About a month ago, we posted that employers could take some lessons from the investigation into President Trump’s claims that he was illegally wiretapped by the Obama Administration.  This investigation still proves to be a cautionary tale for employers.

One of the key, and sometimes difficult, decisions in any investigation is who should conduct the investigation.  Should the investigation be done by HR or an executive in the Company?  Or should the investigation be conducted by an outside third party?

What may have gotten lost in last week’s news of the bombing in Syria is the fact that House Intelligence Chairman Devin Nunes has recused himself from the committee’s probe into Russian interference in the election.  This news came after Nunes was criticized for speaking publicly about classified surveillance reports that seemingly gave support to President Trump’s claims that he was wiretapped.

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Why the criticism?  Well, because before Nunes disclosed the evidence to his fellow members of the committee, he briefed the White House on what he found.  As anger grew over this breach of protocol and the fact that it lent credibility to claims that the investigation was biased, it was discovered that he had in fact reviewed the documents in question at the White House.

Now that he has recused himself in the face of ethics charges filed against him for his actions, the question remains whether anyone on the outside will believe that the new lead, Representative K. Michael Conway (R-Tex.) will conduct an impartial investigation.

Employers should take note that the perception of impartiality is key to a good investigation.  In this case, regardless of whether Nunes could be impartial if presented with evidence of ties to the Trump campaign and the Russian hackers, by so publicly rushing to the defense of the President and his team before any investigation was complete, he tanked the investigation.  Employers should be careful to select an investigator that can be seen as impartial and not favoring the accused in the investigation.

Recently, the United States Court of Appeals for the Seventh Circuit issued an opinion with significant employment law implications.  As you might recall, a panel of the Seventh Circuit issued a split 2-1 decision a few months ago, holding that Title VII’s prohibitions against sex discrimination in employment did not extend to protect employees on the basis of their sexual orientation.  The full Seventh Circuit then heard oral argument about whether the panel decision was correctly decided in the case, Hively v. Ivy Tech Community College.

Last week, the Seventh Circuit sitting en banc reversed the panel’s decision, holding that Title VII’s provisions that prohibit discrimination in employment on the basis of sex necessarily also prohibit employment discrimination on the basis of sexual orientation.  This decision is a binding interpretation of federal law for employers with employees within the Seventh Circuit, which includes Illinois, Indiana, and Wisconsin.  This decision means that employers in those states should immediately review their policies, procedures, and training regimens to ensure compliance.  However, employers outside of those states aren’t necessarily “off the hook” and should strongly consider reviewing their own policies in light of this decision.

To learn more about what this decision could mean for your workplace, check out our recent Labor & Employment Alert on the case.

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In the past year or so, we’ve noticed an increasing legislative trend around the country — governing bodies passing bills to prohibit employers from inquiring about their job applicants’ wage history.  The precise details of these efforts naturally vary from locale to locale.  Still, whether at the federal, state, or local level, the rationale for these legislative efforts is often the same: they are efforts to close the gender wage gap.

This past August, Massachusetts became the first state in the nation to enact a statewide ban on the practice of employers seeking wage information from their applicants — a practice that many employers currently use as a matter of course in their hiring process.  Shortly thereafter, federal legislation seeking similar goals was introduced, and other states have started to get the ball rolling on their own legislation.  Cities have also joined the fray, with Philadelphia Mayor Jim Kenney signing a city ordinance to this effect several months ago.

Effective May 23, 2017 (that’s eight weeks from today, if you’re counting along with me), Philadelphia will become the first city to ban employers from asking about the wage history of job applicants.  The provision will take effect as an amendment to the City’s Fair Practices Ordinance and will be enforced by the Philadelphia Commission on Human Relations.  Our colleague Steven Ludwig has written an excellent summary of the law’s provisions, which you can find here.  Philadelphia employers should check out this information and begin planning (to the extent they have not done so already) to ensure their hiring procedures comply by May 23rd.

Moreover, in your author’s humble opinion, it’s highly likely that similar legislative efforts will continue to spread and gain steam across the country.  While the federal government is unlikely to act in the next two years, states and cities are likely to begin the process of following suit.  Employers should be mindful of the jurisdictions in which they operate and key tabs on legislative developments in this area that may affect their hiring practices.

TSpring Cleaninghe equinox has come and went, meaning warm weather is thankfully approaching. This also means spring hiring season is here for many employers. However, caution is advised. Given the ease of un-vetted online job postings, many forget that these posts are legal minefields (and public too). Federal, state, and local agencies (as well as plaintiffs’ attorneys) can see job ads just as well as potential candidates. As you pack away the winter coats, make sure to dust off your job posts and remove any potential legal snares.

One of the most common issues we see regarding job ads is “preference” language. The Equal Employment Opportunity Commission (“EEOC”) explicitly states that it is “illegal for an employer to publish a job advertisement that shows a preference . . . because of his or her race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.” While this may seem obvious, inadvertent word usage that may show a preference for one protected category over another is often overlooked.

For example, the EEOC notes that the phrase “recent college graduates” may indicate a preference for younger employees, and may violate the law. In addition, historically gendered job titles are frequently used in the hospitality industry, such as “waitress,” “hostess,” or “delivery boy.” Government agencies will often argue that such terms indicate a preference for one sex, gender, or age over another, even if all sexes, genders, and ages were welcome to apply. Moreover, legitimate job requirements, such as “must be able to lift ‘x’ pounds,” must be evaluated with legal counsel to ensure that disability and accommodation laws are complied with, as well as to ensure no overtime exemption misclassification issues are created.

In addition, in some states and localities additional discrimination protections are offered above those available under federal law. The New York City Commission on Human Rights (“NYCCHR”) issued notable guidance in 2015 on the treatment of transgendered employees and applicants. The NYCCHR has since aggressively investigated offending job advertisements that indicate a proclivity toward traditional gender categories, among other problematic conduct. (More information on NYC’s transgender guidance is available here.)

However, remember that simply sanitizing one’s advertisements is not enough. Hiring practices matter too. The EEOC notes that “an employer’s reliance on word-of-mouth recruitment . . . may violate the law” where the newly hired employees mirror the current workforce.

In sum, it is critical to review all job advertisements for problematic language, and train human resources and hiring personnel to be aware of these issues. Discriminatory job language can cause unneeded headaches with federal, state, and local governmental agencies, or that job posting may be “Exhibit A” in your next lawsuit.

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It seems that every day we are hearing something about investigations involving the White House.

Whether it is the investigation into Russia’s hacking of the election that has resulted in the indictment of suspected Russian spies or President Trump’s call for an investigation into whether he was wiretapped, it seems everyone wants an investigation.

Such calls for investigations bring up other questions — should there even be an investigation, who should do the investigation, when the investigation should start, and when should the investigation end.  These are all questions faced by employers when addressing employee complaints.

It may not be fair to compare investigations into employee conduct to Congressional hearings or law enforcement investigations, but employers can learn a lot from those investigations.  In later posts, we’ll get into pitfalls of a poor investigation, but for now we are focusing on whether an investigation is necessary.

Employers frequently face complaints from employees of varying degrees of credulity and proof.  What does an employer do with the “crazy” or unsubstantiated complaint?

Let’s look for example at President Trump’s recent tweets about alleged wiretapping.  Those are pretty sensational claims, that, if true, mean members of the Obama Administration violated the law.  Based on what we know now, the complaint appears to be unsubstantiated by any proof.  Instead, as the White House calls for others to come forward with that proof, it appears that the allegations are based on untrustworthy sources or the President’s bare belief.  This is not that dissimilar from an employee who claims that he or she has been discriminated against based on a “feeling.”

Employers are often tempted to stop the investigation at this point.  After all, if the employee cannot come forward with any proof, then why should the employer waste resources continuing the investigation?

There are two very good reasons to continue.  First, although the employee cannot articulate proof, the employee’s feeling may actually be correct.  In those cases, stopping the investigation early means that a problem will not be uncovered and resolved, leading to much greater liability in the future.

The second reason is for the integrity of the complaint process.  If employees feel that their complaints are summarily dismissed without any investigation, those employees will believe that filing a complaint is fruitless. Those employees are likely to tell others not to complain because the company does not take complaints seriously.  Once that happens, employees who file complaints in court before filing any internal complaints will have an argument against the employer’s affirmative defense that the employee failed to use the internal complaint procedure.

So, the lesson is, even if the complaint seems to be a waste of time, devote some time to investigating it.  Just how much time to invest will be the subject of a future post.

 

 

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A notable case caught our eye recently coming out of the United States District Court for the Middle District of Florida filed by the Equal Employment Opportunity Commission (“EEOC”). Namely, The EEOC sued CRST International, Inc. (“CRST”) claiming that it, among other things, violated the Americans with Disabilities Act (“ADA”) by failing to accommodate and retaliating against a prospective truck driver.

The new driver allegedly requested the use of a prescribed emotional support animal to mitigate post-traumatic stress and mood disorder. CRST purportedly told the new driver simply to leave his dog at home and refused to provide an accommodation, citing unbendable company policies, and effectively rescinded his employment offer. Unfortunately, usually these policies must bend, or at the very least the possibility explored.

While the CRST case is in its early stages, and no court decisions have yet been issued, this complaint serves as a great illustration of just how far reaching the disability discrimination laws are. Here many employers would scoff or summarily dismiss the seemingly unworkable request of having a service animal in a trucking business. However, the CRST complaint reminds us of the potential disability accommodations that employers must consider and make. Regardless of the nature of the requested accommodation, the employer is, at the very least, required to engage in the interactive process with the employee and determine what, if any, reasonable accommodations can be made. Otherwise, you may end up on the wrong side of an EEOC lawsuit alleging ADA retaliation and failure to accommodate.

Please remember that when an employee or prospective employee requests a workplace disability accommodation in order to perform his or her job, an employer generally must consider the accommodation and, if it can be implemented without undue hardship, it must be granted. Anytime an accommodation request is received, never dismiss the request out-of-hand. Make sure to talk to your in-house human resources department or legal department, or involve outside counsel if necessary, to determine your legal obligations. Also, note that your state or local laws may provide additional protections beyond the ADA.

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As my colleague Raquel Gutierrez warned last year, proposed wage payment regulations were set to become effective March 7, 2017. These regulations, created by the New York Department of Labor (“NYDOL”), would have caused new compliance headaches for New York employers. The proposed regulations placed specific notice requirements on employers to inform employees in writing of the methods by which they can receive wages. The regulations also would have implemented various restrictions with respect to payroll debit cards and direct deposits, most notably prohibiting certain financial services fees and requiring local withdrawal access. For the time being, employers needn’t worry about these proposed changes.

The New York Industrial Board of Appeals (“IBA”)—the intermediate administrative appellate body that oversees the NYDOL—has blocked implementation of these regulations by issuing a decision invalidating these proposed restrictions. The IBA found that the Commissioner of Labor overstepped her authority by, among other things, attempting to regulate issues that were truly the province of financial services regulations. For the moment, this alleviates at least one new administrative burden for the New York employer community.

However, please note that even though the NYDOL’s new regulations will not be implemented at this time, all existing laws and regulations regarding the payment of employee wages remain in effect. This includes, but is not limited to, requirements that employers obtain written authorization prior to paying employee wages by direct deposit or by payroll debit card, as well as restrictions on employers from charging fees or making deductions from wages. It is also possible that the NYDOL will submit alternate regulations in order to further its agenda.

As always, your friendly Fox Rothschild attorneys will monitor any new regulatory activity in this regard (or if the IBA’s decision is appealed further) and publish updates here or on our client alerts page.

Bill Egan writes:

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Aside from whistleblower and highly offensive sexual harassment cases, there may be no claim that elicits the protective instincts of the average jury more than disability discrimination cases, especially where the disability is cancer-related.  Employees with disabilities who are terminated without demonstrable cause often are seen as suffering the double indignity of dealing with whatever hardship their disability imposes and the termination of their employment because of it.  Adept attorneys paint a picture of the employer kicking an employee when he’s down and when you place the outcome of such a case in the hands of average Americans (i.e., a jury), and you have the makings of a big verdict.

Such was the case of Axel v. Fields Motorcars of Florida, Inc., where a Mercedes dealership terminated a 71-year-old used car and wholesale manager, Michael Axel, who had been diagnosed with kidney cancer in 2010.  Following surgery, the cancer metastasized to his lungs.  Axel elected to undergo an experimental treatment that came with very unpleasant side effects described as “tremendous” stomach pain, sores in his mouth, and sores on his feet.  Evidence was introduced that Axel’s supervisor expressed frustration with Axel because, among other reasons, he was “not getting real doctors treatment” but “other holistic or crazy things.”

The dealership terminated Axel in 2014, allegedly for making misrepresentations in 2004 on paperwork needed to obtain an auto auction access card for his son, a non-employee of the dealership who occasionally assisted Axel in transporting used cars to the local auto auction.  The son was not accused of misusing this authority other than to move vehicles.  In fact, he was employed by the dealership at the time of his father’s termination.   The misrepresentation on which the termination allegedly was based was discovered ten years after the fact, leading to the decision to terminate.  Pre-trial submissions did not reveal much in the way of other performance deficiencies by Axel.

The jury apparently rejected the dealership’s stated reason for the termination as pretext for disability discrimination.  It found that Axel was fired because of his disability in violation of the Florida Human Rights Act and awarded Axel $680,000 in lost wages and benefits, $600,000 for emotional distress, and $3.22 million dollars in punitive damages.  Notably, despite allegations of stray remarks reflective of possible age animus, the jury found that there was no age discrimination in the decision to terminate Axel’s employment.

A runaway verdict?  Perhaps, but verdicts of this nature and magnitude seem to occur more frequently in disability discrimination cases. This jury’s rejection of the age discrimination claim demonstrates a thoughtful and discerning assessment of the evidence presented.  This case serves as a reminder that disability discrimination cases stand in a class of their own and must be handled with utmost care and discretion.


Bill Egan is a partner in the Labor & Employment Department, resident in Fox’s Minneapolis office.

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Yesterday, the newly confirmed Education Secretary and Attorney General issued a joint letter eliminating the Obama administration’s guidance from last year addressing the issue of bathroom use by transgendered students.  Specifically, the former guidance had said that schools must allow students to use the bathroom of the gender with which they identify, even if that gender is different from the students’ biological gender.

The Obama administration had decided that under Title IX, discrimination based on transgender was sex discrimination.  This guidance was in line with positions taken by the EEOC pushing the issue that Title VII covered sexual orientation and gender identity discrimination because of its broad ban on sex discrimination.

Yesterday’s action only impacts public schools and not private employers.  The question is whether it will have a broader impact on EEOC enforcement strategies going forward.

Of course, the Supreme Court may, sooner, rather than later, have the final say on whether Title IX prohibits discrimination based on gender identity.  The Court is scheduled to hear argument in the case of Gavin Grimm v. Gloucester County School Board next month.  The case could have an impact on the interpretation of Title VII, not just Title IX.

We’ll be keeping an eye on this one.

Today’s post comes to us courtesy of Justin Schwam, an associate in the Labor and Employment Department in Roseland:

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With the trend of local paid sick leave ordinances continuing its progressive sweep in cities across the country, a consistent concern for companies located in the vicinity is whether their operations fall within the local law’s reach.  Does it only apply if the company is physically located in the city?  Or does any employee activity within the city trigger the often onerous recordkeeping obligations?

A few weeks ago, a Minneapolis judge limited the reach of the City’s law slated to go into effect later this year.   Judge Dickstein issued a temporary injunction against the enforcement of its Ordinance against businesses not physically located in the City.  Although the City argued that its exclusive enforcement authority meant that it would not apply the Ordinance against businesses outside the City, the court recognized that such assurances, “however sincere,” did not alter the Ordinance’s plain language.

The court’s analysis of this issue is also notable for its dissection of the City’s argument that its action was a permissible exercise of its police powers to protect the health and welfare of residents.  The court found that the City’s attempt to regulate extraterritorial businesses whose employees “are unlikely (or may never) enter the city while sick” was not a narrowly tailored means of addressing “identifiable harms within the city limits,” such as a rule governing the inspection of extra-territorial cows whose milk was sold within the city.  Because a prime justification for these local ordinances is typically the need to protect residents from the spread of contagion, the court’s refusal to accept policymakers’ assumptions that ill workers would use the sick leave benefit to “protect against potential harm” is significant.

Although the injunction ultimately may be lifted, or the ordinance amended – it’s not scheduled to take effect until July 1, 2017 – employers not located in Minneapolis are breathing a sigh of relief.   For now, employees who occasionally travel to Minneapolis will not be entitled to accrue sick leave under the law.

As local action on this issue will no doubt continue to pick-up steam, since more state governments are looking at measures to prevent municipal action than are moving to enact state-wide measures, it will be interesting to see how cases like this one influence future legal challenges and how future paid sick leave laws are drafted.  We will keep an eye out and report back on any developments.