Category Archives: employment law

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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Employee Handbooks Under Scrutiny

OK, pop quiz: What’s the difference between these two employee-handbook policies?

  1. “Be respectful to the company, other employees, customers, partners, and competitors.”
  2. “Each employee is expected to work in a cooperative manner with management/supervision, co-workers, customers and vendors.”

One, according to the National Labor Relations Board, is legal. The other is not. (I’ll tell you which was which in a minute.)

Don’t fret if you have trouble seeing the difference. That’s why we have lawyers. And that’s why there’s plenty of work for them as the ThinkstockPhotos-517631808NLRB cracks down on employee-handbook language — including provisions that once were standard — that it says is too broad.

In a series of rulings the agency has told companies to revise policies that infringe on rights of workers — unionized or not — to talk to each other about the company in person or through social media.

“Employers are really waking up to this,” says Lauri F. Rasnick, a member of the firm at Epstein Becker Green of New York. “For a long time, nonunionized employers didn’t give a lot of thought to NLRB decisions.”

The U.S. Chamber of Commerce contends the effort is part of an anti-employer crusade. In a highly critical December report titled “Theater of the Absurd: The NLRB Takes on the Employee Handbook,” the trade group argues that the agency “has undertaken a campaign to outlaw heretofore uncontroversial rules found in employee handbooks and in employers’ social media policies.”

Worse, according to the chamber: the NLRB’s guidance to employers often is contradictory, creating “a morass of confusion that leaves employers wondering just how they are to exercise effective control over their workplaces.”

Rasnick agrees. “I do think that’s part of the challenge for employers,” she says, noting that NLRB decisions aren’t always consistent. And they are continuing to evolve, with confidentiality provisions attracting more scrutiny in recent rulings, she says.

The latest headline came this month after an administrative law judge ruled that Quicken Loans and five related companies had illegal rules in its employee handbook, which it calls “The Big Book.” (Despite the Quicken name, the companies are not owned by software company Intuit; they’re led by Dan Gilbert, majority owner of the Cleveland Cavaliers.)

To the untutored eye, many of the rules seem pretty standard stuff. An example: “Think before you Tweet. Or post, comment or pin. What you share can live forever. If it doesn’t belong on the front page of The New York Times, don’t put it online.”

The problem with this rule, wrote judge David I. Goldman in his April 7 ruling:  Although the policy doesn’t tell workers they can’t bad-mouth the company online, “an employee considering this suggestion would reasonably feel chilled by this rule from expressing negative (but protected) information” about the employer.

The companies are appealing the decision to the full board. But there’s little indication that the NLRB is letting up on the effort.

Back to our pop quiz. Of those two employee-handbook policies, the first (“be respectful”) is illegal, according to the NLRB’s general counsel. The second (“work in a cooperative manner”) is OK.

The problem is in telling workers they must be “respectful” to management, as well as customers and others, wrote Richard F. Griffin Jr. in a memo last year. An employee might reasonably see that as a ban on complaining about the company, he wrote.

The second example is legal, Griffin wrote. “Employees would reasonably understand that it is stating the employer’s legitimate expectation that employees work together in an atmosphere of civility.”

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Reflecting on Uber’s Classification Settlement

Worker classification can be a major headache for companies of all shapes and sizes, but for employers embracing the shared-economy business model, it can be one of migraine proportions.

Uber_ride_Bogota_(10277864666)No one knows this better than Uber, which has been facing an onslaught of lawsuits from drivers seeking employee status. Were the drivers to win that battle in the courts, the implications for the firm’s business would be huge.

Well, as you may have heard, Uber avoided that potential outcome in California and Massachusetts when it settled two class-action lawsuits: O’Connor vs. Uber and Yucesoy vs. Uber, respectively.

In the settlement, the parties agreed that …

  • Drivers will remain independent contractors, not employees;
  • Uber will pay $84 million to the plaintiffs (and there would be a second payment of $16 million if Uber goes public and its valuation increases one-and-a-half times from its December 2015 financing valuation within the first year of an IPO);
  • The firm will provide drivers with more information about their individual rating and how it compares with their peers. (It would also introduce a policy explaining the circumstances under which it deactivates drivers in these states from using the app); and
  • The parties would work together to create a driver’s association in both states, with Uber helping to fund these two associations.

In a post about the settlements, Uber CEO Travis Kalanick wrote that Uber is “pleased that this settlement recognizes that drivers should remain as independent contractors, not employees,” noting that drivers value their independence—the freedom to push a button rather than punch a clock.

Kalanick admitted that, as Uber has grown, “… we haven’t always done a good job working with drivers.”

As a story in the Los Angeles Times points out, the settlement still needs to be approved by a judge in the District Court of Northern California, which could take months.

“If approved,” the paper reports, “the payment will be distributed among drivers in California and Massachusetts who performed at least one trip up until the date of the preliminary settlement approval. Distribution will be based on miles driven while a passenger was in the car.”

The plantiffs’ attorney, Shannon Liss-Riordan, released a statement to various press outlets saying the settlement was the right move, considering the risk of having a jury rule against the plaintiffs.

Earlier today, I spoke to Thomas Lewis, a shareholder in the Princeton, N.J., office of Stevens & Lee, who told me it was probably a smart move for Uber, too.

“What’s interesting about the Uber case is that the class-action settlement came just short of effectively giving certain rights to these independent contractors that should belong to employees,” he said. “So this is telling me that Uber is clearly aware that there could be a push to classifying independent contractors as employees were it to go through the court system and there was an adjudication.”

And it’s no secret, of course, that, were Uber to come up on the losing end of a court battle, it would be costly, considering the company’s business model.

Of course, there’s no way to know if this will put an end to the worker-classification issue at Uber. Lewis noted if a new class action is filed, it would be need to be filed with a different set of facts or issues that were brought forth.

But at least for the time being, you would think Uber executives should be able to rest a little easier.

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Supreme Court Rejects Union-Fees Challenge

The U.S. Supreme Court just rejected a legal attack on a vital source of funds for organized labor, splitting 4-4 in a challenge that had appeared to be on the path to victory until Justice Antonin Scalia’s February death, according to Reuters.

The outcome in the case, titled Friedrichs v. California Teachers Association, affirmed a lower-court ruling that allowed California to force non-union workers to pay fees to public-employee unions.

The decision left intact a 1977 legal precedent that allowed such fees, which add up to millions of dollars a year for unions.

The court’s action, the Reuters piece notes, came after a lawsuit brought by a group of non-union public school teachers from California who objected to paying fees to the California Teachers Association union. (A California law requires non-union workers to pay fees to public-sector unions representing workers such as police, firefighters and teachers to fund collective bargaining efforts.)

The decision means the status quo remains, with the unions able to collect fees from non-union workers.

“The U.S. Supreme Court today rejected a political ploy to silence public employees like teachers, school bus drivers, cafeteria workers, higher education faculty and other educators to work together to shape their profession,” said Lily Eskelsen Garcia, president of the National Education Association.

About 5 million public-sector employees are subject to union contracts that include mandatory fee provisions, according to the National Right to Work Legal Defense Foundation, which backed the non-union teachers.

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NLRB Rules Against Chipotle

In yet another case of a corporate social media policy found to have violated employees’ rights to engage in protected concerted activity, an administrative law judge of the National Labor Relations Board has ordered Chipotle Services LLC to rehire former employee James Kennedy, pay him back wages and post signs in its workplaces notifying employees that its former social media policies violated labor law.

Kennedy, who worked at a Chipotle restaurant in the Philadelphia suburb of Havertown, Pa., found himself under management’s spotlight after he replied to a customer who tweeted “Free chipotle is the best thanks” with “nothing is free, only cheap #labor. Crew members only make $8.50hr how much is that steak bowl really?”

After viewing the tweet, Chipotle national social media strategist Shannon Kyllo alerted regional manager Thomas Clark, who oversaw the location where Kennedy worked. Clark subsequently asked Kennedy to review Chipotle’s social media policy and delete the tweet, which he did.

Kennedy was later fired for what his supervisor, Jennifer Cruz, said was insubordination during a meeting at which he was asked to stop collecting signatures on a petition that addressed allegedly poor working conditions at Chipotle, including a lack of adequate meal and break times. Cruz later testified at the board proceedings that she feared for her safety during the meeting because Kennedy (an Army veteran who’d served three tours of combat duty) raised his voice and she feared he would become violent due to his diagnosed post-traumatic stress disorder.

Administrative Law Judge Susan A. Flynn found in her ruling that the corporate social media policy Kennedy had been asked to review was outdated at the time, as Chipotle had revised its policy to better comply with the National Labor Relations Act, which forbids employers from interfering with employees’ rights to engage in protected concerted activity. However, Chipotle could still be found liable for violations under the old policy, as that policy was the one referred to by Clark, the regional manager.

“I find that Clark’s implicit direction not to post tweets concerning wages or working conditions constitutes a violation of [the NLRA],” said Judge Flynn, reports Law360.

The judge also concluded that Cruz violated Kennedy’s rights when she fired him. Cruz’s fear that Kennedy would lash out “was neither justified nor true, and was fabricated after the fact,” Flynn said. Kennedy was fired because he had refused to stop collecting signatures for his petition, she said.

Kennedy has since found new employment working in a unionized position for American Airlines at Philadelphia International Airport and told the Philadelphia Inquirer he’s not interested in going back to work at Chipotle, although, he added, he’ll miss the free meals.

“If you want to tweet something about your personal experience at your job, do it,” he told the Inquirer, cautioning against libel and slander. “Tweet at your bosses and your bosses’ bosses.”

 

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A Word of Caution This Election Year

In case you didn’t notice, the 2016 presidential election season officially kicks off next Tuesday, when Iowa caucus-goers cast their votes for their favorite Democrat or Republican.

ThinkstockPhotos-476244660At this point, it’s anyone’s guess who will eventually win their party’s nominations. But this much is for sure: Contentious debate about the upcoming election around the workplace watercooler (and a host of issues associated with it) is only going to intensify in the coming months.

If the back-and-forth on social media today is any indication, HR leaders will want to brace for the worse. (In today’s environment, that means civil political discussions among employees escalating into heated discussions about issues involving race and religion.) But as Cozen O’Connor attorney Michael C. Schmidt recently reminded me, employers need to be careful not to overreact when things seem to be getting out of hand.

Just as employers have the right to ensure that the workplace is safe and productive, Schmidt said, employees similarly have certain rights that need to be appropriately balanced.

Schmidt, vice chair of Cozen O’Connor’s Labor and Employment Department, points out that “many states have some form of a ‘legal activities law,’ which prohibits employers from taking adverse action against an employee because he or she engages in certain types of political-related activities off premises and outside of working time.”

At the same time, he said, employers need to be “mindful of not imposing the company’s particular political views (and, especially, those of the company’s principals) on employees, and suggesting any link—positive or negative—between an employee’s expressed political views and compensation.”

Schmidt added that HR professionals need to “communicate to all employees that company policies prohibiting discrimination, harassment and violence in the workplace also extend to political discussion in the workplace.”

The bottom line: Employers would be well advised to tread carefully as they navigate what’s increasingly looking like one of the more volatile election seasons in recent memories.

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Coming to the Aid of Unpaid Interns

The U.S. House of Representatives passed a bill last night that would extend new protections to unpaid interns in the federal government, but it’s anyone’s guess whether the legislative branch will enact a similar law for unpaid interns in the private sector.

According to the Huffington Post:

The bill would close a loophole in federal law that carves unpaid interns out of the Civil Rights Act. Current law does not acknowledge unpaid interns as employees, leaving them without remedies if they encounter discrimination based on race, sex, age or religion. The proposed legislation would allow unpaid interns to sue the government in federal court if their rights were violated.

The bill, the Post notes, is one of a trio introduced by Democrats looking to extend civil rights protections to unpaid interns in all U.S. workplaces. The other two would apply to unpaid interns working in congressional offices and to the private sector at large. The bills are being sponsored by Rep. Elijah Cummings (D-Md.) and Reps. Bobby Scott (D-Va.) and Grace Meng (D-N.Y.)

Of course, the legislation aimed at private businesses would have the biggest impact on employers, as well as the tallest hurdles to overcome. Republicans in both chambers have been reluctant to impose any new regulations on businesses, particularly ones that can lead to lawsuits from workers.

Scott said yesterday that, given the passage of the federal portion of the legislation, he was calling on leadership of the Education and the Workforce Committee to take up the private-sector companion bill.

There’s no word on when (or even if) Congress will take up the other two pieces of legislation aimed at unpaid interns, but if your company operates an “unpaid intern” component within  its workforce, then you would be well-served to keep an eye on the status of this proposed legislation.

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