The Affordable Care Act creates new incentives to promote employer wellness programs. However, employers should not rush to establish such programs without first considering the implications of the Americans with Disabilities Act. Why? The Equal Employment Opportunity Commission has not yet issued guidance on how employers may structure their wellness programs to avoid violations of the ADA, despite placing this issue on its Semiannual Regulatory Agenda in May 2014. In fact, the EEOC does not anticipate that any administrative direction on this issue will be forthcoming in the immediate future. Despite a lack of guidance, the EEOC is actively pursuing litigation in this area. In this regard, the EEOC recently filed two cases against employers, claiming that their wellness programs violated the ADA.
In the first case, the EEOC filed a complaint against Orion Energy Systems, Inc., alleging that through its voluntary wellness program, Orion required an employee to submit to medical examinations and inquiries that were not job-related or consistent with business necessity in violation of the ADA. According to the EEOC, Orion’s wellness program required employees to complete multiple medical history forms and submit to blood work. One employee, Wendy Schobert, objected to participation in the wellness program. She asked whether participation was voluntary and whether the medical information would be maintained in a confidential file. The EEOC claims that Orion’s personnel director and Ms. Schobert’s supervisor told Ms. Schobert not to express any opinions about the wellness program to her co-workers. Ultimately, Ms. Schobert decided to opt out of Orion’s wellness program. As a result, the EEOC asserts that Orion failed to pay Ms. Schobert’s insurance premium costs because she did not participate in the wellness program and subsequently terminated her employment.
In the second case, the EEOC filed a complaint against Flambeau, Inc. Similar to the Orion case, the EEOC alleges that the employer’s wellness program violated the ADA by requiring employees to submit to medical examinations and inquiries that were neither job-related nor consistent with business necessity. Specifically, Flambeau’s wellness program required employees to complete biometric testing and a health risk assessment. As part of this process, employees needed to disclose their medical histories and submit to blood work and measurements. Flambeau covered approximately 75% of the health insurance premiums for employees who completed this voluntary process. One employee, Dale Arnold, was not able to complete the biometric testing and health risk assessment as scheduled because he was on a medical leave of absence. According to the EEOC, Mr. Arnold tried to complete the biometric testing and health risk assessment when he returned from his medical leave, but Flambeau did not permit him to do so and instead terminated his health insurance coverage. Since Mr. Arnold could not afford to pay the entire premium cost for his health insurance under COBRA, his health insurance was canceled.
Until the EEOC provides further guidance on this issue, employers should ensure that their wellness programs are truly voluntary. Moreover, employers should make sure to avoid either significant penalties for employees who choose not to participate and/or significant rewards for employees who do participate in these programs. Finally, any medical information that employers obtain through a wellness program should be kept confidential and should not be used as a basis for making employment decisions involving the employee.
On October 1, the U.S. Department of Labor announced the issuance of its final rule implementing Executive Order 13658, which establishes a minimum wage requirement for certain federal contractors. The final rule was published in the Federal Register today, October 7.
As we stated in a prior blog post, Executive Order 13658 requires that certain types of new federal contracts and subcontracts contain a clause specifying that the minimum wage to be paid to workers must be at least $10.10 per hour beginning January 1, 2015. The new $10.10 minimum wage will also apply to disabled employees who are currently working under a special certificate issued by the Secretary of Labor permitting payment of less than the minimum wage.
The final rule defines "new contract" as a contract that results from a solicitation issued on or after January 1, 2015, or a contract that is awarded outside the solicitation process on or after January 1, 2015. A contract that was entered into prior to January 1, 2015 will constitute a "new contract" if, through bilateral negotiation, on or after January 1, 2015: (1) the contract is renewed; (2) the contract is extended (unless the extension is made pursuant to a term in the existing contract providing for a short-term limited extension; or (3) the contract is amended pursuant to a modification that is outside the scope of the existing contract.
The final rule also clarifies, to some degree, the types of federal contracts and subcontracts covered by the Executive Order. The following types of contracts and subcontracts are covered: (1) procurement contracts for construction covered by the Davis-Bacon Act; (2) contracts for services covered by the Service Contract Act; (3) contracts for concessions, including any concessions contract excluded from coverage under the Service Contract Act; and (4) contracts entered into in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public. Grants, within the meaning of the Federal Grant and Cooperative Agreement Act, are expressly excluded from coverage.
Beginning January 1, 2016, and annually thereafter, the minimum wage for federal contractors will be increased by the Secretary of Labor based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, and rounded to the nearest multiple of five cents. The Secretary of Labor is required to publish the new minimum wage at least 90 days before the new minimum wage is scheduled to take effect.
For tipped employees, the hourly cash wage paid by a federal contractor must be at least $4.90 beginning on January 1, 2015. In each subsequent year, the federal contractor minimum wage for tipped employees will be increased by 95 cents until it equals 70 percent of the federal contractor minimum wage in effect for non-tipped employees. If an employee’s tips, when added to the hourly wage, do not add up to the federal contractor minimum wage for non-tipped employees, the federal contractor will be required to supplement the employee’s hourly wage to make up the difference.
The final rule also provides an investigation and enforcement procedure with respect to alleged violations of Executive Order 13658. The potential remedies and sanctions that could be imposed include: (1) requiring payment of back wages owed; (2) withholding of amounts due to the contractor under the federal contract to the extent necessary to satisfy the contractor's wage obligations; and (3) debarment for a period of up to three years.
The Department of Labor's Wage and Hour Division has published on its web site a list of frequently asked questions and a fact sheet about Executive Order 13658.
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.
On September 11, 2014, the U.S. Department of Labor, Occupational Safety and Health Administration ("OSHA"), announced a final rule amending its injury and illness recording and reporting requirements. Although the rule has not yet been published in the Federal Register, it has been submitted for publication. The final rule will be effective on January 1, 2015.
The most notable change in the rule pertains to the reporting requirement for hospitalizations following work-related accidents. Under the current rule in effect until December 31, 2014, an employer must report an “in-patient hospitalization of three or more employees as a result of a work-related incident” within eight hours. Under the proposed rule, an employer must report an “in-patient hospitalization of one or more employees or an employee’s amputation or an employee's loss of an eye, as a result of a work-related incident” within 24 hours. The rule also provides another means (besides calling the OSHA Area Office or the 1-800-321-OSHA hotline) for reporting a fatality or hospitalization: electronic submission through a web portal at www.osha.gov. There is also one important distinction: “in-patient hospitalization” in the revised rule is defined as “formal admission to the in-patient service of a hospital or clinic for care or treatment”; the preamble to the rule makes clear that if the admission is for observation or diagnostic testing only, it is not required to be reported. The requirement to report fatalities within eight hours remains unchanged under the revised rule.
The rule also amends the list of industries that do not need to keep injury and illness records unless otherwise informed by OSHA or the Bureau of Labor Statistics. The revised list can be found in the amendment to the Non-Mandatory Appendix A to Subpart B of Part 1904 in the final rule. Employers with ten or fewer employees still need not keep injury and illness records unless otherwise informed by OSHA or the Bureau of Labor Statistics. All employers, regardless of size or industry, must comply with the 8/24 hour reporting requirements for work-related fatalities, hospitalizations, amputations, or loss of an eye as set forth in the rule.
On August 22, 2014, the National Labor Relations Board ("NLRB") issued companion decisions in Three D, LLC d/b/a Triple Play Sports Bar and Grille, holding that the employer violated the National Labor Relations Act ("NLRA") by terminating two employees for participating in an online discussion on Facebook. The Triple Play decision is yet another reminder to employers to exercise caution in imposing discipline against employees for conduct that takes place on social media. The decision also underscores the need for employers to review their existing social media policies to ensure that the policies are not so overly broad that employees might interpret them to prohibit complaints and conversations about their terms and conditions of employment.
Triple Play is a bar and restaurant whose employees are not unionized. In January 2011, Jillian Sanzone and another employee discovered that they owed more in State income taxes than they had expected due to a withholding error by Triple Play. While at work, Sanzone complained about this issue to other employees who, in turn, complained to the employer. In response, the employer planned to hold a meeting in February with its staff members and payroll company to discuss the employees' concerns.
On January 31, 2011, Jamie LaFrance, who had left her employment with Triple Play in November 2010, posted the following “status update” to her Facebook page: "Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money . . . Wtf!!!!" Several employees and non-employees responded to LaFrance’s post with various comments, most of which used profanity and criticized Triple Play's owners. One employee, Vincent Spinella, did not post a comment, but did select the “Like” button under LaFrance’s original comment. Sanzone posted her own comment, stating: “I owe too. Such an asshole.”
One of Triple Play's owners learned about the Facebook discussion through his sister, who was a Facebook “friend” of LaFrance. When Sanzone reported to work on February 2, 2011, Triple Play's owners notified her that she was being discharged because of her Facebook comment. On February 3, 2011, when Spinella reported to work, Triple Play’s owners called him into a meeting, questioned him about the Facebook conversation, and informed him that he was being discharged because his selection of the "Like" button meant that he supported the "disparaging and defamatory comments" of the other participants in the conversation.
The NLRB affirmed the Administrative Law Judge’s decision that the Facebook discussion constituted concerted activity under Section 7 of the NLRA and “was ‘part of an ongoing sequence’ of discussions that began in the workplace about the Respondent’s calculation of employees' tax withholding.” The NLRB also held that Sanzone and Spinella were engaged in protected concerted activity because the Facebook discussion related to “workplace complaints about tax liabilities, the Respondent’s tax withholding calculations, and LaFrance’s assertion that she owed back wages.” Notably, the NLRB found that Spinella’s selection of the “Like” button “expressed his support for others who were sharing their concerns and ‘constituted participation in the discussion that was sufficiently meaningful as to rise to the level of’ protected, concerted activity.”
In balancing the interest of Triple Play's owners in preventing disparaging comments by their employees, the NLRB held that Spinella's and Sanzone’s comments were not “so disloyal” as to lose protection under the NLRA. Accordingly, the NLRB affirmed the Administrative Law Judge’s decision that Triple Play violated the NLRA by interrogating and discharging Spinella and Sanzone because of their participation in the Facebook conversation.
Notably, the NLRB also found that Triple Play's “Internet/Blogging” policy violated Section 8(a)(1) of the NLRA. Although the policy did not explicitly restrict protected activity, the NLRB held that the policy, insofar as it prohibited employees from engaging in “inappropriate discussions about the company,” was overly broad. In light of Triple Play's discharge of Spinella and Sanzone, the NLRB reasoned that Triple Play's other employees could reasonably interpret the policy as prohibiting discussions regarding their terms and conditions of employment.
The Second Circuit’s recent decision in Moll v. Telesector Resources Group, Inc. is a good reminder to employers that a sexually hostile work environment claim can be based on more than just sexually explicit or sexually offensive statements and conduct. Such a claim can also be established by facially sex-neutral statements and conduct under certain circumstances.
Cindy Moll, the plaintiff in that case, was employed as a Systems Analyst for Verizon from 1997 until 2002. Ms. Moll alleged that she was subjected to a sexually hostile work environment because her supervisor had done such sexually offensive things as: leave her three “inappropriate” notes in 1998-1999; repeatedly ask her to come to his hotel room while they were on a business trip in 1999; and leave her a note in 2001 that said he thought about her when he was taking a shower. She also claimed, however, that other facially sex-neutral conduct engaged in by her supervisor also contributed to the sexually hostile work environment that she experienced. For example, Ms. Moll alleged that her supervisor: required her to communicate with him only in person, as opposed to by phone or email; told her she could not be assessed for a promotion because of an alleged promotion freeze, even though two of Ms. Moll’s male colleagues were promoted during the alleged freeze; put Ms. Moll on a job performance improvement plan in 2002; told her she could no longer work from home in 2002, even though other male employees were allowed to do so; denied Ms. Moll’s request to take vacation in 2002, even though the same requests from her less senior male colleagues were granted; and excluded her from work-related social events, including attending professional hockey games.
In September 2003, Ms. Moll filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) regarding, among other things, the above conduct that she alleged constituted an unlawful sexually hostile work environment under Title VII of the Civil Rights Act (“Title VII”). She subsequently filed a lawsuit in the U.S. District Court for the Western District of New York.
In response to Ms. Moll’s complaint, Verizon made a motion to dismiss her hostile work environment claim because, it argued, no sexually offensive conduct was alleged to have occurred within the applicable statute of limitations period. In New York, a plaintiff is generally required to file a charge of discrimination with the EEOC within 300 days of the alleged unlawful conduct. When a hostile work environment claim is alleged, at least one incident of harassment must be shown to have occurred within the 300 days prior to filing with the EEOC. Verizon argued that because the last incident of sexually offensive conduct (i.e., the supervisor’s note in 2001) occurred more than 300 days before Ms. Moll’s charge was filed with the EEOC, her hostile work environment claim was untimely and should be dismissed.
The District Court agreed with Verizon and dismissed the plaintiff’s hostile work environment claim. Ms. Moll then appealed the dismissal of her claim to the Second Circuit Court of Appeals.
The Second Circuit reversed, holding that the District Court had improperly failed to consider all of Ms. Moll’s allegations in their totality, particularly the alleged conduct that was not sexually offensive in nature. The Second Circuit determined that, based on Ms. Moll’s allegations, a reasonable fact-finder could have found the alleged facially sex-neutral conduct was sex-based and therefore contributed to the sexually hostile work environment. As the Second Circuit explained:
To decide whether the threshold has been reached, courts examine the case-specific circumstances in their totality and evaluate the severity, frequency, and degree of the abuse. . . . Facially sex-neutral incidents may be included . . . among the “totality of the circumstances” that courts consider in any hostile work environment claim, so long as a reasonable fact-finder could conclude that they were, in fact, based on sex.
The Second Circuit reversed the dismissal of Ms. Moll’s hostile work environment claim because the District Court did not consider whether the sex-neutral conduct alleged by Ms. Moll occurred within the applicable statute of limitations period.
The Moll decision serves as a good reminder of what must be considered by employers faced with an internal complaint from an employee that he/she is experiencing a sexually hostile work environment. Even if the sexually explicit statements and sexually offensive conduct about which the employee complains occurred in the distant past, the employer must still review the totality of the circumstances, including all facially sex-neutral statements and conduct alleged by the employee, to determine whether a sexually hostile work environment exists. If so, the employer must act promptly and decisively to remedy the situation, or else face potential liability.
On August 6, 2014, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a proposed rule requiring covered Federal contractors and subcontractors with more than 100 employees to submit an annual Equal Pay Report on employee compensation. Prior to this proposed rule, President Obama signed a Presidential Memorandum on April 8, 2014, instructing the Secretary of Labor to propose a rule within 120 days to collect compensation data from Federal contractors and subcontractors.
The Equal Pay Report applies to contractors and first-tier subcontractors who are required to file EEO-1 Reports, have more than 100 employees, and have a Federal contract, subcontract, or purchase order worth $50,000 or more that covers a period of at least 30 days. The Report requires contractors to submit:
Total number of workers within a specific EEO-1 job category by race, ethnicity, and sex;
Total W-2 wages, defined as the total individual W-2 wages for all workers in the job category by race, ethnicity, and sex; and
Total hours worked, defined as the number of hours worked by all employees in the job category by race, ethnicity, and sex.
According to the OFCCP, this data will allow the OFCCP to direct its enforcement resources towards Federal contractors whose summary data suggests potential pay violations. However, according to a Fact Sheet and FAQs published by OFCCP, the Equal Pay Report will not collect individual pay data or additional factors that may affect pay.
The OFCCP is proposing a reporting window of January 1 to March 31. The data would be based on W-2 earnings for the prior calendar year for all employees included in the contractor’s EEO-1 report for that year.
The OFCCP plans to develop a web-based portal for reporting and maintaining compensation information that conforms to applicable IT security standards. The OFCCP has indicated it intends to protect the confidentiality of the data to the maximum extent permitted under the Freedom of Information Act.
Comments regarding the proposed rule must be submitted by November 6, 2014.
Sun Tzu's seminal work “The Art of War” has long been required reading in leading business schools. As a definitive work on strategy, the impact of “The Art of War” crosses a great many sectors. In its most basic sense, Sun Tzu has a great deal of wisdom to offer anyone charged with motivating a workforce, changing a culture, achieving collective goals, and negotiating with and/or defeating hostiles.
This leads us to the Art of War’s relevance to litigation, and in particular, employment litigation. Of course, we do not equate the trials and tribulations of employment litigation with the sacrifice and horrors of actual war, but we use Sun Tzu merely as a guide to the importance of strategy in litigation. As we are all keenly aware, profligate employment claims bring with them attendant legal fees, in terrorem settlements, potential runaway juries, and loss of time and energy. For every in-house counsel and human resources executive overseeing such claims, reference to this ancient text can serve as a valuable guidepost to effectively manage the case from the proverbial “General’s” chair.
Sun Tzu: Now the general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand.
Strategy is an often overlooked complement to litigation defense. Each case is different, making rote defenses unacceptable. At the very outset of the case, the “General” needs to know: what is our strategic plan for confronting this particular case, before this particular judge, on these unique facts.
Sun Tzu: What the ancients called a clever fighter is one who not only wins, but excels in winning with ease.
Winning with “ease” in employment cases means winning pre-trial and preferably pre-discovery. Consequently, a threshold question is: do we have a motion to dismiss?
Courts have become far more accepting of dismissing complaints that are based solely on conclusory allegations. See, e.g., Zucker v. Five Towns College, 2010 WL 3310698 (E.D.N.Y. 2010) (granting motion to dismiss, finding that allegations concerning plaintiff’s satisfactory work performance, termination, and much younger replacement do not -- by themselves -- suffice to plead an age discrimination claim). If a motion to dismiss is available, it could save discovery costs or possibly paying an in terrorem settlement to avoid those discovery costs. An ill-conceived motion to dismiss, however, only runs up unnecessary costs and, in the view of the deciding judge, may undermine the credibility of any subsequent motion for summary judgment. Dig down deep into the case law to find cases within the jurisdiction in which complaints with similar factual allegations have been dismissed.
Sun Tzu: There is no instance of a country having benefited from prolonged warfare.
Winning after expensive discovery and an expensive trial is not, in Sun Tzu’s philosophy, truly “winning.” This brings us to the concept of a “reasonable” settlement. Often times, there is a fear that if we settle, every terminated employee will believe they can exact a payout upon the mere presentation of a complaint, even if that complaint is utterly specious. On the flip side, standing on principle and “fighting to the death” is expensive and time-consuming.
Perhaps the most important thing to consider with such a conundrum is: who is our judge? Some judges have no problem granting pre-trial motions to dismiss or for summary judgment. Other judges virtually never grant a pre-trial motion. Knowing this at the outset is critical. Even if standing on principle is important, if you know that winning the case will in all likelihood require the cost of a full blown trial, settling at the inception of the case for less than the defense costs to win at trial (and taking away the risk of losing at trial and paying prevailing party fees) may be the better part of valor.
Sun Tzu: Hence to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.
At first blush, this sounds vastly easier said than done. But, one way to subdue an enemy in employment cases is to make the enemy defend against a counterclaim. In our experience, viable counterclaims are often overlooked. Enter the “faithless servant” doctrine. If a former employee plaintiff has been terminated for misconduct, that employee may be subject to a claw-back of all of the compensation he/she was paid during the period of such misconduct. The possibility of not only losing the employment claim but also having to forfeit back already received compensation dramatically changes the leverage in terms of settlement or making the plaintiff simply go away. See, e.g., William Floyd Union Free Sch. Dist. v. Wright, 61 A.D.3d 856, 877 N.Y.S.2d 395 (2d Dep't 2009) (affirming grant of summary judgment which required employees to forfeit all compensation during the period of their disloyalty and to forfeit all forms of deferred compensation).
Sun Tzu: If we do not wish to fight, we can prevent the enemy from engaging us even though the lines of our encampment be merely traced out on the ground. All we need do is to throw something odd and unaccountable in his way.
Something “odd and unaccountable” in the eyes of a plaintiff, and most particularly in the eyes of a plaintiff’s lawyer, is the possibility of fee-shifting not just against the plaintiff, but also against the plaintiff’s lawyer. The availability of prevailing party fees to the plaintiff creates a Damoclean incentive to settle. Little known, however, is that in some cases the threat of fees against the plaintiff, and more specifically the plaintiff’s lawyer, can quickly level that playing field.
A hidden gem in federal law allows for full fee-shifting against a plaintiff’s lawyer who has been put on notice that the plaintiff’s complaint is frivolous. 28 U.S.C. § 1927. While a plaintiff’s lawyer may initially laugh off such a threat, do not hesitate to send the lawyer a case where a substantial fee shift was imposed. See, e.g., Capone v. Patchogue-Medford Union Free Sch. Dist., 2006 U.S. Dist. LEXIS 96016 (E.D.N.Y. 2006) (imposing full fee-shifting against plaintiff’s counsel in employment case). When done right (notice, etc.), a fee-shifting claim can be a potent weapon in an employer’s self-defense arsenal.
Conclusion
Litigation is about strategy -- playing offense when available, breaking the enemy when possible, and avoiding a prolonged fight. There is no one rote method of responding to an employment discrimination claim. In-house counsel and human resources executives should be provided by their counsel with a full range of options and facts to support those options, particularly as to whether the current case -- as assigned to a specific judge -- ought to be quietly and quickly settled or vigorously litigated.
On July 15, 2014, the Occupational Safety and Health Administration ("OSHA") issued a policy memorandum to its Regional Administrators, explaining in greater detail the agency’s Temporary Worker Initiative ("TWI"). The TWI, which was launched on April 29, 2013, is an initiative intended to prevent work-related injuries and illnesses among temporary workers. Employers who have temporary employees hired through staffing agencies should be aware that OSHA has a particular focus on the health and safety of those temporary employees, and should ensure that those temporary employees are provided with proper protective equipment and training to minimize any potential workplace hazards. Perhaps the most interesting portion of the memorandum is the agency’s explanation that “in general, OSHA will consider the staffing agency and host employer to be ‘joint employers’ of the workers in this situation” and, thus, that both employers will be responsible for protecting the safety and health of the worker. OSHA noted that these “obligations will sometimes overlap” and that -- depending on the circumstances of any violations of the Act -- the agency will “consider issuing citations to either or both of the employers.” Notably, while the memorandum states that a host employer will normally have “primary responsibility for determining the hazards in their workplace and complying with worksite-specific requirements,” it adds that the temporary agency or staffing firm also has a “duty to diligently inquire and determine what, if any, safety and health hazards are present at their client’s workplaces.” The memorandum includes the following example: “If a staffing agency is supplying workers to a host where they will be working in a manufacturing setting using potentially hazardous equipment, the agency should take reasonable steps to identify any hazards present, to ensure that workers will receive the required training, protective equipment, and other safeguards, and then later verify that the protections are in place." The memorandum indicates that additional bulletins and a compliance directive regarding the TWI will be issued.
On July 31, 2014, President Obama signed the "Fair Pay and Safe Workplaces" Executive Order, which requires bidders on federal procurement contracts for goods and services (including construction) in excess of $500,000 to disclose labor law violations that have occurred within the three-year period immediately preceding the bid. In addition, the Executive Order requires federal contractors to provide individuals who perform work under the federal contract with information regarding hours worked, overtime hours, pay, and any additions made to or deductions made from pay. The Executive Order also prohibits federal contractors with contracts in excess of $1,000,000 from entering into mandatory pre-dispute arbitration agreements with their employees or independent contractors to resolve complaints under Title VII of the Civil Rights Act ("Title VII") or tort claims arising out of alleged sexual assault or harassment.
For procurement contracts for goods and services, including construction, where the estimated value of the supplies acquired and services required exceeds $500,000, each bidder must disclose whether there has been any administrative merits determination, arbitral award or decision, or civil judgment against the bidder within the preceding three-year period for violations of any of the following labor laws and Executive Orders:
the Fair Labor Standards Act;
the Occupational Safety and Health Act;
the Migrant and Seasonal Agricultural Worker Protection Act;
the National Labor Relations Act;
the Davis-Bacon Act;
the Service Contract Act;
Executive Order 11246 (Equal Employment Opportunity)
Section 503 of the Rehabilitation Act;
the Vietnam Era Veterans' Readjustment Assistance Act;
the Family and Medical Leave Act;
Title VII;
the Americans with Disabilities Act;
the Age Discrimination in Employment Act;
Executive Order 13658 (Minimum Wage for Federal Contractors); and
equivalent state laws.
A bidder's disclosure of labor law violations will not necessarily automatically disqualify the bidder from receiving the federal contract, but the information will be considered in determining whether the bidder is a responsible source that has a satisfactory record of integrity and business ethics. Federal contractors are also obligated to require prospective subcontractors to disclose labor law violations within the preceding three-year period, and are required to consider the information obtained in awarding subcontracts. During the performance of a federal contract, each federal contractor subject to the Executive Order is required to update its own labor law violation disclosure and to obtain an updated labor law violation disclosure from each subcontractor every six months.
Federal contractors who are awarded procurement contracts for goods and services (including construction) in excess of $500,000 are also required to provide each individual performing work under the contract with a document containing information regarding the individual's hours worked, overtime hours, pay, and any additions made to or deductions made from pay. Employees who are exempt from the overtime compensation requirements of the Fair Labor Standards Act need not be given information regarding their hours worked. Compliance with any state or local requirements that the Secretary of Labor has determined are "substantially similar" to the requirements of the Executive Order (such as, presumably, the requirements of the Wage Theft Prevention Act) will be deemed compliance with the terms of the Executive Order. If a federal contractor is treating an individual performing work under the federal contract or subcontract as an independent contractor, the federal contractor must provide the individual with a document informing the individual of this status.
Finally, the Executive Order provides that for all contracts where the estimated value of the supplies acquired and services required exceeds $1,000,000, federal contractors and subcontractors must agree that the decision to arbitrate claims under Title VII or tort claims arising out of alleged sexual assault or harassment may only be made with the voluntary consent of employees or independent contractors after the dispute arises. Thus, federal contractors and subcontractors may not enter into mandatory arbitration agreements with employees or independent contractors to resolve Title VII claims or sexual assault/harassment tort claims before a dispute actually arises. This prohibition does not apply to employees who are covered by a collective bargaining agreement, nor does it apply to employees or independent contractors who entered into a valid arbitration agreement prior to the contractor or subcontractor bidding on a contract covered by the Executive Order.
The Executive Order directs the Federal Acquisition Regulatory ("FAR") Council (in consultation with the Department of Labor and the Office of Management and Budget) to amend the Federal Acquisition Regulation to identify considerations for determining whether serious, willful, or pervasive violations of the labor laws demonstrate a lack of integrity or business ethics. In addition, the Secretary of Labor is directed to develop guidance and processes to implement the provisions of the Executive Order. The Executive Order will apply to all solicitations for contracts as set forth in any final rule issued by the FAR Council.
On July 14, 2014, the U.S. Equal Employment Opportunity Commission ("EEOC") issued its Enforcement Guidance on Pregnancy Discrimination and Related Issues. The purpose of the Enforcement Guidance is to explain the EEOC’s current interpretations of the Pregnancy Discrimination Act of 1978 ("PDA") and the interplay between the PDA and the Americans with Disabilities Act ("ADA"). This interplay is important because although pregnancy by itself is not a disability under the ADA, it is often accompanied by one or more medical impairments which would entitle an employee to the ADA’s protections.
Perhaps the most significant take-away from the new Enforcement Guidance concerns those situations when the PDA and ADA do not overlap, i.e., when pregnant employees do not have ADA-covered disabilities. The EEOC’s interpretations make clear that it views pregnancy as a preferred status for enforcement and litigation purposes, such that pregnancy alone can give rise to certain job protections that would not be afforded to comparable non-pregnant co-workers.
As an amendment to Title VII of the Civil Rights Act of 1964, the PDA prohibits discrimination on the basis of an applicant's or employee’s pregnancy, childbirth, or related medical conditions. It requires that women affected by pregnancy be treated the same as non-pregnant employees who are “similar in their ability or inability to work.” Courts generally interpret this to mean that employers need not adjust their normal policies and practices to accommodate work restrictions caused solely by pregnancy. This is unlike under the ADA, which affirmatively requires that employers reasonably accommodate otherwise qualified individuals who are unable to perform the essential functions of their jobs due to disabilities.
Despite earlier court decisions, the EEOC Enforcement Guidance instructs that employers must generally honor work restrictions for pregnant employees, even if no ADA-covered condition exists to require a workplace accommodation. Similarly, if an employer provides light duty assignments to employees who experience on-the-job injuries (as many employers do to lower workers’ compensation costs), it is the EEOC’s position that pregnant employees must be given the light duty option. This is the EEOC's view even if light duty work is not available to similarly situated employees whose job restrictions result from an injury suffered outside of the workplace.
The EEOC issued its Enforcement Guidance less than two weeks after the U.S. Supreme Court decided to hear the case of Young v. UPS, Inc. The Fourth Circuit held in Young that the PDA does not require pregnancy-related accommodations or light duty assignments since this would effectively grant non-disabled pregnant employees preferential treatment relative to co-workers who are not otherwise covered by the ADA or an employer’s light duty policy (such as an individual who suffered a temporary, off-the-job injury) – a result which was never intended by Congress. Critics view the Enforcement Guidance as an attempt by the EEOC to politicize a question of judicial interpretation in advance of the Supreme Court ruling.
The Enforcement Guidance also describes the EEOC’s position on other pregnancy-related issues affecting the workplace, which will be discussed in a future blog article. In the meantime, as we noted in our January 2, 2013, blog post, the issue of accommodating pregnancy-related limitations will continue to be one of the EEOC’s top enforcement priorities. Accordingly, prudent employers should evaluate their internal policies and practices for compliance with current legal standards, and ensure that those policies and practices are being applied in a consistent and non-discriminatory manner.
The EEOC has also issued a Questions & Answers to summarize its new Enforcement Guidance, as well as a Fact Sheet for Small Businesses.
On July 22, 2014, Governor Cuomo signed a bill that amends the New York Human Rights Law by adding a new Section 296-c entitled, “Unlawful discriminatory practices relating to interns.” The amendment prohibits employers from discriminating against unpaid interns and prospective interns on the basis of age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, or domestic violence victim status, with respect to hiring, discharge, and other terms and conditions of employment. The amendment further prohibits employers from retaliating against unpaid interns who oppose practices forbidden under the Human Rights Law or who file a complaint, testify, or assist in a proceeding brought under the Human Rights Law. The amendment also makes it unlawful for employers to compel an intern who is pregnant to take a leave of absence, unless the pregnancy prevents the intern from performing the functions of the internship in a reasonable manner. The amendment also prohibits employers from subjecting interns to sexual harassment or any other type of harassment based on a protected category. This legislation was introduced following a 2013 case in which the United States District Court for the Southern District of New York dismissed a sexual harassment claim asserted by an unpaid intern who alleged that her boss had groped her and tried to kiss her. In that decision, the Court was bound by the language of the statute that existed at that time and the court decisions interpreting that language, which provided that the Human Rights Law only applied to paid employees and did not apply to unpaid interns. The purpose of the legislation is to give unpaid interns the same right to be free from workplace discrimination and harassment as paid employees. Employers who have unpaid interns or expect to have unpaid interns in the future should consider revising their anti-discrimination and anti-harassment policies to explicitly provide that discrimination and harassment against interns will not be tolerated, and that complaints made by interns regarding alleged unlawful harassment will be investigated in the same manner as complaints made by employees. In addition, as we noted in a 2010 blog post, employers should also make sure that unpaid interns truly qualify as unpaid interns, and would not be considered "employees" who are entitled to the minimum wage and overtime protections of the Fair Labor Standards Act and New York wage and hour laws.
