As we reported in a blog post last month, although neither the federal nor state law expressly prohibits discrimination on the basis of gender identity or expression, Governor Cuomo bypassed the legislative process and urged the New York State Division of Human Rights to issue regulations that will interpret the state’s anti-discrimination prohibitions to cover transgender individuals.  Just this week, the New York State Division of Human Rights adopted those regulations.  The regulations, which became effective on Wednesday, make discrimination or harassment against transgender applicants and employees unlawful, and require employers to accommodate transgender individuals who have been diagnosed with a medical condition referred to as “gender dysphoria” – a medical condition related to an individual having a gender identity different from the sex assigned to him or her at birth. In addition, the New York City Commission on Human Rights recently issued a guidance document on what constitutes discrimination against transgender people under the New York City Human Rights Law.  The Commission’s guidance provides numerous examples of employer actions that violate the NYCHRL, including failure to use an individual’s preferred name, pronoun or title, denying transgender employees the use of restrooms consistent with their gender identity, and even enforcing dress codes that make differentiations based on sex or gender.  The Commission’s recent guidance also announces much more strict penalties for transgender discrimination.  Under the NYCHRL, civil penalties can range from $125,000 to $250,000 for violations that are deemed to be “willful, wanton or malicious.”  The Commission announced that, among other factors, it will consider the lack of an adequate discrimination policy as a factor in assessing penalties. Employers should review and revise their EEO and anti-harassment policies in light of these recent changes.  Employers should also consider taking steps to educate and train their employees regarding these new requirements.

After several unsuccessful attempts to pass the Gender Expression Nondiscrimination Act, which would have extended the nondiscrimination protections in the New York Human Rights Law to transgender individuals, Governor Cuomo took the unprecedented step of directing the New York State Division of Human Rights to issue regulations that would protect transgender applicants and employees in New York. The proposed regulations, which were published in the New York State Register on November 4, 2015, make discrimination and harassment on the basis of gender identity or the status of being transgender a form of sex discrimination prohibited under state law.  The proposed regulations would also make “gender dysphoria” a protected disability under state law, prohibit harassment on the basis of one’s gender dysphoria, and obligate employers to provide accommodations to employees diagnosed with gender dysphoria.  The regulations define “gender dysphoria” as a “recognized medical condition related to an individual having a gender identity different from the sex assigned to him or her at birth.” The 45-day comment period recently ended, which clears the way for the Division of Human Rights to adopt the regulations.  However, it is anticipated that the Division will wait until early 2016 to begin enforcing the Human Rights Law with respect to transgender applicants and employees.  The anti-discrimination statute in New York City and several other city ordinances already extend protection to transgender individuals.  In addition, earlier this year, the Department of Justice and the EEOC began interpreting the sex discrimination prohibition in Title VII of the Civil Rights Act to cover discrimination against transgender individuals.  The Office of Federal Contract Compliance Programs also issued a final rule prohibiting federal contractors from discriminating against employees or applicants based on their sexual orientation or gender identity. A great deal of litigation is likely to occur in this area in the upcoming year, not only to challenge the application of the various federal and state laws to transgender individuals, but also to address complex and sensitive issues including how employers will need to handle issues of confidentiality, employee benefits, accommodations for restroom access, and other issues that might arise for employees transitioning from one gender to another.  Employers would be well-advised to begin to review their employee handbooks and other employment policies and practices to prepare for these expanded protections for transgender employees and applicants.

New York employers take notice:  an amendment to New York’s equal pay law (S.1/A.6075) was signed by Governor Cuomo on October 21, 2015.  The law amends Labor Law Section 194, which prohibits pay differentials based on gender in jobs requiring “equal skill, effort and responsibility” which are “performed under similar working conditions.”  The bill was passed by the Assembly in April, and by the Senate in January, and the changes are significant. The amendment to Labor Law Section 194 is one of eight laws aimed at gender equality issues that Cuomo signed last week.  Of interest to employers, several of the other laws also touch on employment issues.  Those other laws:

• Extend the prohibition on sexual harassment to all employers, including those with less than four employees (S.2 / A.5360);
• Allow employees to obtain attorneys’ fees when they prevail in sex discrimination lawsuits (S.3 / A.7189);
• Add “familial status” to the list of protected traits under the New York State Human Rights Law (S.4 / A.7317); and
• Add a requirement to the Human Rights Law that employers must provide reasonable accommodations to all pregnant employees, not just those with a pregnancy-related disability (S.8 / A.4272).

The laws are slated to take effect on Tuesday, January 19, 2016. The premise of the pay equity amendment is simple and appealing:  the same day’s pay for the same day’s work.  At first glance, this is not big news.  The state labor law and federal law already require equal pay without regard to gender.  However, this law tightens and strengthens Section 194 in ways that will undoubtedly impact many New York workplaces. First, under existing law, an employer can defend a pay discrimination claim by showing that the difference in pay is justified by a seniority system, a merit system, a system measuring earnings based on quantity or quality of work, or “any other factor other than sex.”  This catch-all was viewed by many as a loophole and hindered the success of many pay discrimination claims.  The new law replaces the “any other” defense with the following:  "a bona fide factor other than sex, such as education, training, or experience."  This bona fide factor must be job-related and consistent with business necessity.  Notably, the burden is on the employer to prove the existence of this bona fide factor; it is not on the complaining employee to prove discriminatory motive (as in other types of employment discrimination litigation). As any employer can attest, many factors other than sex go into compensation decisions.  Under the old law (and still under federal law), these other factors typically held up to the test of “any other factor other than sex.”  It is not clear which factors will hold up under the new law.  For example, are market forces still a defense?  In a competitive market for talent, an employer might pay a new hire more than employees currently performing the same job simply because the market demands it.  Perhaps the candidate has an offer from a competitor that the employer must match to attract the candidate.  Often, internal compensation lags behind external market.  Whether market forces will be considered “a bona fide factor other than sex, such as education, training, or experience” remains to be seen. Moreover, even if an employer establishes a “bona fide factor” to justify a gender pay difference, an employee can still prevail under the new law by showing that:  (a) the bona fide factor has a disparate impact on one sex; (b) alternative employment practices exist that would serve the same business purpose and not produce the pay differential; and (c) the employer refused to adopt the alternative practice.  The lack of clarity over what will be considered a “bona fide factor” will undoubtedly result in a wave of litigation. Second, the Pay Equity Act gives employees the right to openly inquire about, disclose and discuss their wages.  Employers cannot prohibit these conversations.  Rather, the employer may only establish and distribute a written policy containing “reasonable workplace and workday limitations on the time, place and manner” for pay discussions.  The law states that an example of a reasonable limitation would be a rule that an employee may not disclose a co-worker’s pay without the co-worker’s permission.  The law contains some recognition that certain employees must still maintain confidentiality of pay information:  an employer may prohibit an employee with access to other employees’ pay information as part of their job from disseminating that information to others who do not have the same access. This right to openly discuss pay is new to New York law, but it is consistent with the National Labor Relations Board’s position that an employee’s right to openly discuss wages is protected by the National Labor Relations Act. Third, the law contains dramatically higher penalties than other state employment discrimination and wage/hour laws.  Employers who are found to have willfully violated the Equal Pay Act are subject to liquidated damages in the amount of 300% of the wages owed.  In other words, in addition to making the employee whole for any unlawful difference in pay, there is an additional potential penalty of three times those wages.  Other provisions of the New York Labor Law provide for liquidated damages of “only” 100%. As stated above, the law takes effect on January 19, 2016.  Therefore, employers should act quickly to evaluate any potential exposure.  Now is the time to review pay rates to ensure any gender differences can be justified based on the factors in the statute.  Consider whether these factors are job-related and consistent with business necessity.  Additionally, employers should review their written policies, particularly confidentiality policies, to ensure they do not contain restrictions on the right to share or discuss compensation information, and revise as necessary.  Similarly, supervisors should be made aware that they may not prohibit conversations about pay.  Finally, consider the pros and cons of adopting a new policy setting reasonable limits on the time, place and manner of pay discussions.

In prior blog articles, we've sought wisdom from Sun Tzu, an audit of Santa's Workshop, a theoretical application of the faithless servant doctrine to A-Rod, and Pooh Corner for some Zen advice on day-to-day employment matters.  Our next stop on the Employment Law Express is a seasonal walk through the Pumpkin Patch with the Peanuts gang. As only he could, Linus explained the criteria for a visit from the Great Pumpkin: Each year, the Great Pumpkin rises out of the pumpkin patch that he thinks is the most sincere.  He's gotta pick this one. . . .  You can look all around and there's not a sign of hypocrisy. Alas, like other astute philosophers of historical significance, Linus is likely keenly aware that the importance of sincerity is not limited to the pumpkin patch, but has broad application, even reaching into the black box of the jury room in an employment discrimination case.  For those plaintiffs hoping for a bag of treats from the Great Pumpkin (in the form of cash), they need to be mindful for signs of hypocrisy -- a lesson painfully learned by the plaintiff in Housley v. Spirit Aerosystems, Inc., which was just recently decided by the Tenth Circuit Court of Appeals on October 9, 2015. The plaintiff was a Boeing employee who was not hired by Spirit Aerosystems when Spirit acquired the facilities where she worked.  She sued for age discrimination, hoping to lure a bounty of treats from the proverbial Great Pumpkin (a federal jury, to be precise), in part by relying on secretly recorded conversations with her supervisors during which she was asked if she was old enough to retire.  On the surface, the plaintiff had found a perfect patch from which to receive her treats (i.e., "He's gotta pick this one" -- just listen to the tape).  But, was the patch sincere and free of hypocrisy?  The jury thought not, and rendered a verdict in favor of Spirit.  During the trial, Spirit exposed the plaintiff's hypocrisy by using the fact that she had secretly recorded conversations with her supervisors as after-acquired evidence of wrongdoing that negated any alleged damages. On appeal, the Tenth Circuit refused to find that the lower court committed any reversible error in allowing Spirit to use the recordings for this purpose.  In sage, Linusesque prose, the Court reasoned:  "The recordings in this case turned out to be a double-edged sword.  Housley wanted the jury to know about them for obvious reasons and considering her active promotion of their admission she is not now in a position to complain about getting what she wanted.  Spirit turned the tables on her by promoting their use for a different, albeit limited, purpose -- after-acquired evidence of wrongdoing.  In the end Housley was obliged to take the bitter with the sweet." Halloween, like a suit for employment discrimination, is goal-oriented -- a pursuit in reaching for "the sweet."  Sometimes this goal seems easily obtainable, as noted by the Peanuts characters: Lucy:  All you have to do is walk up to a house, ring the doorbell, and say "tricks or treats." Sally:  Are you sure it's legal? Yes, in many jurisdictions (including New York), secretly recording a supervisor in a conversation to which the employee is a party is just as legal as knocking on a door and asking for candy.  And, on the surface, the recording (depending on its content) should result in the receipt of treats with no more effort than knocking on a door.  But not everyone gets a treat.  Tricksters may find themselves walking away with nothing but a bag of rocks. So, the lesson for this Halloween season is that employers defending against employment discrimination claims, like Spirit, should always be on the lookout for a smoking gun that, on closer inspection, is nothing more than a Halloween prop ready to backfire if just given enough room to do so.

There are many protected categories under the federal employment discrimination laws, but none of those laws mentions "sexual orientation" as a protected category.  Versions of the Employment Non-Discrimination Act ("ENDA"), which would explicitly prohibit employment discrimination on the basis of sexual orientation, have been introduced in almost every session of Congress since about 1994.  However, the legislation has never made it to the President’s desk. According to the Equal Employment Opportunity Commission ("EEOC"), federal legislation explicitly prohibiting employment discrimination based on sexual orientation is unnecessary because such discrimination is already prohibited under Title VII of the Civil Rights Act ("Title VII").  In a December 2, 2014 blog post, we wrote about a decision issued by the EEOC against a federal agency (the Bureau of Tobacco, Firearms and Explosives) holding that transgender discrimination is a form of sex discrimination prohibited by Title VII.  Therefore, it should come as no surprise that the EEOC has now also issued a decision against another federal agency (the Federal Aviation Administration) on July 16, 2015, holding that sexual orientation discrimination is also a form of sex discrimination prohibited by Title VII. In the case, an employee who worked for the Federal Aviation Administration alleged that he was passed over for a permanent position as a Front Line Manager because of his sexual orientation.  The EEOC determined that it had jurisdiction over the claim even though sexual orientation is not listed as one of the protected categories under Title VII, because “sexual orientation is inseparable from and inescapably linked to sex."  The EEOC further stated:  "A complainant alleging that an agency took his or her sexual orientation into account in an employment action necessarily alleged that the agency took his or her sex into account." The EEOC discussed a number of ways in which discrimination based on sexual orientation could be considered sex discrimination.  For example, the EEOC theorized that sexual orientation discrimination is a form of “associational discrimination on the basis of sex” because it involves an employee being treated differently based on his or her association with a person of the same sex.  The EEOC also opined that sexual orientation discrimination is sex discrimination because it “necessarily involves discrimination based on gender stereotypes" and is often motivated by a desire to enforce heterosexually defined gender norms. This recent EEOC decision was issued in the context of an appeal from a federal agency's decision, and is not binding on employers in the private sector.  However, the reasoning used by the EEOC in its decision suggests that it will likely exercise jurisdiction over discrimination charges filed against private sector employers alleging sexual orientation discrimination and could commence enforcement proceedings against private sector employers in sexual orientation discrimination cases.  As the EEOC noted in its decision, many federal courts (including the Second Circuit Court of Appeals, which is the federal appellate court that hears appeals from cases decided in the U.S. District Courts in New York) have already rejected claims that Title VII prohibits sexual orientation discrimination.  It remains to be seen whether any federal courts will be persuaded by the EEOC's interpretation of Title VII's sex discrimination provision and whether the Supreme Court will eventually address the issue. The EEOC's decision will also likely have less of an impact on employers in New York than on employers in some other states, because sexual orientation discrimination is already prohibited by the New York Human Rights Law ("NYHRL").  However, because Title VII includes punitive damages and recovery of attorneys' fees as potential remedies (and the NYHRL does not), it is possible that plaintiffs' lawyers may start asserting sexual orientation discrimination claims under both Title VII and the NYHRL in order to obtain federal court jurisdiction and to take advantage of the additional remedies under Title VII that are not available under the NYHRL. Employers in New York should periodically review their equal employment opportunity, anti-discrimination, and anti-harassment policies to make sure that they are in compliance with all applicable federal, state, and local laws.  Employers should also make sure that all employees -- especially managers who make hiring and other employment decisions -- are regularly trained regarding those policies.

On June 1, the Supreme Court issued an 8-1 decision in EEOC v. Abercrombie & Fitch Stores, Inc., holding that Title VII of the Civil Rights Act prohibits a prospective employer from refusing to hire an applicant in order to avoid accommodating a religious practice that it could accommodate without undue hardship, even if the applicant has not actually informed the prospective employer of the need for a religious accommodation.  The Supreme Court reversed the decision of the Tenth Circuit Court of Appeals granting summary judgment in favor of Abercrombie, and remanded the case back to the Tenth Circuit for further consideration. The Facts In reviewing the Tenth Circuit's decision granting summary judgment to Abercrombie, the Supreme Court considered the facts in the light most favorable to the EEOC.  The Supreme Court summarized those facts as follows. At the time this case arose in 2008, Abercrombie had a Look Policy that governed its employees' clothing and appearance while at work.  The Look Policy prohibited employees from wearing "caps," but did not define the term "caps." An applicant named Samantha Elauf applied for a position in an Abercrombie store, and wore a headscarf to her interview with the store's assistant manager.  During the interview, Elauf did not comment on (and the assistant manager did not ask any questions about) the headscarf or the reasons why she wore the headscarf.  The assistant manager gave Elauf a rating after the interview that qualified her to be hired, but the assistant manager was concerned that Elauf's headscarf would conflict with the store's Look Policy. The assistant manager sought clarification from the district manager regarding whether the headscarf would be considered a "cap" that was prohibited by the Look Policy.  In making the inquiry to the district manager, the assistant manager stated that she believed Elauf wore the headscarf for religious reasons.  The district manager told the assistant manager that the headscarf would violate the Look Policy and directed the assistant manager not to hire Elauf. Although Abercrombie did not know this for sure at the time it made the decision, Elauf was a practicing Muslim who wore the headscarf for religious reasons.  Elauf filed a discrimination charge with the EEOC, and the EEOC filed a lawsuit against Abercrombie on Elauf's behalf, alleging that Abercrombie's decision not to hire Elauf violated Title VII. The Lower Court Decisions The District Court granted summary judgment to the EEOC on the issue of liability, and awarded $20,000 to Elauf after a trial on damages. On appeal, the Tenth Circuit reversed the District Court and granted summary judgment to Abercrombie.  The Tenth Circuit reasoned that Abercrombie could not be liable under Title VII for failing to accommodate Elauf's religious practice unless Elauf provided Abercrombie with actual knowledge of her need for a religious accommodation.  Because it was undisputed that Elauf did not make any request for a religious accommodation, the Tenth Circuit found that Abercrombie did not violate Title VII. The Supreme Court's Decision The Supreme Court disagreed with the Tenth Circuit's holding that an employer must have actual knowledge of an applicant's need for a religious accommodation in order to establish that the employer violated Title VII by refusing to hire an applicant in order to avoid making a religious accommodation.  The Supreme Court held that an applicant need only demonstrate that his or her need for a religious accommodation was a motivating factor in the employer's decision. The Supreme Court explained the difference between motive and knowledge as follows:  "An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive.  Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed." Considering the facts in the light most favorable to the EEOC and Elauf, the Supreme Court concluded that the Tenth Circuit's decision should be reversed because Abercrombie's assistant manager at least suspected that Elauf wore the headscarf for religious reasons, and Abercrombie's district manager directed that Elauf not be hired because the headscarf violated the Look Policy.  On remand, the lower courts will need to determine whether there are genuine disputes regarding these material facts and whether a trial will be necessary on these issues. What Can Employers Do to Minimize the Risk of Religious Discrimination Claims in the Hiring Process? Many employers delegate responsibility for hiring new employees to managers without providing adequate guidance or training regarding how to carry out that important responsibility.  All personnel who have responsibility for interviewing and making hiring decisions should be trained regularly regarding compliance with anti-discrimination laws and employer policies.  The training should include, at a minimum, a review of lawful vs. unlawful pre-employment inquiries, a review of what information may and may not be considered as part of the hiring process, and the employer's obligations to make accommodations for religious observances or practices if the accommodations can be provided without undue hardship. If the hiring manager believes that an applicant's clothing or appearance during the interview might conflict with the employer's dress code, the hiring manager should still refrain from making any inquiries about whether the applicant's clothing or appearance is for religious reasons.  If the hiring manager feels that the applicant is a good candidate for the position in all other respects and is seriously considering extending an offer to the applicant, one way to address the potential dress code concern would be to show the applicant a copy of the employer's dress code and ask the applicant whether he or she can comply with the dress code, either with or without an accommodation.  If the applicant states that an accommodation would be needed, the employer can begin the process of determining whether the requested accommodation can be provided without undue hardship.  However, if the hiring manager has other legitimate, non-discriminatory reasons for rejecting an applicant that have nothing to do with concerns about the applicant's ability to comply with the employer's dress code or potential religious accommodations, the hiring manager should not make any inquiries during the interview regarding the applicant's ability to comply with the dress code. Finally, as in all other aspects of employment law, documentation is critical.  All hiring managers should be directed to take and maintain detailed notes of their interviews with job applicants and to document the legitimate, non-discriminatory reasons for hiring one candidate over another.  If a religious accommodation is requested by an applicant, the employer should keep documentation of the request, any information provided by the applicant regarding the religious practice for which an accommodation is requested, and the decision regarding whether or not the requested accommodation can be provided without undue hardship.

On March 25, the U.S. Supreme Court issued its much anticipated decision in Young v. United Parcel Service, Inc., which centered on whether UPS unlawfully discriminated against a pregnant employee by denying her a light-duty accommodation for her lifting restriction.  The Court vacated a Fourth Circuit Court of Appeals decision, which granted summary judgment in favor of UPS. Peggy Young, the plaintiff, was a part-time driver for UPS.  UPS policy required drivers to be able to lift up to 70 pounds.  When Young became pregnant, her doctors advised her that she should not lift more than 20 pounds during the first 20 weeks of her pregnancy.  Based on its internal policy, UPS advised Young that she could not work under the lifting restriction. Young sued UPS, claiming that it had discriminated against her by refusing to accommodate her pregnancy-related lifting restriction.  Young alleged that UPS had provided other drivers who had similar restrictions with light-duty accommodations, but UPS argued that it only provided light-duty work to a limited number of employees, including those who:  (1) were injured on the job; (2) had lost their Department of Transportation certification; or (3) had an ADA-covered disability. Young argued that under the Pregnancy Discrimination Act ("PDA"), which amended the definitions subsection of Title VII to include pregnancy discrimination as a form of sex discrimination, if an employer accommodates only a subset of workers with disabling conditions, pregnant workers who are similar in their ability or inability to work must be treated the same regardless of whether there are other non-pregnant employees who do not receive the same accommodations.  Unpersuaded by this broad approach, the Court stated that it doubted Congress “intended to grant pregnant workers an unconditional most-favored-nation status.” However, the Court also refused to accept UPS’ interpretation of the PDA.  UPS argued that the second provision of the PDA (which requires employers to treat "women affected by pregnancy . . . the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work") means that an employer is not required to accommodate a pregnant employee if there are other non-pregnant employees who also are not eligible for such accommodations.  UPS argued that pregnant employees such as Young were treated exactly the same as non-pregnant employees who had temporary lifting restrictions due to off-the-job injuries, and that its refusal to provide an accommodation for Young was therefore lawful. The Court also refused to “rely significantly” on the EEOC guidance which was issued in July of 2014 -- less than two weeks after the Supreme Court decided to hear the case.  The EEOC guidance provided that "an employer may not refuse to treat a pregnant worker the same as other employees who are similar in their ability or inability to work by relying on a policy that makes distinctions based on the source of an employee's limitations (e.g., a policy of providing light duty only to workers injured on the job)."  The Court reasoned that the EEOC’s position was inconsistent with previous positions and the EEOC failed to explain the basis of its guidance. Instead, the Court announced its own interpretation.  It held that a pregnant employee attempting to establish a claim of disparate treatment based on pregnancy may do so through the same general framework applicable to other types of employment discrimination claims (known as the McDonnell Douglas framework).  An employee who alleges that an employer’s denial of a pregnancy accommodation constitutes disparate treatment under the PDA must establish a prima facie case that:  (1) she belongs to the protected class; (2) she sought an accommodation; (3) the employer did not accommodate her; and (4) the employer did accommodate others “similar in their ability or inability to work.” Once the employee establishes her prima facie case, the burden shifts to the employer to offer a legitimate, nondiscriminatory reason to justify its refusal to accommodate the employee.  The Court advised, however, that the employer cannot merely claim that accommodating pregnant women is “more expensive or less convenient.” If the employer articulates a legitimate, nondiscriminatory reason, the employee must show the employer’s reason is a pretext for pregnancy discrimination.  The Court held that the employee may satisfy her burden at this stage by providing “sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s ‘legitimate, nondiscriminatory’ reasons are not sufficiently strong to justify the burden, but rather -- when considered along with the burden imposed -- give rise to an inference of intentional discrimination.”  For the claim to survive summary judgment, the employee can provide evidence that although the employer accommodates a large percentage of non-pregnant workers, it does not accommodate a large percentage of pregnant workers. Applying this standard, the Court explained that Young may be able to show that UPS provides light-duty accommodations to most non-pregnant employees with lifting restrictions, while “categorically failing” to accommodate pregnant employees with similar lifting restrictions.  Accordingly, the Court vacated the Fourth Circuit’s grant of summary judgment in favor of UPS, as there was a genuine dispute as to whether UPS treated employees whose situation “cannot reasonably be distinguished from Young’s” more favorably. For employers, this case may create more confusion than clarification on the issue of what obligation it may have to provide light duty assignments to pregnant employees.  However, given the Court’s articulation of the applicable legal standard, employers should:

• review their light duty policies and determine whether such policies should also apply to pregnant employees;
• review all other workplace accommodation policies to ensure compliance with the PDA and Americans with Disabilities Act;
• establish a policy for addressing requests for an accommodation, and in particular, requests from pregnant employees; and
• train supervisors and managers with regard to pregnant employees’ requests for an accommodation.

In early December, the U.S. Department of Labor's Office of Federal Contract Compliance Programs ("OFCCP") announced the issuance of its final rule implementing Executive Order 13672, which amends Executive Order 11246 by prohibiting Federal contractors from discriminating against employees or applicants based on their sexual orientation or gender identity.  The final rule was published in the Federal Register on December 9, 2014, and will become effective April 8, 2015. The OFCCP did not release a notice of proposed rulemaking.  According to an OFCCP FAQ:  “President Obama’s Executive Order was very clear about the steps the Department of Labor was required to take, and left no discretion regarding how to proceed.  In such cases, principles of administrative law allow an agency to publish final rules without prior notice and comment when the agency only makes a required change to conform a regulation to the enabling authority, and does not have any discretion in doing so.” The regulations will apply to employers that enter into or modify Federal contracts on or after April 8, 2015.  Contractors will need to revise the equal employment opportunity clause in new or modified subcontracts or purchase orders, “ensuring that applicants and employees are treated without regard to their sexual orientation and gender identity, and by updating the equal opportunity language used in job solicitations and posting updated notices.”  OFCCP and EEOC are working together to update the EEO is the Law Poster; Federal contractors should continue to use the existing poster until a new one is finalized. Executive Order 13672 and the new final rule are in addition to the pre-existing prohibition on gender identity discrimination, which is a form of sex discrimination in violation of Executive Order 11246.  OFCCP memorialized this in an Agency Directive dated August 19, 2014. The regulations also make a change to the visa reporting provision.  Contractors that are unable to obtain a visa for an employee and believe that it is because of the employee’s sexual orientation or gender identity will be required to report it to the OFCCP and the State Department. The final rule does not require contractors to:  (1) make changes to Affirmative Action Plans; (2) collect data or set placement goals on the sexual orientation or gender identity of applicants or employees; or (3) solicit voluntary self-identification of applicants’ or employees’ sexual orientation or gender identity.  In addition, there is no change to the current religious exemption. The Department of Labor’s Wage and Hour Division has published on its website a list of frequently asked questions and President Obama's Press Secretary has published a fact sheet about Executive Order 13672.

By now, most employers are familiar with the list of categories protected from employment discrimination under Title VII of the Civil Rights Act:  race, color, religion, national origin and sex.  Additional categories are protected by other federal anti-discrimination laws:  disability (Americans with Disabilities Act), age (Age Discrimination in Employment Act), pregnancy (Pregnancy Discrimination Act), and genetic information (Genetic Information Nondiscrimination Act).  Absent is any mention of sexual orientation or gender identity. The protections are, of course, broader in New York State.  Under the New York Human Rights Law, discrimination on the basis of sexual orientation (among other things) is also prohibited.  And in New York City, the New York City Human Rights Law prohibits discrimination on the basis of gender identity. Advocacy groups have been clamoring for legislation to protect transgender and lesbian/gay employees on the federal level for years.  The Employment Non-Discrimination Act (ENDA) would explicitly prohibit employment discrimination on the basis of sexual orientation and gender identity, but ENDA (despite versions being introduced in almost every Congress since the 1990s) has never made it to the President’s desk. Enter the EEOC.  Apparently tired of waiting for legislative protection for transgender employees, the EEOC has taken matters into its own hands. Back in April 2012, the EEOC officially took the position that transgender discrimination is a form of gender discrimination in violation of Title VII.  In Macy v. Holder, a case involving an applicant to the Bureau of Tobacco, Firearms and Explosives, the EEOC concluded that the Bureau violated Title VII when it withdrew an employment offer after the candidate revealed she was in the process of transitioning from male to female.  The EEOC reasoned that the term “sex” in Title VII encompasses not only a person’s biological sex, but also the cultural and social aspects associated with masculinity and femininity, and therefore, the law’s prohibition against sex discrimination is broader than discrimination based on biological sex.  The EEOC relied on Price Waterhouse v. Hopkins, a 1989 U.S. Supreme Court decision that established a theory known as “sex stereotyping.”  Under this theory, employers unlawfully discriminate on the basis of gender when they take some action against an employee because he or she does not conform to expected gender stereotypes.  The Macy decision was significant, as it was the first time the EEOC officially took this position regarding transgender discrimination.  However, since Macy was an administrative ruling involving a federal agency, it did not create binding precedent for courts. Later in 2012, the EEOC issued its Strategic Enforcement Plan.  As we wrote here, that plan made “coverage of lesbian, gay, bisexual and transgender individuals under Title VII's sex discrimination provisions” a top enforcement priority. Fast forward to September 2014.  Seemingly eager to create binding court precedent recognizing transgender discrimination as a form of sex discrimination under Title VII, the EEOC filed two lawsuits against employers alleging transgender discrimination.  In EEOC v. Lakeland Eye Clinic (filed in Florida) and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. (filed in Michigan), the EEOC claims that employees were terminated after informing their employer that they were transgender.  These cases are both in the early stages, but we will monitor and report on any significant developments in those cases. In the meantime, employers should be ready to deal with the issues that arise with transgender employees in their workplace.  It is wrong to assume these employees are not protected just because the terms “transgender” or “gender identity” do not appear in the federal or state employment discrimination laws.  Aside from not making employment decisions based on an employee’s gender identity, there are also accommodation issues to consider.  Should a transitioning employee be allowed to use the restroom corresponding to their gender presentation -- even if it makes other employees uncomfortable?  (Yes.)  Should you change the first name of the employee in your employment records based on a request?  (It depends on the record.)  The questions abound.  Stay tuned for more guidance on these complex issues.

With that first real chill in the air, the holiday season is suddenly upon us.  For parents, it is a time to relive our childhood, watching with our children all of those holiday specials ranging from It's the Great Pumpkin, Charlie Brown to Santa Claus is Comin' to Town.  Unfortunately, for members of our misfit profession, “tis the season” is not so much about being jolly, but more about defending lawsuits. And speaking of lawsuits, a daily perusal of employment law blogs and periodicals reveals that there is no shortage of new and innovative ways to sue an employer.  The seemingly endless tide of profligate litigation makes me shiver like Linus in the Pumpkin Patch about what would happen if the Department of Labor, the EEOC, or the plaintiff’s bar set its sights on Santa and his manufacturing plant in the North Pole.  For this reason, I offer the following guidance to Mr. Kringle d/b/a Santa on how to clean up some glaring employment law violations.  (Disclaimer:  Our guidance to Mr. Kringle is not intended to be legal advice nor should it be a substitute for him retaining local counsel familiar with the laws in his local jurisdiction.  I would also include the obligatory tax advice disclaimer, but I believe Mr. Kringle is tax-exempt.) I will discuss individual lawsuits below.  However, my main concern in terms of liability is in the arena of the class action.  I say this with all due love and affection, “Mr. Kringle, your workshop is a treasure-trove of wage and hour violations.”  The elves work, quite obviously, more than 40 hours a week.  They work through meal periods and weekends and holidays.  Where is their overtime pay?  While efficiently furnished, I don’t see any punch clock for your employees.  Can we say liquidated damages and attorneys’ fees? Your workplace is also quite literally an accident waiting to happen.  The elves have no protective equipment.  There is an Abominable Snowman on the shop floor.  Can we all say, “OSHA”? Mr. Kringle, despite your big heart, your workplace is rife with harassment and discrimination.  For example, there is Rudolph’s red nose and the universally known harassment and bullying to which he has been subjected (“used to laugh and call him names”).  The un-remedied mocking of Rudolph makes for a great holiday gift for the plaintiff’s lawyer who signs up Rudolph and his “slam dunk” suit.  (We make no representations as to whether any plaintiffs-side lawyers are on the "Nice List" and worthy of such a gift).  I think it is imperative that all of your reindeer immediately receive anti-harassment training.  So too with poor Hermey.  The Seinfeldesque “Anti-Dentite” environment that you have condoned is ripe for litigation and is otherwise an insult to dentists world-wide.  That leads us to our Faragher defenses.  Are your EEO policies translated into “Elfish” and properly distributed with a clear record of same? Of additional concern, have you taken care to make sure that the post-toy delivery workplace celebration does not cross the proverbial “line” of appropriateness and result in more than just hangovers at the workshop the next day? Finally, we need a word about the Island of Misfit Toys.  Notwithstanding that the public may want all lawyers permanently deposited in this desolate place, it is nonetheless illegal to segregate your workforce on the basis of such protected characteristics as being a cowboy who rides an ostrich.  And, who among us wouldn’t want to ride an ostrich? Of course, Mr. Kringle is not the only one staring down the barrel at punitive damages.  Yes, I’m talking to you, Mr. Burgermeister Meisterburger.  Making toys is plainly a recreational activity under state labor laws and interfering with concerted activity in this regard will get you an unfriendly knock on the door from the NLRB. So, to our clients and blog subscribers, I wish you all a joyous holiday season in front of a warm fire surrounded by friends and family, without any visions of EEOC complaints or Department of Labor audits dancing in your heads.

Over the past few months, the media has reported extensively about several incidents of domestic violence involving professional athletes.  While these high-profile cases generate huge attention, it is important to remember that domestic violence is a problem of epidemic proportion.  The Center for Disease Control and Prevention reports that 1 in 4 women and 1 in 10 men have experienced physical or sexual violence or stalking by an intimate partner.  Only a small fraction of these cases involve millionaire athletes. Whether it is obvious or not, domestic violence impacts workplaces across the United States on a daily basis.  When this happens, an employer is often left struggling with the question of how – if at all – it should acknowledge and react to an employee’s sensitive and highly personal situation.  While the nature of the problem makes it impossible to predict every issue that might arise, the following questions are frequently asked by employers when domestic violence affects their workplace. Question:  Do any job protections exist for domestic violence victims? Answer:  Yes.  In several states, including New York, domestic violence victim status is a protected category, meaning that an employer cannot take adverse job actions against an individual on that basis.  While federal law does not expressly provide this same protection, Title VII of the Civil Rights Act (Title VII) makes it unlawful for an employer to treat an employee differently due to sex-based stereotypes, such as the assumption that there will inevitably be “distractions” in the workplace if a female employee is involved in an incident of domestic violence.  This is not to say that domestic violence victims are insulated from employment actions taken for legitimate work deficiencies or other non-discriminatory reasons.  It does mean, however, that an employer will be expected to prove that a challenged action occurred for a non-discriminatory reason. It is also important to remember that the Americans with Disabilities Act (ADA) and analogous state laws prohibit discrimination on the basis of covered physical or mental impairments.  Those same laws also require employers to provide disability-related accommodations, which could include modifying certain job responsibilities or employment policies, unless doing so would cause an undue hardship to the business.  Although an incident of domestic violence would not itself implicate these laws, the accompanying physical and emotional harm could constitute a disability resulting in employee coverage. Question:  Is an employer required to provide victims of domestic violence time off from work? Answer:  The New York Penal Law makes it a misdemeanor offense for an employer to penalize the victim of a crime who, after giving advance notice, takes time off from work to appear in court as a witness, consult with a district attorney, or obtain an order of protection.  In addition, the federal Family and Medical Leave Act (FMLA) grants eligible employees up to 12 weeks of unpaid leave to recover or receive treatment for serious health conditions, which could include counseling for any physical or psychological conditions resulting from domestic violence.  The ADA and equivalent state laws may also require that some amount of unpaid leave be offered as a form of reasonable accommodation. An employer would also be expected to grant domestic violence victims time off from work pursuant to internal leave policies if leave is normally available to employees experiencing other types of personal matters. Question:  Is an employer obligated to ensure a safe workplace for domestic violence victims? Answer:  The Occupational Safety and Health Administration considers workplace violence to be an occupational hazard which can be prevented or minimized with appropriate precautions.  Included within the agency’s definition of workplace violence is violence by someone who does not work at a given location, but who has a personal relationship with an employee.  Under the Occupational Safety and Health Act’s “General Duty Clause,” employers are required to provide a place of employment that is free from recognizable hazards that cause or are likely to cause harm to employees.  An employer that has experienced acts of workplace violence – or is on notice of threats, intimidation, or other indicia to show a potential for workplace violence – is required under the general duty clause to implement feasible abatement measures. Question:  What if my employee is not the victim, but is the person accused or found guilty of engaging in criminal acts often associated with domestic violence? Answer:  New York and many other states make it unlawful for an employer to discipline, discharge, or take other adverse action against an employee who was accused of a crime if the charges have been dropped, dismissed, or otherwise resolved in the employee's favor.  At least in New York, that same protection is not afforded to pending charges, but an employer motivated by mere allegations that an employee has perpetrated a crime could nevertheless find itself defending against claims of discrimination on other grounds.  This includes a claim that the challenged action was the result of an employer policy or practice which adversely impacts one or more groups protected by Title VII, as addressed in recent enforcement guidance issued by the Equal Employment Opportunity Commission.  If the accused employee belongs to a union, additional protections may be afforded under a collective bargaining agreement provision requiring “just cause” prior to disciplinary action. In regards to criminal convictions, several states restrict an employer’s ability to fire an individual because he or she has been convicted of a crime.  In New York, an employer considering such action must evaluate eight factors, such as the nature of the offense, the time elapsed, the age of the individual when the offense occurred, and any evidence of rehabilitation.  Only after evaluating these factors will an employer be in a sufficient position to determine whether a direct relationship exists between the offense and the job, or whether the person’s employment involves an unreasonable risk to property or safety, either of which would provide a defense to a discrimination claim based on a prior conviction. For either arrests or convictions, an employer should investigate the underlying facts to determine if an individual’s conduct justifies termination or some other employment action.  Failure to do so may hurt the employer’s chances of successfully defending against allegations of discrimination, prevailing at arbitration, or avoiding negligent hiring or retention claims. In sum, employers must become familiar with the various legal obligations that arise when an employee is involved in domestic violence, either as the victim or the accused.  If the employee is known to be suffering the effects of an abusive relationship, the employer should be prepared to grant leave or make other work-related adjustments to facilitate the employee's physical and emotional recovery or participation in the legal process (including obtaining an order of protection).  If the employee is accused or convicted of a violent or threatening act, the employer should determine if the underlying conduct impairs his or her continued employment, recognizing that the law generally disfavors employment actions taken because of an individual’s arrest or conviction record.  In either situation, merely ignoring the problem is never a good strategy.

A recent Second Circuit case highlights the potential perils of basing employment decisions upon subjective judgments which are susceptible to multiple interpretations.  In Abrams v. Department of Public Safety, the court reversed a summary judgment decision granted to an employer based upon the hiring supervisor’s assessment that a non-minority applicant for a detective position in a special major crimes group would “fit in better” than a minority applicant for that position. The minority detective, Frederick Abrams, brought a variety of discrimination and retaliation claims against a state law enforcement agency based upon his non-selection for a major crimes unit position and his subsequent reassignment to a casino unit following his internal complaints about not receiving the major crimes job and various other things.  The district court granted the law enforcement agency’s motion for summary judgment on Abrams’ discrimination claims, but found that there were sufficient questions of fact surrounding the retaliation claim to warrant those claims proceeding to trial.  In granting the summary judgment motion, the district court refused to consider the “fit in better” comment, finding that it was an inadmissible hearsay statement.  Abrams appealed to the Second Circuit after a jury ruled in favor of the law enforcement agency following a three-day trial. On appeal, the Second Circuit ruled that the lower court had improperly excluded the “fit in better” statement, finding that it was not hearsay and was admissible evidence.  The court explained that this statement was not being offered to establish its truth – that Abrams would not be a good fit – but rather only to show that the statement was made and that it referred to Abrams. The central question, the court observed, was whether this racially neutral statement was sufficient to create an inference of discrimination sufficient to avoid summary judgment.  Relying on an earlier Fifth Circuit decision, the Second Circuit noted:

[T]he phrasing "better fit" or "fitting in" just might have been about race; and when construing the facts in a light most favorable to the non-moving party, those phrases, even when isolated, could be enough to create a reasonable question of fact for a jury.  It is enough of an ambiguity to create a reasonable question of fact.

The case was therefore remanded to the district court for further proceedings and perhaps a second trial. This case plainly illustrates the vulnerability of employment decisions based upon ambiguous, subjective judgments and shows the ease with which these decisions can be attacked and challenged, even on appeal.  Because of the conflicting inferences that can be drawn from these judgments, employers are obviously well-served to base their employment decisions upon consistent, measurable, job-related criteria whenever possible.