Category: Labor & Employment

New York City Tells Fast Food Employees: “You Deserve A Break Today” By Enacting New Fair Workweek Laws

Earlier this week, New York became the third major city in the United States to enact “fair workweek” laws aimed at protecting fast food and retail employees from scheduling practices that are perceived by the employees to be unfair and burdensome.   Following the lead set by San Francisco and Seattle, New York has adopted a series of new laws aimed at enhancing the work life of fast-food and retail employees.  By eliminating certain scheduling practices commonly used by fast food and retail employers, the New York Legislature seeks to protect these employees from unpredictable work schedules and fluctuating income that render it difficult for them to create budgets, schedule child or elder care, pursue further education, or obtain additional employment.   These new laws include the following provisions:

  • Fast food employers must now publish work schedules 14 days in advance;
  • If fast food employers make any changes to an employee’s schedule with less than 14 days’ notice, the employer must pay the employee, in addition to the employee’s normal compensation,  a bonus payment  ranging from $10 to $75 depending on the amount of notice provided of the change;
  • Before hiring new employees, fast food employers must first offer any available work shifts  to current employees, thereby enabling part-time employees desiring more work hours the opportunity to increase their hours worked and, accordingly, their income, before the employer hires additional part-time employees;
  • Fast food employers may no longer schedule an employee to work back-to-back shifts that close the restaurant one day and open it the next day if there are less than 11 hours in between the two shifts.  However, if an employee consents in writing to work such “clopening” shifts, the fast food employer must pay the employee an additional $100;
  • Fast food employees may ask their employers to deduct a portion of their salary and donate it directly to a nonprofit organization of their choice (This provision is a victory for unions as fast food employees can now earmark money to a group that fights for their rights, and the employer has to pay it on their behalf); and
  • Bans all retail employers  from utilizing  “on-call” scheduling that requires employees to be available to work and to contact the employer to determine if they are needed at work.
This post was written by John M. O’Connor of Epstein Becker & Green, P.C.

The ERISA Fiduciary Advice Rule: What Happens on June 9?

This is an update on the upcoming effective date of the “fiduciary rule” or “fiduciary advice rule” (the “Rule”) that was issued under the US Employee Retirement Income Security Act of 1974 (ERISA). The Rule was published by the US Department of Labor (DOL) in April, 2016. The purpose of the Rule is to cause a person or entity to become a “fiduciary” under ERISA and the US Internal Revenue Code of 1986 (the “Code”) as a result of giving of certain types of advice involving investment of assets of employee benefit plans, such as 401(k) or pension plans, or of individual retirement accounts (IRAs) and receiving compensation for that advice.

calendar hundred daysThe Rule was originally intended to become effective April 10, but in April the DOL extended (the “Extension Notice”) the effective date of the Rule for 60 days (until June 9), and provided for reduced compliance obligations under the Rule from that date through the end of 2017 (the “Transition Period”). The effective date for Prohibited Transaction Exemptions (PTEs), both new and amended, that are related to the Rule also was extended until June 9, and further transitional relief was provided with respect to certain of those PTEs.

In a May 23 Op Ed in the Wall Street Journal, Labor Secretary Acosta announced that the Rule would go into effect on June 9, as provided for in the Extension Notice, and that the DOL would seek additional public comment on possible revisions to the Rule.  He indicated that the DOL “found no principled legal basis to change the June 9 date while we seek public input.”  The DOL also published, on May 23, FAQs on implementation of the Rule and an update of its previously-issued enforcement policy for the Transition Period. Therefore, it is important to review the rules that will go into effect on June 9.

Under the Rule, fiduciary status is triggered by investment “recommendations.” It provides, in general, that if a person (1) provides certain types of recommendations to a plan or its participants and/or beneficiaries, or to an IRA owner (collectively, “Protected Investors”); and (2) as a result, receives a fee or other compensation (direct or indirect), then that person is providing “investment advice for a fee” and therefore, in giving such advice, is a fiduciary to the Protected Investor. Receipt of compensation tied to such recommendations by a person or entity that is a fiduciary could result in prohibited transactions under ERISA and the Code. Under the Extension Notice, the DOL provided simplified compliance requirements under the Rule for the Transition Period.

This post was written by Gary W. Howell, Austin S. Lilling, Gabriel S. Marinaro, Richard D. Marshall, Andrew R. Skowronski, Robert A. Stone of Katten Muchin Rosenman LLP.

Farming Remains One of the Most Dangerous Professions According to Safety Data

Farmers represent a small portion of our population, but feed the entire country and most of the world. Despite advances in agricultural technology, however, farming remains one of the most dangerous occupations. To exacerbate matters, the injury of a farmer often hurts his or her entire family, as entire families often work together and feel the pain when one of their loved ones is unable to contribute and must be cared for by the others. It is for this reason that they must be extremely mindful of safety and constantly devising safer ways of accomplishing their goals.

Over Two Million Workers are employed on Farms Each Year

According to NIOSH, over 1.8 million people are employed full-time in the agricultural field every year, with over 200,000 part time workers. Many of these workers are under the age of 20 and working for their families’ farms. Of these workers, there are a recorded 374 deaths per year on average due to agricultural related injuries, with the most common cause of death being tractor overturns.

Nonfatal injuries are far more common— 167 workers are injured every single day. Many of these workers are injured severely enough to suffer a disability for life. The rate of permanent disability is estimated at about 5% of all injuries while 50% of accidents are as minor as a strain or contusion. Over 2,700 workers under the age of 20 are injured every year as well.

Young People Represent a Third of Farm Deaths

Of the 374 deaths reported annually, an average of 113 are under the age of twenty. This is likely due to the fact that younger workers are more likely to make mistakes and lack the safety training and awareness to avoid serious injuries. Almost one quarter of the youth deaths were due to tractor related accidents and 19% involved the use of motor vehicles such as ATVs.

NIOSH began the development of a special program in the 1990s to help agricultural workers reduce their risk of serious injury through education and research. This organization has conducted research over the last two decades on injuries that include repetitive use, exposure to toxic substances, hearing loss, stress and machinery accidents in an effort to create new safety programs that can help entire farming families. These programs are based out of universities located in ten different states across the country.

Business and Employee Groups Oppose Merger of OFCCP with EEOC

President Trump’s 2018 budget, released on May 23, proposes to merge the Office of Federal Contract Compliance Programs (OFCCP) with the Equal Employment Opportunity Commission (EEOC) by the end of FY 2018.  The proposed merger purports to result in “one agency to combat employment discrimination.”  The Trump administration asserts that the merger would “reduce operational redundancies, promote efficiencies, improve services to citizens, and strengthen civil rights enforcement.”

Both business groups and employee civil rights organizations have opposed the measure, albeit for different reasons.  The OFCCP is a division of the U.S. Department of Labor, while the EEOC is an independent federal agency.  Although both deal with issues of employment discrimination, their mandates, functions and focus are different.  The OFCCP’s function is to ensure that federal government contractors take affirmative action to avoid discrimination on the basis of race, color, religion, sex, national origin, disability and protected veteran status.  The OFCCP, which was created in 1978, enforces Executive Order 11246, as amended, the Rehabilitation Act of 1973, as amended, and the Veterans’ Readjustment Assistance Act of 1975.  The EEOC administers and enforces several federal employment discrimination laws prohibiting discrimination on the basis of race, national origin, religion, sex, age, disability, gender identity, genetic information, and retaliation for complaining or supporting a claim of discrimination.  Its function is to investigation individual charges of discrimination brought by private and public sector employees against their employers.  The EEOC was established in 1965, following the enactment of Title VII of the Civil Rights Act of 1964.

Business groups oppose the OFCCP’s merger into the EEOC due to concerns that it would create a more powerful EEOC with greater enforcement powers.  For example, the OFCCP conducts audits, which compile substantial data on government contractors’ workforces, while the EEOC possesses the power to subpoena employer records.  Combining these tools could provide the “new” EEOC with substantially greater enforcement power.  Civil rights and employee organizations oppose the merger, believing that overall it would result in less funding for the combined functions currently performed by each agency.

The budget proposal is consistent with the Trump administration’s goal to reduce costs and redundancies through a reorganization of governmental functions and elimination of executive branch agencies.  In light of opposition from both employers and employees, however, the measure lacks a powerful proponent; as a result, it is unlikely that the administration will succeed in effecting a combination, at least as it is currently proposed.

This post was written by Salvatore G. Gangemi of Murtha Cullina.

Fox News Lawsuits Highlight Importance of Workplace Culture

Employers should take note of the position Fox News is in due to the proliferation of recent lawsuits against the network by numerous current and former employees. To be clear and fair, the lawsuits only involve allegations at this time – nothing has been proven at trial, or otherwise.  Indeed, Fox News has denied the allegations. However, the common intertwined theme throughout all the lawsuits is that Fox News tolerates harassment, discrimination and retaliation. In short, the lawsuits attack Fox News’ workplace culture.

By having its workplace culture attacked, Fox News faces certain defense challenges. For instance, there is likely an increased risk of copycat or “me too” claims.  In fact, Fox News has stated as much to the media. Additionally, the effectiveness of Fox News’ anti-harassment/discrimination policies and its remedial process addressing harassment or discrimination complaints is at issue. Therefore, the company may face challenges in asserting the defense that those employees or former employees alleging discrimination or harassment never complained about the alleged improper conduct, and therefore never gave the company an opportunity to take appropriate remedial action.  Lastly, Fox News has suffered damage to its public reputation.

So what is the takeaway? Simply put, workplace culture matters. Employers should embrace the creation of a harassment/discrimination free workplace culture.  Such a culture should reduce potential lawsuits because the company would be given the opportunity to redress issues early on. Additionally, such a culture will strengthen the company’s defenses against harassment and discrimination claims, lead to increased employee morale and protect against unfavorable publicity that can damage the employer’s reputation.

The following are tips for employers to help create a harassment/discrimination free workplace:

  • Institute a written harassment/discrimination workplace policy with an effective complaint procedure. The complaint procedure should allow employees to bypass their immediate supervisors and report violations directly to other members of management or directly to the HR department. Convey the message that the policy applies to anyone in the workplace, including supervisors, co-workers, vendors and customers, and that anyone can be a harasser or victim.

  • Provide training or information for current and new employees on policy. Conduct refresher training routinely.

  • Implement training for supervisors and managers on relevant policies, including their supervisory responsibilities and role in ensuring compliance with anti-discrimination and harassment policies.

  • Develop the expectation that any employee who is a victim or witness to harassment or discrimination is required to report it.

  • Communicate that retaliation for raising complaints will not be tolerated.

  • Treat complaints confidentially, to the extent practical.

  • Investigate alleged incidents of harassment/discrimination promptly and objectively. Remember that your selection of the individual(s) conducting the investigation matters. The investigator(s) should have sufficient authority to take appropriate remedial action and should be credible. At the end of the investigation, discuss the results with individual who made complaint.

  • Institute appropriate disciplinary action, up to termination, when investigation determines that a policy violation has occurred.

  • Prior to terminating or taking adverse action against an employee, examine potential basis for a retaliation allegation.

Trump’s Actual Impact on OSHA

In November, we attempted to look into the crystal ball to see what potential impact the new Trump administration could have on the Occupational Health and Safety Administration (OSHA). Here are some of results so far, which on the whole, are favorable to employers who suffered under the “regulation by shaming” mantra of past Assistant Secretary of Labor David Michaels.

  • Budget Cuts – As predicted, on May 5, President Trump signed a spending bill that cuts the labor department’s discretionary spending budget by $83 million. This could limit some of OSHA’s enforcement efforts.

  • Recordkeeping as a Continuing Violation – The Volks rule, which was enacted by OSHA last December as a last minute rule in response to a loss, suffered through an adverse decision in the federal courts. The new rule established that an employer has a continuing duty to create accurate records of work-related employee injuries and illnesses. This effectively changed the statute of limitations for recordkeeping violations from six months to five years and six months. On April 3, President Trump signed a joint congressional resolution under the Congressional Review Act that overturned this rule. The law is now back to the original intent of Congress that the statute of limitations for all OSHA citations is six months. This is a significant win for employers who can focus their time on current substantive safety issues instead of reviewing documents for accuracy from up to five years ago.

  • Union Representatives in OSHA Inspections of Non-union Facilities – As mentioned in the prior post, I predicted that interpretation letters could change with the new appointment of the secretary of labor. One of the most controversial of these letters was the 2013 Fairfax memo regarding walkaround rights during an OSHA inspection. The memo stated that during an OSHA inspection of a non-union facility, a union representative could be designated as the employees’ “personal representative” even without representation election or voluntary recognition of the union as the exclusive representative of the employees. This was being challenged in court and then OSHA rescinded the Fairfax memo and agreed to revise the Field Operations Manual (FOM) for its inspectors to reflect the same change on April 25, 2017. The lawsuit was then dismissed as moot since OSHA rescinded the controversial memo. The letter was viewed as an overstep by OSHA into the area of labor relations covered by the NLRB, since it appeared to be motivated by giving unions more access to non-union employers for organization efforts rather than to assist in a safety inspection. This is another win for employers.

So far, the progress has been good for employers. We will just have to wait and see how other issues develop, including the electronic recordkeeping rule and non-discrimination standard (which limits blanket post-accident drug tests), which is being challenged in two separate lawsuits, as well as the silica standard, which is being challenged in court. The DOL has to decide how strongly it will defend these rules in court which will have a significant impact on how the courts may rule. Stay tuned for updates.

Get the Most Out of Retirement: Checklist for Happiness, Health, Purpose and Financial Security

Get the Most Out of RetirementThe American Bar Association and AARP have partnered to bring you the book Get the Most Out of Retirement: Checklist for Happiness, Health, Purpose and Financial Security. As our population continues to age, more Americans are retiring.  These Americans will need help with all the aspects of retirement.  This book provides an easy step-by-step approach to making decisions that are tailored for this growing segment of the populace.

Click here to order.

Whether you’re planning for or already living in retirement, there’s a lot that goes into making the most of every day. From crafting a budget and managing your money to last a lifetime to simplifying your life so you can really focus on what you want to do next, Get the Most Out of Retirement walks you through the process.

You’ll get step-by-step, practical tips to

  • Nurture new and old relationships
  • Find meaning through volunteer and work opportunities
  • Take classes and pursue hobbies
  • Decide where to live
  • Retire abroad
  • Get organized and clean out the clutter
  • Stay within your budget
  • Simplify the legal paperwork
  • Live healthfully
  • And more!

Our generation has decades of [bonus] years ahead that our parents didn’t have. This is the one book you’ll need not just to manage the business of life wisely but to make your retirement rich with health, happiness, and meaning.

 

Muslim employee who was allegedly told to remove that “rag” from her head gets new day in court

A federal appellate court ruled yesterday that a Muslim employee of Astoria Bank who was allegedly subjected to a “steady barrage” of shameful racist and anti-Muslim statements should be allowed to present her hostile work environment claim to a jury.  Ahmed v Astoria Bank, No. 16-1389 (2d. Cir. May 9, 2017).

Among other things, a senior supervisor reportedly told the employee (Ahmed) to remove her hijab (a headscarf traditionally worn by Muslim women), which the supervisor referred to as a “rag.”

What is a “hostile work environment”?

To prove a hostile work environment claim, an employee must show that the underlying acts were severe or pervasive.  A single act of severe harassment, such as a sexual assault, is actionable under Title VII of the Civil Rights Act.  The acts, however, must be based the employee’s protected characteristic (for example, gender, race, national origin, religion, disability).

Petty slights and generally rude behavior will not rise to the level of an unlawful hostile work environment.

To determine whether harassment violates Title VII, courts consider the following factors:

  • the frequency of the discriminatory conduct;
  • its severity;
  • whether it is physically threatening or humiliating, or a mere offensive utterance; and
  • whether it unreasonably interferes with an employee’s work performance.

The employer may automatically be liable if a supervisor harasses an employee that causes an adverse action like termination, lost wages, or a suspension.

If a supervisor creates a hostile work environment for an employee, then the employer will escape liability only if it can prove:

  • it reasonably tried to prevent and promptly correct the harassing behavior; and
  • the employee unreasonably failed to take advantage of any preventive or corrective opportunities offered by the employer

If a non-supervisory employee harasses another employee, then the employer will be liable for the harassment if the employer knew, or should have known, about the hostile work environment and failed to promptly correct it.

Evidence supporting Ahmed’s hostile work environment claim

The Second Circuit Court of Appeals decision in Ahmed v. Astoria Bank overruled the District Court’s ruling that Ahmed had not produced sufficient evidence to establish a hostile work environment.  The evidence in this case was “right on the knife’s edge of either granting [summary judgment] or allowing [the case] to go to the jury[,]” according to the Second Circuit Court of Appeals.  It nonetheless found that the following alleged conduct by Ahmed’s supervisor was “severe or pervasive” enough for a jury to conclude that an “abusive working environment” existed:

  • “constantly” telling Ahmed to remove her hijab, which he referred to as a “rag,”
  • demeaning Ahmed’s race, ethnicity, and religion “[o]n several occasions,” and
  • making a comment during Ahmed’s interview on September 11, 2013 that Ahmed and two other Muslim employees were “suspicious” and that he was thankful he was “in the other side of the building in case you guys do anything.”

The case will now return to the federal district court for a jury trial on the hostile work environment claim.

Remedies available in hostile work environment claims

A variety of potential remedies will be available under Title VII of the 1964 Civil Rights Act if you win your hostile work environment case.

Assuming that your case is an individual, Title VII case against a private company, then a court may award you any combination of the following remedies:Religious Dress UK WorkplaceCompensatory damages, including emotional distress damages, as well as out of pocket expenses for job searches, medical expenses, etc.;

  • Back pay;
  • Punitive damages; and/or
  • Attorney’s fees, expert witness fees, and litigation costs

Other remedies may be available in hostile work environment cases against the federal, state, or local government, as well as  cases under different anti-discrimination laws.

Company Awarded Damages After Former Employee Hacks Its Systems and Hijacks Its Website

A company can recover damages from its former employee in connection with his hacking into its payroll system to inflate his pay, accessing its proprietary files without authorization and hijacking its website, a federal court ruled. Tyan, Inc. v. Yovan Garcia, Case No. CV 15-05443- MWF (JPRx) (C.D. Cali. May 2, 2017).

data security privacy FCC cybersecurityThe Defendant worked as a patrol officer for a security company. The company noticed that its payroll system indicated that the Defendant was working substantial overtime hours that were inconsistent with his scheduled hours. Upon further investigation, the company learned that that the Defendant accessed the payroll system without authorization from the laptop in his patrol car. When the company confronted him, the Defendant claimed a competitor hacked the payroll system as a means to pay him to keep quiet about his discovery that the competitor had taken confidential information from the company. A few months later, shortly after the Defendant left the company, the company’s computer system was hacked and its website was hijacked. The company later filed suit against the Defendant alleging he was responsible for the hack and the hijacking.

Following a bench trial, the court concluded the Defendant had used an administrative password the company had not given him to inflate his hours in its payroll system. The court also found the Defendant hijacked the company’s website and posted an unflattering image of the company’s owner on the website. In addition, the court found the Defendant engaged in a conspiracy to steal confidential files from the company’s computer system by accessing it remotely without authorization and destroyed some of the company’s computer files and servers.

The court concluded that the aim of the conspiracy in which the Defendant was engaged was twofold: first, to damage his former employer in an effort to reduce its competitive advantage; and second, to obtain access to those files that gave his former employer its business advantage, and use them to solicit its clients on behalf of a company he started. The court also found that by accessing the company’s protected network to artificially inflate his hours and by participating in the conspiracy to hack the company’s systems, the Defendant was liable for violations of the Computer Fraud Abuse Act, the Stored Communications Act, the California Computer Data Access and Fraud Act, and the California Uniform Trade Secrets Act.

As a result of Defendant’s misconduct, the court awarded the company $318,661.70 in actual damages, including damages for the inflated wages the company paid the Defendant, the cost of consultant services to repair the damage from the hack, increased payroll costs for time spent by employees rebuilding records and databases destroyed in the hack, the resale value of the company’s proprietary files, and lost profits caused by the hack. The court declined to award punitive damages under the California Uniform Trade Secrets Act, but left open the possibility that the Plaintiff may recover its attorneys’ fees at a later date.

Take Away

Companies are reminded that malicious insiders, in particular disgruntled former employees, with access to areas of the system external hackers generally can’t easily access, often result in the most costly data breaches.

Steps should be taken to mitigate insider threats including:

  • Limiting remote access to company systems
  • Increased monitoring of company systems following a negative workplace event such as the departure of a disgruntled employee
  • Changing passwords and deactivating accounts during the termination process

What Was Your Prior Salary? No Longer Question You Can Ask When Hiring in New York City

Last month, the New York City Council approved legislation that bars employers from asking prospective hires to disclose their past salary. In passing the measure, New York City joins Massachusetts (see our post here), Puerto Rico and the city of Philadelphia in banning the question from job interviews and on applications. (Also see our post here regarding a recent Ninth Circuit decision addressing pay history.) The law, known as Introduction 1253-A, makes it illegal for any employer or employment agency in New York City to ask about an applicant’s salary history, including benefits, or search any publicly available records to obtain any such information. The measure, aimed at tackling pay inequity, is intended to stop perpetuating any discrimination that women or people of color may have faced in the past and to end wage disparities between men and women. A study released earlier this month by the National Partnership for Women & Families, a Washington, DC-based advocacy group, shows that women in New York State earn 89 cents for every dollar that men are paid. The pay gap is wider among minority women, the study found. African American women in New York earn 66 cents for every dollar paid to non-Hispanic white men. Latina women earn 56 cents for every dollar.

Labor Law HiringThe measure only applies to new hires, not to internal job candidates applying for a transfer or promotion given that their salary information may already be on file. It also excludes public employees whose salaries are determined by collective bargaining agreements. There are certain exceptions built into the bill whereby employers can consider salary history, including the hiring of internal candidates for different positions, workers who are covered by a collective bargaining agreement or employees who voluntarily give their salary history during an interview.

New York City Public Advocate Letitia James, who co-sponsored the bill last year, said the primary focus of the bill is to promote greater transparency in the hiring process. Although it doesn’t require employers to do so, James said the bill suggests to businesses that they post salaries for jobs instead of relying on workers’ past salary.

The City’s Commission on Human Rights will investigate and enforce the measure, imposing a civil penalty of no more than $125 for an unintentional violation or up to $250,000 for an intentional malicious violation. Those figures are in line with other forms of discrimination — including race, disability and sexual orientation bias — for which the commission issues fines.

Fatima Goss Graves, president-elect of the National Women’s Law Center, said in an email that the measure “stands to transform the way that companies operate around the country,” she said. “So many companies operate in multiple jurisdictions. If a company changes its practices in New York, it is likely to also make changes around the country.” I think what we’ll see is companies that do business in New York City just eliminate that from their applications entirely,” she said. “This will have wide-ranging influence.” Meanwhile, nearly 20 states, the District of Columbia and two cities (San Francisco and Pittsburgh) have introduced legislation that includes a provision against salary history information, according to data from the NWLC.

The new legislation is expected to go into effect later this year, or 180 days after Mayor de Blasio signs the bill.  Employers in New York City need to review their applications and standard job questions to ensure they remove any questions about past salaries.