Preparing for the Repeal of Cook County’s Beverage Tax: Requesting Credits and Refunds

Earlier this fall, the Cook County Board voted to repeal its constitutionally suspect, politically unpopular one cent per ounce sweetened beverage tax (Tax). The short-lived Tax will expire at the end of the County’s fiscal year on November 30, 2017.

Having been tasked with implementing the Tax, the Cook County Department of Revenue (Department) is now charged with unwinding it. Distributors and retailers who have paid the Tax are entitled to credits or refunds on their unsold inventory at month’s end. The Department recently issued guidance on the credit/refund procedure.

Retailers that have paid Tax to their distributors may claim a credit/refund from their distributors for Tax paid on their unsold inventory by completing the Department form entitled “2017 Sweetened Beverage Retailer Inventory Credit Request Form and Schedule A.” Retailers should complete and submit the form to their distributors, not the Department.

Distributors must file a final Tax return with the Department on or before December 20 (Final Return). To the extent a distributor already has refunded or credited Tax to its retailers, the distributor may claim a credit for the amount refunded on the “other deductions” line of its Final Return. Distributors must file the Department’s standard refund application, found on the Department’s website, to claim refunds for amounts refunded or credited to retailers after December 20. The Department has issued a new form (the “Sweetened Beverage Tax Distributor Credit Form Schedule”) to be submitted by distributors to the Department in support of any credit or refund claims. The form requires distributors to identify the retailers to which it has provided credits/refunds and the amounts thereof.

Retailers who self-remit the Tax may take a credit on their Final Return with supporting documentation. In addition, retailers that have unsold inventory as of December 1, on which they previously remitted floor tax, may obtain a refund of the floor tax through the Department’s standard refund procedure.

Practice Notes:

  1. To the extent possible, Taxpayers should take advantage of the opportunity to claim a credit on their Final Returns in order to avoid the time and expense associated with the County’s standard refund procedure.
  2. Since the Tax was repealed, enthusiasm has waned for various Illinois House Bills (HB 4082-84) proposing to limit the authority of localities to impose beverage taxes. It’s difficult to predict whether the bills will be enacted.
  3. However, the State of Michigan has passed legislation, signed into law by Governor Snyder on October 26, 2017, which prohibits municipalities from levying local taxes on food or beverages.
This post was written by Lauren A. Ferrante & Mary Kay McCalla Martire of McDermott Will & Emery., © 2017
For more legal go to The National Law Review

The Law of Unintended Consequences: BIPA and the Effects of the Illinois Class Action Epidemic on Employers

Has your company recently beefed up its employee identification and access security and added biometric identifiers, such as fingerprints, facial recognition, or retina scans? Have you implemented new timekeeping technology utilizing biometric identifiers like fingerprints or palm prints in lieu of punch clocks? All of these developments provide an extra measure of security control beyond key cards which can be lost or stolen, and can help to control a time-keeping fraud practice known as “buddy punching.” If you have operations and employees in Illinois (or if you utilize biometrics such as voice scans to authenticate customers located in Illinois), your risk and liability could have increased with the adoption of such biometric technology, so read on ….

What’s the Issue in Illinois?

The collection of biometric identifiers is not generally regulated either by the federal government or the states. There are some exceptions, however. Back in 2008, Illinois passed the first biometric privacy law in the United States. The Biometric Information Privacy Act, known as “BIPA,” makes it unlawful for private entities to collect, store, or use biometric information, such as retina/iris scans, voice scans, face scans, or fingerprints, without first obtaining individual consent for such activities. BIPA also requires that covered entities take specific precautions to secure the information. BIPA also carries statutory penalties for every individual violation that can multiply quickly … and the lawsuits against employers have been coming by the dozens over the past few months.

The Requirements of BIPA

Among other requirements, under BIPA, any “private entity” — including employers — collecting, storing, or using the biometric information of any individual in Illinois – no matter how it is collected, stored or used, or for what reason – must:

  1. Provide each individual with written notice that his/her biometric information will be collected and stored, including an explanation of the purpose for collecting the information as well as the length of time it will be stored and/or used.
  2. Obtain the subject’s express written authorization to collect and store his/her biometric information, prior to that information being collected.
  3. Develop and make available to the public a written policy establishing a retention schedule and guidelines for destroying the biometric information, which shall include destruction of the information when the reason for collection has been satisfied or three years after the company’s last interaction with the individual, whichever occurs first.

Also, any such information collected may not be disclosed to or shared with third parties without the prior consent of the individual.The Money Issue

Under the law, plaintiffs may recover statutory damages of $1,000 for eachnegligent violation and $5,000 per intentional or reckless violation, plus attorneys’ fees and other relief deemed appropriate by the court. Moreover, if actual damages exceed liquidated damages, then a plaintiff is entitled under the Act to pursue actual damages in lieu of liquidated damages.

These damage calculations are made and awarded under BIPA on an individual basis. Do the math: If an employer has 100 employees in Illinois and has allegedly been negligent in obtaining required BIPA consent from employees, this can be a potential exposure of an employer to $500,000 in penalties, before you add in the ability to recover attorneys’ fees.

Who is Getting Sued?

The list of companies sued under BIPA spans industries. The initial groups of defendants included companies such as Facebook, Shutterfly, Google, Six Flags, and Snapchat. Also, a chain of tanning salons and a chain of fitness centers were each sued for using biometric technology to identify members. Between July and October, nearly 26 class-action lawsuits were filed in Illinois state court by current and former employees alleging their employers had violated the BIPA. Companies range from supermarket chains, a gas station and convenience store chain, a chain of senior living facilities, several restaurant groups, and a chain of daycare facilities.

Facts vary from case to case, but nearly all of the recent employee BIPA cases implicate fingerprint or palm-print time-keeping technologies that collect biometric data to to clock employees’ work hours. The plaintiffs allege their employers failed to inform employees about the companies’ policies for use, storage and ultimate destruction of the fingerprint data or obtain the employees’ written consent before collecting, using or storing the individual biometric information.

In at least one case, the employee has also alleged fingerprint data was improperly shared with the supplier of the time-tracking machines, and has named that supplier as a defendant as well (Howe v. Speedway LLC, No. 2017-CH-11992 (Ill. Cir. Ct. filed Sept. 1, 2017)).

What Do I Do Now?

In order to avoid becoming the next target, employers with operations and employees in Illinois should ask some basic questions and review processes and procedures:

  1. First question to ask: are we collecting, storing or using individual biometric data for any purpose?
  2. If the answer is yes, has your company issued the required notice and received signed releases/consents from all affected individuals? This release/consent should be obtained at the commencement of employment before any collection of individual biometric data begins. Do you have a publicaly available written policy to cover the collection, storage, use and destruction of the data? The employee handbook is the most logical place for this policy.
  3. Review your processes: (a) make sure that any collected data is not being sold or disclosed to third parties, outside of the limited exceptions permitted by the Act, and this includes vendors and third party suppliers of biometric technology who process and store the information in a cloud-based service, and (b) make sure that you evaluate your internal data privacy protocols and processes for protecting this new data set, and be prepared to prove that you have “reasonably sufficient” security measures in place for the individual biometric data.
  4. Review your vendor processes: If a vendor has access to the individual biometric data (such as a software-as-a-service provider), make sure the vendor has sufficient data privacy protocols and processes in place and that you have representations regarding this protection from the vendor.
  5. Review insurance coverage for this type of exposure with your broker.
  6. Remember the data breach issues: Make sure your data breach policies recognize that individual biometric data is considered personal information under Illinois laws addressing data breach notification requirements.

This post was authored by Cynthia J. Larose of © Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. For more Labor & Employment legal analysis, go to The National Law Review

Right-to-Work Battle in Illinois Enters Cease Fire – For Now

Illinois is completely surrounded by right-to-work states that have laws making it unlawful for companies to require union dues as a condition of employment. Notwithstanding the recent trend of states enacting such laws, the Illinois legislature tried its best this year to block right-to-work legislation within its borders.

Earlier this year, the Illinois legislature passed a law that would prohibit local governments from enacting their own right-to-work laws after one Illinois municipality attempted to enact a right-to-work ordinance in 2015. Illinois Gov. Bruce Rauner vetoed the legislation – based on his belief that right-to-work laws promote business growth – and this week the legislature fell one vote short of overriding his veto. There are signals legislators may attempt to revive the legislation next year. Thus, this remains an issue for Illinois employers to watch.

This issue is not unique to Illinois; local governments in Kentucky enjoyed some success with their own right-to-work ordinances several years ago before the state enacted its own right-to-work law.

Right-to-work laws are permitted under Section 14(b) of the Taft-Hartley Act and make it unlawful for companies to require union dues as a condition of employment. In states where right-to-work laws are not enacted, most unionized employers have clauses in their labor agreements that require dues payments as a condition of employment – the clauses generally are known as “union seniority clauses.” At present, 28 states have right-to-work laws on the books. The National Right to Work Foundation maintains a current list.

This post was written by David J. Pryzbylski of BARNES & THORNBURG LLP., © 2017
For more Labor & Employment legal analysis, go to The National Law Review

Employees Sue for Fingerprint Use

Employees of Peacock Foods, an Illinois-based food product manufacturer, recently filed a lawsuit against their employer for alleged violations of Illinois’ Biometric Information Privacy Act. Under BIPA, companies that collect biometric information must inter alia have a written retention policy (that they follow). As part of the policy, the law states that they must delete biometric information after they no long need it, or three years after the last transaction with the individual. Companies also need consent to collect the information under the Illinois law, cannot sell information, and if shared must get consent for such sharing.

According to the plaintiff-employees, Peacock Foods used their fingerprints for a time tracking system without explaining in writing how the saved fingerprints would be used, or if they would be shared with third parties. According to the employees, this violated BIPA’s requirement for explaining -in the consent request- how information would be used and how long it would be kept. The employees also alleged that Peacock Foods did not have a retention schedule and program in place for deleting biometric data. The employees are currently seeking class certification.

Putting it Into Practice: This case is a reminder that plaintiffs’ class action lawyers are looking at BIPA and possible complaints that can be brought under the law. To address the Illinois law – and similar ones in Texas and Washington – companies should look at the notice and consent process they have in place.   

This post was written by Liisa M. Thomas & Mukund H. Sharma of Sheppard Mullin Richter & Hampton LLP., Copyright © 2017

For more Labor & Employment legal analysis, go to The National Law Review

Illinois Passes Religious Garb Law Clarifying Religious Protections Under Illinois Human Rights Law

On August 11, 2017, Illinois Governor Bruce Rauner signed into law Public Act 100-100, known as the “Religious Garb Law.”  The law amends the Illinois Human Rights Act (“IHRA”) by clarifying the scope of protection for sincerely held religious beliefs.

Specifically, the amendment makes clear that it is a violation of the IHRA for an employer to impose a requirement that would cause an employee to “violate or forgo a sincerely held practice of his or her religion including, but not limited to, the wearing of any attire, clothing, or facial hair in accordance with the requirements of his or her religion.”  However, the law indicates that “[n]othing in this Section prohibits an employer from enacting a dress code or grooming policy that may include restrictions on attire, clothing, or facial hair to maintain workplace safety or food sanitation.”  Moreover, employers may still prohibit attire, clothing and facial hair if failing to do so would result in an undue hardship to the employer’s business.

In essence, this amendment clarifies the scope of religious protections that exist under the IHRA.  Notably, the EEOC has taken the position that Title VII protects religious garb.

This post was written by Steven J Pearlman and Alex C Weinstein of  Proskauer Rose LLP.© 2017

Tax Changes Implemented As Part of Revenue Package Supporting Illinois Budget

Yesterday afternoon, after months of wrangling and a marathon 4th of July weekend session, the Illinois House of Representatives voted to override Governor Bruce Rauner’s veto of Senate Bill (SB) 9, the revenue bill supporting the State’s Fiscal Year (FY) 2017-2018 Budget. The vote ended Illinois’ two year budget impasse and may avoid a threatened downgrade of Illinois bonds to junk status. The key tax components of the bill as enacted Public Act 100-0022 (Act) are as follows:

Income Tax

Rate increase. Income tax rates are increased, effective July 1, 2017, to 4.95 percent for individuals, trusts and estates, and 7 percent for corporations.

Income allocation. The Act contains a number of provisions intended to resolve questions regarding how income should be allocated between the two rates in effect for 2017.

  • Illinois Income Tax Act (IITA) 5/202.5(a) provides a default rule, a proration based on the days in each period (181/184), for purposes of allocating income between pre-July 1 segments and periods after the end of June when rates increase. Alternatively, IITA 5/202.5(b) provides that a taxpayer may elect to determine net income on a specific accounting basis for the two portions of their taxable year, from the beginning of the taxable year through the last day of the apportionment period, and from the first day of the next apportionment period through the end of the taxable year.

Note: This provision will create planning opportunities for taxpayers. For example, a taxpayer who paid bonuses to employees early in the year may wish to elect specific accounting, whereas taxpayers who paid bonuses out after the effective date of the tax increase may wish to pro rate under the default rule.

  • A new sub-section (IITA 202.5(c)(3)) provides that a taxpayer who elects a specific allocation different from the default rule must divide any Section 204 exemptions between the respective periods in amounts which bear the same ratio to the total exemption allowable under Section 204 as the total number of days in each period bears to the total number of days in the taxable year. We note that no mention is made regarding the treatment of credits.
  • Finally, another new sub-section (IITA 202.5(c)(4)) provides that a taxpayer who elects a specific allocation different from the default rule may not claim negative net income for one portion of the year and not the other. If a taxpayer’s net income otherwise would be negative for a portion of the year, the taxpayer is required to attribute all of its net income to the portion of the taxable year with positive net income and report net income for the other portion of the taxable year as zero.

Elimination of non-combination rule. For taxable years beginning on or after December 31, 2017, the definition of “unitary business group” is amended to eliminate the non-combination rule for group members that use different apportionment methods. There is no exception for insurance companies.

Note: For calendar year corporations, this change will take effect this year.

Expanded definition of “United States.” For taxable years ending on or after December 31, 2017, the definition of “unitary business group” is amended to include an expanded definition of “United States” to include the fifty states, the District of Columbia and “any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources,” but not any territory or possession of the United States.

Note: For calendar year corporations, this change will take effect this year.

Decoupling from Domestic Production Activities Deduction (DPAD). The Act decouples from the federal domestic production activities deduction.

Research and Development Credit Extended and Reliance Protected. The research and development credit is restored retroactively (it had expired on January 1, 2016) and extended through December 31, 2021. The Act provides that all actions taken by taxpayers “in reliance on the continuation of the credit” are “hereby validated.”

Income Cap on individual taxpayer eligibility for certain exemptions and credits. Taxpayers with adjusted gross income for a taxable year in excess of $500,000 (in the case of spouses filing a joint federal return) or $250,000 (for all other taxpayers) may not claim the standard exemptions set forth in IITA Section 204. (IITA 5/204(g)). In addition, they may not claim a tax credit for residential real property taxes (IITA 5/208) or the education expense credit (IITA 5/201(m)).

Increased education expense credit. The education expense credit is increased to $750 for tax years ending on or after December 31, 2007. (See note above about limitations on taxpayer eligibility for the credit.)

Instructional materials credit. A new credit (maximum $250.00) is created for taxpayers who are teachers, instructors, counselors, principals or aides in qualified schools (for at least 900 hours during a school year) for instructional materials and supplies.

Sales Tax

Sales tax base not expanded to include services. The Act does not change the sales tax rate or expand the base to tax services.

Gasohol, majority blended ethanol, biodiesel and certain biodiesel blends. The Retailers’ Occupation Tax Act, Use Tax Act and Services Tax Act are amended to provide that gasohol is taxed at 100 percent of sales proceeds, effective July 1, 2017. Exemptions for blended ethanol, biodiesel and biodiesel blends are extended through 2023.

Manufacturing, Machinery and Equipment Exemption expanded to include graphic arts. The manufacturing, machinery and equipment exemption is expanded to include graphic arts machinery and equipment, effective July 1, 2017.

State Tax Lien Registration Act

The Act creates a central state tax lien registration system, which eliminates the requirement for the Illinois Department of Revenue (DOR) to post liens for taxes due in counties throughout the state. Taxpayers are required to pay any administrative fee imposed by the DOR by rule when creating the State Tax Lien Registry.

Revised Uniform Unclaimed Property Law

The Act includes a complete rewrite of the Illinois Unclaimed Property Laws, which we describe in a separate post.

This post was written byMary Kay McCalla MartireFred M. Ackerson and  Lauren A. Ferrante of McDermott Will & Emery.

Cook County, Illinois Increases Minimum Wage

cook county illinois minimum wageEffective July 1, 2017, employers in Cook County, Illinois, will be required to pay a higher minimum wage that will continue to increase every year thereafter. On October 26, 2016, the Cook County Board voted to gradually increase the minimum wage to $13 per hour by July of 2020. This is similar to the City of Chicago’s minimum wage increase, which gradually raises the minimum wage to $13 per hour by 2019. The new law applies to the all of Cook County, including unincorporated areas. However, home-rule towns can vote to opt out of the increase.

The minimum wage will first increase from $8.25 to $10 per hour on July 1, 2017. It will subsequently increase $1 per year until reaching $13 an hour in 2020. Future annual increases will be tied to the rate of inflation, not to exceed 2.5%. Tipped workers who make $4.95 under Illinois law will not see a wage increase until July 1, 2018, and these wage increases will be tied to the rate of inflation, not to exceed 2.5%.

Employers in Cook County should prepare for payroll increases beginning July 2017 and continuing every year thereafter.

A Twisting Path: Illinois Licensure Actions Against Physicians, Nursing Home Administrators, Nurses, and Other Professionals

The Illinois Department of Financial & Professional Regulation (the Department), Division of Professional Regulation (the Division), regulates the licenses of numerous professionals in the health care fields, including physicians, nurses, nursing home administrators, and many others. For health care professionals facing an investigation, hearing, or potential disciplinary action related to alleged misconduct, the Division’s process can seem quite daunting and confusing. The information provided below, along with the advice of experienced legal counsel, can help you navigate this twisting path.

Notifications and Investigations

Most disciplinary actions are for the overly broad and subjective reason of “unethical or unprofessional conduct.” Individuals can come to the Division’s attention through complaints by dissatisfied patients, co-workers, or supervisors, or by referrals from other regulatory bodies such as the Illinois Department of Public Health (IDPH) or the Illinois Department of Healthcare and Family Services (IDHFS).

Although logic and efficiency dictate that the Division investigate any complaints it receives before alleging the licensed professional might have violated applicable regulations, that is not always the case. More often than not, the “investigation” begins with the filing of a notice to the licensee that the Division received a complaint, and the notice includes a request that the licensee appear at an informal conference. The Division sends such notices to the licensee’s home, as that is the address the Division has on file. Occasionally, licensees will be visited by an investigator at the place of business; this is usually done only when the state budget allows for such expenditures.

If this happens, then do not panic. For reasons detailed below, with the help of experienced counsel, many informal conferences result in the Division concluding that the licensee did nothing wrong.

There are numerous occasions when reporting to the Division is mandatory. For example, IDPH must report the names and license numbers of nursing home administrators when it cites certain deficiencies in a nursing home. Nurses who are administrators or officers of a health facility must report a nurse impaired by drugs or alcohol or who possesses, uses, or distributes drugs. IDHFS reports when physicians enter into integrity agreements or opt out of the Medical Assistance Program. If a health care licensee is accused of a sex crime, the prosecutor notifies the Division and the practitioner can only practice with a chaperone.

Disciplinary Conferences and Hearings

If the Division schedules an informal disciplinary conference, the licensee should consider hiring a lawyer. If the Division does not schedule an informal conference, then the licensee should ask the Division to do so. These conferences are typically handled by a Division attorney and a member of the relevant licensing board (the latter of whom usually takes the lead in asking questions and making the final decisions).

Informal disciplinary conferences generally take the place of an investigation and offer an excellent opportunity for the licensee to tell his or her side of the story. The board members who attend these conferences are typically in the same profession as the licensee (although not necessarily from the same kind of work environment), so they understand the practices, processes, and pressures facing the individuals who appear before them. The vast majority of such conferences end with a recommendation that no further action be taken.

A hearing is a far more formal process, conducted by an administrative law judge (ALJ) with a court reporter present and, generally, conducted according the rules of evidence. Again, the licensee can and should be represented by counsel. One or more members of the relevant board may be present and may participate by questioning witnesses. The ALJ prepares a report that is then reviewed by a committee of board members before it goes to the director of the Department for a final order.

Disciplinary Actions

Activities that generate disciplinary actions include sister-state discipline, drug/alcohol issues, failures related to treatment, and bureaucratic issues. In looking at recent disciplinary actions reported over a seven-month period on the Division’s website, physicians were disciplined for sister-state discipline 58 times, for drug/alcohol transgressions 20 times, treatment problems 50 times and bureaucratic issues 40 times. Nurses were disciplined for sister-state discipline 92 times, drug/alcohol transgressions 88 times, treatment problems 21 times and bureaucratic issues 46 times. Only one nursing home administrator — one on a temporary license, at that — was disciplined for failure to report abuse in a timely manner.

Disciplinary actions can include reprimand, additional continuing education hours, inservices, probation (for a defined or indefinite period), restrictions, quality assurance audits, fines, suspension, refusal to renew, placement in permanent inactive status, or termination. The Division may also place a letter in a licensee’s file, but the letter is not considered discipline — as such, these letters do not appear on the Division’s website. These letters essentially tell the licensee to avoid doing whatever brought them to the attention of the Division in the first place. The Division can use such letters as a basis for progressive discipline if the licensee comes to the Division’s attention for a similar reason in the future.

Disciplinary actions in one state affect licensure status in other states. They also may affect a licensee’s ability to participate in the Medicaid and Medicare programs and to prescribe controlled substances. Even an investigation that does not result in a penalty must on some occasions be reported, and failure to do so may result in further disciplinary action.

Protect Your Privileges!

Remember, holding a professional license is a privilege, not a right. Such a privilege is always subject to strict scrutiny and can be restricted as necessary to assure that the public are not harmed in any way. Needless to say, seeking out knowledgeable counsel is always recommended.

Article By Frances D. Meehan of Much Shelist, P.C.

Illinois: Transgender Locker Room Policy Eludes School District Facing Government Sanctions Under Title IX

An Illinois school district has violated anti-discrimination laws by not allowing a transgender student who identifies as female and is on her high school’s girls’ sports team to change and shower in the girls’ locker room, the United States Department of Education Office of Civil Rights (“OCR”) has held.

The OCR released its findings on November 2, 2015, after completing an extensive investigation of a complaint for unlawful discrimination under Title IX of the Education Amendments of 1972 filed by a transgender female high school student against the Township High School District 211 in Palatine, Illinois. Title IX prohibits discrimination on the basis of sex in any federally funded education program or activity. An entity in violation of Title IX may lose some or all of its Title IX funding.

Schools districts, colleges, and private employers are increasingly at risk of transgender discrimination charges or complaints under laws enforced by the OCR, the Equal Employment Opportunity Commission, the Department of Labor, the Department of Justice, and the Occupational Safety and Health Administration as these agencies develop their policies on transgender issues.

The EEOC, the DOL, and the DOJ have interpreted Title VII of the Civil Right Act’s prohibitions on sex discrimination to bar employment discrimination based on gender identity.

On the employment front, in the seven months between October 2014 and April 2015, EEOC received 505 charges based on sexual orientation discrimination and 112 charges based on gender identity. Moreover, the EEOC’s Strategic Enforcement Plan for 2012-2016 includes the investigation and enforcement of LGBT (lesbian, gay, bisexual, and transgender) sex stereotyping claims .

Further, effective April 2015, the DOL’s Office of Federal Contract Compliance Programs requires federal contractors subject to Executive Law 11246 to allow transgender employees to use the restroom and other facilities consistent with their gender identity (See article DOL Releases Regulations Extending Protections to Lesbian, Gay, Bisexual, and Transgender Employees, Applicants).

Finally, the OSHA guidelines require all employers under its jurisdiction to provide a “safe and healthy working environment for all employees” and transgender employees “should have access to restrooms that correspond to their gender identity.”

OSHA recommends that companies should implement written policies to ensure that all employees have “prompt access to appropriate sanitary facilities.” The agency’s best practices guide also recommends providing options from which a transgender employee may choose. These can include single-occupancy gender-neutral facilities and the use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls (See article Restroom Access Should Be Consistent with Employee’s Gender Identity, OSHA Says).

Background

The Township High School District 211 denied a transgender female student access to three separate girls’ locker rooms (“LR”) (including the Physical Education (“PE”) LR, the PE Swim LR, and the Athletics LR). The Student alleged the District discriminated against her based on sex by denying her access to the girls’ locker rooms because of her gender identity and gender non-conformity.

OCR Decision

The OCR found the District violated Title IX for excluding the Student from participation in and denying her the benefits of its education program, providing services to her in a different manner, subjecting her to different rules of behavior, and subjecting her to different treatment on the basis of sex.

“The evidence shows that as a result of the District’s denial of access to the girls LRs, Student A has not only received an unequal opportunity to benefit from the District’s educational program, but also has experienced an ongoing sense of isolation and ostracism throughout her high school enrollment.”

Other than access to the female locker rooms, the OCR found the District treated the Student consistently with her gender identity, including identifying her by her female name and with female pronouns, providing her with full access to girls’ restrooms and allowing her to participate in girls’ sports.

Alternatives Not Acceptable

The District argued it offered the Student alternative changing options, such as permitting her to change with several female friends in an alternative restroom closer to the PE gym and offering her another restroom near the Swim LR.

The OCR found that the alternatives “continued or would continue to exclude [the Student] from the girls’ locker rooms and set her apart from her female classmates and teammates,” particularly as some of the proposed alternative facilities were not comparable to those provided for other girls.

For example, unlike the other female students who used the PE class swim unit, the Student had access only to a rinse shower and was not able to dry her hair because there was no electrical outlet. Furthermore, by not having access to the PE locker room, she was subjected to stigma and different treatment, OCR said, because she occasionally had been late to class or missed class announcements that were made in the girls’ locker room.

Finally, as a result of being denied access to the girls Athletics LR, the Student felt excluded from the team because she missed the informal huddle in the LR before matches, locker room “girl talk,” and the female bonding in the LR. According, the OCR concluded the District denied the Student’s Title IX rights.

Privacy Concerns Unavailing

While acknowledging that it denied the Student access to the female locker rooms, the District argued that it had to balance the Student’s rights and interests with two distinct privacy concerns of other female students:

  • the need to protect female students from “being observed in a state of undress by a biologically male individual,” and

  • the “inappropriateness of allowing young female students to view a biologically naked male in the locker room in a state of undress.”

The OCR found both of these arguments unpersuasive as the District had installed five showers with privacy curtains and five restroom stalls in the girls PE LR, but had not provided private changing areas in the other two LRs.

“The District’s installation and maintenance of privacy curtains in one locker room go a long distance toward achieving such a nondiscriminatory alternative because providing sufficient privacy curtain access to accommodate any students who wish to be assured of privacy while changing would allow for protection of all students’ rights in this context. Those female students wishing to protect their own private bodies from exposure to being observed in a state of undress by other girls in the locker rooms, including transgender girls, could change behind a privacy curtain.”

Given the Student’s willingness to change privately, the OCR said, the District could have provided equal access to all three LRs if it installed additional privacy curtains for any student that wanted privacy.

Takeaways

Federal government agencies are increasingly examining the purported protections afforded to transgender students and employees, in both the public and private sectors. How to handle transgender issues is still a work-in-progress for the agencies and the entities they regulate. In this case, despite the District’s accommodations and options to provide equal treatment to the Student in all respects other than access to the Locker Room, the OCR nevertheless held its efforts were insufficient. Moreover, states also have laws protecting LGBT individuals (See article Utah Governor Signs Landmark LGBT and Religious Expression Anti-Discrimination Bill).

The following steps can help lower the risk of being under government scrutiny:

  1. closely review and revise EEO (equal employment opportunity), harassment, and transgender policies;

  2. ensure proper sensitivity training of administrators, faculty, and students to foster diverse and inclusive primary, secondary school, and campus environments to avoid stigmatizing transgender students; and

  3. ensure that accommodations for transgender students and employees provide equal access in all respects, as well as balance privacy concerns.

Because of the complexities involved in this area, school districts, colleges, and private sector employers would be well-served to regularly review their policies and practices with counsel to ensure they address specific organizational needs effectively and comply with applicable law.

Jackson Lewis P.C. © 2015

Medical Cannabis in Illinois: What Employers Need to Know

THE MEDICAL CANNABIS PILOT PROGRAM IN ILLINOIS

Is Illinois allowing recreational cannabis use, as is currently the case in Colorado and Washington?
No. The Illinois medical cannabis program is one of the most restrictive regulatory programs in the country, limiting individual usage and industry operations much more than a recreational cannabis state such as Colorado. The Illinois medical cannabis program is a four-year experiment. Illinois government leaders will evaluate a variety of outcomes before deciding whether to restrict, expand or modify the approved uses of cannabis.

How many patients in Illinois will be participating in the pilot program?
Currently, just over 3,000 patients have been approved by the Illinois Department of Public Health to participate in the program. Thousands more are expected to register once the program begins full operations.

How will I know if an employee is approved to participate as a patient in the pilot program?
Employees approved to participate in the program will be issued a State of Illinois identification card verifying registration with the Illinois Department of Public Health.

EMPLOYER CONCERNS

Are employers required to allow patients to use medical cannabis in the workplace?
No. The Illinois medical cannabis law does not require employers to permit employee use of cannabis in the workplace, even when the employee is registered as a patient in the pilot program.

Is permission to use medical cannabis required as a “reasonable accommodation” under the Americans with Disabilities Act?
Although some states have specific language in their laws that answer this question, Illinois law does not appear to include the use of medical cannabis as a required reasonable accommodation under the ADA. Although the underlying debilitating medical condition may qualify an individual for protections under the ADA, whether an employer decides to allow an employee to use medical cannabis as a reasonable accommodation under the ADA will be an individualized determination for the employer to undertake.

Am I required to tolerate medical cannabis use by an employee who works in a safety-sensitive position (i.e., a position in which the employee’s cannabis use could increase the risk of harm to the employee or others)?
No. An employer can enforce a zero-tolerance policy that disallows cannabis use by any employee, such as a physician, who works in a safety-sensitive position.

EMPLOYEE AND CANDIDATE DRUG TESTING

Can I require a medical cannabis patient who is in my employ or a candidate who I am considering hiring to undergo drug testing? What can or should I do if the employee or candidate tests positive?
In Illinois, an employer has discretion to require job candidates (as part of a conditional job offer) and employees to undergo drug testing, as long as the drug testing is conducted in a non-discriminatory manner. The employer also has the option of taking disciplinary action against a current employee who tests positive for a controlled substance (including cannabis), withdrawing an offer of employment issued to a job candidate who tests positive, or taking no action. However, the employer should be consistent in its policies and practices.

If I have contracts with the federal government, am I required to conduct drug tests for medical cannabis for job candidates and/or employees? If so, what am I required or permitted to do if a candidate or employee tests positive for cannabis use?
Some federal government contractors are required to conduct tests for drugs, including cannabis use, for employees and job candidates who are or will be performing certain safety-sensitive or security duties (e.g., owners of nuclear power plants, gas or oil pipelines, airlines and railroads). Action to be taken as a result of a positive drug test will depend on the pertinent circumstances. To ensure compliance with such requirements, employers should consult with an experienced employment law attorney for additional guidance.

Should I review and modify my personnel policies pertaining to drug use and testing? If so, what types of issues should I consider?
Yes, now is an ideal time to review personnel policies involving drug testing and protocols for responding to employee drug use and abuse. Management should carefully consider the company’s approach to drug testing of employees and develop a consistent and transparent plan for responding to drug test results.

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