Category: Labor & Employment

No vaccine? No job! Court affirms employer’s ability to condition employment upon vaccinations

On December 7, 2018, the U.S. Eighth Circuit Court of Appeals held that an employee who was terminated for refusing to take a rubella vaccine was not discriminated or retaliated against, under the Americans with Disabilities Act, as amended (“ADA”).  See Hustvet v. Allina Health System, Case No. 17-2963.

In this case, Janet Hustvet worked as an Independent Living Skills Specialist. In May 2013, Hustvet completed a health assessment, during which she stated she did not know whether she was immunized for rubella.  Subsequent testing confirmed she was not.  Her employer — Allina Health Systems — then told Hustvet she would need to take one dose of the Measles, Mumps, Rubella vaccine (“MMR vaccine”).  Hustvet stated to an Allina representative that she was concerned about the MMR vaccine because she had previously had a severe case of mumps and had “many allergies and chemical sensitivities.”  Later, Hustvet refused to take the MMR vaccine, and was terminated for failure to comply with Allina’s immunity requirements.  Hustvet then sued Allina, alleging discrimination, unlawful inquiry, and retaliation claims under the ADA and Minnesota state law.  The district court granted Allina’s motion for summary judgment, and Hustvet appealed.

On appeal, the Eighth Circuit first addressed Hustvet’s unlawful inquiry claim; specifically, Hustvet alleged that Allina violated the ADA when it required her to complete a health screen as a condition of employment.  When affirming the district court’s grant of summary judgment, the court explained that the information requested and the medical exam, which tested for immunity to infectious diseases, were related to essential, job related abilities.  Indeed, Allina sought to ensure their patient-care providers would not pose a risk of spreading certain diseases – such as rubella – to its client base.  Thus, the inquiry was job-related and consistent with business necessity.

The court then did away with Hustvet’s discrimination claim based upon failure to accommodate because Hustvet was not disabled and, thus, she could not state a prima facie case of disability discrimination. There was simply no record evidence to support the conclusion that Hustvet’s purported “chemical sensitivities” or allergies substantially limited any of Hustvet’s major life activities. She was never hospitalized due to an allergic or chemical reaction, never saw an allergy specialist, and was never prescribed an EpiPen.  Rather, Hustvet suffered from “garden-variety allergies,” which was not enough to conclude she was disabled.

Finally, the court affirmed the district court’s grant of summary judgment regarding Hustvet’s retaliation claim. In pertinent part, the court reasoned that Hustvet could not show that Allina’s proffered reason for terminating her employment – her refusal to take an MMR vaccine – was a pretext for discrimination.  The record evidence demonstrated that Allina terminated Hustvet’s employment because her job required her to work with potentially vulnerable patient populations, and she refused to become immunized to rubella, an infectious disease.

This decision comes as welcome news to employers that provide healthcare-related services, and confirms that healthcare providers may condition employment upon taking certain vaccinations, so long as the vaccination is job-related and consistent with business necessity.  Employers with questions regarding implementing or enforcing such policies would do well to consult with able counsel.

 

© Polsinelli PC, Polsinelli LLP in California
This post was written by Cary Burke of Polsinelli PC.

BOLI Issues Final Rules on Oregon’s Equal Pay Law

On November 19, 2018, the Oregon Bureau of Labor and Industries (BOLI) issued its final administrative rules relating to the state’s Equal Pay Law, which prohibits pay discrimination on the basis of protected class, as well as screening job applicants based on current or past compensation.

The rules establish definitions for several key words in the law, provide more concrete guidance on how to meet the law’s posting requirements, and seek to clarify certain provisions of the law related to screening job applicants based on salary history, determining whether employees perform work of comparable character, establishing bona fide factors that may justify paying employees performing work of comparable character at different compensation levels, explaining benefits as a component of compensation, and “red-circling” or freezing employee compensation in order to bring the pay of employees performing work of comparable character into alignment. Finally, the rules establish that an employer commits an unlawful compensation practice each time an employee is paid in violation of the Equal Pay Law.

Key Takeaways

  • Oregon Administrative Rule (OAR) 839-008-0005 provides that the Equal Pay Law’s prohibition on screening job applicants based on current or past compensation includes a prohibition on using anyinformation about an applicant’s past compensation, regardless of how the information was obtained, to determine a job applicant’s suitability or eligibility for employment. However, unsolicited disclosure of a job applicant’s past compensation (whether by the applicant or former employer) does not constitute a violation of the law, so long as the information is not considered by the employer making the hiring decision.

  • OAR 839-008-0010 expands upon the Equal Pay Law’s criteria for evaluating whether employees perform “work of comparable character” and thus should be paid the same absent the existence of one or more bona fide factors justifying any disparity. The rule provides that “work of comparable character” means work requiring substantially similar knowledge, skill, effort, responsibility, and working conditions in the performance of work, regardless of job description or title. BOLI’s new rule provides non-exhaustive lists of factors that may be considered in determining whether employees have substantially similar knowledge, skill, effort, responsibility, or working conditions. For example, the rule provides that “skill” considerations “may include, but are not limited to, ability, agility, coordination, creativity, efficiency, experience, or precision.”

  • OAR 839-008-0015 establishes criteria that may be used to evaluate whether bona fide factors explain pay differentials that would otherwise violate the Equal Pay Law. The law already broadly delineates what constitutes a “bona fide factor” (i.e., a seniority system; a merit system; a system measuring earnings by quantity or quality of production; differing workplace locations, travel, education, training, experience, or any combination of those factors). While the rule seeks to further explain and provide examples of those factors. For example, the rule provides that education considerations “may include, but are not limited to, substantive knowledge acquired through relevant coursework, as well as any completed certificate or degree program.” Training considerations “may include, but are not limited to, on-the-job training acquired in current or past positions as well as training acquired through a formal training program.”

  • OAR 839-008-0020 seeks to clarify benefits as a component of compensation under the Equal Pay Law. Specifically, the rule provides that (1) employees performing work of comparable character may be provided different benefits so long as the same benefit options are offered to all employees performing work of comparable character; and (2) if an employee declines a benefit, the full cost of the benefit offered to the employee may be used to calculate the total amount of compensation paid to the employee under the Equal Pay Law.

  • OAR 839-008-0025 clarifies that “red circling,” freezing, or otherwise holding an employee’s pay constant as other employees performing work of comparable character are brought into alignment is not considered a reduction in pay for the employee whose pay is frozen.

Questions Remain Unanswered

While the rules clarify some aspects of the Equal Pay Law, many questions remain unanswered for employers. This is particularly true when it comes to performing an equal pay analysis to (1) determine and rectify any pay disparities among comparable employees and (2) take advantage of the law’s affirmative defense to compensatory and punitive damages. No guidance is given, for example, as to how to account for the protected classes that are not self-evident or self-reported. And, while the rules provide some information as to what amounts to a “bona fide factor” justifying a pay disparity, the list remains exclusive and vaguely defined at best.

Next Steps for Employers

Oregon employers that have not yet done so may want to perform equal pay analyses of their workforces as soon as possible. While the Equal Pay Law has been in effect since October 2017, employees will be able to bring claims beginning January 1, 2019, which carry the possibility of economic, compensatory, and punitive damages, as well as attorneys’ fees.

 

© 2018, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Title VII and LGBT Rights: The Current Landscape

The U.S. Supreme Court currently is contemplating whether to review three employment discrimination cases involving what, if any, protection Title VII extends against discrimination on the basis of sexual orientation and gender identity.  See R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission et al., case number 18-107 (considering transgender discrimination under Title VII; see Sixth Circuit opinion below reported at 884 F.3d 560); Altitude Express v. Zarda, case number 17-1623 (considering sexual orientation discrimination under Title VII; see Second Circuit opinion below reported at 855 F.3d 76); Bostock v. Clayton County, Georgia, case number 17-1618 (same; see Eleventh Circuit opinion below reported at 894 F.3d 1335).  The Court will consider the certiorari petitions for all three cases in conference on November 30.

Under Title VII, it is illegal for an employer to discriminate against an employee “because of… sex.”  The statute does not explicitly protect against sexual orientation or gender identity discrimination, and circuit courts are split as to whether Title VII’s protection against sex-based discrimination also provides protection based on sexual orientation, with the Second and Seventh Circuits holding that Title VII prohibits sexual orientation-based discrimination and the Eleventh Circuit reaching the opposite conclusion.  In Harris Funeral Homes, the Sixth Circuit became the first federal Circuit Court of Appeals to recognize transgender discrimination as a form of prohibited sex-based discrimination under Title VII.  The Supreme Court could choose to resolve these questions this term, but until then, this issue will continue to be closely watched by the nation, with government agencies and employers weighing in on the debate.

In October 2018, a U.S. Department of Health and Human Services (“HHS”) memo garnered national attention for defining “sex” to exclude transgenderism.  The memo circulated internally within HHS for months, but was just recently made public in a New York Times article.  The memo defines “sex” as “a person’s status as male or female based on immutable biological traits identifiable by or before birth.”  In other words, HHS wants to rely on birth certificates as the main identifier of an individual’s sex, a policy that would essentially abolish federal recognition and protection of transgender individuals.  The memo requests that other federal agencies – including the Departments of Justice, Education, and Labor – alter their own understanding of the word “sex” to match HHS’s proposed definition.

Shortly after the HHS memo became public, the Department of Justice (“DOJ”), appearing before the Supreme Court on behalf of the federal government, urged the Court to postpone consideration of Harris Funeral Homes until it decides whether to review Zarda and Bostock because the Sixth Circuit relied heavily on Zarda in concluding that Title VII prohibits transgender discrimination.  Further, the DOJ contended, consistent with the HHS memo, that Title VII does not prohibit employers from discriminating against employees based on gender identity.

Not all agencies agree with the HHS and DOJ’s interpretation of Title VII.  For instance, the Acting Chair of the U.S. Equal Employment Opportunity Commission (“EEOC”), Victoria Lipnic (who was appointed Acting Chair by President Trump in 2017), announced that the EEOC plans to continue prosecuting transgender discrimination claims in accordance with the agency’s stated policies.  In response to these recent agency developments, nearly 200 companies – including Amazon, Apple, Pepsico, Twitter, and Uber – signed the Business Statement for Transgender Equality opposing “any administrative and legislative efforts to erase transgender protections through reinterpretation of existing laws and regulations.”

The federal stance on Title VII and LGBT discrimination is conflicting, to say the least.  Until the U.S. Supreme Court rules on these issues, it is important for employers to remember that although there are currently no express federal protections against sexual orientation or transgender discrimination, many state and local governments prohibit such discrimination.  Employers are encouraged to consult with counsel to ensure compliance with state and local laws regarding transgender and sexual orientation discrimination in the workplace.  Stay tuned for our update on whether the Supreme Court decides to hear these cases.

 

© Copyright 2018 Squire Patton Boggs (US) LLP

U.S. Department of Labor Rescinds Guidance Regarding “Side Work” and the FLSA’s Tip Credit in Restaurants

Under the Fair Labor Standards Act (“FLSA”), employers can satisfy their minimum wage obligations to tipped employees by paying them a tipped wage of as low as $2.13 per hour, so long as the employees earn enough in tips to make up the difference between the tipped wage and the full minimum wage. (Other conditions apply that are not important here.) Back in 1988, the U.S. Department of Labor’s Wage and Hour Division amended its Field Operations Handbook, the agency’s internal guidance manual for investigators, to include a new requirement the agency sought to apply to restaurants. Under that then-new guidance, when tipped employees spend more than 20% of their working time on tasks that do not specifically generate tips—tasks such as wiping down tables, filling salt and pepper shakers, and rolling silverware into napkins, duties generally referred to in the industry as “side work”—the employer must pay full minimum wage, rather than the lesser tipped wage, for the side work.

This provision of the Handbook flew largely under the radar for years. This was partly because the Department did not publicize the contents of the Handbook, and party because the Department did not bring enforcement actions premised on a violation of this 20% standard. And historically, virtually nobody in the restaurant industry maintained records specifically segregating hours and minutes spent on tip-generating tasks as compared to side work.

In 2007, a federal district court in Missouri issued a ruling in a class action upholding the validity of the 20% standard, and that decision received an enormous amount of attention and publicity. In the years that followed, a wave of class actions against restaurants flooded the courts across the country, all contending that the restaurants owe the tipped employees extra money because of the Department’s 20% standard in the Handbook.

In January of 2009, in the waning days of the George W. Bush Administration, the Department issued an opinion letter rejecting the 20% standard, superseding the Handbook provision, and stating that there is no limit on the amount of time a tipped employee can spend on side work. Six weeks later, however, in March of 2009, the Obama Administration withdrew that opinion letter. In subsequent years, the Department filed several amicus curiae briefs in pending court cases endorsing the 20% standard, and the Department even modified the Handbook provision to make the requirements even more difficult for employers to satisfy.

In late 2017, a divided three-judge panel of the U.S. Court of Appeals for the Ninth Circuit concluded, in nine consolidated appeals presenting the same issue, that the Department’s 20% standard is not consistent with the FLSA and thus was unlawful. A few months later, however, a divided 11-judge en banc panel of the same court reached the opposite conclusion, ruling by an 8-3 vote that the 20% standard is worthy of deference.

In July of 2018, the Restaurant Law Center, represented by Epstein Becker Green, filed a declaratory judgment action against the Department in federal court in Texas challenging the validity of the 20% standard under the FLSA, the Administrative Procedure Act, and the U.S. Constitution. Roughly a month before the employers’ deadline to file a certiorari petition with the Supreme Court regarding the en banc Ninth Circuit ruling, and just days before the government’s response is due in the Texas litigation, the Department reissued the 2009 opinion letter.

This opinion letter, now designated as FLSA2018-27, once again rejects the 20% standard and clarifies that employers may pay a tipped wage when employees engage in side work so long as the side work occurs contemporaneously with, or in close proximity to, the employees’ normal tip-generating activity. This opinion letter should put an end to the many pending cases, including numerous class actions, that depend on the 20% standard.

The overall take-away for employers is that at least under federal law, side work performed during an employee’s shift, in between tip-generating tasks, should present no concern. The same should be true of side work performed at the start or end of an employee’s shift, so long as the side work does not take too long. An employee coming in fifteen or thirty minutes before the restaurant is open to help get the restaurant ready for the day, followed by the remainder of the shift in which the employee generates tips, seems to be consistent with the new opinion letter. Likewise for employees who spend some time at the end of the shift helping to close the restaurant for the day. But employers should use common sense and good judgment, as having tipped employees spend hours and hours performing side work may still give rise to risks. And it remains important to be aware of any state or local law requirements that may differ from federal law.

©2018 Epstein Becker & Green, P.C. All rights reserved.

This post was written by Paul DeCamp of Epstein Becker & Green, P.C.

#MeToo Movement Inspires Avalanche of New Laws Affecting California Employers

On September 30, 2018, Governor Jerry Brown signed several bills that will affect California employers. The following summarizes key aspects of these new laws. Unless otherwise noted, the new laws are effective January 1, 2019.

Major Changes to the Definition of “Hostile Work Environment” Harassment

Senate Bill (“SB”) 1300 significantly expands the circumstances in which hostile work environment harassment may be found to exist by rejecting the “severe or pervasive” standard developed and refined over several decades by California courts. Harassment is redefined to encompass a broad spectrum of conduct, specifically:

“Harassment creates a hostile, offensive, oppressive, or intimidating work environment and deprives victims of their statutory right to work in a place free of discrimination when the harassing conduct sufficiently offends, humiliates, distresses, or intrudes upon its victim, so as to disrupt the victim’s emotional tranquility in the workplace, affect the victim’s ability to perform the job as usual, or otherwise interfere with and undermine the victim’s personal sense of well-being.”

Government Code Section 12923, which declares the Legislature’s intent in enacting the new law, will provide guidance about what types of evidence will be sufficient to establish a harassment claim. It states that employees are no longer required to prove that their productivity has declined as a result of harassment. Now, they only need to show that the harassment made it “more difficult” for them to do their job. Even a “single incident of harassing conduct” is now sufficient to create a triable issue of fact, allowing a case to go to a jury. Furthermore, a single remark made by someone unconnected to a termination decision can be circumstantial evidence of discrimination. Finally, the Legislature made it clear that harassment cases are “rarely” appropriate for dismissal at the summary judgment stage.

Employers can be held liable for all forms of harassment – not just sexual harassment – directed at employees by non-employees, such as clients or vendors. This includes harassment based on race, national origin, religion, and other protected characteristics.

Finally, if an employer wins a sexual harassment lawsuit, it cannot recover attorney’s fees and costs unless it can prove that the plaintiff’s action was “frivolous, unreasonable, or groundless” either when filed or after it clearly became so.

Restrictions on Releases and Non-Disparagement Agreements

SB 1300 also prohibits employers from requiring a release of harassment, discrimination, or retaliation claims or to sign a non-disparagement agreement that purports to prevent disclosure of information about unlawful acts in the workplace, if the release is required to get a job, stay employed, or receive a raise or bonus. This does not apply to a negotiated settlement to resolve a claim filed in court, with government agencies, in arbitration, or through an employer’s internal complaint process, provided that the employee has an attorney or an opportunity to retain one.

Extended Statute of Limitations for Sexual Assault

The California Legislature lengthened from three years to ten years the statute of limitations for sexual assault claims. Under Assembly Bill (“AB”) 1619, a plaintiff may now bring a civil action for sexual assault within the later of “[ten] years from the date of the last act, attempted act, or assault with the intent to commit an act, of sexual assault by the defendant against the plaintiff” or “[w]ithin three years from the date the plaintiff discovers or reasonably should have discovered that an injury or illness resulted” from the defendant’s act.

Restrictions on Confidentiality and Testimony Provisions in Settlement Agreements

SB 820 prohibits settlement agreements that restrict plaintiffs from disclosing factual information about harassment claims in judicial proceedings. The bill does not, however, prohibit settlement provisions restricting disclosure of settlement amounts. Furthermore, a provision that shields the identity of a claimant may be included in a settlement agreement at the request of the claimant, unless a government agency or public official is a party to the agreement.

AB 3109 voids settlements that waive the right to testify regarding criminal conduct or sexual harassment, when the party has been required or requested to attend a proceeding by court order, subpoena, or other government request.

Enhanced Protection from Defamation

AB 2770 enhances protections from defamation claims made against sexual harassment claimants and employers that investigate such complaints. Three types of statements are privileged: 1) employee complaints of sexual harassment made without malice and supported by credible evidence; 2) communications made without malice between an employer and other interested persons regarding a sexual harassment complaint; and 3) answers provided without malice by a current or former employer in response to questions from a prospective employer regarding whether the current or former employer would rehire an employee, and whether the decision not to rehire is based on a determination that the former employee engaged in sexual harassment.

Broadened Definition of Non-Employment Related Harassment

SB 224 significantly expands sexual harassment claims in business, service, and professional relationships under California Civil Code Section 51.9. Going beyond the prior definition, which applied to physicians, attorneys, trustees, landlords, and other similar relationships, the law now prohibits harassment by individuals who “hold themselves out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party.” Examples include investors, elected officials, lobbyists, directors, and producers.

The law also reduces the burden to establish a claim, removing the previous requirement that a plaintiff establish that he or she was “unable to easily terminate the relationship.” The law also allows the California Department of Fair Employment and Housing (“DFEH”) to prosecute non-employment based sexual harassment claims, and makes it unlawful to “deny or aid, incite, or conspire in the denial of rights of persons related to sexual harassment actions.”

Expanded Anti-Harassment Training

Under existing law, employers with fifty or more employees were required to provide two hours of anti-harassment training to supervisory employees every two years. Under SB 1343, any employer with five or more employees, including temporary and seasonal workers, must provide two hours of anti-harassment training to supervisors and one hour of training to non-supervisors by January 1, 2020, and then once every two years thereafter. The bill also requires the DFEH to develop these courses and to post them online.

Corporate Boards of Publicly Held Corporations Must Include Female Representatives

SB 826 requires all publicly-held domestic and foreign corporations with principal executive offices in California to have at least one female on their boards by the end of 2019. By the end of 2021, the minimum increases to one female for boards with four or fewer members, two females for boards with five members, and three females for boards with six or more members. “Female” refers to an individual’s gender identification, not designated sex at birth.

The bill directs the Secretary of State to publish online reports documenting compliance. In addition, the Secretary of State may issue fines of $100,000 for failure to file board member information, $100,000 for the first violation of the member requirement, and $300,000 for subsequent violations. Each position not appropriately filled constitutes a separate violation.

Salary History Ban and Pay Scale Disclosure Guidance

Labor Code Section 432.3, enacted in January 2018, requires employers to provide applicants, upon request, with the pay scale for a position. It also prohibits employers from asking about or relying on prior salary in hiring or compensation.

An amendment to this bill enacted in July 2018 provides some necessary clarifications. It defines “pay scale” as a “salary or hourly wage range,” and it clarifies that the salary history ban and pay scale requirement do not apply to current employees. It also explains that employers are not required to provide pay scale information until after the initial interview. Employers are also allowed to ask about salary expectations. Finally, it allows employers to make compensation decisions based on existing salaries, so long as any differential is justified by a bona-fide factor such as seniority or merit.

Limitations on Criminal History Inquiries

Existing law restricts employers from considering applicants’ and employees’ judicially dismissed or sealed convictions or participation in pretrial or post-trial diversion programs. SB 1412 narrows the scope of an exception to this general rule. The bill permits employers to seek information from the applicant or other sources only about an applicant’s “particular conviction,” rather than a “conviction” generally.

An employer may inquire about a “particular” conviction only if: 1) the employer is legally required to obtain information regarding the conviction; 2) the applicant would be required to possess or use a firearm; 3) an individual with that conviction is legally prohibited from holding the position; or 4) the employer is legally prohibited from hiring an applicant with that conviction.

The employer may inquire about the particular conviction under these circumstances even if it has been expunged, sealed, statutorily eradicated, or judicially dismissed. The law further states that it does not prohibit an employer from conducting criminal background checks or restricting employment based on criminal history when legally required to do so.

Paid Family Leave for Active Duty Families

SB 1123 extends California’s paid family leave program to families with members on active duty in the armed forces. Beginning on January 1, 2021, an individual may take up to six weeks of paid family leave a year when participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent.

Employment Record Inspection Rights

SB 1252 provides guidance regarding requests to inspect employment records. Employees have a right to receive a copy of their records, not merely inspect or copy them. An employer must deliver a copy within 21 days, and may charge the cost of reproduction to the employee. An employer who fails to provide an employee with a copy of his or her employment records within the 21-day time period will be subject to a $750 fine.

Expanded Lactation Accommodation Requirements

AB 1976 expands the existing lactation accommodation standards to now require that employers create a permanent lactation location in an area other than a bathroom. Before this change, employers were required to provide only an area other than a toilet stall. Employers may create a temporary location if they can demonstrate: 1) an inability to provide a permanent location due to operational, financial, or spatial constraints; 2) the temporary location is private and free from intrusion when needed for lactation; 3) the temporary location is only for lactation purposes when needed for that purpose; and 4) the temporary location otherwise meets state law requirements. If the requirements would create an “undue hardship”, however, the employer must make “reasonable efforts” to provide the employee with an area other than a toilet stall that is in close proximity to the employee’s work area where the employee can express milk in private.

California Construction Employers Temporarily Protected from PAGA Suits

California construction workers will no longer be able to bring suit against their employers under the Private Attorneys General Act of 2004 (“PAGA”) if they work under a collective bargaining agreement that meets certain requirements provided in AB 1654. To qualify, the agreement must: 1) provide for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for employees to receive a regular hourly pay rate of not less than 30 percent more than the state minimum wage rate; 2) provide for a grievance and binding arbitration procedure to redress labor code violations; 3) expressly waive PAGA’s requirements in clear and unambiguous terms; and 4) authorize the arbitrator to award any and all remedies available under law. This exception expires on the earlier of the collective bargaining agreement’s expiration date or the statute’s repeal date of January 1, 2028.

Petroleum Industry Employee Rest Breaks May be Interrupted

Although California law prohibits employers from requiring employees to work during their meal, rest, or recovery periods, AB 2605 creates an exception for certain workers in the petroleum industry who are covered by a qualifying collective bargaining agreement. Under this provision, employers may interrupt rest breaks taken by employees who hold safety-sensitive positions at petroleum facilities from their duties, to the extent the employee is required to carry and monitor a communication device and respond to emergencies or is required to remain on employer premises to monitor the premises and respond to emergencies. If a rest break is interrupted, an employer must promptly provide an additional rest break. If a rest break cannot be provided, the employer must pay the employee an hour of pay. This bill became effective immediately when it was signed by Governor Brown on September 20, 2018, and it will remain effective until the section is repealed in January 1, 2021.

Suggested Actions

In light of these changes, California employers should consider taking the following actions:

  • Train managers, recruiters, human resource professionals, and other relevant staff regarding these new requirements and restrictions.
  • Educate all employees, especially supervisory employees, about laws prohibiting harassment, including SB 1300’s expanded definition of harassment, and train employees on how to appropriately respond to complaints of harassment.
  • Update policies, procedures, and agreements in light of SB 1300’s new restrictions on non-disparagement agreements and releases and SB 820’s and AB 3109’s restrictions on confidentiality provisions in settlement agreements.
  • Update training policies, procedures, and materials to comply with SB 1343’s expanded requirements for sexual harassment training for all employees.
  • Consider updating procedures and policies regarding employment references to third parties to permit disclosures regarding eligibility for rehire. Employers should designate a single person or a human resources professional to provide references in order to ensure that disclosures fall within AB 2770’s defamation privilege.
  • Begin planning for SB 826’s requirements for female representation on corporate boards.
  • Ensure that application forms, candidate questionnaires, interview outlines and scripts, and other screening and hiring materials omit inquiries regarding salary history and inquiries regarding criminal history, consistent with applicable law.
  • Prepare policies and procedures for complying with the salary history ban’s pay scale disclosure requirements. Such policies and procedures should comply with the requirements described above.
  • Consider asking applicants about their salary expectations, rather than salary history. If an employee voluntarily offers salary information, contemporaneously document that the employee introduced the information into the discussion.
  • Review criminal history screening policies, procedures, and forms to ensure compliance with the restrictions on criminal history inquiries. Prepare policies for dealing with criminal history to avoid ad hoc decision-making by managers and consider involving human resource professionals.
  • Contemporaneously document any individualized assessments regarding an applicant’s suitability for employment based on criminal history information.
  • Update written policies regarding qualifying exigencies related to military service.
  • Ensure policies for responding to employee requests for records; permit employees to obtain copies of such records.
  • Ensure that there is an available space for lactation in the workplace that complies with the new requirements.
  • Reach out to us if you have any questions, concerns, or need guidance with respect to these new laws or your company’s obligations to comply with them.
Copyright 2018 K&L Gates.
This post was written by Spencer Hamer and Catherine C. Smith of K&L Gates.

Making Your Employees’ Votes Count: Employer Obligations on Election Day

With just days to go before the 2018 midterm elections, candidates are sending out their final pleas for voters’ endorsements and employers are taking steps to ensure that their employees have the ability to voice their choice.  According to electionday.org, nearly 60% of voting-eligible Americans did not vote in the last midterm elections, with 35% of those nonvoters reporting that “scheduling conflicts with work or school” kept them from getting to the polls.

So, what are employers’ obligations to employees when it comes to getting out to vote?  Federal law does not require employers to provide workers with time off to vote, though it does generally protect an employee’s right to vote by prohibiting interference with the voting process.  The majority of states (nearly 60%), however, have laws on the books that provide some level of protection to employees who need to take time off work in order to cast their vote.  The laws vary state-by-state – some states simply require an employer to allow an employee “sufficient” unpaid leave time to vote, while other states mandate 2-4 consecutive non-working hours of paid leave to vote.  In states with laws requiring employers to allow employees time off to vote, they apply to both public and private employers, and the majority of these state laws require that employees be paid for at least a portion of any such voting leave.

In order to ensure compliance with various state laws, employers should consider the following practices:

  • Maintaining voting leave policies that are compliant with the laws in all states/localities in which the company operates;

  • Training managers on the applicable voting laws and any policies in advance of any major elections – particularly if they manage non-exempt employees;

  • Providing employees anywhere between 2-4 hours of paid or unpaid time off at the beginning or end of a shift for voting leave in certain circumstances (typically where the employees’ daily schedule would not allow them a block of 2-4 consecutive non-working hours between the opening and closing of the polls to vote);

  • Scheduling employees’ work hours on election days so that every employee will have the opportunity to exercise their right to vote;

  • Allowing employees to vote during the first two hours in which polls are open in the state;

  • Posting notices in the workplace reminding employees that they have the right to use time off to vote (note that such posted notices are required by some states, including California and New York); and

  • Requiring employees to provide reasonable notice (anywhere from 1-7 days, depending on the applicable law) of their intention to take time off to vote.

At a minimum, employers should ensure they are in compliance with any state or local voting leave laws applicable to their locations.  Some of those laws are very detailed (time off can vary based on the mileage between a voter’s place of employment and their designated polling location; some laws apply only to employees in certain industries) while others are much more generic in scope (requiring employers to allow “reasonable” or “sufficient” time off, or “encouraging” employers to allow time off, but setting no specific rules).  In order to prevent abuse, some state laws require proof of voting before an employer is obligated to make a payment for voting leave, and many require that employees provide some level of advance notice that they will be taking time off to vote.  In many states, failure to comply with the applicable laws can subject employers to the possibility of criminal or civil penalties.

Even in states where the law does not mandate employee time off to vote, best practice for employers is to provide some base level of paid time off to employees to vote.  For employers operating in multiple states, maintaining one policy that complies with the most favorable of all of the states’ laws where the company is located is advisable.  In addition, employers will be well-served by training managers on any company voting leave policy well in advance of any major election in order to ensure that employees are aware of the policy and that managers know how to apply it.

In preparation for next week, employers should review their existing voting leave policies to ensure compliance with applicable laws.  Employers without voting leave policies should analyze the potential barriers their employees face in getting to the polls, determine the legal requirements of the states in which they operate and implement a policy that is compliant with the applicable laws and meets the company’s operational needs.  Employers should also treat time off for early voting the same way they do Election Day voting, document employees’ requests for time off to vote, direct non-exempt employees to record their time appropriately, and maintain a record of voting leave.  In addition, employers can be proactive by adding Election Day to the work calendar and having managers remind employees that the company encourages employees to use their time to vote.

 

©1994-2018 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Five Things You Should Know About Employment Practices Liability Insurance

If you listen closely on a quiet weekday afternoon, you can hear the steady thumping of stamps on inkpads at the Equal Employment Opportunity Commission’s (EEOC) offices on West Madison Street in Chicago. And it’s no different throughout the country — employee claims of discrimination, harassment, and retaliation are high paced and showing no signs of slowing down.

This high rate of claims means your company needs to be savvy about a number of key strategies that can help you minimize risk. One of these strategies may include purchasing employment practices liability insurance (EPLI). Here, we answer some core questions about EPLI:

1. What is EPLI, and how does it differ from related insurance policies?

EPLI policies allow employers to protect themselves against the exposure and costs associated with claims and litigation arising out of the employment relationship. These policies generally cover claims made by current and former employees, applicants who were never hired, or third-parties claiming the employer has engaged in wrongful conduct.

Discrimination, harassment, retaliation, wrongful discharge, and invasion of privacy are the typical claims covered by EPLI. On the other hand, claims that an employer violated the Fair Labor Standards Act (e.g., failure to pay overtime, misclassification as an independent contractor) are typically not covered by EPLI policies, nor are claims under ERISA, COBRA, or the National Labor Relations Act, although it may be possible to purchase limited coverage for defense costs.

Not surprisingly, EPLI is but one item on a buffet of insurance offerings to employers; alongside it are directors and officers (D&O), commercial general liability (CGL), and errors and omissions (E&O) policies, each serving a distinct purpose. D&O insurance covers acts committed by a company’s directors and officers only; it is of no help when an employee’s supervisor is accused of sexually harassing an employee. Likewise, E&O policies are concerned with true errors and omissions allegedly committed in the course of doing what your company does for a living, and are not implicated by allegations of discriminatory discharge, which is seldom an accident. CGL policies often expressly exclude wrongful employment practices. In other words, EPLI may overlap with other types of coverage, but it largely exerts its own force in confronting an array of everyday claims.

2. Should my company purchase EPLI?

Maybe — it’s a business decision that requires you to take into account several factors, such as the cost of the EPLI premiums and the extent of the deductible (or self-insured retention, to be explained below), your company’s location and number of employees (and how these correlate with the likelihood of a claim being filed against your business), history of claims and losses, and whether you have written, preventative employment policies in place.

According to the 2017 Hiscox Guide to Employee Lawsuits, U.S. companies have a 10.5% chance of being on the receiving end of an employment-related charge, and the chances for Illinois companies are 35% higher than the national average. On average, small-to-medium size companies facing such claims battle for 318 days before resolution and leave the arena with a $160,000 bruise.

As with every type of insurance, the perceived value of the coverage depends upon the company’s level of comfort with the self-insured retention (SIR) or deductible. The SIR is the amount the company must pay out of pocket at the beginning stages of a claim; the insurer is not required to pay a penny until after the SIR has been met by actual payment of defense costs and/or losses by the insured. A deductible, on the other hand, is subtracted by the insurer from its total policy payment, which then must be paid by the company.

As expected, the policy premium will seesaw with SIR levels. Policies with a high SIR amount (or deductible) typically will have lower premiums than the same policy with a low SIR or deductible. These policies are better suited for companies that view EPLI as a type of catastrophic coverage. On the flip side, if your cash flow would make it difficult to absorb a high SIR, then a higher premium with a lower SIR amount may make economic sense.

The number of individuals employed by your company should also factor into your decision-making. Although most federal anti-discrimination statutes apply only to businesses with 15 or more employees, smaller companies are subject to state anti-discrimination laws, which may govern employers with only one employee (depending on the nature of the claim). Nevertheless, it is not unreasonable for a small company in certain industries to forego EPLI, while maintaining strong training and preventative strategies, until it grows closer to 15 employees.

Given the numerous factors that must be taken into account, employers should consult with their attorneys and business advisors to reach a sound decision about whether and what type of EPLI to purchase.

3. What should I do when negotiating the purchase of an EPLI policy?

It is better to negotiate a good EPLI policy up front, than to sign up for standard terms, stuff the policy packet in your desk drawer, and later bemoan its shortcomings when an issue pops up.

A good first step is to talk to your attorney about her previous experiences with various insurance companies; lawyers repeatedly deal with EPLI carriers and it’s best to make decisions based upon known trends than to shop just based on price.

You should determine whether the policy imposes on the insurer a “duty to defend” or a “duty to reimburse.” A duty to defend requires the insurer to defend the claim or lawsuit, cover legal fees and costs, and pay for liability (all up to the policy limits). Insurers with a duty to defend retain high levels of control over the defense of claims, the selection of counsel, and litigation and settlement strategies. The duty to defend extends to all claims, even frivolous ones, or issues reasonably related to the underlying claim.

An insurer subject to a “duty to reimburse,” on the other hand, must reimburse covered costs and losses and is typically not required to defend matters reasonably related to the underlying claim. However, the company retains higher levels of control in selecting counsel and executing its defense strategies.

You may want to consider negotiating a “mutual selection of counsel” endorsement to the policy, which will provide you with greater flexibility in retaining your own counsel, even where the insurer has a duty to defend with the corresponding high levels of control. This will prove helpful when you want your preferred counsel to handle a case, and do not want to relinquish your fate to unknown lawyers selected by the insurance company. Be aware, however, that even if you are able to obtain a selection of counsel provision, you may be required to share in the cost of attorneys’ fees to the extent your preferred counsel charges rates higher than the default panel rates typically paid by insurers. This should be another point of discussion during your negotiations.

4. Even if my company has an EPLI policy, does it always make sense to report a claim?

Unlike auto insurance policies, reporting a claim does not typically impact the cost of maintaining or renewing your EPLI policy. Therefore, it is usually wise to report claims as you become aware of them. However, there may be circumstances where it does not make sense to do so. For example, if your policy comes with an SIR (self-insured retention) of $25,000, and you believe you can settle the matter for $10,000, reporting the claim may achieve nothing but a headache. But even that logic comes with risks; if you are wrong in your estimates and the settlement numbers start to creep up, you risk losing coverage altogether due to untimely notice to the insurer. When in doubt, err on the side of reporting, and consult your attorney to help reach a sound decision.

It is also wise to “park” a potential claim. “Parking” a claim means notifying your carrier that you have been made aware of facts or circumstances that might give rise to a future claim (but for which no current claim exists). If a claim based upon those facts or circumstances later materializes outside of the policy period, because you “parked” your claim, it will be treated as though it arose and was reported during the relevant period.

Staying silent when you know something is brewing may backfire, as insurers are not interested in selling fire insurance to someone who already smells smoke. Providing timely and transparent notice via “parking” also demonstrates to the insurer that your company is prudent, which fosters confidence in the relationship and promotes a sense that you are serious about risk management.

5. What are some common mistakes companies make regarding EPLI policies?

Because most companies prefer to focus on running their business than worrying about the minutiae of an insurance policy, it is easy to overlook potentially critical missteps. Many companies, for example, have never heard of EPLI or don’t even know if they have it. Others automatically renew policies they’ve never read, rather than negotiate more favorable terms. Sometimes, a company is unaware of relevant policy periods, or neglects to promptly ascertain whether an event or awareness of an event constitutes a claim or otherwise triggers reporting requirements. Finally, because there are so many types of insurance policies out there, it is not uncommon for companies to think their existing policies will address employment practices claims, only to later discover that they’re hung out to dry.

© 2018 Much Shelist, P.C.

ARTICLE BY

Laura A. Elkayam
Neil B. Posner
Much Shelist, P.C.

How to Avoid Halloween Horror Stories in the Workplace

This is the season of pumpkin spice, crisp air, falling leaves, and costume parties. But as much as we love autumn, it brings its own set of workplace complexities—especially when celebrating Halloween. Below are a few tips for keeping Halloween festive and nonlitigious:

Optional Participation

Employers may want to ensure that employees are not forced to wear costumes, pass out candy, or attend a Halloween party. Today, Halloween is largely secular, but some believe it has its roots in the religious holiday of All Hallows’ Eve, the night before All Saints’ Day. All Hallows’ Eve celebrations were influenced by ancient Celtic harvest festivals, such as Samhain. Several religions choose not to celebrate Halloween because of these roots in other traditions.

To avoid religious discrimination claims and prevent overall morale concerns for those who may not want to participate, an employer can convey that participation in office Halloween events is optional, not mandatory, and that retaliation against and harassment of people who opt out is not acceptable. Calling someone a “party pooper” or “poor team player” because he or she doesn’t feel comfortable participating in Halloween festivities—either because he or she does not want to be “spooked” or because Halloween traditions conflict with his or her religious or cultural beliefs—could expose an employer to liability.

Appropriate Costumes

If an employer allows employees to wear costumes to work, it can provide clear guidelines of what’s acceptable and specific examples of what’s not. For example, an employer can discourage employees from making racially and culturally insensitive costume choices as well as sexually suggestive outfits. Employers can keep in mind that employees dressed in the traditional attire of any ethnicity, as undocumented immigrants, or as Middle Eastern terrorists may face national origin discrimination accusations. In addition, some costumes could be considered racially insensitive and lead to race discrimination claims, such as wearing blackface or carrying nooses.

In addition, the office isn’t the place for provocative outfits, such as scantily clad nurse uniforms. Employees or third parties may make offensive comments or jokes to an employee in a revealing costume, and the costumes themselves may make other employees uncomfortable. Keeping the office PG should keep those concerns to a minimum.

Job-Specific Costume Concerns

Employers can encourage employees to think about context when deciding on a costume to wear to work. A waiter serving food while fake brains ooze out of his head is not appetizing. A hospital chaplain breaking bad news while she’s dressed as a unicorn is not very comforting. A schoolteacher diagramming a sentence while he’s decked out as a pack of cigarettes doesn’t send a great message to students. A bank teller counting change with a mask on could make customers uneasy. Even on Halloween, these combinations don’t work well.

Key Takeaways

Employers can make sure everyone understands that normal workplace rules about harassment and professionalism apply, even on Halloween. If complaints of harassment surface, employers can investigate them promptly and thoroughly.

Most importantly, Halloween is an opportunity to have fun, boost employee morale, and foster a sense of community in the workplace.

 

© 2018, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

New Federal Overtime Rule Expected in Early 2019

It doesn’t seem that long ago that employers were busily preparing for the new overtime rule that would have doubled the minimum salary level for the “white collar” exemptions from $23,660 to nearly $48,000.  That new rule—finalized in May 2016 and set to take effect on December 1 of that year—was struck down by a Texas federal court in late November 2016.

President Trump took office in January 2017, and the DOL—with less interest in so aggressively raising wages as the predecessor administration—pushed the pause button on revisions to the overtime rule.  In public comments, however, Labor Secretary Alexander Acosta, who assumed the post in late April 2017, repeatedly indicated that he favors some increase in the minimum salary threshold for exemption, which was last raised in 2004 (and before that, in 1975).

In July 2017, the DOL began seeing public comment on a revised overtime rule, publishing a Request for Information in the Federal Register.  The comment period closed in September 2017.

In its Spring 2018 Regulatory Agenda, the Trump Administration formally announced its intention to issue a Notice of Proposed Rulemaking (NPRM) in January 2019 “to determine what the salary level for exemption of executive, administrative, and professional employees should be.”

So what should employers expect in a new overtime rule?  Likely an increase in the minimum salary for exemption to something in the low-to-mid $30,000s.  This would be consistent with Secretary Acosta’s comments on the issue, but still considerably lower than the level proposed by the Obama Administration.  It would also be significant lower than some state law minimum salaries for exemption (consider New York’s minimum for exempt executive and administrative employees, which will climb to $58,500 at the end of 2018).

Another thing we could see in a new overtime rule are more modern examples of how the various exemptions might apply in today’s workplaces.  The DOL included a number of new examples in its sweeping revisions to the overtime exemption rules in 2004.  It would make sense to revisit those examples, and to consider additional examples, given how the workplace has evolved in the last 15 years.

It’s also possible the DOL will depart from a one-size-fits-all salary minimum and propose different tests for smaller or non-profit employers.  Small businesses, non-profits, and educational institutions were among the loudest voices in opposition to the 2016 overtime rule changes, and would be among the hardest hit by any increase in the minimum salary levels.

What I don’t expect from a new overtime rule are automatic future increases (which were part of the 2016 rule) or a change from a qualitative to a quantitative (e.g., California-style) primary duties test.

I also don’t expect any new overtime rule to take effect before 2020.  Even assuming the DOL meets its expected deadline of proposing a new rule in January 2019, it will likely receive (and have to review) hundreds of thousands of public comments.  (The DOL received more than 270,000 comments in response to the proposed overtime rule that was finalized in 2016.)  In all likelihood, the DOL will give employers plenty of lead time to plan and prepare for any increases in the minimum salary for exemption.  So for employers who are not subject to more stringent state rules around exemption, it’s likely you have at least a year and a few months before you’d have to implement any changes.

 

© 2018 Proskauer Rose LLP.
This post was written by Allan Bloom of Proskauer Rose LLP
Learn more labor and employment news on the National Law Reviews Labor & Employment page.

Do Your Employees Use Cell Phones for Work While Driving?

Many employers have policies regarding the use of cell phones while driving, including the requirement to use the car’s hands-free, Bluetooth phone system, and abide by all applicable laws. But what happens when an employee still abides by the employer’s policy, is involved in a car accident, and causes injuries to a third party? Can the employer be held liable under the theory of respondeat superior?

Well, it depends on the facts and circumstances of the case. By way of background, respondeat superior means that an employer is vicariously liable for the torts of its employees when these employees commit the wrongful acts within the scope of their employment. California courts have held that the determination of whether an employee has acted within the scope of employment is a question of fact, but it also can be a question of law in circumstances where the facts cannot be disputed and there can be no conflicting inferences possible.

The California Court of Appeal in Ayon v. Esquire Deposition Solutions (decided on Sept. 21, 2018) was faced with this issue and held that under the facts presented the employer was not liable for the actions of its employee because there was no evidence that the employee in question was acting within the scope of her employment at the time of the accident.

In Ayon, the plaintiff’s car was struck by Brittini Zuppardo (“Zuppardo”), the scheduling manager of defendant Esquire Deposition Solutions (“Esquire”) while Zuppardo was driving. At the time of the accident, Zuppardo was on the phone with one of Esquire’s court reporters using her car’s hands-free Bluetooth phone system. This phone call (and hence the accident) occurred after normal business hours.

The plaintiff filed suit against Esquire and Zuppardo for personal injuries.  Esquire filed a motion for summary judgment on the ground that the plaintiff could not establish Esquire was vicariously liable for any damages its employee caused. The trial court agreed with Esquire, and the plaintiff appealed.

On appeal, the Court found that, based on the evidence presented, Zuppardo was not acting within the course and scope of her employment, particularly since (a) the phone call in question was after-hours, (b) Zuppardo was not on a work errand, but rather was coming home from a social engagement, and (c) although the phone call was with one of Esquire’s court reporters, Zuppardo and the court reporter were also friends and the conversation was not about work matters, but rather personal in nature. In sum, the trial court concluded that there was no evidence that Zuppardo talked about work matters at the time of the accident.

In Ayon, the Court found convincing the testimony of the Esquire employees who denied that they were discussing anything concerning work. And, their testimony was supported by undisputed evidence that (a) Zuppardo only made after-hours work calls on rare occasions, (b) it was not within her usual job duties, and (c) the two were friends. Accordingly, the Court of Appeal agreed with the trial court’s findings in favor of Esquire.

While it is unclear from Ayon whether the employee’s use of her cell phone (albeit hands-free) was a contributing factor to the accident, the employer was successful in avoiding liability in this case. Nevertheless, the outcome of this case may have been different if the employee was not using a hands-free device at the time of the accident. As such, enforcing policies can reduce the risk of claims.

 

©2018 Drinker Biddle & Reath LLP. All Rights Reserved.
This post was written by Pascal Benyamini of Drinker Biddle & Reath LLP.