Today marks the 27th Anniversary of the Americans with Disabilities Act (ADA).  Unfortunately for businesses, two recent developments in the context of website accessibility suggest that there is no reason to celebrate and every reason to believe the ever-increasing wave of demand letters and lawsuits in this area will continue unabated.

First, in Lucia Marett v. Five Guys Enterprises LLC (Case No. 1:17-cv-00788-KBF), the U.S. District Court for the Southern District of New York has finally issued a decision directly speaking to the applicability of Title III of the ADA (Title III) to websites, denying Five Guys’ motion to dismiss, and holding that Title III does indeed apply to websites.  Facing a class action lawsuit brought by serial plaintiff, Lucia Marett, Five Guys sought to dismiss the claim that its website (which, among other things, allows customers to order food online for delivery or pick up at its brick and mortar stores) violated Title III and related state/local statutes because it is inaccessible to the blind, on the grounds that Title III does not apply to websites and, even if it did, the case was moot because Five Guys was in the process of updating its website to provide accessibility.  The Court rejected Five Guys’ arguments.  Citing both the text and the broad and sweeping purpose of the ADA, the Court held that Title III applies to websites – either as its own place of public accommodation or as a result of its close relationship as a service of Five Guys’ restaurants (which the court noted are indisputably public accommodations under Title III).  Further, the court was unmoved by Five Guys’ ongoing efforts to make its website accessible because they had yet to successfully do so and there was no absolutely clear assurance that further accessibility issues would be avoided.  The fact that the Court leaves open the possibility that a website conducting business only in cyber-space might have to comply with Title III is troubling as, to date, that position had remained an outlier, being only adopted by a couple of district courts.

Second, the Trump Administration has finally released its first Unified Regulatory Agenda and – in accordance with its goal of reducing the number of federal regulations – the private sector website accessibility regulations, most recently earmarked for 2018, have been marked as “Inactive.”  The potential for website accessibility regulations has long been one of the factors mitigating against website accessibility lawsuits.  With no reasonable expectation for such regulations in the near future, the courts will continue to serve as the primary forum for the development of this body of law.

These developments, taken in tandem with the recent post-trial verdict for Plaintiff’s in the Winn-Dixie litigation and the recent Hobby Lobby decision further devaluing various jurisdictional and due process defenses may create a perfect storm further emboldening an already aggressive plaintiff’s bar to continue to push website accessibility demands and lawsuits.  Indeed, in recent weeks we have not only seen another surge in the number of such actions being filed, but regular players in this space are using these decisions to push for greater settlement values, and new “copycat” players are starting to enter the fray.

Given the current climate, the best way for companies to try and avoid these litigations remains promptly taking legitimate and comprehensive steps to make their websites accessible.  This is particularly true for companies whose websites are tied to brick and mortar places of public accommodation but, now, may in some contexts and jurisdictions apply equally to cyber-only businesses.  Companies interested in taking such steps should conduct website accessibility audits (both user-based and code-based; and not simply running an automated scanning tool); add website accessibility obligations into vendor agreements; adopt and implement a website accessibility policy; and conduct training for necessary parties.  To the extent such efforts do not prompt plaintiffs to target other websites, they will certainly improve companies’ leverage for settlement negotiations and/or strategies for defending against litigations.

Our colleagues , at Epstein Becker Green, have a post on the Health Employment and Labor blog that will be of interest to many of our readers in the retail industry: “DFEH Publishes Materials to Assist Employers With Handling Harassment Allegations.”

Following is an excerpt:

The Department of Fair Employment and Housing (DFEH) recently released a brief, nine-page guide for California employers, which was prepared in conjunction with the California Sexual Harassment Task Force.  This guide is intended to assist employers in developing an effective anti-harassment program, including information about how to properly investigate reports of harassment and understand what recourse is available.  The guide addresses all forms of workplace harassment, including harassment based on sex. …

Read the full post here.

Our colleague at Epstein Becker Green, has a post on the Wage and Hour Defense Blog that will be of interest to many of our readers in the retail industry: “Tenth Circuit Rules Tips Belong to the Employer If Tip Credit Is Not Taken.”

Following is an excerpt:

When an employer pays the minimum wage (or more) instead of taking the tip credit, who owns any tips – the employer or the employee? In Marlow v. The New Food Guy, Inc., No. 16-1134 (10th Cir. June 30, 2017), the United States Court of Appeals for the Tenth Circuit held they belong to the employer, who presumably can then either keep them or distribute them in whole or part to employees as it sees fit. This directly conflicts with the Ninth Circuit’s decision last year in Oregon Restaurant and Lodging Ass’n v. Perez, 816 F.3d 1080, 1086-89 (9th Cir. 2016), pet for cert. filed, No. 16-920 (Jan. 19, 2017) and likely sets up a showdown this fall in the U.S. Supreme Court. …

Read the full post here.

On May 15th, the Freelance Isn’t Free Act (“FIFA”) went into effect in New York City. The Department of Consumer Affairs (“DCA”) recently issued guidelines to help employers comply with the law.

Coverage and Immigration Status

FIFA protects all freelance workers regardless of their immigration status.

Contract Value Threshold

As previously explained, FIFA requires parties that retain freelance workers to provide any service where the contract between them has a value of $800 or more to reduce their agreement to a written contract. Under the DCA guidelines, the value of the contract includes “the reasonable value of all actual or anticipated services, costs for supplies, and any other expenses under the contract.”

Retaliation

FIFA prohibits hiring parties from retaliating against a freelance worker who exercises his/her rights under FIFA. Under the DCA guidelines, retaliation includes, but is not limited to, any adverse action related to perceived or actual immigration status or work authorization. In order to prove retaliation, a freelance worker can provide circumstantial or actual evidence of the hiring party’s adverse action. Any hiring party who denies a work opportunity to a freelance worker covered under FIFA is liable of retaliation regardless of whether a contract exists between them.

Waiver of Rights

All waivers or limitation for a freelance worker to participate or receive money in a judicial action are invalid as a matter of law under FIFA.

Employers should ensure that contracts entered into with freelance workers (or existing contracts that are renewed) with a value of $800 or more comply with FIFA and the published DCA rules.

This post was written with assistance from Corben J. Green, a 2017 Summer Associate at Epstein Becker Green.

This issue of Take 5 encapsulates the incredible breadth of societal changes and challenges facing the entire retail workplace. The topics addressed below reflect a microcosm of the many issues currently facing our overall society, covering growing political activism in the workplace, increasing expectations to accommodate religious beliefs, otherwise outrageous employee speech that may very well enjoy protection under the law, and the ever-increasing requirements for criminal background checks enacted piecemeal by states and cities. These extremely topical subjects often tap into broader emotionally charged concerns encountered by retailers.

We also address the ever-timely issue of wage and hour classification, in this case, focusing on the classification of assistant store managers.

The articles in this Take 5 include:

  1. Managing Employees’ Political and Social Activism in the Workplace
  2. Religious Accommodation: Handling Unusual Requests
  3. Second Circuit Agrees with NLRB That Employee’s Vulgar Facebook Tirade Against Manager Is Protected Concerted Activity
  4. Increasing Criminal Background Check Requirements Pose Challenges for National Retailers
  5. Correctly Classifying Assistant Store Managers to Avoid Wage and Hour Misclassification Claims

Read the full Take 5 online or download the PDF.

In the latest of an increasing number of recent website accessibility decisions, in Gorecki v. Hobby Lobby Stores, Inc. (Case No.: 2:17-cv-01131-JFW-SK), the U.S. District Court for the Central District of California denied Hobby Lobby’s motion to dismiss a website accessibility lawsuit on due process and primary jurisdiction grounds.  In doing so, the Hobby Lobby decision further calls into question the precedential value of the Central District of California’s recent outlier holding in Robles v. Dominos Pizza LLC (Case No.: 2:16-cv-06599-SJO-FFM) which provided businesses with hope that the tide of recent decisions might turn in their favor.

The Hobby Lobby website provides a variety of services which are closely related to Hobby Lobby’s brick and mortar stores, including:  purchasing products online; searching for store locations; viewing special price offers; and purchasing gift cards.  Plaintiff alleged that Hobby lobby violated Title III of the ADA, as well as California’s Unruh Act, by not providing full and equal access to its website for individuals with disabilities (as the website was inaccessible to individuals who are blind and make use of a screen-reading program).  In the complaint, Plaintiff sought injunctive relief requiring Hobby Lobby to ensure that individuals with disabilities have as full and equal enjoyment of the website as individuals without disabilities.  However, importantly, Plaintiff did not seek the imposition of a specific technical rule or standard for Hobby Lobby to provide full and equal enjoyment.

Hobby Lobby made a motion to dismiss Plaintiff’s complaint on two grounds – due process and the primary jurisdiction doctrine.  In short, Hobby Lobby argued that because the U.S. Department of Justice had not promulgated final website accessibility regulations under Title III setting forth specific accessibility standards, it would violate due process to provide Plaintiff with injunctive relief imposing website accessibility obligations as Hobby Lobby lacked sufficient notice of its obligation.  Additionally, Hobby Lobby argued the action should be dismissed under the primary jurisdiction doctrine which, if applied, would hold that the court should not rule on website accessibility issues until DOJ – the expert regulator in this area – first speaks on the issue by promulgating and adopting regulations.  While these arguments have generally failed in the context of website accessibility, their potential viability was recently revisited following the Dominos decision which dismissed a website accessibility action based on these very grounds (noting that businesses might be able to provide access to a website’s services via alternative means than making the website itself accessible – e.g., a 24/7 toll-free, sufficiently staffed, hotline).

Here, in denying the motion to dismiss, the court rejected each of Hobby Lobby’s arguments.  First, the court took great exception with the contention that Hobby Lobby did not have sufficient notice of the need to make its website accessible.  The court stressed that DOJ had articulated its position that Title III requires website accessibility for over 20 years – including in speeches, congressional hearings, amicus briefs and statements of interest, rulemaking efforts, and enforcement actions and related settlement agreements.  Moreover, at a broader level, the court noted that from its inception, Title III has always required “full and equal enjoyment” and the provision of “auxiliary aids and services” for “effective communication” and further explained that these overarching civil rights concepts could (and should) easily apply to websites and screen-readers.  Second, following up on this reasoning and underscoring other comparable times when courts have interpreted similar issues under Title III’s civil rights provisions, the court disagreed that it would be appropriate to apply the primary jurisdiction doctrine.  The court saw no reason the issue of website accessibility could not be adjudicated in the same way countless other Title III matters had been handled in the past.  Moreover, the court expressed concern that – given that seven years has already passed since DOJ first expressed an intent to promulgate website accessibility regulations under Title III with little progress – invoking the doctrine could needlessly delay potentially meritorious claims.

The Court also rejected Hobby Lobby’s efforts to rely upon the Dominos decision – which was reached in the very same court – to support its arguments.  In Dominos – contrary to the law that had come before it in website accessibility matters decided in other jurisdictions – citing due process concerns, the court did invoke the primary jurisdiction doctrine to dismiss a website accessibility claim.  However, the court in Hobby Lobby, readily distinguished the Dominos decision in concluding it did not dictate the same ruling in this case.  Specifically, in Dominos the plaintiff sought injunctive relief that required Dominos comply with the WCAG 2.0, a specific standard that has not been officially adopted by DOJ in Title III regulations (though it has been officially adopted in other government regulations and is readily used by DOJ in its settlement agreements).  In Hobby Lobby plaintiff merely sought “full and equal” enjoyment of the website’s services without specifying how that would have to be accomplished – a pivotal distinction.

The Hobby Lobby decision underscores the likelihood that the Dominos decision remains, for now, an outlier.  Taken in tandem with last week’s post-trial verdict in Gil v. Winn-Dixie Stores, Inc., this most recent decision should be viewed as another reason why businesses should seriously consider prophylactic efforts to make their websites (at least when linked to places of public accommodation) accessible.  (For now, the most commonly accepted path to accessibility remains compliance with WCAG 2.0 at Levels A and AA).

Featured on Employment Law This Week – New York City has enacted “fair workweek” legislation.

Mayor Bill de Blasio has signed a package of bills into law limiting scheduling flexibility for fast-food and retail employers. New York City is the third major city in the United States, after San Francisco and Seattle, to enact this kind of legislation. The bills require fast-food employers to provide new hires with good-faith estimates of the number of hours that they will work per week and to pay workers a premium for scheduling changes made less than 14 days in advance.

Watch the segment below, featuring our colleague Jeffrey Landes from Epstein Becker Green. Also see our colleague John O’Connor’s recent post, “New York City Tells Fast Food Employees: ‘You Deserve a Break Today’ by Enacting New Fair Workweek Laws,” on the Hospitality Labor and Employment Law blog.

After years of ongoing and frequent developments on the website accessibility front, we now finally have – what is generally believed to be – the very first post-trial ADA verdict regarding website accessibility.  In deciding Juan Carlos Gil vs. Winn-Dixie Stores, Inc. (Civil Action No. 16-23020-Civ-Scola) – a matter in which Winn-Dixie first made an unsuccessful motion to dismiss the case (prompting the U.S. Department of Justice (“DOJ”) to file a Statement of Interest) – U.S. District Judge Robert N. Scola, Jr. of the Southern District of Florida issued a Verdict and Order ruling in favor of serial Plaintiff, Juan Carlos Gil, holding that Winn-Dixie violated Title III of the ADA (“Title III”) by not providing an accessible public website and, thus, not providing individuals with disabilities with “full and equal enjoyment.”

Judge Scola based his decision on the fact that Winn-Dixie’s website, “is heavily integrated with Winn-Dixie’s physical store locations” that are clearly places of public accommodation covered by Title III and, “operates as a gateway to the physical store locations” (e.g., by providing coupons and a store locator and allowing customers to refill prescriptions).  This line of reasoning follows the “nexus theory” body of law that has been developing over the past several years.  Based upon this conclusion, Winn-Dixie was ordered to: (i) bring its website into conformance with the WCAG 2.0 Guidelines; (ii) develop and adopt a website accessibility policy (publishing aspects of it upon the website); (iii) provide website accessibility training; (iv) conduct regular ongoing compliance audits; and (v) pay Plaintiff’s reasonable attorney’s fees and costs.  The parties were left to negotiate the exact timeframe for each requirement.

While this post-trial verdict does not have precedential value in other matters, it does raise a variety of points that businesses should consider as they continue to confront the still-increasing number of website accessibility demand letters and lawsuits:

  • The Court applied the nexus theory to the Winn-Dixie website even though customers could not make purchases directly through the website.  The Court deemed the ability to obtain coupons and link them to customer discount cards (for use in stores), refill prescriptions (for in-store pick up), and the presence of the store locator sufficient services for a nexus to exist between the brick and mortar locations and the website;
  • By applying the nexus theory, the Court was able to avoid having to rule on whether a website is a public accommodation in and of itself (a point of law courts remain split on);
  • The Court adopted the WCAG 2.0 Guidelines as the standard of website accessibility, thus following DOJ, the recently refreshed standards for Section 508 of the Rehabilitation Act, the Air Carrier Access Act, and countless private settlements between businesses and advocacy groups or private plaintiffs reached over the past 5 years;
  • The Court gave heavy weight to the testimony of an “accessibility consultant” who had conducted an audit of the Winn-Dixie site and testified very favorably for the Plaintiff that he did not believe that remediation process would be terribly difficult;
  • Relying upon the accessibility consultant’s representations, the Court went far beyond the scope of most existing website accessibility agreements by holding Winn-Dixie must require that any third-parties – including tech-giants such as Google – who are responsible for aspects of the website to also conform to the WCAG 2.0 while operating as part of the Winn-Dixie website;
  • The Court was unmoved by Winn-Dixie’s estimates that the remediation work to bring the website into conformance with WCAG 2.0 could cost upwards of two hundred and fifty thousand dollars ($250,000), and did not believe that such an amount would constitute an undue burden, noting that in the preceding 2 years the company had spent a total of approximately nine million dollars ($9,000,000) to launch a new website and then modify that new website to roll out a new customer rewards system; and, finally, in the one somewhat helpful piece for businesses;
  • The Court noted that in making a website accessible, a business need not ensure that it is accessible on all browsers and when read by all screen reader programs, provided that it is accessible on “main browsers” (e.g., Google Chrome, Internet Explorer, and Apple Safari) when read by “main screen reader programs” (e.g., JAWS and NVDA).

Given the Trump Administration’s edict against the promulgation of new regulations (without first eliminating multiple existing similar regulations) it is increasingly unlikely that DOJ will issue private sector website accessibility regulations in the near future.  Therefore, businesses can expect advocacy groups and private (often serial) plaintiffs to continue to threaten and/or bring website accessibility actions under both the ADA and corresponding state laws.  With that in mind, this verdict serves as a strong reminder of the risks of litigating a website accessibility matter, at least in situations where there is a reasonably clear nexus between a brick and mortar place of public accommodation and the website.

On May 24, 2017, the New York City Council signed a bill banning retail employers in New York City from utilizing “on-call scheduling.” Given the unpredictable fluctuations in customer flow associated with retail business operations, retail employers have historically utilized “on-call” schedules in an effort to manage labor costs associated with running their businesses. Rather than provide employees with fixed work schedules, many retail employers place employees “on-call,” requiring them to call in shortly before their work shift is to start to ascertain if they need to actually report to work.  The conflicting interests between retail employers and their employees posed by “on call” scheduling is obvious.  Retail employers favor the use of “on-call’ scheduling because it enables them to tailor their workforce to customer needs and avoid excessive labor costs.  Employees disfavor “on-call” scheduling for a variety of reasons.  First, they are not able to accurately predict their income because they are uncertain as to the number of hours they will actually work each week.  Second, the lack of rigid work schedule impacts their ability to plan their day-to-day life. Because they are not certain when they will be required to work, their ability to schedule appointments, attend regular school obligations, or hold a second employment position are impaired.

In January 2015, San Francisco became the first city to pass predictive scheduling legislation, requiring retail employers in that City to pay employees for cancelled on-call shifts and provide notice to their employees of their biweekly schedules. In September 2016, Seattle followed suit, enacting legislation mirroring that in San Francisco.  Similar predictive scheduling legislation is presently pending at the federal level as well as in no less than twelve states (California, Connecticut, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Oregon and Rhode Island).  By adopting this new law banning on-call scheduling, New York City becomes the most recent jurisdiction to seek to protect retail employees’ interests despite the increased operating costs such predictive scheduling legislation may impose on retail employers

Pursuant to the new law, retail employers in New York City now have to post employees’ work schedules at least 72 hours before the beginning of the scheduled hours of work. The law also precludes retail employers from cancelling, changing or adding work shifts within 72 hours of the start of the shift (except in limited cases).  Moreover, each retail employee must be scheduled for no less than 20 hours of work during each 14-day period.  In a press release in which he praised the New York City Council for passing the bill and in which he expressed his intent to immediately sign the law, Mayor de Blasio claimed that the law “will ensure that workers will be able to budget for the week ahead, schedule childcare, and plan evening classes.” While the law is clearly intended to help retail employees better balance their professional and personal lives, the strict scheduling requirements will challenge New York City’s retail employers to develop new means of managing their businesses impacted by the unpredictability posed by seasonal demand, customer fluctuation, weather, holidays, employee turnover issues, and other variations in day-to-day retail operations.

Since the early 1980s, the NLRB has vacillated back and forth on whether non-union employees are entitled to have a co-worker present during an investigatory interview that could result in discipline — a right that has long been afforded union employees pursuant to the United States Supreme Court’s holding in NLRB v. Weingarten, 420 U.S. 251 (1975). In the 42 years since the Supreme Court first extended this right to union employees in Weingarten, the NLRB has changed its position four times as to whether “Weingarten rights” extend to non-union employees.  In what can only be viewed as a victory for retail employers with non-unionized workers, the NLRB, on May 3, 2017, rejected a request that it again reverse course and extend Weingarten rights to non-union employees.  With this Order, the NLRB confirms that retail employers need not acquiesce to a request by a non-union employee to have a co-worker sit in while that non-union employee is questioned in an investigatory interview.

In Weingarten, the Supreme Court concluded that an employer violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by denying a unionized employee’s request to have a union representative present at an investigatory interview which the employee reasonably believed might result in disciplinary action. The Court held that the presence of a union representative “safeguard[s] not only the particular employee’s interest, but also the interests of the entire bargaining unit. . . .” Weingarten, 420 U.S. at 260.  Several years later, the NLRB extended Weingarten rights to non-union employees.  See Materials Research Corp., 262 NLRB 1010 (1982).  However, non-union workers did not savor this right for too long.  In two successive decisions, Sears, Roebuck, & Co., 274 NLRB 230 (1985) and in E.I. DuPont & Co., 289 NLRB 627 (1988), the NLRB reversed course and ruled that Weingarten rights do not extend to non-union employees.  But by 2000, union employees regained this right when, in Epilepsy Foundation of Northeast Ohio, 331 NLRB 676 (2000), the NLRB ruled that Weingarten rights do extend to non-union employees.  In Epilepsy Foundation, the NLRB reasoned that: “Section 7 [of the NLRA] rights are enjoyed by all employees and are in no way dependent on union representation for their supplementation.” Id. at 678.  Just four years later, in IBM Corp., 341 NLRB 1288 (2004), the NLRB changed direction again, ruling that non-union employees do not have the right to have a co-worker present during an investigatory interview that might lead to discipline. In this opinion, the NLRB noted that changes in employment laws and recent security concerns require that investigations into matters like substance abuse, improper internet use, dishonesty, threats, harassment and discrimination be conducted “in a thorough, sensitive, and confidential manner” and that failure to conduct investigations in this manner could expose an employer to claims that it did not conduct a fair investigation or that unfair discipline was imposed based on incomplete information. The NLRB reasoned that the presence of a co-worker increases the possibility that information will not be kept confidential, reduces the chance that the employer will get the whole truth, and increases the likelihood that employees with information about sensitive subjects will not come forward. Accordingly, the NLRB concluded that the right of a non-union employee to a coworker’s presence is “outweighed by an employer’s right to conduct prompt, efficient, thorough, and confidential workplace investigations.” Id.

By application dated November 15, 2016, petitioner Charles Strickler asked the NLRB to reconsider its position and, again, extend Weingarten rights to non-union employees.  By Order dated May 3, 2017, the NLRB rejected this application with virtually no explanation.  Retail employers remain within their rights to deny a non-union employee’s request to have a co-worker present when that employee is being interviewed by the employer, even if the interview may result in discipline.