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Our colleague Linda B. Celauro, Senior Counsel at Epstein Becker Green, has a post on the Financial Services Employment Law blog that will be of interest to many of our readers in the retail industry: “Seventh Circuit Panel Finds That Title VII Does Not Cover Sexual Orientation Bias.”

Following is an excerpt:

Bound by precedent, on July 28, 2016, a panel of the U.S. Court of Appeals for the Seventh Circuit held that sexual orientation discrimination is not sex discrimination under Title VII of the Civil Rights Act of 1964. The panel thereby affirmed the decision of the U.S. District Court for the Northern District of Indiana dismissing the claim of Kimberly Hively, a part-time adjunct professor at Ivy Tech Community College, that she was denied the opportunity for full-time employment on the basis of her sexual orientation.

The importance of the Seventh Circuit panel’s opinion is not in its precise holding but both (i) the in-depth discussion of Seventh Circuit precedence binding it, the decisions of all of the U.S. Courts of Appeals (except the Eleventh Circuit) that have held similarly, and Congress’s repeated rejection of legislation that would have extended Title VII’s protections to sexual orientation, and (ii) the multifaceted bases for its entreaties to the U.S. Supreme Court and the Congress to extend Title VII’s prohibition against sex discrimination to sexual orientation discrimination.

The Seventh Circuit panel highlighted the following reasons as to why the Supreme Court or Congress must consider extending Title VII’s protections to sexual orientation …

Read the full post here.

New York City Enacts Law Requiring Gender-Neutral Restrooms On June 28, 2016, New York City Mayor Bill de Blasio signed legislation passed earlier this month by The New York City Council to amend the City’s administrative code, plumbing code and building code to require gender-neutral single-occupant restrooms. The new law applies to businesses and other establishments in the City’s five boroughs with existing single-occupancy, publicly-accessible restrooms. The law does not require businesses to build new single-occupant restrooms, nor does it affect larger restrooms with multiple single-stalls.

Instead, the law prohibits the labelling of single-occupant restrooms as gender-specific. Beginning January 1, 2017, signs designating single-person restrooms for one gender, i.e., “men” and “women,” must be removed and replaced with signs for all sexes.  Employers with establishments in the City that may be affected should take advantage of the lead time to ensure compliance.

Several states have recently passed laws (California, Maryland,[1] and New York) or have bills currently pending in their state legislatures (California,[2] Colorado, Massachusetts, and New Jersey) [3] seeking to eliminate pay differentials on the basis of sex (and, in some cases, other protected categories) (collectively, “Equal Pay Laws”).

Among other provisions, most of the Equal Pay Laws contain four components. They aim to (i) strengthen current equal pay standards, (ii) create pay transparency rules, (iii) expand equal pay protections beyond gender, and (iv) redefine the geographic reach of existing equal pay laws.

Strengthening of Current Equal Pay Standards

The Equal Pay Laws modify the standards required for plaintiffs to prevail on equal pay claims. Previously, these laws tracked the federal Equal Pay Act, which permits exceptions to equal pay for equal work, “where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” The Equal Pay Laws, however, each modify the fourth prong, so that they now permit pay differentials based on a “bona fide factor other than sex” (emphasis added). This additional language allows plaintiffs to bring claims alleging that a neutral factor produced a wage differential that disparately impacts employees based on their sex, and notwithstanding this impact, the employer did not adopt an alternative business practice that would serve the same purpose without resulting in the wage differential. The new standard also broadens a plaintiff’s ability to allege a prima facie case of wage disparity.

Pay Transparency

Many of the Equal Pay Laws include pay transparency provisions, meaning that employers cannot create policies or enforce rules that would restrict an employee’s ability to discuss his or her wages with co-workers. The Massachusetts bill, which is still in the state legislature, has another unique twist (one that actually passed the legislature in California earlier this year but was vetoed by the governor). The Massachusetts equal pay law would prohibit employers from asking about an applicant’s salary history on an application or during interviews for employment. This would mean that an employer could no longer ask applicants how much they earned at their past jobs when considering making an offer of employment to an applicant. This twist aims to ensure that prior pay discrepancies are not compounded when an applicant’s pay rate with a new employer is based on unequal pay rates that the applicant received in the past.

Expanding Beyond Pay Equality Based on Gender

While the Equal Pay Laws were initially intended to ensure that women received equal pay in relation to men, some of the Equal Pay Laws seek to expand equal pay protection to other protected categories. The proposed California law, which is intended to amend the recently amended equal pay law in that state, would expand protections to race- and ethnicity-based pay differentials. Further, Maryland’s recently enacted law requires equal pay based on gender identity.

Geographical Reach

Finally, the Equal Pay Laws differ as to their geographical scope. For example, the New York law limits the reach of pay differentials to “no larger than a county.” In other words, women cannot compare themselves to other employees outside the county where they work. Some of the other Equal Pay Laws have significantly broader reach, such as California, which has no geographic limit. The New Jersey law, which was vetoed on May 2, 2016, but may be reintroduced in the state legislature, would permit wage comparisons based on compensation rates “in all of an employer’s operations or facilities.” This could mean that New Jersey employees could base their equal pay claims on the pay differential between their own compensation and that of employees of the employer in other jurisdictions (even in locations where the standard of living is considerably higher). Unlike New Jersey, the law proposed in Massachusetts would permit employers to base pay differentials on geographic location if one location has a lower cost of living based upon the Consumer Price Index.

Conclusion

As a result of the Equal Pay Laws, employers should consider whether to perform an internal audit (with the assistance of counsel) in order to identify and address any potential pay disparities. Indeed, in light of the recently published regulations on the overtime exemption status of various employees, this summer may be a good time for employers to review their pay practices for all employees.

A version of this article originally appeared in the Take 5 newsletter “Five New Challenges Facing Retail Employers.”

[1] Maryland’s equal pay law was signed by Governor Larry Hogan on May 19, 2016, and becomes effective October 1, 2016. New York’s and California’s laws are currently effective.

[2] California has introduced a second equal pay amendment addressing wage disparity based on race and ethnicity. The first equal pay amendment became effective on January 1, 2016.

[3] Louisiana’s equal pay bill was recently rejected in the state House committee, despite passing the Senate and having strong support from Governor John Bel Edwards.

On May 31, 2016, the Fourth Circuit Court of Appeals denied en banc review of an April decision permitting transgender students to use sex-segregated facilities that are consistent with their gender identity.  The Fourth Circuit encompasses North Carolina; thus, the case G.G. v. Gloucester County Public School Board (“Gloucester County”), although it arose in Virginia, creates a conflict between federal law and North Carolina’s House Bill 2 (“HB2”), which requires transgender individuals to use public bathrooms that match the gender listed on their birth certificates.  Although Gloucester County applies on its face to students and public schools, the decision impacts retailers who provide bathroom facilities to employees and customers and who must navigate conflicting laws regarding transgender protections.  Of additional importance, plaintiffs in sex discrimination lawsuits will likely use the decision as support for the view that a person’s “sex” includes “gender identity.”

In Gloucester County, a sixteen-year-old transgender high school student who was born a biological female filed suit to use the boys’ restroom at school.  G.G. and his mother contended that the school’s policy of providing separate restrooms and locker rooms based upon a student’s biological sex constituted sex discrimination under Title IX—the federal law that prohibits sex-based discrimination in federally funded educational programs and activities.  On April 19, G.G. prevailed in a two-to-one decision of a three member panel of the Fourth Circuit, which deferred to the U.S. Department of Education’s interpretation that the reference to “sex” in Title IX includes “gender identity.”

Following the panel’s ruling, the school board asked the Fourth Circuit to rehear the case with the full panel of 15 active judges.  On May 31, the en banc panel denied the school board’s request.  Circuit Judge Paul V. Niemeyer, widely considered the most conservative member of the Fourth Circuit, filed the lone dissent, stating the issue “deserves an open road to the Supreme Court to seek the Court’s controlling construction of Title IX for national application.”

Regardless whether the case proceeds to the Supreme Court, the decision signifies the first time a federal appeals court has found that federal law protects the rights of transgender persons to use sex-segregated facilities that are consistent with their gender identity.  Although decided under Title IX with regard to student rights, the decision may have ramifications in the area of employment law, inasmuch as Title VII, like Title IX, prohibits discrimination based on “sex.”  Retailers and other employers should be alert to the issue and may expect that future litigants will seek to expand the Gloucester County ruling to Title VII and other sex discrimination claims.

Given the political and legal climate surrounding HB2 and related laws that affect the rights of transgender persons, we recommend that retailers proactively accommodate the needs of transgender workers rather than reactively respond to potential claims of discrimination.  Retailers, particularly those operating in states with anti-discrimination laws that cover sexual orientation and gender identity, should implement a policy designed to foster workplace inclusion.  In particular, retailers are encouraged to provide transgender employees access to bathrooms that correspond to their gender identity and, where possible, provide employees with additional options, including single-occupancy gender-neutral (unisex) facilities and use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.  Furthermore, retailers in the clothing industry with dressing/fitting rooms should accommodate their employees and patrons alike by permitting them to use the dressing/fitting room that corresponds to their gender identity.  These recommendations apply equally to those retailers in North Carolina because, although HB2 remains in effect in that state, the law applies only to places of public accommodation, and, in any event, the Fourth Circuit’s recent decision signals that the controversial law may not withstand judicial scrutiny.  In general, retailers should beware that engaging in discriminatory practices may have negative business as well as legal ramifications.

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

The new laws:

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

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

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

Nancy L. Gunzenhauser
Nancy L. Gunzenhauser

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

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

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

The top story on Employment Law This Week is the EEOC’s filing of its first sexual orientation bias suits.

Last year, the Equal Employment Opportunity Commission interpreted Title VII of the Civil Rights Act to prohibit discrimination against an individual for sexual orientation. The EEOC concluded that sexual orientation discrimination is a form of unlawful gender discrimination. This month, the agency filed two landmark federal lawsuits seeking to enforce its interpretation of the statute for the first time. The agency is suing on behalf of workers at a company in Baltimore and one in Pittsburgh for harassment based on sexual orientation. Our colleague Jeffrey Landes, from Epstein Becker Green, has more.

View the episode below or read more about these landmark lawsuits in an earlier post on this blog.

Laura C. Monaco
Laura C. Monaco

This week, the EEOC filed its first two federal lawsuits that frame allegations of sexual orientation-based harassment and discrimination as claims of unlawful “sex discrimination” under Title VII of the Civil Rights Act of 1964.

In EEOC v. Pallet Companies the EEOC alleges that an employee’s night-shift manager harassed her because of her sexual orientation by making repeated offensive comments (sometimes accompanied by sexually suggestive gestures), such as “I want to turn you back into a woman” and “I want you to like men again.”  According to the Complaint, the employee was discharged after she complained about her manager’s comments to another supervisor and the Human Resources department.  The EEOC makes similar allegations in EEOC v. Scott Medical Health Center.  There, a supervisor allegedly harassed an employee by making repeated anti-gay comments and vulgar statements about the employee’s sexual orientation.  The employee claims that he was constructively discharged after the company refused to take any corrective action in response to his complaints.

In both lawsuits, the EEOC articulates three legal theories in support of its claim that the alleged sexual orientation harassment constitutes unlawful sex discrimination under Title VII.  First, sexual orientation discrimination “necessarily entails” treating an employee less favorably due to his or her sex and, therefore, the employee’s gender unlawfully motivated the alleged harassment.  Second, the alleged harassment stemmed from the employee’s failure to conform to the harasser’s “sex stereotypes and norms.”  Third, the harasser displayed both general objections to the idea of individuals having romantic associations with others of the same sex, as well as a specific objection to the employee’s close, loving association with a same-sex partner.

Although these are the first lawsuits the EEOC has filed on the grounds of sexual orientation discrimination as “sex discrimination” under Title VII, the agency has actually raised these same three legal theories before.  In July 2015, the EEOC issued Baldwin v. Department of Transportation, an agency determination concluding that allegations of sexual orientation discrimination necessarily state a claim of unlawful sex discrimination because (1) the alleged discrimination would not have occurred but for the employee’s sex, (2) the challenged treatment was based on the sex of the people the employee associates with, and/or (3) the alleged conduct was premised on the fundamental “sex stereotype, norm, or expectation that individuals should be attracted only to those of the opposite sex.”

The EEOC’s new lawsuits attacking sexual orientation discrimination represent just one facet of the agency’s recent efforts to address emerging and developing issues – one of the six national priorities identified in its Strategic Enforcement Plan for fiscal years 2013 to 2016.  In addition to focusing on sexual orientation discrimination, the EEOC also recently filed federal lawsuits alleging unlawful sex discrimination against transgender individuals.  As the EEOC intensifies this focus, employers should review their antidiscrimination policies to determine whether LGBT employees have the same protections as employees in other protected categories, and should consider expanding their training programs to ensure they encompass issues relating to sexual orientation, gender identity, and transgender discrimination.  Employers should also remain mindful of state and local legislation that has increasingly expanded to prohibit sexual orientation or gender identity discrimination in employment.

Joshua A. Stein
Joshua A. Stein

For businesses hoping to identify an avenue to quickly and definitively defeat the recent deluge of website accessibility claims brought by industrious plaintiff’s firms, advocacy groups, and government regulators in the initial stages of litigation, recent news out of the District of Massachusetts – rejecting technical/jurisdictional arguments raised by Harvard University and the Massachusetts Institute of Technology – provides the latest roadblock.

In National Association of the Deaf, et al., v. Harvard University, et al. (Case No. 3:15-cv-30023-MGM, Dist. Mass.) and National Association of the Deaf, et al., v. Massachusetts Institute of Technology (Case No. 3:15-cv-30024-MGM, Dist. Mass.), Plaintiffs brought claims on behalf of individuals who are deaf or hard-of-hearing, alleging that Harvard and MIT violated Section 504 of the Rehabilitation Act of 1973 and Title III of the Americans with Disabilities Act by failing to offer its online video content in a format accessible to individuals who are deaf or hard-of-hearing (e.g., by providing captioning).  Facing case law in the District of Massachusetts that already made arguing against the potential applicability of Title III to goods and services offered on websites more difficult (see Nat’l Assoc. of the Deaf v. Netflix, Inc. (D. Mass. June 19, 2012)), both Harvard and MIT made motions to dismiss and/or stay the actions pending the U.S. Department of Justice’s eventual promulgation of website accessibility regulations governing places of public accommodation under Title III (currently expected in 2018) by asserting the primary jurisdiction doctrine.  DOJ submitted Statements of Interest in both cases opposing Harvard and MIT’s motions, arguing that the courts are presently capable of adjudicating Plaintiffs’ claims based on the existing state of the law and any delay pending the release of its regulations would unduly prejudice the Plaintiffs.

While it will not become a final order until adopted by U.S. District Court Judge Mastrioanni, in an extensive and thorough decision, Magistrate Judge Robertson, denied both Harvard and MIT’s motions in their entirety.  The decisions hold, among other things, that these were not appropriate matters to invoke the primary jurisdiction doctrine because the existing law provides the necessary legal framework for the Court to appropriately adjudicate whether or not Section 504 and Title III were violated by Harvard and MIT’s failure to provide captioning of its online video content.  The Court explained that it did not need to await DOJ’s issuance of final regulations because, if necessary, it had other resources available through which to educate itself about any technical issues involved in the case.  Moreover, as the analysis involved in accessibility cases must be specifically tailored to the entity and situation in question, the Court was not concerned about the potential impact these decisions might have on any broader issues addressed by DOJ’s regulations.  Finally, noting that DOJ’s Title III regulations will not even be in final form if delivered as planned in 2018, the Court expressed concern about the amount of time that would elapse for Plaintiffs if it was concluded that the defendants were violating the law.  This decision comes on the heels of the U.S. District Court of the Western District of Pennsylvania’s decision this past November denying a similar motion to dismiss made by Huntington National Bank in defending against a claim brought by the law firm Carlson Lynch Sweet & Kilpea on behalf of Michelle Sipe.  (Sipe v. Huntington National Bank, Case No. 2:15-cv-01083-AJS (W.D.Pa. 2015))  While that decision came without any discussion, the papers filed by both parties relied heavily upon those submitted by the parties in the Harvard and MIT decisions.

These recent decisions reveal a reluctance among the courts to dismiss website accessibility actions on technical/jurisdictional grounds.  Taken along with the expanding number of jurisdictions who subscribe to legal theories accepting that Title III covers website accessibility (whether adopting a nexus theory or broadly interpreting the spirit and purpose of the ADA) and it is becoming increasingly clear that many businesses will have a difficult time ridding themselves of website accessibility claims in the early stages of litigation.  Of course, these decisions have been quick to note they do not foreclose a variety of potentially successful defenses that may be asserted later in the litigation – e.g., undue burden, fundamental alteration, and the provision of equivalent/alternative means of access.  While, to date, the existing website accessibility case law has not focused on when these defenses might prevail, with the recent proliferation of website accessibility demand letters and litigation, businesses should soon find themselves with greater guidance from the courts.  In the interim, the best way to guard against potential website accessibility claims continues to be to take prophylactic measures to address compliance before you receive a demand letter, complaint, or notice of investigation.

We will, of course, continue to monitor these ongoing developments and update you as appropriate.

 

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

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

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

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

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

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