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While by most accounts the current term of the Supreme Court is generally uninteresting, lacking anything that the popular media deem to be a blockbuster (the media’s choice being same-sex marriage or Affordable Care Act cases), the docket is heavily weighted towards labor and employment cases and a few that potentially affect retail employers in particular. They are as follows.

The Court already has heard argument in Integrity Staffing Solutions, Inc. v. Busk, No. 13-433, which concerns whether the Portal-to-Portal Act, which amends the Fair Labor Standards Act, requires employers to pay warehouse employees for the time they spend, which in this case runs up to 25 minutes, going through post-shift anti-theft screening. Integrity is a contractor to Amazon.com, and the 9th Circuit had ruled in against it, holding that the activity was part of the shift and not non-compensable postliminary activity. Interestingly, DOL is on the side of the employer, fearing a flood of FLSA cases generated from any activity in which employees are on the employers’ premises.  This case will affect many of our clients and should be monitored carefully.

On December 3rd, the Court will hear argument in Young v. United Parcel Service, Inc., No. 12-1226, which poses whether the Pregnancy Discrimination Act requires an employer to accommodate a pregnant woman with work restrictions related to pregnancy in the same manner as it accommodates a non-pregnant employee with the same restrictions, but not related to pregnancy. The 4th Circuit had ruled in favor of the company, which offered a “light duty program” held to be pregnancy blind to persons who have a disability cognizable under the ADA, who are injured on the job or are temporarily ineligible for DOT certification. Ms. Young objects to being considered in the same category as workers who are injured off the job. This case, too, will create a precedent of interest to at least some of our clients. Of  note, this week United Parcel Service sent a memo to employees announcing a change in policy for pregnant workers advising that starting January 1, the company will offer temporary light duty positions not just to workers injured on the job, which is current policy, but to pregnant workers who need it as well. In its brief UPS states “While UPS’s denial of [Young’s] accommodation request was lawful at the time it was made (and thus cannot give rise to a claim for damages), pregnant UPS employees will prospectively be eligible for light-duty assignments.”  The change in policy, UPS states, is the result of new pregnancy accommodation guidelines issued by the Equal Employment Opportunity Commission, and a growing number of states passing laws mandating reasonable accommodation of pregnant workers.

On October 2nd, the Supreme Court granted cert. in a Title VII religious accommodation case, EEOC v. Abercrombie & Fitch Stores, Inc., No. 14-86. The case concerns whether an employer is entitled to specific notice, in this case  of a religious practice – the wearing of a head scarf —  from a prospective employee before having the obligation to accommodate her.  In this case, the employer did not hire a Muslim applicant. The Tenth Circuit ruled that the employer was entitled to rely upon its “look” policy and would not presume religious bias where the employee did not raise the underlying issue. Retail clients and others will be affected by the outcome.

More will follow as developments warrant.

David W. Garland, Chair of Epstein Becker Green’s Labor and Employment Steering Committee and a member of the firm’s Board of Directors, will moderate “It’s In The Bag – Summary of Bag Check Litigation And Strategies For Minimizing Risk” at the National Retail Federation Human Resources Executive Summit at the Hard Rock Hotel in Chicago, Illinois on October 15, 2014.

During this general session, retailers who are grappling with employee bag check litigation discuss what the industry can expect in litigation over employee compensation for time spent in bag checks to deter shrinkage and how retailers can minimize risk through their policies and practices.

Be sure to visit with Epstein Becker Green and share ideas with other retailers and employment law professionals during the networking break sponsored by Epstein Becker Green on October 14, 2014 from 3:00 p.m.-3:15 pm.     

Click here for information about NRF’s HR Executive Summit.  

 

 

By:  Jamie Friedman

This week, the Equal Employment Opportunity Commission (“EEOC”), the agency responsible for enforcing federal employment anti-discrimination and retaliation laws, released its Fiscal Year 2013 Performance Accountability Report (the “Report”). According to the Report, in 2013, the EEOC secured a record-breaking $372 million dollars from private employers for workplace discrimination, despite receiving 6,000 fewer charges of discrimination during FY 2013 (with a total of 93,727 charges) as compared to the prior year, and despite resolving 14,000 fewer cases than in FY 2012.

The EEOC continues to focus on systemic enforcement programs, which allows it to do more with less. Systemic cases are defined as pattern or practice, policy, or class cases where the alleged discrimination has a broad impact on the industry, occupation or geographic area.  The EEOC increased its percentage of systemic cases this fiscal year by 24% since last year. The trend is to bring larger and larger lawsuits with large scale claims that will have a high impact and send a strong message to employers. Indeed, this year, of the 29 systemic cases resolved by the EEOC this year, 14 had at least 14 victims of discrimination, and seven cases had over 50 victims of discrimination. Through its field offices, 300 systemic investigations were done, which concluded in 63 conciliation agreements and approximately $40 million in awards for over 8,000 people.

As part of the systemic program, the retail industry was a target.  One of the systemic investigations into the retail industry resulted in a resolution by conciliation agreement where the employer agreed to pay 2.3 million to a class of 76 individuals whom the EEOC found were denied reasonable accommodation under the ADA. The employer agreed to make significant changes to its reasonable accommodation policies and practices nationwide, conduct issue specific training for employees on accommodations, and provide reports to the EEOC in order for the EEOC to monitor compliance over the three year period of the agreement.  In another retail industry case, an allegation was made that a department store had a policy of requiring employees to disclose personal medical information or face discipline, which the EEOC said violated the ADA. The case was resolved by consent decree providing $2 million to more than 6,000 individuals harmed by the policy in California, and extensive injunctive relief.

The EEOC’s current focus, articulated in its Strategic Plan for Fiscal Years 2012-2016 and reiterated in the Report, centers on three strategic objectives:

  1. The EEOC intends to continue combating employment discrimination through strategic law enforcement, so as to have a broad impact on reducing discrimination at the national and local levels, and to remedy discriminatory practices and secure meaningful relief.
  2. The EEOC intends to prevent employment discrimination through education and outreach, by informing members of the public how to exercise their rights and aiding employers and unions to better address and resolve employment issues.
  3. The EEOC intends to continue delivering excellent and consistent service through a skilled and diversified workforce, which means it intends to have interactions with the public that are timely, of high quality and informative.

Be aware that the EEOC may be targeting companies like yours, especially as a retailer or other large scale employer. Remember, their goal is to root out systemic problems on a large scale in order to achieve bigger results by expending fewer resources.  As a result, employers would be wise to not only review their policies to ensure legal compliance, but also to review how they are actually implemented or carried out in various store locations throughout the country. Train district and regional managers to identify potentially troubling practices, and bring them to the attention of HR. Or else, the EEOC might be coming after you!

In this month’s Take 5 newsletter, I discuss how California is unique for making numerous types of protected leaves of absence available to employees.  All of these options can add up to a lot of protected leave.

Following is from the introduction:

National employers often find it challenging to navigate the employment laws of the various states in which they do business. In most cases, the easiest solution may be to adopt national policies that follow federal law. This process will not work, however, for employers that do business in California, where state protections are often more expansive and provide greater employee rights than their federal law equivalents. This is particularly true in the leave of absence arena. California is unique in that it makes numerous types of protected leaves of absence available to employees. The cumulative impact of administering all of the available leaves in California can be quite burdensome and lead to a perfect storm in which an employee may continue to be on a protected leave of absence for more than one year. Here’s why …

The full issue is here.

By Jennifer Nutter

Until recently, California retail employers could leverage the threat that employees suing them for nonpayment of wages (including sales commissions), fringe benefits, or health and welfare or pension fund contributions would have to pay the employer’s attorneys’ fees in the event that the claim was unsuccessful.  Labor Code Section 218.5 provided that the court “shall” award the “prevailing party” its attorneys’ fees in such cases (assuming a request was made at the beginning of the suit).

It had long been argued by attorneys representing employees in these types of cases that Section 218.5 should be interpreted to mean that a prevailing employer would only be entitled to its fees if the employee’s suit was found to be frivolous, unreasonable, or without foundation – a standard announced in Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412 in connection with Title VII discrimination claims and later applied to claims brought under California’s Fair Employment and Housing Act (FEHA) as well.  However, both Title VII and FEHA give courts discretion to award a prevailing party its attorneys’ fees, whereas Section 218.5, on its face, made the award unconditional if the suit was successfully defended.

On August 26, 2013, Governor Jerry Brown put an end to the uncertainty by signing SB 462 into law.  The bill amended Section 218.5 to provide that a prevailing employer is only entitled to recover its attorneys’ fees for defending an employee’s lawsuit for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, if it can show that the action was brought in “bad faith.”

It remains to be seen how this new standard will be interpreted by the courts, but because the policy considerations of not chilling meritorious suits brought by employees against their employers are the same as in Title VII and FEHA cases, it is likely to be a similarly high bar.

Our blog contributor Anna A. Cohen, an Associate in the Labor and Employment practice at Epstein Becker Green, was quoted in an article titled “TGI Fridays Busted for Family Leave Violations.”

Following is an excerpt:

The leave policy of TGI Fridays violates the Family and Medical Leave Act, and the popular restaurant chain has agreed to change its company-wide policy and pay one employee back wages, according to the Department of Labor (DOL).

The DOL announced the company’s agreement on Aug. 7, following an investigation of a TGI Fridays restaurant in Shreveport, La. There, an employee took FMLA-covered leave but the company didn’t reinstate the employee to the same or equivalent position, as required by the law.

“If violations cannot be resolved, the Department of Labor may bring an action in court to compel compliance,” explains Anna Cohen, an employment lawyer with Epstein Becker Green in New York. “An employee may also file a private action against an employer for violations.”

In this case, it appears that while the initial complaint was likely made by the employee who was denied immediate reinstatement after taking protected leave, the DOL’s investigation uncovered problems with the way the restaurant was notifying its employees of their rights under the FMLA.

Under the FMLA, according to Cohen, employers must:

  • post, in conspicuous places, a notice explaining the Act’s provisions and provide information concerning the procedures for filing complaints with the WHD
  • include the notice in employee handbooks or other written guidance to employees when they are hired
  • notify employees of their eligibility to take FMLA leave within five business days once a request is made
  • explain to employees taking leave their rights and responsibilities including their specific expectations and obligations and any consequences of failing to meet them
  • notify employees in writing whether or not the leave will actually be counted as FMLA leave

“As a general rule, it is important for employers to ensure that their FMLA policies and procedures are in compliance with the law,” Cohen points out.

 

By Laura A. Stutz

Earlier we posted about the increase in domestic violence and the reauthorization of the Violence Against Women Act, which was extended in February 2013, and expanded to provide coverage to both male and female victims of various types of domestic violence.  (See “With Domestic Violence Increasing, What Should Employers Do?”)  A growing number of states have followed the federal lead and undertaken steps to protect domestic violence victims.  On July 17, 2013, New Jersey joined those states and enacted the New Jersey Security and Financial Empowerment Act (S-2177) (“SAFE Act”) to protect victims of domestic violence and sexual assault (as defined by N.J.S.A. 2C:25-19 and N.J.S.A. 30:4-27.6) from employment discrimination.

The SAFE Act, effective October 1, 2013, seeks to prevent employment discrimination against employees for taking time off from work to seek treatment or legal assistance or to engage in other activity relating to the offense.  The law also covers employees who are close family members of victims of domestic violence and sexually violent offenses.  The Act defines close family member as a child, parent, spouse, domestic partner, or civil union partner.

The Act applies to New Jersey employers with 25 or more employees and provides 20 days of unpaid job-protected leave to eligible employees in the 12-month period following the incident.  Intermittent leave may be taken in intervals no shorter than a day.  The leave is in addition to any leave the eligible employee may already be entitled to under the Family and Medical Leave Act, 29 U.S.C. §2601 et seq. (“FMLA”), or the New Jersey Family Leave Act (“FLA”), N.J.S.A. 34:11B-1 et seq.  If the domestic violence-related leave request would also be covered under the FMLA or FLA, the leaves will run concurrently.  Employers are permitted to request documentation to support the leave request.  Such documentation is to be maintained strictly confidential unless disclosure is voluntarily authorized in writing by the employee or required by law, rule or regulation.

The Act requires New Jersey employers to conspicuously display a notice of employees’ rights under the law and to “use other appropriate means to keep its employees informed.”  The form of notice is to be provided by the Department of Labor and Workforce Development; what is necessary for compliance with the “other appropriate means” provision is not yet clear.

Employers should consider federal and state legal requirements when addressing requests for leave or other accommodations for victims of domestic or sexual violence, and should review their leave policies and procedures to ensure compliance.

By Julie Saker Schlegel

In a 5-4 decision the dissent termed “decidedly employer-friendly,” the Supreme Court held on June 24, 2013 that only employees who have been empowered by the employer to take tangible employment actions against a harassment victim constitute “supervisors” for the purpose of vicarious liability under Title VII.  Per the holding in Vance v. Ball State University, employees who merely direct the work activities of others, but who lack the authority to take tangible employment actions, will no longer be considered supervisors under Title VII. 

Under long-standing precedent (Faragher and Ellerth), whether an employer can be found vicariously liable for harassment perpetrated by its employees is dependent on whether the harasser is a supervisor or merely a co-worker of the victim:

  • For co-worker harassment, the employer will only be found liable if it was negligent—that is, if it knew or should have known of the harassment and failed to take corrective action;
  • For supervisor harassment where the supervisor takes a tangible employment action against the victim (such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits), the employer will be considered strictly liable; and
  • For supervisor harassment where the supervisor does not take a tangible employment action against the victim, the employer may establish an affirmative defense to liability if it can prove that: (1) it exercised reasonable care to prevent and correct any harassing behavior; and (2) the victim unreasonably failed to take advantage of the preventive or corrective opportunities offered by the employer.

Despite this framework that is highly dependent on the status of the harasser, however, the Court had never definitively ruled on who constitutes a supervisor, until now.

As a consequence of the Court’s truncated conception of supervisory authority, the Faragher and Ellerth framework has shifted in a decidedly employer-friendly direction.”
—Justice Ginsburg, dissenting

In reaching this decision, the Court emphatically rejected the EEOC’s definition of supervisor, which had included both those who have the authority to take or recommend tangible employment actions and those who direct the daily work activities of others.  The Court noted that a significant advantage of its new definition is that supervisory status can now be readily determined early in the case, and will generally be capable of resolution on summary judgment.  Alternatively, if the issue should reach trial, the new definition will be easier for juries to apply.

While the new definition of supervisor should benefit employers, by leading to more cases being decided under the more lenient “negligence” standard, the Court’s opinion contained a few caveats.  While employees who merely direct the daily work activities of others will no longer be considered supervisors, the Court noted that the nature and degree of authority wielded by the harasser is an important factor to be considered in determining whether the employer was negligent in controlling workplace harassment.  Further, an employer who attempts to evade liability by concentrating all decision-making authority in a few individuals, who in turn rely upon the recommendations of others who actually work directly with the affected employees, may be found to have effectively delegated the power to take tangible employment actions to those employees on whose recommendations it relies.  Accordingly, while the new definition of supervisor has been distinctly narrowed, the Court has allowed some room for it to be expanded in particular cases, should the situation warrant.

In accordance with this decision, employers should ensure that their job descriptions clearly define which employees have the authority to take tangible employment actions against others, keeping in mind that employees who make recommendations regarding such employment actions may also be deemed supervisors in certain situations.

by Lisa M. Watanabe

In recent years, retailers, grocery stores and banks have been hit with a wave of lawsuits over California’s suitable seating requirements set forth in §14 of the Industrial Welfare Commission’s Wage Orders.  (See http://www.dir.ca.gov/iwc/wageorderindustries.htm for § 14 in 16 of the 17 industry-specific Wage Orders).  Despite the surge in lawsuits, there continues to be several unanswered questions regarding the interpretation of subsections (A) and (B) to §14 which state the following:

  1. All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.
  2. When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

For example, how does an employer determine when the “nature” of an employee’s work “reasonably permits the use of seats” (in which case §14(A) would apply) or generally “requires standing” (in which case §14(B) would apply)?  Additionally, as is often the case with retail employees such as a cashier or clerk, what if an employee performs a variety of assigned job duties, some of which may permit seating and some which may not?

A pending case before the Ninth Circuit – Kilby v. CVS Pharmacy, Inc. – should provide answers to courts and litigants to these questions.  Kilby, a former cashier/clerk, filed a representative suit against CVS in 2009 for its alleged failure to provide her with suitable seating under §14(A).  The district court dismissed the lawsuit on the grounds that §14(A) was not applicable to Kilby’s job position.  (See Order Granting CVS’s Motion for Summary Judgment.)  In its decision, the district court interpreted §14(A) as requiring a “holistic” assessment of an employee’s entire range of assigned duties to determine whether the employee’s job “as a whole” reasonably permitted the use of seats (§14(A)) or generally required standing (§14(B)).  The district court also considered CVS’s business judgment in its decision – i.e., CVS expected its clerks/cashiers to perform their work while standing, and trained them to do so (among other things, CVS showed a training video to new hires that reinforced its expectations of them to perform a variety of work while standing).

On appeal, Kilby contends that the district court misinterpreted §14 and, and in doing so, failed to account for evidence that she spent approximately 90% of her time performing duties that could have been done while seated.  The district court’s interpretation of §14, according to Kilby, allows employers to deprive employees of seats “simply by assigning a handful of tasks that require standing … even if the workers’ other assigned tasks consume a significant portion or even the vast majority of the work day.”  As such, Kilby requests the Ninth Circuit to interpret §14 as guaranteeing employees the right to suitable seating whenever a specific task or duty performed for an appreciable period of time can reasonably be accomplished while seated.  Kilby also challenges the district court’s consideration of CVS’s business judgment in determining the nature of an employee’s work on the grounds that it frustrates the Industrial Welfare Commission’s intent to create an objective standard for determining which duties could be performed while seated.

The Ninth Circuit now has an opportunity to clarify the legal standard for §14 and offer much-needed guidance on the scope of suitable seating requirements for employees, including those individuals with mixed seating and non-seating job tasks.   Moreover, the case will clarify what role, if any, an employer’s business judgment, expectations and training may have in assessing the nature of an employee’s work.  The parties’ briefing has been completed and oral arguments before the Ninth Circuit (which should be scheduled and posted on the Ninth Circuit’s website — http://www.ca9.uscourts.gov/calendar/ — in the next few months) will surely keep courts, litigants, and employers on the edge of their seats.

By Marisa S. Ratinoff and Amy Messigian

In a matter of first impression, the California Court of Appeal held last month that an employee who exhausts all permissible leave under the Pregnancy Disability Leave (“PDL”) provisions of the California Fair Employment and Housing Act (“FEHA”) and is terminated by her employer may nevertheless state a cause of action for discrimination.

In Sanchez v. Swissport, Inc., the plaintiff, a former employee of Swissport, alleged that she was diagnosed with a high risk pregnancy requiring bed rest in February 2009 and was due to give birth in October 2009. The plaintiff alleges that she made Swissport aware of her condition and need to remain on bed rest until after the birth of her child. However, with three months remaining in her pregnancy, the plaintiff was terminated by Swissport in July 2009 after exhausting her 4-month PDL entitlement as well as her accrued vacation. The plaintiff alleges that she would have been able to return to work shortly after October 2009 and that her employer never engaged in the interactive process in order to identify available accommodations, such as the extended leave of absence she had requested.

At the trial court level, Swissport challenged the lawsuit on the grounds that the plaintiff had exhausted her PDL entitlement and that no further leave was required. The trial court agreed and the plaintiff appealed. Reversing the decision, the Court of Appeal stated that an employee’s entitlements under PDL are supplemental to the general non-discrimination provisions of FEHA.

While an employer must provide 4 months of PDL to an employee disabled by pregnancy without regard to the hardship to the employer, its duty continues after PDL has been exhausted to engage in the interactive process with the employee to determine whether it may accommodate the disability. Continuing the leave of absence may be a possible accommodation if it will not be an undue hardship to the employer.

This case presents a cautionary tale to employers who base termination decisions simply on the exhaustion of a guaranteed leave entitlement under state or federal law. In all cases, where an employee exhausts their guaranteed leave entitlement but seeks to continue his or her leave of absence due to disability, employers should consider whether an extended leave of absence may be accommodated. If it will be difficult to accommodate an extended absence in the employee’s current position, an employer may also consider transferring the employee to a comparable vacant position and continuing his or her leave of absence from that position. Discussing available options with counsel is highly recommended.