Tag: Labor Law

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

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

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

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

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

Trump Directs Reexamination of the Fiduciary Rule Changes

DOL Fiduciary RulePresident Donald Trump issued a memorandum late last week directing the Department of Labor to reexamine the anticipated changes to the fiduciary rule applying to most retirement plans and individual retirement arrangements. The changes are set to go into effect on April 10, 2017; however, the memorandum directs the Department of Labor to conduct a full review to determine whether to rescind or revise the rule. Initial reports indicated that implementation of the rule was being delayed, but the memorandum ultimately issued by the President did not include a delay. The Department of Labor released a statement following the issuance of the memorandum indicating it would consider its legal options to delay implementation. It is not clear how quickly the Department of Labor may reach a conclusion on a delay of implementation.

The anticipated changes expand the definition of fiduciary under the Employee Retirement Income Security Act of 1974 (“ERISA”) and subject more financial advisors to fiduciary standards under ERISA. The new fiduciary rule is aimed at eliminating a potential conflict of interest by subjecting retirement plan advisors to fiduciary standards under ERISA if the advisor receives variable compensation tied to the investments the advisor recommends to the plan. Advisors could avoid harsh penalties under the rule by providing specific disclosure and agreeing to abide by a “best interest” standard of conduct. We are aware that some advisors were preparing to implement significant business model changes to comply with the anticipated rule changes.

What this means for employers –

  • Employers/benefits committees should evaluate whether they will require advisors to comply with the requirements of the rule despite the memorandum.

  • Employers/benefits committees should reach out to their advisors/consultants and confirm whether they intend to proceed with implementing changes to comply with the rule.

  • Employers/benefits committees should continue to monitor developments in this area from a fiduciary risk perspective.

ARTICLE BY Kevin Selzer of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2017.

You’re Hired: Labor Policy Under Trump Administration and 115th Congress

labor policy trump administrationIf personnel reflect policy, President-elect Donald Trump’s selection of Andrew Puzder as the next Secretary of Labor signals a turning point for labor and employment policy.  The Chief Executive Officer of CKE Restaurants, Mr. Puzder has been critical of many of the Obama administration’s labor initiatives.  His efforts to carry out Mr. Trump’s job creation agenda will likely intersect with action in Congress and in the courts, where several pivotal labor-related cases are currently being heard on appeal.  These dynamics mean that the early days of the Trump administration and the 115th Congress will be a time of flux for employers, with changes to existing regulations and new legislative and regulatory initiatives.  This article details several of the most important policy areas that are likely to undergo change.  Employers should consider engaging in the policymaking process now to help shape legislation and regulations.

New Players, New Priorities

As the leader of a major fast-food company, Mr. Puzder brings a “real-world” perspective on how policy decisions affect employers and employees.  He has been a vocal critic of several Obama-era labor initiatives, especially its activities with respect to the joint employer standard, expanded eligibility for overtime pay and paid leave, among others.

Mr. Puzder’s views on these topics are largely in alignment with the Republican leadership of the Congressional committees with jurisdiction over labor and employment issues.  On the House Education and Workforce Committee, Representative Virginia Foxx (R-NC) is expected to become the new Chair following the retirement of current Chair John Kline (R-MN).  Representative Foxx has promised “to do whatever [Republicans] can to stop the rules coming out of the [Obama] Labor Department – either block them or repeal them.”  She has named the repeal of the Department’s overtime and persuader rules as top priorities, in addition to the National Labor Relations Board’s (NLRB) broadened joint employer standard and rules related to the union election process.  Representative Bobby Scott (D-VA) will remain the Ranking Member on Education and Workforce.

In the Senate, Senator Lamar Alexander (R-TN) will remain the Chairman of the Senate Health, Education, Labor, and Pensions Committee (HELP), while Senator Patty Murray (D-WA) will continue to serve as the top Democratic or ranking member.

Overtime Rule

One of the key labor policies that Mr. Puzder, Rep. Foxx, and their Republican colleagues may consider for reform are the Obama administration’s initiatives with respect to overtime pay.  The overtime rule, which was published in the Federal Register on May 23, 2016, revises income thresholds for determining overtime pay for executive, administrative, professional, outside sales, and white collar employees exempt from regular minimum wage and overtime pay requirements, and raises the cut-off salary of employees eligible for overtime pay from $23,660 to $47,476 per year.  The rule was due to become effective on December 1, 2016.

However, a U.S. District Court Judge in Texas on November 22 issued a nationwide preliminary injunction blocking implementation of the overtime rule, just a few days before its December 1 effective date.[1] This preliminary injunction has given businesses that had not yet moved to comply with the new rules a respite from updating their systems and notifying employees.  In turn, knowing that some businesses have not yet had to comply, Congress has now prioritized repeal of the overtime rule as an early order of business in 2017.

Under complex procedural rules, repeal of the overtime rule could possibly be accomplished through use of the Congressional Review Act (CRA).  CRA is a 1996 law that allows Congress to repeal new “major rules” through an expedited resolution of disapproval as long as those regulations were issued within sixty legislative days in the House or session days in the Senate of the start of the new administration.  With the House and Senate still holding occasional pro forma sessions into mid-December, the Overtime Rule is in a grey area of the CRA window, and the final determination will be made by the Office of the Clerk.  Notably, the Senate Republican Policy Committee has identified the Overtime Rule as a potential candidate for review under the CRA.[2]

Paid Leave

Another key issue is the Department of Labor’s (DOL’s) final September 2016 rule implementing President Obama’s Executive Order 13706 to require federal contractors and subcontractors to provide certain employees with up to seven days of paid sick leave annually.  President-elect Trump has not made any statements regarding his position on mandated paid sick leave for federal contractors.  Delivering on a broad campaign promise to rescind executive orders issued by President Obama, it is possible that President-elect Trump may repeal the executive order, along with other Obama executive orders, during his first weeks in office.

On the other hand, the Trump administration and 115th Congress also could address issues surrounding paid leave.  During the campaign, the President-elect proposed six weeks of mandatory paid maternity leave, as well as tax incentives to support child and elder care.  Although the details of the plan, including what percentage of their salaries mothers will receive, have yet to be clarified, it could offer an opportunity for Democrats and Republicans to find common ground.

Minimum Wage

President-elect Trump has not taken a strong position on the federal minimum wage and has indicated an openness to an increase in the minimum wage as recently as July 2016.

Federal minimum wage legislation was last considered by Congress in April 2014, but the Minimum Wage Fairness Act could not garner enough support in the Senate to proceed to a vote.  This act would have gradually raised the federal minimum wage from $7.25 to $10.10 per hour over a two-year period.  Notably, there were attempts at compromise, which although unsuccessful could serve as a foundation in the case the issue moves forward, perhaps prompted by state-by-state action.[3] For example, Senator Susan Collins (R-ME) proposed to increase the federal minimum wage to $9 per hour, a wage that the Congressional Budget Office had projected would greatly reduce the negative impact on jobs.[4]

A Trump administration may look favorably towards an increase in the minimum wage — indeed, in a television appearance Mr. Puzder said that he was “not opposed to raising the minimum wage rationally.”  However, Congressional Republicans have generally not voiced support for increasing the minimum wage, so prospects for action remain unclear.

Joint Employer Standard

Mr. Puzder and Rep. Foxx will likely prioritize the NLRB’s joint employer standard for repeal.  The NLRB ruling broadens the standard for who is considered an employer from the company that is currently exercising control, to any company with authority to exercise control over the employee.  The result is that when two or more companies are involved with a worker — such as a temporary employment agency and the current employer — they may be considered joint employers.  The implication of this change is that it creates stronger grounds for organizing unions that represent workers at both of the joint employers, thus giving employees more leverage.  The change also increases exposure to liability because a company can now be held liable for labor violations committed by sub-contractors, franchisees, and other companies to which it outsourced responsibilities.

The issue remains unsettled into the next administration because the underlying case that prompted the NLRB decision is currently on appeal in the D.C. Circuit.[5]  In Congress, HELP Committee Chairman Lamar Alexander (R-TN) and House Education and the Workforce Chairman Kline introduced a bill to repeal the changes to the joint employer standard created by the NLRB’s ruling in Browning-Ferris Industries.  The Protecting Local Business Opportunity Act provides potential models for the next Congress.  The legislation would reaffirm that multiple employers must have “actual, direct, and immediate” control over employees to be considered joint employers, rather than the “indirect” or even “potential” control over employment decisions permitted under the NLRB’s new joint employer standard. Because the broadened standard was established by an NLRB ruling, it would require either future litigation or legislative action to overturn.

Additionally, the Committee on Education and the Workforce has been focusing its attention on this issue in part by conducting a year-long investigation of the Occupational Safety and Health Administration (OSHA) joint employer standard, which, they claim, instructs OSHA’s inspectors to “delve into unrelated matters – financial and otherwise – far outside their expertise,” and drifts from the agency’s core mission of examining workplace health and safety in a way that benefits union leaders.  In October, the Committee wrote a letter to Labor Secretary Thomas Perez expressing these concerns.

Persuader Rule

In March of this year, the DOL finalized its much-anticipated “persuader rule,” which requires employers to report any third-party arrangement entered into with the goal of persuading employees, whether directly or indirectly, regarding their right to organize or bargain collectively.  Critics of the rule argue that it will have a chilling effect on employer speech and prevent employers from hiring legal counsel or speaking on labor issues.

Since its passage, the persuader rule has faced significant hurdles in the form of lawsuits challenging its enforcement as unconstitutional, unlawful, and exceeding DOL’s authority.  Although it was set to go into effect July 1, a U.S. District Court judge in Texas granted a nationwide preliminary and later permanent injunction against enforcement of the rule.[6] The DOL is appealing the injunctive relief to the U.S. Court of Appeals for the Fifth Circuit.[7] However, since the persuader rule is based on an administrative determination of the DOL, it is likely that Trump administration changes in DOL priorities or personnel would moot the appeal at some point.  Relying in part on the assumption that a Trump DOL would abandon the rule and the permanent nationwide injunction issued in Texas, a federal judge in Minnesota faced with a similar case recently stayed that litigation, despite his earlier decision not to grant injunctive relief.[8] The split suggests that the issue could ultimately make its way to a federal court of appeals or to the Supreme Court.

Blacklisting Rule

Another DOL regulation following a path similar to that of the Persuader Rule is the DOL’s guidance for implementing E.O. 13673, Fair Pay and Safe Workplaces.  The DOL’s rule is popularly referred to as the “Blacklisting Rule,” and it was published on August 25, 2016.  E.O. 13673 requires that federal contracting officers consider a contractor’s compliance with certain federal and state labor laws as part of the determination of contractor responsibility in awarding federal contracts. The Blacklisting Rule requires that federal contractors bidding over $500,000 report violations of fourteen different labor laws, as well as similar state laws, to the federal government.  Contractors are obligated to report violations even if they are still being contested in court.

The rule was due to become effective on October 25, but just two days before that date, the U.S. District Court for the Eastern District of Texas granted a temporary injunction blocking parts of the rule from going into effect. Judge Marcia Crone ruled that the portion requiring disclosure of labor law violations — even if those violations are being challenged in court or have been settled without any actual violation of the law — was in violation of the First Amendment.[9]  While the injunction is temporary, it demonstrates that the court is likely to eventually rule in favor of the plaintiffs, Associated Builders and Contractors, and strike down the rule.  The ruling left intact the rule’s paycheck transparency provision, which requires employers to note on paychecks information such as whether the person is an independent contractor or an employee under the Fair Labor Standards Act.

In the event that the injunction is lifted, Congress may pursue repeal of the Blacklisting Rule through use of the CRA.  Since the rule was published on August 25, it falls within the CRA’s sixty-legislative or -session day window.  Similar to the Overtime Rule, the Senate Republican Policy Committee has identified the Blacklisting Rule as a potential candidate for review under the CRA.[10]

Predictive Scheduling

Proposed legislation to regulate work schedules has emerged at the state and local levels in the wake of San Francisco’s enactment of its “Retail Workers Bill of Rights” ordinance in November 2014.  A similar law, which applies to retail and food service establishments employing 500 or more workers, will take effect in Seattle on July 1, 2017.  The provisions of these scheduling laws vary, but most require employers to give good faith estimates of an employee’s work hours in advance and provide additional compensation to employees whose hours are changed on short notice, among other provisions.

Proposals similar to the San Francisco and Seattle laws are pending in state legislatures in California, Connecticut, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, and Rhode Island, as well as in major cities like New York and at the federal level.

In the event state and local scheduling laws begin to gain momentum, the Republican majorities in the House and Senate could advance federal legislation to preempt such efforts. As a veteran of the fast-food industry, which has been a target of the push for restrictive scheduling, Mr. Puzder could be sympathetic to calls for a federal solution that balances the interests of employers and employees.

Conclusion

The Trump administration and leadership of the 115th Congress are charting a different course with respect to labor and employment policy than the outgoing Obama administration on the issues described above as well as many others.  The incoming administration and Congress will almost certainly advance efforts to repeal some of the Obama administration’s key labor and employment initiatives, and Congress will also position itself to react to state-based initiatives and legal challenges.  These developments promise a period of changing obligations for employers, as well as opportunities to shape the future of this important policy area.

Labor Regulation/Issue Status Options for Repeal/Change
Overtime Rule Under temporary injunction
  • Possibly CRA repeal
  • Congressional action
  • Final court ruling
Paid Leave for Federal Contractors Obama executive order and DOL implementing regulation passed
  • President-elect Trump can repeal with an executive order
Federal Paid Leave Legislation Currently none
  • Congressional action
Federal Minimum Wage Currently $7.25; no pending Congressional action
  • Congressional action
Joint Employer Standard NLRB ruling issued, currently on appeal in the D.C. Circuit
  • Congressional action
  • Final court ruling
Persuader Rule Under permanent injunction
  • Congressional action
  • Final court ruling
Blacklisting Rule Under temporary injunction
  • CRA repeal
  • Congressional action
  • Final court ruling
  • Reversal of underlying executive order
Predictive Scheduling This is currently being handled at the state and local level
  • Congressional action
ARTICLE BY Karishma Shah Page, Amy Carnevale & Peter V. Nelson of K & L Gates
Copyright 2016 K & L Gates

[1] State of Nevada v. U.S. Dep’t of Labor, No. 4:16-CV-00731 (E.D. Tex. Nov. 22, 2016).

[2] Reining in Obama Regulatory Overreach, SENATE REPUBLICAN POL’Y COMM. (Dec. 6, 2016).

[3] Alexander Bolton, Centrist Republicans Cool to Minimum Wage Hike Compromise, THE HILL (Apr. 4, 2014 6:00AM).

[4] Id.

[5] Browning-Ferris Indus. of California, Inc. d/b/a Newby Island Recyclery, 362 NLRB No. 186 (Aug. 27, 2015).

[6] Nat’l Fed’n of Indep. Bus. v. Perez, Case No. 5:16-cv-00066-C (N.D. Tex. June 27, 2016) (preliminary injunction); Nat’l Fed’n of Indep. Bus. v. Perez, Case No. 5:16-cv-00066 (N.D. Tex. Nov. 16, 2016) (permanent injunction).

[7] Lawrence E. Dubé, DOL Persuader Rule Blocked by Federal Judge, BLOOMBERG BNA (Nov. 17, 2016) https://www.bna.com/dol-persuader-rule-n57982082867/.

[8] Vin Gurrieri, Persuader Case Halted Pending Trump DOL Action, LAW 360 (Dec. 8, 2016, 6:27 PM), https://www.law360.com/articles/870551/persuader-case-halted-pending-trump-dol-action;  Labnet, Inc., d/b/a Worklaw Network v. U.S. Dep’t of Labor, Case No. 16-CV-0844 (PJS/KMM) (D. Minn. June 22, 2016) (stay of proceedings issued on Dec. 7).

[9] Assoc. Builders and Contractors of Southeast Texas v. Anne Rung, Administrator, Office of Fed. Procurement Policy, Office of Mgmt. and Budget, Case No. 1:16-CV-425 (E.D. Tex. Oct. 23, 2016).

[10] Reining in Obama Regulatory Overreach, SENATE REPUBLICAN POL’Y COMM. (Dec. 6, 2016) http://www.rpc.senate.gov/policy-papers/reining-in-obama-regulatory-overreach.

San Marcos, Texas Joins Growing Ranks of Cities Raising Minimum Wage to $15 Dollars

San Marcos Texas Minimum wageTaking its cue from other, larger cities, San Marcos, Texas, recently voted to raise the minimum wage to $15 dollars per hour for businesses applying for tax breaks and others incentives to build or expand in the city. In addition to the higher wage, businesses must also offer all employees and their dependents benefits equal to those offered to full-time employees. The San Marcos City Council saw requiring the higher pay rate as a way businesses could return the favor of receiving tax incentives to the local economy. This new law applies only to future businesses seeking economic development incentives, and not companies already doing business in San Marcos.  The city joins the ranks of cities such as Los Angeles, Seattle, San Francisco, and Washington, D.C. that require a “living wage.”

Key Takeaways for Businesses in San Marcos

Businesses seeking tax incentives to build or expand in San Marcos need to be prepared to pay a higher minimum wage and offer benefits to all of employees. This trend is likely to continue in other cities across the nation.

ARTICLE BY Raven Applebaum of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

© 2016, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Same Sex and LGBT Protection Rights Flourish – Except in Workplaces?

In the last 20 years, the legal landscape has shifted dramatically for lesbians, gays, bisexuals, and transgender (LGBT) individuals. In 1996, the Supreme Court used the Equal Protection Clause to invalidate an amendment to Colorado’s Constitution that would have prevented any branch or political subdivision of the state from protecting individuals against sexual orientation discrimination.1 Several years later, the Court determined that individuals’ rights to liberty under the Due Process Clause gave them the full right to engage in private consensual sexual conduct without the government’s intervention.2 Then, in 2013, the Supreme Court struck down the Defense of Marriage Act, finding that it violated the equal protection guarantee of the Fifth Amendment.3 And finally, just last year, the Supreme Court ruled that under both the Due Process and Equal Protection Clauses of the Fourteenth Amendment, same-sex couples had the right to marry in every state.4

While each of these decisions had a profound impact on the lives of many Americans, none increased the workplace protections of LGBT employees under federal anti-discrimination laws. As a panel of the Seventh Circuit recently pointed out, “[m]any citizens would be surprised to learn that under federal law any private employer can summon an employee into his office and state, ‘You are a hard-working employee and have added much value to my company, but I am firing you because you are gay.’”5

In fact, every circuit court that has been asked whether Title VII – the federal law that prohibits discrimination against an employee because of his race, color, religion, sex or national origin – covers discrimination based on sexual orientation has answered the question “no.”6 However, in reaching this conclusion, every court has unequivocally condemned the practice of sexual orientation discrimination as unwise, unfair and immoral. So why the disconnect?

As most courts see it, the issue is that Title VII does not explicitly prohibit sexual orientation discrimination, and Congress has attempted for decades to pass legislation that would expand Title VII to cover sexual orientation discrimination but has come up short.7 Also, most states have not passed legislation that covers such discrimination.

But all of this is not to say that LGBT employees are without recourse. Since the Supreme Court’s decision in Price Waterhouse v. Hopkins, Title VII has covered claims by employees who were discriminated against because they did not conform to traditional gender stereotypes.8 In Price Waterhouse, Ann Hopkins failed to make partner at her accounting firm and was told she could improve her chances next time if she would walk, talk and dress more femininely, get her hair styled, and wear jewelry. The Supreme Court said this sort of gender stereotyping constitutes discrimination because of sex under Title VII.9

What arose from Price Waterhouse is a line of cases that protect LGBT employees from gender stereotyping discrimination but not from discrimination based on sexual orientation. The courts following this approach are forced to distinguish between behavior that would fall into the gender stereotyping category and be protected from those which would fall into the sexual orientation discrimination category and not be. At best, this is a difficult task. At worst, it’s an exercise in futility.

Some courts, unwilling or unable to differentiate between the two categories, have discarded this approach all together. For these courts, if it appears that the employee is trying to recast a sexual orientation discrimination case as one for gender stereotyping, they will deny all relief. In other words, these courts reject employees’ claims of gender stereotyping, as meritorious as they may be, when it appears the claims are intertwined with a sexual orientation discrimination claim.10

This could be primed for a change, though. While courts seem confused as to Title VII’s scope, the EEOC has no doubt: sexual orientation discrimination is, the EEOC says, discrimination because of sex. In Baldwin v. Foxx,11 the EEOC came to this conclusion for three main reasons. First, it concluded that “sexual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.”12 To make its point, the EEOC gave the example of a woman who is suspended for placing a photo of her female spouse on her desk, and a man who faces no consequences for the same act. Second, it explained that “sexual orientation discrimination is also sex discrimination because it is associational discrimination on the basis of sex,” in which an employer discriminates against lesbian, gay, or bisexual employees based on who they date or marry.13 Finally, the EEOC described sexual orientation discrimination as a form of discrimination based on gender stereotypes in which employees are harassed or punished for failing to live up to societal norms about appropriate masculine and feminine behaviors, mannerisms and appearances.14 In emphasizing this last point, the EEOC rejected the numerous court decisions that have tried to distinguish between gender non-conformity claims and those for sexual orientation discrimination.

In its guidance on the subject, the EEOC has tracked the Baldwin decision and said that discrimination on the basis of sexual orientation is illegal under Title VII. In litigation involving the EEOC, it has pushed this tripartite approach with varying success. While no circuit court has followed Baldwin or the EEOC’s guidance, a number of district courts have taken notice. Courts in Alabama, the District of Columbia, California, Oregon and Pennsylvania have all sided with the EEOC’s position and found that Title VII does prohibit sexual orientation discrimination.15 So, at least in these courts, an employer may be held liable for discrimination based on sexual orientation, just like any other protected category under Title VII.

Unfortunately, the Supreme Court has not weighed in on this important topic to resolve the tension between the circuit courts and the EEOC (and certain district courts). It’s hard to say whether the Supreme Court will decide this issue soon, but the Court’s interest in cases addressing LGBT rights, such as the Gloucester County School Board v. G.G. case (involving issues of a school district’s obligations to a transgender student) that will be addressed this term, makes it likely that this issue will come before the Court eventually.

So until the Court decides whether Title VII prohibits sexual orientation discrimination, what’s an employer to do? After all, a mistake here –- even one made in good faith — could cost an employer Here are three things employers can do right now to minimize their liability:

  • Update your anti-harassment policy to include sexual orientation. While the weight of legal authority says that LGBT employees do not have claims for sexual orientation discrimination under Title VII, that trend is shifting. The EEOC’s position is clearly at odds with most of the case law, but as the agency enforcing federal discrimination laws, it has the authority to file lawsuits against employers who thumb their noses at it. A number of lower courts have listened, holding that Title VII does prohibit sexual orientation discrimination. Even if you disagree with the EEOC’s position, do you want to be the long and expensive test case that goes to the Supreme Court?

  • Train your employees on your policies. A written policy isn’t any good unless your employees –– particularly your managers –– know about it. It’s smart to periodically train your employees on sexual and other types of harassment. Make training on sexual orientation discrimination part of it. Ensure your employees know that your company prohibits discrimination on the basis of sexual orientation just as it does discrimination on other protected bases.

  • Make sure to follow through. It’s easy to talk the talk, but make sure you walk the walk. Just as you should not tolerate racial slurs and derogatory comments about women in the workplace, employees need to know that offensive comments about gay, lesbian and transgender individuals are also out of bounds. If someone makes a complaint of sexual orientation discrimination, management should investigate and take prompt remedial action, just as it would with any other type of complaint.

When it comes to LGBT rights and protections, the legal world is in a state of flux. For employers, that means a lot of uncertainty, but you don’t have to be held captive by uncertain times. Be proactive now and help limit the potential of future liability.

1. Romer v. Evans, 517 U.S. 620 (1996). 

2. Lawrence v. Texas, 539 U.S. 558, 578 (2003). 

3. United States v. Windsor, 133 S. Ct. 2675 (2013). 

4. Obergefell v. Hodges, 135 S. Ct. 2584, 2696 (2015). 

5. Kimberly Hively v. Ivy Tech Community College, No. 15-1720, slip op. at 33 (7th Cir. Aug. 1, 2016). 5.  

6. Id. at 6. 

7. See, e.g., Employment Non-Discrimination Act of 2013, H.R. 1755, 113th Cong. (2013). 

8. 490 U.S. 228, 251 (1989).

9. Id. at 251. 

10. See, e.g., Vickers v. Fairfield Med. Ctr., 453 F.3d 757 (6th Cir. 2006). 

11. EEOC Appeal No. 0120133080, 2015 WL 4397641 (July 16, 2015). 

12. Id. at 5. 

13. Id. at 6. 

14. Id. 

15. Isaacs v. Felder Services, LLC, 143 F. Supp. 3d 1190 (M.D. Ala. Oct. 29, 2015) (holding claims of sexual orientation-based discrimination cognizable under Title VII); Terveer v. Billington, 34 F. Supp. 3d 100 (D.D.C. 2014) (same); Heller v. Columbia Edgewater Country Club, 195 F. Supp. 2d 1212, 1222 (D. Or. 2002) (“Nothing in Title VII suggests that Congress intended to confine the benefits of that statute to heterosexual employees alone.”); Videckis v. Pepperdine Univ., 150 F. Supp. 3d 1151 (C.D. Cal. Dec. 15, 2015) (finding sex discrimination necessarily includes sexual orientation discrimination under Title IX); Equal Employment Opportunity Commission v. Scott Medical Health Center, No. 16-225 (W.D. Pa. Nov. 4, 2016) (denying defendant’s motion to dismiss and finding that allegations of sexual orientation discrimination are covered by Title VII). 

OSHA Clarifies Discipline, Retaliation and Drug Testing Commentary

When the Occupational Safety and Health Administration (OSHA) released its 2016 final rule requiring the electronic reporting of workplace injury and illness reports, it included controversial provisions on discriminatory discipline, retaliation, and even post-incident drug testing by employers. The uproar was instantaneous, with industry groups quickly filing lawsuits challenging OSHA’s authority to enforce the rule. Originally scheduled to go into effect on August 10th, the effective date for the new anti-retaliation rule was pushed back by OSHA until November 1st, and more recently, until December 1st.

In the interim, Dorothy Dougherty, OSHA’s Deputy Assistant Secretary, issued an interpretation memorandum designed to explain the anti-retaliation and injury reporting procedures in more detail. The interpretation may help clarify what your organization must do in order to comply with the final rule – even if it doesn’t make the rule more palatable.

Reasonable Procedures For Employees To Report Workplace Injuries/Illnesses labor law elections

An employer violates OSHA’s new final rule if it either fails to have a procedure for employees to report work-related injuries or illnesses, or its reporting procedure is unreasonable. OSHA states that this requirement is not new, as it was implicit in the previous version of the rule. But now, it is an explicit employer requirement.

OSHA considers a reporting procedure to be reasonable if it is not unduly burdensome and would not deter a reasonable employee from reporting an injury or illness. Examples of what it considers reasonable and unreasonable are as follows:

Reasonable

  • Requiring employees to report a work-related injury or illness as soon as practicable after realizing they have a reportable incident, such as the same or next business day, when possible

  • Requiring employees to report work-related injuries or illnesses to a supervisor through reasonable means, such as by phone, email or in person.

Unreasonable

  • Requiring ill or injured employees to report in person if they are unable to do so

  • Disciplining employees for failing to report “immediately” if they are incapacitated because of the injury or illness

  • Disciplining employees for failing to report before they realize they have a work-related injury that they are required to report

  • Unnecessarily cumbersome or an excessive number of steps to report a work-related injury or illness

In short, if your procedure allows employees to report workplace injuries and illnesses within a reasonable amount of time after they realize they have experienced a reportable event, and the procedure does not make employees jump through too many hoops, it will be reasonable and comply with the final rule.

Anti-Retaliation Provision Explained

Retaliating against employees for reporting work-related injuries or illnesses has long been unlawful. To issue a citation under section 1904.35(b)(1)(iv), OSHA must have reasonable cause to believe that an employer retaliated against an employee by showing:

  1. The employee reported a work-related injury or illness;

  2. The employer took adverse action against the employee (i.e., action that would deter a reasonable employee from accurately reporting a work-related injury or illness); and

  3. The employer took the adverse action because the employee reported a work-related injury or illness.

As in most employment retaliation cases, the third element on causation is often the toughest to prove. The determination is made on a case-by-case basis, depending on the specifics facts in any particular case.

OSHA has focused its commentary primarily on three types of potentially retaliatory actions—discipline policies, incentive programs, and post-accident drug testing. OSHA’s recent interpretation helps shed light on how employers should address these three issues to avoid a citation for a violation of the anti-retaliation rule.

Disciplining Employees For Violating Work Safety Rules

Employers violate the anti-retaliation provision by disciplining or terminating employees for reporting a work-related injury or illness. But, if an employer has a legitimate business reason for imposing discipline, such as the employee’s violation of a workplace safety rule, then there is no retaliation and no violation.

OSHA states that the primary inquiry is whether the employer has treated other employees who similarly violated a safety rule the same way – in other words, did the employer impose the same adverse action regardless of whether the other employees reported a work-related injury or illness. If the rule is consistently applied, then no retaliation exists. However, if the employer disproportionately disciplined employees for violating a rule when they reported workplace injuries, or the employer ignored violations of the safety rule when there was no injury or illness, OSHA may find that the actual reason for the discipline was the reported injury or illness rather than the rule violation.

Incentive Programs

OSHA does not prohibit employers from having safety-related incentive programs. But, it does prohibit employers from withholding a benefit or otherwise penalizing an employee because of a reported injury or illness. OSHA provides this example: if an employer raffles off a $500 gift card at the end of each month in which there are no workplace injuries, such an incentive program would violate the anti-retaliation provision as it withholds the incentive (i.e., the $500 gift card) when an employee reports a work-related injury. On the other hand, an acceptable alternative would be for the employer to raffle off a gift card each month in which employees universally comply with legitimate safety rules, such as using required fall protection and following lockout-tagout rules. The key is whether the employer is withholding a benefit because of a reported work-related injury. Incentive programs that penalize the reporting of injuries and illnesses are likely to result in an OSHA citation.

Post-Accident Drug Testing

One of OSHA’s more troubling and confusing anti-retaliation position is its stance that drug testing employees who report a work-related injury or illness can be considered retaliation. Many employers impose drug testing following any workplace accident or incident that results in injuries. OSHA states that while it does not prohibit employers from drug testing employees who report work-related injuries, employers must have an objectively reasonable basis for such testing.

So what is an objectively reasonable basis for testing? OSHA states that it will consider factors including whether the employer has a reasonable basis for concluding that drug use could have contributed to the injury or illness, whether other employees involved in the incident that caused the injury were also tested (or whether only the employee who reported an injury was tested), and whether the employer has a heightened interest in determining if drug use could have contributed to the injury due to the hazardousness of the work being performed.

In addition, OSHA will consider whether the drug test is capable of measuring impairment at the time the injury occurred, where such test is available. In its interpretive memo, though, OSHA states that at this time, the agency will consider this factor for tests that measure alcohol use, but not for tests that measure the use of any other drugs.

The bottom line is that OSHA is looking whether an employer is using drug and/or alcohol testing as a form of discipline against employees who report a workplace injury, which would be retaliation. Consequently, post-accident drug testing is permitted if all workers involved in the accident are tested in order to gain insight into the cause of the accident. But drug testing an employee whose injury could not possibly be related to drug use, such as a repetitive strain injury, would be seen as retaliation. 

Key Takeaways

Assuming that the anti-retaliation rules survive their legal challenges, employers should prepare to implement a reasonable procedure for employees to report work-related injuries and illnesses. Organizations should review any safety-related incentive programs and remove any punitive effects or withholding of benefits/incentives if an employee reports a workplace injury. When adopting and enforcing drug testing policies, be certain to test all workers involved in a workplace incident, not just those who were injured or reported an injury. And last but not least, be very mindful when deciding to discipline or terminate an employee who has reported a workplace injury or illness. Without a legitimate, well-document business reason for the discipline that is unrelated to the injury report, you may find your business cited for retaliation.

ARTICLE BY Matthew Linton of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2016.

Workplace Law Under President-Elect Donald Trump: What to Expect

labor law elections

President-elect Donald Trump will assume office on January 20, 2017, with a Republican majority in both the Senate and the House of Representatives. While it is difficult to predict whether the new administration will be able to deliver on President-elect Trump’s campaign promises, we can expect significant policy and enforcement shifts. For example, judicial appointments to the U.S. Supreme Court and other federal courts will have significant and far-reaching implications. This analysis focuses on the likely dramatic impact of the Trump Administration on workplace law.

Courts

The U.S. Supreme Court has been operating with eight justices since the sudden passing of Justice Antonin Scalia in February. There also are many judicial vacancies on the federal bench. President-elect Trump likely will appoint judges more inclined to preserve the strict certification standards for class actions and rein in novel interpretations of laws such as the Americans with Disabilities Act (e.g., on disparate impact and reasonable accommodation issues).

Government Enforcement

Federal agencies increasingly have been aggressive and controversial in their enforcement methods. Under new leadership in the Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), and the Office of Federal Contract Compliance Programs (OFCCP), among others, one can expect a return to traditional, more conservative theories of discrimination previously recognized by federal courts. We may see the EEOC ease its systemic discrimination enforcement activity and enforcement position on the ADA, Title VII, and the Pregnancy Discrimination Act. An important issue to watch is the EEOC’s position on Title VII’s application to LGBT issues. Corporate diversity and inclusion programs are not likely to be affected by the new administration, as they are driven much more by demographic changes in the population, labor force, and marketplace and risk management considerations, and much less by federal law and policy in the short-term.

Further, the focus of current controversial regulatory action will change. New DOL leadership may revisit recent DOL proposed or implemented regulations, including those subject to court injunctions. Congress may also now pass legislation to repeal the new DOL overtime rule that raises the salary level for exempt employees effective December 1, 2016, and President-elect Trump might agree. Ongoing challenges to the Occupational Safety and Health Administration (OSHA) final rules (e.g., silica and the electronic recordkeeping rule) may result in settlements that lessen the regulatory impact of the rules. Aggressive enforcement coupled with significant publicity and fines have been key tools implemented by the current administration. Under new leadership, these agencies may ease back on such aggressive approaches and offer greater cooperation to the employer community as they try to balance the purposes of the law with business realities.

Executive Orders and Actions

President-elect Trump has announced an intention to undo President Barack Obama’s Executive Orders, many of which impose significant employment-related prohibitions and requirements on government contractors. The new administration likely will rescind at least some of those Executive Orders, chief among them the controversial Fair Pay and Safe Workplaces Executive Order.

In addition, President-elect Trump has stated he will reverse the Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans (DAPA) Executive Actions. It is unclear whether this would only address the enjoined executive relief programs or also include revocation of work authorization documents for currently eligible workers under DACA.

EEO-1 Pay Data Reporting

Final rules revising the EEO-1 report to add W-2 earnings and work hours reporting are scheduled to go into effect in early 2018. The new administration may consider rescinding the changes before first reporting is due in 2018 or revising the reporting to ease the burden on employers.

National Labor Relations Board (NLRB)

Currently, the NLRB has a 2-1 Democratic majority, with two vacant seats. Since the President traditionally has had the opportunity to appoint Board members to achieve a majority along political lines, the open seats likely will be filled by Trump appointees. This will create a more business-oriented NLRB. A new Board with a Republican majority is likely to revisit recent NLRB rules and decisions, including those covering (1) class action waivers, (2) joint employers, (3) inclusion of temporary workers in bargaining units with an employer’s regular workers, (4) quickie elections, (5) expansion of protected concerted activity (e.g., its impact on workplace policies), (6) definition of appropriate bargaining units, and (7) status of college/university adjunct faculty, graduate students, and student athletes. The new Board also may not make additional changes the current Board would make, such as extending Weingarten rights to non-union workplaces and making misclassification of employees as independent contractors a separate violation of the National Labor Relations Act (NLRA). In addition, the Labor-Management Reporting and Disclosure Act (LMRDA) “persuader” regulations, which are currently enjoined, may be revisited.

Sarbanes-Oxley Act and Dodd-Frank Act

During the campaign, President-elect Trump singled out the Dodd-Frank Act of 2010 (DFA) as making it impossible for banks to lend money to businesses for the purpose of creating jobs. A repeal of the DFA might encourage Congress and the Securities and Exchange Commission to rely more heavily on the Sarbanes-Oxley Act of 2002 (SOX) whistleblower provisions and thus mandate that corporate compliance programs, as developed by publicly traded companies, be increasingly robust, providing for greater “self-regulation.” Further SEC enforcement actions regarding confidentiality agreements likely will decrease.

Affordable Care Act (ACA)

President-elect Trump has vowed to repeal and replace the ACA. The extent to which this comes to fruition, the timing of any dismantling efforts, and the types of replacements that are offered will be of utmost importance to employers. While there has been much mentioned in broad brush strokes about a full repeal, it is unlikely that that can or will occur. Alternatives, such as the reliance on private healthcare savings accounts, market-based universal coverage and allowing for insurance plans to be offered across state lines have been floated, however, there is no Republican consensus on what the path away from the ACA will look like. Employers will be eager to see what is done to change and lessen employer obligations under the ACA, but for the meantime, will have to stay the course.

Fiduciary Rule

The DOL’s fiduciary rule concerning the expanded definition of who is considered a fiduciary under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code, as well as certain exemptions addressing conflicts of interest, also may be subjected to increased scrutiny in light of the President-elect’s opposition to the current administration’s financial initiatives and, more generally, “unnecessary” regulations. It is hard to determine at this point where these types of regulations on fiduciary status and conduct will rank among a long list of priorities for the new administration.

Federal Tax Reform

President-elect Trump has promised sweeping federal tax reform, including tax cuts for corporations. While the viability of implementing such changes rests with the Republican Congress, the lack of specificity as to what tax reform would look like under the new administration leaves many questions. These questions include how tax reform may affect benefits plans and arrangements, such as qualified retirement plans, fringe benefits, and executive compensation arrangements.

E-Verify

The new administration may focus on expanding enforcement of existing immigration laws in the workplace, which may include encouraging more employers to use E-Verify under existing law, as well as working with Congress to expand mandatory use of E-Verify. Under current federal law, E-Verify is voluntary for employers, except as mandated by executive order for federal government contractors.

International

The new administration may suspend temporarily the issuance of visas to certain countries and regions designated as high risk. President-elect Trump has indicated he will ask the Department of State, Department of Homeland Security, and the Department of Justice to begin a comprehensive review of high-risk visa cases to develop a list of regions and countries for which visa issuance will be suspended until a proven and effective vetting mechanism is implemented. Individuals from countries such as Syria, Iraq, Libya, and other designated high-risk areas, or individuals who have traveled to such countries, will face even longer delays obtaining visas for both short- and long-term travel to the U.S. In addition, global mobility may be affected if the U.S. restricts or delays business visas, resulting in reciprocal treatment by the affected countries.

U.S. companies operating in major European markets and other countries with strong labor interests may encounter increasingly complex labor relations and works council issues, as the United States is perceived as more nationalistic and less deferential to local employee protections. Further, there may be increasing pressure from foreign vendors, suppliers, customers, and employees on U.S. companies to certify that they will comply with ILO standards.

Post-Employment Restrictions

The new administration is unlikely to continue attempts to prohibit non-compete agreements we have seen from the White House over the past months, at least on a federal level. On a state level, legislatures still may respond to the Obama Administration’s “call to action” and introduce measures to curb the use of non-compete agreements, as, for example, has been promised by New York State Attorney General Eric Schneiderman.

The “Antitrust Guidance for Human Resource Professionals,” issued by the Department of Justice and Federal Trade Commission, is not likely to continue as a priority for the new administration. The guidance promised criminal prosecution of human resource professionals who, for example, enter into “naked” no-poach agreements.

Trade Secret Protection

Adding to the bi-partisan federal Defend Trade Secrets Act, which provided a civil right of action under the Economic Espionage Act, a new administration may adopt protectionist policies, bringing further enforcement efforts to misappropriation of trade secrets flowing to foreign powers, including to China.

Cybersecurity

President-elect Trump has expressed a desire to reduce, rather than increase regulation. However, political party hacking and unfavorable email dumps from WikiLeaks, coupled with continued data breaches affecting privacy and public sector entities, may prompt the new President and Congress to do more. Politics aside, cybersecurity is a top national security concern, and it is having a significant impact on private sector risk management strategies and individual security.

DOL Opinion Letters

The long-standing practice of the Administrator of the Wage and Hour Division of the DOL issuing official opinion letters regarding application of the Fair Labor Standards Act (FLSA) upon which employers rely may make a comeback. In recent years, the DOL had stopped issuing opinion letters, choosing instead to issue less frequent “Administrator Interpretations” with wider applicability and scope, but less specificity. Two significant Administrator Interpretations concerned “joint employment” and “independent contractor” status under the FLSA. Both have been viewed as clear efforts to expand the rights of workers under the law and place additional burdens on employers. New opinion letters are issued on a variety of topics and could scale-back or withdraw the Obama Administrator Interpretations, permitting employers greater flexibility in using independent contractors and giving business more certainty in expanding through use of franchises.

White Collar

The President-elect has been critical of excessive and unnecessary government regulation in such areas as health care, energy, and the environment. We may see a decreased investigatory focus in these areas, and fewer federal prosecutions of health care organizations, pharmaceutical companies, and manufacturers.

Focused on security and protecting the homeland, the new administration may enhance emphasis on international terrorism investigations, import/export violations, and immigration offenses.

Given his pledge to improve life in “inner city” areas, we should expect greater resources and attention to be devoted to the prosecutions of criminal activity by violent gangs and an effort to address crimes that affect the daily lives of the residents of America’s cities.

***

An important question for many, especially those that operate in multiple states and must comply with the current patchwork of state laws on data breach and sick leave, for example, is whether a federal law that supersedes state law is likely. With Republicans in control of the executive and legislative branches, that remains to be seen.

ARTICLE BY Howard M. Bloom & Philip B. Rosen of Jackson Lewis P.C.

Jackson Lewis P.C. © 2016

EEOC Transgender Case, New York City Labor Peace Agreements, Parental Leave: Employment Law This Week – August 29, 2016 [VIDEO]

EEOC Transgender CaseEEOC Loses Transgender Case in Michigan

Our top story: An employer wins a landmark case after firing a transgender employee. A funeral home in Michigan decided to terminate its director after he notified the business that he would be transitioning from male to female. The U.S. Equal Employment Opportunity Commission (EEOC) filed suit. On a motion to dismiss, a U.S. district court held that Title VII does not prohibit discrimination on the basis of transgender status or gender identity but allowed the EEOC to pursue a claim for sex stereotyping. The funeral home argued that it was protected under the Religious Freedom Restoration Act (RFRA), and the district court agreed, granting the employer’s motion for summary judgment.

“Once the employer is able to prove that they are entitled to a defense under the RFRA, the EEOC has a burden of not just establishing that the purpose of Title VII is a compelling government interest, but it also has to show that the means and application of Title VII was done in the least burdensome way possible. The EEOC failed to address this point in their briefing, and also failed to examine whether this was the least restrictive, or whether there was an alternative, way to enforce Title VII against this employer. . . . In order to be eligible to invoke the RFRA, an employer has to be a private, closely held corporation and cannot be a publicly traded corporation. Secondly, the RFRA can only be invoked if the party suing the employer is the government or a government agency. And third, if the employer is a government itself, they can’t invoke that they have a religion, and therefore the RFRA is not applicable.”

New York City Mandates “Labor Peace” Agreements

New York City is trying to force certain employers to sign “labor peace” agreements with unions. Mayor Bill de Blasio has signed an executive order mandating that a property developer receiving at least $1 million in “Financial Assistance” require its large retail and food service tenants to accept “Labor Peace Agreements.” These agreements would prohibit the companies from opposing union organization and provide what some consider to be affirmative support and assistance to unions. City Development Projects that were authorized or received “Financial Assistance” before July 14, 2016, are exempt from this order.

Lawmakers Urge Rejection of EEOC’s Pay Data Proposal

Senators ask for a halt to the EEOC’s pay data proposal. Three Republican senators have sent a letter to the Office of Management and Budget asking them to shut down a recent proposal from the EEOC. The proposal would expand pay data collection and require employers to categorize hours worked by sex, ethnicity, and race. The lawmakers argue that this kind of data collection would waste time and put significant new burdens on employers.

Parental Leave Requests Increase as School Year Starts

Parental leave requests are on the rise as kids head back to school. An increasing number of states now require that businesses grant unpaid leave to employees for school-related events and activities that happen during the workday. These laws apply to private employers in Washington, D.C., and in such states as California and Massachusetts. As the school year begins, employers will likely see more requests for parental leave and should consider checking the laws in their states to make sure they’re in compliance.

Tip of the Week

Finally, it’s time for our Tip of the Week. Ann Morris, Partner at Finn Partners, is here with some advice on developing a communications plan before a crisis.

ARTICLE BY George Carroll Whipple, III of Epstein Becker & Green, P.C.

©2016 Epstein Becker & Green, P.C. All rights reserved.

Tokyo District Court Rules that “US-Style” Dismissal is Invalid

badge_button_japan_flag_800_2185Article 16 of the Japanese Labour Contracts Act provides that “If a termination lacks objectively reasonable grounds and is not considered to be appropriate in general social terms, it is treated as an abuse of rights and is invalid”.  Obviously the terms “objectively reasonable grounds” and “appropriate in general social terms” are ambiguous but here is a case which sheds a little light on those two phrases.

On March 29, 2016 the Tokyo District Court ruled that the termination of the five plaintiff employees by Japan IBM was invalid.   Chief Judge Toru Yoshida ordered Japan IBM to reinstate them and to pay their salary retroactive to the date of termination.  The plaintiffs were all dismissed without notice based on what IBM said was their poor performance.  The employees alleged that the real reason was a desired reduction of the workforce and that IBM picked on them because they were members of a labour union which was against any restructuring, and not because their performance actually justified their dismissals.

The Court did indeed find that the plaintiffs’ performance was lower than average. However, it ruled that continuous lower evaluation based on a relative evaluation system is not enough to justify the termination.  Merely because their performance was poorer than their colleagues’ did not mean that they were objectively unable to perform the duties of the role to an adequate standard.  As a result, said the Court, Japan IBM had abused the right to terminate.

The plaintiffs’ lawyer said proudly during media interview at the Court, “This judgement is a landmark case because the judgement proved that the Japanese legal theory of “abuse of right” can serve as a brake on US-style terminations”.  In fact it was already very clear that Japanese law would block dismissals without very good reason (i.e. not including performance unless supported by very strong evidence of very serious shortcomings), but we can probably forgive him in his moment of triumph.  Even if it is not strictly a landmark, the decision does make it clear that relatively (as opposed to absolutely) poor performance will not count as “objectively reasonable grounds” for a dismissal, and that a termination without prior warning (or which is stated to be for an untrue reason) will not be found to be “appropriate in general social terms”.

Therefore, unilateral terminations in Japan are often litigated. Since the sanction of default is usually reinstatement rather than a cash payment, getting it wrong for the sake of expediency is often not a sensible option.  This IBM case is a good lesson for employers in Japan accustomed to US or similar employment systems that poor performance is not always a justifiable reason to dismiss.  Establishing objectively reasonable grounds is a very high hurdle in Japan and may strain the patience of employers not used to that burden.  It is therefore much preferable to try to agree a severance with the employee.  While this may be expensive it will at least be effective to terminate his employment and draw a conclusive line under the matter.  The employee in turn gains a cash cushion and an opportunity to leave his employment with little loss of face and a clear record and reference.

Article By Kenichiro Kawada of Squire Patton Boggs (US) LLP
© Copyright 2016 Squire Patton Boggs (US) LLP

Dane County Judge: Wisconsin’s “Right to Work” law unconstitutional

wisconsin supreme courtIn a decision issued April 8, 2016, Dane County Circuit Court Judge William Foust ruled that Wisconsin’s “Right to Work” law violates the Wisconsin Constitution because it takes union property without just compensation (i.e., it is an unlawful taking).

According to the Wisconsin Manufacturers & Commerce (WMC), which played a leading role in seeking and attaining passage of the law, Judge Foust’s decision “is an act of blatant judicial activism that will not withstand appellate review.” Wisconsin Attorney General Brad Schimel also issued a statement expressing disappointment in the ruling and stating that he is “confident the law will be upheld on appeal.”

Judge Foust ruled that the law unconstitutionally takes union property by forcing a union to represent workers who are not members of the union and do not pay dues to the union. Judge Foust found the State’s argument that “neither federal law nor state law requires a union or other entity to become an exclusive bargaining representative” to be “disingenuous.” According to Judge Foust, the unions have no choice in representing all employees because, by law, their existence depends upon being the exclusive bargaining agent for any particular bargaining unit.

A copy of Judge Foust’s order is available here.

Article by: Rufino Gaytán of Godfrey & Kahn S.C.
Copyright © 2016 Godfrey & Kahn S.C.