Category Archives: legal issues

Trumps Appoints NLRB’s Miscimarra

In case you missed it, late last week President Donald Trump  appointed Philip Miscimarra as the permanent head of the National Labor Relations Board, a role the Republican had been holding since Trump nominated him to temporarily fill the position shortly after his inauguration.

According to Reuters, Miscimarra, a former partner at Morgan Lewis & Bockius, was first appointed to the Board in 2013 by then-President Barack Obama “and has routinely broken with his Democratic colleagues on key labor issues.”

We first wrote about Miscimarra back in February, when legal experts weighed in on where they thought his appointment would take the board:

Michael Lotito, a partner and co-chair of the Workplace Policy Institute at Littler Mendelson, calls the appointment of Miscimarra the “first step” in a process of returning the board to balancing the rights of employees with the legitimate interests of employers as set forth in the National Labor Relations Act.

“Over the past five years, the NLRB has reversed over 4,500 years of precedent, often over the dissent of [new chair]  Miscimarra,” Lotito says. “Now, the new administration must appoint two new members to the Board to fill the vacancies that exist.  Hopefully, that will happen soon followed by quick confirmation. Only then, with the board at full strength, will it be able to tackle critical workplace issues needing a reasoned resolution.”

Steve Bernstein, a partner at Fisher Phillips in Tampa, Fla., says that, as the NLRB’s lone Republican for the past several months, Miscimarra  has authored some of the more vigorous and compelling dissents seen in some time:

“An examination of those dissents may offer a roadmap of what we might expect going forward, as the board moves toward a return to full strength,” he says.

A number of Miscimarra ‘s dissents call for greater clarity in the standards to be applied by his agency, Bernstein says, along with a more flexible approach to evaluating employer policies that takes into account the unique justifications for the policies themselves.

More recently, Miscimarra  has applied that “common-sense” approach to a number of NLRB doctrines, ranging from the employee status of graduate teaching assistants to the supervisory status of patient care coordinators, Bernstein says. Miscimarra, he adds, also has challenged controversial decisions invalidating binding arbitration provisions and limiting an employer’s right to insist upon confidentiality in workplace investigations.

“At the same time,” Berstein says, “he has openly questioned the NLRB’s apparent departure from long-standing precedent with respect to doctrine governing the use of permanent striker replacements, along with the test for joint-employer status.”

 

Limiting Subpoena Power

As you might have heard, the Supreme Court issued a ruling this week in the case of McLane Co. Inc. v. Equal Employment Opportunity Commission.

Monday’s ruling addressed the standard of review for a district court in determining whether to enforce or quash an EEOC-issued subpoena, with the Court reversing the Ninth Circuit’s judgment and holding that federal appellate courts must review a district court’s decision whether to enforce an EEOC subpoena for abuse of discretion, and not de novo.

The case centered on a former McLane Co. employee’s claim that the Temple, Texas-based supply chain services provider discriminated against her on the basis of her gender.

In 2007, Damiana Ochoa took three months of maternity leave from her job at McLane, which requires new employees and workers returning from medical leave to undergo a physical evaluation if their job is physically demanding—which Ochoa’s was, according to court documents. Ochoa attempted the evaluation on three separate occasions, and failed to pass each time. She was subsequently fired, which led to her filing a charge of gender discrimination with the EEOC.

As part of its investigation, the EEOC issued subpoenas to McLane, requesting the names, Social Security numbers and contact information for other employees that had been required to take the same evaluation. The EEOC filed actions to enforce the subpoenas after McLane refused to comply with that request.

Finding that the aforementioned information was not relevant to the charges, a federal district court refused to enforce the subpoenas. The Ninth Circuit reversed that decision, determining that the district court had erred in characterizing the information as irrelevant.

The Supreme Court’s decision to overturn that Ninth Circuit ruling offers “a good reminder that there are limits to the EEOC’s subpoena power,” says Melissa Raphan, a Minneapolis-based partner at Dorsey & Whitney.

“The practical effect of this decision for employers is twofold,” says Raphan, who is also chair of the firm’s labor and employment group. “First, it is a good reminder that the EEOC does not enjoy unfettered discretion to obtain information about other current and former employees. Second, the battleground to push back on the EEOC’s subpoena is in the district court.”

The EEOC’s subpoena power “does not allow the agency to bypass the burden of showing that the material is relevant, and, even if relevant, the employer can still show that the request is unduly burdensome.”

Ultimately, the decision’s impact on employers figures to be “somewhat limited in scope,” says John Alan Doran, a Scottsdale, Ariz.-based partner at Sherman & Howard.

Noting that only the Ninth Circuit took the position that it could review these trial court decisions “from scratch,” Doran adds that “every other jurisdiction has held that a trial court’s decision to quash or modify the scope of an EEOC opinion is subject to searching review by the appellate courts.”

As such, the decision directly affects only those employers doing business within the Ninth Circuit, continues Doran.

That said, “there is useful language for all courts to consider with respect to the scope of the EEOC’s subpoena power that employers will likely use in future run-ins with the EEOC throughout the country.”

The case is “largely about whose ox is getting gored, so it is hard to describe the decision as pro- or anti-employer,” says Doran. “In cases where an employer fails to convince a trial court to modify or quash an EEOC subpoena, this decision makes it that much harder to reverse the trial court’s decision on appeal. But where an employer successfully convinces a trial court to modify or quash a subpoena, its likelihood of success on appeal of that issue is considerably better.”

Of RIFs and FMLA Requests

Every HR professional knows that FMLA requests can get tricky, and that non-compliance can get costly. A recent court ruling shows there might be a price to pay even when an employee doesn’t explicitly make an FMLA request.

According to Crain v. Schlumberger Technology, Gregory Crain worked for 10 years as a regional sales manager for Schlumberger Technology Corp. and its predecessor company.

Terminated from his position as part of a reduction in force, Crain subsequently filed an FMLA interference claim, contending that the company violated his leave rights by letting him go just days after informing the organization that he needed to undergo surgery that would force him to take time off from work.

In October 2016, a jury agreed with Crain, awarding him $77,007; the amount of his severance. More recently, the United States District Court for the Eastern District of Louisiana affirmed that ruling, awarding Crain the original verdict award along with an additional, equal amount in liquidated damages. In other words, Schlumberger must now pay double the damages.

Why? The timing of Crain’s termination was certainly a factor, according to Tina Syring, a Minneapolis-based partner at Barnes & Thornburg and a member of the firm’s labor and employment law department.

As Syring points out, Crain’s name was included in the list of employees to be included in the RIF; a list that surfaced two days after his surgery.

“Prior to the formal notification, however, the plaintiff’s name was never included in any company RIF documents, even though the employer’s witnesses claimed that the decision to include him in the RIF was made weeks before such notice.”

In the end, she says, “the jury found the employer’s witnesses less credible than the company’s lack of documentation surrounding the decision to include the plaintiff in the reduction in force.”

Syring describes this decision as a “great reminder” that documentation matters when mapping out a reduction in force.

“According to the court, given the weight of the evidence (or lack thereof) and the temporal proximity of the termination, it was not an unreasonable decision by the jury to find in favor of the plaintiff.  Thus, when addressing RIFs, employers should take the time to carefully document which employees are being considered for the RIF and update this documentation throughout the decision-making process.”

Adding another wrinkle to this case is the fact that Crain didn’t specifically mention FMLA when he told the company that he would undergo surgery and would subsequently require time away from work. He did, however, inquire as to short-term disability leave, which ultimately compels the company to weigh the possibility of FMLA leave.

“As the Crain court noted, an employee is not required to use any sort of ‘magic words’ to provide notice of the need for FMLA leave,” says Syring.

“In this situation, the plaintiff made an inquiry to human resources about short-term disability. The Crain court found that to be sufficient notice to the employer to at least make an inquiry as to whether FMLA leave notice and adherence obligations were triggered,” she says, adding that testimony had also been given to confirm that the plaintiff told his former supervisor and two HR representatives that he was going to have surgery.

“Because the company could not demonstrate that it even considered the possible application of FMLA leave prior to [Crain’s] termination, the court found that the employer’s actions were neither in good faith or reasonable.  As a result, liquidated damages were awarded against the company.”

 

 

Lessons from the Sterling Scandal

With the salacious details of the Sterling Jewelers pay-discrimination lawsuit still sickeningly fresh in our minds, many of us have been asking how such behavior — as alleged by some of the 69,000 former employees involved in the suit– could happen at such a large company.

From security guards with overactive wands to district managers with overheated libidos, the sexual-misconduct accusations truly run the gamut of the perverse, according to court filings.

“But don’t they have programs in place to prevent this sort of behavior?” we wonder.

For its part, the company has denied any wrongdoing. On the matter of pay and promotion discrimination, the accusations are “not substantiated by the facts,” Signet Jewelers Limited, the parent of Sterling, said in a statement. In addition, Sterling said it found the claims of sexual misconduct to be without merit.

But today’s New York Times takes a look at some of the programs that may have unwittingly contributed to the harassing behavior being alleged by the suit plaintiffs:

…[L]awyers and academics who specialize in gender discrimination say the documents — more than 1,300 pages in total — provide a rare insight into how a company’s policies work in real life. Whether it is a not-so-confidential tip line or an in-house court, they say, some widely used corporate procedures can mask problems that women often face in the workplace. Here is a look at what the documents revealed.

The Times article looks at three employee-centric programs in particular: the company’s employee hotline, its arbitration policy and its “tap on the shoulder” promotion policy.

The entire article is well worth a read, if only to remind HR leaders that, just because you have a program in place to remedy a problem, that doesn’t mean it’s necessarily working. In fact, it could actually be covering up more issues than it is resolving, as Sterling is now learning the hard way.

 

 

 

 

 

Uber’s Sex-Harassment Inquiry

In case you missed it over the long holiday weekend, there’s plenty of trouble brewing over at ride-share app Uber.

It’s now so serious that the company hired former U.S. Attorney General Eric Holder to investigate whether the company has appropriately addressed discrimination and harassment claims made by female workers.

The investigation comes after former Uber engineer Susan Fowler Rigetti posted her story on Sunday, detailing her experiences enduring sex harassment at the hands of her direct manager, as well as the stonewalling she says she was subjected to by the company’s HR and leadership after she repeatedly brought the claims to their attention.

According to Fowler Rigetti:

On my first official day rotating on the team, my new manager sent me a string of messages over company chat. He was in an open relationship, he said, and his girlfriend was having an easy time finding new partners but he wasn’t. He was trying to stay out of trouble at work, he said, but he couldn’t help getting in trouble, because he was looking for women to have sex with.

It was clear that he was trying to get me to have sex with him, and it was so clearly out of line that I immediately took screenshots of these chat messages and reported him to HR.

Uber was a pretty good-sized company at that time, and I had pretty standard expectations of how they would handle situations like this. I expected that I would report him to HR, they would handle the situation appropriately, and then life would go on – unfortunately, things played out quite a bit differently.

After receiving less-than-enthusiastic support from HR, she describes how she came to know other women at Uber who had experienced the same harassment and subsequent stonewalling, and how those women decided to use a strength-in-numbers approach to alert HR to the seriousness of the ongoing issue:

Myself and a few of the women who had reported him in the past decided to all schedule meetings with HR to insist that something be done. In my meeting, the rep I spoke with told me that he had never been reported before, he had only ever committed one offense (in his chats with me), and that none of the other women who they met with had anything bad to say about him, so no further action could or would be taken. It was such a blatant lie that there was really nothing I could do. There was nothing any of us could do. We all gave up on Uber HR and our managers after that. Eventually he “left” the company. I don’t know what he did that finally convinced them to fire him.

After the story initially broke, Uber CEO Travis Kalanick tweeted that the behavior mentioned in the post was “abhorrent & against everything we believe in. Anyone who behaves this way or thinks this is OK will be fired.”

Hiring someone like Eric Holder will definitely add credence to an investigation that had previously looked paper-thin. And while only time will tell if Holder uncovers any more stories like Fowler’s, I get the feeling this sordid story isn’t over by a long shot.

Firing Someone over Politics

With conflict between President Trump supporters and detractors still at a fiery pitch, and with his protested inauguration still in the rearview mirror, this recent post on the Littler site might prove helpful.

In it, a boss in Sacramento, Calif., is asking the San Francisco-based employment law firm whether an employee can be fired, or at least disciplined, after the boss “saw one of my employees on the local news the other night participating in a political rally over the weekend.”

“Can I at least institute a policy prohibiting this kind of behavior going forward?” the boss asks.

Well, it all depends, Littler’s Zoe Argento writes, “on the employee’s location, the legality of his conduct, the employee’s contract, the nature of your business and the characteristics of the individual.” But best advice: Probably not a good idea and tread very carefully.

There are some state laws that prohibit employers from taking adverse action against employees because of their off-duty lawful political activities. So know your state’s laws on this. According to Argento:

“In California, employers may not coerce employees, discriminate or retaliate against them, or take any adverse action because they have engaged in political activity. Similar prohibitions exist in other states, including Colorado, Louisiana, New York, South Carolina, and Utah. Connecticut actually extends First Amendment protection of free speech to the employees of private employers. Some of these laws provide exceptions for public or religious employers or for off-duty employee conduct that creates a material conflict with respect to the employer’s business interests. Under such laws, and absent some exception, the proposed termination or demotion of this employee because of his lawful, off-the-clock political activity would be illegal.”

Also, Argento points out, at least three states — California, Louisiana and Colorado — prohibit employers from adopting any policy, rule or regulation that forbids or prevents employees from engaging or participating in politics or from running for office.

On the federal level, she says, firing or disciplining workers who engage in rallies, protests, marches or any other polticial activity could run afoul of the National Labor Relations Act, which provides that “employees shall have the right … to engage in … concerted activities for the purpose of … mutual aid or protection.” She continues:

“The U.S. Supreme Court has interpreted this provision to mean that employees may organize as a group to “improve their lot” outside the employer-employee relationship. Employees’ participation in political advocacy would therefore be protected if it relates to labor or working conditions. Such advocacy can include contacting legislators, testifying before agencies or joining protests and demonstrations. If the means used are not illegal, an employer would generally be barred from retaliating against employees who participate in these political activities outside the workplace.

“Depending on the nature of the activities your employee engaged in and his role in your organization, it may violate the NLRA to penalize him. If the employee participated in a rally concerning sick leave, minimum wage, or immigration reform, for example, that conduct would likely be protected.”

Argento signs off with some sound practical advice, that a decision to terminate or discipline an employee “should be based on an objective assessment of both the individual’s job performance and your business needs.” She writes:

“If the employee is otherwise a solid performer, and if his behavior does not interfere with the operation of your business, an adverse employment decision may be difficult to explain, undermine morale in your workforce, and, on balance, have more negative than positive results.”

Rule of thumb, she signs off, “proceed with caution” before penalizing employees for lawful, off-duty poitical activities, whether they’re frustrating to you or not.

Travel Ban Would Impact Many

Though President Trump’s travel ban has been frozen indefinitely, a decision made Thursday by the United States Court of Appeals for the Ninth Circuit, it’s still worth noting how many organizations would be affected should Trump proceed successfully in appealing the decision to the United States Supreme Court. He has vowed to do just this, according to the New York Times report linked above. (More recently, on Friday, he said he is now considering rewriting the immigration executive order in question.)

Whatever we end up with,  a survey of 261 companies by the Seattle-based Institute for Corporate Productivity (i4cp) — conducted just a few days after Trump signed the order restricting entry to the U.S. by travelers from seven majority Muslim countries — reveals more than a third (36 percent) of organizations would be impacted by the travel ban. Another 21 percent were still scrambling to make that determination at the time of the poll.

Within a week of the signing of the executive order, nearly 100 companies — including many of the largest global-tech organizations such as Intel, Microsoft, Apple, Netflix and Uber — responded by joining in the filing of a brief in support of a lawsuit against the travel ban filed by the state of Washington. It was that lawsuit that was at the heart of the Ninth Circuit Court of Appeals decision Thursday.

In its release about the survey, i4cp describes the responses as very mixed:

“While some respondents lauded the executive order for protecting the safety of employees, others drew attention to its potentially negative impact on the recruiting and motivation of a diverse, inclusive global workforce, a clear illustration of the polarization of views and reactions.”

Some respondents reported they are simply unsure of the impact of the travel restrictions because of a “lack of transparency in their global contract workforces, which are managed by vendors,” the release states.

Human resources, however, was the predominant responsible party (at 41 percent) for managing internally anyone affected by the ban, followed by legal, 7 percent; CEO, 6 percent; other senior executive, 5 percent; and security, 1 percent. (Other responses included don’t know, 10 percent, and other, 30 percent.) As i4cp states:

“Often, [HR’s lead] is in conjunction with legal teams responding to the needs of individual employees.”

In a few cases, companies reported having multifunctional “SWAT” teams in place responding to the situation. And nearly a third said they are providing legal assistance to affected employees and their families.

Of course, these were the actions in place when the ban was in place. No doubt things have returned to normal since the freeze and its being upheld in appeals court. But should Trump succeed at the Supreme Court level, these challenges would be back on employers’ plates immediately. Would be wise to stay poised to help these employees — and clearly, there are a lot of them — once again if need be.

LGBTQ Protections Spared — For Now

Given the combative tone of the first week of the Trump administration (at least as it related to Mexicans, Muslims and the media) it may have come as a surprise to some to learn President Trump will maintain workplace protections for gays and lesbians instituted during the Obama administration, according to multiple news reports.

“The executive order signed in 2014, which protects employees from anti-LGBTQ workplace discrimination while working for federal contractors, will remain intact at the direction of President Donald J. Trump,” the administration said in a statement.

USA Today reported that gay rights groups had expressed concern that Trump would reverse that order, but White House aides said such a step has not been contemplated. Drafts of proposed orders to roll back the Obama order had circulated through Washington in recent days, which caused concern among LGBTQ activists and others.

The Washington Post’s coverage includes a statement from Chad Griffin, president of the Human Rights Campaign, in which he says he and other activists remained concerned that the new administration could still undermine other legal protections based on sexual orientation or gender identify:

“Claiming ally status for not overturning the progress of your predecessor is a rather low bar. LGBTQ refugees, immigrants, Muslims and women are scared today, and with good reason. Donald Trump has done nothing but undermine equality since he set foot in the White House,” Griffin said. “Donald Trump has left the key question unanswered — will he commit to opposing any executive actions that allow government employees, taxpayer-funded organizations or even companies to discriminate?”

The New York Times first reported the decision by the White House to stick with the Obama-era protections.

 

Discriminatory Dress Codes in the U.K.

Over on the other side of the Atlantic, a storm is brewing over the unequal treatment of women in the workplace. The United Kingdom has a law in place — the Equality Act of 2010 –intended to prevent such treatment. However, that apparently hasn’t stopped U.K. employers from ordering their female employees to wear high heels, dye their hair blonde and dress themselves in revealing outfits. That’s according to a recent report by the British Parliament, undertaken in the wake of a petition signed by more than 150,000 people calling for a law that would ban organizations from requiring women to wear heels at work. The parliamentary investigators received complaints from hundreds of U.K. women who said they were subject to sexist dress codes by their employers.

As reported in yesterday’s New York Times, Nicola Thorp started the petition after she was sent home without pay from her job as a temporary receptionist for refusing to comply with an order that she get herself a pair of shoes with heels that were at least two inches high. Turns out that Portico, the receptionist-services firm that formerly employed Thorp, had quite an extensive employee dress code that covered just about every aspect of a woman’s appearance, including hair (“regularly maintained hair colour — if individual colours hair — with no visible roots”), makeup (“makeup worn at all times and regularly reapplied … “) and footwear (“Heel height normally a minimum of 2 inches and maximum of 4 inches, unless otherwise agreed by the company”). The code even suggested the palette of nail polishes that was acceptable. Portico said it changed its policy after Thorp raised the issue, the Times reports.

Thorp told the Times that part of the reason she started her protest was concern for the health effects of wearing high heels throughout the workday: “The company expected me to do a nine-hour shift on my feet escorting clients to meeting rooms. I told them that I just wouldn’t be able to do that in heels.”

Thorp is hardly alone in her concern about the physical effects from being forced to wear high heels all day: “We heard from hundreds of women who told us about the pain and long-term damage caused by the wearing of high heels for long periods in the workplace, as well as from women who had been required to dye their hair blonde, to wear revealing outfits and to constantly reapply makeup,” the report said. It cited longstanding medical evidence showing that women who wear high heels for long periods of time can suffer physical damage, including stress fractures.

U.K. lawmakers expressed concern that the Equality Act has not been effective in preventing employers from applying sexist dress codes. The report calls for “urgent action” by the government, including increased financial penalties for employers that break the law. However, Thorp said she wasn’t satisfied, telling The Guardian she was “absolutely chuffed to bits” that the report’s recommendations didn’t go further.

“The petition took off and I was very pleased to see the debate over heels grow to one about clothes, and continue moving on to other aspects of how women are treated in a work environment,” she told the paper. “We now need to see the government take these recommendations on board. The law should not just be changed but enforced.”

Under current U.K. law, instructing women to wear high heels at work “isn’t necessarily sex discrimination, ” Julia Wilson, an employment lawyer at Baker McKenzie, told British newspaper The Independent. “If [members of Parliament] want clear rules and fines for companies in relation to dress code practices, that is likely to require a change in the law.”

Gaming the Gainsharing System

This is just a guess, but I’m going to say the mood throughout Whole Foods break rooms is less than festive this holiday season.

And if the claims made in a new lawsuit prove to be true, you couldn’t really blame the grocery store chain’s employees for not getting into the spirit this year.

Last week, one current and one former employee from a Whole Foods store in Washington, D.C. filed a federal class-action lawsuit claiming the Austin, Texas-based company “engaged in a nationwide scheme to strip hard-working employees of earned bonuses in order to maximize [its] own profit.”

More specifically, plaintiffs Michael Molock and Randal Kuczor assert that a group of managers gamed Whole Foods’ gainsharing program to avoid paying automatic bonuses to departments that came in under budget for the year, as reported by the Washington Post.

According to the lawsuit, the gainsharing program is intended to enable employees in such departments to share in surpluses. The plaintiffs claim, however, that Whole Foods avoided paying by shifting labor costs to other departments without properly accounting for it, as well as by creating “fast teams” comprised of employees who float from one department to another.

The complaint also alleges that company executives knew of the “illicit practice of shifting costs,” which the suit says has impacted as many as 20,000 past and present Whole Foods employees.

In a statement, Whole Foods acknowledges that some sort of bonus program manipulation took place, while maintaining that it was confined to a relatively small number of its stores. Nevertheless, Whole Foods says it is investigating the matter. And, as the Post reports, the organization has already terminated the nine managers known to have been involved.

The plaintiffs are asking for more than to see a few managers fired. The suit seeks $200 million in punitive damages and triple unpaid wages, among other relief, according to the Post.

“Defendants intentionally manipulated the program and illicitly engaged in a nationwide corporate practice of ‘shifting labor costs’ in order to pad its profits,” the suit claims, alleging that this “unlawful” maneuvering effectively wiped out surpluses in certain departments, “thereby robbing hard-working employees of earned bonuses.”