Employment Training, Practices and Procedures

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.

Retailers should note that the Department of Labor’s Wage and Hour Division (“DOL”) has just released a new Family Medical Leave Act (“FMLA”) poster and The Employer’s Guide to The Family and Medical Leave Act (“Guide”).

New FMLA Poster

The FMLA requires covered employers to display a copy of the General FMLA Notice prominently in a conspicuous place. The new poster is more reader-friendly and better organized than the previous one. The font is larger and the poster contains a QR code that will connect the reader directly to the DOL homepage. According to the DOL, however, the February 2013 version of the FMLA poster can continue to be used to fulfill the FMLA’s posting requirement.

The Employer’s Guide to The Family and Medical Leave Act

According to the DOL, the Guide is intended to provide employers with “essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.” The Guide reviews issues in chronological order, beginning with a discussion of whether an employer is covered under the FMLA, all the way through an employee’s return to work after taking FMLA leave. The Guide includes helpful “Did You Know?” sections that shed light on some of the lesser-known provisions of the FMLA. The Guide also includes hyperlinks to the DOL website and visual aids to improve the reader’s experience. Overall the Guide helps navigating the complex FMLA process; however, it does not provide any guidance beyond the existing regulations.

The top story on Employment Law This Week – San Francisco and New York state break new ground on paid parental leave.

Starting in 2017, businesses with more than 50 employees in San Francisco will be required to give new parents six weeks off, fully paid. San Francisco is the first city in the U.S. to require full salary for new mothers and fathers during their time off. Meanwhile, New York state has passed the most comprehensive paid parental leave policy in the country. New York state’s legislation mandates 12 weeks of partially paid leave for all new parents by 2021.

View the episode below and learn more about the New York legislation in an EBG Act Now Advisory or the San Francisco legislation in an earlier blog post.

On March 28, 2016, New York City Mayor Bill de Blasio signed three pieces of legislation passed earlier this month by The New York City Council to amend the City’s Human Rights Law (“NYCHRL”).

The new laws:

  1. require that the NYCHRL be interpreted expansively to maximize civil rights protections, regardless of how courts have interpreted similar provisions under federal and state anti-discrimination laws;
  2. permit the City’s Commission on Human Rights the authority to award attorney’s fees and costs to complainants in cases brought before the Commission; and
  3. repeal language addressing how to construe the NYCRHL’s prohibition against discrimination on the basis of sexual orientation.

The repealed language provided that the NYCHRL should not be construed to, among other things, restrict an employer’s right to insist that an employee meet bona fide job-related qualifications of employment, or authorize affirmative action on the basis of sexual orientation.

The laws became effective immediately upon the Mayor’s signature. Employers should be aware of the enhanced protections for their New York City employees.

Nancy L. Gunzenhauser
Nancy L. Gunzenhauser

One of the requirements of the amended Philadelphia ban-the-box law has gone into effect. As of March 14, 2016, Philadelphia employers are required to post a new poster provided by the Philadelphia Commission on Human Relations in a conspicuous place on both the employer’s website and on premises, where applicants and employees will be most likely to notice and read it.

The amended law strengthens the prohibition on requesting criminal conviction information prior to a conditional offer of employment. Employers in Philadelphia may no longer use a multijurisdictional application with a criminal conviction question, even where the application advises Philadelphia applicants to not answer the criminal conviction question.  Further, employers are subject to new requirements upon rescinding an offer for employment.

Philadelphia employers should conspicuously post the new poster, remove the criminal conviction question on any job applications, and follow all procedures for rescinding an offer of employment.

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.

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.

On January 7, 2016, New York launched the Medical Marijuana Program established under the State’s Compassionate Care Act (“Program”). The Program

Medical marijuana prescription with bottle and stethoscope.

is intended to deliver approved forms of marijuana to seriously ill individuals “in desperate need of treatment.”   Medicinal use of marijuana in New York requires a registered physician’s certification and State-issued registry identification card.

The Program establishes that State-certified medicinal pot users “shall be deemed” disabled within the meaning of the State’s Human Rights Law (“NYSHRL”).  Under the NYSHRL, employers with four or more employees are prohibited from discriminating against individuals in compensation or in the terms and conditions of employment based on their status as individuals with disabilities. Employers are also obligated to accommodate disabled individuals.

The Program protects certified users from “disciplinary action by a business” with two exceptions.  First, the Program recognizes the right of employers to maintain policies regarding drug use in the workplace. Second, employers are not required to do any act that would cause the employer to violate federal law or cause it to lose a federal contract or funding.  Marijuana, whether medicinal or recreational, remains an illegal drug under federal law.

Retail employers may wish to notify their human resources personnel and managers about the Program and instruct them to analyze each case of employee marijuana use on an individual basis.

John M. O’ConnorRetail employers and other businesses that serve the public in New York City should take particular notice of the New York City Commission on Human Rights’ detailed written guidance issued on December 21, 2015, reinforcing its desire that the protections afforded to transgender individuals by the New York City Human Rights Law (“NYCHRL”) be broadly interpreted to ensure that transgender individuals receive the full protection of the NYCHRL. The guidance includes specific examples of what the Commission believes constitutes unlawful discrimination based on an individual’s actual or perceived transgender status, gender identity, self-image, appearance, behavior or gender expression.

The Commission stresses the need for employers in New York City to use an employee’s preferred name, pronoun (he/she) and title (Mr./Mrs.) regardless of the employee’s “sex assigned at birth, anatomy, gender, medical history, appearance, or the sex indicated on the individual’s identification.”  Recognizing that many transgender and gender non-confirming individuals choose to use a different name than the one they were given at birth, or chose to use gender neutral pronouns (such as ze/hir), the Commission explains that employees expressing such a preference “have the right to use their preferred name.”  Refusal by an employer to use an employee’s preferred name, pronoun or title because they do not conform to gender stereotypes is a violation of the NYCHRL.  Thus, if a transgender woman advises that her preferred name is Jane, even though her identification states that her first name is John, it would be a violation of the NYCHRL for the employer to refuse to call her Jane.  The Commission suggests in its guidance that employers should consider creating a workplace policy of asking all employees what their preferred name and gender pronoun are so that employees can self-identify, and so that no single employee is singled out for such questioning (giving rise to a potential harassment claim).

The Commission also addresses employer dress code and grooming policies, advising that employers “may not require dress codes or uniforms, or apply grooming or appearance standards, that impose different requirements for individuals based on sex or gender.”  The Commission expressly rejects the federal standard that allows employers to apply different dress code or grooming policies to male and female employees unless the policies create an undue burden on employees.  Rather, the Commission opines that “holding individuals to different grooming or uniform standards based on gender serves no legitimate non-discriminatory purpose.”  Thus, while employers are entitled to enforce a dress code or require certain grooming/appearance standards, they must do so without imposing restrictions or requirements specific to gender or sex.  In this regard, polices such as allowing only women to wear jewelry, or requiring only male employees to maintain short hair would be violations of the NYCHRL, as would a policy requiring different uniforms for men and women.  Accordingly, to avoid violations, employers should create gender-neutral dress codes and grooming standards.

Retailers and other businesses that serve the public should also note the Commission’s position that the NYCHRL, “requires that individuals be permitted to use single-sex facilities, such as bathrooms or locker rooms … consistent with their gender, regardless of their sex assigned at birth, anatomy, medical history, appearance, or the sex indicated on their identification.”  Recognizing that other employees or customers may object to sharing a bathroom with a transgender or gender non-conforming person, the Commission warns that “such objections are not a lawful reason to deny access to that transgender or gender non-conforming individual.”  The Commission suggests that, to avoid violating the NYCHRL, employers should, “wherever possible,” provide single-occupancy restrooms (that can be used by people of all genders), or provide private space within multi-use bathrooms or locker rooms for anyone who has privacy concerns.  However, it would be a violation to force a transgender or gender non-conforming person to use a single-occupancy restroom if he/she/ze does not want to use it.  The Commission suggests that employers should post signs in all single-sex bathrooms or locker rooms that state that: “Under New York City Law, all individuals have the right to use the single-sex facility consistent with their gender identity or expression.”

By issuing the guidance, the Commission makes very clear its intention to protect transgender individuals from discrimination based on their transgender status and gender expression.  The guidance concludes with a bold reminder of the penalties for violating the NYCHRL’s prohibition of gender identity discrimination.  In addition to the remedies available at law to aggrieved individuals who prevail on claims under the NYCHRL, the Commission can impose civil penalties up to $125,000 for violations, and up to $250,000 for violations that are the product of willful, wanton or malicious conduct.  Accordingly, to avoid potential violations, New York City employers should consult with counsel to ensure that they create new policies and/or amend existing policies to comply with the directives set forth in the Commission’s guidance, and to minimize the likelihood of a violation of the NYCHRL.

For additional information regarding the Commission’s guidance and other recent developments affecting New York City employers, see our January 28 Act Now Advisory, “NYC Employers Risk New Penalties in 2016: Gender and Caregiver Discrimination, Paying Freelancers.”

In a decision that will affect New Jersey employers seeking to arbitrate employees’ claims, the Appellate Division, earlier this month, in Morgan v. Amy E. HatcherRamours Furniture Company, Inc., held that arbitration clauses contained in employee handbooks are unenforceable where the handbook also includes a disclaimer that it does not create a contract.[1]  Accordingly, New Jersey employers whose handbooks currently include arbitration clauses should consider carefully, replacing them with either arbitration clauses in an employment application, and/or with a stand-alone agreement.

Given the potential for additional disputes, however, part of that process should include determining whether and how to implement such agreements with existing employees. The opinion, which is rife with truisms, highlights the inclination of New Jersey courts to take notions of fairness and equity into their decision making.

Case Facts

The decision arose from the trial court’s denial of Raymours Furniture Company’s (“Raymours”) motion to compel arbitration of plaintiff’s claim alleging age discrimination and retaliation in violation of the New Jersey Law Against Discrimination (“LAD”). Raymours sought arbitration based on a provision in the company’s employee handbook. Although the defendants appealed the denial of their motion to compel arbitration on numerous grounds, the Court focused primarily on the following few facts.

Employee Makes an Internal Complaint, Then is Fired for Refusing to Sign an Arbitration Agreement

Plaintiff contended that upon complaining of age discrimination on the job, defendants gave him an ultimatum –he could either sign a stand-alone arbitration agreement, or be discharged.  When plaintiff refused to sign the agreement, Raymours followed through and terminated his employment.  Plaintiff responded by filing suit.

Raymours Moves to Compel Arbitration Under the Handbook – Despite the Handbook’s Disclaimers

The Company moved to compel arbitration of the plaintiff’s claims based on an arbitration clause and waiver of the right to sue, included in the company handbook.  The handbook, however, was prefaced with the following contract disclaimer:

Nothing in this Handbook or any other Company practice or communication or document, including benefit plan descriptions, creates a promise of continued employment, employment contract, term or obligation of any kind on the part of the Company.

Likewise, the company’s annual electronic acknowledgement of receipt of the handbook included similar contract disclaimer language that the employee,

Understand[s] that the rules, regulations, procedures and benefits contained therein are not promissory or contractual in nature and are subject to change by the company.

Court’s Analysis in Affirming the Denial of the Company’s Motion to Compel Arbitration

In rendering its decision, the Court invoked principles of equity – finding that it would be inequitable to allow an employer to take contrary positions vis-à-vis the contractual nature of the handbook according to whichever position better suited the employer at the time (i.e., claiming that the handbook is not a contract when sued by an employee for breach of contract, but then insisting that the handbook language is contractual when seeking to enforce the handbook’s arbitration provision).

The Court also relied on contractual principles in arriving at its decision, and explained that its decision was wholly consistent with the Federal Arbitration Act – citing to a recent Fourth Circuit decision refusing to enforce a handbook-based arbitration clause, based on nearly identical circumstances.[2]

Take-Away

To be enforceable, the agreement to arbitrate must be in an unambiguous contract.  The Morgan opinion suggests in dicta that “had the plaintiff executed the stand-alone arbitration agreement presented to him when a rift formed in the parties’ relationship, a different outcome would likely have followed.”   When it comes to handbooks and arbitration clauses, the Appellate Division made it clear that employers cannot have their cake and eat it too.

[1] Morgan v. Ramours Furniture Company, Inc., A-2830-14T2, 2016 N.J. Super. LEXIS 1 (App. Div. Jan. 7, 2016).

[2] Lorenzo v. Prime Commc’ns, L.P., 806 F.3d 777 (4th Cir. 2015).