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.

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.

On March 23, 2016, the DOL issued its long-awaited final “persuader rule” (“Final Persuader Rule”), which drastically expands the agency’s prior interpretation of the types of legal and consulting activities that will be subject to the extensive reporting requirements of Section 203 of the Labor-Management Reporting and Disclosure Act (“LMRDA”). In particular, the Final Persuader Rule seeks to narrow significantly the scope of the so-called “Advice Exemption” to the statute’s reporting requirements. As a result, a wide range of services provided by labor relations counsel and consultants may—for the first time—be deemed by the DOL to constitute reportable “persuader activity” under the LMRDA.

Changes to the Advice Exemption

The LMRDA requires employers and their consultants to report any conduct that constitutes “persuader activity”—that is, activity undertaken with a direct or indirect purpose to persuade employees to exercise (or not exercise) their rights to organize and bargain collectively, i.e., to be represented by a union. Under the statute’s Advice Exemption, however, “advice” given to employers by outside consultants does not constitute reportable persuader activity.

For the past 50 years, the DOL has used a bright-line test to interpret whether or not the activities of consultants, including lawyers, constituted reportable persuader activity. When an employer’s consultants (including labor counsel) directly communicated with the employer’s employees to persuade them about unionization, that activity was reportable. If, on the other hand, an employer’s lawyer or consultant did not directly communicate with the employer’s employees, but simply provided advice that the employer was free to accept or reject, such activity fell within the Advice Exemption and did not need to be reported. Under the DOL’s previous statutory interpretation, therefore, labor counsel did not engage in reportable persuader activity when assisting an employer during a union election campaign by providing strategy and guidance, or assisting in the preparation and drafting of materials (speeches, letters, or other written communications).

Under the new Final Persuader Rule, the DOL has significantly narrowed the scope of the Advice Exemption. Specifically, the agency has abandoned the long-standing bright-line test that distinguished between consultants’ direct communications with employees (which were clearly reportable) and other consultant activities that did not involve direct communications with employees and that the employer was free to accept or reject (which was clearly not reportable). Assuming that the Final Persuader Rule takes effect, employers and their consultants must report a broad range of activity that formerly fell within the Advice Exemption—even activity that does not involve a consultant directly communicating with employees. According to the DOL, only communications between the employer and its consultants that pertain solely to legal advice remain within the scope of the Advice Exemption.

Impact on Employers

The Final Persuader Rule, which will apply to arrangements and agreements made on or after July 1, 2016, will require both employers and consultants to report that they have engaged in the following activities, whenever they are taken with a direct or indirect object to persuade employees about unions:

  • planning, directing, or coordinating supervisors or managers;
  • drafting or providing persuader materials (including speeches or materials intended for distribution or dissemination to employees);
  • conducting seminars for supervisors or other employer representatives; or
  • developing or implementing personnel policies to persuade employees.

If a labor consultant or counsel reports engaging in even a single act of reportable persuader activity, the consultant or counsel must also file an annual Form LM-21, listing the names and addresses of all the employers for which the consulting or law firm provided “labor relations advice or services” during the year—regardless of whether or not such advice or services involved persuader activity.

Legal Challenges to the Final Persuader Rule

The Final Persuader Rule, which was first proposed by the Obama administration in June 2011, has been the subject of intense criticism over the past five years from a wide range of sources (including Senators, employer and employee rights groups, and the American Bar Association), all of whom objected to the rule’s potential for compromising and interfering with the attorney-client relationship, and for mandating the release and disclosure of information long understood to be protected by the attorney-client, work product, and other legal privileges.

Three federal lawsuits challenging the Final Persuader Rule have already been filed in U.S. district courts across the country, and the plaintiffs in one such suit have sought a preliminary injunction and expedited hearing on their motion. There has also been ongoing activity before Congress, as the business community, management lawyers, and other employer advocates have criticized the rule. During a recent hearing before a House Education and the Workforce subcommittee, management-side lawyers emphasized that the Final Persuader Rule’s negative effects will likely be compounded by other recent union-friendly rules. For example, the recent “quickie election” rules adopted by the Board drastically reduced the time that an employer has to prepare for an election campaign. The Final Persuader Rule will likely increase the already onerous burdens on these employers as they seek expedited assistance from their consultants and labor counsel.

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

Laura C. Monaco
Laura C. Monaco

This week, the EEOC filed its first two federal lawsuits that frame allegations of sexual orientation-based harassment and discrimination as claims of unlawful “sex discrimination” under Title VII of the Civil Rights Act of 1964.

In EEOC v. Pallet Companies the EEOC alleges that an employee’s night-shift manager harassed her because of her sexual orientation by making repeated offensive comments (sometimes accompanied by sexually suggestive gestures), such as “I want to turn you back into a woman” and “I want you to like men again.”  According to the Complaint, the employee was discharged after she complained about her manager’s comments to another supervisor and the Human Resources department.  The EEOC makes similar allegations in EEOC v. Scott Medical Health Center.  There, a supervisor allegedly harassed an employee by making repeated anti-gay comments and vulgar statements about the employee’s sexual orientation.  The employee claims that he was constructively discharged after the company refused to take any corrective action in response to his complaints.

In both lawsuits, the EEOC articulates three legal theories in support of its claim that the alleged sexual orientation harassment constitutes unlawful sex discrimination under Title VII.  First, sexual orientation discrimination “necessarily entails” treating an employee less favorably due to his or her sex and, therefore, the employee’s gender unlawfully motivated the alleged harassment.  Second, the alleged harassment stemmed from the employee’s failure to conform to the harasser’s “sex stereotypes and norms.”  Third, the harasser displayed both general objections to the idea of individuals having romantic associations with others of the same sex, as well as a specific objection to the employee’s close, loving association with a same-sex partner.

Although these are the first lawsuits the EEOC has filed on the grounds of sexual orientation discrimination as “sex discrimination” under Title VII, the agency has actually raised these same three legal theories before.  In July 2015, the EEOC issued Baldwin v. Department of Transportation, an agency determination concluding that allegations of sexual orientation discrimination necessarily state a claim of unlawful sex discrimination because (1) the alleged discrimination would not have occurred but for the employee’s sex, (2) the challenged treatment was based on the sex of the people the employee associates with, and/or (3) the alleged conduct was premised on the fundamental “sex stereotype, norm, or expectation that individuals should be attracted only to those of the opposite sex.”

The EEOC’s new lawsuits attacking sexual orientation discrimination represent just one facet of the agency’s recent efforts to address emerging and developing issues – one of the six national priorities identified in its Strategic Enforcement Plan for fiscal years 2013 to 2016.  In addition to focusing on sexual orientation discrimination, the EEOC also recently filed federal lawsuits alleging unlawful sex discrimination against transgender individuals.  As the EEOC intensifies this focus, employers should review their antidiscrimination policies to determine whether LGBT employees have the same protections as employees in other protected categories, and should consider expanding their training programs to ensure they encompass issues relating to sexual orientation, gender identity, and transgender discrimination.  Employers should also remain mindful of state and local legislation that has increasingly expanded to prohibit sexual orientation or gender identity discrimination in employment.