When an employee or former employee files a discrimination charge with the Equal Employment Opportunity Commission ("EEOC"), the first step in the investigation is generally the EEOC's request for a position statement from the employer in response to the charge.  Although many employers depend on their labor and employment counsel to gather the necessary information and submit the position statement on their behalf, some employers choose to handle the submission of the position statement themselves.  Employers that submit their own responses should be aware that the EEOC has published new procedures for how it will handle the release of information contained in employer position statements to the charging party.  The EEOC's new procedures and a Q&A for employers can be found on the EEOC's web site here. According to these new procedures, the EEOC will begin releasing employer position statements and “non-confidential attachments” to the position statements to a charging party upon request during the EEOC’s investigation.  The charging party will be permitted to submit a response to the EEOC investigator.  Notably, the EEOC procedures advise charging parties that they can submit this response in writing or they can simply call the investigator to discuss their response.  Employers will not be able to receive a copy of the charging party’s response, even if it is submitted in writing. Historically, a charging party’s ability to obtain the employer’s position statement and/or exhibits varied depending upon the individual procedures of each EEOC District Office.  These new nationwide procedures are intended to make the EEOC’s approach uniform across all offices. Under these new procedures, an employer that submits a position statement is directed to refer to, but not identify, the information it considers “confidential” and to provide that information in a separate attachment that will not be shared with the charging party.  Justification must be included to explain the segregation of this information.  This “confidential” information includes, and must be labeled as, one of the following:

• sensitive medical information (except for the charging party’s medical information);
• social security numbers;
• confidential commercial or financial information;
• trade secret information;
• non-relevant personally identifiable information of witnesses, comparators, or third parties, such as social security numbers, dates of birth in non-age cases, home addresses, phone numbers, etc.; or
• any references to charges filed against the employer by other charging parties.

These new procedures apply to all EEOC requests for employer position statements on or after January 1, 2016.

As we reported in a previous blog post, the Office of Federal Contract Compliance Programs (“OFCCP”) Final Rule implementing Executive Order 13665 (titled Non-Retaliation for Disclosure of Compensation Information) took effect on January 11, 2016.  This Executive Order amended Executive Order 11246 by prohibiting Federal contractors from discharging or discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant. The new Rule applies to Federal contractors who enter into or modify existing covered Federal contracts greater than $10,000, on or after January 11, 2016.  The new Rule also requires Federal contractors to:  (1) revise the “equal opportunity clause” to include the new non-discrimination provision in contracts, subcontracts, and purchase orders; (2) incorporate an OFCCP-prescribed non-discrimination provision into existing employee manuals and handbooks; and (3) disseminate the non-discrimination provisions to employees and job applicants. The OFCCP has created two versions of the mandatory non-discrimination provision:

• One formatted with the OFCCP’s logo and contact information to be posted electronically or printed and posted on an employer’s premises.
• A second version which includes only the required language.  At a minimum, Federal contractors must use this prescribed language.

With the Final Rule already in effect, contractors should ensure their policies are in compliance with the non-discrimination provisions, make sure the OFCCP non-discrimination provision is included in handbooks or manuals and disseminated to employees and applicants, and ensure their “equal opportunity clause” in contracts, subcontracts and purchase orders is in compliance.

Employers face claims of retaliation at an increasingly alarming rate.  Nearly 43% of all charges filed with the U.S. Equal Employment Opportunity Commission (EEOC) in FY 2014 included some allegation of retaliatory conduct.  While retaliation is by no means a new concern for the EEOC, the Proposed Enforcement Guidance on Retaliation and Related Issues issued on January 21, 2016 shows very clearly that the agency intends to take an even more aggressive approach to address what it perceives as an epidemic of retaliation affecting the workplace. The EEOC last issued guidance on the topic of retaliation in 1998.  Since then, the percentage of retaliation charges has almost doubled and the U.S. Supreme Court has issued several significant decisions concerning the scope of the anti-retaliation protections under federal employment statutes, as discussed here.  Citing this backdrop, the EEOC chose to issue the proposed guidance to make known the agency’s current position on several key topics relating to retaliation.  Although not carrying the weight of law or regulation, the enforcement guidance, once adopted, will establish the various standards EEOC staff can be expected to apply while investigating charges or litigating cases. Perhaps not surprisingly, the EEOC’s proposed guidance advances a broader, claimant-friendly application of federal anti-retaliation statutes.  For instance, the EEOC’s classification of conduct as either “participation activity” or “opposition activity” – the two types of activities protected by most federal employment laws – differs sharply from the standard applied almost universally by courts.  Whereas nearly all courts hold that participation activity requires some connection to the administrative or litigation process (such as filing a charge or serving as a witness), the EEOC takes the position that even making an internal complaint with an employer constitutes participation activity.  This is significant because, unlike with opposition activity – which filing an internal complaint unquestionably is – an employee need not reasonably believe that unlawful discrimination actually occurred for participation activity to be cloaked with statutory protection.  In other words, according to the EEOC, an employee should be able to lodge a knowingly baseless internal complaint of discrimination without any potential for repercussion.  This is a dramatic departure from the current state of the law. Also, while the EEOC acknowledges that opposition activity is only protected if the manner of opposition is reasonable, the proposed guidance would make it extremely difficult for an employer to ever establish that an employee’s conduct was so outrageous that it loses the protection of federal anti-retaliation laws.  For example, the EEOC states that protected opposition activity may include engaging in a production slow-down, writing critical letters to customers, or protesting against discrimination in an industry or society in general – without any connection to a specific workplace – even if that conduct causes the employer financial harm. The proposed guidance shows that the EEOC intends to push the limits of federal anti-retaliation laws to expand the scope of employee protections.  To prepare for this, employers should re-evaluate their policies and procedures to ensure that the appropriate mechanisms are in place to minimize even the specter of retaliation.  In this regard, the proposed guidance lists several “best practices” that the EEOC believes employers should follow, including:

• Maintaining written policies which provide examples of prohibited retaliation, a complaint procedure, and a clear explanation that engaging in retaliation can result in discipline, up to and including termination;
• Training all managers, supervisors and employees on the employer’s written anti-retaliation policy and emphasizing to all employees that the employer will not tolerate retaliation;
• Establishing a protocol to remind managers or supervisors who are accused of discrimination of the employer’s anti-retaliation policy, and to provide tips to help managers and supervisors avoid engaging in conduct which might constitute unlawful retaliation or be perceived as such;
• Following up with employees, managers and witnesses while an EEO matter is pending to ask if they have any concerns about potential or perceived retaliation; and
• Reviewing proposed employment actions, ideally by designating a management or human resources representative who can ensure that employees or witnesses involved in an EEO matter are not subjected to unlawful retaliation.

The EEOC’s proposed guidance is open for public comment until February 24, 2016.

As reported in our November 9, 2015 blog post, the present STEM OPT rule which allows F-1 students with U.S. degrees in science, technology, engineering or mathematics (STEM) to extend their optional practical training (OPT) by 17 months was to expire on February 12, 2016, unless the U.S. Department of Homeland Security (DHS) could publish and promulgate a new rule.  The present STEM OPT extension rule had been vacated by the U.S. District Court for the District of Columbia in August 2015 for procedural deficiencies in its promulgation, but the court’s ruling was stayed until February 12, 2016, so DHS could publish a new rule for public comment and prevent hardship to the thousands of F-1 students employed in the U.S. on STEM OPT and the companies that employ those individuals. Our November 9, 2015 blog post detailed some of the highlights of DHS’ proposed STEM OPT extension rule which was published for comment in the Federal Register on October 19, 2015.  The DHS received an overwhelming 50,000 plus comments to the proposed rule and, a few days before the Christmas holiday, asked the court for a 90-day extension of the existing STEM OPT rule so it could address the comments and begin to train DHS officers on the intended changes to the STEM OPT program.  Following additional pleadings by DHS and Washington Alliance of Technology Workers (WashTech) — the plaintiff in the case that was before the U.S. District Court for the District of Columbia — the court, last Saturday, delayed its order terminating the STEM OPT rule as of February 12, 2016, and granted the DHS an additional 90 days to revise its proposed STEM OPT rule.  The court extended the sunset date of the STEM OPT extension rule to May 10, 2016, and warned DHS that no further extensions would be granted. As a result of this determination, those F-1 student employees with STEM OPT remain authorized to work in the U.S., at least through May 10, 2016.  However, WashTech’s counsel has indicated that an appeal of the decision to extend the sunset date by 90 days would be filed with the D.C. Circuit immediately. We will continue to keep you informed of further developments in this matter so you and your employees can plan accordingly.

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.

On December 28, 2015, Governor Cuomo signed a bill repealing Civil Service Law § 75-b(2)(b).  This has a significant effect on the anti-retaliation provisions of New York’s “whistle blower” protection statute for public employees who report to a governmental body either (a) violations of a law, rule or regulation, or (b) something which an employee reasonably believes to be “improper governmental action." Civil Service Law § 75-b protects public employees who are whistle blowers against retaliation by public employers (which includes the State of New York, counties, cities, towns, villages, and school districts).  As originally enacted, § 75-b(2)(b) (now repealed) required that a public employee, in order to invoke the anti-retaliation protection, first “shall have made a good faith effort to provide the appointing authority or his or her designee the information to be disclosed and shall provide the appointing authority or designee a reasonable time to take appropriate action unless there is imminent and serious danger to public health or safety.” With the repeal, there now appears to be no requirement that the employee report the issue internally before taking it to another governmental body.  While no doubt well-intentioned, the repeal may very well empower disgruntled employees to pepper regulatory and criminal authorities with complaints of alleged misconduct. In addition to the fact that public employers should generally be aware of this change, public employers should also examine and review their existing whistle blower policies to determine if any revisions should be made.

In Whole Foods Market, Inc., the National Labor Relations Board, in a 2-1 decision, held that Whole Foods' rules prohibiting the recording of conversations in the workplace violated Section 8(a)(1) of the National Labor Relations Act.  The two rules that were found to be unlawful were nearly identical.  Both appeared in the company's General Information Guide, a guide that applied to all employees. The first rule prohibited the recording of company meetings without prior approval from store management, and the second rule prohibited all recording in the workplace without similar prior approval.  The stated purpose of both rules (as set forth in the Guide) was to encourage open conversation and dialogue, and to eliminate the chilling effect that may exist when someone is concerned a conversation is being secretly recorded. Contrary to the stated purpose of the rules (to encourage open and honest communication), the Board majority instead found that such rules would reasonably be interpreted by employees to prohibit them from engaging in protected Section 7 activity.  The Board majority reasoned that such rules would unlawfully prohibit employees from engaging in Section 7 activity such as (1) recording images of protected picketing, (2) documenting hazardous working conditions, or (3) documenting and publicizing various issues relating to terms and conditions of employment.  The Board majority rejected the employer’s (and the dissent’s) contention that the stated intent of the rules (to encourage open and honest communications in the workplace without fear of surreptitious recordings) constituted a valid overriding employer interest to justify the rules. So, it is clear that the current Board will likely find no-recording rules in the workplace to be a violation of the NLRA unless the employer can establish a valid overriding interest to justify such rules.  Considering the current pro-union makeup of the Board, establishing such an overriding interest will likely be difficult, and such rules will be aggressively scrutinized.  Nonetheless, certain narrowly tailored restrictions supported by valid business justifications may be upheld by the Board.  For example, a rule prohibiting the recording of meetings in which confidential information or trade secrets are discussed, or a rule prohibiting the recording of conversations involving private client or patient information, may be found to be lawful.  However, at this point, employers should be wary of imposing broad no-recording rules in the workplace. Employers may require employees to follow applicable state or federal laws regarding secret recordings.  The impact of an employer's ability to impose this restriction is limited in New York, where an individual may lawfully record a conversation as long as the individual doing the recording is a party to the conversation.  However, an employer's ability to impose this restriction would have a significant impact in states such as Massachusetts and California, where the law requires that all parties to a conversation must consent to the recording of the conversation. The Board's decision in the Whole Foods case may not necessarily be the last word on this issue, because the company has appealed the decision to the Second Circuit Court of Appeals, which may be more sympathetic to the valid business justification for the company's no-recording rules.  However, it may be worthwhile for employers to consider whether they currently have policies in their employee handbooks that prohibit recordings in the workplace, and if so, whether those policies should be revised.  Employers should consult with legal counsel to assess the potential valid business justifications for the policies and to review any recording laws that may be applicable to employees in particular locations.  Both the valid business justifications and any legal restrictions on recordings in the workplace should be expressly stated in the policies.

Human resource officers and managers are often asked to chair or sit on a retirement plan committee responsible for administrative tasks.  In this role, a committee member takes on fiduciary responsibilities to plan participants and beneficiaries, and can be held personally liable for fiduciary breaches under Federal law.  As legal counsel, we endeavor to manage this risk for our clients through guidance on good governance, indemnification protection, and the adoption of effective policies.  Effective management of employee benefit plans will meet this fiduciary duty to participants while at the same time improving results for employees and minimizing potential liability exposure of plan managers. We are sometimes asked to review a proposed investment policy statement or IPS related to a 401(k) or 403(b) retirement plan.  Although these plans are not required to have an IPS, we recommend having one as a guide for prudent plan administration.  Most plan service providers and record keepers will have a standard form or model available for use by the employer adopting the plan.  Models can be useful, but any model should not be adopted without discussion and agreement with its terms.  Because an IPS is a policy of the employer in its role as plan administrator, and not one of the outside record-keeper or financial consultant, it’s important for a plan committee to discuss and “own” its policies.  Furthermore, a carefully-designed policy will not create additional responsibilities for a plan committee or officer beyond those imposed by law. An effective IPS will describe the roles and duties of a plan committee, other responsible officers, or plan service providers.  It provides a framework and process for investment decisions as well as indemnification for employees who are charged with fiduciary duties.  In many cases, there may be a financial advisor or consultant who is engaged to carry out the policy in some capacity.  Once a policy has been discussed and adopted, it is an aid in running efficient committee meetings and in working effectively with outside service providers.  Adopting a well-crafted IPS is an important element of prudent plan administration. An IPS should not dictate how many investment choices will be available for participants or the asset categories to be covered by plan options.  Using factors described in the policy, a plan committee can handle the tasks of monitoring current options, assessing their potential for future performance, and making changes in a plan’s fund options.  By creating and following a disciplined investment policy, a plan committee greatly reduces its risk of fiduciary liability when investment markets become volatile. There is a downside in adopting an IPS and then ignoring it.  Our experience has been, however, that once discussed and adopted, an IPS brings better focus and engagement by committee members, more efficient meetings, and a higher level of fiduciary performance on behalf of plan participants.  We have developed model policies that, together with proposals from plan service providers, can form the basis for your own policy.

Under the heading of “better late than never,” the IRS has recognized that “some employers, insurers, and other providers of minimum essential [i.e., health] coverage need additional time to adapt and implement systems and procedures to gather, analyze, and report” the information required on Forms 1094-B, 1095-B, 1094-C, and 1095-C for the 2015 calendar year.  It has delayed the due dates for providing the required forms to both individuals and the IRS as follows:

• The due date for providing forms to individuals on 1095-B and 1095-C is extended from February 1, 2016 to March 31, 2016.
• The due date for filing with the IRS is extended from:
  • February 29, 2016 to May 31, 2016 if not filing electronically (for employers who filed fewer than 250 W-2s in the prior year), and
  • March 31, 2016 to June 30, 2016 if filing electronically.

Employers or other coverage providers who do not comply with the extended due dates are subject to penalties, which may be abated for reasonable cause based on facts and circumstances. Because of the delay, individuals who file tax returns based on other information from their employers about their offers of coverage for purpose of determining whether they are eligible for a premium tax credit for health insurance marketplace coverage will not be required to file amended tax returns once they receive their Forms 1095-C or any corrected 1095-C.

As we reported previously, the New York State Department of Labor (“NYSDOL”) proposed a series of new regulations earlier this year.  These proposals included new regulations raising the minimum wage and reducing the maximum available “tip credit” for certain workers in the hospitality industry, and new regulations implementing the recommendation of Governor Cuomo’s Fast Food Wage Board to raise the minimum wage for fast food workers to $15.00 per hour.  Today, both sets of regulations were formally adopted and published in the New York State Register. These new regulations are effective on December 31, 2015, and contain no changes from what NYSDOL originally proposed earlier this year. For more information about these regulations, readers can access our prior blog article.  Among other things, as of December 31, 2015, certain tipped workers who fall under New York’s Hospitality Industry Wage Order must be paid at least $7.50 per hour and may only receive a maximum “tip credit” of $1.50 per hour.  Also, as of this same date, covered fast food workers must be paid at least $9.75 per hour if they are employed outside of New York City or at least $10.50 per hour if they are employed inside of New York City.  These minimum wages for covered fast food workers are set to automatically increase annually, eventually reaching $15.00 per hour on December 31, 2018 in New York City and on July 1, 2021 in all other areas of New York. There may be legal challenges to these recently-adopted regulations, in particular the regulations impacting employers in the fast food industry.  We will continue to report any noteworthy developments here.

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.

In the classic 1980's comedy "Say Anything," the iconic high school senior Lloyd Dobler articulates his career goals as follows: "I don't want to sell anything, buy anything, or process anything as a career.  I don't want to sell anything bought or processed, or buy anything sold or processed, or process anything sold, bought, or processed, or repair anything sold, bought, or processed.  You know, as a career, I don't want to do that." A cursory Google search reveals that this 25 year old quote still resonates with much affection.  But what may be deemed a charming lack of ambition from a teenaged movie character can be the death knell of a First Amendment case brought by a plaintiff who turns this quote into a veritable workplace mantra. Take for example the recent case of Alves v. Board of Regents of the University System of Georgia.  In Alves, five psychologists of the Georgia State University Counseling Center submitted a written memorandum to the Counseling Center's director and the director's supervisor, criticizing the director's leadership and management, which they claimed "created an unstable work environment" and prevented the staff from being effective in their work.  The memorandum set forth five areas of concern, including deficiencies in management, witness tampering, and selective treatment of staff based on race. A short time later, the director implemented a reduction in force affecting all the staff psychologists, all but one of whom were signatories to the memorandum, and outsourced their services at allegedly lower costs.  The five psychologists who had signed the memorandum filed a First Amendment retaliation suit, claiming that they were fired for the "speech" contained in the memorandum, which they contended was made by them as ordinary citizens on matters of public concern. The defendants moved for summary judgment dismissing the complaint, arguing that under the Supreme Court's decision in Garcetti v. Ceballos, the memorandum was written about matters of only personal interest pursuant to the plaintiffs' official duties as employees, rather than about matters of public concern.  The lower court agreed with the defendants and dismissed the complaint, which resulted in an appeal to the Eleventh Circuit Court of Appeals. On appeal, the five psychologists employed a Dobleresque view of their job responsibilities, arguing that raising ethical issues and protesting alleged supervisory incompetence were simply not within the ordinary ambit of their job duties.  In other words, according to the plaintiffs, their job was only to provide counseling services to students -- not to "process" or "repair" anything within the broader universe of their workplace.  The Eleventh Circuit disagreed and affirmed the dismissal of the plaintiffs' complaint.  The Court found that the plaintiffs' protests were in furtherance of their ability to perform their job responsibilities with the goal of ending perceived mismanagement.  The Court determined that these were matters of personal interest rather than public concern, and therefore, were not protected by the First Amendment. The long and short of Alves and the cases that follow similar reasoning is that while a public employee may say anything in a lawsuit to try to limit their true job responsibilities, lack of ambition, whether real or feigned, is rewarded with applause only in the movies.