Contractors are still reeling from the many executive orders coming from President Obama in the last year or so, including raising the minimum wage for federal contract employees to $10.10, requiring contractors to disclose labor law violations, demanding pay transparency and the reporting of compensation, prohibiting discrimination on the basis of sexual orientation or gender identity, and more. Now, the New York Times has reported that President Obama has drafted an executive order to force federal contractors and subcontractors to issue paid leave to employees who are sick, are seeking medical attention, or need to care for a sick relative. The online article, which appeared in print today, can be found here. This proposed paid sick leave order is another action that will have a dramatic and costly impact on contractors.

The draft executive order is exceptionally broad in coverage. According to the New York Times, the draft executive order sets a minimum of 56 hours a year of paid sick leave (7 days). The leave would cover not only the employee’s illness, but also caring for a child, parent, spouse, domestic partner, or “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.” It would also apply to absences from work resulting from domestic violence, sexual assault or stalking, if that time was used to seek medical attention, obtain counseling, seek relocation assistance from victim services organizations or prepare civil or criminal proceedings. In addition, unused paid leave will accrue, year after year.

At this point, no actual date for the issuance of the Executive Order has been announced, and the draft order itself apparently has been marked “deliberative and pre-decisional.” The New York Times reports, however, that the Labor Department was to have approved the Order and sent it to the White House as of 2 p.m. on Wednesday, August 5, thereby indicating some urgency to the matter.

We will keep you posted on any further developments.

AT&T Connecticut and the Communications Workers of America were embroiled in bitter contract negotiations in 2009. Among other efforts to let the public know about the dispute, employees, many of whom had to go into customers’ homes, began wearing shirts that said “Inmate” on the front with a black box underneath the lettering. The back of the shirt said “Prisoner of AT$T” with several vertical stripes and bars above and below the letters. The shirt did not have the Union’s name on it. AT&T suspended, for one day, over 100 employees who wore the shirt and who regularly interacted with the public.

Board proceedings ensued and an NLRB ALJ decided that AT&T violated the Act by suspending the employees. In 2011, by a 2 – 1 decision, the Board affirmed the ALJ decision. The Board reasoned that the “special circumstances” doctrine allowing employers to restrict employees from wearing buttons or insignias at work “when the company reasonably believes the message may harm its relationship with its customers and its public image” was not applicable because the “prisoner” shirt was not likely to cause fear or alarm among AT&T customers.

In reversing that decision, in Southern New England Telephone Co. v. NLRB, the U.S. Court of Appeals for the D.C. Circuit started its opinion with:

Common sense sometimes matters in resolving legal disputes. This case is a good example. AT&T Connecticut banned employees who interact with customers or work in public – including employees who enter customers’ homes – from wearing union shirts that said “Inmate” on the front and “Prisoner of AT$T” on the back. Seems reasonable. No company, at least one that is interested in keeping its customers, presumably wants its employees walking into people’s homes wearing shirts that say “Inmate” and “Prisoner.”

In concluding that the Board’s decision failed to take into account the reasonable and practical conclusion that the message on the shirts was offensive and bound to undermine the company’s relationship with its customers, the Court restated, as it had in a previous case a few years earlier that “the Board’s expertise is surely not at its peak in the realm of employer-customer relations.” Because the Court of Appeals found that the special circumstances exception applied, the one-day suspensions were lawful.

Making the NLRB decision particularly head scratching was that just a few years prior to the events in this case there had been, according to The Hartford Courant, “possibly the most widely publicized crime in the state’s history,” involving a home invasion resulting in the murder of several members of a family.

I’d like to say that it’s a sorry state of affairs that a federal Court of Appeals has to rein in the activity of the NLRB that’s supposed to have expertise in enforcing the statute it’s charged with enforcing, but, of course, this is not the first time the D.C. Court of Appeals has had to step in to do so.

So I’ve noticed that the EEOC likes to adopt major policy shifts in sneaky ways.  For example, when the EEOC first decided that pregnancy-related impairments may be disabilities under the amended Americans with Disabilities Act, it didn’t put in the revised regulations, but slid it into the Q&A document on the revised regulations.  When the EEOC decided that discrimination based on gender identity or transgender status was sex discrimination under Title VII, it stated this in a federal sector case (there’s a different EEOC process for government employees than for the rest of us), which is more difficult for the public to hear about.  (I previously blogged about this case, Macy v. Dept. of Justice).  And now the EEOC has done it again, with regard to sexual orientation discrimination, in another federal sector case – Baldwin v. Dept. of Transp.

Prior to this case, the EEOC had been very clear that sexual orientation itself was not protected by Title VII.  In November 2014, it issued a document, “What You Should Know about EEOC and the Enforcement Protections for LGBT Workers.”  (Let’s call this version 1 – you’ll see why in a minute).  In that document, while the EEOC flatly stated that gender identity discrimination is discrimination on the basis of sex under Title VII, the EEOC originally said, “The Commission has … found that discrimination against lesbian, gay, and bisexual individuals based on sex-stereotypes, such as the belief that men should only date women or that women should only marry men, is discrimination on the basis of sex.” (Emphasis added).

Courts in private sector cases, as well as the EEOC in other federal sector cases, have also consistently found that sexual orientation was not protected by Title VII, except to the extent that sex-stereotypes were involved.  For example, the EEOC stated in a 2014 case, Complainant v. Dept. of Homeland Security, that claims of sexual orientation discrimination “may intersect with” claims of sex discrimination where sex-stereotyping is involved.  This use of “intersect” necessarily involves two separate items that meet.

In Baldwin, however, the EEOC now takes the position that “sexual orientation is inherently a ‘sex-based consideration,’ and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII.”  (Emphasis added).  In addition to noting that sexual orientation discrimination is often illegally based on sex stereotypes (the EEOC’s original, limited position), the EEOC now has added two other reasons as to why sexual orientation discrimination is sex discrimination: (1) “sexual orientation is inseparable from and inescapably linked to sex,” and (2) Title VII prohibits discrimination based on an individual’s association with someone with a protected characteristic (i.e. “associational discrimination”) – in this case, someone of the same sex.

Interestingly, the EEOC admits that “Congress may not have envisioned the application of Title VII to these situations.”  And, in fact, Congress clearly thinks that sexual orientation is not covered by Title VII, as it has repeatedly (over the last 20+years) considered – and rejected – legislation (The Employment Non-Discrimination Act) to make sexual orientation a protected category. But the EEOC apparently will proceed, nonetheless, to broaden the scope of Title VII.

Following the issuance of Baldwin on July 16, the EEOC is moving swiftly and silently to cement this position.  Yesterday, I viewed version 1 of EEOC’s “What You Should Know” document on its website.  This morning (July 23), however, I found a new version of the document has replaced version 1 – without fanfare, announcement, or even any indication that it had been revised!  This new version eliminates the sex-stereotyping limitation and baldly states: “The Commission has also held that discrimination against an individual because of that person’s sexual orientation is discrimination because of sex and therefore prohibited under Title VII. See David Baldwin v. Dep’t of Transportation, EEOC Appeal No. 0120133080 (July 15, 2015).”  In one fell swoop, the EEOC has just expanded the law!  Who needs Congress?

Sneaky.

So the Department of Labor is on a mission to extend the reach of the Fair Labor Standards Act.  Following on the heels of the proposed overtime regulations, in which the DOL is seeking to expand the number of workers eligible for overtime pay (and thereby increase their income – at least theoretically), the DOL has now issued an Administrator’s Interpretation in which it provides guidance to employers on how to determine whether a worker is an employee or an independent contractor for purposes of the FLSA.  Notably, the DOL states that, under its analysis, most workers are employees. (Well, that’s not surprising, coming from the DOL).

The DOL uses an economic realities test, and notes that this test is broader than the common law test, which focuses on the employer’s right of control over the worker. The economic realities test analyzes whether a worker is economically dependent on the employer, and is thus an employee, or is truly in business for himself as an independent contractor.

The FLSA defines employee as “any individual employed by an employer” and defines employ to mean “suffer or permit to work.” As described in the Administrator’s Interpretation, the following six factors are considered in determining whether a worker is economically dependent on the employer:

  1. “Is the work an integral part of the employer’s business?” If so, it is more likely that the worker is economically dependent on the employer. Work can be integral to a business even if it is just one component of the business, is performed by many others, or is performed away from the employer’s premises.
  2. “Does the worker’s managerial skill affect the worker’s opportunity for profit or loss?” This factor does not focus on whether a worker can simply choose to work more hours, but on whether the worker exercises managerial skills that affects the opportunity for profit or loss beyond the current job (such as decisions to hire others, purchase materials and equipment, advertise, rent space, manage time tables, etc.)
  3. “How does the worker’s relative investment compare to the employer’s investment?” Under this factor, not only must the worker make some investment, but the worker’s investment must be compared to the employer’s investment. If the worker’s investment is relatively minor, that suggests the worker is economically dependent on the employer.
  4. “Does the work performed require special skill and initiative?” Under this factor, a worker’s business, not technical skills, are the focus. The DOL states that “Even specialized skills do not indicate that workers are in business for themselves, especially if those skills are technical and used to perform the work.”
  5. “Is the relationship between the worker and the employer permanent or indefinite?” If so, this suggests an employment relationship. The DOL notes, however, that the lack of permanence or indefiniteness does not automatically suggest an independent contractor relationship; the reason for the lack of permanence or indefiniteness must be reviewed to determine if it is due to “operational characteristics intrinsic to the industry” (such as the use of staffing agency workers) or the worker’s “own business initiative.”
  6. “What is the nature and degree of the employer’s control?” In order to support an independent contractor designation, the worker must actually – not theoretically – control meaningful aspects of the work being performed. An employer who determines a worker’s schedule, dress, or tasks is exercising control over the worker.

The DOL states that no one factor – particularly control – is determinative of whether a worker is an employee.  All the factors must be examined in a qualitative, not quantitative, manner in the broader context of economic dependence.

What does this mean for employers?  Well, your independent contractor relationships should be examined with a critical – and conservative – eye.  And realize that the worker may be deemed an independent contractor under some laws, but an employee under others!

The U.S. Supreme Court’s decision in Obergefell v. Hodges, in which it held that same-sex couples have a constitutional right to marry, made headlines.  This decision has a practical impact on employers – particularly on those with operations in states that to date had not recognized the validity of same-sex marriages.

There are a number of employment rights and benefits that are affected by the Supreme Court’s ruling. These include the following:

  • Federal Family and Medical Leave Act leave, as well as family/medical-type leaves under State laws. The Department of Labor had previously announced a “place of celebration” rule, meaning that if the marriage is valid in the State in which the marriage took place, the FMLA will protect an employee needing leave to care for his or her spouse, regardless of where the employee lives (including in those States that do not recognize same-sex marriage). This ruling, however, means that leave rights under State laws, which may not have previously applied, must be extended to same-sex spouses as well. This includes such statutorily-provided leaves such as sick leave, family and medical leave, domestic violence leave, military family leaves, and Flexible Leave Act leaves (which enable employees to use paid leave for purposes of family illness).
  • Employment policies. If your policies provide other rights for spouses, such as bereavement leave, same-sex spouses will be covered. You should also update any policy definitions to ensure that same-sex spouses are not excluded. Remove any references to “husband” or “wife,” and replace them with “spouse.”
  • Employee benefits. Your insurance, pension, and retirement plans may need to be updated. You should consult your plan administrators and benefits attorneys regarding any required changes. In addition, employees may wish to change beneficiary designations. COBRA will apply to same-sex spouses.
  • Employee contact information. Employees may also wish to update basic contact information as to their spouses.
  • Employee tax information. In addition, employees may wish to adjust withholding information to account for a now-legally recognized same-sex spouse. Income imputed from employer contributions for a same-sex spouse’s health coverage will not be subject to federal income taxes. Employees will also be able to use flexible spending accounts to cover a same-sex spouse’s medical costs on a pre-tax basis.
  • Marital status discrimination. Same-sex spouses will be entitled to protection under State marital status discrimination laws.

So, after many months of anticipation, I found the Department of Labor’s proposed overtime rules oddly disappointing. This was supposed to be a major overhaul of the regulations governing which employees would be exempt from the requirement to pay overtime for all hours worked over 40 in a workweek. The current regulations set forth three tests for exempt status: (1) the employee must be paid on a salary basis; (2) the salary level must be at least $455 per week ($23,660 per year); and (3) the employee must meet duties tests specific to the exemption in questions (executive, administrative or professional). We all knew there would be a significant increase in the minimum salary level required for exempt status. But we also expected the DOL to address the duties tests. It didn’t.

In the Executive Summary of the proposed rule, the DOL actually said:

The Department is not making specific proposals to modify the standard duties tests but is seeking comments on whether the tests are working as intended to screen out employees who are not bona fide [Executive/Administrative/Professional] employees; in particular, the Department is concerned that in some instances the current tests may allow exemption of employees who are performing such a disproportionate amount of nonexempt work that they are not EAP employees in any meaningful sense.

What?!! Over 16 months after President Obama signed the Executive Order directing the DOL to revise the overtime rules and almost 300 pages of proposed rules later, all the DOL did was to increase the salary level? And they’re still thinking about what to do about the duties tests?

What is even more troubling is what is likely to happen – that the DOL will make changes to the duties tests in the final rule. These changes will become effective without any of us ever having the chance to see them and comment on them. Regulations are supposed to be subject to a notice and comment period, allowing us – the American public – to weigh in on the proposed rules. The agency is then supposed to consider these comments before issuing a final rule. Apparently, this is not going to happen to any changes to the duties tests!

And back to the salary increase. In his Huffington Post blog announcing the overtime rules revision, President Obama touted an increase to $50,400 per year (which is approximately $970 per week). Oddly, however, the proposed regulations themselves use $951 per week and $49,452 per year, which is supposedly equal to the 40th percentile of earning for full-time salaried workers.  The DOL drops a footnote explaining that this number is based upon 2013 data, but that it will be updated for the final rule. At that point, the DOL said it would “likely rely on data from the first quarter of 2016.” It goes on to note that:

The latest data currently available is from the first quarter of 2015, in which the 40th percentile of weekly earning is $951, which translates into $49,452 for a full-year worker. Assuming two percent growth between the first quarter of 2015 and the first quarter of 2016, the Department projects that the 40th percentile weekly wage in the final rule would likely be $970, or $50,440 for a full-year worker.

I am puzzled by why the DOL, having more current 2015 data on hand, would use clearly obsolete data from two years ago. How is that helpful, really?

But another thing that the DOL fails to mention is in the context of the highly-compensated employee exemption. Under the current rules, an employee who makes $100,000 a year and performs at least one exempt duty also is exempt. The proposed rule states that it is setting the highly compensated salary level equal to the 90th percentile of earnings for full-time salaried workers, which it says is $122,148 annually. Again, according to the Executive Summary footnote, this is based on 2013 data. Unlike the 40th percentile number, however, the DOL wholly fails to address how this 90th percentile number will be updated for 2016. If it applies the same updating methodology as its does for the 40th percentile number, the actual required compensation to meet the highly-compensated exemption in the final rule will be quite a bit higher – likely in excess of $128,000!

We’ll certainly watch to see what happens. Maybe the DOL will pull it together and issue a final rule that makes sense. But I am not optimistic.

 

I love cases with weird facts! And this one has the added benefit of providing an example of a violation of the Genetic Information Nondiscrimination Act. When I do training on non-discrimination and harassment, I have all sorts of fun and interesting examples of other forms of discrimination – sex, race, age, etc. But not genetic information – at least not until now…

In Lowe v. Atlas Logistics Group Retail Servs. (Atlanta), LLC, the court described the situation as “the mystery of the devious defecator.” Apparently, an unknown employee was habitually defecating in one of the company’s warehouses. (The court noted that “Apparently, this problem is not as rare as one might imagine,” citing to a 2014 Huffington Post article, “EPA Employees Asked to Stop Pooping in the Hallway.”) To try to solve the mystery, the company identified which employees were working in the location and at the time of the “defecation episodes.” The company then retained a lab to conduct cheek swab testing for DNA analysis, in order to identify the culprit.

Two of the tested employees (neither of whom was the culprit) subsequently brought suit against the company for violation of GINA, which makes it “an unlawful employment practice for an employer to request, require, or purchase genetic information with respect to an employee.” The company tried to argue that the information sought was not “genetic information,” which it interpreted to mean “information related to an individual’s propensity for disease.” The court, however, pooh-poohed this crappy argument. The court noted that the plain meaning of the statutory language was not so limited. In addition, the legislative history of the statute established that the company’s limited reading of genetic information had been advocated by a small group of legislators but was rejected by Congress. Also, the EEOC’s GINA regulations contemplate that genetic testing can occur for reasons other than the identification of disease.

Bottom line – the court found that the testing violated GINA, and the company’s defense ended up in the toilet.

P.S. And I don’t know if the mystery of the devious defecator was ever solved…

Recently, The Century Foundation, a group that pursues “non-partisan research and policy analysis” released a report on virtual labor organizing. The report assesses how a mobile application (“app”) or website could provide a platform that would help workers organize for labor campaigns.

According to the report, approximately 96 percent of workers use Internet, e-mail, or mobile devices to connect to work, and approximately 81 percent spend at least one hour on e-mail during the workday. The Foundation further reports that the group of workers that would likely be most interested in labor organizing through social media and digital platforms are younger workers, including millennials, who, according to the report, are more receptive to unionization.

The report lays out aspects of what such an app would need to contain, including providing a common digital forum for employees to communicate about the workplace, coordinate local and regional organizing campaigns, and connect with experienced organizers and labor lawyers.

The National Labor Relations Board “quickie election” rules, in combination with union organizing apps, may increase what has already been a drastic uptick in petitions filed with the NLRB. An organizing app can assist unions in connecting to voters more efficiently and discreetly, making it more difficult for employers to learn of organizing activity in their workplace. Supervisors or management might now find a union flyer in the company parking lot, but soon, those flyers may be replaced with apps that are accessible only through cell phones of the individual employees.

One way to counteract the new wave of technology-driven union organizing is to properly train managers and front-line supervisors to take notice of and address changes in the workplace, including changes in employee personality and morale. This is crucial because an employee who feels as though she is not being heard by her supervisor may soon be able to download an app that provides a way for her to discuss her concerns regarding her workplace, and potentially find other employees who feel similarly.

If and when such an app is developed and implemented properly, it may drastically change the way that unions run organizing campaigns. Employers must be proactive and maintain constant communication between front-line supervisors and rank and file employees to ensure that employees’ concerns are being addressed.

Last Friday afternoon, I was listening to NPR. I am a loyal NPR listener and have been for many years. Sure, I know it has a liberal bias, but I always thought – in fact, trusted – that it at least got the basic facts right. Thus, I was unbelievably dismayed by a story on religious accommodations, in which NPR described the recent EEOC v. Abercrombie & Fitch case as the Supreme Court “upholding the right of a Muslim woman to wear a headscarf at work” (or words to that effect). The online version of that story, “Why Are Only Three Observant Sikh Men Serving In The Military?”, starts off with, “If a Muslim woman may wear a headscarf at work, as the U.S. Supreme Court has now affirmed, perhaps a Sikh man should be able to wear a turban while serving in the U.S. military.”

WHAT?!!! That is just wrong. Wholly and completely wrong. Under Title VII, an employer must provide reasonable accommodation for an employee’s (or applicant’s) religious needs, unless the accommodation would pose an undue hardship on the employer. This reasonable accommodation obligation includes exemptions from otherwise-applicable dress code policies to permit religious garb, including headscarves and turbans. That is the law, has been the law, and the Supreme Court’s ruling did not change this.

As we discussed in our May E-Update, the issue before the Supreme Court in the Abercrombie & Fitch case was whether an employer must have actual knowledge of an employee’s religious need in order to be liable for a violation of Title VII. In this case, the applicant did not state that her headscarf was worn for religious reasons, but the company believed that it was and it chose not to hire her because she did not fit its East Coast Preppy “Look” policy. The Court held that if an employer refuses to hire an individual based on its belief that she will require a religious accommodation, and she actually would need one if hired, Title VII is violated. Proof of actual knowledge is not required. This is very different than “affirming” the right to wear a headscarf at work.

I was so upset, I nearly hit the car in front. Yes, I know that’s a bit of an overreaction, but let me explain: NPR’s mischaracterization of Title VII and the Supreme Court’s ruling fosters a fundamental misunderstanding in NPR listeners about the law and the rights and obligations of employers and employees under that law.

This NPR story reminded me of another media moment that caused me distress. I enjoy watching “The Good Wife.” But there was an episode in which the show stated that employees are only protected under the National Labor Relations Act if they are actually seeking to unionize. THAT WAS WRONG TOO! The NLRA protects the rights of employees to engage in concerted activity regarding the terms and conditions of employment – which can include, but is not limited to, unionization. Group discussions about wages or working conditions, even where the employees are not interested in unionization, are protected!

Although I was dismayed by the error, I wrote it off as a television show, and we all know that’s fiction and that shows take liberties with accuracy. But in retrospect, and in combination with NPR’s error, I see a grave problem – the public doesn’t know any better, and they believe what they are seeing, reading, hearing is correct. They may make decisions based on this faulty understanding of the law. And that is not OK. I believe the media, whether entertainment or the news, owe it to us, their listeners, to get it right!

Transgender rights have been receiving a considerable amount of media attention this week, most of which has been sparked by the magazine Vanity Fair featuring a cover story about “Keeping up with the Kardashians” star and former Olympian Bruce Jenner as a trans woman (Caitlyn Jenner). On the same day that the cover story was released, the Occupational Safety and Health Administration (OSHA) published a Best Practices Guide to Restroom Access for Transgender Workers.

The OSHA guide estimates that 700,000 adults in the United States are transgender. According to the website for GLAAD (Gay and Lesbian Alliance Against Defamation), transgender is an “umbrella term for people whose gender identity and/or gender expression differs from what is typically associated with the sex they were assigned at birth.” The OSHA guide states that “many transgender people transition to live their everyday life as the gender they identify with.” Transitioning is a different process for everyone and can include social changes (new first name), medical steps, and changing identification documents.

A month ago, OSHA issued a news release stating that it had entered into an alliance with the National Center for Transgender Equality (NCTE) to provide NCTE affiliates and others with information and resources to help foster “safer and more healthful American workplaces.” The restroom guide was developed at the request of NCTE.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. Under OSHA’s Sanitation standard (1910.141), employers under the agency’s jurisdiction are required to provide employees with sanitary and available facilities, so that employees will not suffer the adverse health effects that can result if toilets are not available.

Addressing why restroom access is a health and safety matter, the guide states that when employers restrict employees to use only restrooms that are not consistent with their gender identity or by requiring them to use gender-neutral or other specific restrooms, employees may feel singled out or fear for their physical safety. In some cases, such restrictions can result in employees avoiding using restrooms entirely while at work, which according to the guide, “can lead to potentially serious physical injury or illness.”

The guide establishes the following best practices:

  • Employees should be permitted to use facilities that correspond with their gender identity. For example, a person who identifies as a man should be permitted to use men’s restrooms. The employee should determine the most appropriate and safest option for him- or herself.
  • Employers can provide additional restroom options, which employees may choose, but are not required to use. These include: (1) single-occupancy gender-neutral (unisex) facilities; and (2) use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.
  • Employees are not required to provide any medical or legal documentation of their gender identity in order to have access to gender-appropriate facilities.
  • Employers cannot require a transgendered employee to use a segregated facility apart from other employees because of their gender identity or transgender status.

OSHA makes it clear in its publication that the guide is not a standard or a regulation and that it creates no new legal obligations on employers. Notwithstanding OSHA’s disclaimer, the Equal Employment Opportunity Commission has taken the position that discrimination against an individual because that person is transgender is a violation of Title VII’s prohibition of sex discrimination in employment. And in Maryland, the Fairness for All Marylanders Act of 2014, which added gender identity as a protected class to Maryland’s laws against discrimination in employment, became effective in October of 2014. There are other state and local laws regarding restroom access as well.

Takeaway:  While the guide is not a standard or a regulation, employers should consider employing OSHA’s best practices as a model for their workplace.  This is especially true for employers in states (such as Maryland) or localities that have made gender identity a protected class.