Hunton Employment & Labor Perspectives

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.

Two recent rulings have labor law observers questioning where the line is in disciplining employees for making offensive or obscene comments toward their employer. Seemingly at odds are a recent Second Circuit ruling finding such behavior is protected activity under the NLRA and a recent NLRB ruling finding the use of profanity towards management is not protected.

One of the most controversial regulatory actions from the US Department of Labor during the Obama administration was the DOL’s regulation significantly increasing the salary level under the Fair Labor Standards Act’s white-collar exemptions.  The regulation sought to more than double the current salary requirement of $23,660 per year, and it included an automatic updating requirement that would have accelerated future salary level increases at a rate well above the rate of inflation.

It should come as no surprise that California, known for regulating work, also regulates rest.  Section 551 of the California Labor Code states that, subject to certain exceptions, all employees are entitled to “one day’s rest” from labor “in seven” and Section 552 states that employers shall not “cause [] employees to work more than six days in seven.”  The Ninth Circuit Court of Appeals asked the California Supreme Court in Mendoza v. Nordstrom, Inc. these three specific questions:

In a press release issued this morning, the Department of Labor has announced that it is withdrawing two administrative interpretations issued by the Department of Labor under the Obama administration in 2015 and 2016 relating to misclassification of independent contractors and joint employment. These two administrative interpretations sought to expand the definition of employee, thereby increasing the possibility of misclassification cases, and, as some argued, expanding the concept of joint employer under the Fair Labor Standards Act.  While this is a welcomed ...

[From Hunton’s Retail Blog]  If you are a retailer, you may have policies and procedures in place regarding who can speak on behalf of your company. Such policies may generally instruct employees not to speak to the press as a representative of the company, and to direct all media inquiries to a particular person or department. Similarly, if you are a retailer, you may have a policy in place that instructs employees to forward any reference requests to your human resources department. These commonplace policies allow retailers to control their public image and protect employee ...

The issue of whether workers are properly classified as independent contractors rather than employees is a common dispute in the gig economy, particularly in newer, technology-based industries, such as ride-sharing.

That issue just became a much simpler one in Florida: On May 9, 2017, Florida’s governor signed into law a bill that, among other things, establishes that drivers for companies such as Lyft and Uber—called “transportation network companies” or “TNCs” under the law—are independent contractors, not employees, as long as the company satisfies four conditions:

In a previous post, we discussed the Second Circuit’s opinion finding that Rite-Aid lawfully fired a long-tenured pharmacist after he refused to comply with the company’s new mandate that pharmacists administer immunizations.  The plaintiff requested that the Second Circuit rehear the case, arguing that it should consider additional evidence.  Without discussion, the Second Circuit denied the plaintiff’s request, upholding its prior decision.  The pharmacist was not protected under the Americans with Disabilities Act because he could not perform an essential function ...

At the request of the U. S. Court of Appeals for the Second Circuit, the New York Court of Appeals recently answered several questions regarding liability under the New York Human Rights Law Section 296(15)—which prohibits denying employment on the basis of criminal convictions when doing so violates New York Correction Law Article 23-A—and Section 296(6)—which prohibits aiding and abetting such discrimination.

Imagine that you are a company with two openings for the same position.  After selecting the two most qualified candidates, you offer each candidate a salary equal to his or her prior salary, plus 5%, pursuant to your established policy for setting new hire salaries.  On its face, your policy has nothing to do with sex, but does it violate the Federal Equal Pay Act?  This was the issue addressed by the Ninth Circuit Court of Appeals in the recent decision Rizo v. Yovino, No. 16-15372, slip op. at 11–12 (9th Cir. Apr. 27, 2017).

In an April 24, 2017 decision, the U.S. District Court for the District of Columbia denied a motion to dismiss filed by Bravo! Facility Services, Inc. (“Bravo!”) against a former employee who brought claims under the ADA, District of Columbia Human Rights Act, and the FMLA.  Bravo! asserted that the plaintiff should be barred under the doctrine of judicial estoppel from asserting her claims because she initially failed to disclose her employment discrimination claims in her chapter 7 bankruptcy case filed after her employment terminated.  The plaintiff had moved to reopen her bankruptcy case and amended her asset schedules to disclose the claims before filing suit against Bravo!  In denying Bravo!’s motion, the court distinguished these facts from other situations where a plaintiff fails to disclose a claim prior to filing suit or only after challenged by an adversary.

In a landmark ruling on April 4, 2017, the United States Court of Appeals for the Seventh Circuit, sitting en banc, became the first federal appellate court to officially recognize a discrimination claim under Title VII based solely on the plaintiff’s sexual orientation.  The Court’s decision in Hively v. Ivy Tech Community College of Indiana reflects a groundswell of recent cases questioning whether sexual orientation claims are viable under Title VII.  Although the Seventh Circuit is the only appellate court so far to hold that sexual orientation discrimination is a form of “sex” discrimination under Title VII, recent panel decisions from the Second and Eleventh Circuit Courts of Appeals signal that additional circuit courts might be poised to overrule existing case law to find similar protections.

The continued proliferation of human trafficking for the purpose of labor exploitation remains one of the most serious threats facing companies.  But, it is not just a concern for companies doing business overseas. California has led the charge with its passage of the California Transparency in Supply Chains Act, a law that requires retail sellers and manufacturers doing business in that state to disclose their efforts to eradicate human trafficking in their direct supply chains.  (Cal. Civ. Code, § 1714.43).  The United Kingdom has enacted similar legislation with its passage of the Modern Slavery Act 2015.

The Second Circuit recently held that Rite-Aid lawfully fired a long-tenured pharmacist after he refused to comply with the company’s new mandate that pharmacists administer immunizations.  The Court’s decision overturned a jury verdict of $2.6 million in the pharmacist’s favor and reminds employers what it takes to show that a given function is “essential” and what accommodations are reasonable.  The former pharmacist had claimed Rite-Aid illegally discharged and retaliated against him, and refused to accommodate his disability—trypanophobia, or needle phobia—under the Americans with Disabilities Act and similar state law.

On March 27, 2017, President Trump signed H.J. Res. 37, blocking the Fair Pay and Safe Workplaces Rule, the controversial rule enacted by the Federal Acquisition Regulatory (FAR) Council in August 2016, that legislators have criticized as a method to blackball federal contractors. The bill’s signing follows the U.S. Senate’s March 6, 2017 vote of 49-48 (along party lines) to formally disapprove of the rule.

It has been ironclad law since the enactment of the Title VII of the Civil Rights Act in 1964 that the Act’s prohibition against discrimination “because of . . . sex” does not include sexual orientation.  Federal law does not prohibit employers from terminating someone for being gay or lesbian.  For now, at least.

The U.S. Court of Appeals for the Eleventh Circuit (covering Florida, Georgia, and Alabama) confirmed that proposition this month in Evans v. Georgia Regional Hospital.  On one hand, the court’s holding reinforced what it and every other federal appellate circuit already had determined.  On the other, the court showcased perhaps the most heated internal judiciary battle yet on this issue, which has percolated at high temperatures for the past few years.

On March 9, 2017, the United States Circuit Court for the District of Columbia heard oral argument in the case entitled Browning-Ferris Industries of California, Inc., d/b/a/ Browning-Ferris Newby Island Recyclery v. National Labor Relations Board,  Nos. 16-1028, 16-1063 and 16-1064.  (Our prior blogs about this case can be found here.) This appeal challenges the National Labor Relations Board’s (NLRB) new and imprecise standard for determining whether companies are “joint employers” for purposes of the National Labor Relations Act. The new standard, first issued in Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015), abandons consideration of a company’s direct and immediate control over employees in favor of a fact-specific approach that focuses more on “reserved” or “indirect” control.

Effective March 17, 2017, the District of Columbia will join a dozen other jurisdictions across the country that prohibit an employer’s use of “credit information” in employment decisions.  The new law, D.C. Act 21-673, amends the District of Columbia’s existing human rights law by adding credit information as a prohibited basis for discrimination for any employment decision (not just hiring), and applies to employers of any size.  See D.C. Code § 2-1402.11(a)(1) and (a)(1)(4)(D), as amended.

The United States Supreme Court has granted consolidated review of three cases to determine whether arbitration agreements that waive employees’ rights to participate in a class action lawsuit against their employer are unlawful. The Court’s decision to address the uncertainty surrounding class action waivers of employment claims follows a circuit split last year in which the Fifth and Eighth circuits upheld such waivers and the Seventh and Ninth circuits found that such waivers violate the National Labor Relations Act. Given the increasingly widespread use of class action waivers by employers to stem costly class and collective actions, the high court’s ruling is likely to have a significant nationwide impact.

Beginning next week, on March 13, 2017, San Jose employers must offer existing part-time employees additional work hours before hiring any temporary, part-time, or new worker. This is a result of a vote last fall by voters in San Jose, California who approved “The Opportunity to Work Ordinance” (Ordinance No. 2016.1, codified at Chapter 4.101 of the San Jose Municipal Code) – a local measure that directs employee hours and hiring practices.

San Jose’s Office of Equality Assurance, the local agency tasked with monitoring, investigating, and enforcing the Ordinance, recently issued its Opportunity to Work FAQs, which provides additional guidance on how employers can comply with the new ordinance.  Following more comprehensive scheduling ordinances passed in San Francisco and Emeryville last year, San Jose is the third northern California city to enact a scheduling ordinance.

If the Supreme Court of Virginia were looking for an opportunity to expand its Bowman doctrine—the narrow public policy exception to Virginia’s at-will employment rule—it had the perfect chance to do so.  But, in a recent decision, Francis v. NACCAS, Inc., the Court reiterated the narrow and restrictive application of the Bowman exception.

When is “A Day Without A Woman”? 

Tomorrow, March 8, 2017.

What is the goal of “A Day Without A Woman”?

According to organizers, “[t]he goal is to highlight the economic power and significance that women have in the US and global economies, while calling attention to the economic injustices women and gender nonconforming people continue to face.”

Organizers are looking to end workplace discrimination and urge employers to adopt benefits such as paid family leave, sick days, adequate healthcare, fair pay, vacation time, and healthy work environments.

With the passing of Bill Paxton coming on the heels of the deaths of several other lauded talents—including Carrie Fisher, Debbie Reynolds, and Mary Tyler Moore—fans continue to mourn the losses of their beloved artists, as well as the lost opportunities to see them in their upcoming roles.  And those losses reverberate across entertainment industries.  Disney must now grapple with pushing forward with its Star Wars film saga and related advertising campaigns without its leading princess.  It is a challenge that The Hunger Games filmmakers likewise faced with the passing of Philip Seymour Hoffman, which involved cast mourning periods and script rewrites.  Similarly, Fast & Furious 7 filmmakers reportedly spent an extra $50 million to complete the film following the death of Paul Walker.  The risk of an unfortunate passing looms over projects in other contexts, as well.  In television, John Ritter, John Spencer, and Cory Monteith passed away in the midst of successful runs of 8 Simple Rules, The West Wing, and Glee, respectively.  And entertainers David Bowie, Whitney Houston, and Prince, all likely had pending performance contracts at the times of their deaths.  This creates the risk of broken deals, unrealized projects, and even downstream litigation.

Much has been written about the National Labor Relations Board’s controversial Browning-Ferris decision that significantly expanded the scope of joint employer liability under the National Labor Relations Act. But virtually no attention has been given to the Fourth Circuit Court of Appeals’ recent panel decision in Salinas v. Commercial Interiors, Inc., No. 15-1915 (4th Cir. 2017), which creates an altogether new and incredibly broad joint employment standard under the Fair Labor Standards Act that makes the NLRB’s Browning-Ferris joint employment standard seem ...

On March 9, 2017, a federal appeals court in Washington, DC will hear argument in a challenge to the National Labor Relations Board’s controversial standard, announced in August 2015, for finding two businesses to be joint employers, and thus responsible for each other’s legal liabilities on the labor front.  The labor community is keeping a close eye on the case.  If the NLRB’s standard is upheld, businesses across the country will face the prospect of sharing labor and employment risk with their subcontractors, supply chain partners, and maybe even their franchisees.

Across the country, worker misclassification issues continue to be a significant risk for employers.  One hot button issue is whether workers in newer, technology-based industries, such as ride-sharing, are properly classified as independent contractors rather than employees.  Last week, an appellate court in Florida considered whether Uber drivers are properly classified as independent contractors or employees for purposes of benefits under Florida’s unemployment insurance statute.

The Trump Administration will leave in place an executive order signed by President Barack Obama, which bans sexual orientation and gender identity discrimination by federal contractors.  President Obama signed the order in 2014.  By doing so, he amended and expanded previous executive orders signed by Presidents Nixon and Clinton, which ban discrimination by federal contractors on the basis race, color, religion, sex, national origin, handicap, status as a parent, and age.

One month into 2017 and new pay equity laws already are springing up.  Philadelphia is now the first city to prohibit employers from using pay history information in making employment decisions.  New York Governor Andrew Cuomo has issued executive orders mandating that: (1) agreements entered into by the state require contractors to report their employees’ pay information; and (2) state agencies can no longer use candidates’ current or prior pay in making employment decisions.  Likewise, the Mayor of New Orleans has now issued an executive order prohibiting city departments from asking job applicants about salary history and requesting a study of pay disparity among city employees.

On January 31, 2017, President Trump nominated Neil Gorsuch to fill the nearly year-long vacancy on the Supreme Court left by Justice Scalia.  Judge Gorsuch, currently on the Tenth Circuit Court of Appeal, is likely a welcome choice for employers.  His employment decisions generally—though not always—have favorable outcomes for employers.  However, he does not appear to be a trailblazer on employment issues, but rather applies established precedent that generally favors employers.  His employment decisions do not tend to draw dissent, bolstering the view that his opinions are not significant departures from Tenth Circuit and Supreme Court precedent.  (Of course, not all agree.  Senator Elizabeth Warren describes him as having “twisted himself into a pretzel to make sure the rules favor giant companies over workers and individual Americans.  He has sided with employers who deny wages, improperly fire workers, or retaliate against whistleblowers for misconduct.  He has ruled against workers in all manner of discrimination cases.”)

On January 22, 2017, the City of Los Angeles ‘banned the box’ when the Los Angeles Fair Chance Initiative for Hiring (Ban the Box) (the “Initiative”) went into effect, prohibiting private employers in Los Angeles “from inquiring into or seeking a job applicant’s criminal history unless and until a conditional offer of employment” is made to the individual. In doing so, Los Angeles becomes the fourth California city to ‘ban the box’ with greater protections than the state statute, and the second to do so with respect to private employers. If an employer makes a ...

With Christmas falling on a Sunday this year, employers should be mindful of state blue laws, which sometimes require premium pay to hourly employees working on Sundays or holidays. Although most state laws, as well as federal law, do not require premium pay for work performed on holidays (unless, of course, the employee has worked more than 40 hours that week), there are a few exceptions, such as Massachusetts and Rhode Island.

On November 22, a federal judge in the Eastern District of Texas preliminarily enjoined the Department of Labor’s final overtime rule, which would have expanded overtime eligibility to executive, administrative, and professional employees making less than  $47,476 per year, who were previously exempt from the Fair Labor Standards Act’s requirements under its white collar exemption.  The final rule was scheduled to go into effect on December 1, 2016.

On November 21, 2016, the EEOC announced the release of new enforcement guidance addressing national origin discrimination.   Like many enforcement initiatives of late, the update is intended to address current cultural issues and legal developments.  It updates an EEOC compliance manual section from 2002 (Volume II, Section 13: National Origin Discrimination).  The EEOC also issued a small business fact sheet and a Q-and-A document.

On November 16, 2016, Judge Amos L. Mazzant, heard more than three hours of oral argument from a group of 21 States (“State Plaintiffs”) challenging the Department of Labor’s new overtime rule. Following the hearing, the motion for a preliminary injunction of the rule was taken under advisement and a ruling is forthcoming on Tuesday, November 22,2016. Judge Mazzant’s pointed criticism of the rule during argument suggests employers may have reason to be optimistic.

On November 14, 2016, a federal judge in California denied summary judgment to Hanover Insurance Co. (Hanover), finding that class claims alleging a failure to reimburse reasonable business expenses were not excluded by a “wage-and-hour” exclusion contained in EPLI policies issued by Hanover.  The lawsuit, brought by a former student of the Bellus Academy beauty school, alleged that Poway Academy (the owner of Bellus) and Beauty Boutique, Inc. (BBI) (operator of two other schools under the “Bellus” name), failed to compensate students for working on paying clients at an onsite salon and also failed to reimburse them for out-of-pocket costs to purchase necessary supplies.  The lawsuit alleged a variety of wage-related claims.  The lawsuit also alleged that the schools failed to reimburse necessary business expenses in violation of Section 2802 of the California Labor Code.

Donald Trump's election took many by surprise. Companies must now quickly determine his likely impact on their operations and workforces.

Trump will be the first US president with no government or military experience. He voiced extreme views during his campaign on immigration and discrimination, but he has played it close to the vest when it comes to other labor and employment law issues. What is clear is that Trump will have the backing of a GOP-controlled House and Senate. Does this mean employers will see radical changes in policy? Will the change to a Republican administration ...

The Ninth Circuit has joined both the Sixth and Fifth circuits in holding that USERRA claims are subject to arbitration pursuant to an employee’s agreement to arbitrate employment related claims.  See Ziober v. BLB Resources, Inc., 2016 WL 5956733 (9^th Cir. Oct. 14, 2016).  In doing so, the Ninth Circuit, a traditionally pro-employee circuit, has assuaged any fear of uncertainty that employers may have had with respect to their rights to compel arbitration of USERRA claims.

It is very common for employers to pay employees by direct deposit, and an increasing number pay employees with payroll debit cards.  Beginning March 7, 2017, employers in New York will have to deal with a new regulation regarding the use of direct deposit and payroll debit cards for payment of wages.  The new regulation, issued by the New York Department of Labor and titled “Methods of Payment of Wages,” imposes heightened notice and consent requirements on employers offering either service.

This past week the FTC and DOJ issued an 11-page guidance document aimed at protecting employees against anticompetitive conduct with respect to naked wage-fixing and agreements, in which companies agree on salary or other terms of compensation, and anti-poaching agreements. The guidance to human resource (“HR”) professionals and hiring managers relates to both hiring and compensation decisions.

The government’s guidance makes clear that naked wage-fixing agreements and anti-poaching agreements, in which companies agree not to recruit each other’s employees, are illegal under U.S. antitrust laws and, moving forward, DOJ will criminally investigate both individuals and companies suspected of their violation.  There is a carve-out for legitimate collaboration between employers.  The most common form of relevant, legitimate collaboration would be a joint venture between two companies, as these are not considered per se illegal under the antitrust laws.

Yesterday a federal court in Texas partially enjoined enforcement of what is known as the “blacklisting” rule.  The injunction comes one day before reporting was to begin under the Fair Pay and Safe Workplaces Executive Order, 13673.

On October 5, 2016, the Eleventh Circuit, sitting en banc, held that an unsuccessful job applicant “cannot sue an employer for disparate impact [under § 4(a)(2) of the ADEA] because [an] applicant has no ‘status as an employee.’”  Villarreal v. R.J. Reynolds Tobacco Co., --- F.3d ---, No. 15-10602, 2016 WL 5800001, at *1 (11th Cir. Oct. 5, 2016).

Enforcing a race-neutral grooming policy that prohibits employees from wearing dreadlocks is not intentional racial discrimination under Title VII.  That is what the Eleventh Circuit recently held in Equal Employment Opportunity Commission v. Catastrophe Management Solutions, --- F.3d ---, No. 14-13482, 2016 WL 4916851 (11th Cir. Sept. 15, 2016).

On Monday, September 19, 2016, the Seattle City Council approved an ordinance (C.B. 118765) designed to bring more stability to the schedules of retail and food service industry workers, who often experience last-minute scheduling changes, loss of paid hours, and back-to-back shifts. The law, which was developed during a series of meetings between the City, business owners and worker advocates, will be codified in Chapter 14.22 of the Seattle Municipal Code and will take effect on July 1, 2017.

Employers should be aware of a recent ruling by the U.S. Court of Appeals for the District of Columbia Circuit that overly broad confidentiality and nondisparagement policies violate the National Labor Relations Act (“NLRA”).  The case, Quicken Loans v. NLRB, 2016 U.S. App. LEXIS 13778 (D.C. Cir.), involved an employment policy which prohibited employees from using or disclosing a broad range of personnel information without Quicken's prior written consent or to criticize publicly the company and its management. The National Labor Relations Board (“NLRB” or “Board”) determined that those rules ran afoul of Section 7 of the NLRA because they “unreasonably burden the employees’ ability to discuss legitimate employment matters, to protest employer practices, and to organize.” Quicken then appealed the NLRB’s decision to the D.C. Circuit Court of Appeals.

On August 29, 2016, the U.S. Court of Appeals for the Second Circuit issued Vasquez v. Empress Ambulance Service, Inc., --- F.3d ---, No. 15-3239-CV, 2016 WL 4501673 (2d Cir. Aug. 29, 2016), holding that an employer may be held liable for a low-level employee’s animus under the cat’s paw theory of liability if the employer’s own negligence allows that animus to result in adverse employment action against another employee.

In a decision that could trigger similar action in multiple states, the Fifth Circuit recently decided that an employee could bring a wrongful-termination claim in Mississippi after being terminated for having a gun in his truck, which was parked on company property.   Following the Mississippi Supreme Court’s decision on referral, the Fifth Circuit held that a Mississippi statute—which prohibits employers from establishing, maintaining, or enforcing policies that prohibit an employees from storing a firearm in a vehicle on company property and from taking action against an employee who violates that policy—creates an exception to the state’s employment-at-will doctrine.

Today, on August 25, 2016, the Department of Labor issued final Guidance implementing Executive Order 13673, Fair Pay and Safe Workplaces, bleakly referred to by the contractor community as the “blacklisting” order.  The same day, a Final Rule  and Guidance was added to the Federal Acquisition Regulation (FAR) to implement that Executive Order, by the Department of Defense (DoD), General Services Administration (GSA) and National Aeronautics and Space Administration (NASA).

The “blacklisting” order places a new focus on labor and employment issues during the federal procurement process. Covered federal contractors and subcontractors must now disclose to the government previous violations of fourteen different federal labor and employment laws, plus equivalent state counterparts.  Pre-award disclosures must be made before a contract can be awarded to ensure the company is a “responsible” labor source.  Updated reports then are required every six months post-award.  The rule also imposes limits on the arbitration of certain employment claims, and requires specified paycheck disclosures and transparency.

The issue of religious background has generated substantial discussion during the current election cycle. Recently, the federal government highlighted the issue of religious discrimination and accommodation in the workplace.

On July 22, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced the release of a one-page fact sheet specifically designed to educate young workers of their rights and responsibilities under the federal employment anti-discrimination laws prohibiting religious discrimination. The fact sheet stresses that employers may ...

In Bodine v. Cook's Pest Control Inc., No. 15-13233, 2016 WL 4056031 (11th Cir. July 29, 2016), the Eleventh Circuit held that a forced-arbitration agreement in an employment contract is enforceable, despite the fact that certain provisions of the arbitration agreement violated the Uniform Services Employment and Reemployment Rights Act (“USERRA”).

Rodney Bodine, a member of the U.S. Army Reserve, was part of the sales force at Cook’s Pest Control, Inc. (“Cook’s”) in Alabama. His employment contract with Cook’s contained an arbitration clause, which included ...

In a prior post, we set forth the potential liability of employers for collection of debts owed by employees in violation of the bankruptcy stay. To protect themselves from such liability, employers that accrue claims against their employees in the ordinary course of business should implement written protocols designed in consultation with bankruptcy counsel.

However, even employers that do not ordinarily accrue claims against employees must be careful to avoid violating the automatic stay – most notably when complying with creditor garnishment demands under state law.

With more and more employees working off-site or from home, employers must be aware of the impact on courts’ interpretation of the FMLA’s eligibility requirements.

In June, the U.S. District Court for the Eastern District of Louisiana held in Donahoe-Bohne that the FMLA’s 50-employee threshold was met since the office to which a remote or telecommuting employee reported had at least 50 employees, even though the employee worked from home several states away.

We have written on several occasions about the Equal Employment Opportunity Commission’s (“EEOC”) proposed rules on wellness programs, and the extent to which employer-sponsored wellness plans must comply with the Americans with Disabilities Act. The new rules were finalized in May 2016 and state that employers may offer limited financial and other incentives to employees to participate in wellness programs.

The newly-enacted Defend Trade Secrets Act (DTSA) represents a significant new weapon for companies to prosecute trade secret violations. Among other features, the DTSA creates a federal cause of action for theft of trade secrets and a provision for judicial ex parte seizure of stolen property, double damages, and attorneys’ fees. Please join Hunton & Williams LLP for a complimentary webinar on August 3, 2016, 1:00 p.m. – 2:00 p.m. (EDT) that will cover the important aspects of the law, including the language that needs to be inserted into employment and ...

In December 2014, the New York Attorney General’s Office initiated an investigation into Jimmy John’s corporate office and its New York franchises. Jimmy John’s is a sandwich shop with franchises throughout New York and the United States. The investigation in New York concerned whether the use of a non-compete clause that barred departing employees from taking a job with any employer within two miles of a Jimmy John’s store that made more than 10 percent of its revenue from sandwiches was legal.

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.

Earlier this week, the NLRB issued yet another troubling decision in the joint employer space, a world the Board already turned upside-down last summer with its landmark Browning Ferris ruling. In Miller Anderson, the Board overturned Bush-era precedent and held that a union seeking to represent employees in bargaining units that combine both solely and jointly employed employees is no longer required to obtain the consent of the employers, provided the proposed bargaining unit is appropriate under “traditional” Board precedent. Under the prior rule established in the Board’s 2004 Oakwood Care decision, the Board would not allow employees from nominally different employers to form a single bargaining unit without consent, because employers who join a multi-employer bargaining unit must all consent to their inclusion (a sound policy given the host of practical and legal variables that can arise when separate employers agree to bargain together).

When it comes to employee wage equality, California already has one of the most expansive laws in the country, and it is now attempting to go even further. On June 23, the Wage Equality Act of 2016 (“Wage Equality Act”), SB 1063, took one step closer to becoming law as it passed the California State Assembly’s Committee on Labor and Employment. The bill seeks to extend the protections of the California Fair Pay Act, which prohibits pay disparity based on sex for substantially similar work, to also prohibit such disparities based on race or ethnicity. Already approved by the State Senate on May 31, 2016, the Wage Equality Act will now be heard in the Assembly’s Appropriations Committee in August after which, assuming it passes, it will make its way to the Assembly floor. If California’s Wage Equality Act is enacted, it will likely create the strongest wage equality law in the United States.

Recently, Washington DC council members unanimously voted to increase the city’s minimum wage to $15.00 an hour by the year 2020 for non-tipped hourly workers, many of whom work in the retail industry. The news comes just before Washington DC is scheduled to increase its minimum wage rate from $10.50 an hour to $11.50 an hour on July 1, 2016. The move makes DC the third jurisdiction behind California and New York to increase minimum wages to $15.00 an hour.

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Yesterday, a federal court issued a preliminary injunction temporarily preventing  the DOL from implementing and enforcing its recent Persuader Rule pertaining to outside consultants’ (including lawyers) reporting obligations in the labor relations context.  You can see our prior blogs on this topic here.  The controversial rule was slated to apply to agreements or arrangements and payments made after July 1, 2016, but now is in limbo.  We will keep you posted as new developments occur.  A copy of the Court’s order can be found here

Businesses need to have written protocols in place to deal with bankruptcy filings by their employees and independent contractors, or they risk serious sanctions and, potentially, punitive damages for violations of the bankruptcy laws. Consider two examples.

We are excited to introduce a new video series, Things You Need To Know in 5 Mins or Less. Each episode will feature a discussion of the legal and business challenges facing the real estate industry, and will include lawyers from a variety of disciplines throughout the firm. In the first episode of this new video series Carl Schwartz, co-chair of the firm’s global real estate practice, sits down with labor and employment partner Kurt Larkin to discuss the National Labor Relations Board “joint employer” rule: how it has changed and what it means for the real estate industry. Watch ...

A concerned business community has closely followed the NLRB’s shifting views on the concept of “joint employers” - separate companies that are deemed to be so interconnected that they should be treated as one for purposes of labor relations activity and unfair labor practice liability. In August of last year, the NLRB decision in Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015), put into place a broad new test that dramatically expands the definition of “joint employer.” Now, an entity will be found to be a joint employer if it exercises only indirect control over the employment terms and conditions of another company’s employees. Indeed, joint employer status can be established if a company simply possesses, but never exercises, the ability to control such terms.

Since President Lyndon B. Johnson signed Executive Order 11246 in 1965, the Office of Federal Contract Compliance Programs (OFCCP) has been charged with ensuring nondiscrimination and affirmative action for females in employment. In 1970, regulations were issued to further this goal, known as the Sex Discrimination Guidelines, codified at 41 CFR Part 60-20.

Those guidelines have not been substantially updated in the 46 years since. Until now, that is. The DOL acknowledges the Guidelines have become “out of touch with current law and with the realities of today’s workforce and workplaces.” See: OFCCP Fact Sheet on Sex Discrimination Final Rule. So, the OFCCP is bringing the Guidelines “from the ‘Mad Men’ era’ to the modern era.’”

Roland Juarez will present a webinar on “Final, New DOL Overtime Rule: Strategies to Mitigate Impact of 100% Increase in White-Collar Exemption” on June 22, 2016.

Details and Registration

Yesterday, John Smith, the president of ABC Bank, announced to the board of directors that he intended to resign to go work for XYZ Bank, a local competitor. Smith also intends to take some of the bank’s most important customers, and several top officers with him to XYZ Bank. Upset and panicked, the chair of the board contacted the bank’s employment attorney to determine what could be done to stop the president from leaving and taking customers and employees with him. “Send me a copy of John’s employment agreement,” the lawyer said. “Employment agreement? The board did not ...

With its May 26 Lewis v. Epic-Systems Corp. decision, the Seventh Circuit became the first circuit to back the reasoning in D.R. Horton, Inc., 357 NLRB No. 184 (2012), and held that a mandatory arbitration agreement prohibiting employees from bringing class or collective actions against their employer violates the National Labor Relations Act (NLRA). This decision creates a circuit split regarding the enforceability of arbitration agreements with class action waivers in the employment context, and the issue is now ripe for potential Supreme Court review.

New York Attorney General Eric T. Schneiderman announced yesterday that he has filed a “wage theft” lawsuit against Domino’s Pizza Inc., and several of its New York area franchisees. The case is particularly notable in that Schneiderman is pursuing a joint employer liability theory, seeking to hold Domino’s liable for the alleged wage payment violations of its franchisees. This is the first time Schneiderman has pursued such a claim in a wage payment case, and the lawsuit potentially opens a new front in federal and state enforcement agency attempts to expand the definition of what it means to be a joint-employer.

As we previously reported, the newly-enacted Defend Trade Secrets Act (DTSA) represents a significant new weapon for companies to prosecute trade secret violations. Among other features, the DTSA’s nationwide reach and its provision for judicial seizure, double damages, and attorneys’ fees provide a much more robust enforcement and remedy scheme than is currently available under many state laws.

Today, the U.S. Department of Labor published its final rule increasing the salary requirement for the Fair Labor Standards Act’s white-collar exemptions to $47,476 per year ($913 per week). Though the new salary level is not as high as the $50,440 per year level predicted by the DOL in its July 2015 proposed rule, the final rule nonetheless more than doubles the current salary requirement of $23,660 per year ($455 per week). The reason the salary requirement is somewhat lower than initially predicted is that the final rule applies the proposed 40% threshold to the average full-time salary compensation paid in the lowest-wage Census region, as opposed to applying the 40% threshold to the national salary average.

A recent National Labor Relations Board decision found that particular provisions of an employer’s Code of Conduct unlawfully discouraged employees from engaging in Section 7 Activity.

Section 7 of the National Labor Relations Act protects an employees’ rights to “self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  The Act further makes it unlawful for an employer to interfere with these rights.  What qualifies as employer interference is frequently considered by both the Board and courts.

The Eleventh Circuit confirmed that indefinite light duty is not a reasonable accommodation under the Americans with Disabilities Act (ADA), and employers are not required to create a permanent light-duty position for an employee.

Several new and expanded paid family leave programs signed into law this month present employers with administrative challenges and concerns about business productivity.

California

California’s Paid Family Leave (“PFL”) program, which took effect in 2004, was the first of its kind in the nation. Funded by employee contributions to the State Disability Insurance program, and administered through that program, PFL in California provides employees with partial wage replacement (currently 55%, up to a weekly maximum of $1,104 in 2015) for a period of up to six (6) weeks in order to bond with a new child, or to care for a parent, child, spouse or domestic partner with a serious health condition. This wage-replacement program does not guarantee job protection, so normally it is taken concurrently with job-protected leave under the federal Family and Medical Leave Act (“FMLA”) or its California analog, the California Family Rights Act.

Earlier this month, the San Francisco Board of Supervisors approved six weeks of fully-paid leave for new parents, the first city-wide legislation of its kind in the nation. Parents are entitled to the benefit if they have been employed by the employer for at least 180 days, work at least eight hours per week within the city or county of San Francisco, spend at least 40% of their hours per week working within the city or county of San Francisco, and are eligible to receive paid family leave from the State of California under the California Paid Family Leave law for the purpose of bonding with a new child. The new law requires that employers make up the difference between the benefit provided by the California Paid Family Leave law and 100% of the employee’s normal gross weekly wage.

Last Monday, the California Supreme Court in Kilby v. CVS Pharmacy, Inc. clarified the meaning of California’s requirement that all working employees be provided with suitable seating “when the nature of the work reasonably permits the use of seats.” Answering three questions raised by the Ninth Circuit, the Court ruled that:

(1) The “nature of the work” refers to an employee’s tasks performed at a given location for which a right to a suitable seat is claimed, rather than a “holistic” consideration of the entire range of an employee’s duties anywhere on the jobsite during a complete shift. If the tasks being performed at a given location reasonably permit sitting, and provision of a seat would not interfere with performance of any other tasks that may require standing, a seat is called for;

(2) Whether the nature of the work reasonably permits sitting is a question to be determined objectively based on the totality of the circumstances. An employer’s business judgment and the physical layout of the workplace are relevant but not dispositive factors. The inquiry focuses on the nature of the work, not an individual employee’s characteristics; and

(3) The nature of the work aside, if an employer argues there is no suitable seat available, the burden is on the employer to prove unavailability.

Employers increasingly feel that they are forced to bend, or sometimes even break, company rules to reasonably accommodate disabled workers under federal and state law. In a victory for employers, the Eleventh Circuit bucked this trend, holding that when mandatory overtime is established as an “essential function” of the job, a disabled employee who cannot work overtime is not a “qualified individual” under the Americans with Disabilities Act (“ADA”) and, thus, need not be accommodated.

In Dover Energy, Inc., Blackmer Division v. National Labor Relations Board, the Board held that Blackmer violated section 8(a)(1) of the National Labor Relations Act (“NLRA”) when it threatened Tom Kaanta, a Blackmer employee and United Auto Workers Union shop steward, with disciplinary action if he continued to make “frivolous” information requests to the company’s lead negotiator during collective bargaining agreement (“CBA”) negotiations. On March 22, 2016, the U.S. Court of Appeals for the D.C. Circuit reversed and held that the NLRB’s factual findings were not supported by substantial evidence.

On March 17, 2016, the U.S. Court of Appeals for the Second Circuit decided Graziadio v. Culinary Institute of America, holding that sufficient evidence existed to find that the Culinary Institute of America’s (“CIA”) human resources director was an “employer” under the Family and Medical Leave Act (“FMLA”) and could therefore be held individually liable for violations of the FMLA. In reaching this decision, the court found that the economic-realities test used to analyze whether an individual is an “employer” under the Fair Labor Standards Act (“FLSA”) should also be used to determine whether an individual is an “employer” under the FMLA. The Second Circuit vacated and remanded the Southern District of New York’s summary judgment decision on the question of individual liability for further consideration under the economic-realities standard. The application of this test likely means an increased risk of individual liability for human resources directors, supervisors, and other members of management charged with violating an employee’s rights under the FMLA.

The United States Department of Labor (the “DOL”) has announced a Notice of Proposed Rulemaking (“NPRM”) to implement Executive Order 13706, which requires federal government contractors to provide employees with up to 7 days of paid sick leave annually. As a result, the DOL estimates that employers will be compelled to provide additional paid leave to 828,000 employees, including 437,000 employees who do not currently receive any paid sick leave.

Coverage

On March 1, 2016, the United States Equal Employment Opportunity Commission (“EEOC”) sued employers for the first time for sexual orientation discrimination. The EEOC filed lawsuits in federal courts in Pittsburgh and Baltimore against manufacturing and health care employers for unlawful sex discrimination on behalf of employees alleging they were harassed and discriminated against based on their sexual orientation.

On February 12, 2016, the West Virginia legislature overrode Governor Earl Ray Tomblin’s veto of the Establishing West Virginia Workplace Freedom Act and in doing so became the 26th state to enact “right-to-work” legislation.

On March 1, 2016, the Securities and Exchange Commission (“SEC”) settled administrative charges against a popular telecommunications equipment supplier, Qualcomm Incorporated, under the Foreign Corrupt Practices Act (“FCPA”). According to the SEC, in addition to unlawfully providing meals, gifts and entertainment to foreign officials in an effort to win new business, Qualcomm also offered full-time employment and paid internships to family members and friends of foreign government officials in an effort to curry favor. In some cases, it appears these friends and family members would not have otherwise qualified for employment at Qualcomm and special accommodations were made to hire them. To settle the case, Qualcomm agreed to cease and desist from future violations, paid a $7.5 million civil monetary penalty and agreed to other heightened compliance measures.

Under the Fair Labor Standards Act (FLSA), employers who use a tip credit to satisfy their minimum wage obligations for tipped employees must follow certain rules related to those tips.  One of those rules relates to  the use of tip pools – i.e., pooling of tips received by multiple tipped employees and then dividing the total among the pool participants based on a specified formula.  Under Section 3(m) of the FLSA, employers who rely on the tip credit and who require their tipped employees to contribute their tips to a tip-pooling arrangement must ensure that the only employees who participate in the pool are those that “customarily and regularly” receive tips.  This typically means that managers, hostesses, cooks, dishwashers, and other non-tipped employees cannot participate in the tip pool if the employer wants to rely on the FLSA’s tip credit.

In February of 2016, the Equal Employment Opportunity Commission (“EEOC”) released detailed information and statistics summarizing the charges of discrimination that the agency received throughout its 2015 fiscal year. The EEOC is the administrative agency charged with implementing and enforcing a number of federal anti-discrimination employment statutes, including Title VII of the Civil Rights Act of 1964 (“Title VII”), the Age Discrimination in Employment Act (“ADEA”), and the Americans with Disabilities Act (“ADA”). Under each of these statutes, employees seeking to bring a claim of unlawful discrimination, harassment, or retaliation must first file a charge with the EEOC. The recently released report provides helpful information regarding the types of charges that employees filed in the 2015 fiscal year, which ran from October 1, 2014 to September 20, 2015.

The United States Supreme Court has denied a restaurant manager’s petition seeking review of whether parties may stipulate to the dismissal with prejudice of a lawsuit alleging violations of the Fair Labor Standards Act (“FLSA”), or whether judicial or Department of Labor (“DOL”) approval is a prerequisite to such a dismissal, as the Second Circuit held in his case, Cheeks v. Freeport Pancake House, Inc.  Having declined the petition for writ of certiorari, FLSA lawsuits will remain more difficult to resolve for employers in New York, Connecticut, and Vermont.

The Equal Employment Opportunity Commission (“EEOC”) is asking the Eleventh Circuit Court of Appeals to recognize that discrimination based on an employee’s sexual orientation constitutes unlawful discrimination “because of . . . sex,” in violation of Title VII of the Civil Rights Act of 1964.

The EEOC advances this argument in an amicus brief in support of Barbara Burrows, a lesbian college professor and administrator who claims she was subjected to sex discrimination by her former employer, the College of Central Florida, based on her same-sex marriage and how she looked and acted. The District Court granted summary judgment in favor of the College, holding that Burrows’s sex discrimination claim was “merely a repackaged claim for discrimination based on sexual orientation, which is not cognizable under Title VII.” Burrows appealed, and the case is currently pending before the Eleventh Circuit.

Under a new California law that took effect on January 1, 2016, California employers may face civil penalties of up to $10,000 for misusing E-Verify, the federal electronic employment verification system some employers use to verify employment eligibility of newly hired employees.

The new E-Verify law makes it more difficult for some California employers to comply with both federal and state laws relating to workers’ employment eligibility.

On January 20, 2016, the administrator of the Department of Labor’s Wage and Hour Division (WHD), David Weil, issued an “Administrator’s Interpretation” (AI) regarding the agency’s interpretation of joint employment under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The new AI purports to clarify the WHD’s position that joint employment under these statutes “should be defined expansively.” When considered alongside the National Labor Relations Board’s (NLRB or the Board) controversial ...

The Equal Employment Opportunity Commission announced on January 29, 2016 its proposed revision to the Employer Information Report (EEO-1) that would obligate businesses with 100 or more employees to annually turn over pay data by gender, race and ethnicity. Although employers will not have to divulge specific pay rate information for individual employees, they would have to report pay bands across 10 different job categories.

On January 20, 2016, the U.S. Supreme Court issued its ruling in Campbell-Ewald Co. v. Gomez, affirming the Ninth Circuit’s decision that a defendant cannot moot a putative class action by offering full relief to the individual plaintiff.

On January 19, 2016, a series of bills in New York commonly known as the Women’s Equality Act will take effect. These laws are intended to help achieve pay equity, strengthen human trafficking laws and protections for domestic violence victims, and end pregnancy discrimination in all workplaces, by, among other things:

In 2015 the National Labor Relations Board (the “Board”) issued two opinions, Cook Inlet Tug & Barge, Inc. and Buchanan Marine, L.P., each finding that tugboat captains did not qualify as “supervisors” for the purposes of the National Labor Relations Act (the “Act”). These decisions demonstrate a trend in recent Board decisions narrowing the definition of a supervisor.

Under Section 2(11) of the Act, a supervisor must have the authority to perform one of several enumerated functions, including “assigning” or “responsibly directing” employees, using “independent judgment” in the interest of the employer. In 2006, the Board issued three decisions defining these terms. Oakwood Healthcare, 348 NLRB No. 37 (2006); Croft Metals, Inc., 348 NLRB No. 38 (2006); Golden Crest Healthcare Center, 348 NLRB No. 39 (2006).

As we previously reported, the Department of Labor (“DOL”) issued a proposed rule expected to significantly increase the number of employees who are eligible for overtime. Most notably, the proposed rule seeks to increase the minimum salary threshold for exempt workers from the current level of $23,660 to $50,440.

In a December 16, 2015 interview with Bloomberg BNA, Secretary of Labor Thomas Perez stated he was “confident” that the final rule would be “out by the spring of next year.” This prediction falls ahead of other recent DOL estimations. In its latest regulatory agenda, released in November, the DOL’s Wage and Hour Division estimated that the final rule would be published in July of 2016. And while speaking on a recent panel at the American Bar Association’s Labor and Employment Law conference in Philadelphia, Solicitor of Labor M. Patricia Smith predicted that the new rule was not likely to appear before “late 2016.”

For years, there has been nearly universal agreement among the courts that managers do not engage in “protected activity” for retaliation claim purposes under most employment laws when they raise concerns about compliance issues in the regular course of performing their job duties. The traditional reasoning held that a manager whose job includes evaluating and/or reporting compliance issues, and who does so in furtherance of his or her job duties, should not become cloaked in anti-retaliation protection for merely doing the job he or she is employed to do. Instead, to engage in protected activity, the manager must step outside his or her role as a manager and become adversarial to the employer. The so-called “manager rule” has been consistently used by courts to reject retaliation claims under various employment statutes by human resources professionals and supervisors who report employment-related compliance issues related to other employees.

On November 24, 2015, the U.S. Court of Appeals for the Fourth Circuit refused to enforce an arbitration clause in an employee handbook on the grounds that the employee never agreed to be contractually bound by the handbook, and that a court can only compel arbitration where it is satisfied that the parties have agreed to arbitrate. This case, Lorenzo v. Prime Communications, L.P., should serve as a warning to employers to review their employee handbooks to be sure that provisions, like an arbitration clause, will be enforceable.

On December 7, 2015, the United States District Court for the Western District of Pennsylvania permitted a plaintiff to pursue discrimination claims alleging that she had been forced to retire as a result of her age and disability status—despite the fact that she had voluntarily agreed to retire as part of a union grievance settlement. This case, Melan v. Belle Vernon Area School District, serves as a warning to employers settling grievances under a collective bargaining agreement that implicate employees’ federally protected rights.

On November 3, 2015, Houston voters rejected Proposition 1, a broadly-worded human rights ordinance that would have made it illegal to discriminate on the basis of, among other things, gender identity. Opposition to that ordinance coalesced around the issue of restrooms, with many citizens expressing fear that the law would allow men to use women’s restrooms.

Retailer Big Lots Stores, Inc. is facing a putative class action in Philadelphia, wherein the plaintiff alleges that the company “systematically” violated the Fair Credit Reporting Act’s (“FCRA”) “standalone disclosure requirement” by making prospective employees sign a document used as a background check consent form that contained extraneous information. Among other things, the plaintiff alleges that Big Lots’ form violates the FCRA because it includes the following three categories of extraneous information: (1) an “implied liability waiver” (specifically, a statement that the applicant “fully understand[s] that all employment decisions are based on legitimate nondiscriminatory reasons”); (2) state-specific notices; and (3) information on how background information will be gathered and from which sources, statements pertaining to disputing any information, and the name and contact information of the consumer reporting agency.

This week, the EEOC announced that an Illinois-based packing company, Pactiv LLC, agreed to pay $1.7 million to resolve a charge alleging that the company discriminated against employees who needed time off from work for medical reasons.

According to the EEOC, the company maintained a nationwide policy that assessed “attendance points” to employees who needed time off for medical reasons. The company also allegedly failed to provide employees with intermittent and extended leave as a “reasonable accommodation” under the Americans with Disabilities Act.

In EEOC v. McLane Co., Inc., the Ninth Circuit recently held that the EEOC has broad subpoena powers to obtain nationwide private personnel information, including social security numbers (“SSNs”), in connection with its investigation of a sex discrimination charge.

Damiana Ochoa, a former employee of a McLane subsidiary in Arizona, filed a charge with the EEOC alleging sex discrimination (based on pregnancy), claiming that when she tried to return to work after taking maternity leave, the company informed her that she could not return to work until she passed a physical capability strength test. Ochoa alleged that the company requires all new employees and all employees returning from medical leave to take the test and acknowledged that she failed this test three times. Based on her failure to pass the test, the company terminated Ochoa’s employment.

Starting January 1, 2016, many employers in the District of Columbia will be required to provide commuter benefits to their employees. The Program applies to any District of Columbia employer with 20 or more employees. The term “employees” is defined broadly to include “any individual employed by an employer.” Covered employers must offer the commuter benefits to any employee regardless of the number of hours worked.