Year In Review. Introduction

Transcription

1 Employment, Benefits and Labor Briefing: Year In Review Presented by F Cooper, Cooper Blank Rome LLP Scott F. Lucas Hanback, Blank Rome LLP Introduction 30 minute session Covers major developments in the Courts, Congress, l l governments local t and d various i agencies i To help you spot the tip of the iceberg! 9 1

2 YEAR IN REVIEW AGENDA 1. Overview: Post Election Hangover 2. Supreme Court Focus on Collective Ati Actions 3. Legislative Watch New Laws and Regulations 4. Whistleblower Issues Changing Dynamics 5. Retaliation in the Spotlight 6. Harassment New Responsibilities 7. Americans With Disabilities Act New Interpretations t ti 8. Social Media Issues 9. NLRB Controversy 10. Time Away From Work New and Local Wrinkles 10 Overview Post Election Hangover Now that election is over, President Obama still faces challenges Hot Button Issues: Divided Government Obama reruns to office but more Republicans sent to Congress The Economy Still 7.5% Unemployment College grads having difficulty finding jobs Immigration Major legislation with amnesty provision being debated Sequestration Ripple effects to businesses Gun Control State v. Federal and workplace safety issues 11 2

3 Overview Post Election Hangover The Economy Recovery still anemic Unemployment numbers still at 7.5% College grads having difficulty finding jobs Tied into issues surrounding rising student debt Immigration Major legislation on immigration reform being debated Potential amnesty for 11+ Million illegal immigrants Big implications for employers Arizona v. US immigrants not required to carry ID, police can t arrest people suspected of being illegal immigrants, but if arrested for other reasons they can investigate immigration status 12 Overview Post Election Hangover: Sequestration Budget impact having ripple effects to state and local governments Businesseswith any ties to government feeling effects Court case disposition time and enhanced filing fees Leads to wage and hour issues with private employers who have business with the government For example, docking the pay of exempt employees for furlough days may cause those employees to lose their exempt status. Employers must still follow reduction in force principles to avoid discrimination issues Review for impact on protected classes Issues with benefits coverage confirm whether plans permit benefit continuation during furloughs or hours reduction 13 3

4 Overview Post Election Hangover: The Gun Violence Debate It is a states rights issue pitting state laws against one size fits all federal approach It is also a workplace issue tied into worker safety Some states, including KY and MN, allow restrictions but require stickers on the door if a gun is not allowed inside Other states, including TX, WS, ME, and NH (proposed), prohibit certain restrictions on firearms by employers Other states undecided PA, NJ, NY, and DE Ties to workplace bullying issues 14 Supreme Court Focus on Collective Actions Restricting availability of class actions Genesis HealthCare Corp. v. Symczyk Plaintiff has no independent legal standing to pursue class claims on basis of conditional certification once her claim is moot Comcast Corp. v. Behrend Party seeking class certification must offer evidentiary proof and court must conduct a rigorous analysis when evaluating evidence 15 4

5 Changing Class Action Landscape Genesis HealthCare Corp. v. Symczyk Plaintiffhas no independent legal standing to pursue class claims on basis of conditional certification once her claim is moot Did not address whether offer of judgment moots plaintiff s case Has larger implications for class certification generally Opens opportunity to use offers of judgment in class certification cases not only as fee shifting mechanism but as way to moot the case where only one plaintiff 16 Genesis HealthCare Corp. v. Symczyk Supreme Court of the United States held that a putative Fair Labor Standards Act ( FLSA ) collective action was properly dismissed where the lead plaintiff s claim was moot and no other plaintiffs had joined the litigation. Plaintiff alleged that her employer failed to compensate employees for work performed during scheduled meal breaks. Before any other employees joined the litigation, the employer made an offer of judgment that would have satisfied the plaintiff s individual claim. Plaintiff did not accept the offer, but the district court dismissed as moot both the individual and collective action claims. Third Circuit agreed on appeal that the plaintiff s individual claims were moot, but reinstated the plaintiff s collective action claims. Because the Third Circuit had restored her collective action claims, the plaintiff did not challenge the mootness of her individual claim before the Supreme Court. Supreme Court assumed, without deciding, that this aspect of the Third Circuit s decision was correct. The Supreme Court s decision i lf left unresolved a significant ifi split among the fd federal Courts of Appeals. Left unanswered important questions including whether a plaintiff s refusal to accept an offer of judgment that would fully satisfy his or her claim renders the claim moot. Third Circuit had held previously that an unaccepted offer of judgment may moot a plaintiff s individual claim, other Courts of Appeals have held that the viability of a plaintiff s claim is not affected by her decision to reject a fully satisfactory offer of judgment. 17 5

6 Changing Class Action Landscape Comcast Corp. v. Behrend Has implications for all class actions where plaintiffs litiff seek class certification under Rule 23(b)(3) Party seeking class certification must offer evidentiary proof to satisfy the requirements of Rules 23(a) and 23(b) Court must conduct a rigorous analysis when evaluating evidence Individual issues of damages can defeat class certification if not amenable to class wide resolution Decision makes it significantly more difficult for plaintiffs to obtain certification of damages classes 18 Comcast Corp. v. Behrend Plaintiffs brought federal antitrust claims, alleging that defendants engaged in anticompetitive clustering. offered theory that defendants deterred competition from overbuilders which the district court used to certify a class of more than two million current and former subscribers defendants appealed under Rule 23(f) and Third Circuit affirmed on basis that [a]t the class certification stage we do not require that Plaintiffs tie each theory of antitrust impact to an exact calculation of damages, but instead that they assure us that if they can prove antitrust impact, the resulting damages are capable of measurement and will not require labyrinthine individual calculations. Supreme Court held that plaintiff seeking certification must also satisfy through evidentiary proof at least one of the provisions of Rule 23(b). Comcast will have significant implications not only for antitrust class actions, but all class actions in which h plaintiffs iff seek class certification i of damages claims under Rule 23(b)(3). Decision confirms that the party seeking class certification must offer evidentiary proof to demonstrate that the requirements of Rule 23(a) and Rule 23(b) are satisfied and that the court must conduct a rigorous analysis when evaluating that evidence. Moreover, the decision establishes that individual issues of damages can defeat class certification where those issues are not amenable to class wide resolution. 19 6

7 Genesis HealthCare Corp. v. Symczyk FLSA s Changing Landscape Genesis HealthCare Corp. v. Symczyk Did not address whether offer of judgment moots plaintiff s case But did decide that plaintiff has no independent legal standing to pursue class claims on basis of conditional certification once her claim is moot Has larger implications for class certification generally Opens opportunity to use offers of judgment in class certification cases not only as fee shifting mechanism but as way to moot the case where only one plaintiff FLSA suits remain the fastest growing area of litigation 20 Legislative Watch New Laws and Regulations Affordable Care Act Implementation Underway Increase in Minimum Wage Federal Minimum Wage Act of 2013 would increase minimum wage from $7.25 to $10.00 by 2015 Ten states also increased minimum wage effective Jan. 1, 2013 NY and NJ also planning increases Proliferation of Facebook laws passed by States Prevent employers from requiring candidates to disclose log in information Potential Federal law in the works 21 7

8 Legislative Watch Affordable Care Act Implementation ACA Implementation Already here, or coming soon: OSHA Whistleblower Rules Minimum i Vl Value Summaries of Benefits and Coverage State Exchanges Employer Penalties Pre existing Condition Exclusions Dependent Coverage Facebook Laws Currently in effect in CA, MI, DE, IL, MD, UT, NM and AR. NJ legislature enacted a bill. Governor sent back with recommended changes. Changes currently being voted on in Senate. Introduced or Pending in at least 15 other states Sen. Blumenthal (D. Conn.) is reportedly drafting a bill in the U.S. senate 22 Legislative Watch New Laws and Regulations Criminal Records Guidance from OFCCP Individualized assessments and job related exclusions required Local Laws too Philly Ban the Box ordinance bans employers from asking about criminal records in application or first interview New DOL Rules on FMLA for Veterans Significantly expand the military family leave provisions underthe FMLA EEOC Activity Strategic Enforcement Plan EEOC v. Houston Funding II Limited et al. Title VII protection for breastfeeding 23 8

9 Legislative Watch DOL FMLA Rules expand the military family leave provisions under the FMLA in several important ways: Employees may now take qualifying exigency leave to care for family members serving in the Regular Armed Forces in addition to the National Guard or Reserves. Employees may take military caregiver leave to care for servicemembers with injuries or illnesses that existed prior to active duty and were aggravated in the line of duty. Family members of veterans with a serious health condition or illness may now take military caregiver leave if the veteran was a member of the Armed Forces within the previous five years. Increases Rest and Recuperation exigency leave time from five to 15 days. OFCCP Criminal Records Guidance to Federal Contractors Nearly one in three adults now has a criminal record, and racial and ethnic disparities are reflected in incarceration rates, Hiring policies and practices that exclude workers with criminal records may run afoul of antidiscrimination laws. Directs use of EEOC guidance ensure that any criminal conduct exclusions are job related and consistent with business necessity. Conduct individualized assessments that are narrowly tailored to the specific circumstances of the job at issue. 24 Legislative Watch EEOC Strategic Plan Strategic Plan six national priorities: (1) eliminating barriersinin recruitment and hiring; (2) protecting immigrant, migrant and other vulnerable workers; (3) addressing emerging and developing employment discrimination issues; (4) enforcing equal pay laws; (5) preserving access to the legal system; and (6) preventing harassment through systemic enforcement and targeted outreach. In addition to the national priorities, the Plan also seeks the development of local and federal sector priorities and seeks to ensure "consistent and integrated enforcement" throughout the private, public, and federal sectors. EEOC v. Houston Funding II Limited et al. Fifth Circuit rules that Title VII protects nursing mothers from being fired for lactating or expressing breast milk Worker Donnicia Venters was allegedly fired after asking to use a breast pump at work. 25 9

10 Whistleblower Issues Changing Dynamics Lawson v. FMR LLC, et al. (Supreme Court) Whether private contractors of public companies are protected by Sarbanes Oxley Increasing attempt by employers to keep whistleblower complaints inhouse Severance provisions requiring: foregoing a whistleblower reward disclosing or refraining from engaging in communications with the Government 26 Whistleblower Issues Changing Dynamics Jackie Hosang Lawson and Jonathan M. Zang v. FMR LLC et al. (Supreme Court) Lawson and Zang were employees of private company under contract with a public company to provide advisory services Lawson alleged she was harassed and ultimately forced to quit because she provided Fidelity managers with information on inappropriate expense reporting, retention of investment company fees, and methodologies for reporting or accounting for mutual fund expenses and operations. Zang contended he was fired for informing Fidelity management that disclosures that were being prepared for submission to the Securities and Exchange Commission did not accurately reflect the details of some fund managers' compensation. First Circuit says only people who work for public companies are protected by the Sarbanes Oxley Act, which protects whistleblower activity Asresponse to DoddFrank s SEC whistleblower reward program increasing attempt by employers to keep whistleblower complaints in house Employers increasingly requiring employees to agree to settlement or severance provisions requiring: foregoing a whistleblower reward disclosing or refraining from engaging in communications with the Government Practice has lead to calls for SEC rulemaking to prohibit this practice 27 10

11 Retaliation in the Spotlight University of Texas Southwestern Medical Center v. Nassar Standard of proof for Title VII retaliation But for causation v. mixed motive All federal circuits now recognize Title VII claims for retaliatory hostile work environment claims Number of claims still on the rise 28 Retaliation in the Spotlight Decision expected from Supreme Court on Standard of proof for Title VII retaliation Is but for causation v. mixed motive University of Texas Southwestern Medical Center v. Nassar Supreme Court may also decide scope of deference afforded to agencies when interpreting retaliation provisions Jackie Hosang Lawson and Jonathan M. Zang v. FMR LLC et al. All federal circuits now recognize Title VII claims for retaliatory hostile work environment claims 11th circuit was last to adopt in Gowski, et al v. Peake, et al. According to the EEOC, there was an unprecedented rise in the number of retaliation claims filed in 2011 and 2012 Experts generally blame the weak economy for this increase in filings 29 11

12 University of Texas Southwestern Medical Center v. Nassar Issues is Whether the retaliation provision of Title VII, and similarly worded statutes require a plaintiff to prove but for causation, or instead require only proof that the employer had a mixed motive. Dr. Naiel Nassar, who is of Middle Eastern descent, was hired by the University of Texas Southwestern Medical Center (UTSW) in 1995 to work at the Amelia Court Clinic. His immediate supervisor at the Clinic was Dr. Philip Keiser, whose supervisor at UTSW was Dr. Beth Levine. After being hired in 2004, Levine immediately began inquiring into Nassar s productivity and billing practices. In 2005, after interviewing a candidate who was of Middle Eastern descent, Levine stated in Nassar s presence, Middle Easterners are lazy. In 2006, after hiring the candidate, Levine made a similar statement in Keiser s presence. Keiser informed Nassar of these comments as well as the fact that Levine scrutinized Nassar s productivity more than any other doctor. Around this time, Nassar applied for a promotion that Levine actively undermined. In 2006, Nassar resigned from the UTSW faculty and cited Levine s harassment and the creation of an unhealthy work environment in his resignation letter. Nassar resigned with the understanding that he would be offered a position at the Amelia Court Clinic unaffiliated with the UTSW, but the Clinic was forced to withdraw its offer after heavy opposition from the UTSW faculty, who have an agreement with the Clinic regarding positions to be filled by faculty doctors. In 2008, Nassar sued UTSW under Title VII of the Civil Rights Act of 1964 and argued that UTSW had constructively discharged and retaliated against him. The jury found in favor of Nassar and awarded him back pay and compensatory damages. The U.S. Court of Appeals for the Fifth Circuit affirmed in part and reversed in part, holding that there was sufficient evidence to support the retaliation claim but insufficient evidence to support the claim of constructive discharge. UTSW argues that Nassar needs to prove that retaliation was the sole motivating factor for the negative employment action. In contrast, Nassar argues that he need only show that retaliation was a motivating factor, but not necessarily the only one, for the negative employment action 30 Harassment New Responsibilities Employers must prevent harassment by non employees EEOC Guidance Applies to all forms of harassment Second Circuit Summa v. Hosftra University: Employers can be liable if they knew or should ldhave known of third party harassment and failed to take action New Alert: Workplace Bullying 31 12

13 Harassment New Responsibilities EEOC guidance employer is responsible for the acts of non employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing these cases, the Commission will consider the extent of the employer s control and any other legal responsibilitywhich the employermay may have with respect to the conduct of such non employees employees. 29 C.F.R (e) 11(e) (emphasis added). EEOC Guidance also followed by several Circuits including 4th, 7th, 9th, 10 th and 11 th Summa v. Hosftra University, 708 F.3d 115 (2d Cir. 2013): Plaintiff Lauren Summa worked as a manager of the football team. suffered repeated harassment by team members, all of whom were students. (insulting Facebook pages, lewd comments) Coach promptly disciplined players when plaintiff complained, and school s Equality Officer conducted anti harassment training afew months later. The court held that Hofstra University could be liable if it failed to provide a reasonable avenue for complaint or that it knew, or in the exercise of reasonable care should have known, about the harassment yet failed to take appropriate remedial action. The court analyzed whether the response was immediate or timely and appropriate in light of the circumstances, particularly the level of control and legal responsibility the employer has with respect to the employee s behavior. The court found that each time Summa complained, Hofstra reacted immediately and appropriately, including disciplining the players involved, and provided training to the entire athleticsdepartment to prevent ent future incidents of harassment. The court concluded dedthat [b]ecause defendants took the needed remedial action in this case, the harassment carried out by some players on the football team cannot be imputed to the University and its personnel. Employers must have adequate reporting mechanisms, they must take reports seriously, and they should conduct thorough investigations of complaints 32 Harassment Workplace Bullying Increasing focus on workplace bullying Recent surveys by Workplace Bullying Institute find 35% of workers have experienced bullying firsthand (additional 15% witness) Bullying is 4X more prevalent than illegal harassment Has negative impacts on worker productivity Difficult problem for employers because conduct may not rise to the level of illegal harassment or discrimination Employers focusing on various strategies: Violence prevention Training Social Media Rules 33 13

14 Americans with Disabilities Act New Interpretations EEOC cancer, diabetes, epilepsy and intellectual disabilities are covered within the definition of disability EEOC s $240M verdict in EEOC v. Hill's Country Farms, Inc. Increased Focus in Strategic Enforcement Plan 34 Americans with Disabilities Act New Interpretations EEOC v. Hill's Country Farms, Inc., d/b/a Henry's Turkey Service defendant violated Title I of the Americans With Disabilities Act ("ADA") by subjecting 32 intellectually disabled employees to unlawful harassment and discriminatory treatment. The EEOC alleged on the employees' behalf that the defendant subjected them to derogatory and humiliating name calling based on their disabilities, and physical abuse, including hitting and kicking by the defendant's supervisory employees. The Complaint further alleged that the defendant discriminated against the employees by relegating them to substandard living conditions, providing inadequate attention to illnesses and injuries, imposing excessively harsh discipline, denying restroom breaks and paying substandard wages as compared to those paid to similarly situated non disabled workers. The jury initially awarded $5.5 million in compensatory damages, plus $2 million in punitive damages, to each of the 32 employees, for a total of $240 million. That initial award marked the largest verdict ever obtained by the EEOC. Following the ti trial, the court entered djudgment tin the amount of $50, compensatory and punitive damages per employee, for a total judgment of $1.6 million because of the ADA's limits on compensatory and punitive damages. Despite the sharp reduction in the verdict, this case should nevertheless stand as a reminder to employers of the potentially steep cost of violating the ADA

15 Americans with Disabilities Act New Interpretations EEOC Strategic Enforcement Plan also indicates increased focus onadaaa issues Policy exceptions for disabled employees American Psychiatric Association just released new edition of Diagnostic and Statistical Manual of Mental Disorders Contains new mental disorders for which no guidance exists in courts 36 Americans with Disabilities Act New Interpretations EEOC Strategic Enforcement Plan focuses on: Whether employers perform and/or document an interactive, individual evaluation of the disabled person s circumstances, as compared to the requirements of the job; and Whether employers consider whether a reasonable accommodation, (including a policy exception) would enable the individual to perform the essential functions of the job

16 Continuing New Social Media Issues Employees are increasing connecting personal devices to company networks Personal mobile phones that were used for work or other company activity are liable to be confiscated and examined for evidence during discovery or investigation NLRBThird SocialMedia report issued by Acting General Counsel 38 NLRB Social Media Report Social Media Issues supplements two prior reports issued in January 2012 and August 2011 by the NLRB. Ambiguous policies without limiting language or context are more likely unlawful, while rules that clarify or restrict their scope by including examples of clearly illegal or protected conduct, such that they could not reasonable be construed to cover protected activity, are not unlawful. Inclusion of a savings clause, providing a policy will be administered in compliance with the NLRA, will not cure an otherwise overbroad or ambiguous policy. In light of these decisions, employers should look carefully at their social networking and disciplinary policies to ensure compliance with the NLRA

17 NLRB Controversy NLRB has been extremely active issuing decisions affecting employers, including invalidating: handbook policies i preventing media contacts t policies preventing employees from discussing workplace investigations social media policies prohibiting employees from posting messages damaging to the company BUT Recess appointments unconstitutional under Noel Canning v. NLRB decision Potentially invalidates over 1,500 NLRB decisions since 2010 including those listed above Will likely head to Supreme Court Richard Griffin Sharon Block Terrence Flynn 40 NLRB Actions DirectTV U.S. DirecTV Holdings, LLC, 359 NLRB No. 54 policies prohibited employees from contacting the media and required employees to contact public relations personnel beforespeaking to the media Banner Health System d/b/a Banner Estrella Medical Center, 358 NLRB No. 93 Policy directed employees making a complaint to refrain from discussing the matter with their coworkers while the investigation was ongoing. Costco Wholesale Corp., 358 NLRB No. 106 policy yprohibited employees from electronically posting messages that "damage the Company, defame any individual or damage any person's reputation." All policies were invalidated by the NLRB because "employees would reasonably conclude that the rule requires them to refrain from engaging in certain protected communications 41 17

18 Potential Impact of Noel Canning Since 2010, NLRB has only had a quorum without recess appointments for a little over two months 6/22/10 8/27/10 During this period, 48 of the 126 decisions issued relied on a recess appointment for quorum All other decisions since 2010 are potentially invalid Major cases: D.R. Horton Appeal in 5 th Circuit employers may not require as a condition of employment that employees agree to a blanket waiver of rights to pursue their employment claims by means of class actions. Others Social Media Karl Knauz Motors, Inc., 358 NLRB No. 164 (2012) (holding that employer's handbook rule prohibiting "disrespectful" language or "any other language which injures the image or reputation of the Dealership" was unlawful). Off Duty Employee Access Rules Sodexo America LLC, 358 NLRB No. 79 (2012) (holding that employer's off duty access rule was invalid because the rule granted the employer "unfettered discretion" to determine which employees could access the facility while off duty). Marriott Int'l, Inc., 359 NLRB No. 8 (2012) (holding that the employer's policy of prohibiting off duty employees from accessing the employer's property without managerial approval was unlawful). Dues Check Offs WKYC TV, Gannett Co., 359 NLRB No. 30 (2012) (holding that an employer's duty to collect union dues from employees pursuant to a dues check off provision continues even after the expiration of the collective bargaining agreement). Employee Discipline Alan Ritchey, Inc., 359 NLRB No. 40 (2012) (holding that unionized employers must give the union notice and an opportunity to bargain before imposing discretionary discipline involving demotions, suspensions, and terminations where the applicable collective bargaining agreement does not establish a grievance arbitration process). 42 Time Away from Work: New and Local Wrinkles Reminder: Watch state and local regulations wherever you operate Philadelphia s proposed paid sick days Vetoed by Mayor in April, likely to resurface Other states and cities have or are considering this too (NYC, DC, San Francisco and Portland) Domestic violence proposal NY Bill to give victims of domestic violence 90 days of job protection PTO for Disasters Questions in wake of Hurricane Sandy and tornadoes FLSA and state law issues 43 18

19 Time Away from Work: New and Local Wrinkles Philadelphia Sick Leave After two year fight, dies in City Council when they could not get 12 votes needed to override Mayor s veto Supporters vow to fight on, so bill will likely resurface Debate in other cities with state legislatures Milwaukee established its own requirement in 2011, but Wisconsin lawmakers overturned it. Kansas, Tennessee, Mississippi, Louisiana and Arizona have also approved laws banning local lsick ikleave ordinances. In Florida, a ban approved by lawmakers is awaiting Gov. Rick Scott s signature, and a similar measure is pending in the Michigan Legislature even though no city in Michigan has approved a sick leave law. 44 Time Away from Work: New and Local Wrinkles NY Domestic Violence Bill approved by a New York State Senate labor committee in April gives victims of domestic violence 90 days of job protection Workers denied the right to take time off would have cause to sue for wages, benefits or other compensation as well as job reinstatement and could collect damages if a willful violation is found. A sworn statement, police documentation or other evidence would suffice to make a worker eligible for the protection, according to the legislation PTO for disasters governed by FLSA Depends on exemption status Exempt must be paid for any day where work performed (including work from home), but need not be paid for week in which no work performed Non exempt must be paid for hours actually worked unless CBA says otherwise Also check reporting time exemptions in NY, NJ and CT May be able to force employees to use PTO, but should review policies and handbooks first 45 19

20 Want to Stay Ahead of All This? Sign Up for Blank Rome Alerts Stay Up to Date of the Most Recent Legal Employment Law Developments! 46 Conclusion Tremendous amount happening Prevention still best defense 47 20