In a decision that will be celebrated by employers in the Seventh Circuit struggling with employee requests for post-Family Medical Leave Act (“FMLA”) leave as an accommodation under the American with Disabilities Act (“ADA”), the Seventh Circuit in Severson v. Heartland Woodcraft, Inc., 2017 U.S. App. LEXIS 18197 (7th Cir. Sept. 20, 2017), recently held that an employer did not violate the ADA by firing an employee instead of extending his leave after he exhausted all leave under the FMLA.  This holding – finding that extended long-term leave is not a reasonable accommodation under the ADA – is not only contrary to the Equal Employment Opportunity Commission (“EEOC”)’s position regarding extended leave as a reasonable accommodation, but also conflicts with several other federal Circuit courts that had previously ruled on the same issue (holding that extended/post-FMLA leave can be a reasonable accommodation under the ADA).

In Severson, the plaintiff was diagnosed with back myelopathy, which negatively affected his back, neck, and spinal cord.  While plaintiff generally could perform his duties without incident, he did experience several “flare ups” which made it difficult for him to walk, bend, lift, stand, and work.  As a result of his disability, plaintiff injured his back and went on FMLA leave, with several continuations of leave, totaling 12 weeks, approved by defendant.  After exhausting all FMLA leave, plaintiff informed defendant that he would undergo disc compression surgery and would require at least an additional two months of leave for recovery time.  Instead of extending plaintiff’s leave, defendant informed plaintiff that his employment would terminate on the date that his FMLA leave expired.

In reaching its holding that leave for an extended period of time is not a reasonable accommodation under the ADA, the Seventh Circuit reaffirmed its analysis in an earlier case – Byrne v. Avon Prods., Inc. 328 F.3d 379 (7th Cir. 2003) – that a long-term leave of absence could not be a reasonable accommodation under the ADA.  Although EEOC guidance “Employer-Provided Leave and the Americans with Disabilities Act” states that employers should consider long-term leaves of absence as reasonable accommodations, the Seventh Circuit disagreed, stating that such an interpretation was untenable and would transform the ADA into “a medical-leave statute – in effect, an open-ended extension of the FMLA.”  (A previous article on the guidance can be found here.)  Moreover, the Court in Severson stated that long-term medical leave does not enable an individual to perform the essential functions of the job and, therefore, cannot be considered a reasonable accommodation because at the time it is required the employee is not a qualified individual with a disability.  Finally, the Court noted that the ADA only requires “reasonable accommodations” and not “effective accommodations”, finding the a request for extended leave is only the latter.  Thus, the Seventh Circuit rejected plaintiff’s argument (which had been joined by the EEOC) that defendant should have granted him a reasonable accommodation of additional leave.

This case represents a stark deviation from both the EEOC’s guidance and the rulings of multiple other Circuit courts throughout the country setting forth that employers must evaluate requests for leave (including those extending beyond FMLA leave) under the ADA on a case-by-case basis to analyze whether granting the leave would be an undue hardship, so long as the request is not for indefinite leave. While this may change the way employers in the Seventh Circuit approach their analysis of leave as a reasonable accommodation under the ADA, employers should be careful not to over-extend this ruling:

  • First, the Severson holding itself does not totally preclude any post-FMLA as an accommodation under the ADA. Indeed, the holding leaves open the possibility that leave spanning a few days or even a couple of weeks could be a reasonable accommodation.
  • Second, some state and local laws governing disability discrimination and accommodation may have different language and standards that could result in a contrary decision. (And now, more than ever, state and local laws that are more restrictive than federal law are being passed on a regular basis.)
  • Third, employers outside the Seventh Circuit should remain diligent in individually analyzing requests for extended leave as an ADA accommodation, particularly in jurisdictions that follow the EEOC’s guidance or where Circuits have expressly ruled contrary to Severson.

No matter what jurisdiction an employer operates in, it is always important for employers to communicate with employees regarding expiration of leave and expected return dates while the employee remains out on leave.

When: Thursday, September 14, 2017 8:00 a.m. – 4:30 p.m.

Where: New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

  • Immigration
  • Global Executive Compensation
  • Artificial Intelligence
  • Internal Cyber Threats
  • Pay Equity
  • People Analytics in Hiring
  • Gig Economy
  • Wage and Hour
  • Paid and Unpaid Leave
  • Trade Secret Misappropriation
  • Ethics

We will start the day with two morning Plenary Sessions. The first session is kicked off with Philip A. Miscimarra, Chairman of the National Labor Relations Board (NLRB).

We are thrilled to welcome back speakers from the U.S. Chamber of Commerce. Marc Freedman and Katie Mahoney will speak on the latest policy developments in Washington, D.C., that impact employers nationwide during the second plenary session.

Morning and afternoon breakout workshop sessions are being led by attorneys at Epstein Becker Green – including some contributors to this blog! Commissioner of the Equal Employment Opportunity Commission, Chai R. Feldblum, will be making remarks in the afternoon before attendees break into their afternoon workshops. We are also looking forward to hearing from our keynote speaker, Bret Baier, Chief Political Anchor of FOX News Channel and Anchor of Special Report with Bret Baier.

View the full briefing agenda and workshop descriptions here.

Visit the briefing website for more information and to register, and contact Sylwia Faszczewska or Elizabeth Gannon with questions. Seating is limited.

The new episode of Employment Law This Week offers a year-end roundup of the biggest employment, workforce, and management issues in 2016:

  • Impact of the Defend Trade Secrets Act
  • States Called to Ban Non-Compete Agreements
  • Paid Sick Leave Laws Expand
  • Transgender Employment Law
  • Uncertainty Over the DOL’s Overtime Rule and Salary Thresholds
  • NLRB Addresses Joint Employment
  • NLRB Rules on Union Organizing

Watch the episode below and read EBG’s Take 5 newsletter, “Top Five Employment, Labor & Workforce Management Issues of 2016.”

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.”

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.

The EEOC announced a rule change that will more than double the maximum fine for violating Title VII, the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA)  notice posting requirements. Under the new rule, which is projected to become effective the first week of July, employers will face a maximum penalty of $525 per violation — up from $210.

While most retailers undoubtedly know they must have notices, where the notices are posted matters. The regulations require that they be in a prominent and accessible place where notices to employees and applicants are customarily maintained. For retailers in tight spaces this might prove challenging.  To avoid being dinged, however, it will pay to double check that the notices are not properly displayed and relegated to a storage closet door or obscured by stacked boxes.

On April 5, the San Francisco Board of Supervisors unanimously approved a city ordinance requiring businesses which have employees working in the City to offer those employees six weeks of supplemental paid parental leave. If signed by Mayor Ed Lee, San Francisco will be the first city in the country to require this benefit.

Current and Proposed Law

Currently, California employees are eligible to take six weeks of partially-paid leave under California’s Paid Family Leave (PFL) law to bond with a newborn child or newly placed child for adoption or foster care, among other reasons. Payment is made from a worker-funded state disability program and calculated as a percentage of the employee’s wages (55 percent) subject to the maximum weekly benefit amount set by the PFL program.

Under the proposed San Francisco ordinance, for up to six weeks employers must bridge the gap between the amount the employee receives in PFL and one-hundred percent of the employee’s gross weekly wages (referred to as “Supplemental Compensation”) for parental bonding purposes.  In other words, the employer must pay the remaining forty-five percent of the employee’s gross wages. However, if the employee is already receiving the maximum weekly benefit under the PFL law, the employee’s gross weekly wage is calculated by dividing the maximum weekly benefit amount by the percentage rate of wage replacement provided under the PFL.

Covered employers

The ordinance will eventually cover all employers that regularly employ twenty or more individuals if any of those persons are regularly employed in San Francisco. The ordinance will be phased in, starting with companies that employ 50 or more employees in January 2017. Companies with 35 to 49 employees must comply starting in July 2017, and companies with 20 to 34 employees will have until January 2018 to comply.

The ordinance does not apply to federal, state or municipal government entities.

Covered employees

The Supplemental Compensation benefit has four eligibility requirements. It applies to new mothers and fathers who: (1) have been employed at least 90 days prior to starting leave; (2) are eligible to receive PFL compensation from the State of California; (3) perform at least eight hours of work per week for the employer within the city of San Francisco; and (4) at least forty percent of their total weekly hours worked for the employer are within the city of San Francisco. Part-time and temporary employees and employees of staffing agencies are expressly included.

The employee must agree to allow the employer, in its discretion, to apply up to two weeks of the employee’s unused vacation leave to help meet the employer’s obligation to provide Supplemental Compensation. If the covered employee does not agree, the employer is not required to provide Supplemental Compensation.

Anti-Retaliation

The ordinance prohibits covered employers from discriminating or taking, threatening to take, any adverse action against any person in retaliation for exercising rights to Supplemental Compensation. This includes discharging, threatening to discharge, demoting, suspending, filing a complaint with the Office of Labor Standards Enforcement, or cooperating in any prosecution or investigation of an alleged violation of the ordinance. The ordinance imposes a rebuttable presumption of retaliation, shifting the burden of proving non-retaliation to the employer by clear and convincing evidence.

Employee Verification

There are no provisions in the ordinance permitting an employer to require the employee to provide verification of the need for leave.

Termination of Employee on Leave

If an employee is terminated during leave, the employer must continue paying Supplemental Compensation to the employee for the remainder of the California Paid Family Leave period. The ordinance does not contain any exception which creates a very unusual situation where the employer might be required to make payments to an employee terminated for misconduct.

Records  Required

Employers are required to keep records of Supplemental Compensation paid for three years. Although not stated in the ordinance, to comply with the Labor Code, employers should make a notation of any Supplemental Compensation payment on the employee’s paystub.

Further Thoughts

As has been the case with other progressive San Francisco employment-related ordinances, there are many questions to be resolved about how this new law will be applied. We anticipate that the City’s Office of Labor Standards Enforcement will issue some form of guidance for employers in advance of the first effective date of the ordinance. We also anticipate that employers will discover more ambiguities and uncertainties in the ordinance as they more toward developing policies for compliance. We will keep our friends and clients advised as developments warrant. As is always the case with San Francisco employment law, stay tuned!

Our colleague Frank C. Morris, Jr., attorney 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: “New Online Recruiting Accessibility Tool Could Help Forestall ADA Claims by Applicants With Disabilities.”

Following is an excerpt:

In recent years, employers have increasingly turned to web based recruiting technologies and online applications. For some potential job applicants, including individuals with disabilities, such as those who are blind or have low vision, online technologies for seeking positions can prove problematic. For example, some recruiting technologies and web-based job applications may not work for individuals with disabilities who use screen readers to access information on the web. The U.S. Department of Labor’s Office of Disability Employment Policy (ODEP) recently announced the launch of “TalentWorks.”

Read the full post here.

The top story on Employment Law This Week is the EEOC’s filing of its first sexual orientation bias suits.

Last year, the Equal Employment Opportunity Commission interpreted Title VII of the Civil Rights Act to prohibit discrimination against an individual for sexual orientation. The EEOC concluded that sexual orientation discrimination is a form of unlawful gender discrimination. This month, the agency filed two landmark federal lawsuits seeking to enforce its interpretation of the statute for the first time. The agency is suing on behalf of workers at a company in Baltimore and one in Pittsburgh for harassment based on sexual orientation. Our colleague Jeffrey Landes, from Epstein Becker Green, has more.

View the episode below or read more about these landmark lawsuits in an earlier post on this blog.

The top story on Employment Law This Week is the EEOC’s announcement of new nationwide disclosure rules for position statements.

Retroactive to January 1, 2016, employers should expect the disclosure of their position statements to the charging party, even if the statement contains confidential information. Under the new policy, complainants have the right to request access to the statement and respond to it, but any response from the charging party will not be disclosed to the employer in turn. Lauri Rasnick, a Member of the Firm at Epstein Becker Green, has more on what this means for employers.

View the episode below or read more about the EEOC’s announcement in an earlier blog post.