37744565 - legislation blank list, business conceptEarlier this month, members of the New Jersey General Assembly introduced legislation to prohibit employers from seeking wage/salary histories from prospective employees.  Assembly Bill 4119 (“A-4119”) follows on the heels of other states that are looking to take action on this issue, as well as similar efforts at the federal level.

The public policy rationale often cited by legislatures in passing these kinds of bills is that they may help close the gender wage gap.  The substantive discussion of whether these efforts are effective is beyond the scope of this blog, so for our purposes, we are focusing solely on the effect this legislation would have on employers.

Specifically, A-4119 would make it an unlawful employment practice:

For any employer to seek the wage or salary history of a prospective employee, or require, as a condition of employment, that an employee disclose information about either the employee’s own wages, including benefits or other compensation, or about any other employee’s wages; and for any employer to require that a prospective employee’s prior wage or salary history meet any minimum or maximum criteria as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment. 

As far as such things go, this is a broad prohibition — and one that would subject employers to liability under New Jersey’s Law Against Discrimination.

In addition to the text above, there are three other provisions to note.  First, the bill also notes that it would not prohibit prospective employees from volunteering wage/salary history, as long as that disclosure was not coerced by the prospective employer.  Second, employers are only permitted to confirm (or permit the would-be employee to confirm) wage/salary history after making an offer of employment.  Third, A-4119 also includes an anti-retaliation provision.

As with all proposed legislation, standard disclaimers apply:  this is the bill in its current form, which may or may not ultimately be enacted, and which may or may not be amended to varying degrees if it is ultimately enacted.  We will continue to monitor this legislation and provide any relevant updates should it move in the New Jersey Legislature.

First, a disclaimer.  Let me assure you that the contributors to the Employment Discrimination Report run the full gamut of the political spectrum.  This is not a post about politics, it just so happens that our demonstrative example comes from the presidential race.

It is not uncommon for employers and employees to execute Non-Disclosure Agreements (NDAs) to govern the employment relationship following its conclusion.  To wit, one of the major presidential candidates made all campaign employees (and volunteers but that is a whole other can of worms) sign an NDA that governs all information of a “private, proprietary or confidential nature or that (the candidate) insists remain private or confidential.”  The NDA in question further prohibits former employees from making negative comments regarding the candidate or family members…in perpetuity.  It’s worth noting that the other major candidate also has asked campaign employees to execute an NDA, though the substance of it remains undisclosed.

Compensation on the Whisper

When executing NDAs with employees, be it at the end of the employment relationship or as part of a restrictive covenant at some earlier point, it’s important to do keep the scope reasonable so as not to be judicially struck later.  Here are some simple rules that were not followed above:

  1. Identify with specificity the information that must be kept private and confidential. Simply saying “confidential information” is a recipe for failure on this front, as the ambiguity as to what information is “confidential” will be read against the employer.
  2. Put a time frame on the responsibility. While it is not per se impossible to have an agreement enforced in perpetuity, the path of least resistance is put a time frame on the responsibility that bears some relationship to legitimate business necessity.
  3. Restrict Nondisparagement to Reasonable Topics. While nondisparagement clauses, the legal cousin of NDAs, are valid, they similarly need to be narrowed in scope to include only information for which there is a legitimate business purpose.

While keeping your corporate information in-house is a compelling aim, understand that there is no fool-proof way to keep information under wraps.  But adhering to simple rules of the road will help make sure that What Happens At Work, Stays at Work.

11298754_sTime for a pop-quiz on disabilities in your workplace!  (I hope you brought your No. 2 pencils, because it’s multiple choice).

You are a supervisor at Company X. You have an employee who has worked for the company for a number of years. By all accounts, he’s a reasonably good employee — receiving raises and benefits for performance over the years. At the time he was hired, he disclosed a number of his medical conditions, including hemophilia, HIV+ status, and Hepatitis C. The employee comes to you and says he will be undergoing a six-month treatment regimen for his hepatitis, for which he will not take leave during the treatment period.

Do you:

(A) Share with the employee your own personally-held fears and stereotypes regarding his illness
(B) Distance yourself from the employee, speaking to him less and less during the course of his treatment
(C) Fire the employee four months after he completes the treatment
(D) None of the above

If you picked (D), congratulations — you’re correct!  One supervisor at NJ Transit, however, appears to have run afoul of a similar situation, resulting in the state transportation agency shelling out $200,000 to settle a discrimination suit:

Kenneth Hitchner, a nine-year employee at the public transit agency, disclosed when he was hired as a public information officer in 2002 that he had hemophilia, Hepatitis C and was HIV positive, according to a copy of the lawsuit obtained by The Trentonian . . .

Hitchner’s direct supervisor, Ken Miller, allegedly had an animus towards people infected with Hepatitis C.

“Miller had previously told Hitchner that Miller was afraid of Miller’s own mother because she had Hepatitis C and was afraid that she would infect his kids by going to the bathroom in the house,” the lawsuit reads . . .

“Miller began distancing himself from Hitchner and speaking to Hitchner less and less during the months that Hitchner was undergoing the Hepatitis C treatment,” the lawsuit states.

After his treatment was complete in February 2010, Hitchner was advised four months later that his job was eliminated due to “budget cuts,” court documents outline.

Hitchner then learned that other employees without disabilities whose positions were also eliminated were offered other jobs with the agency at the same rate of pay. When Hitchner protested this to the agency and requested a similar placement, he was offered a customer service representative position, which is an entry-level position with lower pay, documents show.

A few disclaimers. The news story above only cites the plaintiff’s complaint. Thus, we don’t have the benefit of knowing what legal defenses the employer would have asserted, nor the additional facts the employer might use to support those defenses. Another point to keep in mind: as the case has settled, none of its allegations or theories have been tested by rigorous cross-examination. Nor has any liability been duly adjudged by a jury. It’s fair to say that we are probably not getting the full picture by merely reading the story and that the hypothetical presented above is somewhat oversimplified.

All of that said, the story raises a few worthwhile points to remember when it comes to employee disabilities in the workplace. (Note: the suit alleges a claim under New Jersey’s Law Against Discrimination, but for the benefit of our broader readership, I will discuss these points in the context of the Americans with Disabilities Act).

First, do not rely on fear, generalizations, or stereotypes in making decisions about an employee’s disability.  The ADA does permit employers to set qualification standards that an employee will not pose a “direct threat” to health and safety in the workplace. “Direct threat” is a legal defense established by the ADA that refers to “a significant risk to the health or safety of others that cannot be eliminated by reasonable accommodation.” The ADA’s regulations require an employer to weigh a number of factors, and as such, this defense is very fact-specific. However, the determination must be established through individualized judgments of the employee’s ability to safely perform the job’s essential functions and must be based on reasonable medical judgment and objective evidence. In other words, taking adverse action against an employee that may be motivated by fear or stereotypes regarding their disability (such as, a supervisor allegedly expressing fear that people with Hepatitis C will infect others by using the bathroom) is asking for legal trouble.

Second, remember: “disability” is broadly defined. A bit of backstory may be helpful here. In 2008, Congress amended the ADA via the Americans with Disabilities Amendments Act (or, “ADAAA”). Congress did so in response to a number of court decisions, including Supreme Court decisions, that construed the definition of disability in what it regarded as too narrow or technical a fashion. In particular, the ADAAA included a directive that disability should be broadly construed in favor of coverage.

One method to establish protected disability status is when an employee has a physical or mental impairment that substantially limits one or more major life activities.  The Act itself states the determination of whether a life activity is “major” should not be interpreted strictly or create a demanding standard for disability.  Moreover, with the exception of eyeglasses or contact lenses, determining if a major life activity is substantially limited is done “without regard to the ameliorative effects of mitigating measures,” such as medication.  Thus, in the example above, an employer would not be able to successfully argue that because the employee was undergoing treatment, he was not disabled under the meaning of the law. 

Third, train, train, and train some more. Training your supervisors, managers, and HR team on the nuances of the ADA (and any state/local law equivalents in the states where your business operates) is a crucial component of ensuring compliance, promoting harmony in the workplace, and reducing potential legal exposure. You should plan for regular training — at least annually.

Regardless of the type of employer you are, you depend, on some level, on customers who are willing to pay for the goods or services being offered.  And the old adage, “The Customer is Always Right,” a mantra of the American business community since this country’s founding, is as true today as it was then.  But from time to time, valued customers will step over the line and act inappropriately towards company employees.  If and when that occurs, employers need to understand the legal ramifications of dealing with the fallout.

Recently, a receptionist at a New Jersey automobile dealership brought an action against her employer for violation of the New Jersey Law Against Discrimination.  In the Complaint, she alleged, inter alia, that her employer retaliated after she pressed charges against a high-profile customer who had tugged at her shirt and exposed her bra.   Thereafter, she alleged that her work environment became hostile until she was terminated.

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This case has been up to the Appellate Division in New Jersey, who ruled that the employer is not responsible for the conduct of a non-employee, and will not be held responsible for customer conduct under most circumstances.  However, the Appellate Division did find that an employee filing charges against a customer is a protected activity that protects and individual against employer retaliation.

The upshot of the case is that in the rare case that customer behavior crosses over the line of good taste, take immediate measures to correct the situation.  In the even rarer case that the conduct becomes criminal, let your employees know that if they choose to press charges, they will not the subject of retaliation in any way, shape, or form.

Last Friday, my colleague Alexander Leonard, reported that Massachusetts had just passed a sweeping gender equity law that would prohibit employers from asking applicants about their past salary history.  Days after the Massachusetts law was signed by Governor Baker, the New York City Public Advocate Letitia James introduced a similar bill.  We wonder if laws like these will be become part of a new grassroots movement that produce a lot of patchwork laws like sick leave laws have been in the last few years.

The proposed bill has 6 co-sponsors and was designed to implement one of the policy recommendations from Ms. James’ April 2016 pay equity policy report.

If passed, it would be illegal for NYC employers and employment agencies to ask about any applicant’s salary history or benefits.  Employers and employment agencies could not get around this law by conducting public record searches on applicants.  Finally, the law would make it illegal for employers to rely on salary history to determine an applicant’s salary.

Employers have long asked applicants about their salary history in an attempt to find the appropriate salary to offer a candidate. This is done both to save money for the employers, but just as often to insure that a previous salary is at least being matched with the new offer.

Massachusetts’ law does not go into effect until January 2018.  If New York City’s law passes it will likely be effective before Massachusetts’ law goes into effect.  This means that New York City employers won’t have the benefit of seeing how this law will affect the interviewing and hiring process.  Questions remain as to whether laws such as this will in fact close the gender pay gap or will simply make the hiring process more time-consuming and drawn out as employers struggle to hit on the appropriate compensation to get candidates to accept job offers.

We will keep an eye on this one.

56212572 - business cartoon about two different perceptions of compensation level.

 

On July 29, 2016, Governor Bruce Ratnor signed the Child Bereavement Act into law.  The Act requires employers with 50 or more employees to provide up to 10 working days of unpaid leave to employees to:

  1. attend the funeral or alternative to a funeral of a child;
  2. make arrangements necessitated by the death of the child; or
  3. grieve the death of the child.

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Bereavement leave must be completed within 60 days after the date on which the employee receives notice of the death of the child.   Further, employees requiring leave must provide employers with at least 48 hours’ advance notice of the employee’s intention to take bereavement leave, unless providing such notice is not reasonable and practicable.

The law defines employer as it is defined under the Federal Family and Medical Leave Act, which provides that employers are covered employers if they have 50 employees located anywhere in the U.S.  However, the law also defines eligible employees as is defined in the FMLA.  Thus, in order to be eligible for leave employees must have worked at least 12 months for the employer, worked at least 1250 hours in the last 12 months, and work in a location with 50 or more employees within a 75-mile radius.

The law does not define “child” as the FMLA does so employees will be able to take this leave regardless of the age of their children.

Employers may require reasonable documentation to demonstrate the need for leave.  Such documentation can include a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or government agency.

If an employee tragically suffers the death of more than one child in a 12-month period, an employee is entitled to up to a total of 6 weeks of bereavement leave during the 12-month period. Although the Act provides for unpaid leave, if an employee has paid leave (including family, medical, sick, annual, personal, or similar leave) from employment, the employee may elect to use paid leave for bereavement leave.

Finally, the law provides that it is not meant to increase the total amount of unpaid leave the employee can take under the FMLA.  This seems to mean that if an employee has exhausted his or her 12 week FMLA entitlement, that he or she will not be permitted to take bereavement leave.

The law was effective immediately so, if employers have not already updated their leave policies, we encourage you to do so.

As my colleague Christina Stoneburner wrote earlier in the week, we aren’t even through summer 2016, yet the number of new employment laws and regulations enacted that employers must contend with are already piling up.  Massachusetts recently joined the fray, with Governor Baker signing into law earlier this month S.2119 (effective January 1, 2018), which addresses pay equity discrimination based on gender.  Notably, the new pay equity legislation reiterates what Massachusetts and federal law have long stated: pay disparities based on gender are unlawful.  However, this new law goes further, is more employee-friendly than ever, and specifically addresses neutral conduct that arguably affects gender pay equality.

35827527 - question sign from packs of dollar isolated on white. where to invest money concept. 3d

One unique and notable component of the new law is a first-of-its-kind “ban the box” type prohibition that makes it unlawful to inquire regarding the prior salary history of prospective employees (similar to the prohibition of criminal conviction questions that many jurisdictions have recently adopted). Questions about prior salaries are extremely common and can be found on most employment applications.  However, this practice must now be eliminated in Massachusetts.  The intent of the legislature is to root out historic pay discrimination by forcing pay decisions to be made based on the job and not prior salaries.  The law prohibits, any time prior to making an offer of employment (with salary offer), either directly requesting prior salary information from the prospective employee and/or his or her former employers, or indirectly researching the same.  Moreover, employees cannot be prohibited from discussing their wages amongst themselves (although such policies are already prohibited by current interpretations of the National Labor Relations Act).

In addition, the law reiterates that actual pay differences based on gender are expressly prohibited where employees are engaged in “comparable work,” which is defined as any job(s) (regardless of titles) that require “substantially similar skill, effort and responsibility . . . under similar working conditions.”  Moreover, the law clearly delineates the few bona fide non-discriminatory reasons allowed for neutral pay policies, namely: (i) seniority pay systems, (ii) merit pay systems, (iii) production or sales quality/quantity pay systems, (iv) geographic differences, (v) job relevant education, training, and/or experience, and (vi) job related travel.  Lastly, the statute contains an anti-retaliation provision that prohibits taking retaliatory action against employees or applicants that oppose practices prohibited by the law.

An action enforcing the statute may be brought within three years of any discriminatory act, either by the attorney general or through civil litigation by the affected employee(s) and/or applicant(s), including but not limited to by class action.  Damages recoverable include any owed or diminished wages and benefits, as well as additional “liquidated” damages (which doubles any owed compensation) and any reasonable attorneys’ fees and costs.

The one piece of good news for employers is that an affirmative defense is provided in the statute where an employer, within the prior three years, conducts a good faith self-evaluation of its pay practices in order to eliminate pay discrepancies based on gender. As a result, it is recommended that prior to the effective date of the act that employers conduct a thorough review of all employee handbooks, non-disclosure agreements, employment applications, and other new hire policies and forms, as well as review institutional pay structures and systems, to ensure compliance with the law.  As always, your friendly Fox Rothschild attorneys are here to help in this regard.

 

I know what you’re thinking, it’s not even September yet.  I’ll worry about January sometime in December.

The beginning of the year may seem like a long way away, but it can sneak up on you.  I often have employers who are scrambling at the end of the year to understand legal changes and to update policies to insure compliance.

37744565 - legislation blank list, business concept

In the spirit of getting ready to go back to school, we thought we’d start educating employers now of the changes to come and laws that are effective on January 1, 2017.  We will periodically update the list and try to do an overall round-up in December of laws going into effect in January 2017.

1.   FLSA exemption rules.  The biggest sea change on the legal landscape is the revised definition of the salary test under the Fair Labor Standards Act.  In order to be exempt employees, employees must meet the salary test and perform exempt job duties.  The final rule settled on the new weekly salary of $913 (or $47,476 per year), which is a significant increase over the old threshold of $455 per week.  Employees must earn at least $913 in salary (may include certain bonuses) per week or they cannot be considered exempt employees regardless of whether they perform exempt job duties.  More details can be found here in the Firm’s alert.  Be warned, however, that the effective date of this rule is December 1, 2016;  it is such a big deal that we wanted to include it here.

2.   Connecticut Ban the Box.  The Fair Chance Employment law was signed in June 2016 and is effective January 1, 2017.  The law prohibits employers from inquiring about an applicant’s criminal background history on an employment application.  There are two exceptions to the rule and employers may ask questions about criminal history on applications where: (1) required to do so by law; or (2) a security or fidelity bond or equivalent bond is required for the position.  In addition, employers may not at any time ask about criminal records that have been “erased” by statute.

Employers should review application forms to remove any objectionable questions.  Where employers are permitted by statute to ask about criminal backgrounds on an application, the employers must include a clear disclaimer that applicants are not obligated to disclose erased records and must advise what records may be subject to erasure.  Employers must also advise that where a criminal records has been erased, the applicant will be deemed to have never been arrested.

Employers must also insure that portions of applications that disclose criminal backgrounds can only be viewed by HR personnel, or where there is no HR, the person in charge of employment and any person involved in interviewing the candidate.  There are limited exceptions to the disclosure rule as may be required by FINRA, for an insurance producer, or the FDIC Act.

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57530400 – deadline note calendar planner concept

This week, the EEOC officially opened its EEO-1 survey process for 2016.  The EEO-1 form requires employers who meet qualifying thresholds to provide certain data about their workforces (e.g., race, ethnicity, gender, job classifications/categories, etc.) to the EEOC.

Who must comply?  1) Private employers with 100 or more employees; 2) private employers with fewer than 100 employees, if the company is owned by/affiliated with another company such that the enterprise employs 100 or more employees; and 3) certain prime and first-tier subcontractors of the federal government who have contracts totaling $50,000 or more.

You may be thinking to yourself:  Self, this seems like a lot of complicated paperwork, and I am not going to do it.  There are (at least) three excellent reasons why you should!

First, it’s required by law.  If your business meets one of the thresholds above, both Title VII itself and federal regulations require you to complete the EEO-1.  Failing to complete the EEO-1 may well result in the EEOC going into federal court to compel your compliance.

Second, it’s not (technically) paperwork.   The EEO-1 is submitted electronically (unless your business faces what the EEOC calls “extreme circumstances where Internet access is not available” and gets EEOC permission to submit paper forms).

Third, EEOC uses the data generated from EEO-1 as part of its ongoing enforcement efforts — for example, analyzing employment patterns within particular industries, regions, etc.  Providing the required data, in theory, helps the EEOC to make these decisions and analyses with a more accurate picture of the workforce.

September 30th is the filing deadline.  Have questions?  See the EEOC’s FAQ page on the EEO-1 process here.

3324553_s Yesterday, the U.S. Seventh Circuit Court of Appeals affirmed a lower court ruling holding that Title VII does not prohibit employment discrimination on the basis of sexual orientation.  The case involved a lesbian part-time employee, who alleged she was deprived of the opportunity for full-time employment and was not promoted due to her sexual orientation.  After losing her case at the District Court level, the employee appealed to the Seventh Circuit.

The Seventh Circuit noted its hands were tied in the matter:

Since Hamner and Spearman, our circuit has, without exception, relied on those precedents to hold that the Title VII prohibition on discrimination based on ‘sex’ extends only to discrimination based on a person’s gender, and not that aimed at a person’s sexual orientation.

In affirming the decision, the court also pointed to the fact that Congress had not amended the law to include sexual orientation and the fact that the Supreme Court has not established precedent extending Title VII protections to employees on the basis of their sexual orientation.

While Title VII does not expressly include sexual orientation as a protected characteristic in its ban against employment discrimination, your faithful blog authors have discussed a number of legal theories under which LGBT employees have sought relief.  We have discussed the sex stereotyping theory, i.e., the idea that an employee’s failure to conform to gender stereotypes or norms may be actionable for LGBT plaintiffs under Title VII.  We have also discussed what might be called the “referential” theory, under which the EEOC has argued that sexual orientation cannot be understood as a distinct concept from sex, and that sexual orientation discrimination is therefore sex discrimination by definition.

Absent congressional action or Supreme Court guidance, employers continue to face some uncertainty as to the viability of these kinds of claims — which some courts may find persuasive.  In light of this uncertainty, employers should consider doing three things:

  • Remember that even if not covered by Title VII, sexual orientation may be a protected characteristic in employment under state, county, local law, or executive order — depending on the jurisdiction(s) where a business operates
  • Proactively develop policies and procedures to prevent sexual orientation discrimination in the workplace, even in jurisdictions where it is not a protected characteristic
  • Continue to monitor these legal developments and discuss them with legal counsel