Retail Labor and Employment Law

Retail Labor and Employment Law

News, Updates, and Insights for Retail Employers

Union Organizing Gets a Boost from New York City “Labor Peace” Executive Order

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A new Act Now Advisory will be of interest to many of our readers in the retail industry: “Union Organizing at Retail and Food Service Businesses Gets Boost from New York City ‘Labor Peace’ Executive Order,” by our colleagues Allen B. Roberts, Steven M. Swirsky, Donald S. Krueger, and Kristopher D. Reichardt from Epstein Becker Green.

Following is an excerpt:

New York City retail and food service unions got a boost recently when Mayor Bill de Blasio signed an Executive Order titled “Labor Peace for Retail Establishments at City Development Projects.” Subject to some thresholds for the size and type of project and the amount of “Financial Assistance” received for a “City Development Project,” Executive Order No. 19 mandates that developers agree to a “labor peace clause.” In turn, the labor peace clause will compel the developer to require certain large retail and food service tenants to enter into a “Labor Peace Agreement” prohibiting their opposition to a “Labor Organization” that seeks to represent their employees. …

If the objective of the Executive Order is to assure labor peace by way of insulation from picketing, work stoppages, boycotts, or other economic interference, it is not clear how its selective targeting of retail and food service tenants occupying more than 15,000 square feet of space—and the exclusion of other tenants and union relations—delivers on its promise. There are multiple non-covered tenants and events that could occasion such on-site disruptions as picketing, work stoppages, off-site boycotts, or other economic interference.

As a threshold matter, there is no particular reason why a labor dispute with a tenant occupying space shy of 15,000 square feet—among them high-profile national businesses—somehow is less disruptive to the tranquility of a City Development Project than one directed at a tenant whose business model requires larger space.

Also, the Executive Order does not address the rights or responsibilities of either landlords or their tenants that are Covered Employers bound to accept a Labor Peace Agreement when faced with union demands for neutrality that go beyond the Executive Order’s “minimum” neutrality requirements. There could be a dispute over initial labor peace terms if a union, dissatisfied that the Executive Order’s Labor Peace Agreement secured only a Covered Employer’s “neutral posture” concerning representation efforts, were to protest to obtain more ambitious and advantageous commitments that are coveted objectives of union neutrality demands, such as …

Read the full Advisory here.

U.S. Department of Labor Updates Mandatory FLSA and Polygraph Protection Act Posters

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Retail employers should take note that the U.S. Department of Labor (“DOL”) updated its mandatory posters notifying employees of their rights under the Fair Labor Standards Act (“FLSA”) and Employee Polygraph Protection Act (“EPPA”).  The FLSA and EPPA posters no longer identify the civil monetary penalties that may be assessed for violations.  The FLSA poster also provides information regarding the rights of nursing mothers under the FLSA.  Employers are required to post the revised mandatory posters as of August 1, 2016, and may download the revised posters from the DOL’s website.

Employers should review their workplace employment law postings to ensure those displayed are up-to-date and in compliance with all applicable laws.

Employers should also be reminded of their responsibilities under the FLSA, including their responsibilities to nursing mother employees who are subject to the FLSA’s overtime requirements. Those nursing mothers are entitled to reasonable break time to express breast milk for one year after the child’s birth and a private place, other than a bathroom, to do so.

Are You a Joint-Employer with Your Suppliers? NLRB Examines Corporate Social Responsibility Policies

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Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the retail industry: “Can Your Corporate Social Responsibility Policy Make You a Joint-Employer With Your Suppliers? The NLRB May Find That It Does

Following is an excerpt:

The National Labor Relations Board (NLRB or Board), which continues to apply an ever expanding standard for determining whether a company that contracts with another business to supply contract labor or services in support of its operations should be treated as a joint employer of the supplier or contractor’s employees, is now considering whether a company’s requirement that its suppliers and contractors comply with its Corporate Social Responsibility (CSR) Policy, which includes minimum standards for the contractor or supplier’s practices with its own employees can support a claim that the customer is a joint employer. …

Employers are well advised to review the full range of their operations and personnel decisions, including their use of contingent and temporaries and personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they make take to better position themselves for the challenges that are surely coming.

Read the full post here.

Seventh Circuit: Title VII Does Not Cover Sexual Orientation Bias

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Our colleague Linda B. Celauro, Senior Counsel at Epstein Becker Green, has a post on the Financial Services Employment Law blog that will be of interest to many of our readers in the retail industry: “Seventh Circuit Panel Finds That Title VII Does Not Cover Sexual Orientation Bias.

Following is an excerpt:

Bound by precedent, on July 28, 2016, a panel of the U.S. Court of Appeals for the Seventh Circuit held that sexual orientation discrimination is not sex discrimination under Title VII of the Civil Rights Act of 1964. The panel thereby affirmed the decision of the U.S. District Court for the Northern District of Indiana dismissing the claim of Kimberly Hively, a part-time adjunct professor at Ivy Tech Community College, that she was denied the opportunity for full-time employment on the basis of her sexual orientation.

The importance of the Seventh Circuit panel’s opinion is not in its precise holding but both (i) the in-depth discussion of Seventh Circuit precedence binding it, the decisions of all of the U.S. Courts of Appeals (except the Eleventh Circuit) that have held similarly, and Congress’s repeated rejection of legislation that would have extended Title VII’s protections to sexual orientation, and (ii) the multifaceted bases for its entreaties to the U.S. Supreme Court and the Congress to extend Title VII’s prohibition against sex discrimination to sexual orientation discrimination.

The Seventh Circuit panel highlighted the following reasons as to why the Supreme Court or Congress must consider extending Title VII’s protections to sexual orientation …

Read the full post here.

NLRB Multiplies Impact of Expanded Joint Employer Test: Requires Bargaining in Combined Units Across Multiple Employers

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Our colleagues Adam C. Abrahms and Steven M. Swirsky, attorneys at Epstein Becker Green, have a post on the Management Memo blog that will be of interest to many of our readers in the retail industry: “NLRB Drops Other Shoe on Temporary/Contract Employee Relationships: Ruling Will Require Bargaining In Combined Units Including Employees of Multiple Employers – Greatly Multiplies Impact of BFI Expanded Joint Employer Test.”

Following is an excerpt:

The National Labor Relations Board (“NLRB” or “Board”) announced in its 3-1 decision in Miller & Anderson, 364 NLRB #39 (2016) that it will now conduct representation elections and require collective bargaining in single combined units composed of what it refers to as “solely employed employees” and “jointly employed employees,” meaning that two separate employers will be required to join together to bargain over such employees’ terms and conditions of employment.” …

The potential for confusion and uncertainty is enormous. In an attempt to minimize these concerns, the Board majority stated that the so-called user employer’s bargaining obligations will be limited to those of such workers’ terms and conditions that it possesses “the authority to control.”

Read the full post here.

New York City Enacts Law Requiring Gender-Neutral Restrooms

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New York City Enacts Law Requiring Gender-Neutral Restrooms On June 28, 2016, New York City Mayor Bill de Blasio signed legislation passed earlier this month by The New York City Council to amend the City’s administrative code, plumbing code and building code to require gender-neutral single-occupant restrooms. The new law applies to businesses and other establishments in the City’s five boroughs with existing single-occupancy, publicly-accessible restrooms. The law does not require businesses to build new single-occupant restrooms, nor does it affect larger restrooms with multiple single-stalls.

Instead, the law prohibits the labelling of single-occupant restrooms as gender-specific. Beginning January 1, 2017, signs designating single-person restrooms for one gender, i.e., “men” and “women,” must be removed and replaced with signs for all sexes.  Employers with establishments in the City that may be affected should take advantage of the lead time to ensure compliance.

EEOC Targets Religious and National Origin Discrimination Against Individuals Who Are, or Are Perceived to Be, Muslim or Middle Eastern

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The EEOC has released several new guidance tools, for both employers and employees, focused upon religious and national origin discrimination against people who are (or are perceived to be) Muslim. This focus on religious and national origin discrimination is particularly important for retail employers because retailers often require employees to follow dress codes or work at times that may conflict with religious observance.

In December 2015, EEOC Chair Jenny Yang released a statement highlighting the need for employers to “remain vigilant” in light of the recent terrorist attacks. Yang commended employers that have “taken steps to issue or re-issue policies preventing harassment, retaliation, and other forms of discrimination in the workplace.” At the same time this statement was released, the EEOC also released two technical guidance tools regarding religious discrimination: “Questions and Answers for Employers: Responsibilities Concerning the Employment of Individuals Who Are, or Are Perceived to Be, Muslim or Middle Eastern” (“Employer Q&A”) and a similar guide for employees.

The Employer Q&A does the following:

  • provides helpful insight on the various measures that employers should undertake to avoid violations of Title VII, which prohibits discrimination based on religion and national origin, among other protected categories;
  • addresses questions about hiring and other employment decisions, harassment, religious accommodation, and background investigations;
  • reminds employers that they may not discriminate against an individual because the individual’s religious garb may make customers feel uncomfortable; and
  • emphasizes the need to engage in an interactive process with employees who request a religious accommodation, such as time off for religious holidays and exceptions to dress and grooming codes.

When evaluating whether the religious accommodation will cause an undue hardship, the EEOC (through the Employer Q&A) explains that employers may not speculate on whether other employees may seek the same accommodation and make decisions based on those speculations. Rather, each accommodation request must be addressed on a case-by-case basis.

Earlier this year, the EEOC joined forces with other federal agencies, including the Department of Justice, to create an interagency initiative aimed at religious bias. As part of this initiative, in March 2016, the EEOC released another technical guidance tool titled “What You Should Know About Religious and National Origin Discrimination Against Those Who Are, or Are Perceived to Be, Muslim or Middle Eastern” (“What You Should Know Guidance”).

Among other things, the What You Should Know Guidance:

  • summarizes some of the ways in which discrimination against individuals who are (or could be perceived to be) Muslim or Middle Eastern can materialize in the workplace;
  • reminds employers of their obligations to prevent and correct unlawful discrimination or harassment, and provide reasonable religious accommodations;
  • points out several recent cases brought against retailers that involve claims of religious and national origin discrimination and harassment, or a failure to accommodate based on these factors; and
  • highlights the increase in litigation in these areas (in particular, the What You Should Know Guidance reports that, since 9/11, there has been a 250 percent increase in EEOC charges involving religious discrimination against Muslims).

These guidance tools serve as a follow up to the EEOC’s previously released guidance on religious garb and grooming in the workplace, which provides even more detail on how employers should address these issues. Given the EEOC’s increased scrutiny of religious and national origin discrimination against people who are, or are perceived to be, Muslim or Middle Eastern, retailers should be particularly wary of religious or national origin bias. Retailers can work toward preventing this type of bias in the workplace by reviewing and disseminating their anti-discrimination policies and providing training to employees and managers.

A version of this article originally appeared in the Take 5 newsletter Five New Challenges Facing Retail Employers.”

The Focus of Equal Pay Laws Is Redefined

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Several states have recently passed laws (California, Maryland,[1] and New York) or have bills currently pending in their state legislatures (California,[2] Colorado, Massachusetts, and New Jersey) [3] seeking to eliminate pay differentials on the basis of sex (and, in some cases, other protected categories) (collectively, “Equal Pay Laws”).

Among other provisions, most of the Equal Pay Laws contain four components. They aim to (i) strengthen current equal pay standards, (ii) create pay transparency rules, (iii) expand equal pay protections beyond gender, and (iv) redefine the geographic reach of existing equal pay laws.

Strengthening of Current Equal Pay Standards

The Equal Pay Laws modify the standards required for plaintiffs to prevail on equal pay claims. Previously, these laws tracked the federal Equal Pay Act, which permits exceptions to equal pay for equal work, “where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” The Equal Pay Laws, however, each modify the fourth prong, so that they now permit pay differentials based on a “bona fide factor other than sex” (emphasis added). This additional language allows plaintiffs to bring claims alleging that a neutral factor produced a wage differential that disparately impacts employees based on their sex, and notwithstanding this impact, the employer did not adopt an alternative business practice that would serve the same purpose without resulting in the wage differential. The new standard also broadens a plaintiff’s ability to allege a prima facie case of wage disparity.

Pay Transparency

Many of the Equal Pay Laws include pay transparency provisions, meaning that employers cannot create policies or enforce rules that would restrict an employee’s ability to discuss his or her wages with co-workers. The Massachusetts bill, which is still in the state legislature, has another unique twist (one that actually passed the legislature in California earlier this year but was vetoed by the governor). The Massachusetts equal pay law would prohibit employers from asking about an applicant’s salary history on an application or during interviews for employment. This would mean that an employer could no longer ask applicants how much they earned at their past jobs when considering making an offer of employment to an applicant. This twist aims to ensure that prior pay discrepancies are not compounded when an applicant’s pay rate with a new employer is based on unequal pay rates that the applicant received in the past.

Expanding Beyond Pay Equality Based on Gender

While the Equal Pay Laws were initially intended to ensure that women received equal pay in relation to men, some of the Equal Pay Laws seek to expand equal pay protection to other protected categories. The proposed California law, which is intended to amend the recently amended equal pay law in that state, would expand protections to race- and ethnicity-based pay differentials. Further, Maryland’s recently enacted law requires equal pay based on gender identity.

Geographical Reach

Finally, the Equal Pay Laws differ as to their geographical scope. For example, the New York law limits the reach of pay differentials to “no larger than a county.” In other words, women cannot compare themselves to other employees outside the county where they work. Some of the other Equal Pay Laws have significantly broader reach, such as California, which has no geographic limit. The New Jersey law, which was vetoed on May 2, 2016, but may be reintroduced in the state legislature, would permit wage comparisons based on compensation rates “in all of an employer’s operations or facilities.” This could mean that New Jersey employees could base their equal pay claims on the pay differential between their own compensation and that of employees of the employer in other jurisdictions (even in locations where the standard of living is considerably higher). Unlike New Jersey, the law proposed in Massachusetts would permit employers to base pay differentials on geographic location if one location has a lower cost of living based upon the Consumer Price Index.

Conclusion

As a result of the Equal Pay Laws, employers should consider whether to perform an internal audit (with the assistance of counsel) in order to identify and address any potential pay disparities. Indeed, in light of the recently published regulations on the overtime exemption status of various employees, this summer may be a good time for employers to review their pay practices for all employees.

A version of this article originally appeared in the Take 5 newsletter Five New Challenges Facing Retail Employers.”

[1] Maryland’s equal pay law was signed by Governor Larry Hogan on May 19, 2016, and becomes effective October 1, 2016. New York’s and California’s laws are currently effective.

[2] California has introduced a second equal pay amendment addressing wage disparity based on race and ethnicity. The first equal pay amendment became effective on January 1, 2016.

[3] Louisiana’s equal pay bill was recently rejected in the state House committee, despite passing the Senate and having strong support from Governor John Bel Edwards.

Retailers Navigate Conflicting Laws Regarding Transgender Protections

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On March 23, 2016, the North Carolina Legislature passed House Bill 2, the “Public Facilities Privacy and Security Act” (“HB2”), that overturned a Charlotte ordinance extending anti-discrimination protections to lesbian, gay, bisexual, and transgender (“LGBT”) individuals and allowing transgender persons to use the bathroom of their choice. Instead, HB2 requires individuals to use public bathrooms that match the gender listed on their birth certificates. A swift public outcry followed, with many celebrities denouncing the law and canceling appearances in North Carolina, companies threatening to boycott, and the American Civil Liberties Union filing a lawsuit challenging HB2 as unconstitutional and for violating federal law. North Carolina officials have refused to disavow HB2 and, on May 9, filed a lawsuit against the federal government seeking a ruling that HB2 is not discriminatory. The Justice Department has countersued, alleging that HB2 violates Title VII of the Civil Rights Act of 1964 (“Title VII”). Regardless of the ultimate outcome of these lawsuits, it is clear that discriminating against LGBT individuals has real consequences, from both a business and legal perspective. What should retailers know and, more importantly, do to survive in this current environment?

At a minimum, retailers should familiarize themselves with their state’s employment nondiscrimination laws (if any) that apply to private employers. Twenty states (including California, Illinois, New Jersey, and New York) and the District of Columbia have passed employment non-discrimination laws that prohibit discrimination by private employers based on both sexual orientation and gender identity. Two states (New Hampshire and Wisconsin) have such laws covering sexual orientation only. These laws protect LGBT persons from discrimination in hiring and in the workplace.

Retailers also are encouraged to review their municipality’s nondiscrimination laws and regulations, if any. For example, New York City law prohibits gender identity discrimination, and the New York City Commission on Human Rights recently announced guidance (“NYC Guidance”) that makes clear what constitutes gender identity and gender expression discrimination under the NYC Human Rights Law. The NYC Guidance warns employers and business owners that they may violate New York City law if they intentionally fail to use a transgender employee’s preferred name, pronoun, or title, or refuse to allow a transgender employee to use single-sex facilities, such as bathrooms or locker rooms, and participate in single-sex programs consistent with their gender identity.

Retailers also should know that the EEOC has aggressively pursued transgender discrimination claims on theories of sex stereotyping and gender nonconformity under Title VII, which bars employers from discriminating against employees on the basis of their sex.[1] In cases involving government employees, the EEOC has held that: (i) an employer’s restriction on a transgender woman’s use of a common female restroom facility constituted illegal sex discrimination under Title VII,[2] (ii) an employer’s intentional references to a transgender female as “he” may constitute sex-based discrimination and/or harassment,[3] and (iii) a transgender employee stated a valid Title VII sex discrimination claim based on his allegation that his employer took over a year to correct his name in the company’s computer system.[4]

The EEOC has taken further action against private companies. For example, it recently entered into a consent decree with a Minnesota financial services company for allegedly refusing to let a transgender employee use the women’s restroom and subjecting her to a hostile work environment.[5] In another action, a Florida eye clinic paid $150,000 to settle an EEOC lawsuit that sought relief for an employee who was allegedly discriminated against when transitioning from male to female.[6]

In light of this climate, retailers are encouraged to accommodate the needs of transgender workers proactively rather than reactively responding to potential claims of discrimination. Retailers, particularly those operating in states with anti-discrimination laws that cover sexual orientation and/or gender identity, should implement a policy designed to foster workplace inclusion. Retailers can avoid significant business and legal risk if they follow these two directives:

  • Call transgender employees by their preferred names, pronouns, and titles, and promptly update internal databases (pay accounts, training records, benefits documents, etc.) with this information upon an employee’s request. The NYC Guidance, for example, advises employers to use the employee’s preferred name regardless of whether the employee has legally changed his or her name “except in very limited circumstances where certain federal, state, or local laws require otherwise (e.g., for purposes of employment eligibility verification with the federal government).” This is a sound policy that retailers beyond New York City should consider following. In addition, employers may choose to offer new business cards and email aliases for their employees.
  • Provide transgender employees access to bathrooms that correspond to their gender identity. On May 3, the EEOC issued a “Fact Sheet” stating that the denial of equal access to a bathroom corresponding to an employee’s gender identity qualifies as sex discrimination prohibited under Title VII and that contrary state law is no defense. The Fact Sheet encourages employers to refer to the more comprehensive “Guide to Restroom Access for Transgender Workers,” which was issued by the Occupational Safety and Health Administration (“OSHA”) and offers model practices for restroom access for transgender employees. Like the EEOC, OSHA advises that “all employees should be permitted to use the facilities that correspond with their gender identity.” Where possible, employers should provide employees with additional options, including single-occupancy gender-neutral (unisex) facilities and use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.

While the North Carolina Legislature has rolled back protections for the LGBT community, the media attention surrounding HB2 has been largely negative and has affected the businesses of companies operating in the state. Given the number of other states that have enacted laws expressly prohibiting sexual orientation and/or gender identity discrimination, the federal government’s enforcement position, and changing public opinion on the issue, retailers are on notice that such discrimination may have negative business or legal ramifications.

A version of this article originally appeared in the Take 5 newsletter Five New Challenges Facing Retail Employers.”

[1] See “Five EEOC Initiatives to Monitor on the Agency’s Golden Anniversary” (June 22, 2015) (noting EEOC’s increased emphasis on transgender protections), available at http://www.ebglaw.com/news/five-eeoc-initiatives-to-monitor-on-the-agencys-golden-anniversary/.

[2] Lusardi v. Dep’t of the Army, EEOC Appeal No. 0120133395, 2015 WL 1607756 (Mar. 27, 2015).

[3] Jameson v. U.S. Postal Service, EEOC Appeal No. 0120130992, 2013 WL 2368729 (May 21, 2013)

[4] Complainant v. Dep’t of Veterans Affairs, EEOC Appeal No. 0120133123, 2014 WL 1653484 (Apr. 16, 2014).

[5] EEOC, Press Release, “Deluxe Financial to Settle Sex Discrimination Suit on Behalf of Transgender Employee” (Jan. 21, 2016), available at https://www.eeoc.gov/eeoc/newsroom/release/1-21-16.cfm.

[6] EEOC, Press Release, “Lakeland Eye Clinic will Pay $150,000 to Resolve Transgender / Sex Discrimination Lawsuit” (April 13, 2015), available at https://www.eeoc.gov/eeoc/newsroom/release/4-13-15.cfm.

Key Implications of Fourth Circuit’s Denial of En Banc Review of Pro-Transgender Ruling

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On May 31, 2016, the Fourth Circuit Court of Appeals denied en banc review of an April decision permitting transgender students to use sex-segregated facilities that are consistent with their gender identity.  The Fourth Circuit encompasses North Carolina; thus, the case G.G. v. Gloucester County Public School Board (“Gloucester County”), although it arose in Virginia, creates a conflict between federal law and North Carolina’s House Bill 2 (“HB2”), which requires transgender individuals to use public bathrooms that match the gender listed on their birth certificates.  Although Gloucester County applies on its face to students and public schools, the decision impacts retailers who provide bathroom facilities to employees and customers and who must navigate conflicting laws regarding transgender protections.  Of additional importance, plaintiffs in sex discrimination lawsuits will likely use the decision as support for the view that a person’s “sex” includes “gender identity.”

In Gloucester County, a sixteen-year-old transgender high school student who was born a biological female filed suit to use the boys’ restroom at school.  G.G. and his mother contended that the school’s policy of providing separate restrooms and locker rooms based upon a student’s biological sex constituted sex discrimination under Title IX—the federal law that prohibits sex-based discrimination in federally funded educational programs and activities.  On April 19, G.G. prevailed in a two-to-one decision of a three member panel of the Fourth Circuit, which deferred to the U.S. Department of Education’s interpretation that the reference to “sex” in Title IX includes “gender identity.”

Following the panel’s ruling, the school board asked the Fourth Circuit to rehear the case with the full panel of 15 active judges.  On May 31, the en banc panel denied the school board’s request.  Circuit Judge Paul V. Niemeyer, widely considered the most conservative member of the Fourth Circuit, filed the lone dissent, stating the issue “deserves an open road to the Supreme Court to seek the Court’s controlling construction of Title IX for national application.”

Regardless whether the case proceeds to the Supreme Court, the decision signifies the first time a federal appeals court has found that federal law protects the rights of transgender persons to use sex-segregated facilities that are consistent with their gender identity.  Although decided under Title IX with regard to student rights, the decision may have ramifications in the area of employment law, inasmuch as Title VII, like Title IX, prohibits discrimination based on “sex.”  Retailers and other employers should be alert to the issue and may expect that future litigants will seek to expand the Gloucester County ruling to Title VII and other sex discrimination claims.

Given the political and legal climate surrounding HB2 and related laws that affect the rights of transgender persons, we recommend that retailers proactively accommodate the needs of transgender workers rather than reactively respond to potential claims of discrimination.  Retailers, particularly those operating in states with anti-discrimination laws that cover sexual orientation and gender identity, should implement a policy designed to foster workplace inclusion.  In particular, retailers are encouraged to provide transgender employees access to bathrooms that correspond to their gender identity and, where possible, provide employees with additional options, including single-occupancy gender-neutral (unisex) facilities and use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.  Furthermore, retailers in the clothing industry with dressing/fitting rooms should accommodate their employees and patrons alike by permitting them to use the dressing/fitting room that corresponds to their gender identity.  These recommendations apply equally to those retailers in North Carolina because, although HB2 remains in effect in that state, the law applies only to places of public accommodation, and, in any event, the Fourth Circuit’s recent decision signals that the controversial law may not withstand judicial scrutiny.  In general, retailers should beware that engaging in discriminatory practices may have negative business as well as legal ramifications.

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