Hunton Employment & Labor Perspectives

In the wake of the #MeToo movement, New York, like other states, enacted legislation aimed at limiting employers’ use of non-disclosure provisions in settlement agreements to resolve claims of workplace discrimination. Recently, Governor Kathy Hochul signed legislation that amends those existing laws to further strengthen the restrictions on non-disclosure provisions in settlement agreements for discrimination, harassment, and retaliation claims. The legislation also extends the statute of limitations for filing such claims with the state enforcement agency. 

As of late, it seems we can hardly go a day without hearing about the rise of artificial intelligence (“AI”) and its potential to disrupt all manner of industries.  But awareness of AI’s potential implications to our careers has only recently hit the mainstream.  Many employees may be surprised to learn that a number of employers have already been using AI to make employment decisions for some time, especially in the hiring process.  And the number of employers using AI in the workplace has been growing rapidly.  Some employers are even using AI to make promotion decisions.

The Department of Labor Wage and Hour Division and the National Labor Relations Board released a Memo of Understanding announcing that the two agencies will be collaborating “to strengthen the agencies’ partnership through greater coordination in information sharing, joint investigations and enforcement activity, training, education, and outreach.” The MOU took effect upon both agencies’ approval in early December and will remain in effect for five years.

In the first four months of 2021, Virginia, New Mexico, New York and New Jersey passed laws legalizing or decriminalizing, in some form, recreational marijuana.  Exactly how these laws will affect employers in these states is still an open question, but for now, employers should understand the nuances of the laws so they can prepare for the emerging reality that is legal marijuana.

On December 16, 2020, the Equal Employment Opportunity Commission (EEOC) updated its COVID-19 guidance with a new section pertaining to vaccinations.

The updated release—“What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws”—discusses how employers who require vaccinations should respond to an employee who is unable or unwilling to receive a COVID-19 vaccination because of a disability or sincerely held religious belief.

As originally reported in the American Bar Association’s Summer 2020 Labor & Employment Newsletter, due to the outbreak of COVID-19 and the inherent risks in holding large gatherings of people, the prospect of mail ballot elections has recently received considerable national attention. Typically, this attention is focused on how mail ballot elections might affect voter turnout or election results in state and federal elections and whether it might benefit one party over the other. So far, state and federal elections have generally continued to be held with inperson voting occurring at polling places, albeit with new safety measures in place.

The Department of Labor issued two opinion letters on Tuesday in response to specific inquiries that may nonetheless provide some clarity for employers in general.

The first letter was in response to an inquiry from an employer that offers its employees a non-discretionary lump sum bonus of $3,000 (in addition to their regular hourly rate) for completing a 10-week training program.  During the training program, the employees may work more than 40 hours in a given week and the employer requested an opinion from the DOL on the proper method for calculating overtime pay.  In response, the DOL stated that the $3,000 bonus must be included in the regular rate of pay (for purposes of calculating overtime) “as it is an inducement for employees to complete the ten-week training period.”  The DOL then explained that the bonus should be divided into ten $300 increments to be added to the employees’ pay for each week of the training program for purpose of making the overtime calculation.

This summer, the National Labor Relations Board (“NLRB” or “Board”) issued several pro-employer decisions.  Just last month, the NLRB issued two key decisions for employers, which are discussed below.

Worker Misclassification Not a Violation of the NLRA

 As we previously reported, the Board previously invited interested parties and amici to submit briefs in the case of Velox Express, Inc. (15-CA-184006) to address under what circumstances, if any, the Board should deem an employer’s misclassifying statutory employees as independent contractors as a violation of the National Labor Relations Act (“NLRA”).

On September 3, 2019, in First Student, Inc. v. NLRB, __ F.3d __ (D.C. Cir. 2019), the court upheld the National Labor Relations Board’s application of the “perfectly clear” doctrine in First Student Inc. v. NLRB, 366 NLRB No. 13 (February 6, 2018).  The “perfectly clear” doctrine affects the right of a labor law successor, which acquires a unionized business, to set new terms and conditions of employment.  Thus, it can have an important impact on the economics of the commercial transaction.

The National Labor Relations Board has issued the first part of its planned series of revisions to labor union election procedures.  The revisions arrive five years after the Obama-era Board’s controversial 2014 changes that created the so-called “ambush election” procedures.

On August 12, a three-member majority, over a one-member dissent, issued a 113-page proposed rule that would modify three of the Board’s election processes: (1) its handling of “blocking charges,” (2) the restriction on elections after an employer’s voluntary recognition of a union, and (3) the standard for contractually-negotiated recognition of a union in the construction industry.

In a recent advice memorandum, the National Labor Relations Board (the “Board”) set forth its position that drivers for the rideshare company Uber are independent contractors, not employees, for purposes of the National Labor Relations Act (“NLRA”).  This means that the Board, as it is currently comprised, will not entertain efforts of drivers to unionize or seek other protections under the NLRA.  Because it is only a directive from the Board’s General Counsel, as opposed to a decision by the five-member Board, the advice memorandum is not appealable to a federal appellate court, and those who oppose the Board’s position will not have judicial recourse.  The Board’s advice memorandum comes on the heels of the Department of Labor’s recent opinion letter stating that workers for a “virtual marketplace company that operates in the so-called ‘on-demand’ or ‘sharing’ economy” are not employees under the Fair Labor Standards Act, and thus not covered by the law’s minimum wage and overtime requirements.

The current trend at both the state and federal levels is moving in the direction of mandatory paid family leave.  For example, in recent years, 6 states (California, Massachusetts, New Jersey, New York, Rhode Island, and Washington) and the District of Columbia have enacted mandatory paid family leave benefits for employees.  Moreover, at least 18 other states are currently considering some form of paid family leave legislation.

In a rare win for plaintiffs seeking to avoid arbitration, the U.S. Supreme Court rejected a trucking company’s attempt to compel arbitration in a driver’s proposed minimum wage class action.  The Court held that the Federal Arbitration Act’s exemption for interstate transportation workers applies not only to employees, but also to those classified as independent contractors.

As the new year gets off to a start, employers in the retail industry will be making wage adjustments to meet current and future minimum wage increases.  Employees in 21 states around the country will see their state’s minimum wage increase.

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The U.S. District Court for the Northern District of California is a popular venue for class action lawsuits.  As of November 1, 2018, it is also the first to require parties settling such lawsuits to make broad public disclosures regarding the settlements.

The Supreme Court recently approved substantial changes to the Federal Rules of Civil Procedure, including amendments to Rule 23, which covers federal class actions.  The amendments to Rule 23 seek to modernize and standardize the notice, settlement, objection, and appeal procedures.  If Congress approves the amendments, they will become effective December 1, 2018.     

A single paragraph in an otherwise routine opinion could have reverberations in FLSA exemption cases for years to come.

Earlier this week, in a 5-4 decision, the Supreme Court held in Encino Motorcars LLC v. Navarro et al. that auto service advisors are exempt under the FLSA’s overtime pay requirement.  While the case resolved a circuit split for a discrete exemption, the Court’s decision has broad implications for all employers.

The practice of “tip-pooling,” which refers to the sharing of tips between “front-of-house” staff (servers, waiters, bartenders) and “back-of-house” staff (chefs and dishwashers), has been in the news recently as the Trump Department of Labor (“DOL”) seeks to roll back a 2011 Obama-era rule limiting the practice under the Fair Labor Standards Act (“FLSA”).

During a week that brought several notable decisions, the National Labor Relations Board issued a ruling on Friday, December 15, 2017, overturning its controversial 2011 Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”) decision, which held that in order for employees to be included in a collective bargaining unit, employers had to prove the employees shared an “overwhelming community of interest” with one another.  The unions argued that the “overwhelming community of interest” burden was all but impossible to meet and effectively allowed unions to create “micro-units” of any number, group, or sub-group of employees the unions saw fit.  This in turn meant that an employer could be faced with negotiating collective bargaining agreements with multiple groups of employees who often shared the same schedule, workplace, and general terms and conditions of employment, but nonetheless were represented by different locals or divisions of the same or multiple unions.  In one particularly glaring example, the Board approved a union’s request for separate bargaining units in each of nine different graduate student departments at Yale University despite the fact that the union already represented existing, university-wide bargaining units.

The National Labor Relations Board issued a much-anticipated decision on Thursday, overruling its controversial 2015 Browning-Ferris decision that unions and employees argued drastically expanded the definition and scope of the Board’s joint-employer doctrine.  In Browning-Ferris, the Board departed from decades of precedent and held that entities who merely possessed—as opposed to directly and immediately exercised—control over workers would be deemed joint employers for purposes of assessing liability under the National Labor Relations Act.  The Board used the Browning-Ferris decision to expand its reach under the joint-employer doctrine to include, for example, companies that relied on staffing agencies and in some cases, parent companies that did not exercise immediate or direct control over a subsidiary’s workers, but had the potential authority to affect certain terms and conditions of employment.  The Browning-Ferris decision faced heavy criticism from employers as well as an appeal of the decision itself to the D.C. Circuit Court of Appeals.

On November 15, the EEOC issued its 2017 annual Performance and Accountability Report, providing details and statistics regarding the Commission’s performance and goals during the period of October 1, 2016 to September 30, 2017.

On August 31, 2017, a federal district court judge in Texas struck down the Department of Labor’s Obama-era controversial 2016 rule that raised the minimum salary threshold required to qualify for the Fair Labor Standards Act’s “white collar” exemption. Under the proposed regulations, the minimum salary threshold was raised to just over $47,000 per year, and increased the overtime eligibility threshold for highly compensated workers from $100,000 to about $134,000.

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On June 27, President Trump nominated labor attorney William J. Emanuel to fill the last vacancy of the five seats on the National Labor Relations Board.  Emanuel is a management-side labor attorney who has practiced many years before the Board.  Emanuel has extensive experience arguing in support of employee class and collective action waivers, including involvement in multiple cases that have either been before the Supreme Court or directly led to precedent that the Supreme Court is now set to consider.

As we have said in previous posts, President Trump’s election and now ...

In a ceremonial signing on June 22, Philadelphia Mayor Jim Kenney signed a new municipal bill giving the City of Philadelphia authority to temporarily close businesses found to have repeatedly violated the City’s anti-discrimination statutes.  The new bill, which amends the City’s Fair Practices Ordinance, states that the Philadelphia Commission on Human Relations may, “upon a finding that [an employer] has engaged in severe or repeated violations without effective efforts to remediate the violations, order that the [employer] cease its business operations in the City for a specified period of time.” The bill, which went into effect immediately, does not state how long a business may be closed.  Nor does it define “severe or repeated violations” or clarify what constitutes “effective efforts to remediate.”

With an eye towards “increasingly unaffordable” higher education, President Trump signed an Executive Order on June 15, 2017, seeking to “provide more affordable pathways to secure, high paying jobs by promoting apprenticeships and effective workforce development programs, while easing the regulatory burden on such programs and reducing or eliminating taxpayer support for ineffective workforce development programs.” The Executive Order directs the Department of Labor (“DOL”) to propose regulations that “promote the development of apprenticeship programs by third parties,” including trade and industry groups, companies, non-profit organizations, unions, and joint labor-management organizations. The term “apprenticeship” means “an arrangement that includes a paid-work component and an educational or instructional component, wherein an individual obtains workplace-relevant knowledge and skills.”  The Executive Order, in effect, seeks to expand the authority of employers and other third parties to design their own apprenticeship programs and tasks the DOL with implementing or rejecting and assessing such programs on an expedited basis.

President Trump nominated attorney Marvin Kaplan to fill one of two vacancies on the National Labor Relations Board on June 19, 2017.  Kaplan currently works on the Occupational Safety and Health Review Commission and previously served as Republican counsel to the House Education and Workforce Committee which, among other things, provides oversight of the NLRB.  The five-seat NLRB currently consists of only three members: Chairman Philip Miscimarra (R) and Members Mark Gaston Pearce (D) and Lauren McFerran (D).  With members appointed (subject to Senate approval) to 5-year terms, the NLRB is typically composed of three members of the sitting President’s party and two from the other party.  If Kaplan’s appointment is approved, it could clear the way for President Trump to appoint a third Republican, giving the NLRB its first Republican majority since 2008.

The Fifth Circuit held recently that the State of Texas had standing to sue the Equal Employment Opportunity Commission (“EEOC”) over the Commission’s “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII” (the “Guidance”) issued in April 2012, which warned employers that blanket policies against hiring felons could disproportionately exclude minorities and thus be deemed discriminatory. Texas originally sued the EEOC in late 2013 seeking an injunction against enforcement of the Guidance and a declaratory judgment that state agencies be allowed to maintain their policies, as instituted under state law, barring categories of convicted felons from state employment. In its complaint, the State also claimed that the EEOC’s Guidance improperly preempted state law. The lower court granted the EEOC’s motion to dismiss on grounds that Texas lacked standing to sue the EEOC because the Commission cannot bring an enforcement action against the state for failing to comply with the Guidance. The lower court also held that the EEOC Guidance did not constitute a “final agency action” under the Administrative Procedure Act (“APA”), and thus the Guidance was not subject to judicial review.

President Obama signed an Executive Order on Monday, September 7, requiring federal contractors to provide paid sick leave to their employees, effective January 1, 2017.  The Order  requires federal contractors and their subcontractors to let employees earn at least one hour of paid sick leave for every 30 hours worked, up to 56 hours, or 7 days, of leave.

On September 10, 2015, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a Final Rule implementing last year’s Executive Order 13665, which prohibits federal contractors from discharging, or discriminating against, any employee or applicant who “has inquired about, discussed, or disclosed” either their own compensation information or that of another employee or applicant.

On Friday, August 21, 2015, the U.S. Court of Appeals for the District of Columbia Circuit upheld the U.S. Department of Labor’s (“DOL”) 2013 rule extending FLSA overtime and minimum wage protections to employees of home health care agencies who provide “companionship services” or live-in domestic care. The rule modified an exemption that was part of a 1974 amendment to the Fair Labor Standards Act (“FLSA”) that required domestic service workers to receive overtime and minimum wage, but excluded from those requirements employees who provide companionship services or live in the home where they work. Under the 2013 rule, the exemption for companionship services and live-in care only applies to workers employed by individuals or families who are receiving the care, not to employees of third-party home care providers. The 2013 rule also narrowed the definition of companionship services. Specifically, a worker only falls under the companionship exemption if the worker is employed directly by members of a household where the worker provides “fellowship and protection” (i.e. socializing with and monitoring the safety of elderly or infirm people) or if the worker provides daily living assistance, such as dressing and grooming, in conjunction with fellowship and protection, but does not spend more than twenty percent of their time providing such assistance.

More and more employers are faced with the following question -- can a transgender employee use the restroom associated with his or her gender identity? According to federal governmental agencies, the answer seems to be yes.