Category Archives: employment law

A Groundbreaking New Pay Equity Law

Beginning July 1, 2018, employers in Massachusetts will be prohibited from asking job candidates about their salary history before offering them a job or asking candidates’ former employers about their pay. The new law, the Pay Equity Act, is designed to reduce the pay disparities between men and women in the workplace.

Although other states (including California and Maryland) have also enacted recent legislation designed to reduce pay inequity, Massachusetts is the first state to ban employers from asking about candidates’ salary history. The law, signed earlier this week by Republican Gov. Charlie Baker, not only had bipartisan support in the state legislature but also from business groups such as the Greater Boston Chamber of Commerce.

Nationally, women still earn only 79 cents for every dollar earned by men, according to the U.S. Census Bureau. Because companies tend to use candidates’ pay history as a guideline in making offers, these inequities can follow candidates throughout their lifetimes, pay-equity advocates say.

The Massachusetts law, which amends and expands upon the state’s pre-existing pay equity law, also makes it illegal for employers to ban employees from discussing their pay with others and will require equal pay employees whose work is “of comparable character or work in comparable operations.” The law also bars employers from reducing the pay of any employee in order to come into compliance with the Pay Equity Act.

The law also increases the penalties for violations, according to an analysis by law firm Holland & Knight:

The law expands the remedies available to plaintiffs by extending the statute of limitations from one year to three years, and creating a continuing violation provision under which a new violation of the law occurs each time an employee is paid an unequal amount. This provision may permit employees to recover years of back pay discrepancies as well as liquidated damages. Fines are increased from $100 to $1,000 per violation. There is no requirement that an employee file first with the Massachusetts Commission Against Discrimination (MCAD). Lawsuits may be filed directly in court.

Notably, however, the law features a safe harbor provision for employers that have been accused of pay discrimination, writes attorney Victoria Fuller of White and Williams:

Employers may avoid liability for pay discrimination under the Act if they can show within the last three years and before the commencement of the action, they have completed a good-faith self-evaluation of their pay practices and can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender for comparable work in accordance with the evaluation.

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Eliminating the ‘Mad Men’ Mind-set

Less than two weeks from today — August 15 — federal contractors that work with the U.S. government will need to comply with modernized rules when it comes to sex discrimination in the workplace.

According to the Office of Federal Contract Compliance Program’s fact sheet, the revisions will bring the “guidelines from the ‘Mad Men’ era to the modern era,” as well as protect women and men from discrimination on the job.

The U.S. Department of Labor is publishing new sex discrimination regulations that update – for the first time in more than 40 years – the department’s interpretation of Executive Order 11246 to reflect the current state of the law and the reality of a modern and diverse workforce.

“Updated rules on workplace sex discrimination will mean clarity for federal contractors and subcontractors and equal opportunities for both men and women applying for jobs with, or already working for, these employers,” the department said in a release.

“We have made progress as a country in opening career opportunities for women that were, for decades, the province of men. Yet, there is more work that lies ahead to eradicate sex discrimination. This is why it is important that we bring these old guidelines from the ‘Mad Men’ era to the modern era, and align them with the realities of today’s workplaces and legal landscape,” said director of the Office of Federal Contract Compliance Programs Patricia A. Shiu.

The final rule updates OFCCP’s sex discrimination regulations to make them consistent with current law. It makes explicit the protections against compensation discrimination; sexually hostile work environments; discrimination based on pregnancy, childbirth or related medical conditions; and discrimination based on unlawful sex stereotypes, gender identity, and transgender status. The regulations also promote fair pay practices.

The rule implements Executive Order 11246, which prohibits companies with federal contracts and subcontracts from discriminating in employment on the basis of sex.

But before the new rules take place, says Brett Draper, a partner at Alston & Bird’s labor and employment group:

“[E]mployers should review current policies to determine what changes should be made to processes in order to keep up with new regulations and ensure compliance.”

The new rules add to the growing employment obligations imposed on federal contractors through various guidelines and regulations, adds Clare Draper, also a partner with the law firm.

“While the OFCCP seeks to minimize discrimination in the workplace through these expanded requirements, the burden on businesses to comply grows as well. Businesses should take immediate action to protect themselves from exposure that can arise through OFCCP compliance reviews, class actions and other legal actions.”

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A Glimpse Inside a Strange Corporate Culture

At Bridgewater Associates, the world’s largest hedge fund, employees are expected to familiarize themselves with “a little white book” written by the firm’s founder, Ray Dalio, that’s filled with more than 200 of his “principles” on life and business. Aside from the overtones of Chairman Mao and his little red book, a New York Times story that’s based on documents from a filing against Bridgewater by the National Labor Relations Board and interviews with former employees and people who’ve done work with the $154 billion company suggests there are other odd practices at the Westport, Conn.-based firm.

An employee who filed a complaint earlier this year with the Connecticut Commission on Human Rights and Opportunities likened the company in his complaint to a “cauldron of fear and intimidation,” the Times reports. Employees are under constant video surveillance, all meetings are recorded and security guards regularly patrol the building, all as part of an effort to “silence employees who do not fit the Bridgewater mold.”

Employees in some units of the company are required to lock up their personal cell phones when they arrive at work, the sources tell the Times.

Such secrecy and surveillance sounds, and probably is, uncomfortable, but then again hedge funds do tend to be secretive places with enormous amounts of money at stake. But at Bridgewater, the practice appears to have been taken a step further, with meetings between employees and managers not only routinely recorded but also shown to other employees. For example, new are shown videos of confrontations between executives and managers in an effort to “give new employees a taste of Bridgewater’s culture of openly challenging employees and putting them on the spot,” the Times reports. In one such video (which is no longer shown, according to the former employees), a confrontation between executives and a female manager ends up with the woman breaking down and crying. That certainly must have made for a memorable onboarding experience.

The employee who filed the initial complaint with the state commission was Christopher Tarui, an adviser to large institutional investors, who contended that he was sexually harassed by his male supervisor. In his complaint, Tarui said he did not report the conduct “out of fear it would become public because of the firm’s policy of videotaping confrontations between employees.” He ultimately complained to Bridgewater’s HR department, he said, because his supervisor gave him a bad performance rating despite the fact he’d been promoted and given a pay raise a few months earlier. Tarui said in his complaint that the firm promised to investigate, but management tried to persuade him to withdraw his allegations.

Tarui said all of his meetings, including his meeting with HR to complain about the alleged harassment and a subsequent meeting with top executives, were recorded and “widely shared” with managers at Bridgewater, the Times reports.

“The company’s culture ensures that I had no one I could trust to keep my experience confidential,” Tarui said in the complaint.

He filed the complaint in January. However, in March both Tarui and Bridgewater jointly asked to withdraw the complaint from consideration by the Connecticut human rights commission, which halted its investigation. The Times notes that Bridgewater employees (as at many companies) are required to settle disputes through binding arbitration.

However, the Times reports that in a related action, the NLRB later filed a separate complaint against Bridgewater accusing the company of “interfering with, restraining and coercing” Tarui and other employees from exercising their rights through confidentiality agreements that all employees are required to sign once they’re hired. The Times obtained the NLRB complaint and Tarui’s initial complaint through a Freedom of Information Act request. In a statement to the Times, Bridgewater said “we are confident our handling of this claim is consistent with our stated principles and the law.”

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EEOC Steps Up Data Collection on Discrimination

In case you missed this bit of news on your rush out the door to start your weekend last Friday:

In an effort to improve the information available about religious discrimination, the U.S. Equal Employment Opportunity Commission  announced it will implement changes in the collection of demographic data from individuals who file charges with the agency. These changes, the agency says, will allow it to collect more precise data about the religion of the individual alleging discrimination – allowing the EEOC, as well as the public, to recognize and respond to trends in charge data.

Additionally, the EEOC also announced the release of a one-page fact sheet designed to help young workers better understand their rights and responsibilities under the federal employment anti-discrimination laws prohibiting religious discrimination. The fact sheet is available at EEOC’s Youth@Work website, which presents information for teens and other young workers about employment discrimination.

Combating Religious Discrimination Today, a community engagement initiative coordinated by the White House and the U.S. Department of Justice, Civil Rights Division, brought together EEOC and other federal agencies to promote religious freedom, challenge religious discrimination, and enhance efforts to combat religion-based hate violence and crimes. The report from the effort is available at https://www.justice.gov/crt/file/877936/download.

Finally, EEOC plans to improve coordination with the Department of Labor’s Office of Federal Contract Compliance Programs, which enforces the prohibition of religious discrimination in employment by federal contractors and subcontractors. EEOC and OFCCP will work together to develop joint outreach and education efforts concerning discrimination based on religion.

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Don’t Get Blindsided by Family-Leave Laws

Ever wonder what a typical case of family-responsibility discrimination involving elder care might look like? Consider this 538047854 -- elder carescenario laid out in a piece by Tom Spiggle that posted on the Huffington Post in June:

“You have an elderly parent who suffers from Alzheimer’s. He requires continuous care. You have worked at the same job for five years with a strong, positive work history. To better care for your father, you move him out of assisted living into your house. A paid caregiver takes care of him during the day, but leaves at 6, which means that you have to be home then.

“Your performance at work remains strong, but you are no longer able to take part in the informal after-work get-together frequently arranged by your boss. After missing these for a month, your boss stops by your office to ask why. You tell him. He responds ‘How long will this go on?’ You tell him maybe years. After this, things change at work. For no apparent reason, your boss begins to criticize your work. At one point, HR puts you on a performance-improvement plan.

“Although you do everything they ask and more, nothing seems good enough. One day, your father falls at your house, breaking an arm. You have to leave work early to get to the hospital and miss work the next day. You call HR, letting them know what happened and put in for [Family and Medical Leave Act] leave to cover the absence. When you return, the axe falls; you get fired. The last communication you receive from your boss is an email: ‘I’m sorry it had to end like this. You will be missed. I hope that this gives you the time that you need with your father.’

“That would be discrimination under the Family Medical Leave Act and the Americans with Disabilities Act.

Granted, his piece speaks primarily to employees, but there are some nuggets worth reviewing for employers, such as a little-known fact (little known by me anyway) that some bosses seem fine and accommodating with the first child, “but their attitude is that one child should have been enough,” writes Spiggle, an employment lawyer and founder of the Spiggle Law Firm, based in Arlington, Va.

(Note to anyone reading this who considers this a familiar occurrence in his or her organization: Time for some manager training!)

Here’s another nugget: Employees claiming they were discriminated against or weren’t accommodated under family-leave law have much stronger cases if they ask for the law’s protection while they’re still working for you. Spiggle elaborates (remember, this is directed at employees, so interpret between the lines):

“Let me give you an example. Suppose that your boss says that you are a shoo-in for a promotion. Before things become official, you announce your pregnancy. Next thing you know, the promotion goes to a man who is your junior. When you confront your boss, she shrugs and says, ‘Them’s the breaks. Next round.’ Let’s suppose things only go downhill from there and you get fired, even though your performance remained unchanged.

“Here’s the thing: If you had complained about being skipped over for the promotion because you were pregnant before you were fired, you’d have a second claim of retaliation, which is easier to prove and gives you more leverage.

“There’s also a chance that, by reporting your concerns, you might get the problem fixed. Sometimes companies do the right thing when they learn that a rogue manager is violating the law. By reporting what happened, you give the company a chance to fix it.”

Probably the most telling piece of information he shares though — as does Mark McGraw in this HRE Daily post from May — is the fact that the number of family-responsibility-discrimination cases are going way up. McGraw and Spiggle both cite a report, Caregivers in the Workplace: Family Responsibilities Discrimination Litigation Update 2016, showing a 269-percent increase in the number of family-responsibility-discrimination cases between 2006 and 2015.

Many of our HREOnline.com news analyses have also mentioned this increase and the fact that far too many employers still don’t seem to get it when it comes to proactively turning that trend around.

Consider this a reminder, then, to get your anti-family-caregiver-discrimination house in order. And make sure you’re up on the nuances involved, including who has what rights and when — and precisely what this form of discrimination looks like.

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‘Professional Plaintiff’ Targets Firms via FCRA

Meet Cory Groshek. He’s an aspiring rapper who calls himself “Cory Crush.” He’s also a fitness guru who produces YouTube videos featuring himself as “Low Carb Cory.” He also writes scary stories under his own name and has worked as a customer-service representative.

Groshek also has found a pretty lucrative gig targeting companies that unwittingly violate the Fair Credit Reporting Act when they fail to properly disclose their intention to obtain his credit history as part of the hiring process. According to court documents, Groshek has used this tactic to obtain at least $230,000 in legal settlements from companies across the country.

As reported by the Milwaukee Journal Sentinel, Groshek applied to 562 jobs within an 18-month period of time and has admitted to threatening 40 companies with class-action lawsuits on behalf of all their recent hires for technical violations of the federal law unless they pay him a personal settlement to go away. In most cases, the companies decided to simply pay Groshek — about 20 paid him relatively small settlements of between $5,000 and $35,000.

Under the law, the plaintiffs involved in a FCRA class action could be entitled to up to $1,000 per employee should the case succeed. And, Groshek had good reason to believe he’d succeed: According to WebRecon, the number of FCRA class-action suits filed against companies last year doubled to 400 from the number filed in 2014. Companies such as Domino’s, Home Depot, Uber and the parent company of the Food Lion supermarket chain are among those that have agreed to pay millions of dollars each to settle FCRA class-action suits.

A small number of companies opted not to settle with Groshek, however, and Time Warner Cable was among them. He’d applied for, and was offered, an $11-an hour job with the cable giant. Instead of accepting the job, Groshek sent TWC a 2,300-word letter threatening to sue the company over FCRA violations on behalf of all recent hires unless they paid him a settlement of between $5 million to $10 million. TWC refused to settle and Groshek filed suit, which is how his activities came to light.

TWC’s lawyers have filed a motion to dismiss the lawsuit, arguing that Groshek (whom they referred to as a “professional plaintiff”) shouldn’t be allowed to sue because he intentionally initiated any alleged violations and that he violated state extortion laws. Groshek has also filed suit against three other companies that refused to settle; those cases are also pending.

Melissa Sorenson, executive director of the National Association of Professional Background Screeners, told the Journal Sentinel that previous settlements of FCRA claims have emboldened more people to file FCRA class-action lawsuits in recent years.

“It’s opened up an entire area of practice,” she told the paper.

Due to the many technical requirements of the FCRA statute, “there are lots of technical ways to violate the statute, and there are a lot of plaintiffs’ attorneys who recognize that,” Veena Iyer, a labor and employment attorney at Nilan Johnson Lewis told my colleague Mark McGraw for a story on FCRA lawsuits last year.

Many employers unintentionally commit FCRA violations in handling adverse-action notices, sources told McGraw. In particular, employers must ensure that applicants are given a meaningful opportunity to challenge any incorrect information that’s uncovered in a background report. Some of the most common FCRA claims are that employers’ background-check disclosure forms contained language not limited to the disclosure required by the statute, the employer failed to provide a pre-adverse action notice, and the employer did not wait the right amount of time before taking final adverse action against an individual.

“Do not assume that no one will challenge the information in the consumer report,” Doug Kauffman, a partner in Balch & Bingham’s labor and employment group, told McGraw. “Employers who become too mechanical in the application of providing the notice of a potential adverse action, wait seven days, and then automatically send the final adverse action, may effectively skip a key requirement under FCRA to provide a meaningful opportunity to the applicant to correct any misinformation.”

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Supreme Court Backs Workers

The U.S. Supreme Court ruled 7-1 yesterday  in the case of Green v. Brennan that the statute of limitations for Title VII constructive discharge claim begins on the date of the employee’s notice of resignation, not on the date of the last alleged discriminatory act by the employer.

According to Fisher Phillips’ Melody Rayl,  the court’s decision is a “bad one” for employers and will likely lead to an uptick in legal claims filed by disgruntled former workers.

“The question that confronted the Supreme Court is important because it goes directly to whether such constructive discharge claims are filed in a timely manner,” Rayl writes. “Prior to filing suit for discrimination under Title VII, employees must first file a claim with the Equal Employment Opportunity Commission (EEOC) within 180 days ‘after the alleged unlawful employment practice’ occurred, although the time is extended to as much as 300 days if the claim is also filed with a state or local agency authorized to investigate such claims.”

Further, Rayl writes, the Supreme Court’s decision now opens the door for former employees to file constructive discharge claims long after the alleged discriminatory conduct occurred by simply delaying their resignation indefinitely.

Now may be a good time for some legal background, courtesy of Rayl:

What Is A “Constructive Discharge?”
In a claim for constructive discharge, a former employee accuses the employer of engaging in discriminatory or retaliatory conduct that makes the working conditions so intolerable that any reasonable person in the shoes of that employee would feel they have no choice but to quit. In other words, a constructive discharge means a worker is forced off the job by the employer.

The concept of constructive discharge is a sort of legal fiction, allowing workers who claim to have been subjected to particularly egregious workplace treatment, but who have not been fired, to nonetheless resign from the offensive work environment and preserve their right to seek damages in the form of lost wages and benefits.

While the ruling is plainly a win for employees on this front, Rayl notes there was one area of the ruling in which employers can take solace:

In the smallest of victories for employers, the Court did acknowledge the limitations period should begin to run when the employee gives notice of resignation rather than on the date the resignation becomes effective.

With respect to Green, the Court found the facts were not sufficiently developed to pinpoint precisely when his notice of resignation occurred. Thus, the Court remanded the case back to the Tenth Circuit to determine, as a factual matter, whether he gave notice of his resignation on the date he signed the settlement agreement or nearly two months later when he submitted his retirement paperwork.

All things considered, that’s a small victory for employers indeed.

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Supreme Court Deals a Blow to the EEOC

The upshot of today’s U.S. Supreme Court unanimous ruling in favor of a trucking company in CRST Van Expedited Inc. v. EEOC is that a company can still be considered the prevailing party in a court case — and thus be eligible for reimbursement of its legal fees by the other party — even if it doesn’t win a favorable judgment on the merits of its argument.

CRST, a trucking company, had been awarded a record $4.7 million in legal fees against the Equal Employment Opportunity Commission by a trial court after a class action brought against the company by the EEOC on behalf of 154 female drivers was found to have been without merit. The EEOC’s suit had alleged that CRST allowed “severe and pervasive” sexual harassment against female drivers in its driver-training program. The case was later dismissed by the court because it found that the EEOC had failed to show a pattern or practice of discrimination, nor did it fully investigate the claims, find reasonable cause and attempt reconciliation prior to filing suit.

However, the 8th Circuit Court of Appeals vacated the $4.7 million award because the claims were dismissed without ruling on their merit and thus CRST was ineligible per Title VII of the 1964 Civil Rights Act, which grants attorney fee awards to “prevailing” defendants who can show the EEOC’s position was “unreasonable or frivolous.”

Writing for the court, Justice Anthony Kennedy said there was no indication that Congress had intended “that defendants should be eligible to recover attorney’s fees only when courts dispose of claims on their merits.”

“It would make little sense if Congress’ policy of ‘sparing defendants from the cost of frivolous litigation’ depended on the distinction between merits-based and non-merits-based frivolity.”

The ruling sends the case back to the lower court for further review.

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The Cost of Not Accommodating Caregivers

Some employers “still aren’t getting it when it comes to discriminating against employees with family responsibilities.”

So says Joan C. Williams, founding director of the Center for WorkLife Law at the University of California, Hastings College of the Law, in a recent statement highlighting findings from a new UC Hastings study.

And, judging by some of the statistics found in said study, it’s hard to argue that she has a point.

The report, Caregivers in the Workplace: Family Responsibilities Discrimination Litigation Update 2016, analyzed 4,400 family responsibilities discrimination cases that were filed in the United States between the years 2006 and 2015.  Report author Cynthia Thomas Calver looked at employees’ claims alleging discrimination based on their status as a pregnant woman, mother, father, or a caregiver for a sick or disabled family member or an aging or ill parent, and found a 269 percent increase in the number of such cases filed in that 10-year span, compared to the prior decade.

While you’re digesting that number, chew on these facts and figures to emerge from the UC Hastings report:

  • Claims for FRD have been filed in every U.S. state.
  • Cases involving eldercare have increased 650 percent in the last 10 years.
  • Pregnancy accommodation cases have gone up by 315 percent.
  • Though the number of claims remains small, suits in which an employer is alleged to have denied accommodations or discriminated against an employee because she was breastfeeding or needed to express milk during the workday has risen by 800 percent.
  • Male employees have brought 55 percent of spousal care cases, 39 percent of eldercare cases, 38 percent of FMLA cases and 28 percent of childcare cases.
  • A clear majority of employees are succeeding with family responsibilities discrimination suits, with workers winning 67 percent of the FRD claims that went to trial from ’06 to ’15.

Naturally, these claims are hitting American employers pretty hard in the wallet. FRD litigation cost U.S. companies $477 million over the past decade (compared to roughly $197 million from 1996 to 2005), according to the WorkLife Law report, which suggests that the actual amount is “likely to be significantly higher, as many settlements are confidential.” These figures “also fail to capture the ripple effects of discrimination, including employee attrition and related replacement costs, damage to the company’s public reputation and reductions in the morale and productivity of all employees.”

The report also lays out some steps for preventing family responsibilities discrimination within the organization, such as providing supervisor training, adopting anti-discrimination policies that include family responsibilities, activating HR-run oversight programs and ensuring that the company’s procedures for responding to employee complaints address FRD.

In the aforementioned statement, Calvert, a senior advisor to the Center for WorkLife Law, stresses the importance of adapting to America’s evolving workforce and families, and the cost of failing to do so.

“Until employers adjust to the realities of families with all adults in the paid workforce and a significant growth in the number of older Americans who need assistance from their adult working children, it’s unlikely we’ll see a decrease in the number of cases filed.”

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New Trade Secrets Law: The HR Angle

It’s incredibly rare these days for a proposed law to receive near-unanimous backing in the U.S. House and Senate but, by George, our nation’s politicians managed to pull off this miraculous feat recently, which culminated with President Obama affixing his signature yesterday to the Defend Trade Secrets Act.

The new law puts trade secrets on par with patents, copyrights and trademarks, which are already protected under federal law. The Defend Trade Secrets Act provides a “uniform set of rules for trade secret protection” throughout the United States (although it does not replace trade secret laws passed by individual states). The upshot is that companies whose trade secrets were violated in multiple states can now file suit in a federal court rather than trying to determine which state may (or may not) provide the best legal remedy.

Trade secret claims have long been a key component of employee non-compete agreement lawsuits, writes Chris Marquardt, a partner at Alston & Bird’s labor and employment law group. For this reason, the new federal law “not only gives employers another tool to protect their confidential business information, but will also likely shift many routine employment-agreement lawsuits into the federal court system,” he writes.

Employee non-compete agreements can vary widely from state to state and the new law is written in such a way as to recognize that “the statute should not override state laws” on such agreements, Marquardt writes. However, he adds, “only time will tell how broadly federal courts interpret the new law and how willing they are to use it to prevent employees from accepting new jobs in competition with a former employer.”

Brett Coburn, also a partner with Alston & Bird, writes that one of the less-frequently discussed aspects of the new law is one that will impact nearly all employers: “The law grants both criminal and civil immunity under both federal and state trade secrets laws to individuals who disclose a company’s trade secrets to the government” if the person has reason to suspect that a legal violation has occurred. It also requires employers to notify employees of this immunity “in any agreements that govern the use of trade secrets or other confidential information.”

To ensure compliance, Coburn writes, HR leaders and legal counsel will need to reexamine their company’s restrictive covenant and nondisclosure agreements, as well as policies regarding the protection of confidential information and employee whistleblower activities.

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