A Year in Review: Key U.S. Employment Law Developments in … Point... · 2013. 1. 21. · Key U.S....

A Year in Review:

Key U.S. Employment Law Developments in 2012 and What to Expect in 2013

Wednesday, January 23, 2013

PRESENTERS

Moderator

Stephen J. Hirschfeld, Partner, Hirschfeld Kraemer LLP, San Francisco, CA [email protected]

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mailto:[email protected]

Speakers

Bruce R. Alper, Shareholder, Vedder Price P.C., Chicago, IL [email protected]

Scott A. Holt, Partner, Young Conaway Stargatt & Taylor, LLP, Wilmington, DE [email protected]

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Speakers

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Mary Ellen Simonson, Partner, Lewis and Roca LLP, Phoenix, AZ [email protected] David M. Smith, Shareholder, Maynard Cooper & Gale, P.C., Birmingham, AL [email protected]



THE NLRB Agenda

• Save private sector unions • Increase union power without regard

to employee rights and legitimate management interests

• NLRB “quickie” election rules

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What to Expect from the NLRB

• More active and aggressive NLRB – Strengthening employee Section 7 rights

and derivative union rights – Weakening non-union sector property rights – Encouraging organizing – Enhancing remedies

• A willingness to reconsider cases, particularly those decided by Board controlled by Bush nominees

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NLRB

• Ease or increase organizing – Rights poster – “Quicky” election

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NLRB

• Attack on personnel policies – Confidentiality during internal

investigations – Employment at-will statement in

employee handbook – Social media policies – “Courtesy” policies – Off-duty access policies

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NLRB

• Confidentiality during internal investigations – Banner Health Systems (July 2012)

• Statement to employees that the contents of a complaint and/or investigation should not be discussed with co-workers violates the NLRA

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NLRB

• Confidentiality during internal investigations – The employer must first determine if:

– Witnesses need protection – Evidence is in danger of being

destroyed – Testimony is in danger of being

fabricated – There is a need to prevent a cover-up

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Employment-at-Will Acknowledgments

• American Red Cross Arizona Blood Services Region (ALJ – February 2012) – Statement in an employee handbook

acknowledgment form violated NLRA “I further agree that the at-will

employment relationship cannot be amended, modified or altered in any way.”

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Employment-at-Will Acknowledgments

• Acting General Counsel memo (10/31/12)

• At-will disclaimers can be lawful! – Do not say that at-will status cannot be

altered. Waiver not permitted. – Can say that status cannot be altered

by managers and supervisors.

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Social Media / “Courtesy” Policies

• Three Acting General Counsel Reports

• Costco Wholesale Corp. • Knauz BMW

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Social Media Polices

• Reports by Acting General Counsel – Rules that are ambiguous as to whether

they apply to NLRA protected activity are unlawful.

– “Savings clause” in handbook will not likely cure an overbroad SM policy

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Social Media Policies

• Costco Wholesale Corp. (Sept. 2012) – Rule prohibiting employees from

electronically posting statements that damage the company or any person’s reputation

– Could cover concerted communications protesting Costco’s treatment of its employees

– Rule did not exclude protected activities 15

“Courtesy” Policies

• Knauz BMW (Oct. 2012) – Policy stated employees “expected to

be courteous, polite and friendly” and should not be “disrespectful” to Dealership

– NLRB: policy could prohibit employees from objecting to terms and conditions of employment

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Off-Duty Access Policies

• J.W. Marriott Los Angeles at L.A Live (Sept. 29, 2012) – Rule prohibiting employees from accessing

interior areas of the hotel more than 15 minutes before/after their shift, unless “management approval”

– NLRB: because policy did not uniformly prohibit off-duty employee access to the property for any and all reasons, it was unlawful

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Employer Access to Social Media Username and Passwords

California: • (AB 1844); enacted September 2012 • Prohibits employers from requesting social

media account user names or passwords from employees or applicants and from retaliating against employees who don’t comply with a request for the information

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Delaware: • Delaware Workplace Privacy Act

Illinois: • Amended its Right to Privacy in the

Workplace Act

Maryland: • Passed HB 964, similar to California

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Michigan: • The Internet Privacy Protection Act

New Jersey: • October 2012: legislature made it illegal

for employers to ask for prospective and current employees’ social media user names and passwords.

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• Similar social media privacy bills have been introduced in Minnesota, Missouri, New York, Ohio, Pennsylvania, South Carolina, Texas and Washington

• At the federal level, The Password Protection Act of 2012 failed to gain much traction in 2012

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Right-to-Work Laws

• Indiana and Michigan passed laws in 2012 making it illegal to require employees to join a union, pay dues, fees, or other any other charges as a condition of continued employment

• Twenty-one other states considered right to work legislation in 2012

• Measures are pending in, e.g., New Hampshire, Missouri, and New Jersey

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Discrimination against the Unemployed

• D.C. became the first in the country to make the unemployed a protected class

• Oregon made it illegal for employers to state a preference for currently employed applicants in their job advertisements

• Similar legislation pending in New York and Pennsylvania 23

Discrimination – Miscellaneous

California: • The California Fair Employment and

Housing Act (FEHA) was expanded to include breastfeeding and medical complications related to breastfeeding for sex discrimination purposes

• Under FEHA, employers have a duty to reasonably accommodate employees’ religious beliefs and observances

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California: • Religious dress and grooming practices

now under the category of “beliefs and observances”

• Clarifies that segregating employees is no longer an acceptable accommodation; “significant difficulty or expense” now the standard for “undue hardship” rather than more narrow Title VII language

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Connecticut: • In October 2012, passed An Act

Concerning the Palliative Use of Marijuana, permitting the use of marijuana for medicinal purposes

• Employers may not threaten, discharge, refuse to hire, or otherwise discipline an employee based on having status as a qualifying patient

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Employer Use of Social Security Numbers

New York: • Employers may not require employees or

potential employees to disclose their social security number in full or in part

• Exceptions apply to comply with federal, state, or local law or regulation

• No private right of action; violations enforced by fines

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Equal Pay

Illinois: • Amended its Equal Pay Act; individual

liability for employers that willfully and knowingly evade paying a final award or final judgment under the Act.

Federal: • Paycheck Fairness Act

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Employee Records

California: • Employers must make employment

records available for inspection within 30 days of written request from an employee

• Employers may redact the names of non-supervisory employees prior to viewing or copying

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Compensation Practices

California: • 2012 Amendment to Labor Code Section

226(e) and (f) defines the term “injury.”

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California: • AB 1396: employees who are paid with

commissions must be given a written commission agreement outlining the method by which commissions are determined and paid (exceptions apply)

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Massachusetts: • The Temporary Workers Right to Know

Act – takes effect on January 31, 2013 – Requires staffing agencies to be more

forthcoming with details about employee assignments

– Prohibits staffing agencies from charging certain fees to employees and requires reimbursement for travel to sites where it turns out no work is available

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Credit Scores in Employment

• New York, New Jersey, Pennsylvania, Missouri and Indiana passed laws making it unlawful for employers to conduct a credit check or use an applicant’s credit score in making hiring decisions

• Exception for jobs where credit history might be germane to the position

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Federal Law

• Fair Credit Reporting Act • OFCCP • EEOC • Department of Labor

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EEOC Priorities FY 2013-2016

• Eliminating barriers in recruitment and hiring

• Protecting immigrant, migrant and other vulnerable workers

• Addressing emerging and developing employment discrimination issues

• Enforcing equal pay laws • Preserving access to the legal system • Preventing harassment through

systematic enforcement • http://www.eeoc.gov/eeoc/plan/sep.cfm

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http://www.eeoc.gov/eeoc/plan/sep.cfm

EEOC – ELIMINATING BARRIERS

• EEOC will target intentional recruitment and hiring discrimination, facially neutral recruitment and hiring practices that adversely impact particular groups

• Focus will be on policies and practices at the recruitment and hiring stages, including: – Restrictive application processes, and the

use of screening tools

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EEOC – Eliminating Barriers

• Using Criminal Records in Hiring Decisions – In April 2012, the EEOC issued Enforcement

Guidance on employers’ consideration of arrest and conviction records in hiring decisions.

– Focused on how background checks and use of criminal records may have a disparate impact on the basis of race or national origin.

– Stated that use of criminal records must be job-related & consistent with business necessity.

– Exclusion based solely on an arrest itself is not job related or consistent with business necessity

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• Use of Criminal Records – Practice Tips: – Eliminate policies that exclude applicants or

terminate employees based solely on the fact of an arrest.

– Eliminate policies that exclude applicants on the fact of a criminal conviction without considering: the nature of the crime, date of conviction, or employee’s individual circumstances.

– Develop policies for using criminal records that account for: the nature of the position, nature and date of the conviction, and applicant’s response.

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• Use of Credit Reports in Hiring – Background checking of applicants’

credit reports has come under increased scrutiny by the EEOC.

– The EEOC has stated that credit checks must be “essential to the particular job in question.”

– Consider whether a credit report is relevant to the particular position in question.

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Protecting Immigrant, Migrant and Other Vulnerable Workers

• Goal: to focus on workers who are often unaware of their rights or are reluctant or unable to exercise them.

• The EEOC will target: – Disparate pay – Job segregation – Harassment – Trafficking – Other discriminatory practices and policies

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Emerging & Developing Issues

• The EEOC will “continue to prioritize issues that may be emerging or developing”: – ADA issues, e.g., coverage, reasonable

accommodation, undue hardship, etc. – Accommodating pregnancy-related

limitations under ADA and PDA – Coverage of lesbian, gay, bisexual and

transgender individuals under Title VII's sex discrimination provisions, as they apply

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Preserving Access to the Legal System

• EEOC will target policies & practices that prohibit or discourage individuals from exercising their rights under employment discrimination statutes: – Retaliatory actions – Overly broad waivers and settlement

provisions that prohibit filing EEOC charges

– Failure to retain records required by EEOC regulations.

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Preventing Harassment through Systemic Enforcement and Outreach

• EEOC: harassment is one of the most frequent complaints raised in the workplace, and will continue to make such claims its focus.

• It will take “a more targeted approach that focuses on systemic enforcement and an outreach campaign”

• Bottom Line: Employers should expect to see a very active EEOC over the next four years.

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Recent Employment Discrimination Decisions

Macy v. Holder • EEOC concluded that Title VII bars

discrimination not only on the basis of biological sex, but because of gender stereotyping.

• Lesson: Audit hiring, promotion, and termination practices to ensure no personnel activity has an adverse impact on transgender employees.

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http://www.eeoc.gov/decisions/0120120821 Macy v DOJ ATF.txt


Hosana Tabor Evangelical Lutheran Church v. EEOC 132 S. Ct. 694 (2012) • The U.S. Supreme Court recognized a

“ministerial exception” to employment discrimination laws.

• Lesson: Organizations with mixed religious and secular functions must review the circumstances and function of each employee closely before concluding ministerial exception applies.

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Coffman v. Robert J. Young Co. 871 F. Supp. 2d 703 (M.D. Tenn. 2012) • Employee was fired after she took a

medical leave of absence. In her termination letter the employer stated: “Due to your long-term disability we must terminate your employment.”

• Lesson: Employers should consider carefully the language it uses in terminations notices.

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Gerner v. County of Chesterfield, 674 F.3d 264 (4th Cir. 2012) • Fourth Circuit: Title VII’s protections

against gender discrimination can extend to former employees complaining about a severance package offered.

• Lesson: Employers must be consistent in their practices, including the severance packages offered to terminated employees.

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Cortezano v. Salin Bank & Trust, 680 F.3d 936 (7th Cir. 2012) • Seventh Circuit held that Title VII does not

prohibit discrimination on the basis of immigration status.

• Employers should proceed cautiously: – There is a very fine line between immigration

status and national origin. – Also beware of IRCA and state laws protecting

citizenship status.

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Vance v. Ball State University, 646 F. 3d 461 (7th Cir. 2011) • Supreme Court previously ruled employer is

vicariously liable for severe or pervasive workplace harassment committed by supervisor of victim under Title VII.

• The Court will now consider whether “supervisor” means: employees who have authority to oversee and direct the work of the alleged victim; or only those who have authority to “hire, fire, demote, transfer, or discipline” the alleged victim.

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WRONGFUL TERMINATION UPDATE

• Aggressive recruiting • Negligent hiring / investigation • Terminating whistleblowers • Terminating an employee for filing

false charges

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Wage and Hour Issues: Significant Disputed Issues of 2012

• Unpaid workers: trainees/interns • Commonality for collective actions • Joint employers • Executive and administrative

exemptions • Hours worked

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Wage and Hour Issues: Significant Disputed Issues of 2012

• Meals and rest periods • Preliminary and postliminary time • Changing clothes • Nursing mothers – P.P.A.C.A. • Confidentiality and settlements

under seal

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Focus of Recent Collective Actions

• Misclassification of workers – Family Dollar Stores / store managers

(2012) • Off-the-clock work

– Xerox affiliate / call center employees (2012)

• Deducting paid time for breaks without ensuring workers are not working 53

Hybrid Opt-In / Opt-Out Cases

• FLSA Section 216 (b) has the opt-in collective action procedure; FRCP 23 has the opt-out procedure by which state law wage & hour claims may be pursued

• Combining these processes in one case: called a hybrid wage and hour action

• Employers have argued the processes are inconsistent

• In 2012, the Third Circuit rejected this argument in Knepper v. Rite Aid Corp. (2012 WL 1003515) 54

FLSA Collective Actions after Wal-Mart v. Dukes

• Dukes established under Rule 23 that plaintiffs must establish a common question tying together all the plaintiffs in the purported class (2011).

• The application of Dukes to FLSA collective actions is an open question.

• Employers have maintained that Dukes should apply to and limit Section 216(b) collective actions.

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FLSA Collective Actions after

Wal-Mart v. Dukes • In 2012, district and circuit courts

have provided divergent results – Aburto v. Verizon (C.D. Cal. 2012) – Hughes v. WinCo Foods (C. D. Cal.

2012) – Ware v. T-Mobile (M.D. Tenn. 2011) – Ross v. RBS Citizens (7th Cir. 2012) – Vang v. Kohler Co. (7th Cir. 2012)

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Arbitration and Waivers of FLSA Class Actions

• AT&T Mobility v. Concepcion – U.S. Supreme Court held FAA preempts state law requiring arbitration agreement to provide for class claims.

• In 2012, several lower courts upheld arbitration agreements with class action waivers, effectively compelling the employees to have their cases heard in individual arbitration.

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Arbitration and Waivers of FLSA Class Actions

• Three appeals currently pending in the Second Circuit on the issues

• Employers in Second Circuit with class waiver arbitration agreements risk having them stricken – Financially burdensome – Impractical – Undue added cost to vindicate statutory

rights

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Offers of Judgment

• FRCP 68 provides for offer of judgment to

settle and terminate litigation • Employer/Defendants have used Rule 68

in FLSA collective actions prior to conditional certification

• One purpose, presumably, is to prevent the collective action proceedings

• Split in Circuits: whether Rule 68 offer of judgment prior to conditional certification renders plaintiff’s claims moot

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Paying the Claim, but No Judgment

• Dionne v. Floormasters (11th Cir.

2012) – Plaintiff sues for OT and adds a class; – Defendant denies liability, but sends

the money sought and moves to dismiss

– Plaintiff said she is still owed liquidated damages

– Defendant paid liquidated damages and moved to dismiss

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Paying the Claim, but No Judgment

• Dionne v. Floormasters (11th Cir.

2012) (con’td) – District court dismissed the case with

prejudice – Plaintiff petitioned for attorney’s fees

and district court denied petition – No determination by court that

defendant violated FLSA – 11th Circuit affirmed saying plaintiff did

not receive a judgment 61

Ensuring the Enforceable Settlement

• Courts and DOL continue to expect to

approve settlement agreements • Martin v. Spring Break ’83 Productions

(5th Cir. 2012) • Carpenter v. Colonial Mgmt. Group (D.

Md. 2012) • Galvez v. Americlean Services Corp.

(E.D. Va. 2012) • Brumley v. Camin Cargo Control, Inc.

(D. N.J. 2012)

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Misclassification Initiative

• GAO estimated in 2009 that 7.4% of U.S. workforce misclassified as independent contractors

• Estimates: increase in tax receipts of $7B over 10 years

• USDOL has signed an MOU with the IRS to work together

• DOL now devoting more resources to enforcing current laws

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Misclassification Initiative

• 2012 budget for WHD had an additional $15M and 107 employees for this initiative alone

• Additional funding sought for 2013 • IRS is training agents to add this issue

to audits over the next three years • IRS started the Voluntary Classification

Settlement Program – use with caution

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USDOL’s Other Recent Strategies

• Elimination of WHD Opinion Letters • Conversion to Administrative

Interpretations • USDOL Right to Know Rule

– Abandons the catch-me-if-you-can enforcement model

– In effect, employers would have to prepare a plan, self-audit and self report

– Expected priority of current administration; proposed regulations may be coming soon

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A Year in Review: Key U.S. Employment Law Developments in … Point... · 2013. 1. 21. · Key U.S....

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