General Employment Matters

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.

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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.

57530400 - deadline note calendar planner concept
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.

We don’t normally talk a lot about NLRB decisions and rulings related to the NLRB on this blog.  However, in light of the importance of the DOL Persuader rule, we wanted to update you on events that have management-side attorneys jumping for joy.

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If you are thinking to yourself that you have no idea what the DOL Persuader rule is, the short version is that it would have directly impacted the advice that attorneys could give employers during union organizing campaigns as some of that advice could be deemed persuader activity under the Labor Management and Reporting Disclosure Act (“LMRDA”).  This rule would impact even non-unionized employers as it may apply to questions employers ask counsel about handbook policies such as non-solicitation provisions and progressive discipline policies that an employer wants to implement to thwart attempts at unionization.

The rule and the decision are discussed in more detail on the Firm’s Franchise Law Update. The decision can be found here: National Federation of Independent Business, et als. v. Perez.

The Court found that the rule was vague and intruded on employers’ First Amendment rights.  Although this is a significant victory for employers and their counsel, it may be temporary.  The decision will likely be appealed.

We will keep you posted.  In the meantime, if you have not already spoken to labor counsel about the potential implications of the rule, we recommend that you do so.

Bill Egan writes:

The NLRB has added to its rapidly expanding body of work addressing the permissible scope of workplace rules under National Labor Relations Act.  In the related cases of T-Mobile USA, Inc. and Communications Workers of America, et al, and MetroPCS Communications, Inc. and Communications Workers of America, the Board struck down over a dozen workplace rules of T-Mobile USA and its affiliate, MetroPCS Communications, Inc., on the ground that the rules were overbroad and employees could construe the language in the rules as chilling their rights under Section 7 of the NLRA.  Section 7 affords employees the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.

Workplace rules
Copyright: convisum / 123RF Stock Photo

In its opinion, the Board reiterated its position that even if a work rule does not expressly restrict protected activities, it is nonetheless a violation of the NLRA if “employees would reasonably construe the language to prohibit Section 7 activity.”  In reliance on that reasonable construction element, the Board found as ambiguous, and therefore overbroad under the NLRA, the following workplace rules:

  1. A requirement that employees “maintain a positive work environment by communicating in a manner that is conducive to effective working relationships with internal and external customers, clients, co-workers, and management;”
  2. A prohibition against using company information or communication resources “in ways that could be considered disruptive, offensive, or harmful to morale;”
  3. A prohibition against using the employer’s information or communication resources “to advocate, discourage, or solicit for political causes or non-company-related outside organizations;”
  4. A prohibition against permitting “non-approved individuals access to information or information resources, or any information transmitted by, received from, printed from, or stored in these resources” without prior written approval of the employer;
  5. A prohibition against making detrimental comments about the company or its customers, products, services or employees;
  6. A prohibition against arguing with co-workers, subordinates, or supervisors;
  7. A prohibition against failing “to treat others with respect” and failing to demonstrate “appropriate teamwork,”
  8. A prohibition against making recordings in the workplace;
  9. The designation of the employee handbook as a confidential and proprietary document;
  10. The requirement that employees maintain the confidentiality of the names of employees involved in internal investigations;
  11. The non-exclusive imposition of a requirement that employees notify the employer if thea employee believes he or she was not properly paid wages, or was required to miss a meal or rest period (deemed invalid because it not did not also advise that employees may also seek outside recourse);
  12. The requirement to refer all media inquiries to the company without comment (deemed invalid because it did not exclude inquiries about wages and other terms and conditions of employment);
  13. The requirement that employees to sign a confidentiality agreement that classifies employee wage and salary information as confidential information not subjected to disclosure; and
  14. A prohibition against using or disclosing employee addresses, telephone numbers, and accessing such information without a business need to do so and without either the employer’s authorization or the employee’s consent.

The takeaway is that all employers must take particular care in their drafting of workplace rules, policies, and procedures, be they employee handbooks, policies and procedures manuals, or codes of conduct.  Section 7 protections extend to all non-supervisory employees, not just those in a union or seeking union representation. Work rules must be drafted narrowly and in a way that does not chill employees’ Section 7 rights, whether expressly, impliedly or even arguably.


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

5 DiscriminationAs we wrote about last week, the New York City Council passed legislation seeking to bolster the New York City Human Rights Law (NYCHRL).  Although the NYCHRL was already one of the most employee friendly statutes in the nation to begin with, especially in light of the 2005 Local Civil Rights Restoration Act, the legislature decided it was time to make New York City even friendlier to bring a discrimination claim.  Mayor Bill de Blasio has now signed into law several amendments (five to be exact) that push the NYCHRL further, three expanding its employment discrimination protections, one with respect to public accommodation discrimination, and one regarding housing discrimination.

Int 814-2015 amends the NYCHRL to explicitly state that any and all exceptions and exemptions found in the statute must “be construed narrowly in order to maximize deterrence of discriminatory conduct.”  This new law also codifies directly into the NYCHRL three notable decisions that purportedly embody the NYCHRL’s broad protections: Bennett v. Health Management Systems, Inc., 92 A.D.3d 29 (1st Dep’t 2011); Albunio v. City of New York, 16 N.Y.3d 472 (2011); and Williams v. New York City Housing Authority, 61 A.D.3d 62 (1st Dep’t 2009).  This provision is effective immediately.

Int 818-2015 modifies the NYCHRL to now allow attorneys’ fees and expert fees in an administrative proceeding before the New York City Commission on Human Rights. This mimics the attorneys’ fees that were previously available to a prevailing plaintiff in a state or federal court action.  This provision is effective immediately.

Int 819-2015 repeals several NYCHRL provisions which previously interpreted and limited the reach of the law’s sexual orientation protections.  This new law eliminates various exceptions and clarifications in the NYCHRL that stated, among other things, that an employer could insist an employee meet a bona fide job-related qualification based on sexual orientation, an employer was not required (or allowed) to establish affirmative action quotas based on sexual orientation, and that an employer was not subject to the law if it employed fewer than four persons or was a religious, charitable, or educational institution operated, supervised, or controlled by a religious organization.  However, these prior exclusions have all been removed.  This provision is effective immediately.

Int 805-2015 expands the public accommodation protections under the NYCHRL to franchises, franchisees and lessors.  Moreover, this amendment states that businesses cannot deny full and equal enjoyment of all services, facilities, and/or privileges at public accommodations based on any protected characteristics.  Even more striking is the expansion of the prohibitions against discriminatory advertisements.  Any marketing language that indicates any individual is unwelcome, objectionable, not acceptable, undesired, or unsolicited because of such person’s actual or perceived protected characteristics, is now unlawful.  This provision is effective July 26, 2016.

Finally, Int 832-2015 amends the housing discrimination provisions in the NYCHRL to now preclude owners, lessors, managing agents, and real estate agents from discriminating against victims of domestic violence, sex offenses, and/or stalking.  This provision is effective July 26, 2016.

Links to the new enactments are provided above.  While an expanding NYCHRL is nothing new, employers should be continually wary and ensure they are prepared to deal with New York City’s uniquely protective employment and other discrimination laws.  Even one misstep may result in a discrimination claim that will be incredibly difficult to defend.  Remember, at least in New York City, this includes reviewing all language in advertisements or other marketing materials that could potentially run afoul of the expanded public accommodation protections.  We will of course keep you updated as these new provisions are interpreted by the courts.

Title VIIAs my colleague Christina Stoneburner posted yesterday and today, North Carolina recently enacted the Public Facilities Privacy & Security Act, which, among other similar state laws that continue cropping up (such as the recently vetoed religious exemption bill in Georgia), curtails protections based on Lesbian, Gay, Bisexual, and/or Transgender (LGBT) status.  These proposed laws have drawn significant media attention and are likely to continue expanding and developing in the foreseeable future.  However, despite these local exceptions, please remember that federal law may still apply.

The Equal Employment Opportunity Commission (EEOC) has taken an aggressive position on sexual orientation and gender identity under federal law, finding they are both protected under Title VII of the Civil Rights Act. Several federal court decisions have found the same, including for example, a recent decision by the federal district court in Arizona, which found with almost no analysis or fanfare, that a transgender prison guard is clearly entitled to protection under Title VII. Doe v. Arizona, No. CV-15-02399-PHX-DGC, 2016 WL 1089743 (D. Ariz. Mar. 21, 2016).  This decision illustrates just how far Title VII jurisprudence has evolved over the past decade.  Many district courts regularly hold that transgender and/or sexual orientation status is protected under federal anti-discrimination laws.

Previously such theories were not readily accepted, and even today remain debatable. Courts have had trouble in the past resolving the dissonance of Congress’ intent, which specifically excluded from the Civil Rights Act sexual orientation and gender identity as protected characteristics.  Indeed, Congress has repeatedly refused to expand Title VII to list sexual orientation and gender identity as protected categories through the Employment Non-Discrimination Act (ENDA).

However, the United States Supreme Court originally opened the door for these gender identity and sexual orientation status protections in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) and Oncale v. Sundowner Services, 523 U.S. 75 (1998).  To recap, very briefly, Hopkins involved a woman who was “too aggressive” and “not feminine enough,” and was ultimately passed over for partnership. The Court found that discrimination for failing to live up to gender stereotypes was actionable. Oncale similarly found same-sex harassment, in this case men harassing other men on an oil rig, was actionable because the harassment was based on expected gender norms.  Since then, the EEOC and some intermediate federal appellate courts have applied this reasoning and found that Title VII can protect transgender status and/or sexual orientation based on these gender norm theories. Macy v. Holder, App. No. 0120120821, 2012 WL 1435995 (EEOC Apr. 20, 2012); see also Glenn v. Brumby, 663. F.3d 1312 (11th Cir. 2011); Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004).

As a result, for prudent employers, the question may be moot even in states that may curtail transgender and/or sexual orientation protections.  A body of federal cases protecting against gender identity and/or sexual orientation status discrimination exists and continues to develop.  In addition, many state and local jurisdictions affirmatively provide such protections (e.g., California and New York).  Until further guidance is provided by the Supreme Court or Congress, it would be best to assume discrimination based on these protected characteristics remains prohibited nationwide.

45810489_sThings seem to be developing rapidly in North Carolina.  Just yesterday morning we reported that the ACLU had filed a challenge to the Public Facilities Privacy & Security Act that was passed last week and signed by Governor McCrory.   The response from the North Carolina’s Attorney General’s Office was immediate and decisive:  the AG would not defend this law against the legal challenge filed by the ACLU.

The AG, Roy Cooper, in making his announcement noted that businesses all over the country had taken a strong stance against the law.  New York Governor Andrew Cuomo and the cities of Seattle and San Francisco have banned all nonessential public travel to North Carolina.

The fact that the AG will not defend the law does not mean that lawmakers will not appoint a private attorney or law firm to do so.  In fact, at least one Republican Senator has condemned Cooper’s refusal to defend the law.

What may be getting lost in all of the drama is what the outcome means for employers in North Carolina.  In the immediate future, if the law is repealed or judicially overturned, then Charlotte’s anti-discrimination ordinance will go into effect, which may require some updates to employers’ policies and handbooks.  It also means that municipalities will be free to enact other employment related laws, including increasing the minimum wage.

Copyright: <a href="http://www.123rf.com/profile_damedeeso">damedeeso / 123RF Stock Photo</a>

End of year vacations and holidays are fast approaching. Everyone is eager to see family and enjoy some much needed time away. It is easy to forget, however, that the ball drop in Times Square will not only ring in the New Year, it will also ring in various new and modified employment laws in several jurisdictions.  December and January are often a hotbed of effective dates for new legal and regulatory changes, and this year is no exception. Now is a good time to review your handbook and other policies to ensure compliance with these various regulatory changes, before they go into effect this January.

For example, in New York, hospitality employers (including restaurants and bars) will see most of the tip credit typically applied to the minimum wages of tipped front-of-house employees evaporate. The tip credit minimum wage for food service employees in the hospitality industry is set to increase from $5.00 per hour up to $7.50 per hour come January 1, 2016. Moreover, beyond the hospitality industry, the regular minimum wage in New York will also increase to $9.00 an hour, in addition to higher minimum wages applicable to fast food employees ($10.50 in New York City, $9.75 in the rest of New York State). These minimum wage increases are not limited to New York alone, with several states and municipalities also implementing minimum wage increases as we approach 2016. Moreover, New York as well as many other states and municipalities also require any affected employees to receive new rate of pay notices and/or tip credit notices reflecting these minimum wage increases in accordance with federal, state, and local law.

In addition, numerous state and local discrimination laws, leave laws, and other employment-related laws will also go into effect January 1st. For example: California is expanding its child-related activities leave law to broaden what is considered covered child care and to include stepparents, foster parents, or those who are “in loco parentis” to a child.  In Oregon, ban-the-box legislation goes into effect prohibiting questions on an employment application regarding an applicant’s criminal background. In New York, the “Women’s Equality Act” goes into effect a few weeks after the New Year, which includes several new laws that increase equal pay protections, the applicability of sex discrimination laws, and recovery of fees in sex discrimination lawsuits, in addition to additional protections against familial status discrimination and requiring accommodations of some pregnancy-related conditions.

These changes are just a small sampling of the numerous legal and regulatory changes across the country awaiting us in the New Year. Getting ahead of these policy shifts is necessary to avoid unneeded headaches or, god forbid, liability later on. Before you head off for your holiday vacation, make sure to review any legal changes coming soon to the jurisdictions in which you operate.  It will provide you peace of mind once all the champagne has worn off on New Year’s Day.

Back in JBan the Box Effective in NYCune, we reported that the New York City Council passed, and Mayor Bill de Blasio had signed into law, the New York City Fair Chance Act (FCA). This new law prohibits most employers (with limited exceptions for law enforcement, industries that require background checks under federal, state, or local law, etc.) from inquiring about an applicant’s arrest or criminal conviction record until a conditional offer of employment is extended. This is just a friendly reminder that the FCA is now effective as of October 27, 2015 in New York City. If you have not already done so, employers with operations in New York City should review their employment applications and other hiring policies to ensure compliance with this new law.

So called “Ban The Box” legislation has been enacted in several states, and over one hundred other jurisdictions, in order to prevent individuals with arrest and criminal conviction records from being dismissed early in the employment application process. This legislation, most notably, prohibits questions commonly found in employment applications that require applicants to disclose arrest and/or criminal conviction history. Moreover, this new law prohibits an employer’s independent investigation of arrest and/or criminal history, as well as verbal inquiries regarding the same, prior to a conditional offer of employment.

Please note that, even after a conditional offer is made, Article 23(a) of the New York Correction Law still applies. The New York Correction Law contains strict requirements and restrictions if an employer in New York state wishes to conduct a post-offer criminal background check and/or rescind an offer of employment because of an individual’s criminal history. In sum, all employees who are responsible for hiring should be aware of these restrictions and know to proceed cautiously when criminal history issues arise.