Profanity Can Also Be a Controversial Issue in the Workplace

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

Political controversies, such as President Trump’s alleged use of the term “sh**hole” in reference to third-world countries, serve as a reminder to private employers that profanity in the workplace can also be a controversial issue. There is no federal law which expressly addresses profanity in the workplace, but profanity can still be at the heart of a legal dispute under applicable employment laws.

Protected Profanity?

The National Labor Relations Board (“NLRB”), for instance, has said that concerted activities for the mutual aid or protection of employees can be legally protected under the National Labor Relations Act even if laced with profanity. Several decisions show just how far the NLRB has gone to protect employee speech rights.

On May 19, 2014, an administrative law judge of the NLRB in Hooters of Ontario Mills found that a Hooters’ franchise had unlawfully fired an employee for shouting “you’re a f***ing b**ch” within earshot of customers during a bikini contest. The judge opined that the profanity was tied to a protected complaint that the contest was rigged. The employee was ordered to be reinstated.

On May 28, 2014, in Plaza Auto Center, Inc., the NLRB held that a business owner unlawfully discharged an employee who called him a “f***ing mother f***ing”, a “f***ing crook”, and an a**hole.” The NLRB said these statements were made during a meeting in which the employee lodged a protected complaint as to the calculation of sales commissions. The employee was ordered to be reinstated.

On March 31, 2015, in Pier Sixty, LLC, the NLRB again held that an employer unlawfully terminated an employee for the following Facebook post about his supervisor during a union organizing campaign: “Bob is such a NASTY MOTHER F***ER don’t know how to talk to people!!!!!! F*** his mother and his entire f***ing family!!!! What a LOSER!!! Vote YES for the UNION.” The NLRB opined that the Facebook comments were directed at the supervisor’s asserted mistreatment of employees, and sought redress through the upcoming election, and thus constituted protected, concerted and union activity. The employee was ordered to be reinstated.

Unlawful Profanity?

Under certain circumstances, moreover, workplace profanity may provide the basis for a claim of harassment under federal discrimination laws. Indeed, some decisions have found that severe and pervasive profanity can be the entire basis of a harassment claim.

On October 25, 2013, in Griffin v. City of Portland, an Oregon federal court decided the city’s motion for summary judgment as to a religious discrimination suit under Title VII of the Civil Rights Act of 1964 (“Title VII”) and Oregon law. The employee, a devout Christian, alleged frequent profanity in the workplace, including the use of God’s and Jesus Christ’s name as curse words. The court found genuine issues of material fact existed as to whether the employee was subjected to a hostile work environment because of her religion.

On April 28, 2008, in Reeves v. C.H. Robinson Worldwide, the Eleventh Circuit decided a summary judgment motion as to a Title VII claim of sexual harassment. Unique to the fact pattern in this case was the existence of gender specific vulgarities which were not targeted or directed at women. The plaintiff specifically complained that sexually offensive language, such as “f**k”, “whore”, “b**ch”, “c*nt” and “d**k”, from multiple coworkers permeated the work environment every day. The court denied summary judgment for the employer.

Takeaway for Employers

As with many workplace issues, employers can face a legal tightrope when it comes to profanity in the workplace. An overly broad or aggressive approach can trigger an unfair labor practice charge with the NLRB. Ignoring or tolerating profanity altogether can trigger a harassment complaint. To traverse this legal tightrope, it is imperative that managers and supervisors be trained as to how to lead by example and how to respond to cursing employees. The risk of not doing so can be dire.

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The Risk For Employers Of Sexual Harassment Fatigue

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

On October 5, 2017, a New York Times article uncovered multiple sexual harassment complaints against film executive Harvey Weinstein. The article prompted hundreds of women, and some men, to tell their stories of harassment by celebrities and politicians. #MeToo has spread virally as a hashtag on social media. Time magazine named the “Silence Breakers” as its Person of the Year.

This year’s developments have certainly brought the issue of sexual harassment to the forefront of the public consciousness, but not necessarily in a manner supportive of employer efforts to combat harassment in the workplace. Media coverage, for instance, has done little to educate the public as to the meaning of sexual harassment. The focus on sensational stories, such as unwelcome physical contact and quid pro quo harassment (demands for sexual favors as condition of employment), may even leave a misleading impression as to what constitutes harassment. In fact, according to a recent Instamor survey, 1 in 3 men still don’t think catcalling is sexual harassment. The same poll found that 2 in 3 men still don’t regard repeated unwanted invitations to drinks, dinner or dates as sexual harassment. Nearly 1 in 5 men still don’t believe that sexual harassment is a fireable offense.

Furthermore, partisan politics have infected the dialogue regarding sexual harassment. Facts and evidence have often been overshadowed by opinions and social media memes regarding the credibility of accusations and denials.

With no end in sight to the constant media coverage of sexual harassment claims, moreover, a segment of the public will likely grow weary of such coverage, if it has not already done so. Stated differently, some persons will likely succumb to “sexual harassment fatigue.”

Now that sexual harassment is in the spotlight as never before, employers should nevertheless expect greater legal scrutiny of their efforts to combat it in the workplace. This legal scrutiny will likely encompass not just the existence, but also the effectiveness, of training. In a Report published in June 2016, in fact, the EEOC Select Task Force on the Study of Harassment in the Workplace underscored the importance of “effective” harassment training.

As many employers already know, sexual harassment training is frequently met by employees with apathy or ridicule. Indeed, according to a November 15, 2017 article by the Harvard Business Review, “[m]en who score high on a psychological scale for likelihood to harass women come out of training with significantly worse attitudes toward harassment, thinking it is no big deal.” To be sure, there may be employees who will be more inclined to take such training seriously after hearing the stories of alleged victims over the past months. For other employees, however, the recent media storm may prompt the opposite reaction and make them even more apathetic or suspicious towards training.  The challenge for effective training as to this second group of employees, therefore, is overcoming their apathy, suspicions and/or “sexual harassment fatigue.”

The short-term solution may be as simple as a reminder of the personal stake of all employees in maintaining a work environment free of sexual harassment. This personal stake can include continued employment with the employer and personal liability under certain state laws. Indeed, Jonathan Segal is quoted in the June 2016 Report of the EEOC Select Task Force on the Study of Harassment in the Workplace as saying: “[Compliance training] is not training to change your mind. It is training to keep your job.” In short, make it clear that training is a “big deal” for them personally.

Who To Believe When Sexual Harassment is Disputed?

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

News stories, such as the accusations against U.S. Senate candidate Roy Moore and his corresponding denials, serve as reminders of what many employers already know from experience; often, an investigation of a sexual harassment claim yields two conflicting stories. The victim’s story is one of improper behavior by a supervisor, co-worker, customer or vendor. The accused’s story is one of denial and perhaps speculation regarding an ulterior motive for the harassment claim. Especially when there are no witnesses to the alleged behavior, the conflicting stories present the employer with a difficult question – what do I do now?

One action which should not be considered by the employer is the termination of the investigation without any analysis of the credibility of the competing stories. If the employer ultimately takes no remedial action, this action risks a claim by the victim, as part of a legal claim for sexual harassment under Title VII of the Civil Rights Act of 1964 (“Title VII”) or state law, that the investigation was merely cursory. If the employer fires the accused, this action risks a claim by the accused that the investigation was a mere pretext for sexual discrimination in violation of Title VII or state law.

So, how does an employer go about assessing the credibility of two competing stories? In 1999, the Equal Employment Opportunity Commission (“EEOC”) published guidance as to this question.

If there are conflicting versions of relevant events, the employer will have to weigh each party’s credibility. Credibility assessments can be critical in determining whether the alleged harassment in fact occurred. Factors to consider include:

Inherent plausibility: Is the testimony believable on its face? Does it make sense?
Demeanor: Did the person seem to be telling the truth or lying?
Motive to falsify: Did the person have a reason to lie?
Corroboration: Is there witness testimony (such as testimony by eye-witnesses, people who saw the person soon after the alleged incidents, or people who discussed the incidents with him or her at around the time that they occurred) or physical evidence (such as written documentation) that corroborates the party’s testimony?
Past record: Did the alleged harasser have a history of similar behavior in the past?

None of the above factors are determinative as to credibility. For example, the fact that there are no eye-witnesses to the alleged harassment by no means necessarily defeats the complainant’s credibility, since harassment often occurs behind closed doors. Furthermore, the fact that the alleged harasser engaged in similar behavior in the past does not necessarily mean that he or she did so again.

When weighing the credibility of a sexual harassment complaint, moreover, it is not necessary that the employer believe either story “beyond a reasonable doubt.” Indeed, holding the victim or accused to such a burden may itself be discriminatory.  All that is necessary is that the employer reasonably believe one of the two competing stories to be more believable than the other story.

So, what if the credibility assessment is still inconclusive as to the competing stories? Again, the risk of taking no remedial action whatsoever is a legal claim by the victim. At the very least, an employer should formulate and implement a plan to monitor the situation more closely. The employer should also consider sexual harassment training or refresher training if sexual harassment training has previously been provided.

To be sure, credibility assessment is not an exact science. The employer may never know the complete truth even after an investigation. Even if the truth proves to be elusive, however, the employer may still be called upon to defend in litigation the integrity of its effort to determine the truth. Accordingly, the goal of an employer in conducting a sexual harassment investigation must be a reasonably diligent and unbiased effort to determine the truth.  The consequences of not achieving this goal can be liability for discrimination under Title VII or state law.

What Will Become Of Non-Disclosure Agreements After Weinstein Scandal?

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

According to a New York Times article published on October 5, 2017, employees of the Weinstein Company have agreements wherein they agree not to harm the company’s “business reputation” or “any employee’s personal reputation.” According to the article, employees who settled claims of sexual harassment against the company against the company and its co-founder, Harvey Weinstein, also signed agreements whereby they agreed to keep the claims and settlement confidential.  For years, these agreements kept the substance and number of harassment allegations against Harvey Weinstein secret.

Non-disclosure agreements between employees and employers are not unusual. They can provide additional protections for an employer’s trade secrets and confidential data not provided by the Defend Trade Secrets Act of 2016 or state trade secrets law. They can also encompass sensitive data entrusted to an employer by customers, vendors and employees, thereby mitigating the risk of legal exposure for breach of such confidences. Employee handbook provisions addressing the security of trade secrets and confidential data are also common.

Non-disparagement agreements between employee and employees are less prevalent, but also not unusual. They can provide additional safeguards to an employer’s reputation not provided by state defamation or breach of fiduciary duty laws.  Employee handbooks also commonly include disparagement of the employer and employees as a ground for discipline, up to and including termination.

As a condition to receipt of severance pay, or payment of a disputed claim (other than a Fair Labor Standards Act claim), it is also routine for an employer to require a confidentiality agreement in addition to a release. For some employers, a confidentiality agreement has more value than the release. Without a pledge of confidentiality, the employer may decide to pay less or nothing at all for a release of claims.

In the wake of the sexual harassment allegations against Harvey Weinstein, however, what have historically been routine agreements are under new and intense scrutiny. Such scrutiny has raised key questions: Do such agreements enable future discrimination by eliminating unwanted publicity as a deterrent? Are such agreements legal? Do such agreements violate public policy?

With such intense scrutiny, it is likely that some government action as to non-disclosure agreements and non-disparagement is forthcoming.

Equal Employment Opportunity Commission

In EEOC v. CVS Pharmacy, Inc., the Equal Employment Opportunity Commission (“EEOC”) unsuccessfully argued that a severance agreement, which included a confidentiality clause, had the purpose or effect of deterring employees from filing or assisting with charges of discrimination. Considering the aggressive approach by the EEOC in recent years, it is conceivable the Commission will seek to revisit this argument in another suit. The agency may also seek to test in litigation the argument that confidentiality clauses contravene federal employment discrimination statutes by perpetuating silence about unlawful discrimination.

National Labor Relations Board

The National Labor Relations Act (“NLRA”) protects “concerted activities for mutual protection” by non-supervisory employees, which necessarily encompasses the rights to communicate with one another about collective action, and to seek to improve terms and conditions of employment through channels outside the immediate employer-employee relationship. The National Labor Relations Board (“NLRB”) has confirmed this protection includes discussion of harassment.

Under NLRA jurisprudence, agreements and rules which tend to chill such discussions can be an unfair labor practice under the NLRA even in the absence of enforcement. On March 24, 2017, the D.C. Circuit in Banner Health System v. NLRB found an employer’s Confidentiality Agreement to be an unfair labor practice because it explicitly directed employees not to discuss co-workers “[p]rivate employee information.” On July 29, 2016,  the D.C .Circuit in Quicken Loans, Inc. v. NLRB, also held that a non-disparagement rule in an employment agreement constituted an unfair labor practice where it stated: “You agree that you will not (nor will you cause or cooperate with others to) publicly criticize, ridicule, disparage or defame the Company or its products, services, policies, directors, officers, shareholders, or employees …” For employers with overly broad rules or agreements regarding confidentiality or disparagement, unfair labor practice charges are already a risk.

State Action

On October 13, 2017, New York State Senators Brad Hoylman and Nily Rozic proposed new legislation which would void any contract provision whereby an employee is required to conceal claims of unlawful conduct, including harassment. Legislators in other states may soon follow suit.

Under the jurisprudence of most states, moreover, courts will not enforce agreements if their purpose or effect is to violate public policy. Indeed, many cases have specifically voided confidentiality or non-disclosure agreements which have the purpose or effect of suppressing information regarding criminal conduct.  Especially as to employment rights protected by statute, some courts may be persuaded to void confidentiality provisions which are deemed to be contrary to the purpose of the statute.

Takeaways for Employers

Periodic review of employment rules and agreements is always recommended to mitigate the risks of legal claims.  Employment law, perhaps more than any other area of law, is ever-changing.  What is lawful today, may be unlawful tomorrow.  Employers must thus be prepared to adjust employment rules and agreements as their legality comes under new scrutiny.  If not now for rules and agreements subject to the NLRA, the time may soon come for employers to revisit the viability of their non-disclosure rules and agreements, non-disparagement rules and agreements, severance agreements and settlement agreements.

What Texas Employers Need To Know About State’s New Knife & Sword Law!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

Prior to September 1, 2017, a person committed a criminal offense in Texas if he or she “intentionally, knowingly, or recklessly” carried on or about his or her person an “illegal knife” anywhere other than “(1) the person’s own premises or premises under premises under the person’s control, or (2) inside of or directly en route to a motor vehicle or watercraft that is owned by the person or is under the person’s control.” An “illegal knife” was defined as including “a knife with a blade over five and on-half inches”, a “hand instrument designed to cut or stab another by being thrown”, a “dagger, including but not limited to a dirk, stiletto, and poniard”, a “bowie knife”, a “sword”, or a “spear.”

Except as to business owners, therefore, it was generally unlawful under the old law for an employee to carry an “illegal knife” onto an employer’s premises. Except within the confines of an automobile being driven by the employee, it was also generally unlawful for an employee to carry an “illegal knife” during work hours away from the employer’s premises.

Effective September 1, 2017, however, there is no such thing in Texas as an “illegal knife.” There is now what is called a “location-restricted knife”, which is defined as a “knife with a blade over five and one-half inches.”  It is unlawful for a person younger than 18 years of age to be in possession of such a knife unless he or she is “(1) on the person’s own premises or premises under premises under the person’s control, (2) inside of or directly en route to a motor vehicle or watercraft that is owned by the person or is under the person’s control, or (3) under the direct supervision of  a parent or legal guardian.”

it is also unlawful for any person to possess a “location-restricted” knife “on the physical premises of a school or educational institution, any grounds or building on which an activity sponsored by the school or education institution is being conducted, or a passenger transportation vehicle or a school or educational institution”, “on the premises of any government court or offices”, “on the premises of a racetrack”, “in a secured area of an airport”, in certain bars, “on the premises where a high school, collegiate or professional sporting event is taking place”, in a “correctional facility”, hospitals, in “an amusement park”, or “on the premises of a church, synagogue or other established place of worship.”

Except as to minors and places enumerated in the new law, therefore, it is now generally lawful for an employee to carry any size or type of knife, sword or spear anywhere during working hours whether at or away from the employers’ premises.  Such carry can be open or concealed.

Accordingly, if a Texas employer wants to prohibit knives, swords or spears at work, it must undertake to do so on its own with the publication and enforcement of an applicable policy. Otherwise, an employee may simply follow the new law.  Such a policy should differentiate bladed instruments which are permissible at work from bladed instruments which are impermissible at work.  That way, an employee will understand that such instruments as letter openers, kitchen knives, and Swiss Army knives are not prohibited.

 

UPS’s $1.7M Wakeup Call: Does Your Leave of Absence Policy Violate the ADA?

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

The uncertainty associated with indefinite leaves of absence has prompted many employers to adopt policies which place a cap on the length of leaves of absence. A policy previously adopted by UPS is a common example:

“…if you are absent from your regular occupation for 12 months, you will be administratively separated from employment, regardless of your status on STD [short term disability] or LTD [long term disability].”

Uniform enforcement of a policy providing for administrative termination after a one-year leave of absence has, in fact, been found sufficient to defeat a claim of retaliatory discharge for filing a worker’s compensation claim. See Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386 (Tex. 2005).

For eight years, however, UPS fought a suit brought by the EEOC alleging the aforementioned policy violated the Americans with Disabilities Act (“ADA”). On July 28, 2017, UPS finally agreed to a proposed consent decree with the EEOC. The proposed consent decree, which has not yet been approved by the court as of the date of this writing, requires UPS to, amongst other things, (1) “seek legal advice before terminating the employment of an employee who has reached the end of the medical leave of absence or residual duty/disability period; and (2) pay a group of aggrieved former employees $1,718,500.

What Does the ADA Require?

The ADA prohibits an employer from discriminating against an “qualified individual with a disability” who is an applicant or employee. One form of prohibited discrimination is the use of “qualification standards, employment tests, or other selection criteria that screen out or tend to screen out an individual with a disability or a class of individuals with disabilities unless the standard, test or other criteria …. Is shown [by the employer] to be job-related for the job in question and consistent with business necessity.”

Another form of prohibited discrimination is the failure to make “reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability … unless [the employer] can demonstrate that the accommodation would impose an undue hardship on the operation of the business of [the employer].”

Can a Leave of Absence or Leave Extension be a Reasonable Accommodation?

Most courts agree that a leave of absence or a leave extension can constitute a reasonable accommodation under the ADA “in some circumstances.” What this means for employers is that a leave of absence or leave extension simply cannot be excluded “in all circumstances” as a possible accommodation to an otherwise qualified individual with a disability. Especially, if a leave of absence or leave extension is being requested by a disabled employee, compliance with the ADA mandates that the employer consider whether such an accommodation is “reasonable” or would impose an undue hardship.

Does a FMLA Leave Policy Satisfy the ADA?

The Family & Medical Leave Act (“FMLA”) provides limited rights to medical leave, which may not be available to all employees of an employer. Specifically, FMLA rights may not be available to an employee who (1) has worked less than 12 months, or (2) works at a location with less than 50 employees within 75 miles. The FMLA also generally provides only for 12 weeks of leave.

The ADA otherwise operates independently of the FMLA. Indeed, Department of Labor regulations provide that an “employer must … provide leave under whichever statutory provision provides the greater rights to employees.” 29 C.F.R. § 825.702(a). Since ADA may provide greater leave rights than that provided by the FMLA, a FMLA leave policy does not necessarily satisfy the ADA.

Is Indefinite Leave a Required Accommodation?

Most courts agree, however, that the ADA does not require that an employer provide a disabled employee with indefinite leave. In addressing a claim brought under the Rehabilitation Act of 1973, the Eleventh Circuit, in in Luke v. Board of Trustees of Fla. A&M University, reasoned in a December 22, 2016 opinion: “While a leave of absence might be a reasonable accommodation in some cases … an accommodation is unreasonable if it does not allow someone to perform his or her duties in the present or immediate future.” The court thus affirmed summary judgment in favor of the employer as to a claim that it improperly denied a six-month extension of medical leave.

In addressing an ADA claim, the Fifth Circuit, in Moss v. Harris County Constable, similarly reasoned in a March 15, 2017 opinion: “[R]easonable accommodation is by its terms … that which presently, or in the immediate future, enables the employee to perform the essential functions of the job in question.” The court thus affirmed summary judgment in favor of an employer which terminated an employee who was taking leave without a specified date to return.

More recently, the First Circuit in Echevarria v. Astrzeneca Pharmaceutical, L.P., found, on May 2, 2017, that a proposed accommodation of an additional twelve months of leave, after the employee had already been on leave for five months, was “facially unreasonable.” Still the Court cautioned:

“Although we have previously suggested that ‘there may be requested leaves so lengthy or open-ended as to be an unreasonable accommodation in any situation’ … we need not – and therefore do not – decide that a request for a lengthy period of leave will be an unreasonable accommodation in every case.”

So, What did UPS Allegedly do Wrong?

According to the EEOC suit and the proposed consent decree, UPS’s 12-month leave of absence cap violated the ADA in two respects. First, the cap was so inflexible that it automatically provided for termination of employment, without regard to the possibility that a short extension could be a reasonable accommodation which did not impose a hardship on UPS. Second, the cap acted as “as a qualification standard, employment test or other selection criteria that screen[ed] out or tend[ed] to screen out a class of individuals with a disability and [was] not job related or consistent with business necessity.”

These allegations are consistent with the position taken by the EEOC in a publication, dated May 9 2016, entitled “Employer-Provided Leave and the Americans with Disabilities Act.” In this publication, the EEOC opined that “although employers are allowed to have leave policies that establish the maximum amount of leave an employer will provide or permit, they may have to grant leave beyond this amount as a reasonable accommodation to employees who require it because of a disability, unless the employer can show that doing so will cause an undue hardship.” The publication suggests communication with an employee nearing the end of maximum leave asking if the employee needs additional leave as a reasonable accommodation to the employee’s disability, and then engaging in an interactive process with the employee regarding leave.

What Should Employers Learn from UPS’s Experience?

As the First Circuit recognized in Echevarria, “[w]hether [a] leave request is reasonable turns on the facts of the case.” A policy which establishes a cap on leave may not necessarily be a violation of the ADA, but a refusal to consider any leave which extends beyond the cap may violate the Act in certain circumstances. Any such policy must thus allow room for a reasonable accommodation assessment whereby the cap can be modified as to a particular individual with a disability. Indeed, employers would do well to voluntarily follow the protocol which UPS will soon be required to follow and seek legal counsel before terminating an employee who has exhausted leave. Otherwise, the result may be a prolonged and expensive lawsuit, such as that experienced by UPS.

Are Workplace Recording Bans Legal?

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

Smart phone technology, and the ability of video and audio recordings to be uploaded to social media sites, has prompted many employers to adopt rules regulating the surreptitious recording of workplace interactions.  The “no recording” rule adopted by Whole Foods Market Group, Inc. is a common example:

“It is a violation of [Company] policy to record conversations, phone calls, images or company meetings with any recording device (including but not limited to cellular telephone, PDA, digital recording device, digital camera, etc.) unless prior approval is received from [management], or unless all parties to the conversation give their consent. Violation of this policy will result in corrective action up to and including discharge.”

The business justifications for such a rule can include (1) prevention of workplace bullying, harassment and retaliation, (2) protection of trade secrets and proprietary information, (3) protection of private or embarrassing information shared in confidence, (4) protection of vendor and customer relationships, and (5) encouragement of open dialogue among employees.

The National Labor Relations Board (“NLRB”), however, has long held that a work rule violates Section 8(a)(1) of the National Labor Relations Act “if it would reasonably tend to chill employees” from engaging in concerted activities for mutual aid or protection. Such a work rule can violate the Act even if adopted by a non-union employer. Subject to review and enforcement in federal court, the NLRB has the power to order an employer to (1) revise or rescind a work rule determined to violate Section 8(a)(1), and (2) post notices prescribed by the Board.

On June 1, 2017, the U.S. Court of Appeals for the Second Circuit affirmed and enforced a 2015 NLRB Decision ordering that Whole Foods’ “no recording” rule be rescinded or revised. The NLRB opined that the rule unqualifiedly prohibited all workplace recordings, including recordings in pursuit of concerted activities for mutual aid or protection.  The Board found that the rule could reasonably chill the employees in the exercise of their protected rights, such as “recording images of protected picketing. documenting unsafe workplace equipment or hazardous working conditions, documenting and publicizing discussions about terms and conditions of employment, documenting inconsistent application of employer rules, or recording evidence to preserve it for later use in administrative or judicial forums in employment-related actions.”

The Second Circuit also enforced an order from the NLRB Decision requiring that a notice be posted at all Whole Foods’ facilities companywide.  The prescribed notice includes the following statement: “The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.”  The prescribed notice also reminds Whole Foods’ employees of their right to “form, join or assist a union.”

To be clear, the Whole Foods decisions only addressed a rule which unqualifiedly prohibited all workplace recording. The decisions did not go so far as to declare all “no recording” rules unlawful under Section 8(a)(1).  Indeed, at least one previous NLRB decision found that an employer rule that prohibited the use of cameras for recording images in a hospital setting did not violate Section 8(a)(1), in light of the compelling patient privacy interests at stake.

As noted in a previous post on this blog, it is strongly recommended that employee handbooks be periodically updated.  The Whole Foods decisions show why such periodic updates are important.  For any employee handbook with a workplace recording ban similar to the Whole Foods’ rule above, the time for such an update is now.

In this regard, the first remedial action contemplated in response to the Whole Foods decisions need not be the elimination of a recording ban altogether. Indeed, the legal risks of such an option may be prohibitive for certain employers.  Rather, the first remedial actions contemplated should be analyses of two questions:  (1)  Does the existing rule have a potential chilling affect on the exercise of protected employee rights?;  and (2) if so, can the language of the rule be modified to serve its underlying business justifications without the collateral damage of a potential chill on protected employee rights?  Ultimately, the best option may be to maintain the “no recording” rule, albeit with a narrower scope.  Of course, any “no recording” rule should be reviewed with legal counsel prior to adoption.

How Would Your Overtime Exemptions Fare in Court?

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

On May 30, 2017, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit, in Dewan, et al. v. M-I, LLC, said a jury should decide whether two oil field workers were entitled to overtime pay under the Fair Labor Standards Act (“FLSA”).  Accordingly, the Court reversed a summary judgment ruling by the District Court which found the workers were exempt from the FLSA’s overtime requirements because they worked “in a bona fide … administrative capacity.”  Absent a settlement, the fate of the exemption for the two old field workers is now in the hands of a federal jury.

The employer’s experience in Dewan underscores five realities of a suit alleging improper reliance on a FLSA overtime exemption. First, FLSA litigation is often prolonged, costly and unpredictable. The suit in Dewan was initially filed on December 14, 2012. Nearly 4½ years later, the dispute is now going back to the District Court and to an uncertain timetable for resolution.

Second, most FLSA suits are filed by former employees, not current employees. While he was still employed, the named plaintiff in Dewan may have regarded exempt status a badge of pride. After his employment ended, the exempt status became the basis for a monetary claim. The absence of complaints by current employees is thus not a barometer for determining the viability of an exemption. Such a complaint may still be filed after separation and reach back two or three years, depending upon the applicable statute of limitations.

Third, it is not the burden of an employee to disprove a FLSA exemption; rather, it is the employer’s burden to prove such an exemption. Dewan shows this burden can be a formidable one, especially if the goal is to avoid an uncertain jury trial. Meeting this burden requires conclusive evidence. If the evidence to support the exemption is lacking or inadequate, the burden may not be met.

Fourth, “it is the actual day-to-day activities of … employees that determine whether the employee is exempt, not the labels the employer or employee place on those duties.”  Even though each of the oil field workers in Dewan held the title of “mud engineer”, it was their actual work in the field which determined whether they were properly classified as exempt.

Finally, employers are not the final arbiters of who is exempt and who is not exempt under the FLSA.  The Act leaves that final determination to judges and juries.  Whether an employer is comfortable with its employee classifications, therefore, is not the most pertinent question in managing the risk of suit. Until the May 30th ruling by the Fifth Circuit, M-I, LLC was likely comfortable that its oil field workers were classified properly. Rather, the most pertinent question is whether the employer can prove (and/or sell) the exemption to a judge and jury.

Dewan provides a wake-up call to employers who have not conducted any review of their employee classifications, or who have not conducted such a review recently.  Periodic reviews and adjustments provide the type of evidence needed to effectively manage the risk of scrutiny by a federal court or the U.S. Department of Labor.  The alternative can be that experienced by M-I, LLC, the meter for whom is still running as to legal fees.

Candidate Screening: Salary History Joins Growing List of Banned Criteria!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC.

On May 4, 2017, New York Mayor Bill De Blasio signed a bill which bars private employers from (1) inquiring about a prospective employee’s salary history during all stages of the employment process, and (2) relying upon a prospective employee’s salary history in the determination of salary. New York City joins Massachusetts, Puerto Rico and Philadelphia which already have similar legislation.  The theory behind such laws is that such inquiries may serve to perpetuate discrimination that job applicants have experienced in the past.

Laws addressing candidate screening are nothing new.  Amongst the federal laws which directly govern pre-employment inquiries are (1) the Americans with Disabilities Act, (2) the Genetic Information Nondiscrimination Act, (3) Employee Polygraph Protection Act, and (4) the Fair Credit Reporting Act.  Certain pre-employment inquiries have also been recognized to be synonymous with, or evidence of, unlawful discrimination under federal, state or municipal laws.

In recent years, however, states and municipalities have taken the lead in directly regulating certain candidate screening practices. Inquiries regarding salary history are  only the latest screening methods to be targeted.

UNEMPLOYMENT

In 2011 and 2012, respectively, New Jersey and Oregon passed laws prohibiting job postings which state or suggest that (1) the qualifications for the job include current employment, (2) the employer will not consider or review an application for employment submitted by any job applicant currently unemployed, or (3) the employer will only consider or review applications for employment submitted by job applicants who are currently employed. In 2012, the District of Columbia passed a law barring discrimination against an applicant who is unemployed.

CRIMINAL RECORDS

Job Postings

San Francisco requires private employers to state in all job solicitations/advertisements that qualified applicants with arrest and conviction records will be considered for the position.

Inquiries Regarding Arrest Records

Several states have laws limiting inquiries or reliance upon arrests which did not lead to convictions.  These laws vary considerably from state to state and from municipality to municipality.  In California, Illinois, Massachusetts and Rhode Island, for example, employers may not inquire about or use any information related to prior arrests that did not lead to convictions.  Other states, such as ColoradoGeorgiaIdaho, Kansas, Maryland, MichiganNew York, North Carolina, Oklahoma, UtahVirginia, Washington and Wisconsin, (1) exclude certain types of arrest records from employer inquiry, (2) allow an applicant to deny certain types of arrest records, or (3) both.

Other states – Hawaii and Wisconsin –outlaw discrimination against applicants with arrest records.

Inquiries Regarding Juvenile Records

Effective January 1, 2017, private employers in California may not ask applicants about juvenile records relating to arrest, detention, processing or adjudication while the applicant was subject to the juvenile court system.  Other states, including Ohio and Texas, (1) exclude sealed or expunged juvenile records from employer inquiry, (2) allow  an applicant to deny the existence of such records, or (3) both.

Inquiries Regarding Conviction Records

Five states – Hawaii, Kansas, New York, Pennsylvania and Wisconsin – have enacted statutes which make it unlawful for private employers to discriminate against applicants with conviction records. Such statutes have varying exceptions based upon the nature of the job and the suitability of the applicant for the job.  In Washington, an employer may not generally base hiring decisions on convictions, where conviction or release from prison occurred more than 10 years earlier.

Moreover, nine states – Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island and Vermont – have enacted so called “ban the box” statutes which prohibit inquiries by private employers into conviction records until after the employment application.  Many more municipalities, including Austin, Texas, have passed similar “ban the box” ordinances.

In California, a private employer may not ask about minor marijuana convictions that are more than two years old.

Inquiries regarding Conviction Records That Have Been Sealed or Expunged

In California, a private employer may not ask about convictions that have been sealed, expunged or statutorily eradicated, or a referral to or participation in a pretrial or post-trial diversion program.  Other states, including Florida, Kansas, Ohio and Rhode Island, (1) exclude sealed or expunged conviction records from employer inquiry, (2) allow an applicant to generally deny the existence of such a record, or (3) both.

CREDIT HISTORY

Ten states – California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington – as well as several municipalities, including the District of Columbia and New York City, place limitations on the ability of private employers to check an applicant’s credit history in making a hiring decision.

MILITARY DISCHARGE STATUS

Subject to certain exceptions, Illinois makes its unlawful to discriminate against any individual in hiring based on military discharge status.

TAKEAWAYS FOR PRIVATE EMPLOYERS

Salary history, employment status, criminal background, credit history and military discharge status have long been criteria by which employers screened candidates for employment.  For instance, previous salary history may be informative as to whether a candidate will likely accept an offer of employment or be satisfied with employment if accepted.

Increasingly at the state and municipal level, however, the interests of job candidates are being favored over the interests of employers.  It is expected, therefore, that the list of states and municipalities which govern the use of such criteria will continue to grow.  It is also expected that the list of banned criteria will continue to grow.

Private employers must thus be vigilant in keeping apprised of the laws of every state and municipality in which they hire employees.  What may be lawful hiring criteria today, may become unlawful hiring criteria tomorrow.

Supreme Court Likely to Resolve Conflict As to Sexual Orientation Bias

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje, PLLC

Title VII of the Civil Rights Act of 1964 (“Title VII”) makes it unlawful for employers subject to the Act to discriminate on the basis of a person’s “sex.”  In the past 30 days, three federal appellate courts have addressed the question of whether discrimination on the basis of sexual orientation can be actionable under Title VII as a form of “sex” discrimination.

On March 10, 2017, a panel of the Eleventh Circuit in Evans v. Georgia Regional Hosp. found  (by a 2-1 vote) that it could not recognize sexual orientation claims under Title VII.  In doing so, the panel opined that it was bound by the 1979 Fifth Circuit decision in Blum v. Gulf Oil Co., which had held “[d]ischarge for homosexuality is not prohibited by Title VII.”

On March 24, 2017, a panel of the Second Circuit in Christiansen v. Omnicom Group, Inc. declined to hold that Title VII bans discrimination on the basis of sexual orientation.  Similar to the Eleventh Circuit, the panel observed that it lacked the power to reconsider an earlier Second Circuit decision holding that sexual orientation claims are not cognizable under Title VII.  Two of the three judges, however, argued in concurring opinions that the Second Circuit ought to reconsider its earlier precedent.

On April 4, 2017, in an en banc decision, the Seventh Circuit in Hively v. Ivy Tech Community College of Indiana concluded that “discrimination on the basis of sexual orientation is a form of sex discrimination” outlawed by Title VII.  Three justices dissented reasoning that “[s]exual orientation is not on the list of forbidden categories of employment discrimination” set forth in Title VII.

So what does it mean for employers that there are seemingly inconsistent appellate opinions as to whether sexual orientation discrimination is prohibited by Title VII?  First, it means that the issue is likely headed to the Supreme Court.  A conflict of opinion amongst lower appellate courts is one basis for the Court to agree to hear a case.

Second, it means that employers can no longer assume that sexual orientation claims under Title VII will be dismissed.  Indeed, many federal courts have already held that gay plaintiffs may be able to survive dismissal under Title VII by couching their claims as gender stereotyping.  In Christensen, therefore, the Second Circuit found that an openly gay male plaintiff pleaded a claim of gender stereotyping under Title VII that was sufficient to survive dismissal.

Finally, it means that employers should be reviewing their personnel policies and training programs to make sure that sexual orientation discrimination is addressed. The alternative could be costly and protracted litigation even if the Supreme Court ultimately and finally decides that discrimination based upon sexual orientation is not a form of “sex” discrimination outlawed under Title VII.