Tag: labor and employment

Your Employee As Your Arbitrator? Maybe!

The Hon’ble Supreme Court of India (“Court”) has, by its order dated August 24, 2009, in the matter of Indian Oil Corporation Ltd. & Ors. (“Appellants”) Vs. M/s. Raja Transport (P) Ltd. (“Respondent”)1, once again upheld that the Court must give full effect and meaning to the appointment procedure set by the parties in the arbitration agreement before appointing arbitrator of their choice.

BRIEF FACTS OF THE CASE:

The Appellant and Respondent entered into an agreement dated February 28, 2005 (“Agreement”), where under, the Respondent was appointed as the dealer of the Appellant for the retail sale of petroleum products. Clause 692 of the Agreement provided for settlement of disputes by arbitration where the Director, Marketing of the Appellant, or a person appointed by him, was to act as the sole arbitrator.

On August 06, 2005, the Appellant terminated the dealership. The Respondent filed suit in the Civil Court, Dehradun, seeking (1) a declaration that the order of termination of dealership was illegal and void and (2) for a permanent injunction restraining the Appellant from stopping the supply of petroleum products to the retail outlet of the Appellant. In this same suit, the Appellant filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (“the Act”), praying that the suit be rejected and the matter be referred to arbitration in terms of Section 69 of the Agreement. The Ld. Judge allowed the Appellant’s application and directed the parties to refer the matter to arbitration within two months and also directed the Appellant not to stop supplies to the Respondent for a period of two months.

Both parties challenged the said order before the District Court, Dehradun. The Respondent also filed an application under Section 9 of the Act seeking an interim injunction against the Appellant. Both appeals and the Section 9 application were disposed off by a common order dated January 20, 2006, whereby, both appeals were dismissed and the Section 9 application was allowed, retraining the Appellant from interrupting the supply of petroleum products to the Respondent for two months as well as directing the parties to refer the matter to arbitration as per the agreement, within the said period of two months.

While the appeals were pending, the Respondent issued letter dated January 04, 2006, through their counsel, wherein, the Respondent, referring to the Appellant’s insistence that only its Director, Marketing could be appointed as the Arbitrator, inter alia alleged that it (the Respondent) did not expect fair treatment or justice if the Director, Marketing or any other employee of the Appellant was appointed as the Arbitrator and called upon the Respondent to have a joint meeting so as to enable the parties to mutually agree on an independent arbitrator. This request was not accepted by the Appellant.

Thereafter, the Respondent filed an application before the Chief Justice of the Uttaranchal High Court under Section 11(6) of the Act for appointment of an independent arbitrator to decide the dispute. This application7 was allowed and a retired High Court Judge was appointed as the Sole Arbitrator to decide the dispute. The Ld. Chief Justice inter alia assigned the following two reasons to appoint a retired Judge as an Arbitrator instead of the persons as named in the arbitration agreement.

  1. The Director (Marketing) of the Appellant, being its employee, should be presumed not to act independently or impartially.
    1. The Respondent had taken steps in accordance with the agreed appointment procedure contained in the arbitration agreement and directions of the civil court by issuing notice dated January 04, 2006, calling upon the Appellant to appoint an arbitrator. After receipt of the said notice, the Appellant had to refer the matter to its Director, Marketing, which it did not do, nor did it take any steps for the appointment of an Arbitrator. The Appellant had, thus, failed to act as required under the agreed procedure.

    Aggrieved by the said order, the Appellant preferred an appeal before the Court.

    JUDGMENT:

    The facts and circumstances of this case raised three issues for the Court to consider:

    1. Whether the Ld. Chief Justice of the Uttaranchal High Court was justified in assuming that when an employee of one of the parties to the dispute is appointed as an arbitrator, he will not act independently or impartially.

    On this issue, the Court inter alia noted as under:

    • Arbitration is a binding and voluntary dispute resolution process by a private forum so chosen by the parties.
    • Where a party, with open eyes and full knowledge and comprehension of the said provision enters into a contract with a government/statutory corporation/public sector enterprise, where such arbitration agreements providing for settlement of disputes where the arbitrator will be one of its senior officers, were common, such party cannot subsequently turn around and contend otherwise unless performance of that part of the arbitration agreement is impossible, or is void being contrary to the provisions of the Act.
    • It was settled law that arbitration agreements in government contracts providing that an employee of the department (usually a high official unconnected with the work or the contract) will be the arbitrator are neither void, nor unenforceable.
    • Whilst the provisions relating to independence, impartiality and freedom from bias are implicit under the Arbitration Act, 1940, the same are made explicit in the Act.
    • This position may differ where the person named as the arbitrator is an employee of a company/body/individual other than the state and its instrumentalities e.g. a Director of a private company who is party to the arbitration agreement. In such cases, there may be a valid and reasonable apprehension of bias in view of his position and interest. In such cases, the court has the discretion not to appoint such a person.
    1. In what circumstances the Chief Justice or his designate can ignore the appointment procedure or the named arbitrator in the arbitration agreement to appoint an arbitrator of his choice.

    On this issue, the Court inter alia noted as under:

    • The court must first ensure that the terms of the agreement are adhered to or given effect to, as far as possible and those remedies, as provided for, are exhausted.
    • It is not mandatory to appoint the named arbitrator but at the same time, due regard has to be given to the qualifications required by the agreement and other considerations. Referring the disputes to the named arbitrator shall be the rule. Ignoring the named arbitrator and nominating an independent arbitrator shall be the exception to the rule, which is to be resorted to for valid reasons.

    Interestingly, the Court also proceeded to expound on the scope of Section 11 of the Act, which contains the scheme of appointment of arbitrators.

    1. Whether the Respondent had taken the necessary steps for the appointment of an arbitrator in terms of the agreement, and the Appellant had failed to act in terms of the agreed procedure, by not referring the dispute to its Director, Marketing for arbitration.

    On this issue, the Court inter alia noted as under:

    • In view of the order dated January 20, 2006, the Respondent ought to have referred the dispute to the Director (Marketing) of the Appellant within two months from January 2006. The Respondent had not done so and in light thereof, it was the Respondent that had failed to act in terms of the agreed procedure and not the Appellant.
    • As the Arbitrator was already identified, there was no need for the Respondent to ask the Appellant to act in accordance with the agreed procedure.

    The Court proceeded to hold that the Chief Justice had erred in having proceeded on the basis that the Respondent had performed its duty under the agreement and that there was justification for appointment of an independent arbitrator.

    The Court then proceeded to allow the appeal, set aside the impugned order and appointed the Director (Marketing) of the Appellant as the sole arbitrator to decide the disputes between the parties.

    ANALYSIS:

    By this decision, the Court has once again upheld that when a person enter into a contract with a government/statutory corporation/public sector enterprise having an arbitration agreement providing for settlement of disputes where the arbitrator will be one of its senior officers, such person cannot subsequently turn around and contend otherwise unless performance of that part of the arbitration agreement is impossible, or is void being contrary to the provisions of the Act. However, this position may differ where the person named as the arbitrator is an employee of a company/body/individual other than the state and its instrumentalities e.g. a Director of a private company who is party to the arbitration agreement.

    Referring to its decision taken earlier in the matter of Northern Railway Administration, Ministry of Railway, New Delhi Vs. Patel Engineering Company Ltd. (please refer to our earlier hotline dated August 26, 2008) Court reiterated that it is important to first ensure that the terms of the arbitration agreement are adhered to or given effect to, as far as possible and those remedies, as provided for, are exhausted, before they intervene in any manner.

    However, If circumstances exist, giving rise to justifiable doubts as to the independence and impartiality of the person nominated, or if other circumstances warrant appointment of an independent arbitrator by ignoring the procedure prescribed, the Chief Justice or his designate may, for reasons to be recorded ignore the designated arbitrator and appoint someone else.

    FOOTNOTES

    1 Civil Appeal No. 5760 of 2009 arising out of SLP (C) No. 26906 of 2008.

    2 “69. Any dispute or a difference of any nature whatsoever or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this Agreement shall be referred to the sole arbitration of the Director, Marketing of the Corporation or of some officer of the Corporation who may be nominated by the Director Marketing. The dealer will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the contract related or that in the course of his duties or differences. ………………..It shall also be a term of this contract that no other person other than the Director, Marketing or a person nominated by such Director, marketing of the Corporation as aforesaid shall act as arbitrator hereunder…………………….”

    Nishith Desai Associates 2022. All rights reserved.

Article By Sahil Kanuga and Vyapak Desai with Nishith Desai Associates.

For more articles on international law updates, visit the NLR Global section.

Illinois Department of Labor Publishes Guidance for Employers Seeking Equal Pay Registration Certificate

Effective March 24, 2022, the Illinois Equal Pay Act (IEPA) was amended to require private businesses with more than 100 employees in Illinois to obtain an Equal Pay Registration Certificate (EPRC) by March 23, 2024, and every two years thereafter.

To apply for the EPRC, businesses must submit the following to the Illinois Department of Labor (IDOL): (1) a filing fee; (2) an equal pay compliance statement; (3) a copy of the employer’s most recently filed EEO-1 report; and (4) a list of employees separated by gender and the race and ethnicity categories as reported in the employer’s most recently filed EEO-1 report, and the total wages paid to each employee during the past calendar year.

The IDOL recently updated its Frequently Asked Questions (FAQs) for the EPRC, addressing, among other things, the application and submission processes, fee requirements, recertification, publicly available data, and penalties for employer noncompliance.  Here are key takeaways:

  • All employees based in Illinois, including those working remotely, should be included in the total employee count for reporting purposes. An employer’s total employee count includes the total number of people employed who worked in or were based out of Illinois on December 31 of the 12-month calendar year immediately prior the year the employer is required to submit an EPRC application.
  • For reporting purposes, “wages” means any compensation paid to an employee by an employer pursuant to an employment contract or agreement between the two parties, including wages, salaries, earned commissions, earned bonuses, stocks and ownership shares. This does not include retirement health insurance benefits, or other fringe benefits.
  • If an employer’s submitted wage data in its EPRC application shows that the employer is paying unequal wages to male and female employees or to African-American and non-African American employees, the IDOL may initiate its own investigation pursuant to Sections 10(a) and 15(c) of the IEPA and Section 320.200 of the IEPA regulations.
  • Before any fines may be imposed for a violation of the IEPA, the IDOL will provide notice to an employer that violates the IEPA and inadvertently fails to file an initial EPRC application or recertification that they have 30 calendar days to submit the application or recertification. If the employer fails to do so, it shall be fined up to $10,000.
  • An employer that falsifies or misrepresents data on an EPRC application faces suspension or revocation of the EPRC and civil penalties up to $10,000.
  • Current employees subject to the IEPA may request anonymized data from the IDOL regarding their job classification or title and the pay for that classification.

Illinois employers should audit their pay practices to ensure that any differences in wages amongst employees of similar job classifications are justified by legitimate, non-discriminatory reasons.

© 2022 Proskauer Rose LLP.
For more articles covering labor law updates, visit the NLR Labor & Employment section.

Six Things to Know About New York’s New Employer Notification Requirements for Electronic Monitoring of Employees

Under an amendment to the New York Civil Rights Law that will take effect on May 7, 2022, private-sector employers that monitor their employees’ use of telephones, emails, and the internet must provide notice of such monitoring. The following provides highlights of the new law.

Question 1. Which employers and electronic monitoring activities are covered?

Answer 1. The law applies to any private individual or entity with a place of business in New York, and it broadly covers “telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage by an employee by any electronic device or system, including but not limited to the use of a computer, telephone, wire, radio, or electromagnetic, photoelectronic or photo-optical systems [that] may be subject to monitoring.”

Q2. Are any electronic monitoring activities exempted from coverage?

A2. The law does not cover processes “designed to manage the type or volume of incoming or outgoing electronic mail or telephone, voice mail or internet usage,” and it also does not apply to processes “that are not targeted to monitor or intercept the electronic mail or telephone voice mail or internet usage of a particular individual.” The law also exempts processes that are “performed solely for the purpose of computer system maintenance and/or protection.”

Q3. What are some of the law’s compliance obligations?

A3. Private-sector employers that “monitor[] or otherwise intercept[] [employee] telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage” must post a notice of electronic monitoring in a “conspicuous place which is readily available for viewing” by affected employees. Employers also must furnish new employees with written notice when they are hired. The law requires that newly hired employees acknowledge receipt of the notice, “either in writing or electronically.”

Q4. What information must be included in the notices?

A4. Under the law, employers are required to notify employees that “any and all telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage by an employee by any electronic device or system” may be subject to monitoring “at any and all times and by any lawful means.” The law requires that the written notice advise employees that the electronic devices or systems that may be subject to monitoring include, but are not limited to, “computer, telephone, wire, radio or electromagnetic, photoelectronic or photo-optical systems.”

Q5. What are the penalties for violations of the law?

A5. The law provides for the imposition of civil penalties for violations of its requirements. Employers found to be in violation of the law are subject to civil penalties of $500 for a first offense, $1,000 for a second offense, and $3,000 for a third offense and for each subsequent offense. The Office of the New York State Attorney General will enforce the law.

Q6. Are there similar requirements in other jurisdictions?

A6. Connecticut and Delaware also require employers to provide notification of electronic monitoring. As the requirements of these laws vary slightly from New York’s law, employers doing business in either or both of these states and in New York may wish to consider whether to adopt a single approach, or adopt approaches tailored to each jurisdiction’s requirements.

Key Takeaways

New York employers that have not already taken action to comply with this new law may wish to consider whether to post physical notices in the workplace or utilize electronic postings that are visible upon logging in to the employer’s computer, or both.

Employers may also wish to determine how to incorporate the required notice to new employees in their new-hire and onboarding systems. Employers that address electronic monitoring in existing policies may also wish to review the existing policies to ensure that the information in those policies is consistent with the nature of the notification required by the new law, and update existing policies if warranted.

Employers may also wish to consider whether to obtain written or electronic acknowledgments of electronic monitoring from current employees. In addition, employers may wish to evaluate the potential for challenges to the use of information obtained through electronic monitoring absent compliance with the notice requirements.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more articles about labor laws, visit the NLR Labor & Employment section.

Return to Work Considerations – COVID and the ADA

Employers are contending with difficult challenges unlike any time in modern history. Even though many employees, especially in the manufacturing industry, returned to work after working from home during the COVID pandemic, the effects of the increased flexibility seen during the COVID era linger. Many employees enjoyed the benefits of working from home during the last two years, even if only part-time, and do not want to give up the benefit. By contrast, and especially as COVID restrictions ease, employers often desire their workforce return to work in a more consistent and routine capacity. These tensions are further complicated by an extremely competitive labor market. Recruiting and retaining employees is a challenge in the current environment. Against this backdrop, prudent employers will keep in mind employment law considerations when developing return-to-work and work-from-home policies.

Where should an employer look to determine what accommodations it should make for an employee who wishes to work from home, either due to a COVID diagnosis and/or a condition that places the employee at a heightened risk for severe COVID? Early in the pandemic, local or state health orders answered such questions regarding COVID-related leave. As the pandemic continued, many of those local health orders were rescinded or expired. As a result, employers are left without clear local guidance. When local requirements are of no assistance, employers should look to CDC guidance for quarantining and isolating guidelines.

In addition, employers should keep in mind that COVID may qualify as a “disability” depending on the symptoms and their severity. If an employee tests positive for COVID and is experiencing symptoms that require an absence from work that is longer than the CDC recommended quarantine period, employers should involve legal counsel to analyze whether the employee’s COVID diagnosis constitutes a disability under the ADA. If it does constitute a disability, the employer is then required to engage in the interactive process under the ADA with the employee to determine whether a reasonable accommodation for the disability can be made. Leave can be an accommodation under the ADA, as can working from home, in certain circumstance and for certain roles.

Likewise, some disabilities may heighten the risk of severe COVID symptoms. In the event that such a disabled employee requests an accommodation related to this heightened risk of COVID, the employer should treat the request as it would any request for accommodation under the ADA. As always, employers should seek legal counsel and check local requirements regarding COVID leave when considering accommodations for employees in these circumstances.

Employers have many competing and challenging considerations when determining a company’s return-to-work policy. While the labor shortage, industry, and specific role considerations certainly play a part in those decisions, employers should not lose sight of the ADA’s additional requirements. The ADA may play a role on an individual level and affect whether an employee may seek leave, work from home, or is entitled to other accommodations related to a COVID diagnosis or high-risk factors.

Article By Felicia S. O’Connor of Foley & Lardner LLP

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 Foley & Lardner LLP

Filing Tax Returns and Making Tax Payments: Best Practices During the Pandemic and Beyond

With staffing shortages and service center closures, it should come as no surprise that the IRS has faced a number of challenges during the pandemic. A couple of the biggest challenges have been in the opening and processing of taxpayer correspondence and in the processing of tax returns. As National Taxpayer Advocate, Erin Collins, stated in her Annual Report to Congress, “Paper is the IRS’s Kryptonite, and the IRS is buried in it.”

Going into 2022, the IRS has a significant backlog of unprocessed taxpayer correspondence and unprocessed returns. The estimates are staggering.

  • Five million pieces of unprocessed taxpayer correspondence
  • Over 11 million unprocessed tax returns, including:
    • Six million individual income tax returns
    • 2.3 million amended individual tax returns
    • 2.8 million business returns (income tax and employment tax returns)

The 2022 tax filing season, which opened on Thursday, January 24 for individual income tax returns, has the potential to create even more challenges for the IRS. Below is a list of best practices taxpayers can follow to ensure timely processing of their payments, tax returns, and claims for refund. These practices apply to individuals and required filing for businesses.

  • File returns and make payments electronically.
  • If you must file a paper return or mail in a payment to the IRS, send the return or payment to the proper address via USPS Certified Mail, Return Receipt Requested. Using this method will assist in resolving timely filing and/or timely payment penalties assessed by the IRS.
  • Properly notate your tax payment and include the form number, tax period and your social security number or employer identification number.
  • Respond to notices from the IRS in a timely manner.

In addition to the above, the IRS has offered a few filing tips for individuals.

  • Fastest refunds by e-filing, avoiding paper returns: Filing electronically with direct deposit and avoiding a paper tax return is more important than ever to avoid refund delays. If you need a tax refund quickly, do not file on paper – use software, a trusted tax professional or IRS Free File.
  • Filing 2021 tax return with 2020 tax return still in process: For those whose tax returns from 2020 have not yet been processed, 2021 tax returns can still be filed. For those in this group filing electronically, here’s a critical point: taxpayers need their Adjusted Gross Income, or AGI, from their most recent tax return at time of filing. For those waiting on their 2020 tax return to be processed, make sure to enter $0 (zero dollars) for last year’s AGI on the 2021 tax return. Visit Validating Your Electronically Filed Tax Return for more details.

More individual filing tips from the IRS can be found here.

If you have unpaid taxes or unfiled returns, you need an experienced tax attorney to represent you in your dealings with the IRS or the Department of Justice. An accountant or enrolled agent is not protected by the attorney-client privilege.

© 2022 Varnum LLP
For more articles about tax returns, visit the NLR Tax type of law section.

A Very Simple Proposal to Tweak the FLSA to Benefit Both Employees and Employers

A number of years ago, I received a kind note around the holidays from my opposing counsel in a wage-hour class action, thanking me and my firm for being their “partners” in addressing employment issues.

Maybe the word he used wasn’t “partners,” but it was something close to it.

At first, I must admit that I thought he was joking.

Then I realized that this attorney, for whom I have great respect, got it.

He got that employers are not looking to violate employment laws, and that the attorneys who represent them are not trying to help their clients violate the laws.

He got that the opposite is true – employers are trying to comply with the laws, and their attorneys are trying to help them do so.  No employer is hoping to get sued.  Not one.  And lawyers advising employers on how to violate the laws will soon be looking for new clients.  Or a malpractice attorney.

The general public may not understand this notion, and, unfortunately, many employees and plaintiffs’ lawyers may not, either.

The desire of employers and their counsel to comply with the law plays out thousands of times every day, to the great benefit not just of employers, but of employees.

All management-side employment lawyers worth their salt have stories about how they worked with their clients to prevent a manager from terminating an employee’s employment, or cutting an employee’s pay, or implementing a problematic policy, by explaining the law and the potential repercussions.  Some lawyers have hundreds of these stories.

“You should give the employee another chance,” is an expression that may as well be on a tape recording, it’s used that often.  “Document the problem, sit down with the employee to explain how they need to do things differently, and give the employee another chance.”  “If you make that change, you’re walking right into a class action that you will have difficulty defending.”

Often – usually – employers will understand and follow their counsel’s advice once distanced from the heat of the moment.

They’re looking to do the right thing, to treat their employees fairly.  And, yes, to comply with the law.

It’s an approach that works in virtually every context except perhaps one – the Fair Labor Standards Act (FLSA).

The FLSA actually works to dissuade employers from working with employees to correct many wage issues.

Why is that?

Because, unlike other employment laws, the FLSA generally doesn’t permit employers and employees to resolve wage disputes, short of the very litigation or agency complaint that neither employers nor employees really want.

The FLSA generally forbids the very amicable resolutions that would benefit both employers and employees.

And perhaps it’s time to change that.

In a perfect workplace, if employees have issues, whatever they might be, they would speak with their managers or with human resources and resolve their disputes amicably.

And, for the most part, the law not only permits them to do so, but encourages them to do so.

If employees believe they have been harassed, they can take their concerns to their employer and let their employer investigate and take corrective action, if appropriate.

If employees believe they have been discriminated against, they can share their concerns with their employer and resolve their disputes.

And if part of the resolution is a payment of some sum that the employer and employee agree to be fair, they can enter into a settlement agreement whereby those claims are resolved.  That is, the employee can accept some agreed-upon sum of money and sign a release.  And the employee can review the settlement agreement with his or her attorney beforehand in deciding whether the terms are fair.  If not, the employee won’t sign it.

But these very same employees who are able to amicably resolve virtually any dispute with their employers generally are not allowed to do so with FLSA claims.

If employees believe they were not paid for all time they worked, they cannot simply speak with their managers or human resources personnel to resolve the issue, get the problem fixed, and move on.  No, generally speaking, the only way they can resolve the issue is to file a lawsuit or a complaint with the Department of Labor (DOL).

If employees believe their overtime pay was miscalculated, the only way they and their employers can resolve the claim is by suing or going to the DOL.

If employees believe that they have been misclassified as exempt, they can’t resolve the issue with their manager or human resources personnel.  No, they have to sue or file a DOL complaint.

And if employers identify an issue – an error on someone’s paycheck, or a concern that an employee might have been misclassified – the best they can do is to correct the issue and pay the employee, then sit back and hope that the employee doesn’t turn around and sue about the very issue the employer wanted to resolve, but couldn’t.

It’s a system that is built to increase litigation, often unnecessarily, at the expense of amicable resolutions of issues that may arise.

There is no good reason that employees can be trusted to resolve other employment disputes without litigation or an agency complaint, but can’t be trusted to do so with regard to wage claims.

None.

There is no good reason why employees can be allowed to amicably resolve a race or sex discrimination concern, for instance, but the same employees can’t be allowed to resolve a wage claim – not even as part of the resolution of the race or sex discrimination concern.

None.

The argument that an employee wouldn’t understand the nuances of the FLSA flies about as far as a turkey.  The FLSA is no more nuanced than Title VII or the Americans with Disabilities Act, and employees are allowed to resolve those claims outside of litigation or an agency complaint.

And don’t forget that employees could always have an attorney review a proposed FLSA settlement before they ever enter into it.  If it wasn’t fair, the attorney would surely tell the employee that and try to negotiate better terms, right?

Ultimately, it’s the employees’ decision.  If they don’t like the terms of a proposed resolution of FLSA claims, they can always file suit or a DOL claim then.

If you assume that employers and employees would like to have the opportunity to try to resolve their FLSA disputes prior to litigation or a DOL claim, then it is time to amend the FLSA to give them to right to do so.

And the blueprint for what legislation could look like is easy to find – it’s right in the Age Discrimination in Employment Act (ADEA).  Or, more specifically, it’s right in the Older Workers Benefits Protection Act (OWBPA) amendments to the ADEA.

For reasons that remain somewhat mystifying, releases of age discrimination claims under the ADEA require specific terms that releases of other types of federal discrimination claims do not.  Among other things, such releases must specifically reference the ADEA, they must advise employees that they have the right to consult with an attorney, they must provide the employee with 21 days to consider the release (or 45 days under some circumstances), and they must provide the employees with 7 days to revoke an agreement after signing.

There is no reason that the FLSA couldn’t be amended to permit private settlements along the same lines – with a requirement that the release specifically reference the FLSA, that it advise employees that they have the right to consult with an attorney (or the DOL), that they have 21 days to consider the release, and that they may revoke the release within 7 days.

Don’t like the settlement proposed by your employer?  Don’t sign it.

Don’t understand it?  Talk with a lawyer or the DOL.

Need time to think about it?  You’ve got plenty of time.

Have second thoughts after signing the agreement?  Revoke it.

If such bells and whistles are sufficient to protect older workers who wish to settle age discrimination claims, they should be sufficient to protect all employees who wish to resolve FLSA claims.

Employees would benefit from a system that would encourage employers to address wage issues – and, not incidentally, by which they might not have to share 30-40% of their settlement with lawyers.

Employers would benefit from a system that would help them address those issues while avoiding litigation – saving on paying attorney’s fees to attorneys like me.

The courts and the DOL wouldn’t be clogged with claims that cry out for resolution.

The only people who wouldn’t benefit from this proposed amendment would be the lawyers.

And if you’re worried about us lawyers, you should call a doctor.

©2022 Epstein Becker & Green, P.C. All rights reserved.
For more articles on employment laws, visit the NLR Labor & Employment section.

Employees Miffed by Your Monitoring of Company Devices? Give Notice Now to Hopefully Avoid Annoyance Later

We’ve talked about social media policies several times over the years, but it’s been a while since we’ve discussed monitoring your employees’ work phones, emails, and internet usage. As you most likely know, you can and probably should monitor employees’ work phones, emails, and internet usage. You never know when someone outside the business will require you to produce emails (hello, subpoenas or litigation). But, how do you protect your business upfront from employees who are miffed by your monitoring? One of the best ways is to provide notice to your employees that you are watching.

In fact, effective May 7, 2022, the state of New York will require all employers to provide notice to employees that their work phones, email, and internet use is monitored. The new law requires the following for new hires:

  • Written notice (hard copy or electronic) to all who are subject to electronic monitoring
  • Written acknowledgment (hard copy or electronic) of the notice

As for current employees, no written acknowledgement is required but employers must post notice about electronic monitoring. Failure to meet these requirements could result in civil penalties up to $500 for the first offense, $1,000 for the second, and $3,000 for any subsequent offense.

Even if you are not operating in New York or another state that requires notice, we suggest you take the time now to review your onboarding materials and policies and, if you don’t already have one, implement a policy related to monitoring work phones, emails, and internet usage. Providing your employees with your expectations about their electronic usage and notice that you are monitoring their use of company devices could save you from headaches in the future. Here are a few tips:

  • Review and revise any existing policies related to work phones, emails, and internet usage to include your expectations and let them know you are monitoring and will discipline employees for misuse
  • Identify what devices may be monitored (tip: it’s best to limit monitoring to company devices but we understand gray areas may arise and advise you to speak with counsel about those issues)
  • Include the policy and acknowledgement of receipt in the onboarding materials (which will keep you compliant in New York)
  • If you have annual training for employees, consider including a brief section that covers and reminds employees about the policy
  • Also, if you discuss prohibitions in your policy, remember to make clear that there is no prohibition on employees’ rights to engage in discussion of terms and conditions of employment (as that could be protected, concerted activity under the National Labor Relations Act)

This article was written by Cortlin Bond and Anne R. Yeungert of Bradley Arant Boult Cummings law firm. For more articles about employee monitoring, please see here.

Stopping Harassment Before it Starts Includes Dealing with Bullying

Toxic workplaces have been making plenty of headlines lately.  Recent stories about toxic workplaces – and some of the fallout – have spanned all sorts of industries, from the government to video gaming to professional sports.

What makes a workplace toxic?  There’s probably an academic definition (or two), but what’s intended for the purposes of this article is behavior that is intimidating, demeaning or belittling, and is either severe, ongoing or both.  It typically involves someone taking advantage of a power difference, real or perceived.  The power difference may come from the official position or title, it may come from a long tenure with the organization, it may come from namedropping or sense of connections to power within the organization, and it may come from being a rainmaker, superstar, or someone identified as high potential.  The person or group on the receiving end lacks such power and often receives a message, not always in so many words, that any complaint will not be believed or taken seriously.  Critically, there are usually instances of demonstrating poor behavior in front of others, without intervention or acknowledgment, signaling the behavior is accepted.

A toxic workplace can be especially difficult to deal with because rude (or worse) behavior, unless tied to a protected characteristic, is not necessarily harassment or discrimination under the law.   Even the Supreme Court says companies are not required to be manners police, and most certainly do not want to be tasked with managing the manners of our coworkers.  After all, we are all capable of an off day when we are not as kind or considerate as we aspire to be.  We hesitate to call out the poor behavior in someone else, either to avoid embarrassment or confrontation, because it’s not a good time and then it’s too late, or because it could be us the next time.  Unfortunately, this tolerance likely contributes to a bigger problem, allowing the poor behavior to grow into illegal harassment.

The problem is not new.  In 2016, the EEOC reported that training to stop or prevent harassment was largely missing the mark.  Among other things, the EEOC suggested training focus more on preventing poor behavior(s) that tends to escalate into harassment, namely bullying.

With that suggestion in mind, what should be done to improve processes? What can you do?

  • Make sure your training programs address behaviors that are common precursors to harassment or discrimination (either as part of EEOC training or something separate).
  • Consider whether your complaint process would allow or even encourage complaints that do not fit the typical paradigm of unlawful discrimination or harassment.  If not, consider broadening your process or developing something different that can help address concerns before they become formal complaints.  (And be prepared to hear and listen more.)
  • Consider how to ensure appropriate confidentiality but also have a way to recognize a pattern of poor behavior attributed to an individual or group.
  • Don’t communicate tolerance as a bystander.  If you recognize someone is uncomfortable, intervene.  Intervention does not have to be an admonition or correction, it can simply be a diversion.
  • Foster dialogue about how to improve, starting with yourself and those comfortable with you. Are you quick to apologize if you were short with someone? If you made a remark or told a joke that someone that was too stereotypical or otherwise offensive, would someone tell you they had been uncomfortable? To be clear, you probably are not the problem. But more dialogue means more opportunity for everyone to improve and recognize what or who might be a real problem.

These are just a few suggestions and none of them are very easy to accomplish.  But, they do not cost much and may save a lot of money. No one wants to deal with the publicity or litigation that often comes with making the headlines for having a toxic workplace. But, the more common costs are low productivity and high turnover. It’s worth another look.

© 2021 Foley & Lardner LLP
For more articles about employee rights in the workplace, visit the NLR Labor & Employment section.

More Circuits Added to the OSHA ETS Lottery

Lawsuits challenging the COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) were filed in three additional U.S. Circuit Courts of Appeals on Wednesday, November 10, 2021. Labor unions filed lawsuits in the U.S. Circuit Court of Appeals for the Second, Fourth, and Ninth Circuits. As a result, there are now ETS-related lawsuits pending in the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Eleventh, and D.C. Circuit Courts.

According to federal rules, the legal challenges to the OSHA ETS will be consolidated and heard by a single U.S. Circuit Court of Appeals. The Judicial Panel on Multidistrict Litigation will conduct a lottery, expected on November 16, to select which U.S. Circuit Court of Appeals will hear the consolidated litigation. The court to hear the litigation will be drawn “from a drum containing an entry for each circuit wherein a constituent petition for review is pending.” Each court only gets one entry, despite the number of petitions pending before each court. Until the Judicial Panel selects the U.S. Circuit Court of Appeals to hear the litigation via the lottery, all the U.S. Circuit Courts of Appeals can proceed with rulings, as the Fifth Circuit did this past weekend.

The labor unions’ move may be a move reflective of an intent by some to increase the odds that the OSHA ETS is upheld. The First, Second, and Fourth circuits all have a majority of Democratic-appointed judges. But it is difficult to predict the future of the OSHA ETS as the panel of judges to hear the case is also selected randomly.

© Polsinelli PC, Polsinelli LLP in California
For more updates on COVID-19, visit the NLR Coronavirus News section.

Protections for Employees Who Report Workplace Discrimination

While thousands of employees each year submit complaints of discrimination against their employers, many more experience workplace discrimination and do not submit a formal complaint or even report it internally. A 2016 study by the Equal Employment Opportunity Commission (EEOC) noted that three out of four individuals who experienced harassment never spoke with a supervisor, manager, or union representative about the harassment. Other studies estimate that only one percent of people who experience workplace discrimination file a formal discrimination charge.

Types of Discrimination Charges Filed

Even with a high level of underreporting of harassment and discrimination in the workplace, the EEOC reported that workers filed 67,448 charges of workplace discrimination in fiscal year 2020.[1] The EEOC breaks down the data by the characteristics of the individual who filed the complaint. The breakdown reflects the various bases for protection under federal anti-discrimination laws, specifically disability, race, sex, age, national origin, color, religion, and genetic information. In the EEOC data from fiscal year 2020, retaliation claims made up 55.8% of all charges filed, which was the most common claim asserted. Retaliation claims are often coupled with claims of discrimination because they generally require complaints about, or opposition to, discrimination in the workplace. Because of this overlap in claims and the reality that workers may have multiple characteristics or identities that entitle them to protections, the total of the percentages of the types of claims asserted is greater than 100%.

Following retaliation claims, discrimination claims based on disability were the most common in fiscal year 2020, making up 36.1% of all workplace discrimination claims. Fiscal year 2020 may have seen an even greater increase in disability-related charges due to the COVID-19 pandemic. The EEOC continues to update its guidance periodically on the impact of COVID-19 on workplace discrimination laws related to disability. Discrimination based on race made up 32.7% of claims, and discrimination based on sex made up 31.7%.

The breakdown by category is consistent with charge filing patterns in past years. One study conducted by the Center for Employment Equity of the University of Massachusetts Amherst analyzed all discrimination charges filed with the EEOC (or a comparable state agency) from 2012 to 2016. It determined that discrimination charges based on disability and race were the most common and that disability-related claims had become more frequent than charges based on other protected categories. In an article published by staff at the Center for Employment Equity, they determined that 63% of employees who filed a complaint eventually lost their jobs.

Protections from Retaliation

The data from the EEOC and Center for Employment Equity underscores an unfortunate reality for employees who come forward to report discrimination—they face the possibility of retaliation by their employer, which, at its most extreme, results in a loss of their job. Fortunately, there are legal protections in place for employees who face retaliation for complaining about workplace discrimination.

Employees who engage in protected activity, either by participating in an investigation of workplace discrimination, complaining of workplace discrimination, or opposing discrimination in the workplace, are protected from retaliation. This means that an employer cannot take any “materially adverse action” against these employees. Such actions include anything that would deter a reasonable worker from coming forward to complain about discrimination in the workplace.  This includes actions short of termination, like demotions or salary reductions. The law protects not only current employees and applicants, but also former employees and third parties who have a close relationship with the employee who experienced discrimination. Employees who face retaliation for reporting discrimination in the workplace may be entitled to monetary compensation for the harm caused by the retaliation, including back wages, reinstatement to their former position if they were terminated, compensation for emotional distress caused by the employer’s actions, and reimbursement of their attorneys’ fees and costs.

While no employee should face retaliation for reporting workplace discrimination or harassment, the data demonstrates that it is an unfortunate reality in workplaces. If you believe you have faced discrimination, harassment, or retaliation, you should contact an employment attorney to determine your options and how to proceed.

Importance of Seeking Legal Counsel

The Center for Employment Equity’s analysis highlighted another reality faced by employees who filed discrimination charges with the EEOC. Upon examining the outcome of each charge and excluding charges that were closed because of administrative reasons, it noted that monetary benefits and changes to workplace practices were relatively infrequent. In less than 20% of charges, employees received a monetary benefit.  Less than 10% resulted in changes to employer practices. This data does not account for employees who made complaints of discrimination and were able to reach a resolution with their employer prior to filing a charge.

This data showing the poor outcomes from filing discrimination charges demonstrates the importance of seeking legal counsel if you believe that you have faced discrimination in the workplace. An attorney can advise you on the merits of your claim as well as the appropriate deadlines for filing a charge and lawsuit, and can advocate for you before the employer, both before and after submitting a discrimination charge. For current employees, such advocacy may help to shield you from retaliation or to exit from your employment on more favorable terms. In addition to seeking legal counsel, you can begin to take other steps to assist your case by doing the following:

  • Document the mistreatment you experience.

  • Create a detailed timeline of instances of discrimination, which will assist an attorney who may assess your potential claims.

  • Retain employment-related documents, like employee manuals; employment offer letters and agreements; and information concerning commission, equity, and benefits plans.

  • Do not record conversations without the consent of the other party and without first seeking advice from legal counsel. Each state has different recording law statutes that require all parties or at least one party to consent to recording. It is important not to violate these laws, which can carry civil and sometimes criminal liability.

This list only identifies basic steps that you can take if you believe you have experienced discrimination or harassment in the workplace. If you have faced workplace discrimination, you should consult with an employment attorney for advice on your potential claims

[1] The number of charges filed has decreased steadily in recent years, with 72,675 charges of workplace discrimination filed with the EEOC in fiscal year 2019 and 76,418 filed in 2018. There may be multiple explanations for this decrease, though this year’s decline may be in part explained by the COVID-19 pandemic, which left many employees without work for much of 2020 and required others to work remotely.

This article was written by Alia Al-Khatib of Katz, Marshall & Banks, LLP.
For more articles regarding workplace discrimination, please visit our Labor and Employment News section.