U.S. Supreme Court Hears Argument on LGBTQ Rights

This week the United States Supreme Court commenced its 2019-2020 term, during which it will examine significant questions related to the scope of Title VII of the Civil Rights Act of 1964.  Yesterday, on October 8th, the Court heard oral argument in a trio of cases on whether Title VII, the federal law that prohibits workplace discrimination “on the basis of sex,” prohibits discrimination based on sexual orientation and gender identity.  The issue is whether “sex” as used in Title VII is limited to gender or also includes sexual orientation or gender identity.  Currently, federal courts around the country are split on that question.  State laws are equally split, with 25 states (including Oregon, Washington, and California) protecting the rights of LGBTQ individuals and expressly prohibiting discrimination on the bases of sexual orientation or gender identity.  The Supreme Court’s ruling – expected sometime in 2020 – will shape the federal landscape on LGBTQ rights and, if it finds that Title VII prohibits discrimination against LGBTQ individuals, dramatically expand the rights of LGBTQ individuals in states that currently do not afford such protections.

We will keep you updated when the Court issues its ruling.

Department of Labor Announces Expanded Overtime Protection for over 1 Million Workers Beginning January 1, 2020

The U.S. Department of Labor announced today that an estimated 1.3 million workers will soon be eligible to receive overtime or be in line for a raise. Effective January 1, 2020, the minimum salary threshold for the “white-collar” exemptions under the Fair Labor Standards Act will be $684 per week or $35,568 per year, an increase from $455 per week and $23,660 per year. This rule comes more than three years after a similar rule was proposed by the Obama administration, but which raised the salary threshold significantly higher to $913 per week and $47,476 per year and ultimately was blocked by a federal court.

What Happened?

After the Obama rule was blocked, the Trump administration engaged in a prolonged rulemaking process to develop the current rule. Employers and other stakeholders weighed in, often with strong feedback that the Obama threshold was simply too high. Responding to those and other concerns, the current administration issued this new rule providing a smaller increase. The new rule also:

  • Raises the total annual compensation level for “highly compensated employees” from the currently enforced level of $100,000 to $107,432 per year; and
  • Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices.

Importantly, the new rule does not change the “duties” tests under the “white collar” exemptions (for example, to meet the executive duties test, the employee must supervise at least two other full-time workers, exercise independent judgment on significant matters, have authority to hire and fire, etc.). The new rule also does not come with an automatic update to the salary threshold, unlike the 2016 proposal.

What Should Employers Do Now?

With an impending January 1, 2020 effective date, employers should not delay in reviewing their workforce classifications before year-end to determine whether any employees currently categorized as an exempt executive, administrative, or professional employee are paid less than $684 per week or $35,568 per year. (It also presents an opportunity to double-check that employees also meet the requisite duties test.) If so, employers need to begin preparations to either bump those individuals’ salaries to comply with the new thresholds or pay them overtime as appropriate. Budgetary, employee morale, and other considerations will factor into this decision. If employees are re-classified to non-exempt status, then other changes will follow, such as the requirement that employees track their time worked as well as the employer managing or limiting potential overtime to be worked.

California Codifies Dynamex – Now What?

On September 18, 2019, California Governor Gavin Newsom signed Assembly Bill (“AB”) 5, thereby codifying the California Supreme Court’s landmark decision in Dynamex Operations West, Inc. v. Lee.  This represents the culmination of a seismic shift in California employment law that began a little over a year ago.

To refresh, starting in 1989, the leading test in California for distinguishing employees and independent contractors was the multifactor standard set forth in S.G. Borello & Songs, Inc. v. Department of Industrial Relations.  Under Borello, the key question was whether the employer “[had] the right to control the manner and means of accomplishing the result desired.”  In addition to this factor, the Borello test also endorsed multiple “secondary” indicia in analyzing and determining the employment relationship.

In April 2018, the California Supreme Court issued its decision in Dynamex.  In Dynamex, the Court announced a new, more objective standard for determining worker classification for the purposes of the California wage orders.  Under this new standard, the burden is on the hiring entity to establish that the worker is an independent contractor who was not intended to be included within the coverage of the California wage orders.  In order to satisfy this burden, the hiring entity must establish all of the following:  (1) that the worker is free from the control and direction of the hiring entity in connection with the performance of work, (2) that the worker performs work that is outside the usual course of the hiring entity’s business, and (3) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. Continue Reading

Oregon Supreme Court Affirms That Employers Can Be Liable for Post-Employment Retaliation

Oregon employers should be aware of the Oregon Supreme Court’s recent decision in McLaughlin v. Wilson, 365 Or 535, __ P3d __ (2019).  In McLaughlin, the court was asked to decide the scope of ORS 659A.030(1)(f), which makes it unlawful “[f]or any person to discharge, expel or otherwise discriminate against any other person because that other person” has opposed or reported harassment or discrimination.

The court broadly interpreted the statute in two key ways. First, the court held that any person can be liable for retaliation under the statute and that liability is not limited to employers. This means that supervisors, HR personnel, and other individuals may be held liable under the statute. This differs from federal Title VII, under which only employers can be liable for retaliation. Second, and perhaps of most interest to employers, the court held that the phrase “otherwise discriminate against” extends beyond discrimination that affects that terms and conditions of employment to certain post-employment acts such as, in this particular case, providing a negative reference. Although the court’s reading of the statute was broad, the court was careful to limit its holding to retaliation that has “a nexus to past or future employment.”

What does this mean for employers? Employers need to be cautious that potential liability does not stop after an individual’s employment ends. Providing a negative reference or impeding future employment prospects can give rise to a retaliation claim if it is done because the employee opposed discrimination or harassment.

California Employers Gain Time to Meet New Training Requirements for Employees

On August 30, 2019, California’s Governor Gavin Newsom signed SB 778, extending for one year the deadline for providing harassment prevention training to employees.  California employers now have until January 1, 2021 to provide the sexual harassment prevention training mandated by SB 1343, which took effect on January 1, 2019.

SB 1343 requires an employer with five or more employees to provide at least two hours of classroom or other effective interactive training and education regarding sexual harassment prevention to all supervisory employees, and at least one hour of such training to all nonsupervisory employees in California within six months of their assumption of a position.  That statute gave employers until January 1, 2020 to provide that training.

SB 778 was introduced as “clean-up” legislation, meant to address unintended consequences of SB 1343 that were making it difficult for employers to provide the newly mandated training by the January 1, 2020 deadline.  First, the language of SB 1343 made it unclear whether employers who had already trained employees in 2018 were required to re-train those employees by January 1, 2020.  Second, although SB 1343 gave employers the option of using online training created by the Department of Fair Employment and Housing (DFEH) to satisfy the new training requirements, DFEH made it clear that its online training would not be available until late 2019, making it difficult for employers to get their employees trained by January 1, 2020.

In addition to giving employers until January 1, 2021 to provide training, SB 778 also gives the DFEH more time to prepare and make its online harassment training available.  It also gives the DFEH more time to update its regulations on harassment prevention training to better define what is required for the new one-hour nonsupervisory harassment training.

For more information on the training requirements and Stoel Rives’ employee training services, please contact Vida Thomas at (916) 319-4669 or vida.thomas@stoel.com.

Ninth Circuit Requires Proof of “But For” Causation for Claims Under Americans with Disabilities Act

On Tuesday, August 20, the Ninth Circuit Court of Appeals in a case entitled Murray v. Mayo Clinic, joined four other Circuit Courts of Appeal in holding that a “but for” causation standard applies in ADA discrimination claims.  This standard is considered to make it more difficult for employees to prove discrimination claims than what had been applied previously and is referred to as “a motivating factor standard.”  The court reasoned that this change was required to comport with two earlier United States Supreme Court rulings that had adopted a similar standard based on similar statutory language found in the federal law prohibiting age discrimination in employment.

Using this new standard, ADA discrimination plaintiffs bringing a claim under 42 U.S.C. § 12112, which bars discrimination “on the basis of disability,” must now show that the adverse employment action would not have occurred but for the disability discrimination.  Under the former standard, a jury could have found an employer had violated the ADA even if the employer proved that it had a “mixed motive” for the adverse action, i.e., both legitimate and illegitimate reasons.

While employers can rejoice about this important change, any celebration should await review of their applicable state disability discrimination practice.  Many states have adopted standards that are different from what is afforded by this recent interpretation of federal law.  Indeed, employees in those states may eschew federal claims in favor of a more liberal state law cause of action.   Because employees can, and most often do bring claims under both federal and state law, juries will now face the unenviable task of applying two different legal standards that could yield different results:  no liability under federal law, but liability under state law.

We asked the lawyers in some of Stoel Rives’ offices to explain how this change might impact state law regarding disability discrimination is in their respective states:

Amy Joseph Pedersen in our Portland office notes that Oregon’s disability statute is construed consistently with the ADA and Oregon law uses language identical to Title I of the ADA—barring discrimination “on the basis of disability.”  Historically, Oregon courts have used a “substantial factor” test for these types of claims.  Amy does not believe that Oregon courts will adopt the “but for” standard for state disability claims, and because a “substantial factor” test is easier for plaintiffs to meet, plaintiffs will be more likely to prevail on state law disability claims than those made under federal law.

Chris Wall in our Seattle office says that the Murray decision is unlikely to have much day-to-day impact for Washington employers, because few claims in Washington are brought under the ADA—most plaintiffs rely on state law.  Washington courts have expressly rejected a “but for” standard for claims brought under the Washington Law Against Discrimination (“WLAD”).  Washington courts require plaintiffs to prove only that their protected characteristic was “a substantial factor” in the allegedly discriminatory employment action.  While Washington courts consider federal decisions as “persuasive,” Washington courts have noted that some WLAD provisions are “radically different” from federal law.  Washington courts interpret the WLAD with “liberal construction” and find that “the WLAD provides greater employee protections than its federal counterparts.”  Accordingly, Washington employers should take little solace in the Murray decision.

Continue Reading

Pay Equity Update: Oregon Legislature Amends Equal Pay Law

SB 123, just passed by the legislature and signed by Governor Brown, makes several amendments to Oregon’s pay equity law. Most notable are the revisions to the limited affirmative defense available to employers in litigation. The law previously provided employers a “safe harbor” from emotional distress and punitive damages if a lawsuit is filed, if the employer had conducted a pay equity audit within the last three years that related to the plaintiff’s protected class, and if the employer had eliminated any unlawful wage gaps for the plaintiff. As amended, the law protects employers from emotional distress and punitive damages if they have conducted a pay equity audit within the last three years that is calculated to – and makes – “reasonable and substantial” progress towards closing wage gaps generally, even if those efforts do not address a particular plaintiff’s wage gap. While the safe harbor is not a complete defense (prevailing plaintiffs can still recover back pay and attorney fees), the amendment offers broader protection and provides additional incentive to conduct at least a limited pay equity analysis for employers who have not done so already.

SB 123’s other (mostly minor) amendments include:

  • Explicitly providing that an employer can pay employees differently if they are on light duty related to a workers’ compensation claim or otherwise temporarily performing modified work as a result of a medical condition.
  • Clarifying that any wage increases an employer makes in response to a pay equity audit may not be viewed as an admission of liability in a pay equity lawsuit.
  • Defining “system” (which, in the context of a seniority or merit system, is a lawful reason to justify a pay disparity) as a “consistent and verifiable method” that is in place to evaluate employees at the time a pay equity violation is alleged.

For more information about SB 123 and other legislative changes, sign up for our next breakfast briefing here. More information about Oregon’s pay equity law is also available here.

California Supreme Court Confirms that the “anti-SLAPP” Statute Applies to Claims of Discrimination and Retaliation

Prior to the California Supreme Court’s decision in Wilson vs. Cable News Network, Inc., California Courts of Appeal were split on whether California’s anti-SLAPP statute applied to an employee’s claims of discrimination and retaliation.  The Supreme Court in Wilson resolved this split in favor of the statute’s application, bringing a welcome bit of good (albeit narrowly tailored) news to California employers.

California Code of Civil Procedure section 425.16 is referred to as the anti-SLAPP statute.  The term “SLAPP” refers to Strategic Lawsuits Against Public Participation, which are meritless lawsuits brought against critics in order to silence their criticism.  Section 425.16 was first passed by the California legislature in 1992 due to its concern that real estate developers were attempting to bully project opponents into submission by filing frivolous litigation.  This section provides a procedure for a defendant to challenge a pleading via a special motion to strike.  In order to succeed on the challenge, the defendant must demonstrate that the claim or claims at issue arise out of protected speech or petitioning activity.  If the defendant can make this showing, then the burden shifts to the plaintiff to demonstrate that the claim or claims have probable validity.  If the plaintiff makes this showing, then the defendant’s motion is denied. If not, then the claim or claims at issue are dismissed and the defendant is entitled to his, her, or its attorneys’ fees and costs.

With this in mind, it is clear that the anti-SLAPP laws can be a powerful weapon if wielded correctly.  And that is where the Supreme Court’s decision in Wilson comes into play,  both with good news and bad news. Continue Reading

Oregon Enacts Paid Family Leave

Starting in 2023, Oregon employers with at least 25 employees must provide eligible employees with up to 12 weeks of paid leave for a covered purpose (family, medical, or “safe” leave). The program will be funded with payroll contributions (40% employer/60% employee), the amount of which depends on an employee’s wages. Benefit amounts will be based on the state’s average wage and the eligible employee’s average wage.

Employers do not need to begin collecting and remitting contributions until 2022, and benefits will not be available until January 1, 2023.

Employers that already provide benefits equivalent to or greater than the state program may be exempt from Oregon’s new requirements. In addition, self-employed individuals may opt into the state program to receive benefits equivalent to those that are provided to employees. The new law provides a general framework for how the program will be administered but leaves many important aspects, including the precise percentage of wages that must be contributed to the state fund (though it is capped at 1% of employee wages), to the determination of the Director of the Employment Department.

Click here for a more complete summary of the new program. Contact your Stoel Rives attorney if you have any questions about these new requirements.

Resources for Protecting Your Company During an ICE Raid

With all of the buzz about potential impending raids by U.S. Immigration and Customs Enforcement (“ICE”), many employers are understandably concerned about the rights of their employees, as well as their own rights and obligations with respect to ICE activity.

Employers must be careful to not provide assistance to employees beyond providing factual information about the employee’s rights, such as the right to remain silent, the right to refuse to sign any documentation, and the right to speak with an attorney. You cannot instruct employees to answer questions in a particular way or forbid them from answering questions, and you cannot hide employees or assist them in leaving the premises.

If ICE agents arrive at your workplace, you should take the following steps:

  • Contact your attorney
  • Confirm that there is a warrant and review it to ensure it has been signed by a judge and to determine its scope
  • Accompany ICE officials at all times and document everything
  • Refuse to discuss policies, practices, or particular employees with ICE officials
  • Do not hide employees, assist with their escape, or mislead ICE officials

The American Immigration Lawyers Association and American Immigration Council’s ICE Worksite Raid: Employer Rights and Responsibilities is a great reference, and can be helpful in providing information to those in management or supervisory roles who may encounter ICE officials. The National Employment Law Project and National Immigration Law Center have a similar reference tool here.

If you would like to circulate materials to your employees informing them of their rights, the American Civil Liberties Union has materials available in English and Spanish.

For further discussion of this issue, see our previous blog post on this issue here. If you have further questions or anticipate that your business may be targeted in an ICE raid, please contact one of our labor and employment attorneys.

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