The U.S. Department of Labor (“DOL”) Administrative Review Board (“ARB”) has sounded an alarm that needs to be heard by accounting firms, law firms, and other consultants, advisors, and providers of services to publicly traded companies. With its recent decision in Spinner v. David Landau & Associates, LLC, ARB Case Nos. 10-111, 10-115 (May 31, 2012), the ARB continued its expansion of whistleblower protection, holding that Sarbanes-Oxley (“SOX”) whistleblower protections extend to employees of privately held businesses that merely contract with publicly traded companies. The ARB’s decision significantly expands the number and type of organizations whose employees it says are covered by SOX whistleblower protections. But the result was accomplished by direct rejection of the opposite conclusion reached by the U.S. Court of Appeals for the First Circuit in its well-reasoned recent decision in Lawson v. FMR LLC, 670 F.3d 61 (1st Cir. 2012). While this is not the first instance of contrasting administrative and judicial interpretations of the definition and reach of SOX protections, it clearly indicates the current climate in which a wide swath of employers need to reassess their compliance programs, provisions for receipt of whistleblower reports, and procedures for addressing claims and avoiding retaliation.
Violence against women has been in the headlines lately – the reauthorization of the Violence Against Women Act is engendering vigorous debate, and as of last month, federal agencies were ordered to implement policies to assist their employees who are victims of domestic violence. Also last month, the National Institute for Occupational Safety and Health and the Injury Control Research Center at West Virginia University published a paper entitled “Workplace Homicides Among U.S. Women: The Role of Intimate Partner Violence” in the Annals of Epidemiology. The study found that from 2003 to 2008, 648 women were murdered in the workplace. And workplace homicides against women are on the rise – in 2010 they were up 13% (even though workplace homicides have generally been declining).
Employer liability can result from workplace violence incidents, even when committed by a non-employee. Indeed, although the Occupational Safety and Health Administration (“OSHA”) has no specific standard addressing workplace violence hazards, OSHA has released voluntary guidelines to address these issues in various industries. Guidance is also offered by OSHA to all employers to help them prepare for and handle emergencies and to develop a workplace violence program. A more detailed discussion is located on our OSHA blog. See Workplace Violence Policies and Background Checks Are Essential Components of a Prevention Plan. Failing to properly implement procedures or handle these difficult situations correctly may lead to liability or even OSHA citations.
Given these trends, employers should review ways they can prevent domestic violence in the workplace and accommodate employees who may be victims of domestic violence:
- Employers should review their safety policies and procedures and consider ways in which they address workplace violence issues.
- Policies prohibiting women from working alone are not advisable since they could violate anti-discrimination laws. Nevertheless, sex-neutral policies about employees working alone (especially during certain shifts when there are fewer people or a higher risk of violence) may be advisable.
- As many workplace homicides occur in parking lots, employers may want to examine their parking lot areas to see whether they are adequately lit, or whether security patrol or escorts may be helpful to reduce possible violent attacks.
- To assist workers facing domestic violence, employers may want to adopt policies that encourage workers concerned about domestic violence to seek protection or particular accommodations in the workplace without fear of retaliation.
- Employers should review their policies and ensure they do not directly or indirectly impact certain protected groups adversely when domestic violence is at issue.
- Employers may want to include domestic violence victims as a protected class in their equal employment opportunity statements/policies. Several jurisdictions, including New York, prohibit discrimination against victims of domestic violence, and several other jurisdictions have similar legislation pending.
- Employees who are victims of domestic violence, depending on the severity of the violence, may fall under the protections of the Family Medical Leave Act or even the Americans with Disabilities Act (“ADA”) in certain cases. Thus, employers receiving requests for leave or other accommodations for victims of domestic violence should consider whether there are federal legal requirements in responding to such requests.
- Many states, including New York and California, require employers to provide victims of domestic violence with time off for certain reasons, such as attending court proceedings. Employers should make sure they are complying with applicable state domestic violence laws if time off for domestic violence-related proceedings is requested.
- In the absence of an applicable state law providing leave for victims of domestic violence, employers everywhere should make sure that requests for time off to attend a court proceeding due to one’s status as a domestic violence victim are treated in the same way as requests for time off to attend other court proceedings. Failure to do so could lead to claim for disparate treatment.
- Employers should review their anti-bullying and workplace violence policies. The policies should cover situations in which intimate partners might be bullying or otherwise abusing each other in the workplace.
- It may be beneficial for employers to include a discussion on domestic violence during their anti-bullying and workplace violence training.
In a sharp setback for the National Labor Relations Board (the “Board”), a federal district court in Washington, D.C. (the “Court”), struck down the Board’s election rules, which took effect on April 30, 2012, on technical grounds, holding that the Board did not have a properly constituted quorum of three members when it voted to change its election rules and procedures. See Chamber of Commerce v. NLRB, No. 11-2262 (JEB), Slip Op., 2012 WL 1664028 (D.D.C. May 14, 2012). This decision comes less than a month after a federal appeals court struck down the Board’s notice-posting rule that would have required employers to advise employees of their rights under the National Labor Relations Act, and less than two years after the Supreme Court of the United States in New Process Steel LP v. NLRB, 130 S. Ct. 2635, 560 US __ (2010), held that the Board, which is traditionally comprised of five members, must have a quorum of three members to lawfully issue its decisions.
On April 20, 2012, in a noteworthy decision, the Equal Employment Opportunity Commission (“EEOC”) ruled that Title VII of the Civil Rights Act of 1964 (“Title VII”) protects transgender individuals from disparate treatment. Macy v. Holder, Appeal No. 0120120821, Agency No. ATF-2011-00751 (EEOC, Apr. 20, 2012). The case therefore opens up a new protected category which, while already recognized under many state and local anti-discrimination statutes and by some federal courts, had not previously been formally recognized by the EEOC. Employers may want to consider updating employment policies, such as anti-discrimination policies, to include “transgender status” or “gender identity” as protected categories (if they have not already done so because of applicable state or local laws) and to train managers not to discriminate, harass or retaliate against employees or applicants based on transgender status or gender stereotyping.
Mia Macy (“Macy”), a police detective, applied for a position with the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). Macy interviewed for the position by telephone and was promised the position pending completion of a background check. A few months later, Macy informed the third-party contractor responsible for filling the position and performing her background check that she changed her name and gender (from male to female) and requested that the contractor inform ATF of these changes. Five days later, Macy received an e-mail stating that due to federal budget reductions, the ATF position was no longer available. Macy later learned that the position had not been cut, but had been offered to another candidate.
Complaint of Discrimination
Macy filed a complaint with the EEO officer at the ATF alleging discrimination on the basis of gender identity stereotyping. The ATF interpreted Macy’s complaint to encompass a gender discrimination claim and a gender identity stereotyping claim. With respect to the gender discrimination claim, the ATF followed the Department of Justice’s (“DOJ”) policy of processing the claim through the EEOC, which provides for remedies pursuant to Title VII. With respect to the gender identity stereotyping claim, the ATF processed it through a separate DOJ process that allows for fewer remedies than Title VII and does not include the right to request a hearing before an EEOC Administrative Law Judge or the right to appeal the final DOJ decision.
Appeal to the EEOC
Macy appealed to the EEOC the ATF’s decision to process her gender identity claim separately and requested that the EEOC adjudicate the claim that she was discriminated against on the basis of “sex stereotyping, sex discrimination based gender transition/change of sex, and sex discrimination based gender identity.” In its decision to process the entire complaint pursuant to Title VII, the EEOC noted that the Supreme Court has held that Title VII bars not just discrimination based on biological sex, but also gender stereotyping – in other words, failing to act and appear according to expectations defined by gender – and that the terms “gender” and “sex” are often used interchangeably to describe discrimination under Title VII. See Price Waterhouse v. Hopkins, 490 U.S. 228, 239 (1989).
Although most of the federal circuit courts have recognized that gender stereotyping constitutes discrimination prohibited by Title VII, this decision by the EEOC is significant. Other than a proposed amicus brief submitted by the EEOC to the court in the Western District of Texas on October 17, 2011 in Freedom Buick GMC Truck, No. 07-115 (W.D. Tex. Oct. 17, 2011) (the judge denied as moot the EEOC’s motion for leave to file an amicus brief), this is the first case in which the EEOC has expressly adopted the position that disparate treatment of an employee because he or she is transgender is discrimination “because of . . . sex” under Title VII.
Now, because of this decision, transgender employees who experience workplace discrimination can file a discrimination charge with the EEOC at any of its 53 field offices. If the allegations are found to have merit, employees will be entitled to remedies pursuant to Title VII, including hiring, reinstatement, and back pay. In addition, the EEOC may bring lawsuits directly in court against employers it has determined have discriminated, harassed, or retaliated against transgender employees or applicants.
The On April 25, 2012, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued an enforcement guidance document titled “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et. seq.“ (the “Guidance”), with respect to employers’ use of arrest and conviction information in connection with employment decisions.
Disparate Treatment v. Disparate Impact
Although Title VII of the Civil Rights Act of 1964 (“Title VII”) does not prohibit employers’ use of criminal background checks, the Guidance reaffirms the EEOC’s longstanding position that employers may violate Title VII if they use criminal background information improperly. The Guidance, which updates and consolidates existing EEOC guidance documents on the subject that have previously been left unchanged since 1990, focuses on employment discrimination based on race and national origin.
According to the EEOC, there are two ways in which an employer’s use of criminal history information may violate Title VII. First, Title VII prohibits employers from engaging in “disparate treatment” discrimination – that is, treating job applicants with the same criminal records differently because of their race, color, religion, sex, or national origin. Second, even where employers apply a criminal record exclusion under a neutral policy (e.g., uniformly excluding applicants based on certain criminal conduct), the exclusion may still operate to disproportionately and unjustifiably keep out people of a particular race or national origin. This is referred to as “disparate impact” discrimination. If the employer does not show that such an exclusion is “job related and consistent with business necessity” for the position in question, the exclusion is unlawful under Title VII.
The U.S. Equal Employment Opportunity Commission (“EEOC”) has issued a long-awaited final rule (“Final Rule”), which amends the regulation on the “reasonable factors other than age” (“RFOA”) defense available under the Age Discrimination in Employment Act (“ADEA”). The Final Rule is available at 29 C.F.R. Part 1625. The EEOC previously published proposed rules regarding the RFOA defense on March 31, 2008, and then on February 18, 2010. The Final Rule takes into account public comments received on those proposals.
Unfortunately for employers, the Final Rule was not worth the wait. The revised regulation, which takes effect on April 29, 2012, imposes rigorous procedural and factual requirements for employers when attempting to establish the reasonableness of a policy or practice that causes an age-based adverse impact.
Like it or not, we live in a digital-age, and how people choose to define themselves is often readily showcased on social networking sites such as Facebook. Given the candid manner many individuals express themselves on their social networking profiles, it’s only natural that employers have started to pay attention. Why wouldn’t they? Employers want to pick the right person for the job and that their employees do not disparage the company or act in a manner that threatens workplace security. But when news spread that a few employers were demanding access to applicants’ on-line profiles, many – including businesses and members of Congress –decried this practice as an unwarranted intrusion of privacy.
Specifically, Facebook stated that this practice “undermines the privacy expectations and the security of both the user and the user’s friends,” indicating that sharing passwords or granting another individual access would violate Facebook’s “Statement of Rights and Responsibilities.”
On Capitol Hill, U.S. Senators Charles Schumer, N.Y., and Richard Blumenthal, CT., wrote a joint letter to the U.S. Department of Justice and to the EEOC, requesting an investigation of the practice. A bill was also introduced in the House of Representatives aimed at prohibiting the practice. Other legislation may be in the works at both the federal and state level. Maryland was the first state to pass legislation banning employers from asking for an employee’s or applicant’s social media site passwords. Other states may soon follow suit.
Although many users update their privacy settings to limit the content that is publicly available, granting a potential employer access allows them to readily sidestep those controls. This is cause for concern, but it is not just about privacy. It is also a question about whether it makes good business sense for an employer.
While employers may gain some benefit from learning additional information that helps guide hiring decisions, employers should weigh those benefits against possible disadvantages. Clearly, there are circumstances, such as government positions with high-level security concerns, where it may be a “need to know” situation. In most ordinary cases, however, employers should consider the pitfalls before deciding that Facebook should be part of the applicant review process.
In other words, employers should be cautious about what a social media search might reveal. Many jurisdictions, including New York, have already enacted statutes that prohibit an employer from making decisions in reliance on certain lawful recreational activities or associations outside of work.
By looking at an online profile, an employer might learn information regarding an applicant or employee’s protected classification that would not be otherwise revealed on a resume. Thereafter, the employer could be charged with a discriminatory failure to hire claim based on that newly acquired information. Similarly, an employer may unwittingly take on a duty that had not previously existed. For example, the employer may become privy to information suggesting that an employee is unstable and, based on that knowledge, the employer could be charged with having acted unreasonably by subsequently entrusting that individual with certain responsibility.
Moreover, an employer may face liability if it takes adverse action after happening upon conversations that could be considered union activities or “concerted activities” under the National Labor Relations Act. The National Labor Relations Board has certainly said a lot about that recently.
Finally, employers may risk losing out on top-talent that may be discouraged by the policy.
The bottom line is that, in this digital age, employers need to consider the impact of social media on workforce issues. Employers should review their workforce needs and address social media issues in their internal hiring policies and practices as well as in their handbooks and other policies disseminated to employees and applicants. This goes beyond merely informing employees that their internet use may be monitored, because a basic technology policy that glosses over social media issues may end up causing problems in the long-run. The same can be said for an inflexible, uniform policy, because a single policy may not be right for every situation.
The New York Court of Appeals recently upheld a jury verdict in favor of a brokerage firm employee who claimed that his employer breached an oral promise (and violated New York wage law) when it failed to pay him a guaranteed bonus of $175,000, to be paid at the end of his first year of employment. The discussions with the hiring manager regarding compensation were not put in writing. Nevertheless, the employee subsequently signed an acknowledgment in the formal employment application that “compensation and benefits are at will and can be terminated, with or without cause or notice, at any time” at the discretion of the employer or the employee. He was discharged after less than two years of employment, and had not been paid the full $175,000 he claimed to be owed.
After a jury found for the employee and the intermediate appellate court sustained the verdict in a 3-2 decision, the employer appealed to the top court. To be clear, the employer denied having made any such oral promise, but the jury believed the employee, so the employer appealed as a matter of law based on, among other things, the at-will language in its employment application, arguing that all compensation, including bonuses, was discretionary. The Court noted that the at-will language was silent as to bonuses, and unanimously held that the oral promise of a guaranteed bonus made at the outset of employment was contractually enforceable and had vested as wages. Thus, while the employer maintained the right to change compensation going forward, its at-will language did not bar recovery on the breach of contract and wage law claims for compensation allegedly due and owing. The case is called Ryan v. Kellogg Partners Institutional Services and is a worthwhile read, particularly for the way it distinguishes the New York case law employers routinely rely upon to support the position that discretionary bonuses do not constitute “wages.”
To continue reading this post from our sister blog, “The Bellwether,” click here.
Gary Ehrhard, an air traffic controller for the Federal Aviation Administration asked for Family Medical Leave Act (“FMLA”) leave to care for his children, 8 and 10 years old. Because they did not suffer from a serious health condition, he was denied FMLA leave, and he claimed that he was later retaliated against for asking for the time off. He discovered that female air traffic controllers were allowed the kind of leave he sought. He sued the Department of Transportation (”DOT”) for sex discrimination and retaliation for complaining about alleged sex discrimination. On March 28, 2012, the U.S. District Court for the Eastern District of New York ruled that even though there was no viable FMLA claim, the sex discrimination and retaliation claims had to go to a jury trial because these claims were broader than the FMLA request. Ehrhard v. LaHood.
Ehrhard claimed that the DOT permitted similarly-situated female air traffic controllers to use employer-provided Leave Without Pay (“LWOP”) in an “open-ended special arrangement,” and that such arrangements were not available to Ehrhard because of his sex. The DOT contended that the gender discrimination claim should be dismissed because Ehrhard was not entitled to FMLA leave, since his children did not have serious health conditions. Ehrhard requested the leave because his wife was unavailable that day to care for his children. The court ruled, however, that Ehrhard’s sex discrimination claim was “broader than an FMLA request” and that “the requirements of the FMLA are not dispositive of this claim.” The court concluded that Ehrhard raised genuine issues of fact as to whether his request for child care was treated differently than requests by female air traffic controllers.
The DOT conceded that female employees were permitted to submit leave requests under a special procedure but Ehrhard was not, but the DOT argued that the female air traffic controllers were not similarly situated to Ehrhard, because they were previously part-time employees. The Court reasoned that “[t]he law does not require the employees to be similarly situated in all respects, but rather requires that they be similarly situated in all material respects.” Accordingly, the court held the jury must decide whether female employees were “similarly situated” and treated more favorably regarding the granting of child care leave.
Ehrhard also claimed that the DOT retaliated against him after he complained that the denial of his leave requests was based on his gender. The court found that Ehrhard produced sufficient evidence that the DOT took adverse action against him after he complained. While the DOT argued that Ehrhard’s complaints were not reasonable, good-faith complaints about suspected sex discrimination, the court ruled that the reasonableness of Ehrhard’s belief of sex discrimination as it pertained to retaliation would have to be decided by a jury.
It may be good practice to help employees who need special privileges, but employers should be aware that a good deed may result in litigation if the favors are not bestowed without regard to protected class status such as sex, or race, or religion or national origin. To minimize risk and exposure from claims of illegal discrimination, employers who provide leaves of absences for child care must ensure that the leaves are available to all employees regardless of sex. As a best practice, employers should also ensure that their child care leave of absences policies are drafted in a gender-neutral manner.
Effective April 3, 2012, the Equal Employment Opportunity Commission (“EEOC”) extended its existing recordkeeping requirements under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act to employers covered by Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”). The burden on employers to comply with the recordkeeping requirements under GINA will likely be minimal, as employers should already have recordkeeping policies in effect for personnel and other employment records pursuant to these and other employment laws with the same or more stringent requirements. This Act Now Advisory should serve as a reminder of those recordkeeping requirements, which now apply under GINA as well.