Hunton Employment & Labor Perspectives

On April 8, 2014, in recognition of National Equal Pay Day, President Obama continued to advance his wage equality agenda by focusing on wage transparency through Executive Order on Non-Retaliation for Disclosure of Compensation Information (“Executive Order”) and a Presidential Memorandum entitled "Advancing Pay Equality Through Compensation Data Collection" (“Presidential Memorandum”).

On February 25, 2014, National Labor Relations Board (“NLRB” or “the Board”) General Counsel Richard F. Griffin issued Memorandum GC 14-01 to outline the agency’s enforcement priorities for the coming year.  The memorandum, which requires regional offices to submit matters of special interest to the Board’s Division of Advice for guidance on how to proceed, groups those priorities into three categories: (1) matters that involve General Counsel initiatives or areas of law and labor policy that are of particular concern to his office; (2) matters that involve difficult legal issues or areas of law in which governing precedent is unclear; and (3) an updated and expanded list of case-handling matters that have traditionally been submitted to the Division of Advice.

On March 6, 2014, the U.S. Equal Employment Opportunity Commission (“EEOC”) released guidance pertaining to employers’ responsibilities to accommodate religious dress and grooming in the workplace.  

The guidance provides explanation and analysis concerning an employer’s responsibilities under Title VII to “make exceptions to their usual rules or preferences to permit applicants and employees to follow religiously-mandated dress and grooming practices unless it would pose an undue hardship to the operation of an employer’s business.”

Earlier this month, the Equal Employment Opportunity Commission released its fiscal year 2013 enforcement and litigation statistical report.  Each year, the EEOC publishes a comprehensive set of data tables which contain statistics on topics such as numbers of charges filed, types of charges filed, litigation and resolution numbers, and a myriad of other tables that provide insight into the agency’s actions over the 12-month period.

The EEOC recently settled a national origin discrimination case involving a “restrictive language policy” or “English-only rule.”  EEOC v. Mesa Systems, Inc., 2:11-cv-01201 (D. Utah 2013).  The employer agreed to pay $450,000.00 and to provide a variety of injunctive relief, including training, policy revisions, apologies, notice postings, and reporting to the EEOC.  The EEOC’s Strategic Enforcement Plan made it a priority to protect the most “vulnerable workers,” and Commissioner Jacqueline Berrien said the settlement is an important demonstration of a “renewed commitment” to that goal.  And, indeed: this settlement is the latest in a decade-long line of EEOC enforcement actions based on English-only rules.  See, e.g.: $2.44 million settlement with University of Incarnate Word (2001); $700,000 settlement with Premier Operator Services, Inc. (2000).

The Equal Employment Opportunity Commission (“EEOC”) announced that it won what it describes as a “historic” verdict last week when an Iowa federal jury awarded $240 million to a group of intellectually disabled plant workers who were subjected to disability-based discrimination and harassment.  The award is the largest in the agency’s history.  The EEOC’s General Counsel, David Lopez, remarked that the verdict is “one of the EEOC's finest moments in its ongoing efforts to combat employment discrimination.”

The U.S. Equal Employment Opportunity Commission (the “EEOC”) recently approved a new Strategic Enforcement Plan to establish national enforcement priorities and provide more transparency for employers who may find themselves the subject of EEOC investigations.  After soliciting public and internal recommendations, the EEOC approved a plan that identifies six specific areas in which the agency believes increased enforcement will result in the most change. 

The EEOC is targeting pregnancy discrimination in several states.  The EEOC has filed a string of recent cases in an apparent attempt to crack down on workplace discrimination against pregnant women.  A California-based security guard contractor was recently sued by the EEOC on September 20 after it terminated a female employee when she tried to return to work after her pregnancy leave.  A week later, a Texas-based restaurant was also sued after terminating eight pregnant employees. The restaurant allegedly had in place a written policy that instructed managers to terminate pregnant employees three months into their pregnancies.  One of the fired employees was terminated pursuant to the policy even though her doctor had cleared her to work without restrictions until the 36th week of her pregnancy.   In another restaurant-related complaint, this one filed September 27, the EEOC sued a Florida-based restaurant in Panama City, Florida for terminating two pregnant waitresses.  According to the EEOC, the restaurant told pregnant workers that their pregnancies made them a “liability” to the company.  In a related matter, the EEOC is seeking an injunction against a Michigan juvenile detention center to prevent it from maintaining a policy that requires women to immediately notify the company when they become pregnant.

In several prior blog entries, we told you about the NLRB’s new requirement that employers post a notice regarding employee rights under the NLRA.  Employers have been following the story with interest.

Initially proposed by the NLRB in December 2010, the new posting tells employees about their rights under the National Labor Relations Act (“NLRA”).  The new requirement initially had an effective date of November 14, 2011, but it has been delayed several times.  The NLRB first delayed implementation until January 31, 2012, to allow “for further education and outreach.”  Then, several industry groups and businesses filed federal lawsuits in South Carolina and Washington, D.C., challenging the NLRB’s Final Rule.  The groups argued the NLRB did not have statutory authority to issue the notice requirement.  While the lawsuits were pending, in the District of Columbia and South Carolina, the NLRB agreed to further delay implementation until April 30, 2012.

The Office of Federal Contract Compliance Programs (OFCCP) budget request for next year reflects its intent to increase aggressive enforcement.  The OFCCP, part of the U.S. Department of Labor, is the agency charged with enforcing the affirmative action obligations of federal contractors and subcontractors.   Approximately 25% of the American workforce is employed by federal contractors and subcontractors, whose federal contracts total more than $700 billion annually.  The OFCCP’s proposed budget for FY 2013 is now available online.

The EEOC recently voted to move forward on new regulations that will likely make it easier for older workers to bring disparate impact claims, and harder for employers to defend against such claims.  The EEOC is taking the position that employers have to prove their choices are reasonable when adopting policies that might adversely affect older workers, and the rules provide several guidelines for consideration.  In light of the new regulations, employers should revisit the factors used in making hiring, promotion, and termination decisions and take steps to minimize the use of subjective criteria and procedures.  Employers should also consider the likelihood that litigation costs may increase as more cases may survive summary judgment, and consult with legal counsel to determine whether additional precautions must be put into place to proactively address potential disparate impact issues.

The NLRB announced today it has issued a Final Rule requiring employers to notify employees of their rights under the National Labor Relations Act (“NLRA”). A Fact Sheet  is also available. The rule is scheduled to be published in the Federal Register on August 30, 2011. It is effective November 14, 2011.

The national unemployment rate, as reported by the Department of Labor, has stubbornly remained at about 9% or higher for more than two years. As many of these unemployed individuals search for new jobs, some have purportedly been denied available employment opportunities simply because they were unemployed. Unemployment discrimination, as it is often called, is not currently prohibited under federal law. The EEOC and Congress, however, have taken steps focused on so-called unemployment discrimination that could affect how employers conduct their hiring processes.

In March, we reported on the increasing attention that federal and state legislatures, as well as the EEOC, were paying to employers’ use of employee credit checks in employment decisions. At the time of posting, four states had laws regulating employer use of credit history data and fourteen additional states were considering similar measures. Earlier this month, Connecticut passed Public Act No. 11-223 regulating employer use of credit reports.

Section 203 of the Labor-Management Reporting and Disclosure Act requires employers to annually report via Form LM-10 any agreement or arrangement with a third-party consultant to persuade employees as to collective bargaining rights, or to obtain certain information about the activities of employees or a labor organization involved in a labor dispute with the employer. The retained consultant must also file a report concerning the agreement or arrangement (Form LM-20). However, one statutory exception in section 203(c) provides that no report need be filed when the consultant gives “advice” to the employer.

The United States Department of Labor (“DOL”) has announced the launch of its first application, or “app,” for smartphones to “help employees independently track the hours they work and determine the wages they are owed” in accordance with the Fair Labor Standards Act (“FLSA”). The application is available in both English and Spanish and allows employees to privately record regular work hours, break and meal times, and any overtime hours. The free app is currently compatible only with iPhone and iPod Touch; however, the DOL is exploring updates for compatibility with other smart phones such as Android and Blackberry phones.

By proposing to amend its Scheduling Letter and Itemized Listing, the Office of Federal Contract Compliance Programs (“OFCCP”) is at it again, imposing greater burdens on federal contractors.  Following its recent proposal to strengthen contractors’ affirmative action efforts for veterans, the OFCCP has now issued a proposal to modify its Scheduling Letter and Itemized Listing used in compliance reviews and compliance checks.  On May 12, 2011, the OFCCP published Notice in the Federal Registry requesting comments on its proposed changes.  The current Scheduling Letter and Itemized Listing are set to expire on September 30, 2011.  Comments on the proposed changes must be submitted by July 11, 2011.

The Office of Federal Contract Compliance Programs (“OFCCP”) has issued a proposed rule to strengthen the current regulations that require federal contractors and subcontractors to engage in affirmative action efforts for veterans. The proposed rule was published in the Federal Register on April 26, 2011. Fed. Reg. 23,358 (Apr. 26, 2011). Public comments regarding the rule are due by June 27, 2011.

The OFCCP’s proposed rule would revise the regulations that implement the Vietnam Era Veterans’ Readjustment Assistant Act (“VEVRAA”), 41 CFR Parts 60-250 and 60-300, which have generally remained unchanged since 1976. VEVRAA, its amendments and regulations prohibit contractors from discriminating against protected veterans and additionally require contractors to take affirmative action to recruit, employ, and advance the employment of protected veterans. VEVRAA also requires certain contractors to maintain a written Affirmative Action Plan.

The 2010 fiscal year was a busy one for the EEOC as employees filed a record number of charges.  See A Year In Review: EEOC Charges & Trends.  This wave of charges is historic -- not just because of the number of charges filed, but also because of the evolving trends in the types of claims made. Unfortunately for employers, these trends will likely continue in 2011 and beyond.

Historically, the most common types of claims filed were those of race and sex discrimination. Although these particular types of claims remain prevalent (the number of both race and sex discrimination claims increased in 2010), other types of claims are emerging at an alarming rate due to recent changes in the legal landscape.

A commonly used pre-employment screening method--conducting credit checks--has drawn increased scrutiny in recent months. Legislatures at the state and federal levels are considering bills that would limit employer use of credit checks. Moreover, two recently-filed lawsuits, one of which was filed by the EEOC, seek to challenge the use of pre-employment credit checks in hiring decisions. 

Only four states--Hawaii, Illinois, Oregon, and Washington--currently have laws regulating employer use of credit history data. Sparked by the downturn in the economy, fourteen additional states--California, Colorado, Connecticut, Indiana, Kentucky, Maryland, Missouri, Nebraska, New Jersey, New Mexico, New York, Pennsylvania, Texas, Vermont--are considering similar measures.

On January 4, 2011, President Obama signed the FDA Food Safety Modernization Act (FSMA), which seeks to promote food safety by enacting strict safety standards in the food industry. In addition to the enactment of safety standards, Section 402 of the FSMA ensures sweeping protections for whistleblowers in the industry. The FSMA whistleblower protection applies to any “entity engaged in the manufacture, processing, packing, transporting, distribution, reception, holding, or importation of food.” The anti-retaliation provisions protect any employee of a covered entity who provides to the employer, the federal government, or the Attorney General of a State information that the employee reasonably believes constitutes a violation of the FSMA; testifies or is about to testify about any such violation; assists or participates in any such proceeding; or objects to or refuses to participate in any activity that the employee reasonably believes is a violation of the FSMA.

Expanding on our December 21 post, the U.S. Equal Employment Opportunity Commission on January 11, 2011, announced that private sector workplace discrimination charge filings reached the “unprecedented level” of 99,922 during fiscal year 2010, which ended on September 30, 2010.  According to the data, all major categories of charge filings in the private sector, including charges against state and local governments, increased significantly.

The Genetic Information Nondiscrimination Act (GINA) prohibits discrimination in hiring and employment decisions based on an individual’s genetic information.  So, for example, a company cannot refuse to hire a woman because her mother had breast cancer.  The law also prohibits requesting, requiring and/or purchasing genetic information, with limited exceptions, and prohibits disclosure of genetic information.  There are many open questions about the law, such as whether companies can have wellness programs anymore (restricted genetic information is routinely gathered as part of such programs) or whether it is a violation of the law for a supervisor to learn about genetic information by accessing an employee’s page on a social networking site, or by asking innocent questions about the employee’s health, such as “How are you?.”  The EEOC issued final regulations last week in an attempt to answer these and other questions under the law.  A short discussion follows.

In yet another employee misclassification case, Kentucky Attorney General, Jack Conway, brought suit against FedEx Corp. alleging that FedEx violates Kentucky state law by misclassifying its drivers as independent contractors.  The Complaint contends that FedEx violated state law in regards to unemployment insurance, workers compensation, payroll taxes, and the Kentucky Consumer Protection Act.  The lawsuit asks the Court to order FedEx to classify its drivers as employees and to pay the contributions and penalties required by state law, which includes back pay dating to 2000 and totaling at least $10 million.

Our prior posts have chronicled recent attempts by Congress and state legislatures to crack down on employers who misclassify employees as independent contractors, the most notable of which was the Employee Misclassification Prevention Act that, among other things, seeks to create a cause of action under the FLSA for misclassification and to require employers to keep records of hours worked by independent contractors.  On September 15, Congress took yet another step in the enforcement direction when Senator John Kerry (D-Mass.) and Representative Jim McDermott (D-Wash.) introduced The Fair Playing Field Act of 2010 (S. 3786, H. 6128), which seeks to close a so-called “loophole” under the current tax regime.

The Dodd-Frank Wall Street Reform and Consumer Protection Act just signed into law by President Obama, H.R. 4173, 111th Cong. (2010) (“Dodd-Frank”), creates new statutory rights and incentives for whistleblowers and also expands already existing rights, such as under the Sarbanes-Oxley Act (“SOX”).  Now more than ever, clear policies and procedures backed by strong audit, compliance and investigatory functions are critical to managing the anticipated increase of regulatory enforcement and private party whistleblower litigation that this expansive legislation likely will create.

The Senate Committee on Health, Education, Labor, and Pensions has announced that it will conduct a hearing on Thursday, June 17, 2010 on the Employee Misclassification Prevention Act, which was introduced in both the Senate and House on April 22, 2010.  The Act seeks to amend the Fair Labor Standards Act so that worker misclassification is a violation of federal law.  The act also requires employers to maintain records reflecting hours worked and wages paid to independent contractors.  See our previous post for a detailed discussion of the legislation.

The Secretary of Labor has finalized implementing regulations under Executive Order 13496, which requires federal contractors and subcontractors covered by the National Labor Relations Act (NLRA) to post a new notice advising employees of their rights under the Act.  Note that most employers in the private sector are covered by the NLRA; the Order is not limited to companies with union activity or representation.

The regulations are codified at Title 29, Part 471 of the Code of Federal Regulations.   The Department of Labor (DOL) also provides a helpful fact sheet about the new requirement.

For years, employers wrestling with thorny wage and hour issues under the Fair Labor Standards Act (“FLSA”) have used the Wage & Hour Division’s (“WHD”) opinion letters for fact-specific guidance.  To the extent a particular issue was not addressed by a current opinion letter, the employer could submit a request for an opinion letter and obtain definitive guidance from WHD.  Employers who relied on opinion letters were immune from FLSA liability under the Portal Act’s safeharbor provision, which allows an employer to avoid liability for FLSA violations if the employer relied on a written interpretation of the WHD.

The proposed 2011 fiscal year federal budget signifies a renewed commitment to combating employee misclassification, as it contemplates funding an additional 4,700 investigations into worker misclassification issues.  With penalties for worker misclassification being quite steep -- including back taxes, interest, and even punitive fines -- employers should audit their workforce to ensure that their independent contractors are properly classified.

Unfortunately, there is no bright line test to determine whether a particular worker has been properly classified as an independent contractor.  In fact, the precise definition of an independent contractor not only varies between federal and state law, but can also vary from state to state and even statute to statute.  

Continuing a trend in Congress to limit employers’ use of independent contractors, on April 22, 2010, Rep. Lynn Woolsey (CA) and Senator Sherrod Williams (OH) introduced the Employee Misclassification Prevention Act (H.R. 5107, S. 3254) (“EMPA”) in the House and Senate respectively.  The EMPA would amend the Fair Labor Standards Act (“FLSA”) and render worker misclassifications a violation of federal law.  Employers would be required to maintain records reflecting hours worked and wages paid for employees and non-employee workers.  They also would be required to provide workers a “notice” that identifies: the worker’s classification, a yet to be created Department of Labor website (containing an on-line complaint link), contact information for the applicable Department of Labor office, and other additional information as prescribed by regulation.  For workers classified as non-employees, the Notice would be required to state: “Your rights to wage, hour, and other labor protections depend upon your proper classification as an employee or non-employee. If you have any questions or concerns about how you have been classified or suspect that you may have been misclassified, contact the U.S. Department of Labor.”

In its recently published Spring 2010 Regulatory Agenda, the Department of Labor (“DOL”) announced that it plans to propose a rule that would amend the current recordkeeping regulations under the Fair Labor Standards Act (“FLSA”).  Under the proposed rule, any employers seeking to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to provide to Wage and Hour Division (“WHD”) enforcement personnel upon request.  The proposal will also address burdens of proof when employers fail to comply with records and notice requirements.

With a dearth of job openings for recent college graduates, many have pursued unpaid internships while continuing to search for fulltime employment.  A 2008 survey found that half of all college students hold at least one internship before graduating.  In light of the 18.8% March unemployment rate for American workers aged 16-24—nearly double the 9.7% unemployment rate for the workforce at large—this practice can be beneficial for interns, who gain experience and contacts, as well as for employers, who can benefit from having eager interns ready to learn and contribute.

On April 1, Secretary of Labor Hilda Solis announced a new campaign aimed at enforcing federal wage and hour laws on behalf of low-wage and immigrant workers and warned employers, “A new sheriff is in town.”

For those who thought the proposed Paycheck Fairness Act had faded away, here is a wake-up call.  After more than a year since the bill was passed by the House of Representatives and introduced in the Senate, the Senate Committee on Health, Education, Labor and Pensions is holding a new hearing on March 11 to focus on equal pay issues.

The Obama Administration announced on February 1, 2010, that it requested $385.3 million for the Equal Employment Opportunity Commission for fiscal year 2011.  In addition, the administration requested $162 million for the Civil Rights Division of the Department of Justice.  Significantly, the requests represent an $18 million dollar budget increase for the EEOC and a $17 million dollar budget increase for the DOJ Civil Rights Division.

President Obama’s proposed $3.8 trillion federal budget for 2011 includes $117 billion for the U.S. Department of Labor.  The Department’s Wage and Hour Division, which will receive $244 million under the new budget (an increase of almost $20 million from last year), pledges to use the money to increase its number of investigators, to train investigators to detect misclassification of workers as independent contractors, and to focus on industries where misclassification is most prevalent.

The EEOC reported that workplace discrimination charges reached near-record highs in 2009.  According to the EEOC, there were 93,277 charges filed in fiscal year 2009 -- the second-highest level in its history. 

On December 24, 2009, the National Labor Relations Board ("NLRB") issued a revised version of its Case Handling Manual (Part One).  For those inside the NLRB, the Manual provides guidance on various internal policies and procedures for enforcement proceedings.  For those outside the NLRB, the Manual not only states how the agency is likely to deal with issues that arise during such proceedings, but also provides insight into the agency’s enforcement priorities.  Part One (the part recently revised) covers unfair labor practice (“ULP”) charges, but also includes sections that apply to representation elections and compliance proceedings as well.

Last week, Secretary of Labor Hilda Solis announced the Department of Labor's planned launch of an ambitious new public awareness campaign called "We Can Help."  The campaign, set to debut in early 2010, is designed to help inform workers about their rights under federal wage and hour laws.

President Obama recently announced his intent to nominate P. David Lopez for the position of General Counsel of the Equal Employment Opportunity Commission (EEOC).  Lopez currently holds the position of Supervisory Trial Attorney for the EEOC’s Phoenix District Office.

In August 2009, the Obama administration named Patricia A. Shiu the new Director of the Office of Federal Contract Compliance Programs (OFCCP).  The OFCCP, part of the Department of Labor (DOL), enforces the non-discrimination and affirmative action obligations of federal contractors under Executive Order 11246, the Vietnam Era Veterans’ Readjustment Assistance Act, and the Rehabilitation Act.

At the recent AFL-CIO Constitutional Convention, Secretary of Labor Hilda L. Solis declared that the Department of Labor (DOL) is “back in the enforcement business.”  The DOL chief vowed to increase the DOL’s workplace enforcement of the nation’s labor laws because vigorous enforcement “is not only our responsibility, it’s our moral obligation.”

President Obama recently nominated Victoria A. Lipnic for a seat on the five-member Equal Employment Opportunity Commission (EEOC).  Lipnic is Republican, with an extensive background in employment law.  During the prior Administration, she served as Assistant Secretary of Labor for Employment Standards from 2002-2009.  In that capacity, Lipnic oversaw the Department of Labor’s largest agency, and led the teams that revised the Part 541 overtime regulations under the Fair Labor Standards Act (FLSA), and the Family and Medical Leave Act (FMLA) regulations.