Category Archives: employment law

Stopping ‘Sex Stereotyping’

After the Department of Labor announced a Final Rule prohibiting discrimination based on sexual orientation and gender identity by federal contractors and subcontractors, employers are now being urged to revisit their policies to ensure they are in compliance with the new rule.

Connie Bertram, head of Proskauer’s Washington-based labor and employment law practice and co-head of Proskauer’s government regulatory compliance and relations group, says the executive order and implementing rules clarify the protections that the Office of Federal Contract Compliance Programs had been extending, in part, “under a ‘sex stereotyping’ theory.”

“OFCCP’s revised Federal Contract Compliance Manual, which was released last year, instructs compliance officers conducting audits to examine whether contractors policies make prohibited distinctions in the conditions of employment based on sex-based stereotypes,” she says. “OFCCP has issued several notices of violation recently based on this theory.”

The rule implements Executive Order 13672, which was signed by President Obama on July 21, and is the first federal action to specifically address LGBT workplace equality in the private sector. It will become effective 120 days after its publication in the Federal Register and will apply to federal contracts entered into or modified on or after that date. More information is available at http://www.dol.gov/ofccp/LGBT/.

“Americans believe in fairness and opportunity. No one should live in fear of being fired or passed over or discriminated against at work simply because of who they are or who they love,” said U.S. Secretary of Labor Thomas E. Perez. “Laws prohibiting workplace discrimination on the bases of sexual orientation and gender identity are long overdue, and we’re taking a big step forward today to fix that.”

While 18 states, the District of Columbia and many businesses, large and small, already offer workplace protections to lesbian, gay, bisexual and transgender employees, but this rule first federal action to ensure LGBT workplace equality in the private sector, according to the press release announcing the rule.

“This rule will extend protections to millions of workers who are employed by or seek jobs with federal contractors and subcontractors, ensuring that sexual orientation and gender identity are never used as justification for workplace discrimination by those that profit from taxpayer dollars,” says Patricia A. Shiu, director of the department’s Office of Federal Contract Compliance Programs, which will enforce the new requirements.

Bertram says it will be critical for contractors to update their internal and external policies, third-party notifications and affirmative action plans to include these new protected categories.

And, as with any protected category, she says, “it is critical to train managers concerning their non-discrimination obligations and to monitor compliance with the contractor’s anti-discrimination policies.

“It is not enough to ‘talk the talk,’ ” Bertram says. “[Y]ou have to ‘walk the walk’ to ensure compliance and avoid claims.”

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EEOC Adds Pregnancy Cases to Controversy

Just an update for those who are following the recent pregnancy-discrimination guidelines issued by the Equal Employment 490128943 -- pregnanct employeeOpportunity Commission — despite the controversy some think the agency created amidst the pending U.S. Supreme Court consideration of Young v. United Parcel Inc.:  The EEOC isn’t waiting on the high court before filing or settling pregnancy-discrimination lawsuits either.

According to the EEOC’s website, press releases were issued on nine lawsuits filed and two settlements since the agency issued its updated Enforcement Guidance on Pregnancy Discrimination and Related Issues on July 14.

Here, for your information — should you choose to venture into this much reading — are all the cases the EEOC has filed and listed on its website against employers accused of pregnancy discrimination since the guidance was issued, from most recent to oldest:

All the suits in question accuse the businesses of violating Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act.

“I am surprised that this issue continues to be a recurring theme in the workplace in this day and age,” says Robert Canino, regional attorney for the EEOC’s Dallas District Office, which filed the Pharmacy Solutions lawsuit. “We hope that by continuing to increase public awareness through our law-enforcement efforts, we will see more of an awakening by some companies about the right of a woman to hold on to her job and to earn a living when she is expecting and during her maternity leave.”

But critics of the EEOC’s assertiveness and timing in issuing its guidance — which was the focus of this HREOnline news analysis I wrote back in July — say adding cases to the pregnancy-discrimination docket only clutters an already-cluttered legal landscape.

“With its new pregnancy enforcement guidance still in its first trimester, the EEOC has set about vigorously pursuing companies that do not comply,” thereby filling the courts with more to work on as the Supreme Court hearing has yet to be scheduled,  says Philip Voluck, managing partner in the Blue Bell, Pa., office of Kaufman Dolowich & Voluck.

“Since the EEOC first gave birth [pun intended, no doubt] to the guidance in July, it has inserted itself as plaintiff in at least nine federal-court lawsuits against employers [allegedly] discriminating against pregnant employees,” he says. “Each decision is accompanied by rather strong remarks from the [agency], which state quite clearly its intent to induce an ‘awakening’ by employers and erase ‘archaic prejudices’ still held by companies toward pregnant women.”

The issue up for consideration in Young v. UPS is whether an employer — in this case, UPS —  is required under the PDA to offer light-duty work to pregnant employees with restrictions, even if light-duty work is available for certain categories of nonpregnant employees.

“This is precisely the issue the Supreme Court has yet to take up,” Voluck told me back in July, “and that decision won’t come out until next year some time. “I honestly have no idea why this was issued at this time,” he said then. “A power move? I have no idea.

“It’s like the Perfect Storm, these two entities colliding,” he said, referring to the 2000 movie, “though my crystal ball tells me there’s no doubt the Supreme Court will expand the rights of pregnant women.”

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Non-Competes for Sandwich-Makers?

Fast-food chain Jimmy John’s Sandwich Shops bills itself as a place that makes good sandwiches “freaky fast.” Perhaps the formula behind “freaky fast” is so vital and unique that it’s worthy of being shielded behind the walls of Fort Knox, Ky.? That seems to be the gist behind an interesting issue revealed via a class-action lawsuit filed against Jimmy John’s and its franchisees: They apparently require employees to sign a non-compete agreement stipulating that, should they leave (or be fired from) Jimmy John’s employ, they will not seek employment for at least two years with any other establishment that derives at least 10 percent of its revenue from selling sandwiches that’s within a three-mile radius of any Jimmy John’s location.

The lawsuit in question is Brunner v. Jimmy John’s Enterprises Inc., and the details were first reported by the Huffington Post. The plaintiffs accuse the sandwich-chain’s franchisees and its corporate parent of violations under the Fair Labor Standards Act. In the lawsuit, the plaintiffs assert that the non-compete clause “effectively restricts an employee ‘from working in an area that is over 6,000 miles large, at innumerable types of business … in any capacity for a period of two years in 44 states and the District of Columbia,” according to the Workplace Prof blog, which analyzes the details of the non-compete clause.

Is a non-compete clause for fast-food workers enforceable? Unlikely, according to two attorneys interviewed by Politico. Rochelle Spandorf, a business-franchise attorney, said non-competes for low-level workers are quite rare and “very hard to enforce in court.” “I don’t think it’s a smart policy for any employer to apply a non-compete to lower-level employees who are taking directions from supervisors and who are not given independent access to really classified information,” she said.

However, Jimmy John’s and its franchisees — and indeed, many other organizations that require large numbers of their employees to sign these agreements — may have an ulterior motive that’s linked to the traditionally high turnover rates in their field, said Eric Fink, a professor at Elon University Law School.

“It’s not uncommon for employees to extend non-competes that are far broader than the law allows,” he told Politico. “Employees may be scared by this.”

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Part-Timers’ Woes Spur New Legislation

Members of Congress, states, municipalities and unions are reacting forcefully to complaints from many part-time workers that their work schedules have become too unpredictable and erratic to allow for time to take care of other important matters, such as child care or attending college classes, according to a front-page story in yesterday’s New York Times by reporter Steven Greenhouse.

As Greenhouse documents in his story, employers that make heavy use of part-time workers — such as retail and restaurant chains — are increasingly relying on “on-call” scheduling of their part-timers, with the aim of ensuring that hours worked are more closely tailored to peak customer traffic, which is not always predictable. This can result, as the story documents, in situations like that experienced by Mary Coleman, an employee of the Popeyes fast-food chain in Milwaukee, who — after taking an hour long bus commute — arrived at her job one day only to be told by her boss to go home without clocking in, even though she was scheduled to work that day.

U.S. Rep. George Miller (D.-Calif.) plans to introduce legislation this summer that would require organizations to pay their employees for an extra hour if they were notified they had to work with less than 24 hours’ notice. He also wants to guarantee that workers receive four hours’ worth of pay if they’re sent home after only a few hours on shift because of low customer traffic at the establishment at which they’re employed.

Here’s what Miller (who serves on the House Committee on Education and the Workforce) told Greenhouse:

It’s becoming more and more common to put employees in a very uncertain and tenuous position with respect to their schedules, and that ricochets if workers have families or other commitments. The employer community always says it abhors uncertainty and unpredictability, but they are creating an employment situation that has huge uncertainty and unpredictability for millions of Americans.”

The story notes that Vermont and San Francisco have laws that give workers the right to request flexible or predictable schedules to make it easier to take care of children or aging parents and that New York City is considering similar legislation. Unions such as the United Food and Commercial Workers and other organizations are promoting the “Fair Workweek Initiative,” which is encouraging the passage of legislation in cities across the nation that would discourage employers from using “just-in-time” scheduling.

Don’t expect this issue to disappear anytime soon. As Susan J. Lambert, a University of Chicago professor, told Greenhouse: “The issue of scheduling is going to be the next big effort on improving labor standards. To reduce unpredictability is important to keep women engaged in the labor force.”

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Woman Sues Ex-Employer Over Commute

Just when you think that every possible employment-based lawsuit that could be filed has been filed…

According to a piece in Cherry Hill, N.J.’s Courier-Post, a woman has filed suit against her former employer that refused to change her work schedule to avoid rush-hour traffic. The woman also contends in her suit the company fired her in May 2013 in retaliation for her efforts to address alleged workplace bias.

From the Courier Post:

In her lawsuit, [Andrea] DeGerolamo says she joined [Lancaster, Pa.-based] Fulton Financial as a marketing consultant in 2007 and took a medical leave in August 2012.

Around that time, DeGerolamo “began to feel great anxiety and depression, which was especially aggravated by crowded roadways experienced during the heavy traffic of rush hour,” the suit says.

“Her medical condition qualified her as being disabled,” it asserts.

When DeGerolamo returned from leave in November 2012, she requested a work shift “by which she could come in after morning rush hour and leave prior to evening rush hour.”

The lawsuit asserts that change, requested “at the mandate” of DeGerolamo’s doctor, would have been a reasonable accommodation for the woman’s disability.

According to the lawsuit, Fulton Financial changed DeGerolamo’s schedule for a short period, then made no effort to accommodate her. The suit also says DeGerolamo returned from leave to find her duties were downgraded improperly to “clerical-type work.”

DeGerolamo objected through her firm’s ethics review board in May 2013 but never heard back about the complaint; instead, she was terminated on May 17, the lawsuit says.

The story also notes the case has been moved from Superior Court (where it was originally filed) to federal court in Camden at Fulton Financial’s request, which should give the company better hope for a quick dismissal.

But, if allowed to proceed, the suit could eventually have far-reaching ramifications for employers everywhere, and that’s certainly not good for any HR leader’s anxiety levels.

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Ruling on ‘Trial-by-Formula’ Still Reverberating

Employment lawyers continue weighing in on the California Supreme Court’s recent ruling in Duran v. U.S. Bank National Association. Granted, this is California, but attorneys courthouse 158540094say the case will still be looked at and referred to beyond California for years to come in terms of whether, and how, plaintiffs may use statistical sampling — so-called “trial by formula” — to prove liability.

Duran was a wage-and-hour class-action brought under the California Labor Code and unfair competition law on behalf of 260 “business banking officers” who claimed they were misclassified and denied overtime compensation. The question was whether they worked more than 50 percent of their time outside the branch.  If they did, they weren’t entitled to overtime or meal/rest breaks; if not, they were.

In Duran, the trial court allowed plaintiffs to prove liability for the entire class based on a sample of 20 plaintiffs “randomly selected” to testify at trial. From that sample, the court extrapolated that all 260 class members had been denied overtime, even though 78 of them — fully 25 percent of the class — swore under oath that they were not misclassified.

The trial court ignored that evidence in favor of statistics, and entered judgment against the employer for nearly $15 million (including $6 million on behalf of the workers who denied they were misclassified). The Court of Appeal reversed, concluding that the trial court’s flawed trial plan amounted to an improper “trial by formula,” which deprived the employer of its due-process rights because the employer could not raise individual challenges to absent class members’ claims. On this basis, the Court of Appeal also ordered the class decertified. Plaintiffs appealed, and the California Supreme Court rendered its decision upholding the appeals-court reversal.

This alert by William L Stern, a partner with Morrison & Foerster in San Francisco, lays the facts out nicely. In his opening, Stern writes:

‘There are three kinds of lies: lies, damned lies and statistics.’ The California Supreme Court could have been channeling Mark Twain when it rejected, emphatically, the unbridled use of statistical sampling to prove liability in a class-action wage/hour case. In a unanimous decision, California’s high court … gave the heave-ho to the kind of ‘trial by formula’ that has become a feature of modern-day wage/hour litigation. At the same time, the court restored some sanity to class-action litigation generally.”

Of course, on a national precedent-setting scale, Duran only has to be followed by California courts and by federal courts (in California and elsewhere) considering class actions brought for violations of California law. Nevertheless, Stern told me privately, it is persuasive in that “two of its holdings simply reaffirm what the U.S. Supreme Court already said in Wal-Mart v. Dukes — that any trial plan has to accommodate a defendant’s affirmative defenses, and that convenience can’t be exalted over a defendant’s due-process rights.”

On the face of it, California or no, the decision is pretty far-reaching, attorneys say. This more recent post by Brendan G. Dolan and Heather M. Sager, attorneys with Chicago-based Vedder Price, says that, “while many observers anticipated a narrowly written decision limited to the particular facts of the Duran case, the California Supreme Court endorsed a significantly increased level of academic rigor on statistical evidence and survey and sampling methodologies relied upon by courts and plaintiffs’ lawyers to support class certification in wage-and-hour litigation.” This obviously bodes well for all employers.

As for the court’s reasoning, this alert on the California Employment Law Blog by Los Angeles attorney and author Steve Pearl quotes the ruling’s introduction. I’ll just leave it with you here. It gives a pretty clear sense of the case and the decision:

We encounter here an exceedingly rare beast: a wage-and-hour class-action that proceeded through trial to verdict. Loan officers for U.S. Bank National Association sued for unpaid overtime, claiming they had been misclassified as exempt employees under the outside-salesperson exemption. this exemption applies to employees who spend more than 50 percent of the workday engaged in sales activities outside the office. After certifying a class of 260 plaintiffs, the trial court devised a plan to determine the extent of USB’s liability to all class members by extrapolating from a random sample. In the first phase of trial, the court heard testimony about the work habits of 21 plaintiffs. USB was not permitted to introduce evidence about the work habits of any plaintiff outside this sample. Nevertheless, based on testimony from the small sample group, the trial court found that the entire class had been misclassified. After the second phase of trial, which focused on testimony from statisticians, the court extrapolated the average amount of overtime reported by the sample group to the class as a whole, resulting in a verdict of approximately $15 million and an average recovery of over $57,000 per person. As even the plaintiffs recognize, this result cannot stand. The judgment must be reversed because the trial court’s flawed implementation of sampling prevented USB from showing that some class members were exempt and entitled to no recovery. A trial plan that relies on statistical sampling must be developed with expert input and must afford the defendant an opportunity to impeach the model or otherwise show its liability is reduced. Statistical sampling may provide an appropriate means of proving liability and damages in some wage-and-hour class-actions. However … the trial court’s particular approach to sampling here was profoundly flawed.”

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Layoffs and Litigation

Gavel and JudgeSome employees may breathe a sigh of relief after surviving not one but two reductions in force. Roger Maxwell filed a lawsuit.

Maxwell, a disabled veteran and former manager of customer service with the U.S. Postal Service in Bloomfield Hills, Mich., filed an internal EEO charge in 2004 (for reasons not specified in Roger L. Maxwell v. Postmaster General of the United States).

Sometime after the EEO proceedings concluded, Frances Chiodini—an HR manager representing the Postal Service during the proceedings—adopted “an undisguised attitude of hostility toward [Maxwell] and undertook, over time, consistent adverse actions against Plaintiff in his employment,” according to the suit.

Among the allegations:

• Chiodini took adverse actions against Maxwell because he is male, and wrongfully rejected him from consideration for a promotion, which was subsequently awarded to a less-qualified female applicant.

• Maxwell was not included in a 2009 reduction in force, depriving him of a promotion and pay raise.

• His position was not upgraded from EAS-20 to grade EAS-21, while a “similarly situated” female was upgraded.

• Maxwell was not included in a 2010 downsizing, which again deprived him of a promotion and pay raise.

That’s right. Maxwell claims that emerging with his job after two rounds of layoffs adversely impacted his employment with the Postal Service.

How so?

As a disabled vet, Maxwell maintains he would have had certain rights in the event his position was included in a reduction in force, in the form of either an automatic upgrade to a new role or the permission to vie for a new position at a higher level. Instead, he was involuntarily transferred to a different facility, according to the complaint.

Maxwell subsequently sued, claiming retaliation and gender bias. While the Postal Service argued the transfer didn’t qualify as an adverse employment action, a trial court recently found that the transfer—which occurred in lieu of a promotion—could potentially constitute an adverse action.

The ruling is “fairly fact-specific and at a very early stage of litigation,” but the Maxwell case still holds lessons for employers and HR, says Eric Stevens, a Nashville, Tenn.-based attorney with Littler Mendelson.

“The transfer, in and of itself, appeared to be a neutral event,” says Stevens. “There was no change in compensation, duties, title or working conditions. Typically, such a move would not be considered a materially adverse change.”

However, he notes, the appeals court considered the potential effect of the transfer—disqualifying the plaintiff from an alleged automatic upgrade and pay increase—and found that effect sufficiently material to allow Maxwell to continue with the portion of his lawsuit relating to the transfer.

“There are occasions in which an employee may have been subject to inappropriate, possibly even unlawful treatment in the past,” continues Stevens. “Some employers, when they become aware of such circumstances, feel bound to avoid managing the employee as others would be managed because of that past improper conduct.”

This opinion demonstrates that, in the absence of a “longstanding and demonstrable policy of discrimination, an employer will not necessarily be liable for past, discrete violations,” he says.

“While no such violations should be countenanced by the employer, if one does occur, the employer should deal with it appropriately, and then continue to treat the aggrieved employee the same as any other employee.”

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A Valuable Legal Lesson

courtroomThis recent Michigan court ruling may seem like a bit of a puzzler, but it could also be instructive for employers.

The United States Court of Appeals for the Sixth Circuit is sending the case of Deleon v. Kalamazoo County Road Commission to trial, ruling the plaintiff can proceed with suing the county for an adverse employment action motivated by discrimination—after being granted the very job transfer he had previously sought.

According to the suit:

In 2008, Kalamazoo County employee Robert Deleon applied for an internal transfer to the position of equipment and facilities superintendent. According to the job description, the role entailed working primarily in an office as well as a “garage where there is exposure to loud noises and diesel fumes.”

Initially passed over for the job, Deleon was involuntarily transferred into the position when it became available again in 2009. He subsequently sued the county, claiming the transfer was a retaliatory adverse employment action, in addition to alleging the working conditions in his new job led to him developing bronchitis as well as a cough and sinus headaches due to the aforementioned diesel fumes.

According to Kalamazoo County, Deleon never withdrew his initial request for the transfer, and did not complain at the time he received it.

In its ruling, however, the appeals court found Deleon had provided sufficient evidence that he was exposed to toxic and hazardous diesel fumes on a daily basis, and that his work environment was “objectively intolerable.” The court also noted that Deleon applied for the position under the impression the move would include a $10,000 raise; a raise he never received, advancing the argument that his transfer was involuntary.

The case is “a classic example” of the challenges employers face in defending against discrimination claims, says Joel S. Barras, a Philadelphia-based partner in Reed Smith’s labor and employment practice.

Employers often spend tens of thousands of dollars in these cases, “which typically involve disproving a negative,” he says. “[It’s] no wonder there’s a cottage industry of plaintiffs’ lawyers who indiscriminately file claims against ‘deep-pocket’ employers, which only serve to detract focus from the cases of actual discrimination and retaliation.”

Nevertheless, this particular decision holds a valuable lesson for employers and HR, says Barras.

“The takeaway … is to always go the extra step, even if the outcome seems obvious.

“Common sense alone may not guarantee summary judgment,” he continues, advising employers in similar situations to ask the applicant if he or she still wants the job, clearly describe the working conditions, and make sure the candidate truly understands what the job entails.

There is a direct correlation between the amount of time and effort HR professionals expend on the front [end] of employment decisions and the chances for getting discrimination and retaliation suits dismissed quickly and relatively inexpensively.”

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Broadening Definitions Under the ADA

In case you missed it, employers were recently given further insight as to what qualifies these days as a disability under the ADA Amendments Act of 2008.

On Jan. 23, the Fourth Circuit Court of Appeals ruled that, as long as a temporary impairment is sufficiently severe, it would qualify as a disability, reversing a district court decision regarding a wrongful-discharge claim.

200249331-001The case involved Carl Summers, who, as a senior analyst for Altarum Institute, fell and injured himself while exiting a commuter train. Summers, who underwent leg surgery and was told by doctors he might not be able to walk normally for at least seven months, was provided with short-term-disability benefits. He suggested that he start working part-time from home and gradually return to full-time work, but representatives from Altarum failed to follow up on Summer’s return-to-work plan or suggest any alternative reasonable accommodation. The firm eventually terminated him, installing another analyst in his position.

In Sept. 2012, Summers filed a complaint under the ADA, alleging he was wrongfully terminated because of his disability.

In its ruling, the Fourth Circuit said “an impairment is not categorically excluded from being a disability simply because it is temporary” and that Summer’s alleged impairment “falls under the amended Act’s expanded definition of disability.”

I asked Paul Mollica, of council with Outten & Golden LLP in Chicago, for his thoughts on what the decision—which many believe could be the first ruling of its kind under the ADAAA—means for employers.

Going forward, he told me, employers are going to need to accept that the “lessons learned up to this point aren’t true anymore” and “retool” accordingly.

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Is Anti-Unemployment Discrimination Going Global?

I received an interesting email the other day suggesting the European Union may be in the early stages of adopting legislation to classify individual unemployment as an equal-employment-opportunity issue.

134518530 -- unemployedActually, according to the source, Brussels, Belgium-based Ius Laboris, the suggestion is more like a tiny whisper, but it is safe to say the EU’s general directorate has expressed interest in passing pan-European legislation to classify individual unemployment as an EEO matter.

“In essence,” the email says, “this would mean ‘unemployment’ was a protected category on a par with race or religion, prohibiting employers and employment agencies from asking employees about their current employment status in a job interview, and creating the threat of legal action if a business was demonstrated to have discriminated against an applicant on the basis of unemployment.”

Not sure where this is going and/or in what time frame, IL’s spokesperson tells me. And though it comes on the heels of similar moves across the United States, it’s hard to tell how far the anti-unemployment-discrimination momentum will take us on this side of the pond either.

At the time I wrote this news piece on New York’s passage of such legislation, this is where things stood here: “New York City is only the most recent jurisdiction where legislative action has been taken to protect the unemployed. States that have already passed laws against such discrimination include Oregon (passed in March 2012) and New Jersey (2011). The District of Columbia passed a similar bill in May 2012. And as of May 2013, five states — New York, Pennsylvania, Massachusetts, Iowa and Minnesota — have introduced bills during the 2013 legislative session, with another 17 states considering doing so.” Sources tell me this is still the case.

Wondering how this trend will be impacted if the unemployment figures continue to suggest steady job growth, as noted in this Associated Press piece released Wednesday.

Whatever the case, I’m compelled to share with you HREOnlineTalent Management Columnist Peter Cappelli’s column from several years ago, advising against such discrimination because it simply doesn’t make business sense.

 

 

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