Monday, April 24, 2017

That is SO last week

Last week, the EEOC announced that The American Dental Association has agreed to pay $1.95 million to settle retaliation claims.  The Association’s former legal counsel and director of human resources alleged that they were discharged in retaliation for complaining to the board of directors about potential violations of federal anti-discrimination laws, including Title VII, ADEA, and ADA. In addition to its payment to the plaintiffs, the Association agreed to conduct training on discrimination laws for all employees in its Chicago headquarters, post a notice of the EEOC’s finding of reasonable cause to believe violations occurred, post a notice about its agreement with the EEOC, and allow EEOC inspection of its employment records for two years.

Discrimination

The EEOC sued a Miami Beach hotel for violating anti-discrimination laws by allegedly firing its black Haitian kitchen staff and replacing them with lighter-skinned Hispanic workers hired through a staffing agency.

The American Journal of Managed Care covered a recent study which found that workplace discrimination against employees with cancer persists, despite amendments to the 2009 Americans with Disabilities Act that extended the ADA to include employees whose disabilities are well-managed or in remission.

HR Dive covered a class action lawsuit that accuses Pricewaterhouse Cooper LLP of discriminating against older workers.

Mattress company Sealy of Minnesota agreed to pay $175,000 to resolve an EEOC charge based on allegations of severe racial harassment against black and Hispanic employees.

Technology

HR Dive covered Facebook’s new job posting feature and offered guidelines for reducing the risk of bias when recruiting on social media.

CNBC reported on new features of Facebook’s Workplace app for workplace collaboration and communication.

Billionaire Elon Musk has founded a new company called Neuralink dedicated to human-machine interface.

Market Watch reported that tech workers are increasingly looking for jobs outside of Silicon Valley.

Ere Media published recommendations to HR for protecting data in employee records.

In Other News

Jon Hyman wrote for Workforce about a bill pending in Congress that would enable employees to earn comp time off instead of overtime pay, a practice that currently runs afoul of the Fair Labor Standards Act.

The Department of Justice requested an extension to June 30 to file briefs in the litigation over the FLSA overtime rule.

Amazon has implemented a policy in some of its German facilities that offers a bonus to employees who do not use their sick leave.

NY Mag’s The Cut featured a story on the pitfalls of being a fun boss.

The Atlantic covered recent findings about the big impact that office culture has on the leadership ambitions of female employees.

Fast Company reported on a new trend of employers offering social justice” paid time off.

Thursday, April 20, 2017

Constructive Discharge

The concept of constructive discharge appears regularly in employment law cases and commentary, but we’ve found that it’s not always well understood. Because a constructive discharge can have all the consequences of a typical discharge, it’s important for in-house counsel, HR professionals, and business owners to be familiar with its legal definition and understand how and when it can create legal liability.

The Department of Labor describes constructive discharge this way:

In general, the term "constructive discharge" is when a worker's resignation or retirement may be found not to be voluntary because the employer has created a hostile or intolerable work environment or has applied other forms of pressure or coercion which forced the employee to quit or resign. This often arises when an employer makes significant and severe changes in the terms and conditions of a worker's employment….

In 2004, the United States Supreme Court wrote that the proper inquiry in a constructive discharge case is whether working conditions became so intolerable that a reasonable person in the employee’s position would have felt compelled to resign. Pennsylvania State Police v. Suders, 542 U.S. 129, 147 (2004). This standard generally guides courts in discrimination cases involving constructive discharge, and similar standards are articulated by courts deciding cases involving other claims of wrongful termination. It’s important to remember that there is no separate legal claim for constructive discharge. Recognition that an employer can force an employee to resign allows employees to claim damages as if they had been fired, but employees must still prove that their treatment violated statutory or common law.  

So when do working conditions become hostile or intolerable? Here are some examples:

Pay reduction.  Courts differ on how significant a pay reduction must be to support a claim of constructive discharge, but most decisions recognize the possibility. The Seventh Circuit ruled in Zabielski v. Montgomery Ward & Co., Inc that an income reduction from $26,000 to $10,000 a year, plus the fact that the employee’s position was scheduled to disappear in three months, was sufficient to constitute a constructive discharge. In Scott v. Harris Interactive, the Second Circuit considered whether or not a one-third reduction in salary amounted to a constructive discharge. While refusing to rule that a one-third reduction in pay automatically triggers constructive discharge, the court said that the percentage of a reduction and reasonable expectations of the parties are relevant to the determination.  

Terms and Conditions of Employment.  In a 2013 California Court of Appeals decision, the court held that an employee was constructively discharged when his employer refused to reimburse job-related travel expenses, effectively reducing his salary to below minimum wage. A New York federal court has ruled that an indefinite suspension is the equivalent of firing. Late last year, another New York federal court held that an employee was constructively discharged when she was given the choice between accepting a demotion or facing “dire consequences” for failure to meet an unrealistic sales goal. Nielsen vs. Pioneer Bank, No. 1:15-cv-623 (N.D. N.Y., 9/13/16)   In the Pennsylvania State Police v. Suders case noted above, the Supreme Court found that a hostile work environment created by sexual harassment resulted in a constructive discharge. On the other hand, being put on a performance improvement plan, being berated in front of customers, and being transferred do not support a claim for constructive discharge, and the Sixth Circuit ruled last year that an allegation of retaliation, standing alone, does not support such a claim.

Forced Resignation.  If an employee is required to resign in order to avoid being fired, he or she can claim constructive discharge. An employer cannot use a forced resignation to escape the consequences of an otherwise unlawful termination. For the employee, any perceived benefit gained by being able to claim resignation may be outweighed by the potential loss of unemployment insurance.

It’s worth noting that in many states, unemployment insurance—which is generally unavailable if an employee resigns—can be awarded if the employee is determined to have quit for a good reason attributable to the employer. In Minnesota, for example, unemployment insurance will be awarded if the employee resigns for a reason that “…would compel an average reasonable worker to quit.”

Employers should stay alert to circumstances that could give rise to a constructive discharge claim, and should make certain that terminations are properly documented, called what they really are, and handled appropriately and professionally.

Monday, April 17, 2017

That is SO last week

Last week, HR Dive reported a Yale University global study on the forces behind continued underrepresentation of women in business leadership. After surveying 5,000 individuals in 100 countries, the study concluded that women’s careers are negatively impacted by the perception that women are less available to work 24/7 because of responsibilities at home. Sixty-five percent of survey respondents reported that senior management believed women were responsible for most of the childcare duties in the home. Regardless of whether this is accurate, and whether 24/7 availability is an accurate measure of productivity, the study suggests that these perceptions impede women's advancement even when their performance merits promotion.

Discrimination

CNN Money shared advice from EEOC Commissioner Chai Feldblum and other experts on the importance of HR’s role in any harassment investigation.

A New York Times Op-Ed argued that private settlements of sexual harassment cases allow harassment to continue.

The EEOC announced that a subsidiary of U.S. Steel agreed to pay $150,000 to settle a religious discrimination and retaliation lawsuit that alleges the company violated federal law by revoking a worker’s job offer because of his religion and in retaliation for the worker’s request for accommodation of his religious practices.

Technology

An SHRM report on the tension between workers’ desire for remote work and executives’ commitment to a traditional workplace concluded that technology is key to bridging the divide.

MIT Technology Review examined the legal challenges raised by advances in AI.

McDonald’s is now recruiting via Snapchat in Australia.

Ere Media explained how the EU’s General Data Protection Regulation, taking effect next year, impacts US employers.

Quartz published an excellent analysis of the importance of managing the apparently inevitable age of robots at a societal level.

In Other News

SHRM reported on legislation recently proposed in California that would increase the state’s salary threshold for employees who are exempt from overtime pay to $47,476, the same threshold that the federal government attempted to implement last year.

Online food-delivery service DoorDash agreed to pay $5 million to settle claims by delivery workers that they were illegally misclassified as independent contractors.

Eric B. Meyer wrote for SHRM on a couple of new bills in Congress that employers should pay attention to.

Harvard Business Review covered best practices adopted by some employers to help reduce the stress of childcare for employees.

Thursday, April 13, 2017

Summing Up: Equal Pay

Last week’s observance of Equal Pay Day - and a review of the commentary it generated - has reminded us that gender-based pay disparity is a complicated topic, worthy of employers’ attention but difficult to put in perspective.

Let’s review the basics.  Federal law, through the Equal Pay Act of 1963, prohibits sex-based wage discrimination by virtually all US employers. It requires that employees who perform jobs requiring substantially equal skill,effort, and responsibility under similar working conditions must be paid equally.  Title VII of the Civil Rights Act of 1964 prohibits discrimination in pay or benefits based on sex (as well as other protected characteristics), and has a somewhat more flexible standard for determining whether jobs are comparable.  Most states have comparable pay equity laws, and some, like California’s Fair Pay Act, have been recently amended to strengthen worker protections.

Despite these long-standing equal pay laws, women continue to make less than men overall.  By some estimates, a gender-based pay gap will continue for decades to come.  The persistence of gender-based pay disparities is, of course, rooted in societal history and norms, and cannot be blamed on or solved by employers alone.  EEOC charges and lawsuits alleging gender-based pay disparity continue, and sometimes result in significant settlements or employer liability. It can be challenging  for employers and employees, as well as the courts, to identify when pay disparities are the result of discriminatory practices rather than the result of history and market forces.

Against this backdrop, government and corporate efforts to address pay disparity have increased.  A recent article in The Atlantic describes corporate pay equity initiatives, highlighting Salesforce and its annual audit of gender-based pay discrepancies.  NBC News just published a summary of state legislative initiatives, pointing out that at least 180 pay equity-related bills were introduced in state legislatures around the country in 2016.  At the municipal level, the New York City Council has just approved legislation that addresses pay equity by prohibiting employers from asking job applicants for salary history. The City of Philadelphia has a similar ordinance, currently being challenged by a Chamber of Commerce lawsuit.  During the Obama administration, federal contractors were required to comply with so-called “paycheck transparency” obligations under the 2014 Fair Pay & Safe Workplaces order, but those requirements have been revoked by Executive Order of the current administration.

So what’s a reasonable employer to do? Educated compliance with existing law is essential.  Beyond basic compliance, employers can take voluntary actions to prevent claims, attract and retain the best talent, and improve morale and productivity.  Here are some suggestions:
  • Know the law in the jurisdictions in which you have employees.  Be aware of the requirements of state and municipal equal pay legislation, as well as the mandates of the Equal Pay Act and Title VII. Pay policies and practices that apply nationwide, though convenient, must comply with the requirements of the most employee-friendly jurisdictions.
  • Watch for new legislation and regulations.  Chambers of Commerce, employers’ organizations, and organizations like the Society for Human Resource Management (SHRM) are good sources of up-to-date information on pay equity.
  •  Consider conducting an internal pay audit.  This can be the work of outside experts, but can also be a simple review by HR professionals.  If employees doing substantially similar jobs are being paid differently, be sure you understand why and be sure the reasons for the disparity are lawful, documented, and unrelated to gender or other protected class status.
  •  Review job titles and duties regularly.  Outdated job descriptions and titles can drive pay disparities. Titles and descriptions may be inconsistent across departments or over time, resulting in similar jobs with dissimilar compensation or advancement opportunities.  Clear, current, consistent job descriptions provide support for both pay equity and pay differences.
  • Involve employees of both genders in the creation and implementation of pay policies. Make certain that those who set salaries and wages, determine benefits, and establish criteria for advancement reflect the diversity of your workforce.
  • Check your culture.  Consider what drives success and advancement in your organization.  Is it the ability to work very long hours? Is it constant availability, even on evenings and weekends? Is it participation in after-work or weekend socializing? And are those things really essential to the business, or just habit? Women (and men who are primary caretakers of family members) may have difficulty being successful if those are the requirements, and may seek a work culture in which advancement is possible without them.
  • Value the job first and the candidate second.  Every search for applicants should begin with a clear understanding of the nature of the job being filled and the value of that job to the organization.  The value of the job, rather than the demands of the candidate, should be the primary driver of compensation.
Published by Judy Langevin

Monday, April 10, 2017

That is SO last week

Last Tuesday was Equal Pay Day, which highlights the gender pay gap.  It marks how far into the new year women must work to earn what men made in the previous year.  In other developments focused on pay practices, the U.S. Department of Labor accused Google of systemic pay discrimination against women, and the New York City Council  passed a bill intended to combat gender pay inequity by banning employer inquiries into salary.  In Philadelphia, the Chamber of Commerce sued to challenge Philadelphia’s similar law, which was the first municipal law in the country to prevent employers from asking about  job candidates’ salary history.
Discrimination
  • The Seventh Circuit Court of Appeals ruled that Title VII protects employees from discrimination on the basis of sexual orientation.
  • The Washington Post Editorial Board advocated breaking the silence around workplace sexual harassment in the wake of recent allegations of serial sexual harassment by Fox News host Bill O’Reilly.
  • New Jersey’s Kean University agreed to pay $375,000 to settle an age discrimination suit brought by a former administrator.  
Technology
  • Wired wrote about the implications of an employer owning the rights to the social media accounts of employees who are public figures.
  • Phys.org suggested that the increased use of artificial intelligence will reshape how we think about consciousness and human identity.
  • Uber remained in the hot seat, this time for its use of software that allegedly manipulates its drivers to work longer hours.
In Other News
  • Fast Company examined how companies can strengthen the value and efficacy of their HR departments.
  • Quartz reported on a leaked document from UK-based delivery service Deliveroo that revealed the lengths to which gig economy startups go to avoid calling their workers “employees.”
  • The Department of Labor delayed implementation of the fiduciary rule to June 9, apparently in order to comply with the administration’s directive that the agency examine the rule to ensure it doesn’t adversely affect the ability of Americans to gain access to retirement information and financial advice.
  • A Yale professor wrote for the New York Times about his research demonstrating that job interviews are counterproductive.
  • With enough votes to override an anticipated gubernatorial veto, the Maryland legislature passed a paid sick leave bill that requires employees with at least 15 workers to offer five days of paid sick leave.
  • An unpublished study suggested that two-thirds of millennial employees would give up social media for a week if all of their coworkers recycled.

Friday, April 7, 2017

Employer Liability for Data Breaches: Where Are We Now?

When a data breach places employees’ information at risk, is the employer liable? We’ve continued to track legal actions against employers based on data breaches, but we still don’t have clear guidance from the courts.

We do know that any business or organization has certain obligations when a data breach occurs. Forty-seven states and the District of Columbia require private or governmental entities to notify affected individuals of security breaches involving personally identifiable information. Employers need to understand the requirements of the jurisdictions in which they do business, and should have a plan in place to respond immediately if a breach occurs, because there are significant statutory penalties for failure to comply with data breach notification requirements.

Compliance with data breach notification laws is an essential start, but does not necessarily protect an employer from liability for damage to employees that may occur as a result of a data exposure. Individuals and groups of employees have made claims based on the release of personally identifiable information through data breaches.  Those who do so, however, can’t base their claims on speculation or the threat of future harm. Courts are unwilling to allow lawsuits based on data breaches to proceed unless the plaintiffs can show that they have suffered some concrete harm beyond the compromise of personal data. In one case, a federal court in California held that the use of employee data obtained in a breach to file fraudulent tax returns, and the costs an employee incurs to pay for identity theft protection, are sufficiently concrete to support a claim against an employer.

This week, a Pennsylvania federal court weighed in, finding in favor of Coca-Cola Co. in a former employee’s proposed class action for identity theft.  Several dozen laptops that contained employees’ personal information were stolen from Coca-Cola, and a former employee subsequently became the victim of fraud.  He blamed the company for the release of his information and claimed that Coca-Cola had explicitly or implicitly promised to secure his personal data in its multiple policies relating to information security.  After reviewing the company’s policies, the court disagreed, holding that Coca-Cola had no contractual obligation to secure employees’ personal information.  Although ultimately favorable to the employer, the court’s holding indicated that Coca-Cola could be held liable for breaching specific duties it assumed in its Code of Conduct and written policies.

With the Coca-Cola decision in mind, and as we watch for additional developments, employers can continue to manage their risk of legal liability for data breaches that expose employees’ personal data.  Here are some tips:
  • Exercise reasonable care in the management of personally identifiable information about employees.
  • Take cybersecurity seriously and take steps to minimize the risk of data breaches.
  • Review policies and codes of conduct related to the handling of data.  Make certain that they do not promise absolute protection or security of employees’ data and that they are specific about what the employer will do and what the employer expects employees to do.
  • Respond swiftly to suspected data breaches and other events – like the theft of computers – that could result in data breaches.
  • When breaches occur, or are suspected, consider affirmative steps, such as paying for credit monitoring or identity theft protection, to address employees’ fears.
Published by Laura Bartlow and Judy Langevin

Monday, April 3, 2017

That is SO last week

There was a lot of discrimination law action last week, including the announcement of a $12 million settlement to be paid by Texas Roadhouse.  The EEOC brought an age discrimination suit against the Louisville, Kentucky-based restaurant chain on behalf of job applicants nationwide who claimed they had been denied front-of-house positions because of their age.  The settlement requires Texas Roadhouse to change its hiring and recruitment practices, hire a diversity director, and consent to monitoring of its compliance with settlement terms.

Discrimination

The EEOC announced that it will hold a meeting on April 5 to discuss “The State of the Workforce and the Future of Work.”

SHRM and the College and University Professional Association for Human Resources recently sent a letter  to the EEOC with suggestions for improving the agency’s proposed guidance on preventing harassment.

Two African-American women sued Fox News, alleging a pattern of top-down racial harassment.

Bill O’Reilly and Fox News paid $13 million to five women to settle allegations of sexual harassment and inappropriate behavior.

NPR reported on the Illinois Attorney General’s investigation of age discrimination built into some online job websites.

A disability support services company agreed to pay $100,000 and furnish other relief to settle an EEOC suit alleging a practice of firing employees with disabilities who needed extended leave or reassignment, rather than providing them with reasonable accommodations.

A panel of the Second Circuit Court of Appeals held that an employee may bring a sex discrimination suit under Title VII for sex-stereotyping based on sexual orientation.

Technology

HR Dive discussed the benefits and risks of Internet of Things devices for companies with large and mobile workforces.

Bernard Marr, a contributor to Forbes, suggested that a company’s HR data may be more valuable than its financial data.

Jon Hyman wrote for Workforce about a recent Fourth Circuit decision upholding an employer’s decision to fire an employee because of the employee’s social media activity.

MacDonald’s Canada announced that the records of 95,000 job applicants were stolen in a recent data breach.

Ere Media covered the recent announcement by online job board America’s JobLink Alliance that the personally identifiable information of up to 4.8 million job seekers in ten states may have been compromised in a recent hacking incident.

In Other News

The recent Thinx scandal highlights the importance of maintaining boundaries in the workplace.

Uber finally released its employee diversity numbers, calling the release the first step in its efforts to improve diversity.

Quartz mapped American wage growth over the past 35 years.