As we reported in an earlier blog post, the National Labor Relations Board issued the American Baptist Homes of the West (“Piedmont Gardens”) decision in December 2012, overturning more than 30 years of precedent shielding witness statements from disclosure.  In June 2014, however, the Supreme Court handed down the Noel Canning decision, in which it found that President Obama’s January 2012 Board appointments were invalid and thus the Board lacked the necessary quorum of three members to issue valid decisions from that date until August 2013 (when a full five-member Board was properly appointed).  As Piedmont Gardens was one of the Board decisions invalidated by the Noel Canning ruling, the Board issued an order setting aside the decision but retained the case on its docket. After reconsidering the case, the Board issued a decision on June 26, 2015, reaffirming its earlier decision.  In doing so, the Board overruled the blanket exemption -- first established by the Board’s 1978 Anheuser Busch decision -- that allowed employers to withhold witness statements in response to pre-arbitration requests for information.  Arguing that the Anheuser Busch rationale was “flawed,” the Board held that such statements are now subject to the same standard applicable to all other union requests for information:  an employer must furnish “relevant” information that is “necessary” to the union’s proper performance of its duties as collective bargaining representative. Under this new standard, an employer that seeks to withhold the production of witness statements on “confidentiality” grounds must first establish that:  (i) witnesses need protection; (ii) evidence is in danger of being destroyed; (iii) testimony is in danger of being fabricated; and (iv) there is a need to prevent a cover-up.  As the Board took pains to point out, “a legitimate and substantial confidentiality interest requires more than a generalized desire to protect the integrity of employment investigations.” If the required confidentiality showing can be made, the Board would then weigh the employer’s interest in confidentiality against the union’s need for the information.  Even if the Board finds that the confidentiality interest outweighs the union’s need, the employer cannot simply refuse to provide the information but “must seek an accommodation that would allow the [union] to obtain the information it needs while protecting the [employer]’s interest in confidentiality.” This decision places yet another unnecessary burden upon employers.  The Board cites no evidence that the old standard hamstrung unions in performing their collective bargaining duties.  Under Anheuser Busch, unions were still entitled to witness names and could conduct their own investigations.  Now employers can offer no assurance of confidentiality to employees, who will likely be more hesitant than ever to provide truthful accounts against their union brethren for fear of reprisal. In the wake of this decision, employers should reassess their investigatory methods, including best practices for preserving confidentiality, and avoid blanket rejections of union requests for witness statements.

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 July 22, 2015, the Fast Food Wage Board (which was empaneled at the direction of Governor Cuomo to investigate and make recommendations regarding an increase in the minimum wage for employees in the fast food industry) passed a resolution recommending that the minimum wage for employees in the fast food industry be raised to $15.00 per hour.  The recommended increase will be phased in to take effect by December 31, 2018, in New York City, and by July 1, 2021, for the rest of the state.  Governor Cuomo has publicly applauded the Wage Board's recommendation, which will almost certainly be accepted and adopted by the Commissioner of Labor. Assuming the Commissioner of Labor issues an order accepting the Wage Board's recommendation, the fast food hourly minimum wage in New York City will increase to $10.50 on December 31, 2015, $12.00 on December 31, 2016, $13.50 on December 31, 2017, and $15.00 on December 31, 2018.  The fast food hourly minimum wage in the rest of the state will increase to $9.75 on December 31, 2015, $10.75 on December 31, 2016, $11.75 on December 31, 2017, $12.75 on December 31, 2018, $13.75 on December 31, 2019, $14.50 on December 31, 2020, and $15.00 on July 1, 2021.  At this point, the minimum wage for all employees is $8.75 per hour.  On December 31, 2015, the minimum wage will go up to $9.00 per hour for all employees except fast food employees, who will be entitled to the higher minimum wage recommended by the Wage Board. In the Wage Board's resolution, "fast food employee" is defined as any person employed or permitted to work at or for a fast food establishment where the person's job duties include at least one the following:  customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.  The Wage Board's resolution does not contain any exemption for high school or college students, who often seek part-time jobs in the fast food industry and who generally are not trying to support themselves or their families on their income. The term "fast food establishment" is defined as any establishment in New York serving food or drinks:  (1) where customers order and pay for their items before eating, and the items may be consumed on the premises, taken out, or delivered; (2) which offers limited service; (3) which is part of a chain; and (4) which is one of 30 or more establishments nationally.  The definition includes a franchisee who owns and operates only one fast food restaurant in New York State, if the franchisor and all other franchisees of the franchisor own and operate at least 30 such restaurants nationwide. If the Commissioner of Labor adopts the Wage Board's recommendation as expected, the Commissioner's order could be subject to legal challenges based on its selective targeting of the fast food industry and potentially other grounds.  It remains to be seen whether this minimum wage increase for employees in the fast food industry will withstand judicial scrutiny.

On July 15, the U.S. Department of Labor's Wage and Hour Division ("WHD") issued Administrator’s Interpretation No. 2015-1, which provides guidance regarding the misclassification of employees as independent contractors.  According to the WHD Administrator's Interpretation, “most workers are employees” under the Fair Labor Standards Act ("FLSA"). The Administrator's Interpretation notes that the FLSA’s definition of “employee” is extremely broad and basic (“any individual employed by an employer”) and that to "employ" includes to "suffer or permit to work.”  The WHD explains that this definition was intentionally designed to create "as broad of a scope of statutory coverage as possible." In interpreting this broad definition, the WHD rejects the common law "control" test in favor of an “economic realities” test to determine employee or independent contractor status.  The economic realities test focuses on whether a worker is economically dependent on an employer (which would indicate an employment relationship) or in business for herself or himself, (which would indicate an independent contractor relationship).  The WHD evaluates the following six factors in making this determination, with no one factor being dispositive:

1. The extent to which the work performed is an integral part of the employer’s business.
2. Whether the worker’s opportunity for profit or loss depends on his or her managerial skill.
3. The extent of the worker’s investment compared to that of the employer.
4. Whether the work performed requires special business skills, judgment, and initiative.
5. Whether the relationship is permanent or indefinite.
6. The degree of control exercised by the employer over the worker.

According to the WHD, these factors should be evaluated in light of the broad definition of "employee" under the FLSA and the principle that the FLSA should be liberally construed to provide expansive coverage for workers. Misclassifying employees as independent contractors can result in a number of potentially expensive consequences, such as liability for minimum wage and overtime violations, unemployment insurance contributions, workers' compensation coverage, and unpaid employment taxes.  Therefore, organizations that have independent contractor relationships should examine those relationships closely to make sure that they do not cross the line into an employment relationship.  It is also worth noting that, although written agreements with independent contractors can be helpful, they are not dispositive in establishing an independent contractor relationship. Editor's Note:  Our thanks to Luke O'Brien, one of Bond's Summer Law Clerks, who helped prepare this article.

In two recent cases decided on July 2, the Second Circuit Court of Appeals held that in many instances, unpaid interns may not necessarily be employees covered by the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL").  In both cases (Glatt v. Fox Searchlight Pictures and Wang v. The Hearst Corporation), plaintiffs who had obtained internships at major media companies argued that they were entitled to wage payments under the FLSA and NYLL; in addition, they sought to bring their claims as class and/or collective actions, which would drive up the costs of litigation and significantly increase the potential liability.  The Second Circuit adopted a standard that will likely make it more difficult for unpaid interns to establish employment status, and will likely make it more difficult for unpaid interns to litigate their FLSA and NYLL claims in a class or collective action. The Glatt and Wang decisions articulated two principles of great importance to employers considering internship programs.  First and foremost, the Second Circuit rejected a rigid six-point test promulgated by the United States Department of Labor to determine whether interns should be considered employees, and instead adopted a more nuanced test of employment status that examines whether the employer or the intern is the “primary beneficiary” of the relationship.  Second, the Court noted that because the circumstances of the internships at issue in the two cases were fact-specific, there is a high burden which plaintiffs must meet to show the requisite commonality to support a class or collective action. While these cases were pending in the Second Circuit, the college and university community was concerned that an important resource for experiential learning might be foreclosed if employers decided to discontinue their unpaid internship programs because of a concern about FLSA or NYLL liability.  Because of the potential impact on higher education, the American Council on Education (together with six other national consortia of colleges and universities) asked Bond attorneys Shelley Sanders Kehl and E. Katherine Hajjar to file an amicus brief arguing that the Court should consider the educational value of internships.  These arguments were adopted by the Court and featured prominently in its Glatt decision. The Court proposed the following seven (non-exhaustive) factors to be considered in determining who is the “primary beneficiary” in an internship placement, but also recognized that additional factors may be relevant:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation;
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions;
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit;
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar;
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning;
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The Court explained that these considerations require “weighing and balancing all of the circumstances” and that a single factor will not be dispositive for a court to find that an intern is entitled to minimum wage.  The Court went on to observe that its decision reflects the “modern internship,” and the importance of internships in an intern’s formal education.  While the Court recognized that some internships may not pass muster under the primary beneficiary test, it established a protocol for designing internship opportunities that will qualify. This is good news both for interns and for employers, who will likely find it less risky to offer unpaid internships, providing real world experience to complement the formal education of today’s young adults.

The U.S. Department of Labor released its highly anticipated proposed rule on the Fair Labor Standards Act white-collar overtime exemptions today, along with a fact sheet summarizing the proposed rule.  The proposed rule more than doubles the salary requirement to qualify for the executive, administrative, professional, and computer employee exemptions from the current level of $455 per week to an amount that is expected to be $970 per week by the first quarter of 2016, and significantly increases the salary threshold to qualify for the "highly compensated employee" exemption.  The proposed rule also includes a procedure to automatically raise the minimum salary levels to qualify for the white-collar exemptions from year to year without further rulemaking.  The USDOL estimates that nearly five million employees who are currently classified as exempt will immediately become eligible for overtime pay if the proposed rule is adopted as the final rule. The USDOL is proposing to set the salary requirement to qualify for the executive, administrative, professional, and computer employee exemptions at the salary level equal to the 40th percentile of earnings for full-time salaried workers, and the salary requirement to qualify for the highly compensated employee exemption at the salary level equal to the 90th percentile of earnings for full-time salaried workers.  The USDOL used data compiled by the Bureau of Labor Statistics from 2013 in drafting the proposed rule, which provides for a minimum salary level of $921 per week to qualify for the executive, administrative, professional, and computer employee exemptions, and a minimum salary level of $122,148 per year to qualify for the highly compensated employee exemption.  However, the USDOL stated in its Notice of Proposed Rulemaking that it will likely rely on data from the first quarter of 2016 if the proposed rule is adopted, which will result in a projected minimum salary level of $970 per week to qualify for the executive, administrative, professional, and computer employee exemptions. The proposed rule does not include any proposed revisions to the outside sales exemption.  In addition, although there was some speculation that the duties requirements would also be revised to make the exemptions more restrictive, the USDOL's proposed rule does not include any revisions to the duties requirements to qualify for any of the white-collar exemptions.  However, the USDOL stated in its Notice of Proposed Rulemaking that it is nevertheless seeking comments on whether the duties tests are working as intended to screen out employees who are not bona fide executive, administrative, or professional employees.  So, there is still a possibility that the duties requirements could be revised based on comments received by the USDOL about the proposed rule. Employers should immediately begin to assess which employees who are currently classified as exempt will become non-exempt if the proposed rule is adopted as the final rule.

The New York State Department of Labor (“NYSDOL”) recently proposed new regulations governing the payment of employee wages via payroll debit cards – a growing practice among employers.  These draft regulations, which are not yet final or effective, also set forth new requirements governing the payment of wages by direct deposit. Regarding an employer’s use of these so-called “payroll cards,” NYSDOL has previously cautioned that paying employees in this manner raises a number of potential legal issues under the New York Labor Law.  Even so, NYSDOL concurrently opined that employees may be paid lawfully through such payroll cards, so long as certain requirements are met.  For example, according to NYSDOL, employers are required to first obtain written authorization from employees, and employees cannot be subjected to undue fees or encumbrances when accessing their wages through the payroll cards. The proposed regulations track this prior guidance and, if enacted, will codify the specific requirements that must be met in order for employers to lawfully use such payroll cards.  Among other things, employers will be required:  (1) to provide specific, advanced disclosures to employees about the payroll card program in question; (2) to obtain the prior “informed consent” of employees; and (3) to ensure the payroll card program includes a long list of other mandatory terms and conditions (e.g., employees must be provided with access to at least one ATM network offering withdrawals at no cost). With respect to direct deposit, the proposed regulations would require employers to maintain an employee's written consent to be paid through direct deposit during the entire duration of the employee's employment and for six years after the last deposit is made.  In addition, employers would be required to provide a copy of the written consent to the employee and to make the direct deposits at a financial institution selected by the employee. Notably, the proposed regulations would not apply to individuals working in executive, professional, or administrative positions who earn in excess of $900.00 per week. The proposed regulations are currently open for public comment.  We will continue to monitor this issue and report on any further developments. Editor's Note:  Our thanks to Stephanie Hoppe, one of Bond’s Summer Law Clerks, who helped prepare this article.

On June 10, 2015, the New York City Council passed the Fair Chance Act, which amends the New York City Human Rights Law to prohibit most employers in New York City from making any inquiries about an applicant's pending arrest or criminal conviction record until after a conditional offer of employment has been made.  The law is expected to be signed by Mayor Bill de Blasio, and will become effective 120 days after it is signed. The law applies to employers with four or more employees, with some exceptions.  For example, the law does not apply to actions taken by an employer pursuant to any state, federal, or local law that requires criminal background checks for employment purposes or bars employment based on criminal history.  The law also does not apply to actions taken by an employer with regard to an applicant for employment as a police officer or peace officer. The law prohibits covered employers from making an inquiry or statement regarding the pending arrest or criminal conviction record of an applicant until after the employer has extended a conditional offer of employment.  The term "inquiry" is defined to include not only questions communicated to an applicant in writing or otherwise, but also any searches of publicly available records or consumer reports that are conducted for the purpose of obtaining an applicant's criminal background information. After a conditional offer of employment has been made, an employer may inquire about the applicant's arrest or criminal conviction record, but may not take any adverse employment action based on the results of the inquiry unless the employer complies with the following requirements:

• The employer must provide a written copy of the inquiry to the applicant in a manner to be determined by the New York City Commission on Human Rights;
• The employer must analyze the various factors under New York Correction Law Article 23-A to determine whether the applicant should be disqualified from employment;
• The employer must provide a copy of the analysis and any documents in support of the determination to the applicant in a manner to be determined by the New York City Commission on Human Rights; and
• The employer must give the applicant at least three business days to respond and must hold the position open for the applicant during the response period.

In addition to prohibiting pre-offer inquiries about an applicant's arrest or criminal conviction record, the Fair Chance Act prohibits employers from publishing any job advertisements or solicitations stating either implicitly or explicitly that an applicant's arrest or criminal conviction record will limit the applicant's opportunity to be considered for the job. In preparation for this new law, covered employers in New York City should take the following steps:  (1) review their employment applications and remove any inquiries about an applicant's arrest or conviction record; (2) review their procedures for conducting background checks to ensure that any criminal background checks are not conducted until after a conditional offer of employment has been made; and (3) make sure that all managers and supervisors who conduct interviews or who are otherwise involved in the hiring process are well-trained to avoid asking questions or making statements about an applicant's arrest or criminal conviction record. Editor's Note:  Our thanks to John Boyd, one of Bond's Summer Law Clerks, who helped prepare this article.

On June 1, 2015, the United States Occupational Safety and Health Administration (“OSHA”) published A Guide to Restroom Access for Transgender Workers.  OSHA stated that the “core principle” of the Guide is as follows:  “All employees, including transgender employees, should have access to restrooms that correspond to their gender identity.”  The Guide serves as an extension to OSHA’s longstanding rule that, as a matter of health and safety, all employees must be provided a sanitary toilet facility in order to avoid “the adverse health effects that can result if toilets are not available when employees need them.” According to the Guide, there are approximately 700,000 adults in the United States who are transgender -- meaning that their internal gender identity is different from the sex they were assigned at birth.  OSHA explained that restricting employees to using “only restrooms that are not consistent with their gender identity or segregating them from other workers by requiring them to use gender-neutral or other specific restrooms, singles those employees out and may make them fear for their physical safety.”  This could potentially lead to an unsafe situation where transgender employees avoid using restrooms entirely while at work.  Therefore, the Guide’s “Model Practices” explain that an employee who identifies as a man should be permitted to use men’s restrooms, and an employee who identifies as a woman should be permitted to use women’s restrooms, and that the decision of which restroom to use should be made solely by the employee.  Notably, employees are not required to submit medical or legal documentation of their gender identity in order to have access to the restroom of their choosing. This Guide does not come as a surprise given the actions taken recently by the Office of Federal Contract Compliance Programs, Equal Employment Opportunity Commission, and United States Department of Labor in acknowledging the rights of transgender employees to use the restroom that is consistent with their gender identity. Unfortunately, OSHA did not provide much guidance for employers, stating simply that “employers need to find solutions that are safe and convenient and respect transgender employees.”  OSHA also did not provide any guidance indicating how employers should address situations where employees raise concerns about a transgender employee using their restroom. Nevertheless, employers must be conscious of and follow OSHA’s guidance, regardless of whether adherence makes other employees uncomfortable, or else they will potentially invite legal action, including the filing of OSHA complaints or EEOC charges.  Employers should also review their policies (if any) to ensure that they cannot be construed as prohibiting transgender employees from using the restroom that is consistent with their gender identity.

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 April 20, 2015, the Acting Director of the Occupational Safety and Health Administration (“OSHA”) Whistleblower Protection Programs issued a memorandum to all Regional Administrators clarifying the standard which should be applied to whistleblower claims at the agency investigatory stage.  The guidance was issued because there was some concern that the standards contained in OSHA’s Whistleblower Investigations Manual were “ambiguous.”  The clarified standard is that “after evaluating all of the evidence provided by the employer and the claimant, OSHA must believe that a reasonable judge could rule in favor of the complainant.” A few points about the clarification are noteworthy.  First, the agency made it clear that “the evidence does not need to establish conclusively that a violation did occur.”  Second, “a reasonable cause finding does not necessarily require as much evidence as would be required at trial.”  Finally, the memorandum does note that “although OSHA will need to make some credibility determinations to evaluate whether a reasonable judge could find in the complainant’s favor, OSHA does not necessarily need to resolve all possible conflicts in the evidence or make conclusive credibility determinations.” While it is too early to tell whether the newly clarified standard will result in more (or less) reasonable cause determinations, employers need to take the guidance into consideration when they are involved in any future whistleblower investigation.

On April 20, 2015, the Equal Employment Opportunity Commission (“EEOC”) issued a proposed rule to amend the regulations and interpretive guidance implementing Title I of the Americans with Disabilities Act (“ADA”) as it relates to employer wellness programs.  The EEOC also issued a Fact Sheet for Small Business and a Q&A regarding the proposed rule. By way of background, Title I of the ADA prohibits employment discrimination on the basis of disability.  This non-discrimination provision applies to compensation and other terms, conditions, and privileges of employment, including fringe benefits, whether or not administered by the employer.  It also limits the medical information that employers may obtain from employees and applicants.  The ADA, however, does permit employers to conduct medical examinations and inquiries, including voluntary medical histories, when it is part of a voluntary employee health program.  The EEOC’s proposed rule is intended to provide guidance to employers on the extent to which the ADA permits employers to offer incentives to employees to promote participation in wellness programs that are employee health programs. What is a wellness program and when would it be considered  an employee health program? A wellness program is a program or activity that is typically offered through employer-provided health plans to help employees improve their health with the goal of lowering health care costs.  Wellness programs often encourage employees to become more active, quit smoking, eat better, etc., by offering monetary or other rewards or incentives for doing so.  Some wellness programs obtain medical information from employees by asking them to complete health risk assessments or undergo biometric screenings. According to the proposed rule, a wellness program could be considered an employee health program if it is reasonably designed to promote health or prevent disease.  In other words, it must:  (1) have a reasonable chance of preventing disease and improving the health of participating employees; (2) not be overly burdensome; (3) not be a subterfuge for violating the ADA or other employment discrimination laws; and (4) not be highly suspect in the method chosen to promote health and prevent disease. When would participation in a wellness program be considered voluntary? A wellness program that includes disability-related inquiries or medical examinations would be considered voluntary as long as the employer:  (1) does not require employees to participate; (2) does not deny access to health coverage or limit the extent of benefits for employees who do not participate; (3) does not take adverse action, retaliate against, interfere with, coerce, intimidate, or threaten employees who do not participate in the program or who do not achieve certain outcomes; and (4) provides written notice to employees (when the wellness program is part of a group health plan) that describes the medical information that will be obtained, the purposes for which it will be used, who will receive it, and how it will be safeguarded. Does the use of incentives to encourage employees to participate in a wellness program render it involuntary? No.  The EEOC takes the position in its proposed rule that the use of incentives, whether in the form of reward or penalty, will not render the program involuntary as long as the maximum allowable incentive available under the program does not exceed 30 percent of the total cost of employee-only coverage.  For example, if the total cost of employee-only coverage is $5,000, the maximum incentive for an employee under the plan cannot exceed $1,500.  This is consistent with the maximum allowable incentive amount under the Health Insurance Portability and Accountability Act (“HIPAA”) and the Affordable Care Act health-contingent wellness programs. Will medical information gathered as part of an employee’s participation in wellness programs be kept confidential? Yes.  The EEOC proposes adding a new subsection to its regulations relating to confidentiality to ensure that medical information collected through participation in employee health programs will only be provided to employers in aggregate terms and will not disclose (or be reasonably likely to disclose) the identity of any specific employee. While we await issuance of a final rule, here are a few steps that employers can take to ensure that their wellness programs comply with the ADA:

• Confirm that wellness programs are reasonably designed to promote health or prevent disease.
• Audit the incentives offered under wellness programs to ensure that they do not exceed 30 percent of the total cost of employee-only coverage.
• Ensure that employee participation in wellness programs is voluntary.
• Provide reasonable accommodations to enable employees with disabilities to participate in wellness programs and earn whatever incentives are offered.
• Ensure that medical information is maintained in a confidential manner, which includes training employees on handling confidential medical information, encryption of electronic medical information, and prompt reporting of breaches.
• Establish a written notice to employees regarding the collection of medical information.
• Do not deny health insurance or limit the extent of benefits to employees who choose not to participate in wellness programs.
• Do not take adverse action, retaliate against, interfere with, coerce, intimidate, or threaten employees who do not participate in wellness programs or who do not achieve certain outcomes.