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.

On May 24, 2017, the New York City Council signed a bill banning retail employers in New York City from utilizing “on-call scheduling.” Given the unpredictable fluctuations in customer flow associated with retail business operations, retail employers have historically utilized “on-call” schedules in an effort to manage labor costs associated with running their businesses. Rather than provide employees with fixed work schedules, many retail employers place employees “on-call,” requiring them to call in shortly before their work shift is to start to ascertain if they need to actually report to work.  The conflicting interests between retail employers and their employees posed by “on call” scheduling is obvious.  Retail employers favor the use of “on-call’ scheduling because it enables them to tailor their workforce to customer needs and avoid excessive labor costs.  Employees disfavor “on-call” scheduling for a variety of reasons.  First, they are not able to accurately predict their income because they are uncertain as to the number of hours they will actually work each week.  Second, the lack of rigid work schedule impacts their ability to plan their day-to-day life. Because they are not certain when they will be required to work, their ability to schedule appointments, attend regular school obligations, or hold a second employment position are impaired.

In January 2015, San Francisco became the first city to pass predictive scheduling legislation, requiring retail employers in that City to pay employees for cancelled on-call shifts and provide notice to their employees of their biweekly schedules. In September 2016, Seattle followed suit, enacting legislation mirroring that in San Francisco.  Similar predictive scheduling legislation is presently pending at the federal level as well as in no less than twelve states (California, Connecticut, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, Oregon and Rhode Island).  By adopting this new law banning on-call scheduling, New York City becomes the most recent jurisdiction to seek to protect retail employees’ interests despite the increased operating costs such predictive scheduling legislation may impose on retail employers

Pursuant to the new law, retail employers in New York City now have to post employees’ work schedules at least 72 hours before the beginning of the scheduled hours of work. The law also precludes retail employers from cancelling, changing or adding work shifts within 72 hours of the start of the shift (except in limited cases).  Moreover, each retail employee must be scheduled for no less than 20 hours of work during each 14-day period.  In a press release in which he praised the New York City Council for passing the bill and in which he expressed his intent to immediately sign the law, Mayor de Blasio claimed that the law “will ensure that workers will be able to budget for the week ahead, schedule childcare, and plan evening classes.” While the law is clearly intended to help retail employees better balance their professional and personal lives, the strict scheduling requirements will challenge New York City’s retail employers to develop new means of managing their businesses impacted by the unpredictability posed by seasonal demand, customer fluctuation, weather, holidays, employee turnover issues, and other variations in day-to-day retail operations.

Since the early 1980s, the NLRB has vacillated back and forth on whether non-union employees are entitled to have a co-worker present during an investigatory interview that could result in discipline — a right that has long been afforded union employees pursuant to the United States Supreme Court’s holding in NLRB v. Weingarten, 420 U.S. 251 (1975). In the 42 years since the Supreme Court first extended this right to union employees in Weingarten, the NLRB has changed its position four times as to whether “Weingarten rights” extend to non-union employees.  In what can only be viewed as a victory for retail employers with non-unionized workers, the NLRB, on May 3, 2017, rejected a request that it again reverse course and extend Weingarten rights to non-union employees.  With this Order, the NLRB confirms that retail employers need not acquiesce to a request by a non-union employee to have a co-worker sit in while that non-union employee is questioned in an investigatory interview.

In Weingarten, the Supreme Court concluded that an employer violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by denying a unionized employee’s request to have a union representative present at an investigatory interview which the employee reasonably believed might result in disciplinary action. The Court held that the presence of a union representative “safeguard[s] not only the particular employee’s interest, but also the interests of the entire bargaining unit. . . .” Weingarten, 420 U.S. at 260.  Several years later, the NLRB extended Weingarten rights to non-union employees.  See Materials Research Corp., 262 NLRB 1010 (1982).  However, non-union workers did not savor this right for too long.  In two successive decisions, Sears, Roebuck, & Co., 274 NLRB 230 (1985) and in E.I. DuPont & Co., 289 NLRB 627 (1988), the NLRB reversed course and ruled that Weingarten rights do not extend to non-union employees.  But by 2000, union employees regained this right when, in Epilepsy Foundation of Northeast Ohio, 331 NLRB 676 (2000), the NLRB ruled that Weingarten rights do extend to non-union employees.  In Epilepsy Foundation, the NLRB reasoned that: “Section 7 [of the NLRA] rights are enjoyed by all employees and are in no way dependent on union representation for their supplementation.” Id. at 678.  Just four years later, in IBM Corp., 341 NLRB 1288 (2004), the NLRB changed direction again, ruling that non-union employees do not have the right to have a co-worker present during an investigatory interview that might lead to discipline. In this opinion, the NLRB noted that changes in employment laws and recent security concerns require that investigations into matters like substance abuse, improper internet use, dishonesty, threats, harassment and discrimination be conducted “in a thorough, sensitive, and confidential manner” and that failure to conduct investigations in this manner could expose an employer to claims that it did not conduct a fair investigation or that unfair discipline was imposed based on incomplete information. The NLRB reasoned that the presence of a co-worker increases the possibility that information will not be kept confidential, reduces the chance that the employer will get the whole truth, and increases the likelihood that employees with information about sensitive subjects will not come forward. Accordingly, the NLRB concluded that the right of a non-union employee to a coworker’s presence is “outweighed by an employer’s right to conduct prompt, efficient, thorough, and confidential workplace investigations.” Id.

By application dated November 15, 2016, petitioner Charles Strickler asked the NLRB to reconsider its position and, again, extend Weingarten rights to non-union employees.  By Order dated May 3, 2017, the NLRB rejected this application with virtually no explanation.  Retail employers remain within their rights to deny a non-union employee’s request to have a co-worker present when that employee is being interviewed by the employer, even if the interview may result in discipline.

The Age Discrimination in Employment Act (“ADEA”) protects individuals who are at least 40 years of age from discrimination in the workplace. As such, the outcome of disparate-impact claims under the ADEA hinges, ordinarily, on whether or not an employer’s facially neutral-policy has a disparate impact on employees who are 40 years of age or older.  On January 10, 2017, the Third Circuit, in Karlo v. Pittsburgh Glass Works, LLC, 2017 BL 6064 (3d Cir. 2017), issued a precedential ruling, holding that disparate impact claims under the ADEA are not limited to comparisons of the impact an employer’s policy has on employees over 40 with the impact to employees under 40. Rather, the Third Circuit found that claims premised on an allegation that an employer’s policy impacted workers over the age of 50 are cognizable under the ADEA even when the policy had no disparate impact when employees in their forties were considered.

The defendant employer in Karlo terminated approximately 100 employees through a series of reductions in force (“RIFs”). While the impact of the RIFs did not have a disparate impact when comparing employees under the age of 40 with those over the age of 40, the plaintiffs in Karlo, all 50 years of age or older, asserted an ADEA claim premised on the allegation that the RIFs had a disparate impact on employees who were 50 or older.  Rejecting the defendant employer’s argument that the disparate impact claim failed because no evidence of disparity existed when the younger members of the protected category (employees between the age of 40 and 50) were considered with the employees over the age of 50, the Third Circuit opined that: “The ADEA prohibits disparate impact based on age, not forty-and-older identity,” and that “requiring the comparison group to include employees in their forties has no logical connection to that prohibition.”

The Third Circuit’s decision creates a split among the federal appeals courts on whether the ADEA permits disparate impact claims by subgroups of workers in the “40-and-over” protected category when the alleged bias disproportionately impacts older workers within that protected class. The ruling rejects the view of the Second Circuit (Lowe v. Commack Union Free Sch. Dist., 886 F.2d 1364 (2d Cir. 1989)), Sixth Circuit (Smith v. Tenn. Valley Auth., 924 F.2d 1059 (6th Cir. 1991)), and Eighth Circuit (E.E.O.C. v. McDonnell Douglas Corp., 191 F.3d 948 (8th Cir. 1999), that such claims are not allowed.

The Third Circuit correctly recognized that its decision “may very well require employers to be more vigilant about the effects of their employment practices.” The ruling that disparate impact claims may be asserted by subgroups within the protected category of employees over the age of 40 most definitely complicates employers’ ability to effectuate workforce reductions. Before approving a proposed RIF, retail employers concerned with avoiding potential disparate impact claims cannot simply satisfy themselves that employees over and under the age of 40 are treated fairly.  Retail employers now need to check for age-based impacts across different strata of their employees over the age of 40.

You Snooze, You Don’t Necessarily LoseDo retail employers really need to tolerate employees who sleep on the job??  The plaintiff in Beaton v. Metropolitan Transportation Authority New York City Transit, (S.D.N.Y. June 15, 2016), was an overnight Station Agent at a New York subway station who was terminated after he was found sleeping at his work station.  While he admitted that it appeared that he was sleeping, plaintiff denied that he was actually sleeping.  Rather, he informed his supervisor that he was drowsy due to the high dosage of anti-psychotic prescription medication that he took after he experienced severe schizophrenia symptoms at work that night.  Despite informing his employer of his disability, and presenting medical corroboration that his medication caused drowsiness, plaintiff’s employment was terminated.  Plaintiff initiated his lawsuit asserting that the termination of his employment was an act of disability discrimination in violation of the ADA and New York State Law.

Upon receipt of plaintiff’s Complaint, the defendant employer moved to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that plaintiff could not establish a prima facie case of disability discrimination because sleeping on the job prevented him from performing the essential functions of his job and rendered him not qualified for the position.  The employer also argued that plaintiff could not raise an inference that his employment was terminated because of his disability given the fact that it appeared to the employer that he was sleeping, even if he was not.   Surprisingly, the Court sided with the slumbering plaintiff, denying defendant’s motion and refusing to dismiss plaintiff’s Complaint.  The Court considered the fact that plaintiff was a long-term employee who worked for the defendant for years without incident in concluding that he was qualified for the position.  The Court also found that it was plausible that plaintiff’s employment was terminated because of his disability in light of the fact that plaintiff’s employment was terminated even though he informed his supervisor of his mental ailment and that drowsiness was a side-effect of his medication.

The result is largely attributable to the early stage of the proceeding.  The Court forecast that the defendant “may very well have evidence of non-discriminatory reasons for the termination … but such evidentiary disputes are not appropriate at this stage of the case.”  Thus, the Court’s decision hinged, as is expressly stated in the Opinion, on “the minimal threshold” that plaintiff faced in response to a Rule 12(b)(6) motion.  However, the Court’s refusal to dismiss the Complaint pursuant to Rule 12(b)(6) evidences a desire by the Court to see some proof that the employer engaged in good faith in the interactive process before imposing discipline, especially where the employee presents appropriate medical information to support his claim of disability.   This decision does not mean that retail employers must tolerate employees who sleep on the job.  Indeed, Courts have repeatedly upheld discharges for sleeping on the job, and retail employers remain entitled to enforce their discipline process against employees found sleeping on the clock.  However, retail employers are well-advised to not summarily dismiss dozing employees who offer some medical explanation for their mid-shift hibernation, but to consider the explanation offered by the employee before taking action.

Retail employers dismayed by employees publicly airing workplace grievances in disparaging social media posts must think twice before taking disciplinary action.  On August 18, 2016, the National Labor Relations Board (“NLRB”) confirmed the finding by Administrative Law Judge Susan A. Flynn that Chipotle’s social media policy forbidding employees from posting “incomplete” or “ inaccurate” information, or from making “disparaging, false, or misleading statements” on Twitter, Facebook and other social media sites violates Section 8(a)(1) of the National Relations Labor Act (“the Act”).

Chipotle discovered that an employee responded to a customer’s tweet thanking Chipotle for a free food offer, by tweeting back: “@ChipotleTweets, nothing is free, only cheap #labor. Crew members make only $8.50hr how much is that steak bowl really?”  Then, attaching a news article describing how hourly workers at Chipotle were required to work on snow days while certain high-level employees were not, the employee tweeted his displeasure, specifically referencing Chipotle’s Communications Director: “Snow day for ‘top performers’ Chris Arnold?”  Informed by his manager that Chipotle considered his tweets to be in violation of Chipotle’s social media policy, the employee removed them at Chipotle’s request.  Then, several weeks later, Chipotle fired the employee after he circulated a petition about employees not receiving required breaks.

Finding the provision in Chipotle’s policy prohibiting employees from spreading “incomplete” or “inaccurate” information to be unlawful, Judge Flynn opined that: “An employer may not prohibit employee postings that are merely false or misleading.  Rather, in order to lose the [NLRA]’s protection, more than a false or misleading statement by the employee is required; it must be shown that the employee had a malicious motive.”   Judge Flynn also found the policy provision prohibiting “disparaging” statements to be unlawful, explaining that it “could easily encompass statements protected by Section 7 [of the NLRA]” including “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”   Although Chipotle’s social media policy contained a disclaimer that the policy “does not restrict any activity that is protected by the National Relations Labor Act, whistleblower laws, or any other privacy rights,” Judge Flynn concluded that this “sentence does not serve to cure the unlawfulness of the foregoing provisions.”

The NLRB adopted Judge Flynn’s decision that Chipotle was wrong, not only for firing the employee, but for attempting to limit his commentary on social media by its unlawfully termed social media policy.  While agreeing with Judge Flynn’s reasons for finding the social media policy unlawful, the NLRB disagreed with Judge Flynn’s finding that Chipotle violated the NLRA by asking the employee to delete the tweets.  In particular, while Judge Flynn opined that the employee engaged in “concerted activity” even though he did not consult with other employees before posting his tweets because “concerted activities include individual activity where individual employees seek to initiate or to induce … group action,”  the NLRB disagreed, asserting, with no true explanation, that it did not find the employee’s conduct to be concerted.  Agreeing that Chipotle violated the NLRA by terminating the employee after he engaged in protected concerted activity by circulating a petition regarding the Company’s break policy, the NLRB required Chipotle to, among other things, post signs acknowledging that its social media policy was illegal, and to re-instate the employee with back pay.

The message from the NLRB to retail employers is that, barring malicious misstatements, speech concerning terms and conditions of employment is often protected activity, even for employees who want to criticize their employers on Twitter and other social media websites.  To avoid Chipotle’s fate, ensure that your social media policies are up to date and provide for the increasing protections afforded to employee social media activity by the NLRB.

In employment litigation, plaintiffs often rely on the “cat’s paw” doctrine to hold their employers liable for discriminatory or retaliatory animus of a supervisory employee who influenced, but did not make, the ultimate employment decision.  On August 29, 2016, the United States Court of Appeals for the Second Circuit, in Vasquez v. Empress Ambulance Service, Inc., greatly extended the reach of the “cat’s paw,” holding that the doctrine could be applied to hold an employer liable for an adverse employment decision that was influenced by the discriminatory or retaliatory animus of a low-level, non-supervisory co-worker.

The plaintiff, an emergency medical technician employed by the defendant, was terminated within hours of complaining to her supervisors that a male co-worker had sent her a text message containing a graphic, sexual photograph.  Plaintiff alleged that when her male co-worker learned that she had complained, he manipulated his iPhone to make it appear that a conversation containing consensual sexual text banter that he had with another person was a conversation between him and plaintiff and, when questioned by the employer about plaintiff’s allegations, provided printed screen shots of portions of this alleged conversation, telling the employer that he and the plaintiff had been involved in a consensual relationship.  In her lawsuit, plaintiff complained that her employer accepted the co-worker’s tale as true, and rejected her offer to turn over her cell phone for inspection or otherwise refute his claim.  Instead, plaintiff asserted that she was told by her employer that it “kn[e]w the truth,” that she had a sexual relationship with the co-worker, and that her employment was being terminated because she had sexually harassed him.   Plaintiff filed suit, asserting that the employer’s decision to terminate her employment was an act of retaliation in violation of Title VII because she had voiced complaints of sexual harassment.  Relying on the “cat’s paw” doctrine, the plaintiff argued that the employer’s decision to terminate her employment was influenced by false information provided by her male co-worker.  The district court dismissed her complaint, concluding that an employer could not be held liable under the “cat’s paw” doctrine for the discriminatory or retaliatory intent of a non-supervisory co-worker.

On appeal, the Second Circuit disagreed and reinstated plaintiff’s Complaint.  Despite the fact that the male co-worker was a low-level employee without any supervisor authority, the Second Circuit held that the employer’s “own negligence provides an independent basis” to treat the male co-worker as its agent and hold it accountable for his illegitimate intent.  Referencing the allegations that the employer “blindly credited” the male co-worker’s assertions and “obstinately refus[ed] to inspect [plaintiff]’s phone or to review any other evidence proffered by [plaintiff] in refutation,”   the Second Circuit concluded that “an employer may be held liable for an employee’s animus under a ‘cat’s paw’ theory, regardless of the employee’s role within the organization, if the employer’s own negligence gives effect to the employee’s animus and causes the victim to suffer an adverse employment action.”

The impact of this decision on retail employers who are often called upon to make employment decisions based on information provided by one employee about another?  Negligence is the key.  Only when the employer effectively adopts the co-worker’s animus by acting negligently with regards to the information provided may the co-worker’s improper motivation be imputed to the employer to support a claim under the cat’s paw doctrine.  Exercise good faith and be thorough in conducting internal investigations.  Do not ignore warning signs.  Consider all evidence offered in making employment decisions.

Service DogThe United States Department of Justice recently released technical guidelines aimed at cur”tail”ing proliferating efforts purporting to expand the meaning of “service animal” under the Americans With Disabilities Act (“ADA”). Under the ADA, public accommodations (e.g. restaurants, hotels, retail establishments, theaters, and concert halls) must permit the use of service animals by disabled individuals. These technical guidelines take aim at increasing claims that a variety of animals (e.g. a pigs) are service animals because they provide emotional support or comfort to the disabled individual. As this technical guideline makes clear, a service animal must not only be a dog, but it must be working like one as well.

The technical guidelines explain that, under the ADA, a service animal is “a dog that has been individually trained to do work or perform tasks for an individual with a disability.” In addition, the task(s) performed by the dog “must be directly related to the person’s disability.” Applying these definitions, the technical guidelines make clear that dogs (or other animals) that provide comfort through their presence alone do not qualify as service animals under the ADA. To satisfy the requirements of the ADA, the dog must be trained to take a specific action when the disabled individual requires assistance. The technical guideline provides these examples:

  • A person with diabetes may have a dog that is trained to alert him/her when his blood sugar reaches high or low levels;
  • A person with epilepsy may have a dog that is trained to detect the onset of a seizure and then help the person remain safe during the seizure; and
  • A person who suffers anxiety attacks may have a dog that is trained to sense when an attack is about to happen and take a specific action to help avoid or lessen its impact.

Merely providing emotional support and comfort by presence alone is insufficient to qualify a dog as a service animal under the ADA.

The technical guidelines also provide clarification as to the proper inquiries that may be made of a patron seeking to utilize a service animal in a place of public accommodation. In situations where it is not obvious that the dog is a service animal, staff may ask the patron only two specific questions:

  1. Is the dog a service animal required because of a disability?
  2. What work or task has the dog been trained to perform?

Staff may not request supporting documentation for the dog, require the dog to demonstrate the task, or inquire about the nature of the patron’s disability.

Managers of restaurants, hotels, retail establishments and other public accommodations should review the guidelines provided by the Department of Justice in order to more fully understand their rights when presented with a patron claiming need to use a service animal.