The Immigration Law Group at Epstein Becker Green released a Special Immigration Alert that will be of interest to our readers.

Topics include:

  1. President Trump Issues Revised Executive Order on Travel
  2. USCIS Suspends Premium Processing for H-1B Petitions Starting April 3, 2017: All H-1B Petitions, Including H-1B Cap Petitions, Are Affected!
  3. Use of New Form I-9 Is Now Mandatory
  4. IRS Announces That Delinquent Taxpayers Face Revocation/Denial of U.S. Passports
  5. DHS Issues Two New Memos on Enforcement/Border Security

Read the full alert here.

A new post on the Management Memo blog will be of interest to many of our readers in the retail industry: “‘A Day Without’ Actions – How Can Employers Prepare?” by our colleagues Steven M. Swirsky and Laura C. Monaco of Epstein Becker Green.

Following is an excerpt:

[T]he same groups that organized the January 21, 2017 Women’s March on Washington – an action participated in by millions of individuals across the county – has called for a “Day Without Women” to be held on Wednesday, March 8, 2017. Organizers are encouraging women to participate by taking the day off from paid and unpaid labor, and by wearing red – which the organizers note “may be a great act of defiance for some uniformed workers.”

Employers should be prepared to address any difficult questions that might arise in connection with the upcoming “Day Without Women” strike: Do I have to give my employees time off to participate in Day Without events? Can I still enforce the company dress code – or do I need to permit employees to wear red? Can I discipline an employee who is “no call, no show” to work that day? Am I required to approve requests for the day off by employees who want to participate? As we explained in our prior blog post, guidance from the National Labor Relations Board’s General Counsel suggests that an employer can rely on its “lawful and neutrally-applied work rules” to make decisions about granting requests for time off, enforcing its dress code, and disciplining employees for attendance rule violations. An employer’s response, however, to a given employee’s request for time off or for an exception to the dress code, may vary widely based upon the individual facts and circumstances of each case. …

Read the full post here.

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: “NLRB Acting Chair Dissents Point to Likely Changes to Board Election Rules and Employee Handbook and Email Standards.”

Following is an excerpt:

NLRB Acting Chair Philip Miscimarra has given the clearest indication to date of what steps a new Republican majority is likely to take to reverse key elements of the Labor Board’s hallmark actions of the Obama administration once President Trump nominates candidates for the Board’s two open seats and the Senate confirms. In each of these cases, Miscimarra highlighted his earlier opposition to the majority’s changes in long standing precedents and practices. …

Read the full post here.

Our colleagues Brian G. Cesaratto and Adam S. Forman, at Epstein Becker Green, have a post on the Technology Employment Law blog that will be of interest to many of our readers in the retail industry: “Phishing Scam Targets Human Resources and Payroll Departments.”

Following is an excerpt:

Human Resources and Payroll should advise employees in their departments to be on the lookout for the latest tax season phishing scam designed to steal employees’ tax related information and social security numbers. Given the regular frequency of these types of attacks, employers should be taking appropriate steps to safeguard employee Personally Identifiable Information (“PII”).  At a minimum, Human Resources should have in place written policies regarding the handling of employee PII and provide training designed to protect employee PII against a data breach.  Because Human Resources works with employee PII on an everyday basis, it may be the best equipped to secure sensitive personnel information against the type of fraudulent scheme highlighted in the recent IRS alert. …

What preventative steps can be taken to guard against these attacks? Human Resources should ensure that policies and procedures are in place requiring that the sending of employees’ confidential tax related information by email only be done with 100% confidence that the intended recipient is within the organization and has requested the information. Indeed, the IRS advises that employers consider adopting written policies that govern the electronic distribution of confidential employee Form W-2s and tax related information. …

Read the full post here.

Our colleagues Brian W. Steinbach and Judah L. Rosenblatt, at Epstein Becker Green, have a post on the Heath Employment and Labor blog that will be of interest to many of our readers in the retail industry: “Mayor Signs District of Columbia Ban on Most Employment Credit Inquiries.”

Following is an excerpt:

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. …

Read the full post here.

In January, a New York federal district court denied a retailer’s bid to dismiss a former regional manager’s lawsuit alleging that workplace rumors spread by three female co-workers that she showed her breasts to the company’s CEO by wearing a revealing blouse without a bra and that her subsequent termination shortly after she complained about the gossip constituted hostile work environment sex discrimination and retaliatory discharge. Baez v. Anne Fontaine USA, Inc., No. 14-cv-56621 (KBF), 2017 U.S. LEXIS 1630 (S.D.N.Y. Jan . 5, 2017).

Background

Baez, who normally dressed without a bra, was employed as the East Coast Regional Manager for Anne Fontaine USA, Inc. (“AFUSA”), a clothing retailer that operates 25 stores nationwide.

In September 2013, AFUSA began looking for candidates to replace Baez because of alleged unsatisfactory job performance.  On September 27, 2013, AFUSA extended an offer for Baez’s position to a candidate who declined the job.

In late December 2013, Baez heard that two female managers who reported to Baez and the company’s retail operations manager (also female) were spreading a rumor that Baez had worn a revealing blouse and no bra at a meeting with the CEO, thereby showing him her breasts. On December 27, 2013 Baez reported the rumor to the company’s Controller who, after conferring with the retail operations manager, advised Baez not to write-up one the managers because Baez had already given her a verbal warning and not to terminate the other manager because she was a top performer.

On the 27th, Baez also sent an email to the CEO complaining that one of the managers was telling her team that Baez would soon be terminated. Baez did not, however, mention the rumor about her revealing blouse.

On January 14, 2014 the Controller responded in writing to Baez’s complaint about the rumor advising her “[R]garding the content of the rumor/gossip, you either need to be strong and say ‘so be it, I make my own fashion and life choices…’ Or, if the content bothers you, you need to adjust what you are doing to prevent such rumors/gossip, but you can’t prevent people from having their opinions.” The Controller reiterated that she did not recommend escalating the matter to a written warning.

On January 30, 2014, however, at the direction of the CEO the Controller and Baez met with one of the managers to issue her a written warning. Baez disagreed with the wording of the warning and the manager refused to sign it.

In the meanwhile on January 6, 2014 a week after Baez’s emailed complaints, AFUSA went back to the candidate who had turned them down in September and arranged for her to meet with the CEO. On January 27, 2014 AFUSA offered and the candidate accepted the position of “North America Director,” to start on February 10, 2014.

Thereafter, on February 7, 2014, the CEO and the Controller terminated Baez’s employment. In the termination meeting, which Baez unilaterally taped, the CEO gave Baez three reasons for her discharge: (1) unsatisfactory management of an employee at one of the stores under her supervision; (2) problems associated with the opening of a store; and (3) that she was connected with “too much drama.”  Baez sued AFUSA, the CEO and the Controller alleging violation of Title VII of the Civil Rights Act of 1964 (“Title VII”), the New York State Human Rights Law (“NYSHRL”) and New York City Human Rights Law (“NYCHRL”).

The Court Rulings

The district court found that Baez’s complaint about the gossip regarding her going bra-less and allegedly showing her breasts to the CEO constituted protected conduct and a “very weak claim of discrimination.” The court noted that “if comments on bra-less attendance at a meeting were made by a man, plaintiff’s case would be much stronger[,]” but found “no legal reason why the gender” alters the analysis. The court opined that “even ‘a single comment that objectifies women . . . made in circumstances where that comment would, for example, signal views about the role of women in the workplace [may] be actionable.”

The district court also held that the short time frame between Baez’s December 27, 2013 Complaint and her February 7, 2014 discharge, in part, for being associated with “too much drama” created a sufficient factual dispute to preclude summary judgment on the retaliation claim. The district court acknowledged that AFUSA had articulated two legitimate business reasons for Baez’s discharge, i.e., alleged poor management of an employee and alleged problems with a store opening. Citing Second Circuit precedent, however, the court stated that retaliation need not be the only reason for the adverse job action, but “only that the adverse action would not have occurred in the absence of the retaliatory motive.”

The district court also concluded that there was an issue of material fact over whether the controller adequately investigated the rumor and whether AFUSA responded with the appropriate discipline.  The court granted summary judgement as to the CEO finding no evidence that he directly participated in or abetted any violation of law.

In sum, the content of the gossip, which concerned Baez’s sex; the remedial nature of discrimination statutes and in particular the expansive nature of the NYCHRL; and the use of the word “drama”- a term more likely to be applied to a woman’s behavior – as a reason for Baez’s discharge following her complaints, combined to create enough of a factual dispute to preclude summary judgment.

Lessons For Employers

Retail employers, especially those operating in New York City, should ensure that employees are counseled about the employer’s anti-discrimination and anti-harassment policies, fully investigate all complaints that potentially implicate anti-discrimination laws, and, when appropriate, discipline offending employees.

Retail employers should also ensure that adverse employment actions are based solely upon legitimate non-discriminatory factors which, preferably, are documented. Employers should be careful to avoid ambiguous or potentially charged language, which might undermine the employer’s legitimate reasons for discharge or discipline, when speaking with the employee.

Our colleagues Jeremy M. Brown, Steven M. Swirsky and Laura C. Monaco, 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: “F17 and the General Strike Movement – Best Practices for Addressing Political Activity in the Workplace.”

Following is an excerpt:

This week, an activist group calling itself “Strike4Democracy” has called for a day of “coordinated national actions” – purportedly including more than 100 “strike actions” across the country – on February 17, 2017. The group envisions the February 17th strike as the first in “a series of mass strikes,” including planned mass strikes on March 8 (organized by International Women’s Day and The Women’s March) and May Day, and a general “heightening resistance throughout the summer.” The organizers are encouraging people not to work or shop that day. …

Read the full post here.

In Prince v. Sears Holding Corp., the United States Court of Appeals for the Fourth Circuit (the “Fourth Circuit” or the “court”) sets forth a test that should assist sponsors of employee benefit plans covered by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) in identifying when participants’ state law claims may be removed to the federal courts.  The Fourth Circuit offers a clear explanation of complete preemption under Section 502(a) of ERISA and the test to determine if Section 502(a) completely preempts a state law claim.

Summary of the Facts

This case involves a claim for benefits under an employer-sponsored life insurance plan covered by ERISA. In November 2010, Billy E. Prince (“Prince”) submitted an application to enroll his spouse in the life insurance program sponsored by Sears, his employer.  In May 2011, Sears sent an acknowledgement letter to Prince and began withholding premiums from his pay.  However, in 2012, Sears advised Prince that his spouse’s coverage never became effective because a completed evidence of insurability questionnaire had not been submitted for her.

Prince’s spouse died in May 2014. When Sears denied his claim for benefits, Prince filed a complaint in the Circuit Court of Marion County, West Virginia.  The complaint asserted “constructive fraud/negligent misrepresentation” and “intentional/reckless infliction of emotional distress”.

Sears removed the suit to a United States district court in West Virginia and asked the court to dismiss the complaint, arguing that ERISA completely preempted the state law claims. Prince opposed the motion and moved to remand the case.  The district court held that ERISA completely preempted Prince’s claims and then denied Prince’s motion to remand and dismissed the complaint without prejudice.  Prince filed an appeal with the Fourth Circuit.

The Court’s Analysis

In its opinion, the Fourth Circuit first examined the removal statute and explained that any civil action brought in a State court of which the U.S. district courts have original jurisdiction may be removed to federal court.  The court further explained that when a federal statute completely preempts state law causes of action (referred to as complete preemption), a state law complaint is converted into one stating a federal claim and defendants may remove preempted state law claims to a federal court, regardless of any state-law label that the plaintiff may have used..

The court stated that Section 502(a) of ERISA completely preempts a state law claim when the following three-prong test is met:

  • The plaintiff has standing under Section 502(a) to pursue its claim;
  • The plaintiff’s claim falls within the scope of an ERISA provision that the plaintiff can enforce via Section 502(a); and
  • The claim is not capable of resolution without an interpretation of the contract governed by federal law, i.e., an employee benefit plan covered by ERISA.

The Fourth Circuit found that all prongs of the test for complete preemption were satisfied. With respect to the first prong, Prince conceded that he had standing under Section 502(a), which states that a civil action may be brought by a participant to recover benefits due under a plan, to enforce his rights under the plan or to clarify his rights to future benefits under the plan.  The court determined that Prince satisfied the second prong and  rejected Prince’s argument that ERISA 502(a) did not apply because his claims relied on actions by Sears prior to the denial of benefits.  The court easily concluded that the third prong of the test was satisfied because resolution of Prince’s claim required interpretation of the ERISA life insurance plan maintained by Sears.

Take-Away for Plan Sponsors

The Prince case serves as reminder to plan sponsors that, under the complete preemption doctrine, Section 502(a) of ERISA may allow them to convert claims filed in state court relating to ERISA benefit plans to federal claims and then remove such claims to a federal court.  Since a plaintiff cannot avoid removal by seeking money damages, use of the complete preemption doctrine should provide a valuable tool for plan sponsors in responding to claims under their ERISA plans.

United States District Court in Texas has refused to dismiss a law suit challenging OSHA’s practice of allowing union representatives and organizers to serve as “employee representatives” in inspections of non-union worksites. If the Court ultimately sustains the plaintiff’s claims, unions will lose another often valuable organizing tool that has provided them with visibility and access to employees in connection with organizing campaigns.

The National Federation of Independent Business (‘NFIB”) filed suit to challenge an OSHA Standard Interpretation Letter (the “Letter”), which sets forth the agency’s position that an employee of a union that does not represent the workers at the site may accompany the OSHA representative conducting an inspection. The Federation argued on behalf of itself and one of its members because OSHA had permitted a representative of the Service Employees International Union (“SEIU”) to accompany him despite the fact the SEIU did not represent the workers at the facility. The lawsuit asserts that in allowing this, OSHA had violated its own rules and gave the union rights that it did not have under the law. In the Letter, issued in February 2013, OSHA gave a new definition of “reasonably necessary,” which supported its holding, for the first time, that a third party’s presence would be deemed “reasonably necessary,” if OSHA concluded that the presence of the third party “will make a positive contribution” to an effective inspection. The NFIB’s lawsuit contradicted both the OSHA statute itself and OSHA regulations issued in 1971 following formal rulemaking.

While OSHA asked the Court to dismiss the lawsuit, claiming that the NFIB lacked standing to bring the lawsuit because it could not demonstrate that it had been harmed, and that the lawsuit was procedurally flawed for a number of other reasons as well, Judge Sidney A. Fitzwater denied the U.S. Department of Labor’s Motion to Dismiss, finding that “NFIB as stated a claim upon which relief can be granted,” and that “the Letter flatly contradicts a prior legislative rule as to whether the employee representative” in such a walk-around inspection “ must himself be an employee.”

The rule Judge Fitzwater referred to, 29 U.S.C Section 1903.8(c) contained OSHA’s policies for what are referred to as “safety walk-arounds,” which are on site workplace inspections. The Letter gives employees in the workplace the right to have a representative present during such an inspection. OSHA’s own rules make clear that such “authorized representative(s) shall be an employee(s) of the employer,” but that when “good cause is shown why accompaniment by a third party who is not an employee of the employer (such as an industrial hygienist or a safety engineer) is reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace, such third party may accompany the Compliance Safety and Health Officer during the inspection.” (emphasis added)

If the ultimate outcome of the case, which seems likely, is a finding that OSHA does not have the authority to permit union representatives to participate in OSHA inspections of workplaces where they do not represent the workers, the effect would be to deny unions a potentially potent tool for organizing. As Judge Fitzwater described in his Memorandum and Order, unions such as the UAW in its ongoing organizing campaign at Nissan in Tennessee have come to rely upon participation in OSHA inspections as a valuable tool.

While it is too soon to say whether the Department of Labor will continue to defend the 2013 Letter and the position that OSHA has the right to permit union representatives to participate in safety and health inspections, Judge Fitzwater’s denial of the motion to dismiss raises serious doubt as to the long term viability of OSHA’s position.

Our colleague Sharon L. Lippett, a Member of the Firm 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 DOL FAQs Provide Additional Guidance (and Comfort) for Plan Sponsors.”

Following is an excerpt:

Based on recent guidance from the Department of Labor (the “DOL”), many sponsors of employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA Plans”) should have additional comfort regarding the impact of the conflict of interest rule released by the DOL in April 2016 (the “Rule”) on their plans. Even though it is widely expected that the Trump administration will delay implementation of the Rule, in mid-January 2017, the DOL released its “Conflict of Interest FAQs (Part II – Rule)”, which addresses topics relevant to ERISA Plan sponsors. As explained below, these FAQs indicate that the Rule, as currently designed, should not require a large number of significant changes in the administration of most ERISA Plans. …

Read the full post here.