Earlier this week, a three judge panel of the Fifth Circuit Court of Appeals issued its long-awaited decision in DR Horton Inc. v. NLRB. As expected by most labor lawyers, including us, the Fifth Circuit (with one judge dissenting) overruled the National Labor Relations Board’s dramatic extension of the law, that employers could not require employees to enter into agreements to individually arbitrate employment disputes, precluding collective or class action litigation. In DR Horton the NLRB had concluded that such agreements conflicted with employees’ rights to engage in concerted activity under the National Labor Relations Act (the “NLRA”) -- a conclusion that had since been rejected by almost every court to face the issue. The Fifth Circuit’s decision does contain a cautionary note for employers: an arbitration agreement may not appear to bar an employee from filing charges with the NLRB.
DR Horton is a home builder with operations throughout the United States. Beginning in 2006, DR Horton required all its employees to enter into a “Mutual Arbitration Agreement.” The agreement precluded civil litigation between the parties, requiring that all disputes be submitted to arbitration. Most critically, the agreement also barred any form of collective or class action proceeding. In 2008 the underlying plaintiff filed a putative class action lawsuit, contending that he had been misclassified as an exempt managerial employee in violation of the Fair Labor Standards Act. When DR Horton responded by insisting on individual arbitration pursuant to the agreement’s bar of collective actions, the plaintiff filed unfair labor practice charges with the Board.Continue Reading...
No Harassment, No Problem: Idaho Court Holds Harassing Comments May Still Support Liability for Negligent Infliction of Emotional Distress
A November 27, 2013 opinion from the Idaho Supreme Court reinstated a former Assistant Vice Principal’s claim seeking damages for negligent infliction of emotional distress. This decision highlights that allegedly harassing workplace comments may subject employers to liability even though e the complaining employee cannot make out a traditional sexual harassment claim.
In Frogley v. Meridian Joint School Dist., 2013 opinion No. 124, the employee claimed that he had been the victim of sexual harassment based upon sexually-charged comments to and about him. Mr. Frogley claimed that the behavior continued despite making known that the behavior was offensive. The complaints came at approximately the same time his superiors began to question his work performance.
All of the claims, including sexual harassment under federal and state law, were dismissed before they were allowed to proceed to trial. The Supreme Court’s opinion does not detail the reason for the lower court’s decision in that regard and the employee chose not to appeal dismissal of the sexual harassment theories; pursuing instead his claims for retaliation and negligent infliction of emotional distress.Continue Reading...
Top 25 FAQs Employers May Have About Implementing the New Portland Paid Sick Leave Ordinance in 2014
In March 2013, the Portland City Council passed the new Portland Paid Sick Leave Ordinance requiring all but the smallest employers to provide paid sick leave (“PSL”) for employees who work within city limits. On November 1, the city released final regulations interpreting the Ordinance and fleshing out some of the requirements in more detail. Also, the original Ordinance was amended in early October while the regulations were being finalized. The law becomes effective January 1, 2014, so employers with employees in Portland need to review relevant policies to confirm they comply with the new ordinance.
Many of the Ordinance’s requirements will look familiar to employers used to dealing with other leave laws, particularly the Oregon Family Leave Act (“OFLA”). But this Ordinance has its own twists, many of which result from the fact that it’s not a state-wide law like OFLA but instead only applies to employees within Portland. This list of 25 frequently asked questions (“FAQ”) covers many of the the questions employers might have as they work through understanding the Ordinance and update their policies to ensure compliance. Yes, there are really 25 of them.
1. What does the Ordinance require in 20 words or less?
Employers with six or more employees must allow employees in Portland at least 40 hours of PSL per year. That’s 19 words! But of course, there’s a lot more to it than that, so read on.
Seattle employers are about to become much more restricted in their ability to inquire into or act upon the criminal records of applicants and employees. On November 1st, the Seattle Job Assistance Ordinance, SMC 14.17, takes effect and will apply to positions that are based in Seattle at least half of the time. The Ordinance does not apply to governmental employers (with the exception of the City of Seattle) or to positions involving law enforcement, crime prevention, security, criminal justice, private investigation, or unsupervised access to children under the age of sixteen or to vulnerable or developmentally disabled adults.
The Ordinance imposes the following new restrictions on the hiring process:
- Advertisements for positions cannot state that applicants with criminal records will not be considered or otherwise categorically exclude such applicants;
- The employer cannot implement any policy or practice that automatically excludes all applicants with criminal histories;
- The employer must complete an initial screening process to weed out any unqualified candidates before the employer can question applicants about their criminal histories or run criminal background checks on applicants;
- The employer cannot refuse to hire an applicant solely because he or she has an arrest record (as opposed to a conviction record); and
- The employer cannot refuse to hire an applicant solely because of his or her conviction record, conduct underlying his or her arrest record, or pending criminal charges unless the employer has a legitimate business reason to do so.
California Governor Jerry Brown recently signed into law an increase in the state’s minimum wage, from the current rate of $8.00 per hour up to $9.00 per hour beginning on July 1, 2014. The minimum wage will increase again to $10.00 per hour, effective January 1, 2016.
In addition to ensuring that all non-exempt employees are paid the increased minimum wage, employers with operations in California should also evaluate how the increase to the minimum wage affects salaries of exempt employees. California law requires that exempt employees be paid a salary of at least twice the minimum wage for full time employment on a monthly basis. Under the existing minimum wage of $8.00, exempt employees must be paid an annual salary of at least $33,280. With the increase to the minimum wage, the minimum salary for an exempt employee will increase to $37,440 per year by July 2014, and then to $41,600 by January 1, 2016. Employers who do not ensure that their exempt employees are receiving at least these amounts will be exposed to misclassification claims.
Companies with employees in California should review their compensation practices to ensure they are fully in compliance with applicable law before the increased minimum wage takes effect.
Employers Should Review Benefits Plans And Other Policies Affecting Employees In Same-Sex Marriages As New IRS Guidance Implementing U.S. Supreme Court's Windsor Decision Becomes Effective Today, September 16, 2013
Here's something that should be at the top of your to do list on this Monday morning: make sure your benefits and other employee policies are in compliance with new guidance from the IRS that becomes effective today relating to federal tax treatment of same-sex marriages under the U.S. Supreme Court's decision in U.S. v. Windsor. In Windsor, the Supreme Court struck down provisions of the Defense of Marriage Act (“DOMA”), which had prohibited recognition of same-sex marriages under federal law. That decision has several implications for employers, including application of employee leave laws such as the Family Medical Leave Act (“FMLA”), which we blogged about recently.
Since the Windsor ruling, federal agencies have been busy carrying out President Obama’s directive to update regulations and guidance accordingly. On August 29, the IRS issued Revenue Ruling 2013-17 and two sets of FAQs (here and here), advising how the IRS will treat same-sex marriages for federal tax purposes. (Windsor was, after all, a tax case, in which the issue was whether the IRS was allowed to disregard a same-sex marriage for federal estate tax purposes). The guidance becomes effective today, September 16, 2013.
Under that new guidance, the IRS will apply the marriage laws of the state or country in which the marriage was celebrated (‘state of celebration”) to determine if the couple is validly married for federal tax purposes, including tax and other issues relating to employee benefits. Under the new IRS guidance, any same-sex marriage validly entered into in any state or foreign country that allows same-sex marriage will be recognized by the IRS for income, estate, and other tax purposes, even if the couple does not live or work in a state that recognizes the marriage. For example, if a same-sex couple is married in Washington (or Canada), which recognizes same-sex marriage, and then moves to Oregon, which currently does not, the couple will still be considered married for federal tax purposes.Continue Reading...
Chasm Continues To Widen, For Now, Between NLRB and Federal Courts On Enforceability Of Class Action Waivers In Employment Agreements
Just last week, in the case GameStop Corp., a National Labor Relations Board (NLRB) administrative law judge applied recent Board precedent and ignored contrary cases from federal courts to find an employer’s arbitration agreement was unenforceable because it waived the right of employees to bring class or collective actions. While the decision has yet to be approved by the NLRB itself (parties can appeal ALJ decisions to the NLRB), it illustrates the continuing tension in this area between the NLRB (which disfavors class action waivers in employee arbitration agreements) and the federal courts (which favor them).
As we have reported, U.S. federal courts continue to hold that employees may enter into arbitration agreements in which they waive the right to file class or collective action claims. The U.S. Supreme Court put its stamp of approval on such waivers in 2011 in the blockbuster case AT&T v. Concepcion, holding that the enforceability of arbitration agreements was governed by the Federal Arbitration Act (FAA), which preempted any state law purporting to regulate arbitration agreements, including arbitration agreements with class action waivers. Building on a decades-long line of cases steadily increasing support for the concept of arbitration and similar alternative dispute resolution (“ADR”) methods for resolving litigation, Concepcion also held decisively that arbitration agreements could include waivers by the parties of the right to bring lawsuits as class actions. The U.S. Supreme Court has re-affirmed Concepcion in subsequent decisions.Continue Reading...
Maryland Federal District Court's Dismissal of EEOC v. Freeman Provides Guidance for Employers on Background Check Rules
As we’ve blogged about before, the EEOC has become more aggressive over the past few years in scrutinizing employer use of criminal background and credit checks. While federal anti-discrimination laws do not expressly prohibit employers from performing background checks or similar screening methods on employees or applicants, their use can be unlawful where the practice has a “disparate impact” on protected classes of employees under Title VII. Recently, the EEOC has issued Guidance documents focusing on disparate impact cases involving criminal history and credit checks, all as part of its interest in “systemic” forms of discrimination. In addition to issuing guidance limiting when and how employers can use criminal and credit history background checks in employment, the EEOC has been actively investigating specific employers, as some readers of this blog are undoubtedly all too aware. In some cases, the EEOC has even initiated lawsuits challenging employers’ use of background checks. For example, the EEOC has filed suit just a few weeks ago against Dollar General (EEOC v. Dollar General, No. 1:13-cv-04307, Illinois) and BMW (EEOC v. BMW Manufacturing Co., LLC, No. 7:13-cv-01583-HMH-JDA, South Carolina).
Many employers and employment attorneys who have argued that appropriate use of background checks can be important and necessary believe the EEOC is going too far. Those employers have complained that the EEOC’s aggressive position presumes the use of criminal or credit background checks is per se unlawful and amounts to a de facto ban on their use under any circumstances, regardless of whether or not they result in an unlawful disparate impact. If you are one of those raising such concerns, federal judges may be listening. A few weeks ago, a federal judge in the U.S. District Court in Maryland issued an opinion granting summary judgment dismissal in another of the EEOC’s enforcement lawsuits, EEOC v. Freeman (No. 1:10-cv-2882, Maryland). The scathing opinion by U. S. District Court Judge Roger Titus held that the EEOC’s evidence was unreliable and failed to raise a question of fact or show Freeman’s background check policies created a disparate impact in violation of Title VII.Continue Reading...
Minnesota employers, take note: laws that impact you are changing this year. Not only did the Minnesota legislature recently expand the use of employee sick leave (as we blogged about here) and legalize same-sex marriage, but several other changes occurred this year that may directly impact your business. Here's a quick round up of some of the most important new laws enacted by the legislature affecting Minnesota employers.
Criminal Background Checks
Perhaps the most notable change is, beginning January 1, 2014, most Minnesota employers must change their standard employment applications and hiring practices related to use of a job applicant's criminal history. The new "ban the box" law, which refers to the check box on most employment applications asking about an applicant's criminal history, will bar private employers from asking about or considering an applicant's criminal history until (1) the applicant is selected for an interview or (2) if there is no interview, the applicant receives a conditional offer of employment. Employers who have a statutory duty to conduct criminal history investigations or otherwise consider criminal history in the employment process, such as school districts and many health and human services providers, are exempt from the new law.
When the law goes into effect, Minnesota employers who previously required all applicants to disclose criminal history will need to defer the inquiry until further into the interview process.Continue Reading...
New California Law Provides that Sexual Desire Is Not a Required Element in a Sexual Harassment Lawsuit
In a same-sex sexual harassment case, does the plaintiff need to prove that the alleged harasser's conduct was motivated by sexual desire? Under SB 292, a law signed by Governor Brown a few days ago, the answer in California is "no."
A key question when dealing with a sexual harassment claim under California's Fair Employment and Housing Act ("FEHA") is whether the harassment was "because of sex." Relying on the United States Supreme Court's ruling in Oncale v. Sundowner Offshore Services, Inc., a California appellate court held in Kelley v. The Conco Companies that proof of sexual desire was required in order to allege a same-sex sexual harassment claim. In Kelley, the plaintiff, a male apprentice iron worker, suffered sexually-explicit and homophobic insults and threats from male coworkers. The Kelley court found that the conduct, while abusive, was not "because of sex" under FEHA, because the coworkers were simply using sexually-explicit language but were otherwise not acting out of sexual attraction towards the plaintiff.
Five years before Kelley, a different California appellate court in Singleton v. United States Gypsum Company had reached the opposite conclusion, holding that plaintiff only had to prove that he or she was treated differently because of gender and that proof of sexual motivation was unnecessary. While the Court in Singleton also analyzed Oncale, it found that the case did not stand for the proposition that a plaintiff had to present proof that the harasser was motivated by sexual desire.
SB 292 resolves the split in the California appellate courts by explicitly overturning Kelley and clarifying that sexual harassment under FEHA does not require proof of sexual desire towards plaintiff. Employers with operations in California should take note, however, that while SB 292 is aimed at overturning the decision in Kelley, it goes beyond that decision as it encompasses all types of sexual harassment, same-sex as well as different-sex. This new law is a reminder that effective policies that comply with state and federal law, and training of supervisors as required by California law, is more important than ever.
After more than 20 years under the ADA and FMLA, and 18 years since the passage of the Oregon Family Leave Act (“OFLA”), most employers are familiar with the basics of these laws. Many employee leave situations can be handled in a basic and straightforward manner. Unfortunately, others involve an obscure application of a particular law, or the thorny challenges presented by the interplay of all three laws. (Unlike FMLA and OFLA, the ADA was not specifically enacted for the purpose of providing leave per se. In fact, EEOC Commissioner Chai Feldblum has referred to the ADA as “an inadvertent leave law.”)
This post gives an overview of specific practical tips to address some of the stickier leave situations that can arise. (Shameless self-promotional plug: these and other topics were covered in depth at a Stoel Rives Breakfast Briefing Seminar. For details on other Stoel Rives seminars and breakfast briefings, click here.)Continue Reading...
U.S. Supreme Court's Decisions on DOMA Extend FMLA Definition of "Spouse" To Same-Sex Partners In States Recognizing Gay Marriage
As almost everyone knows, the U.S. Supreme Court issued two blockbuster decisions on gay marriage, U.S. v. Windsor, which struck down the Defense of Marriage Act's ("DOMA") definition of marriage for the purposes of federal law, and Hollingsworth v. Perry, which struck down California's "Proposition 8" prohibiting same-sex marriage in that state. Those decisions will likely have significant effects on employers, such as with respect to employee benefits, health care and tax issues related to employees with same-sex partners. For example,read here for a detailed discussion of how the Supreme Court's decisions may impact employee benefits.
Those decisions, particularly Windsor, also will have an immediate impact on employee coverage under the federal Family Medical Leave Act ("FMLA"), which requires covered employers to provide up to 12 weeks per year of unpaid leave to eligible employees for qualifying reasons (more leave may be required in certain situations, such as leave related to military duty). One such qualifying reason entitles an employee to take leave to care for a family member, such as a family member with a serious health condition. FMLA specifically defines family members to include a "spouse," which is further defined to mean a "husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized." 29 CFR 825.122. Despite the fact that states have begun recognizing same-sex marriage in recent years, because the DOMA specifically defined marriage as only between a man and woman for the purposes of federal law, the DOMA basically overrode those states' laws for the purposes of FMLA coverage to spouses.Continue Reading...
The IRS issued Notice 2013-45 recently, the official guidance document explaining the one-year delay in the implementation of the employer pay-or-play penalties under the Patient Protection and Affordable Care Act ("PPACA") health care reform.
As announced in a Treasury blog, the IRS has delayed for one year the information reporting requirements (found in sections 6055 and 6056 of the Internal Revenue Code) that apply to insurers, self-funded plans, government agencies and large employers regarding health plan coverage. This purpose of this delay is to allow the IRS addition time “for dialogue with stakeholders in an effort to simplify the reporting requirements” and for employers and other reporting entities to “develop their systems for assembling and reporting the needed data.” Since the collection of this information crucial for the IRS’ determination of an employer’s liability for pay-or-play penalties will not occur in 2014, the IRS has announced that it will not impose pay-or-play penalties for 2014. In the Notice, the IRS states that it expects that proposed regulations on the information reporting requirements will be issued later this summer.Continue Reading...
(Plaintiff's) Paradise Found? Ninth Circuit Allows Title VII Claim, Omitted in Bankruptcy Petition, To Proceed
“Bankruptcy?” you ask. “Why are employment lawyers talking about bankruptcy?” Well, in fact, there are times when bankruptcy can provide a defense to employment discrimination claims. It involves a principle known as “judicial estoppel,” which precludes a party from taking a position in a case which is contrary to a position they have taken in earlier legal proceedings.
Although there is no uniform definition of judicial estoppel under federal law, the U.S. Supreme Court outlined three factors that courts may consider in determining whether to apply the doctrine: (1) whether the party took “clearly inconsistent” positions, (2) whether the court accepted the party’s earlier position, and (3) whether the party would obtain an unfair advantage if not estopped. Failure to disclose a pending claim (discrimination or otherwise) in bankruptcy can establish that the party took a “clearly inconsistent” position. As a penalty, the court can invoke judicial estoppel to dismiss the later case entirely.
Federal courts agree that judicial estoppel should not apply when the failure to reveal the claim was a result of inadvertence or mistake. Courts disagree, however, as to what constitutes ‘‘inadvertence’’ and as to what, if any, showing of bad faith is required. Last week, the Ninth Circuit weighed in and provided its view on the appropriate analysis.Continue Reading...
Minnesota employers who offer sick leave benefits take note: employees can use benefits to care for sick family members.
The Minnesota Sick or Injured Child Care Leave Act, Minn. Stat. § 181.9413, permits an employee to use personal sick leave benefits for absences due to the injury or illness of the employee's child. Child is defined as "an individual under 18 years of age or an individual under age 20 who is still attending secondary school." Minn. Stat. § 181.940. A recent amendment to the statute, however, will allow an employee to use sick leave benefits to care for other family members as well.
Effective August 1, 2013, employees may use personal sick leave benefits to provide care for a sick or injured minor or adult child (including a biological, adopted, foster, or stepchild), and also a spouse, sibling, parent, grandparent, or stepparent, on the same terms upon which the employee may use sick leave for him or herself. An employer may limit the use of sick leave for an employee's adult child, spouse, sibling, parent, grandparent, or stepparent to no less than 160 hours in a 12-month period. No limit may be placed on sick leave for a minor child.
Two notable limitations to the law exist. First, the law does not require employers to provide sick leave benefits. It merely states that employers offering sick leave benefits must extend the benefits to absences resulting from the illness or injury of an employee's family member. And, second, the law applies only to employers with 21 or more employees.
Employers who are subject to the amended statute are advised to update their employee handbooks and sick leave policies, and train managers and supervisors on the new law.