Photo: Beatrice Murch via Flickr (CC by 2.0)

In a 5-4 decision, the United States Supreme Court has held that employers may enforce arbitration agreements signed by employees that bar class-action lawsuits and require individualized arbitration. In so holding, the Court found that the Federal Arbitration Act (FAA) instructs courts to enforce the terms of arbitration agreements, including terms requiring one-on-one arbitration proceedings.  It also found that the National Labor Relations Act (NLRA) says nothing about how legal disputes must be resolved.  “Far from conflicting, the Arbitration Act and the NLRA have long enjoyed separate spheres of influence and neither permits this Court to declare the parties’ agreements unlawful,” wrote Justice Neil Gorsuch for the majority.

Continue Reading Employers Get Green Light for One-on-One Arbitration Clauses in Employment Agreements

Photo: Judge Neil Gorsuch (Public Domain)
Photo: Judge Neil Gorsuch (Public Domain)

Last month, President Trump nominated Judge Neil Gorsuch from the United States Court of Appeals for the Tenth Circuit to fill the vacant seat left by the late Antonin Scalia on the United States Supreme Court.  While Judge Gorsuch’s nomination has been met with both praise and criticism from a divided electorate, it may bring good news to employers wrestling with leave requests under federal disability laws. Continue Reading Supreme Court Nominee’s Record on Disability Leave Favorable to Employers

Photo: Rafael Sato via Flickr (CC by 2.0)
Photo: Rafael Sato via Flickr (CC by 2.0)

On August 3, 2016, the US Supreme Court voted 5-3 to put on hold a lower federal court ruling that a transgender male student be allowed to use the bathroom of his gender identity.

The Virginia student, who was born a girl and now identifies as a male, had been granted the right to use the boys’ bathroom during the coming school year. The Supreme Court’s order on Wednesday now means that the student will not be able to use the restroom of his gender identity when school starts.

In April of this year, the 4th Circuit Court of Appeals had ruled that not allowing the student to use the bathroom of his gender identity was a violation of Title IX, a federal law which prohibits sex or gender discrimination at any educational institution that receives federal funds. The school board asked the US Supreme Court to block the ruling arguing that it deprived parents of the right to direct the education and upbringing of their children.

The Supreme Court will take this up in the fall but, in the meantime, it would appear that this young man cannot use the school restroom of his gender identity.

For further reading, click the links below:

“Supreme Court Blocks Transgender Bathroom Ruling” by Pete Williams

“US Supreme Court blocks transgender toilet ruling”

“SCOTUS: School can block transgender teen from boys’ room”

Photo: dbking via Flickr (CC by 2.0)
Photo: dbking via Flickr (CC by 2.0)

In Tyson Foods, Inc. v. Bouaphakeo, the U.S. Supreme Court held that statistical or representative evidence could be used by a class of employees to prove liability for an employer’s failure to pay them for donning and doffing protective gear in violation of the Fair Labor Standards Act (FLSA).  In this class action lawsuit, workers at a meat-processing plant alleged that Tyson failed to give them credit for time spent donning and doffing protective gear and walking to and from their production line.  The workers were claiming overtime pay as a result of all hours worked over 40 hours a week when adding this additional time.

A jury found for the workers and awarded the class about $2.9 million in unpaid wages.  At trial, the court allowed the employees to use representative or an average sample of time it took workers in donning and doffing their gear rather than requiring each class member to present individualized proof of time spent.  Plaintiffs’ expert testified at trial that he determined the average time it took 53 of the 3,344 workers in the class to do these tasks and concluded that an average of 18 minutes a day needed to be added to weekly hours worked for one department and 21.25 minutes a day for another department.  Plaintiffs claimed it could be presumed that all class members were identical to the statistical average and that the workers were owed overtime for all time over 40 hours when adding the representative time to the weekly time worked.

Tyson argued that the trial court erred because the time per employee to perform those tasks was so different that they cannot rely on averages and the class should not have been certified under Federal Rule of Civil Procedure 23(b)(3).  The U.S. Supreme Court disagreed and found that a categorical exclusion of the use of samples made little sense.  It held that it would allow statistical samples to establish liability on a case by case basis — depending on the purpose for which the evidence was being introduced and on the elements of the underlying action.  In reaching this decision, the Supreme Court highlighted the employer’s violation of its duty to maintain records of this time.  Because there was a gap in employer required records of work-time, each employee could have relied on the average sample of time to prove liability and therefore the representative evidence could be used on a class-wide basis.

The Supreme Court explained that its holding was consistent with its 2011 decision in Wal-Mart Stores, Inc. v. Dukes as that case involved 1.5 million employees who were not similarly situated because they were at different stores and under different policies.  The class in Dukes failed to meet even Rule 23(a)’s basic requirement that class members share a common question of fact or law.  On the contrary, in Tyson, the employees worked out of the same facility, did similar work, and were under the same policies for pay.

While refusing to establish a general rule governing the use of such evidence, the Supreme Court widened the potential liability for employers in defending class action suits by allowing representative samples.  This is particularly the case where there are record keeping violations by the employer in the wage and hour area.  Employers should make sure that they review their practices and procedures and confirm that they are maintaining appropriate records of time for all employees.

 

Photo: dbking via Flickr (CC by 2.0)
Photo: dbking via Flickr (CC by 2.0)

As has been the case since 2009, the Equal Employment Opportunity Commission again reported that retaliation remained the most frequently filed discrimination charge in fiscal year 2015.  With the continued upward trend of these claims, the EEOC has issued new proposed guidance which broadly interprets provisions of this protective legislation. The last guidance it issued on retaliation was in 1998.

The purpose of the guidance is to inform the public about how the EEOC may guide its personnel in processing and investigating discrimination charges filed by employees and in considering what litigation it may bring for enforcement.  Essentially, it is used as a reference by EEOC staff in making decisions on claims.  The proposed guidance can be found at http://www.eeoc.gov/eeoc/newsroom/release/1-21-16a.cfm.

An employee bringing a retaliation claim must prove:  (1) the employee engaged in a statutorily-protected activity; (2) the employee suffered an adverse employment action; and (3) the protected activity and the adverse employment action were causally connected.  The new guidance takes an aggressive position on what is within the scope of protected activity in the workplace.  For example, the EEOC interprets “participation activity” to include an internal complaint made with an employer whereas courts generally require some connection to an actual administrative complaint or the litigation process.  This difference in scope from the EEOC can have significant consequences for employers.

While EEOC guidance is not controlling, it can be persuasive to a court.  As the US Supreme Court explained in Young v. United Parcel Service, Inc. issued in March 2015, the weight placed on guidance should be based upon “the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors that give it power to persuade, if lacking power to control.”

Companies have 30 days to review and comment on the draft guidance, which ends on February 24, 2016.  Input may be submitted at www.regulations.gov in letter, email, or memoranda format. Alternatively, hard copies may be mailed to Public Input, EEOC, Executive Officer, 131 M Street, N.E., Washington, D.C. 20507.  The EEOC will review all comments and consider revisions to the draft guidance.

In the latest case to challenge elements of the Affordable Care Act (“Act”), the United States Supreme Court in a six-to-three vote, ruled on June 25, 2015 in King v. Burwell that premium subsidies will remain available in 36 states in which the federal government has primary responsibility for running health insurance exchanges.

The legal issue before the Court was the validity of Internal Revenue Service regulations that allow premium subsidies to individuals enrolled in a health plan through exchanges operated by a State or by the federal government.  The regulation interprets Section 36B(b)(2) of the Internal Revenue Code added by the Act which provides that the IRS is to calculate tax credits for premiums for qualified health plans “which were enrolled in through an Exchange established by the State.”

The Court was not persuaded by the petitioners’ argument that the plain, unambiguous language of the statutory provision prevented the IRS from establishing the regulation and there was no basis for the Court rejecting the plain text of Section 36B that only tax credits were available on state exchanges.  Rather, the Court viewed Section 36B as ambigu­ous in that the phrase could be limited in its reach to State exchanges but it could also refer to all exchanges—both State and Federal—for purposes of the tax credits.  Given that it determined that the text was ambiguous, the Court looked to the broader structure of the Act to determine whether one of Section 36B’s permissible meanings produced a substantive effect that was compatible with the rest of the Act, the core purpose of which is to provide quality, affordable health care.

Chief Justice Roberts concluded his lengthy majority opinion with the following statement that summarized the majority’s rational for the decision “[a] fair reading of legislation demands a fair understanding of the legislative plan.  Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.”

Last month, the United States Supreme Court ruled unanimously in Tibble v. Edison International that retirement plan fiduciaries have an ongoing duty to monitor plan investments.  The ruling came in a case involving challenges to plan investment decisions made more than six years before suit was filed. The lower courts had ruled some claims were barred by the statute of limitations.

In a 2007 lawsuit, participants in the Edison 401(k) Savings Plan sued various Edison International entities and the plan fiduciaries alleging numerous claims under ERISA.  The claims included that the plan fiduciaries should have offered identical lower-cost institutional shares instead of the more expensive investment options selected in 1999 and 2002.

The Supreme Court reversed the lower courts’ ruling that ERISA’s six-year limitations period barred plaintiff’s claims that the 1999 mutual fund investments were imprudent.  Although the Supreme Court stated that the lower court correctly asked whether the last action which constituted a part of the breach or violation of the duty of prudence occurred within the rele­vant 6-year period, the lower court was incorrect to focus on the act of designating an investment for plan inclusion to start the six ­year period. Instead, the lower courts should have recognized that a fiduciary is required to conduct a regular review of its investments with the nature and timing of the review contingent on the circumstances.  The case highlights the need for retirement plan fiduciaries to monitor plan investments pursuant to written procedures.

Photo: dbking via Flickr (CC by 2.0)
Photo: dbking via Flickr (CC by 2.0)

The US Supreme Court on June 1, 2015 decided the highly publicized case of EEOC v. Abercrombie & Fitch Stores, Inc. (“Abercrombie”).  The case involved a job applicant, Samantha Elauf, who went to an interview at the popular retail store wearing a hijab or traditional Muslim head scarf.  The interviewing manager gave her high marks and recommended she be hired.  The district manager vetoed the decision because the wearing of the hijab conflicted with company’s dress code or “Look Policy.”  He stated that all headwear, religious or otherwise, was against the policy.  The company claimed that the employee never told them she needed an accommodation.  The Court addressed the question whether an employer can be liable under Title VII of the Civil Rights Act of 1964 for refusing to hire an applicant or discharging an employee based on a “religious observance or practice” only if the employer has actual knowledge that a religious accommodation is required.

The EEOC filed suit on behalf of Elauf and prevailed in the District Court, and Abercrombie appealed.  The Tenth Circuit Court of Appeals reversed the decision and awarded summary judgment to Abercrombie on the ground that the requirement to accommodate an employee’s religious beliefs attaches only when the employee specifically tells the employer of the need for the accommodation.

The Supreme Court, in a resounding 8-1 decision which can be read here in its entirety, reversed the Tenth Circuit and remanded the case back to the lower court.  The Court held that an applicant need only show that the need for an accommodation was a motivating factor in the employer’s decision not to hire in order to be actionable. According to the opinion authored by Justice Scalia, the rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightfor­ward: An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions. Even a facially neutral policy barring all employees from wearing headscarves does not exempt a company from providing a religious accommodation allowing some employees to wear headscarves for religious purposes.

Employers should take note of this case along with the 2014 guidance on religious garb in the workplace issued by the EEOC.  The EEOC makes clear that Title VII prohibits a wide variety of actions, including: treating an applicant or employee differently on the basis of religion in recruitment, hiring, promotion, benefits, training, job duties, termination or any other aspect of employment; denying reasonable accommodation for sincerely held religious practices, unless the accommodation constitutes an undue hardship; segregating employees on the basis of religious belief; allowing workplace harassment on the basis of religious belief; or retaliating against an employee who requests a religious accommodation.  The EEOC defines religious practice or belief very broadly. The definition encompasses not only traditional, organized religions, but any theistic and non-theistic moral or ethical beliefs, even if they are new, uncommon, not part of any formal organization, or followed by very few people.  Further, it does not matter if the practice or belief varies among different members of the same religion, or if an individual employee’s adherence to the belief changes over time.

The EEOC warns companies of the following:

  • An employee does not need to say any “magic words” when he or she requests an accommodation.  If it is obvious that a particular practice is religiously-motivated and conflicts with a work policy, the employer is obligated to provide an accommodation.
  • Employers must take their employee’s word that a particular practice or belief is “sincerely held.”
  • An accommodation must be granted unless the accommodation would present an undue hardship to the employer.
  • A grant of religious accommodation does not mean that the employer must grant other employees the same accommodation for non-religious reasons.
  • Customer preference is not a defense to a claim of discrimination.
  • Segregating the employee or moving him or her to another position that is not customer facing is likely not appropriate.

The US Supreme Court on March 25, 2015 decided the case of Young v. United Parcel Service, Inc.(UPS).  The issue in the case was whether, and in what circumstances, the Pregnancy Discrimination Act (PDA), 42 U.S.C. § 2000e(k), requires an employer which provides work accommodations to non-pregnant employees with work limitations to provide work accommodations to pregnant employees who are “similar in their ability or inability to work.”

Photo: TipsTimesAdmin via Flickr (CC by 2.0) - tipstimes.com
Photo: TipsTimesAdmin via Flickr (CC by 2.0) – tipstimes.com

UPS offered  a “light duty program” to workers who were injured on the job, were disabled under the Americans with Disabilities Act (ADA) or had lost their Department of Transportation certifications.  UPS, however, did not provide any such accommodations to pregnant employees who were not disabled. Young challenged the policy arguing that the PDA requires an employer to provide pregnant employees light duty work if it provides similar work to other employees in other circumstances.    

Young worked as a  part-time driver for UPS where her responsibilities included pickup and delivery of packages. She had suffered several prior miscarriages so when she became pregnant, her physician limited her to lifting 20 pounds during the first 20 weeks of her pregnancy and 10 pounds thereafter.  Her normal job requirement was that she be able to lift parcels weighing up to 70 pounds herself and 150 pounds with assistance.  UPS did not allow Young to work under this restriction resulting in her staying out of work without pay for most of her pregnancy and ultimately losing her health insurance benefits.  Young filed suit, and UPS responded by saying that other employees which had been accommodated fell within one of the three categories referenced above; and since Young did not, there had been no discrimination.

The Fourth Circuit Court of Appeals sided with UPS and ruled that: (1) the employer did not “regard” a pregnant employee as disabled under the Americans with Disabilities Act (ADA); and (2) employers are not required under the PDA to provide pregnant employees with light duty assignments so long as the employer treats pregnant employees the same as non-pregnant employees with respect to offering accommodations.  That court further referred to UPS’ policy as “pregnancy blind” showing no discriminatory animus toward pregnant workers.

The Supreme Court reversed the decision and remanded the case back to the trial court to allow Young to pursue her claim.  The Court, refusing to accept the interpretation of the PDA espoused by either party, concluded that once an individual pregnant worker like Young made a prima facie showing of discrimination “by showing actions taken by the employer from which one can infer, if such actions remain unexplained, that it is more likely than not that such actions were based on a discriminatory criterion illegal under Title VII.”  In Young’s case this meant showing that she belonged to the protected class, that she sought accommodation, that the employer did not accommodate her, but did accommodate others “similar in their ability or inability to work.”  Thereafter, the employer must justify its refusal to accommodate the employee based on “legitimate, non-discriminatory” reasons.  The fact that the accommodation might be expensive or inconvenient for the employer is not necessarily sufficient justification.  Even once the employer presents its justifications, the employee has an opportunity to show that the reasons offered are pretext for discrimination.

The Court concluded that Young had created a sufficient factual issue regarding whether UPS provided more favorable treatment to non-pregnant employees in situations which could not be distinguished from hers to allow her to take her case to a jury.

Based on this decision employers should review their policies surrounding accommodation for pregnant and non-pregnant employees to insure that there is no unjustifiable disparate treatment occurring.

Photo Credit: Daniel Logo via Flickr (CC by 2.0)

In a unanimous decision, the US Supreme Court once again addressed the issue of whether time the employer requires an employee to do something is compensable under the Fair Labor Standards Act.  Integrity Staffing required its warehouse workers whose job it was to retrieve inventory and package it for shipment to undergo an antitheft security screening before leaving the warehouse each day. During the screening, employees removed items such as wallets, keys, and belts and passed through metal detectors.  Employees filed suit for unpaid wages arguing that the time spent waiting for and being screened was compensable, in part because they were required by the employer to do so. Continue Reading Integrity Staffing Solutions v. Busk, et. al: US Supreme Court Reverses Court of Appeals for the Ninth Circuit: Warehouse Workers’ Time spent in Post-Shift Security Screen Not Compensable