Category: Labor & Employment

DOL Issues Final Rule Amending FMLA Definition of “Spouse” to Include Same-Sex Marriages

The U.S. Department of Labor has issued a final rule amending the regulatory definition of “spouse” under the Family and Medical Leave Act (“FMLA”).  We earlier reported on the DOL’s proposed rule to this effect, which is now final and will become effective on March 27, 2015.

The amendment changes the definition of “spouse” to include individuals in same-sex marriages if the marriage was valid in the place it was entered into regardless of where they live.  Before the new rule was issued, the FMLA and its accompanying regulations defined “spouse” as a husband or wife as recognized under the laws of the state in which the employee resides.  The new definition of spouse instead looks to the law of the jurisdiction in which the marriage was entered into and expressly encompasses same-sex married couples.  The final rule thus adopts a “place of celebration” rule rather than a “state of residence” rule for the definition of “spouse” under the FMLA.

According to the DOL, the amended regulatory definition of spouse permits “eligible employees in legal same-sex marriages [to] be able to take FMLA leave to care for their spouse or family member, regardless of where they live.”  The DOL has also suggested that the new rule will reduce the administrative burden on multi-state employers, who no longer have to consider an employee’s state of residence and the laws of that state in determining the employee’s eligibility for FMLA leave.

The new rule was prompted by the United States Supreme Court decision in United States v. Windsor, which found unconstitutional those provisions of the Defense of Marriage Act that prohibited federal recognition of same-sex marriages.

Some of the other features of the new rule include:

  • The new rule encompasses an employee in a same-sex marriage entered into abroad as long as the marriage is valid in the place it was entered into and could have been entered into in at least one state in the United States.

  • The new rule encompasses employees in a common law marriage as long as the common law marriage became valid in a state that recognizes such common law marriage.

  • An employee in a legal same-sex marriage can now take FMLA leave to care for his or her stepchild whereas before, an employee in a legal same-sex marriage could only take FMLA leave to care for his or her stepchild for whom the employee stood in loco parentis.

  • Similarly, an employee can now take FMLA to care for his stepparent who is the employee’s parent’s same-sex spouse, even if the stepparent never stood in loco parentisto the employee.

ARTICLE BY

Shira Forman
Sheppard, Mullin, Richter & Hampton LLP

Statements of Samantha Elauf and David Lopez Following Oral Argument at the Supreme Court in EEOC v. Abercrombie & Fitch Stores, Inc.

U.S. Equal Employment Opportunity Commission Seal

Samantha Elauf filed the original charge of religious discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) that led to today’s argument in the Supreme Court. She has the following statement for the press:

I was born and raised in Tulsa, Oklahoma. When I applied for a position with Abercrombie Kids, I was a teenager who loved fashion.  I had worked in two other retail stores and was excited to work at the Abercrombie store.  No one had ever told me that I could not wear a head scarf and sell clothing.  Then I learned I was not hired by Abercrombie because I wear a head scarf, which is a symbol of modesty in my Muslim faith.  This was shocking to me.

I am grateful to the EEOC for looking into my complaint and taking this religious discrimination case to the courts.  I am not only standing up for myself, but for all people who wish to adhere to their faith while at work. Observance of my faith should not prevent me from getting a job.

David Lopez, General Counsel of the U.S. Equal Employment Opportunity Commission (EEOC), made the following statement at the conclusion of the Supreme Court argument in EEOC v. Abercrombie & Fitch Stores, Inc., a case involving religious accommodation.

This year we celebrate the 50th Anniversary of the Equal Employment Opportunity Commission, established as part of Title VII of the Civil Rights Act of 1964.  Title VII prohibits discrimination because of race, color, sex, national origin, and religion.  The prohibition against religious discrimination reflects this country’s historical tradition of religious freedom and religious tolerance. Since that time, the Commission has led the effort to enforce laws that prohibit religious discrimination for persons of all faiths. Today’s case is the latest effort to ensure all persons protected by  Title VII are not placed in the difficult position of choosing between adherence to one’s faith and a job.

Finally, I would be remiss not to recognize the courage and tenacity of Samantha Elauf.  Regardless of the outcome of this case, her effort to stand up for the important principles at issue is an inspiration.  Samantha now has a brief prepared statement that will be read by Christine Saah Nazer, EEOC spokesperson.

ARTICLE BY

U.S. Equal Employment Opportunity Commission

Statements of Samantha Elauf and David Lopez Following Oral Argument at the Supreme Court in EEOC v. Abercrombie & Fitch Stores, Inc.

U.S. Equal Employment Opportunity Commission Seal

Samantha Elauf filed the original charge of religious discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) that led to today’s argument in the Supreme Court. She has the following statement for the press:

I was born and raised in Tulsa, Oklahoma. When I applied for a position with Abercrombie Kids, I was a teenager who loved fashion.  I had worked in two other retail stores and was excited to work at the Abercrombie store.  No one had ever told me that I could not wear a head scarf and sell clothing.  Then I learned I was not hired by Abercrombie because I wear a head scarf, which is a symbol of modesty in my Muslim faith.  This was shocking to me.

I am grateful to the EEOC for looking into my complaint and taking this religious discrimination case to the courts.  I am not only standing up for myself, but for all people who wish to adhere to their faith while at work. Observance of my faith should not prevent me from getting a job.

David Lopez, General Counsel of the U.S. Equal Employment Opportunity Commission (EEOC), made the following statement at the conclusion of the Supreme Court argument in EEOC v. Abercrombie & Fitch Stores, Inc., a case involving religious accommodation.

This year we celebrate the 50th Anniversary of the Equal Employment Opportunity Commission, established as part of Title VII of the Civil Rights Act of 1964.  Title VII prohibits discrimination because of race, color, sex, national origin, and religion.  The prohibition against religious discrimination reflects this country’s historical tradition of religious freedom and religious tolerance. Since that time, the Commission has led the effort to enforce laws that prohibit religious discrimination for persons of all faiths. Today’s case is the latest effort to ensure all persons protected by  Title VII are not placed in the difficult position of choosing between adherence to one’s faith and a job.

Finally, I would be remiss not to recognize the courage and tenacity of Samantha Elauf.  Regardless of the outcome of this case, her effort to stand up for the important principles at issue is an inspiration.  Samantha now has a brief prepared statement that will be read by Christine Saah Nazer, EEOC spokesperson.

ARTICLE BY

U.S. Equal Employment Opportunity Commission

Wal-Mart to Pay $150,000 to Settle EEOC Age and Disability Discrimination Suit

U.S. Equal Employment Opportunity Commission Seal

Keller Store Manager Was Harassed and Fired Because of His Age and Denied Accommodation for His Diabetes, Federal Agency Charged

Wal-Mart Stores of Texas, L.L.C. (Wal-Mart) has agreed to pay $150,000 and provide other significant relief to settle an age and disability discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today. The EEOC charged in its suit that Wal-Mart discriminated against the manager of the Keller, Texas Walmart store by subjecting him to harassment, discriminatory treatment, and discharge because of his age. The EEOC also charged that Wal-Mart refused to provide a reasonable accommodation for the man’s disability as federal law requires.

According to the EEOC’s suit, David Moorman was ridiculed with frequent taunts from his direct supervisor, including “old man” and “old food guy.” The EEOC further alleged that Wal-Mart ultimately fired Moorman because of his age. Such alleged conduct violates the Age Discrimination in Employment Act (ADEA), which prohibits discrimination on the basis of age 40 or older, including age-based harassment.

The EEOC’s suit also alleged that Wal-Mart unlawfully refused Moorman’s request for a reasonable accommodation for his diabetes. Following his diagnosis and on the advice of his doctor, Moorman requested reassignment to a store co-manager or assistant manager position. According to the suit, Wal-Mart refused to engage in the interactive process of discussing Moorman’s requested accommodation, eventually rejecting his request. Under the Americans with Disabilities Act (ADA), Wal-Mart had an obligation to reasonably accommodate Moorman’s disability.

The EEOC filed suit on March 12, 2014, (Case No. 3:14-cv-00908 in U.S. District Court for the Northern District of Texas, Dallas Division) after first attempting to reach a pre-litigation settlement through its conciliation process.

“Mr. Moorman was subjected to taunts and bullying from his supervisor that made his working conditions intolerable,” said EEOC Senior Trial Attorney Joel Clark. “The EEOC remains committed to prosecuting the rights of workers through litigation in federal court.”

Under the terms of the two-year consent decree settling the case, Wal-Mart will pay $150,000 in relief to Moorman. In addition, Wal-Mart agreed to provide training for employees on the ADA and the ADEA. The training will include an instruction on the kind of conduct that may constitute unlawful discrimination or harassment, as well as an instruction on Wal-Mart’s procedures for handling requests for reasonable accommodations under the ADA. Wal-Mart will also report to the EEOC regarding its compliance with the consent decree and post a notice to employees about the settlement.

“The EEOC is pleased that Wal-Mart recognized the value of resolving this case without any further court action,” said EEOC Dallas District Director Janet Elizondo.

ARTICLE BY

U.S. Equal Employment Opportunity Commission
OF
U.S. Equal Employment Opportunity Commission

Philadelphia Mandates Paid Sick Leave

Morgan, Lewis & Bockius LLP.

Employers should act to ensure compliance before the law takes effect on May 13.

On February 12, the City of Philadelphia joined the nationwide paid sick leave trend when Mayor Michael Nutter signed the Promoting Healthy Families and Workplaces Ordinance (the Ordinance) into law. The Ordinance requires employers with 10 or more employees in the City of Philadelphia to provide paid and unpaid sick leave to eligible employees and is effective May 13.

Under the Ordinance, full- and part-time employees who work at least 40 hours per year within the City of Philadelphia will accrue paid sick leave at the rate of one hour for every 40 hours worked, up to a maximum of 40 hours per year. Employees who work less than 40 hours per year within the City of Philadelphia will accrue unpaid sick leave at the same rate.[2]Employees may use covered leave (1) for their own illnesses; (2) to address a family member’s mental or physical illness, injury, or health condition; or (3) to obtain medical attention to recover from an injury or disability caused by domestic or sexual violence (including stalking) or for related legal services or remedies.

The Ordinance also includes the following:

  • Employer Coverage: Employers that employ fewer than 10 full-time, part-time, or temporary employees for at least 40 weeks in a calendar year are not required to comply with the Ordinance. However, certain chain establishments, as defined under the Ordinance, are required to provide paid sick leave regardless of the number of employees at the chain’s Philadelphia location.

  • Excluded Employees: Independent contractors, seasonal employees, adjunct professors, employees hired for a term of less than six months, interns, pool employees in the healthcare industry, state and federal employees, and employees covered by a bona fide collective bargaining agreement are not covered by the Ordinance.

  • Accrual of Paid Sick Time: Paid sick time begins to accrue on the effective date of the Ordinance (May 13) for any then-current employee and begins to accrue on the date of hire for any employees hired after the effective date. Recently hired employees can use accrued sick time 90 days after their hire date. Employers must allow employees to carry over accrued sick time to the following calendar year, unless the employer chooses to provide at least 40 hours of sick time at the beginning of the following calendar year. Employers that already provide employees with paid leave (including, for example, vacation days, sick days, floating holidays, parental leave, personal leave, or paid time off) that may be used as sick leave and that meets or exceeds the amount mandated by the Ordinance are not required to provide additional sick leave.

  • Use of Paid Sick Time: Employees are generally required to provide advanced notice of the need for sick leave and may use accrued sick time in hourly increments (or any smaller increment) that the employer uses to account for absences or use of other time. If an employee takes two or more sick days, the employer may require documentation to verify that the sick time is covered by the Ordinance.

  • Notice: Covered employers must distribute individual written notices to all eligible employees regarding their rights under the Ordinance or display a poster regarding the Ordinance in a conspicuous and accessible location in the workplace. If an employer has employees who do not speak English as a first language, the employer must post or provide individual notice of the Ordinance and its requirements in any other language that is the first language spoken by at least 5% of its workforce.

  • Anti-Discrimination and Anti-Retaliation Provisions: The Ordinance prohibits discrimination and retaliation against any employees who exercise their rights under the Ordinance or who inform other employees about the right to paid sick time under the Ordinance. The Ordinance also creates a rebuttable presumption of retaliation against any employer that takes an adverse action against an employee within 90 days of the employee engaging in protected activity under the Ordinance.

  • Enforcement: Mayor Nutter will designate an agency responsible for implementing, administering, and enforcing the Ordinance, and the agency will have the authority to issue guidelines and regulations to carry out and enforce the Ordinance. Employees may pursue claims against an employer for violations of the Ordinance by filing a complaint with the agency or in court (after first filing a complaint with the agency). The agency or the city solicitor may also pursue claims in court against employers to enforce the Ordinance.

  • Record Keeping: Employers must keep records that document the hours worked by employees and sick time accrued by and taken by the employees. Employers must retain the required records for a two-year period and allow the agency reasonable access to such records with appropriate notice.

Recommendations

To ensure compliance, employers should take the following actions on or before May 13:

  • Supply each employee with an individual written notice that contains the information required by the Ordinance or display a poster with the same information where employees can easily read it. The Ordinance mandates that this same information should also be included in any employee handbook distributed to employees. (The city has yet to issue a model poster. Employers should continue to visit the city’s website because the agency responsible for enforcing the Ordinance is required to create and make available a poster that contains the mandated paid sick leave information.)

  • Review, create, or modify existing vacation, paid time off, and sick leave policies to ensure compliance with the Ordinance. Employers must ensure that they are not only providing sufficient sick leave to employees but also that employees are permitted to take leave under the Ordinance’s terms.

  • Train human resources and supervisory personnel on the Ordinance’s new sick leave requirements, including, for example, the reasons that employees may use sick time, how much sick time they may use, and the documentation that employers may request when employees use accrued sick time. Employers should also train human resources and supervisory personnel on the anti-discrimination and anti-retaliation provisions under the Ordinance and update related policies accordingly.

  • Ensure that time and payroll records are sufficiently detailed to reflect the hours that employees worked and the amount of sick leave covered employees accrued and used to comply with the Ordinance’s record-keeping provisions.

ARTICLE BY

Cailin Heilig
Sarah E. Bouchard
Michael J. Ossip
Michael J. Puma
OF
Morgan, Lewis & Bockius LLP

Another Court Rejects Notion that Restrictive Covenant Agreements Must be Supported by At Least Two Years of At-Will Employment

Godfrey & Kahn S.C. Law firm

In a recent decision addressing the enforceability of a restrictive covenant agreement under Illinois law, the court in Bankers Life and Casualty Co. v. Miller, 2015 U.S. Dist. LEXIS 14337 (N.D. Ill. 2/6/15), ruled that Illinois law did not require a minimum of two years of employment to support the employee’s restrictive covenant obligations.  The court rejected the employee’s argument that the “bright-line” rule created by the Illinois Appellate Court in Fifield v. Premier Dealer Services, Inc.required at least two years of continued employment to justify enforcement of the non-competition restrictions.

The Bankers court ruled that “the competition restrictions were not invalid for lack of consideration as a matter of law on the basis that the departing employees’ tenure was less than two years[.]”  Instead, the court ruled that each non-competition restriction should be assessed on a case-by-case basis.  The Bankers ruling is in line with a prior Northern District of Illinois decision, Montel Aetnastak, Inc. v. Miessen, in which the court (by a different judge) ruled that 15 months of continued employment was sufficient consideration to support a non-competition restriction.  In Montel, the employee voluntarily resigned his employment.

In Illinois state courts, however, employers have not had such good luck.  The Illinois Appellate Court in Prairie Rheumatology Associates, S.C. v. Francis recently reiterated the two-year rule created in Fifield.

For employers, the difference in the treatment of Illinois restrictive covenant agreements emphasizes the importance of beating the employee to the courthouse.  In other words, if an employee files a declaratory action in state court, the odds are that the court will follow the Fifield rule.  If, on the other hand, the employer files first in federal court, the odds favor the employer.

Yet another case, Instant Technology, LLC v. Defazio, 2014 U.S. Dist. LEXIS 61232 (N.D. Ill. May 2, 2014), is pending in the Seventh Circuit Court of Appeals.  We will monitor this case and follow up once a ruling is issued.

ARTICLE BY

Rufino Gaytán
Deborah Rehorst
OF
Godfrey & Kahn S.C.

Paid Sick Leave: Coming Soon to a City Near You?

Barnes & Thornburg LLP Law Firm

President Obama reincarnated paid sick leave as a possible federal law right in his recent State of the Union address. “Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave,” Obama said. “It’s the right thing to do.” Under the Family and Medical Leave Act, employees of covered employers currently have rights to as much as twelve weeks of unpaid medical leave per year. In addition, thousands of employers of every size voluntarily provide some form of paid sick leave in their employee benefits, such as a limited number of sick days or personal days. Three states (California, Connecticut and Massachusetts) presently mandate some form of paid sick leave for employees of private companies.

Although the President’s prospects for achieving a federal form of paid sick leave seem dim in the current Republican majority Congress, paid sick leave benefits are steadily rolling out at the municipal level.

The growing roster of cities with paid sick leave ordinances now includes: New York City; San Francisco; Seattle and Tacoma, Washington; Portland and Eugene, Oregon; and eight municipalities in New Jersey. This is a recent trend. In 2014, two states (Massachusetts and California) and five cities adopted paid sick leave laws for the first time. While more state-level paid sick leave laws do not appear to be on the near horizon, the steady growth of municipal-level paid sick leave requirements for private employers may indicate an important trend.

Local paid sick leave ordinances create serious complications for employers with widespread operations, resulting in a patchwork of employee benefits and medical leave issues on top of current FMLA compliance headaches.

ARTICLE BY

Peter R. Spanos
OF
Barnes & Thornburg LLP

Two More HR Mistakes To Avoid – Human Resources

Michael Best Logo

Having just touched the tip of the HR iceberg in my recent post  “Avoid these 3 Common HR Mistakes,” let’s dive a little deeper. Below are two more common mistakes made by companies and their human resources professionals:

Mistake #4: Failing to preserve key evidence.  Every terminated employee poses the risk of future litigation. Consequently, take steps to preserve crucial evidence. To the extent possible, save all employee voice mails that involve statements of: (1) quitting; (2) insubordination; (3) threats of violence; (4) profanity; and (5) excuses for absences unrelated to any disability (if you terminated the employee for absenteeism). Similarly, print and save screen shots of employees’ texts and social media postings, particularly if the contents reveal employee misconduct. Finally, always keep a signed and dated copy of the termination letter, and save the employee’s personnel file for at least 3 years.

Mistake #5: Failing to keep quiet. When it comes to discussing employment terminations, the less said the better. Never talk with a lawyer representing an employee. Generally, anything you say is evidence that will be used against you. For the same reason, don’t talk to an employee’s family member about their situation – he/she is not the employee. Don’t talk with anyone from a government agency unless your lawyer is present. Don’t tell individuals who do not have a “need to know” why an employee was terminated; if you can’t later prove the reason(s) for the termination you may face a defamation claim. Finally, be careful what you write in emails. Do not: (1) refer to an employee’s protected characteristics (such as race, age, gender, sexual orientation, religion, disability, etc.); (2) refer to an employee’s threat of a lawsuit; or (3) call the employee derogatory names (including “troublemaker”). Emails can and will be discovered in the course of litigation, and can be highly damaging to your case.*

Navigate around these legal icebergs in order to avoid sinking your case.

ARTICLE BY

Mitchell W. Quick
OF
Michael Best & Friedrich LLP

Anti-Bullying Laws in California and Tennessee Could Be the Start of a New Trend

Jackson Lewis Law firm

While there are no current federal laws that prevent workplace bullying in the private sector, “Healthy Workplace” bills have been introduced in 26 states since 2003.  Tennessee recently became the first state to pass the “Healthy Workplace Act,” a law designed to encourage public sector agencies to create an anti-bullying policy that addresses “abusive conduct” by making the agencies immune to bullying-related lawsuits if they adopt a policy that complies with the law.

More recently, California passed a workplace anti-bullying law for private-sector employers that became effective on January 1, 2015.  California’s A.B. 2053 requires employers with 50 or more employees that already provide training on preventing sexual harassment to include new training on preventing “abusive conduct” in the workplace to supervisory employees.  It is likely that other states will follow suit and pass their own “Healthy Workplace” bills in the coming years as anti-bullying continues to trend in the news and become a focus in the workplace.

Statistics show bullying in the workplace may be a real problem, with 65.6 million U.S. workers being affected by it.  According to 2014 National Survey conducted by the Workplace Bullying Institute, 27 percent of U.S. workers reported that they had experienced abusive conduct at work and 21% of U.S. Workers have witnessed abusive conduct of others at work.

The 2014 National Survey uncovered that most employees do not think that their employers do enough to address workplace bullying:

• 25% of employees’ surveyed asserted that employers deny that bullying and harassing conduct takes place and fail to investigate complaints

• 16% asserted that employers discount bullying or describe it as non-serious

•  15% asserted that employers rationalize it by describing the bullying as innocent

• 11% asserted that employers defend abusive conduct when the perpetrators are executives and managers

Only 12% of employees’ surveyed found that their employers took steps to eliminate bullying by creating and enforcing certain policies and procedures.  The perceived failure from employees and state lawmakers that employers are adequately addressing workplace bullying may be one reason for the recent passage of anti-bullying laws in Tennessee and California and the introduction of similar bills in other states.

Under Tennessee’s Healthy Workplace Act, “abusive conduct” is broadly defined as acts or omissions that would cause a reasonable person, based on the severity, nature, and frequency of the conduct, to believe that an employee was subject to an abusive work environment, such as: (A) Repeated verbal abuse in the workplace, including derogatory remarks, insults, and epithets; (B) Verbal, non-verbal, or physical conduct of a threatening, intimidating, or humiliating nature in the workplace; or (C) The sabotage or undermining of an employee’s work performance in the workplace.

California’s A.B. 2053 similarly defines “abusive conduct” very broadly.  “Abusive conduct” means conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.  It may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.  The Act recognizes that a single act shall not constitute abusive conduct, unless especially severe and egregious.

While California and most other states do not provide a private right of action for an employee to sue for workplace bullying, bullying at the workplace – that goes unchecked – can result in negative consequences, such as decreased productivity and efficiency, increased absenteeism, loss of morale, increased resignations or transfer requests, and increased hotline calls and internal complaints.   It may also result in employees suing their employers for harassment or a hostile work environment based on a protected class, such as race and gender under Title VII of the Civil Rights Act of 1964 or for tort liability claims, such as negligent hiring or intentional infliction of emotional distress.

Thus, employers would be well-advised to manage this risk and develop a stronger workplace conduct policy now.  To address the potential for workplace bullying and the possibility that states will follow Tennessee’s and California’s lead in regulating workplace bullying, employers should analyze the workplace culture for incidents or prevalence to bullying and develop a workplace bullying prevention program.

ARTICLE BY

Nickole C. Winnett
OF
Jackson Lewis P.C.

Will Religiously Based Federal Contractors Challenge OFCCP's New LGBT Regulations?

Gonzalez Saggio & Harlan logo

As 2014 headed toward close, the Office of Federal Contract Compliance Programs (“OFCCP”) gave the federal contractor community, already presented with five Executive Orders in 2014, one last compliance gift. On December 9, 2014, without notice or an opportunity for public comment, OFCCP issued its final rule (“Rule”) implementing Executive Order (“EO”) 13672. President Obama signed EO 13672 on July 14, 2014, extending protections against workplace discrimination to members of the lesbian, gay, bisexual, and transgender (“LGBT”) community by amending Executive Order 11246 to add sexual orientation and gender identity as protected characteristics. It also requires contractor employers to take affirmative action to ensure that applicants and employees are treated without regard to their sexual orientation or gender identity during their employment. The Executive Order was effective immediately. The Rule is effective April 8, 2015, and applies to all new or modified federal contracts and subcontracts after that date.

The issuance of EO 13672 and the requirements of its implementing Rule highlight OFCCP’s intention to focus on LGBT protections and might be seen as steps to squarely tee up the issue of enforcement of LGBT protections in the post-Hobby Lobby era. First, and seemingly to leave no doubt of its intention, OFCCP had also issued Directive 2014-02 in August 2014, with its stated purpose, “[t]o clarify that existing agency guidance on discrimination on the basis of sex under Executive Order 11246, as amended, includes discrimination on the bases of gender identity and transgender status.” The directive explicitly piggybacked off of the EEOC’s 2012 decision in Macy v. Holder, where the EEOC concluded that gender identity and transgender status did not need to be specifically addressed in Title VII in order to be protected bases of discrimination, as they are simply part of the protected category of “sex” under Title VII. Anticipating the question of why EO 13672 was then necessary if already protected under Title VII, OFCCP offered a questionable explanation that the directive “does not address gender identity as a stand-alone protected category, which (along with sexual orientation) is the subject of Executive Order 13672.”

Second, as written, the Rule is relatively straightforward. It amends EO 11246’s implementing regulations by replacing the phrase “sex or national origin” with the phrase “sex, sexual orientation, gender identity, or national origin” wherever the former appears in the regulations.  The Rule also places the following obligations on employers:

  1. Ensure that applicants and employees are not discriminated against based on their sexual orientation or gender identity.

  2. Update existing affirmative action plans and all equal opportunity, harassment, and nondiscrimination policies to reflect the additional protected categories.

  3. Make available to applicants and employees a revised version of the “EEO is the Law” poster that includes a notice regarding the protections for LGBT workers.

  4. Include “sexual orientation” and “gender identity” as protected traits in the equal opportunity job solicitation taglines. (OFCCP suggested in the Rule preamble that “equal opportunity employer” may be sufficient to cover all protected categories of EO 11246.)

  5. Incorporate the new categories into new or modified subcontracts and purchase orders.

  6. Report to OFCCP and the Department of State any suspicion that it cannot obtain a visa for an employee, from another country with which it does business, due to the employee’s sexual orientation.

  7. Ensure that facilities (e.g., restrooms, locker rooms, and dressing areas) provided for employees are not segregated on the basis of sexual orientation and gender identity.

The Rule does not burden contractor employers with the same data collection and analysis obligations that are required with respect to females and minorities and does not require contractor employers to set placement goals on the bases of sexual orientation or gender identity, nor does it require them to collect or analyze any data with respect to the sexual orientation or gender identity of their applicants or employees. Contractor employers are also not required to, or prohibited from, soliciting applicants or employees to self-identify regarding their sexual orientation or gender identity.

Finally, it is notable that EO 13672 and its implementing Rule were issued despite the growing number of states (currently 20 states plus the District of Columbia) that have implemented protections against sexual orientation and/or gender identity discrimination. And further, that they are set within the larger context of the legalization of same sex marriage by, as of this article, 37 states, as well as the US Supreme Court’s consideration of the status of same sex marriage this year. Thus, the issue brought to focus by these OFCCP actions and the Executive Order may be more pointed than an identification of sexual orientation and gender identity as protected traits and may go towards whether a religious contractor employer may base employment decisions on the LGBT status of an applicant or employee.

EO 13672 contains no exemption for religiously affiliated federal contractors. Section 204(c) of EO 11246, which allows a religious corporation, association, educational institution or society, to base employment decisions on the religious membership of a particular individual (rather than on the beliefs of the organization), was specifically not amended by EO 13672. Possibly by design, this may result in a test of the reach of the Supreme Court’s 2014 decision in Burwell v. Hobby Lobby Stores, Inc., which, broadly speaking, allowed a closely-held, for-profit corporation to be exempt from the Affordable Care Act’s birth control mandate based upon its owners’ religious objection because it found that there was a less restrictive means of furthering the law’s interest.

A similar legal challenge may play out in the arena of employee benefits governed by EO 13672. OFCCP enforcement of the new Rule’s nondiscrimination prohibitions would bring within OFCCP’s purview the provision of benefits to an employee’s same sex spouse. Title VII and Supreme Court precedent require employers to make available the same benefits for spouses regardless of the gender of the employee. Closely-held contractor employers who oppose same sex marriage as a violation of religious belief may object to this requirement’s enforcement as a burden on their religious beliefs, similar to the arguments made by Hobby Lobby. While the Hobby Lobby majority attempted to dismiss the idea that its decision might allow an employer to “cloak as religious practice” prohibited acts, such as racial discrimination in hiring, the reach of the Hobby Lobby decision is far from settled, and the next batch of cases may seek to extend that decision to regulations requiring equal benefits based upon sexual orientation or gender identity.

And, lest employers think that the OFCCP was done, just today it announced that on January 30, 2015, it will publish a Notice of Proposed Rulemaking to update contractors’ obligations to not discriminate on the basis of sex under EO 11246 to “reflect present-day workplace realities and align OFCCP’s rules with current law under Title VII.” The new rules will touch on “compensation discrimination, sexual harassment, failure to provide workplace accommodations for pregnancy, and gender identity and family caregiver discrimination, among other topics.” The regulatory landscape for federal contractors saw many changes in 2014, and it seems 2015 is shaping up to be no different.

ARTICLE BY

Jill Pedigo Hall
Gonzalez Saggio & Harlan LLP