March 2016

Feds to Require Pay Data from Employers in 2017

On the seventh anniversary of the Lilly Ledbetter Fair Pay Act, the Equal Employment Opportunity Commission (EEOC) announced new data reporting requirements for certain employers. Starting in 2017, employers with 100 or more employees will have to submit extensive pay data to the EEOC along with the workforce race, gender and ethnicity data already collected as part of the annual Employer Information Report (EEO-1).

Current EEO-1 Report: Generally, the EEO-1 report is submitted by September 30^th of each year. It is submitted by private employers with 100 or more employees and federal contractors (and some subcontractors) with 50 or more employees. The data is used to highlight employee totals based on race, ethnicity and sex within 10 job categories. The EEO-1 report emanates from Title VII, which requires employers to make and keep records relevant to determining whether unlawful employment practices have been or are being committed to preserve such records and to produce reports to the EEOC, when required.

Proposed EEO-1 Report: If approved, the revised EEO-1 report would require employers to continue reporting the same counts, but with a catch. For each of the 10 existing job categories, employers would also be required to include aggregate W-2 earnings among 12 pay bands and hours worked in order to better identify pay discrimination. This would not apply to federal contractors with 50-99 employees. For a look at the proposed report, click here. For the fact sheet, click here.

The EEOC’s proposed changes were published in the February 1, 2016 edition of the Federal Register. See here.

RLG Takeaway
For one, while employers do issue W-2s to their employees, meaning the desired information is available, W-2s are typically not issued until year end and the EEO-1 report is due on September 30^th. So, automated payroll systems may need to be adjusted for this new process. Another issue is that pay differences are not just reflective of gender, race or age. They are also reflective of experience, education and seniority.

We will have to take a wait and see attitude as the public comments come in before we can make a clearer assessment of the effects of this new regulation on employers.

Appellate Court Reinstates Sex-Discrimination Claim of Transgender Employee

Recently, a federal appellate court reinstated the sex-discrimination claim of a transgender auto mechanic. Credit Nation Auto Sales fired Jennifer Chavez less than three months after she notified it of her gender transition. Credit Nation argued that it fired her because it caught her sleeping in a customer’s vehicle while on the clock.

Even though the court concluded that the employer’s reason was “true and legitimate,” it still reversed the trial court’s dismissal of the sex-discrimination claim, concluding that Chavez had presented enough evidence that her gender was a “motivating factor” in the termination decision. Chavez v. Credit Nation Auto Sales [pdf].

So, what did the court rely on?

More apparent scrutiny and criticism of her performance after she announced her gender transition.
The company’s president saying he was “very nervous” about Chavez’s transition; that he believed it would “negatively impact his business.”
The company’s president telling Chavez “not to wear a dress back and forth to work” stating it would be “disruptive.”
Concerns by other company management over Chavez’s use of a unisex bathroom.

RLG Takeaway
This case is just a sampling of what will be a deeper trend as GLBTQ employees identify themselves in the workplace. Employers will want to be vigilant in not making comments and not allowing conscious or unconscious biases to pervade decisions about these employees. Moreover, plaintiff’s attorneys and the courts will look to the training employers provide to their employees and management on these issues. So, as more courts accept transgender-discrimination claims under Title VII’s sex-discrimination prohibitions, and because Title VII permits mixed-motive discrimination claims, comments and biases could change an an otherwise legitimate termination into something left to a jury.

The NLRB Strikes Again in the Non Union Setting

Whole Foods Markets had a policy banning employees from taking photos, videos, or other recordings in the workplace. However, the National Labor Relations Board (NLRB) struck down the policy, claiming it had a “chilling effect” on an employee’s ability to document possible violations of the National Labor Relations Act (NLRA).

For almost 15 years, Whole Foods Market’s handbook prevented employees from taking photos or making recordings in the workplace unless they first obtained supervisor permission. When employees challenged the policy because it could inhibit them from either communicating with fellow workers about protected collective action or documenting certain working conditions believed to be unlawful, the company argued to the contrary, saying that the policy allowed a more open workplace where employees could “speak up and speak out …” without the fear of being recorded.

Even though an Administrative Law Judge found for Whole Foods, the NLRB first noted that smartphone photos, videos and recordings have become increasingly prevalent in labor actions and then found that past decisions are “replete with examples” in which covert photography or recordings have formed the basis for finding a violation of the NLRA. Whole Foods Market, Inc., 12/24/2015, 363 NLRB No. 87.

RLG Takeaway
Review your handbooks. There are situations where a company could have a ban on recordings (e.g., where recordings might affect patient privacy). However, employers should focus on the language in such policies and ensure that if it is vague or general, it is revised to account for these recent rulings.

Employees Can Lose Their Job After a Facebook Post

As reported in the Minneapolis Star Tribune, a Mankato man accused of sending racist messages to a Black Lives Matter Facebook page recently lost his job after his employer investigated the employee’s comments. The employee, Brad Schultz, used a racial epithet, saying that the group should “get out of town with your [expletive] protesting,” and that they should “just leave, white people don’t like you.”

After screen shots of Mr. Schultz’s comments were publicly circulated, his employer, Archer Daniels Midland (ADM), investigated and issued a statement saying that Schultz no longer worked for ADM and that “[his] remarks are unacceptable and do not reflect ADM’s values.”

While employees may (and can) consider their opinions on social media to be part of their personal lives, the nature of online comments means that employers often become aware of conduct of which they otherwise would not know about. It is important to note that employees do not have a First Amendment right to free speech or free expression at a private employer. Thus, if an employer determines that an employee’s speech (at work, at home, on-line or otherwise) runs counter to the company’s values or image, the employee can be fired.

This runs parallel with the NLRA’s protection of the rights of employees to act together, or collectively, to address and improve their conditions at work. This protection applies regardless of whether the employees are represented by a union. As we have read recently, there have been a number of NLRB decisions that “protected concerted activity” extends to work-related conversations conducted on social media. So, for example, if an employee complains about her boss online he/she is likely engaging in protected conduct. The same is true for employees who complain about their wages or working conditions. An employer that disciplines its employees for social media activity that can be construed as protected concerted activity likely will be found in violation of the NLRA.

Moreover, a company cannot prevent employees from discussing the terms and conditions of their employment (such as wages, hours, or personnel issues) or anything that would reasonably be understood by employees as prohibiting protected activity. Yet, a company can (and should) have a policy that requires the maintenance of codes of conduct or anti-discrimination/harassment.

RLG Takeaway
A company can prohibit some types of speech if it is discriminatory, harassing or threatening of violence. However, if an employee is complaining about a term or condition of his/her employment, then those posts could be protected.

Is Mandatory Paid Sick Leave Coming for 2016?

Minneapolis
Last fall, Minneapolis Mayor Betsy Hodges released a proposal that would require all Minneapolis employers to provide paid sick leave to their employees. After much criticism from the business community, the Minneapolis City Council delayed a vote on the proposal and put a task force in place to study the impact of the Mayor’s plan. Throughout January, the task force held 14 community listening sessions to engage employers and employees in discussions about the potential policy and take public comments. The task force was assigned a deadline of February 24 to return a policy proposal.

As reported by the Star Tribune, the group has reached a tentative agreement that the policy should cover all employees with employees in Minneapolis, even if the businesses are located outside the city. Additionally, members “have agreed tentatively that employees would accrue sick time at the rate of one hour for every 30 hours worked.”

However, other key details remain to be decided and the process has again been delayed. The task force is attempting to complete their proposal before March 16.

Minnesota
On March 8, 2016, DFL legislators released initial details of a plan to institute a paid family leave program in Minnesota. The proposal would establish a state insurance fund to provide employees a portion of their pay (depending on income) for up to 12 weeks for pregnancy or medical leave, and an additional 12 weeks to care for a sick family member or newborn child. The plan would be funded by taxes on both employers and employees.

Republican legislators indicate that they will release their own plan in the coming weeks.

The DFL proposal comes on the heels of Governor Mark Dayton’s proposal to provide paid parenting leave to 35,000 state employees.

Federal
Both major Democratic presidential candidates support paid family and medical leave. Hillary Clinton’s plan would guarantee 12 weeks of paid leave, funded by a tax on high earners. Bernie Sanders also supports 12 weeks of paid leave in a plan that would raise payroll taxes on all workers.

On the Republican side, Marco Rubio opposes a federal mandate but would use tax cuts to encourage employers to offer at least four weeks of paid leave. Ted Cruz, while a personal supporter of paid leave, also opposes a federal mandate. Donald Trump has not indicated his position.

RLG Takeaway
Though we don’t know the specific details or timeline, Minneapolis is likely to go the direction of 15 other states and cities that mandate that mandate paid sick leave for employees – unless the state or feds beat them to the punch. Of course, much depends on the election results. More to come.

Federal Court Approves Medical Exams for Wellness Programs

A Wisconsin federal court approved employer-sponsored wellness programs requiring medical examinations as a condition of enrollment in the employer’s health insurance plan.

In EEOC v. Flambeau, Inc., the employer established a wellness program that required employees enrolling in the employer’s health plan to complete the wellness program’s health risk assessment and a biometric test. The risk assessment included a questionnaire about the employee’s medical history, diet, mental health, social well-being and job satisfaction. The biometric test was like a physical examination in that it recorded the employee’s height, weight, blood pressure, and required a blood draw.

The information gathered was used by the program administrators to identify health risks and medical conditions among the workforce participants. No specific results were given to the company.

One employee failed to complete the wellness program’s test and, consequently, was dropped from the medical plan. The employee filed a union grievance, a complaint with the Department of Labor (DOL), and a disability discrimination charge with the EEOC. The DOL and the EEOC settled by reinstating the employee retroactively if he complied with the testing requirements.

The EEOC sued the company. Its claim was that the program violated the Americans with Disabilities Act’s (ADA) ban on employer-mandated medical examinations. The company claimed that the wellness program fell within the ADA’s safe harbor for insurance benefit plans. In a win for the company, the Federal District Court Judge found that the wellness requirement was a term of the employer’s health plan and that it was intended for the purposes authorized under the ADA’s safe harbor provision. The Court was influenced by the use of the data for forecasting insurance costs, setting premiums and purchasing certain types of insurance.

RLG Takeaway
The EEOC is continuing its fight on wellness programs despite its lack of success to date successful to date. If you have one, ensure it’s compliant.

This newsletter is provided for informational purposes only, not as legal advice. The reader of these materials should seek legal advice before using this or any other materials from this author.