closes the employee’s designated worksite, the employee is only entitled to FFCRA benefits up to the date of the site closure.
Amount of FMLA Leave
The FAQs confirm that employees are not entitled to more than 12 weeks of FMLA leave in a 12-month period regardless of whether an employee takes paid leave under the expanded FFCRA FMLA provision or “regular” unpaid FMLA leave for reasons unrelated to COVID-19.
Small Business Exemption
DOL guidance also sheds new light on the requirements of the FFCRA’s “small business exemption.” Under the new guidance, small businesses (defined as employers with fewer than 50 employees) do not need to provide employees with FFCRA leave if an employee is requesting leave due to a COVID-19 related school closure or child care provider unavailability, and an authorized officer of the business has determined that providing leave would “jeopardize the viability of the small business.” There are three ways in which an employer can establish that providing leave would jeopardize the viability of a business:
While employers can evidently interpret the factors above, the factors are seemingly subjective and if an outsider is making an objective assessment, there is a substantial risk that the employer’s “proof” will not be enough. However, the most significant aspect of the DOL guidance is that an authorized officer may use his or her judgment to determine whether the business will be in jeopardy. Therefore, the “judgment call” rests with the employer, which is good news for small businesses.
Importantly, however, the small business exemption only applies to paid leave for school closures and does not exclude small businesses from having to provide FFCRA emergency paid sick leave due to other COVID-19 related reasons.]]>
Know Your Resources
Employers should continue to monitor reliable guidance provided by the U.S. Centers for Disease Control and Prevention (“CDC”) and local public health agencies. Understanding how COVID-19 is transmitted and what steps can be taken to protect diagnosed or exposed employees is essential to dispelling employee fears. Employers can educate employees on prevention and symptoms and should be prepared to answer employee concerns regarding workplace safety. The following are guides which may be helpful to employers:
Keep Your Workforce Informed
Employers can and should provide their workforce notice regarding potential exposure. However, when doing so, less is more. Employers should not identify diagnosed individuals by name, or provide other identifying information, which could expose confidential employee health information. This is because under federal, state, and local laws, infectious diseases may constitute disabilities, and thereby confer protected status. Employers should nevertheless address in detail the steps taken to mitigate exposure to COVID-19, including environmental cleaning and other preventative measures, such as supplying antibacterial wipes for employees to use at workspaces and hand sanitizer for use throughout the employer’s facility.
Understand the Interplay with Employment Laws
Although the breadth of COVID-19’s impact remains to be seen, employers must be careful to avoid discrimination against employees who are disabled or perceived as disabled because they are exhibiting symptoms of COVID-19, or because they belong to races or nationalities linked to the virus. Employers should also be aware that COVID-19 might present other legal risks. For example: employees suffering from, or caring for a family member suffering from COVID-19, may be eligible for protections under the FMLA; employees who contracted COVID-19 through occupational exposure may have Workers’ Compensation claims; and employees raising collective concerns regarding working conditions or changes to operations as a result of the virus may be protected under the NLRA.
While much is still unknown regarding the scope of COVID-19’s impact on businesses and workforces throughout the US, employers should consider the following tips:
Finally, and perhaps, most importantly, when an employee issues arises because of COVID-19, employers should consult legal counsel to mitigate risks and forestall potential litigation.]]>
The vote for union representation strikes at the heart of the business model used by companies like HCL, a multinational Indian IT services company. Although the HCL employees who have been contracted out to Pittsburgh work alongside Google employees in similar positions, they contend that they receive less favorable benefits and less compensation for their work than do those employed directly by Google. This is often the case for contract workers, who are heavily utilized in the technology industry thanks to the lower costs of employing them. But these same contract employees have historically been less inclined to unionize, fearing that their employers will respond by declining to renew their contracts when the time comes. Indeed, some HCL Technologies employees expressed this exact concern, recognizing the possibility that Google would decline to renew its contract with HCL as a result of Tuesday’s vote.
Other hurdles to unionization have traditionally existed with regards to employment in the technology sector. There has historically been an inclination to associate unions with blue-collar work; well-paid engineers may not think they would derive any additional benefits from joining a union. Similarly, in a world of tech startups, employees may not view management as strict authority figures against whom they should engage in the often adversarial process of negotiating for better pay, benefits and working conditions. All of these factors have formed a headwind against the unionization of tech, since tech companies unaccustomed to unionization efforts may not hesitate to show hostility towards, or even penalize, employees for trying to unionize.
But the direct unionization of HCL’s tech workers was perhaps not entirely unpredictable or without an overall context in which unions have gained footholds among tech giants. Despite a historical lack of interest in unionization, unions have taken aim at their employers, but just with other kinds of workers, even before Tuesday’s vote. Security guards and bus drivers employed by large tech companies like Google and Facebook are now unionized; employees at Amazon and Salesforce campaigned for changes in their working conditions. And Google employees staged a 20,000-person walkout in 2018 to protest unfavorable company policies. Each of these signals a new level of union activism in the technology sector, and each has helped pave the way for employees like those at HCL Technologies to advocate for better wages and working conditions.
Whether the HCL employees’ recent vote to bring in a union is an aberration or, rather, an indication of a real trend has yet to be seen. But multinational tech companies whose labor models are built on the low costs of contract workers should take note: nothing in federal labor law prevents employee unionization, as HCL learned. Tech employers would do well to consider how attractive a target they may be for unionization and address employee concerns well before a petition for a union election is filed with the National Labor Relations Board.
Kelley Drye’s labor and employment group regularly counsels employers across industries and has deep experience in working within the tech industry. We would be pleased to provide more information about unionization issues.]]>
In Cordúa Restaurants, employees, as a condition of their employment, had to sign arbitration agreements waiving “their right to file, participate or proceed in class or collective actions.” Despite this agreement, some employees still filed collective wage and hour actions in federal court. Additional employees began “opting-in” to these collective actions.
In response, the employer revised its arbitration agreement so that employees waived their right to opt-in to a collective action. The agreement was revised to say “I agree that I cannot file or opt-in to a collective action under this Agreement, unless agreed upon by me and the Company in writing.” Employees had to sign this new arbitration agreement as a condition of employment.
The Board found that the employer could lawfully change its arbitration provisions even after a claim was filed, and could lawfully require that signing the new arbitration provision is a condition of employment.
Relying on Epic Systems, the Board held that the act of “opting-in” to a collective action is simply a procedural step to participating in a collective action. Since the Supreme Court in Epic Systems already held that employers don’t violate the National Labor Relations Act by requiring employees to bring individual claims as opposed to collective claims, then an employer could lawfully require an employee to waive their right to “opt-in” to these types of claims. Even if the change in the arbitration agreement was a direct result of employees filing collective actions, it would still not violate the law since individual arbitration agreements are legal under the Act.
Additionally, the Board explained that since the revised arbitration agreement was lawful, the employer was allowed to require an employee to sign the revised agreement as a condition of employment.
WHAT THIS MEANS FOR EMPLOYERS
The Cordúa Restaurants decision can now be set alongside the recent Epic Systems and Lamps Plus decisions as proof positive that employers can draft arbitration provisions to the exact specifications they want, and the provisions will likely be upheld (the recent New York anti-harassment law notwithstanding, which will likely be found pre-empted in the coming year). Given this new reality, employers should not hesitate to review their arbitration provisions and revise them to cover all necessary claims, and also ensure that employees are waiving their right to file class or collective actions. However, even if employers aren’t quick enough to get this done, they can always revise their arbitration agreements later to mitigate the damage.
What’s the takeaway? We’ve always viewed the value of agreements to arbitrate employment disputes as threefold:
Kelley Drye’s L&E group has helped many employers structure, draft and enforce arbitration agreements. We’re happy to help with yours.]]>
These various provisions have different effective dates. While employers should keep an eye on all effective dates, employers should take care to review the provisions that are effective immediately or within the next sixty days:
Effective October 11, 2019
With these significant changes, employers should review everything that might be impacted by the new law, and remember, employers can never offer too much training. Work with counsel to develop a holistic approach. A piecemeal strategy will not work with this new law due to the myriad of significant changes. Get it wrong and open the floodgates to a new set of claims in uncharted territory.
To learn more, join partners Barbara Hoey and Mark Konkel on a Lexology hosted webinar, entitled “The New Sexual Revolution: Radical Changes to US Harassment Laws” on September 24, 2019. For more information and to register, click here.]]>
This latest monkey-wrench was thrown into the gears just last week by federal district court Judge Denise Cote when she held that New York’s arbitration law prohibiting arbitration of sexual harassment claims (effective as of July 2018 and reported on by this blog last year) is preempted by the Federal Arbitration Act (“FAA”), and is therefore invalid. This is the first case deciding the merits of this arbitration exclusion. And although Judge Cote didn’t formally rule on the more general, brand-new bar on arbitration of all discrimination claims (harassment or not), she observed in a footnote that the more general bar suffers from the same problem and is probably preempted by federal law, too.
This decision will likely result in a failure-to-launch of the arbitration prohibitions in this latest round of legislation. But for now, here’s the unsettling message for employers navigating the ever-shifting landscape of discrimination law obligations: the new provisions of New York law barring mandatory arbitration of all employment discrimination claims will be struck down, but for the time being, you can’t count on it.
In Latif v. Morgan Stanley, et al., the plaintiff alleged that he was subject to discrimination, a hostile work environment, and retaliation, all in violation of federal, state, and city law. Specifically, Mr. Latif alleged that he was the target of inappropriate comments regarding his sexual orientation, inappropriate touching, and offensive comments about his religion. Mr. Latif also alleges he reported these events to human resources, and was terminated shortly thereafter.
As part of his onboarding documentation at hire, Mr. Latif executed a Morgan Stanley Offer Letter. The Offer Letter incorporated Morgan Stanley’s CARE Arbitration Program Arbitration Agreement. This arbitration agreement set forth that any “covered claim” between Mr. Latif and Morgan Stanley would be resolved by binding arbitration. “Covered claims” included “statutory discrimination, harassment and retaliation claims.” The agreement was to be construed in accordance with the FAA.
Morgan Stanley moved to compel arbitration of all Mr. Latif’s claims. Mr. Latif did not dispute that his other claims were subject to arbitration, but specifically argued that the sexual harassment claim could not be sent to arbitration due to the New York law prohibiting arbitration of these claims.
To the contrary, Judge Cote found that Mr. Latif’s sexual harassment claims were subject to mandatory arbitration since New York’s law was inconsistent with the FAA. She found that the FAA is clear: when a state law prohibits the arbitration of a specific type of claim (in this case, a sexual harassment claim), then that state law is “displaced by the FAA.” In other words, the FAA’s strong presumption of favoring the enforcement of arbitration agreements overrides New York’s attempt to prohibit arbitration of sexual harassment claims.
Judge Cote went even further to suggest that New York’s recent legislative amendment of prohibiting mandatory arbitration for all discrimination claims would likely meet the same fate.
What This Means for Employers
No one can blame employers who want to rush to their arbitration agreement template and reinsert sexual harassment claims as a covered claim. However, since the Latif decision is only a trial court decision, and there is likely to be an appeal to the Second Circuit, employers should exercise caution.
For those employers that wish to revise their arbitration agreements, they should be prepared to engage in a similar court battle over the validity of arbitrating sexual harassment claims. Depending the whether this battle will be in state or federal court, and depending on the judge who decides the matter, employers may not see the same result as Latif. In that case, the employer will then have to continue onto litigation in court.
For those employers who don’t wish to revise their arbitration agreements, they should closely watch the legal news regarding this topic to see if additional trial courts, or better yet, an appellate court, reinforce Judge Cote’s decision in Latif. This may take a few months to a few years.]]>
A Critical Bit of History
Boring history lesson now ensues (but will make you sound smart when you tell your HR and management colleagues about it):
Everybody knows that Title VII of the Civil Rights Act of 1964—the basic model for all state employment discrimination statutes—makes it unlawful to discriminate against employees on the basis of a number of protected characteristics, including “sex.” In 1964, and for a couple of decades after that, “discrimination” meant the big employment decisions: you couldn’t refuse to hire, fail to promote, or fire somebody because she was, say, a woman, or black, or a Baptist. Under the original conception of Title VII, those were the tangible, serious “adverse employment actions” that violated the law—that is, anything that involved getting a job, losing a job, getting promoted or paid on that job, etc. The big stuff only.
In the 1970s and 80s, however, women starting aiming Title VII at a real problem that the drafters of the law had not addressed: promotions or other advancement—or even just keeping a job—was sometimes appallingly paired with coerced sex from a male supervisor. And sometimes a female employee would be so victimized by a continuous, overwhelming, humiliating barrage of sexual comments and conduct that this “harassment” was as bad as any originally-prohibited “adverse employment action.” In other words, the U.S. Supreme Court ultimately recognized that workplace harassment could be so “severe” and so “pervasive”—so serious, in other words—that it was as bad as getting fired, and therefore was exactly the kind of “adverse employment action” that violates Title VII.
Everything you have understood until now about sexual harassment law is built on this legal foundation. And it is precisely that foundation that New York has now treated to 1,000 tons of TNT.
#Times Up, #MeToo, and the Hashtag Wars
The #MeToo movement fundamentally changed the level of tolerance for behaviors that are clearly not the kind of “severe or pervasive” harassment Title VII makes unlawful. The movement asked a basic, important question: why should any level of unwelcome sex-based conduct or speech be tolerated? Why should a woman at work have to listen to even a single comment about her body, or demeaningly be called “sweetheart” by her boss even once?
Why, indeed. However—and this was a point the Supreme Court repeatedly made—Title VII is not supposed to be a “general civility code.” Now, before you jump all over a Scalia-era, conservative Supreme Court as somehow condoning really stupid and awful treatment of women, think about the public policies that have to be balanced: on the one hand, we’d like to bar all demeaning treatment of employees based on protected characteristics. On the other hand, if we gave employees a legal cause of action—that is, a right to sue—every single time they are on the receiving end of something they don’t like on the perceived basis of some protected characteristic, you will see a superabundance of costly lawsuits, often when an employee just doesn’t like how she’s treated, whether or not the treatment is really on the basis of sex, and whether or not it’s “as bad as getting fired.”
Even without actual changes to the law, the #MeToo era opened the floodgates to new legal claims resting less on “severe or pervasive” harassment than on this kind of “zero tolerance for anything perceived as demeaning” attitude. But employers could still defend those suits by arguing that the harassment was not “severe or pervasive.” New York has now changed that landscape forever, removing that “as bad as getting fired” standard from harassment suits. New York has also deprived employers who react to harassment complaints by investigating and correcting the harassment from using that investigation/correction as a defense—a defense created by the Supreme Court in two 1998 cases, Burlington Industries, Inc. v. Ellerth and Faragher v. City Of Boca Raton.
The New Standards
New York’s new legislation provides sweeping changes aimed at strengthening protections for workers of any protected class who face discriminatory harassment in the workplace. The most significant changes include:
What This Means for Employers
Calling the impact of the new law “significant” is a little like calling a killer asteroid “disruptive.” In reality, it could not be more profound. In the most immediate practical terms, the law means that (1) any unwelcome treatment on the basis of sex, regardless of its severity, may provide an employee with a legal claim against his/her employer; and (2) even if an employee never complains to HR or anyone else, and thus never gives his/her employer a chance to correct the problem, the employer is liable.
In other words: if you don’t prevent all harassment from occurring in the first place, you’re on the hook as an employer.
Clearly, the most significant change is the elimination of the requirement that a plaintiff establish that harassment is “severe or pervasive.” Instead, a plaintiff can establish a claim of discriminatory or retaliatory harassment if the plaintiff is subjected “to inferior terms, conditions or privileges of employment because of the individual’s membership in a protected categor[y].” This standard significantly lowers the bar to establish discriminatory harassment. While the legislation provides an employer an affirmative defense, it is not of much comfort, since the defense is available only if the employer can establish the harassing conduct did not rise above the level of what a “reasonable victim of discrimination” with the same protected characteristic would consider petty slights or trivial inconveniences. Translation: if it’s even slightly more than just a little annoying, it’s illegal.
Employers must take a new, very different approach to harassment issues at work:
Mark Konkel or Diana Hamar, or anyone in Kelley Drye’s labor and employment group, would be happy to provide more advice on the new law and its profound impact on employers in this state and elsewhere.]]>
Here are seven suggestions of what New York HR professionals can get ahead of over the summer:
1. Coordinate Sexual Harassment Prevention Training – Under New York State law, all employers must provide annual sexual harassment prevention training that satisfies the State’s training requirements by October 9, 2019 (NYC has its own requirements, as we describe here). An employer can satisfy these requirements by either adopting the State’s model training documents or by providing live or interactive online/video training which meets or exceeds the State’s minimum standards. With a mid-fall deadline quickly approaching, summer is the perfect time to think about, and possibly complete, your workforce’s first annual training.
2. Ensure Compliance with Sick and Safe Leave Law Requirements – Both New York City and Westchester County have recently adopted new laws and requirements for paid sick and safe leave, and the Westchester law has approaching deadlines. For instance, the new Westchester County, New York Sick Leave Law requires employers to provide employees a copy of the law and a notice of how the law applies to them, either when an employee starts at the organization, or by July 9, 2019, whichever is later. Westchester employers must also post the law and a poster in a place accessible to all employees (the law and its requirements can be found here).
Employers who have employees in both NYC and Westchester must be careful to note some key differences between the New York City and the Westchester laws. For example, employees under New York City law accrue safe leave based on hours worked, whereas employees under Westchester County’s new Safe Time Leave Law do not accrue leave, but are instead entitled to take a specific amount of protected, paid leave. The safe leave provision in Westchester is also in addition to the sick leave provision, whereas in NYC the two are combined. Given the new requirements and recent changes, this summer is an ideal time to get a handle on the state of the law that applies to your organization, and to make sure your notice and posting procedures are compliant, that your payroll systems are accruing/deducting sick and safe leave banks correctly, and that your HR departments are poised to handle requests for these kinds of leaves in the right way. You may also need to consider training for your supervisors who are often your first line of defense when fielding employee requests for leave.
3. Implement Changes Based on Paid Family Leave Law – You readied your workforce for New York Paid Family Leave when it first started in January 2018, and so you know that each year until at least 2021, each January will bring a slightly new coverage and payment scheme. Currently, as of January 1, 2019, under the New York State Paid Family Leave Law, eligible employees can take up to 10 weeks of paid leave. Additionally, employees taking paid leave this year receive 55% of their average weekly wage, capped at the current statewide average weekly wage of $1,357.11, with a maximum weekly benefit of $746.41. Employees contribute 0.153% of their gross wages each pay period to Paid Family Leave this year. In January 2020, employees will still be eligible for 10 weeks of paid leave, but will instead receive 60% of their average weekly wage.
Given these changes, summer is a good time to update any Paid Family Leave forms distributed by your organization to reflect the increased number of weeks of paid leave employees can take and what their rights and responsibilities are with respect to taking paid leave. Managers (and staff) should be reminded or notified about the increase in benefits that is coming soon, and how that will affect their paychecks. Likewise, you should consider using this summer to work with payroll personnel to ensure employee contributions are being properly deducted from employees’ wages.
4. Review Employee Handbooks – Reviewing your organization’s policies and procedures annually is always best practice. Take advantage of the summer to make sure your organization’s policies are complete, up to date and well-drafted. Once reviewed, you still need approval from key figures and stakeholders to implement any policy changes. You may find decision-makers more willing to come to the table during the summer months when work demands tend to be lighter and the work environment is more relaxed.
5. Address Compensation Program – Since many salary surveys are published in the spring, summer is a good time for salary benchmarking activities. Use the summer (and any available summer interns you may have!) to collect and analyze the appropriate data to determine the proper market comparisons for your organization’s job listings. You do not want to find out too late that the reason a position is not filled is because the salary posted on the job listing is below market. Also consider reviewing current job descriptions during this time to ensure accuracy with tasks actually performed, and to double-check exemption categories. Taking time to address any pay equity issues you discover when assessing your compensation program is also a good idea.
6. Plan Employee Engagement Events – Summer is an excellent time to start planning and booking engagement events and activities for the upcoming winter, spring and summer. Booking now guarantees your desired venues are reserved well before they become unavailable. The summer’s warm-weather also makes it a great time to get employees outside. Try to coordinate a few outdoor outings this summer to generate employee satisfaction and inspire workplace commitment.
7. Recruit for the Upcoming Fall – Slower summertime business means there is room for other initiatives like recruitment. Many businesses also find themselves with higher-than-normal resignation rates in the summer, as members of their workforce return to school in the fall. With September recruiting around the corner, now is an opportune time to start reviewing applications and conducting interviews to fill open positions, or to plan to fill positions that will open in the fall.
So make your summer work for you. Better to move the HR ball forward methodically now than frantically later. You’ll thank us in September.]]>
The next day, on Tuesday, May 7, 2019, a Texas state jury awarded a plaintiff $80 million – of which $75,000,000 was in punitive damages – to a truck driver who fell asleep and crashed behind the wheel, when his supervisors forced him to alter his log book and drive without the required amount of rest.
What could these two cases possibly have in common? Both impart the same basic lesson: adherence to good record-keeping practices can save employers money.
Montgomery v. Club Pink (19 CV-62683, Southern District of Florida)
In Montgomery v. Club Pink, Montgomery brought a putative collective action on behalf of herself and other alleged exotic dancers who worked at Club Pink, alleging that Club Pink improperly classified the dancers as independent contractors instead of employees and denied them fair wages. Club Pink countered that it had “never heard of” Montgomery and didn’t know who she was. Instead, it argued Montgomery was simply an “admittedly drunk and repeatedly-violent customer of Club Pink, with no affiliation to Club Pink, whom management asked to leave the premise on two separate occasions.”
Club Pink sought sanctions against Montgomery and her attorneys under Rule 11 of the FRCP – which allows sanctions for “objectively frivolous” lawsuits – for filing the suit. The motion for sanctions was, however, denied.
The magistrate judge, in his report to the Judge on the motion, noted that “the documentation provided by Montgomery” was enough to confirm that Plaintiff’s counsel had a reasonable belief that his client was a dancer at the club and validated his filing the original complaint. Importantly, the magistrate noted that the Club never responded to Montgomery’s lawyers’ repeated pre-filing demands, and thus did not claim that it did not know who Montgomery was until after the Complaint was filed. Also, when the Club argued that sanctions were appropriate because Plaintiff provided no documentation to support her statement of claim, the magistrate judge found Plaintiff’s excuse persuasive – that “as is common in the industry . . . no payments were made to her, so therefore there is no documentation such as time sheets or pay checks to provide.”
Club Pink has since filed a motion for summary judgment on Plaintiff’s claims, which is currently pending. If the court believes Club Pink’s assertion that they “never heard of” Montgomery – an outcome which is not yet decided – then the case will be dismissed. But the inability of the club to receive attorneys’ fees and sanctions for what it believes to be a frivolous lawsuit, coupled with the time, energy and unfavorable media attention it has received as a result of this lawsuit, must sting. Surely many employers can relate to the bitter feeling of being unable to resolve a lawsuit that it believes is fundamentally meritless.
Montgomery’s lack of documentation to support her claim for employment went from being a fact Club Pink thought would bolster its claim for sanctions, to one easily glossed over by the magistrate, when the magistrate recognized that Montgomery’s lack of documentation was “common” in the industry and thus the absence of documentation could not preclude a potential finding of employee status. The magistrate was reinforcing what every good human resources professional (should) know – document, document, and then document further – and this is true even in the case of independent contractors.
As part of its Motion for Summary Judgment, Club Pink submitted that the club adhered to a “strictly-enforced” practice of obtaining government-issued ID’s and a “contractual signature” from anyone seeking a staff position or affiliated performance artist independent contractor position at Club Pink. However, evidence of such practices was not disclosed to Plaintiff’s counsel. Having these practices is a good start, but it provided nothing Club Pink could show to opposing counsel when asked to “prove a negative.” Rather, a written policy describing these practices would have provided extra protection: If Club Pink had been able to produce an already-available written policy describing its independent-contractor engagement practices, along with a written affirmation from Club Pink’s owner that Montgomery failed to appear on any of the club’s documentation, it possibly could have resulted in a much earlier resolution to this lawsuit – or at least would have better supported Club Pink’s motion for sanctions.
Lozano v. JNM Express (C-571-17-B, Texas District & County Court)
In Lozano Jr. v. JNM Express, et seq., the plaintiff, a commercial truck driver, alleged that shortly after he completed a driving trip, he was instructed to drive another load several hours later. According to Plaintiff under Federal Law, truckers are required to take 34 hours of rest between driving trips. Plaintiff alleges that he resisted his supervisor’s request, telling his supervisor that he had not sufficiently rested from his last run and that he could not safely or legally drive the load. In response, Plaintiff alleges, his supervisor instructed him to alter his log book so it would appear he had taken the required rest, and instructed him to appear ready to drive the following morning. Fearing retaliation if he refused, Plaintiff complied with his supervisor’s request, and began the drive. In the early morning hours the following day, Plaintiff alleges that because his employer denied him adequate rest, he fell asleep behind the wheel, caused a collision, and suffered severe debilitating injuries as a result.
When his case came before a jury, he was awarded $5 million in compensatory damages and $75 million in punitive damages grounded on the jury’s finding of “gross negligence” against his supervisor and employer.
Clearly, this is a terrible outcome, no matter the “fault” involved. And there are likely a number of contributing causes to the collision itself. But one thing is certain – if the supervisor had not believed that altering the log books was an “option,” then Plaintiff could not have been pressured into accepting the driving assignment. In this case, by having Plaintiff alter his own time logs, Plaintiff’s supervisor not only flouted the Federal laws that required minimum rest breaks, but jeopardized the health and safety of the driver, other vehicles, and the company’s cargo. While commercial truck drivers are exempt from the overtime provisions of the FLSA, a similarly-minded supervisor of employees who are subject to the FLSA could have also subjected his employer to a bevy of wage and hour claims, not to mention retaliation claims.
Lessons For Employers
Strong, consistent record-keeping practices and policies are a “must” for any business. Do not let a lack of policies – or a lax application of your policies – have a disproportionate effect on your bottom line like it did for the employers in the two cases above. Regularly audit your workplace for discrepancies, provide training on proper record-keeping, and ensure that front line managers in particular are impressed with the importance for accurate record-keeping and are consistently adhering to your policies. And as always, speak with experienced employment counsel for advice on any of the above.
The Supreme Court continues to limit the ability of employees to pursue class arbitration against their employers. The latest salvo—the Court’s decision in Lamps Plus, Inc. v. Varela—comes on the heels of last year’s Epic Systems Corp. v. Lewis, which found that class action waivers in individual arbitration agreements between employers and employees are enforceable. Taking the next natural step in limiting class actions, Lamps Plus now requires arbitration agreements to specifically permit class claims; if an arbitration agreement leaves the issue unaddressed, no class claim is available at all.
Bottom line: if the agreement doesn’t say an employee can pursue a class claim, an employee can’t pursue a class claim.
In Lamps Plus, an employee brought suit against his employer, Lamps Plus, due to a data breach causing a fraudulent tax return to be filed on the employee’s behalf. The employee brought the matter as a putative class action, seeking to represent all similarly situated Lamps Plus employees. Lamps Plus sought to compel individual arbitration based on the arbitration agreement the employee signed, and also argued that class arbitration was unavailable under the agreement.
The Ninth Circuit explained that the language of the agreement was ambiguous regarding class arbitration. As such, the Ninth Circuit held that class arbitration was allowed since the ambiguity was to be interpreted against the party that drafted the contract, in this case Lamps Plus.
The Supreme Court reversed, holding that even if an arbitration agreement is ambiguous on the availability of class arbitration, that ambiguity is not enough to show the parties specifically agreed to class arbitration.
The Court explained there is stark difference between individual arbitration and class arbitration, with the former allowing for more efficient resolution of disputes. On the other hand, class arbitration lacks these benefits, and is more likely to be “slower, more costly, and more likely to generate procedural morass than final judgment.” Due to the difference between individual and class arbitration, the Court explained that under the Federal Arbitration Act an agreement cannot “infer consent to participate in class arbitration” without an affirmative contractual basis showing the parties “agreed to do so.”
In other words, ambiguity is not enough – the arbitration agreement must have clear language showing both parties agree to allow class arbitration of claims. Without this clear language establishing consent between the parties, class arbitration is unavailable.
WHAT SHOULD EMPLOYERS DO NOW?
Employers should again take this opportunity to review their arbitration agreements with their employees. While the holdings of Epic Systems and now Lamps Plus provide more leniency for employers in staving off class arbitration, clarity is still key with these agreements.
Employers should strive to eliminate uncertainty by crafting clear language eliminating any chance of class arbitration. Employee arbitration agreements should be drafted to ensure that employees can only bring individual actions, that they are waiving their right to class action arbitration, and that both parties acknowledge they are in no way consenting to class arbitration. In doing so, employers will meet their objectives of ensuring individual arbitration while doing their best to side-stepping a costly court battle over the scope of arbitration.]]>
Employers with 100 or more employees, and federal contractors with 50 or more employees, have until September 30, 2019 to file EEO-1 Component 2 pay data for calendar years 2017 and 2018 with the Equal Employment Opportunity Commission (“EEOC”). Component 1 demographic data, which includes identification of the number of employees by race, ethnicity, and sex, is still due to the EEOC on May 31, 2019. Employers may request a two week extension to submit Component 1 data.
In her Order, Judge Chutkan ordered the EEOC to notify filers via its website that the 2018 calendar year pay data collection must be submitted no later than September 30, 2019. The Court also gave the EEOC the option to either 1) collect Component 2 EEO-1 pay data for calendar year 2017, or 2) collect Component 2 EEO-1 data for 2019 during the 2020 EEOC reporting period. On May 2, 2019, the EEOC stated that it will collect both 2017 and 2018 pay data from employers. Both calendar years of data must be submitted to the EEOC by September 30, 2019. The EEOC stated that it expects to begin collecting 2017 and 2018 Component 2 data in mid-July, 2019, though it did not specify the exact date.
Judge Chutkan’s Order, as well as the EEOC’s update, resolves any ambiguity regarding the reporting deadlines. The EEOC has always required employers with 100 or more employees to submit annual reports, known as “EEO-1” submissions, to the Commission. These reports are required to include data concerning the number of employees the company employs based on gender, race, and ethnicity. At two pages long, they were relatively straightforward and the data fairly easy to submit.]]>
Last year, the Supreme Court refused to hear a case filed by a Black woman whose job offer was rescinded when she refused to cut off her dreadlocks. The company had a hairstyle policy that banned dreadlocks and said that an employee’s “hairstyle should reflect a business/professional image” and that prohibited “excessive hairstyles.” New York City has now stepped up and taken a stand against these grooming policies.
The Commission has found that bans or restrictions on hair or hairstyles “are often rooted in white standards of appearance and perpetuate racist stereotypes that Black hairstyles are unprofessional.” Although grooming policies impact many communities, the Commission’s guidance focuses on hairstyles commonly associated with Black people and the race discrimination they suffer as a result of biased appearance policies.
“There is a widespread and fundamentally racist belief that Black hairstyles are not suited for formal settings, and may be unhygienic, messy, disruptive, or unkempt.”
The Commission has added Black hairstyles to the list of protected racial characteristics. Employers covered by the NYC Human Rights Law that “enact groom or appearance policies that ban or require the alternation of natural hair or hair styled into twists, braids, cornrows, Afros, Bantu knots, fads, and/or locs may face liability . . . because these policies subject Black employees to disparate treatment.” Grooming policies may not be implemented “to promote a certain corporate image, because of customer preference, or under the guise of speculative health or safety concerns.” Similarly, schools and other places of public accommodation in New York City may not treat Black people differently or harass them because of their hair or hairstyles.
The Commission’s guidelines are an attempt to lessen the physical and psychological harm to Black individuals who are forced to choose because their careers and their personal and cultural identity through their hairstyle.
Employers in New York City with grooming or appearance policies should consider alternative options to addressing any legitimate safety or health concerns besides a complete ban on certain hairstyles. Policies should be inclusive of all “racial, ethnic, and cultural identities and practices associated with Black and historically marginalized communities.” Grooming policies prohibiting hairstyles or requiring employees to alter their hair, requiring only Black employees to cut or alter their hair in order to keep their jobs, refusing to hire Black applicants with a hairstyle that “does not fit the ‘image’” of the employer, or requiring Black employees to hide their hairstyles would all be violations under the Commission’s new guidance.
Employers outside of New York City should also consider revising any grooming policies they may have should other cities and state follow the Commission’s lead. Hair discrimination may be the next area where state and local laws set stricter standards while federal guidance remains silent.]]>
Technology Ahead of Laws and Regulations – Or Is It?
It’s generally accepted that technological advancement will outpace the legislatures and courts tasked with regulating that technology. But that isn’t to say the legislatures and courts won’t catch up. Just recently, we have seen social media enter the spotlight as the newest target of potential government regulation. And with the European Union enacting the General Data Protection Regulation, companies must be vigilant in how they collect and maintain job applicant information, or face the possibility of severe fines. As fast as new technology is introduced to the market, regulators are working to act just as quickly to mitigate potential harm from that technology.
However, one thing that may be lost in the shuffle is the unintended consequences of some of these technologies, and how that may expose businesses to potential claims under existing laws. Take for example a business that decides to shift its recruiting efforts from a more human-driven approach to a process that uses data to steer the course. There is a trove of data points that a company can collect on a job applicant, such as experience and education. But if HR allows these data points to drive the recruiting and interview process, they may be allowing this data to exploit innate biases, albeit unintentionally. If a data-driven process leans too heavily on quality of education, the process may filter out those candidates who may not have had a ready access to high-quality education, but still may be a good fit for the job. HR professionals need to be careful in implementing these types of processes and work to eliminate these issues, otherwise they may face heightened scrutiny.
Technology Reacting to New Laws
This past year has seen a flood of new employment laws, mainly at the state and local level, as well as the wide-reaching implications of the seismic #MeToo movement. These developments have not gone unnoticed by the technology sector. New software will help HR departments manage the various state and local employee leave laws, help employers implement employee schedules that comply with scheduling laws, and even assist companies in conducting internal investigations of employee complaints. But for each new technological advancement, there is a potential pitfall.
To illustrate this point, let’s consider a company that implements new software in order to guide and streamline the employee complaint process. This software will surely be more efficient and provide a place to store all of the information regarding the investigation. But HR professionals cannot allow the process to create a “one size fits all” approach to these investigations, providing nothing more than a checklist to mark off as the investigation moves along. Professionals must work to integrate the technology to augment their investigation process, not replace it, since a subpar investigation process can expose a business to liability down the road.
There is no doubt that technology has the potential to simplify the jobs of HR professionals in today’s fast-paced world. But that business must integrate that technology in a way that makes sense for them, and utilize professionals who can use it effectively.
On March 26th, the New Jersey Assembly passed legislation that requires employers in New Jersey to provide earned sick leave to their employees. The legislation was then passed by the New Jersey Senate on April 12th, and Governor Phil Murphy signed it into law on May 2, 2018. He tweeted out that he believes that enacting the law will “support working families and strengthen our economy.”
What is the New Law?
The new Paid Sick Leave law allows New Jersey workers to accrue paid sick leave for every 30 hours worked. The number of hours of leave that can be accrued per year is capped at 40 hours. There is no minimum amount of time an employee must be employed before they are able to start accruing paid sick leave. Employers are required to give employees the same pay rate and benefits for earned sick leave that the employees would regularly receive for working hours. Employers may offer to pay workers for their unused earned sick leave in the final month of the year. The sick leave can be used for physical and mental illness, to care for an ill or injured family member, to attend a school-related event for a child, to obtain services if the employee or a family member is a victim of domestic or sexual abuse, or circumstances arising from a public health emergency. Employers are prohibited from retaliating or discriminating against an employee for using their paid sick leave. Employers also must not discipline, discharge, demote, suspend, or take any other adverse action against employees who are using their sick leave.
Why was this Law Enacted?
The intent of the new law is to ensure an employee does not have to choose between a paycheck and going to work sick. Governor Murphy tweeted “No one should lose a day’s pay due to sickness or because a loved one has fallen ill.” When signing the bill he stated, “There is no reasons anyone should have to choose between economic security and their health. After today, New Jerseyans will no longer have to face such a choice. I am proud to sign into law one of the strongest earned leave protections in the country for every hardworking employee who deserves the basic right of a paid sick day.”
Who has to Comply?
The new law preempts all existing municipal and county sick leave laws. However, if an employer is already offering full paid leave that is accrued at a rate equal to or greater than that in the new policy, they will be in full compliance with the new law. Employers are permitted to create more generous policies that provide additional leave time.
When Will the Law Go into Effect?
The law will go into effect 180 days after it was signed by Governor Murphy, October 29, 2018.
If you have any questions about the new law, feel free to contact Mark Konkel (email@example.com).]]>