Democratic leaders are at it again, pushing a bill that would topple the United States Supreme Court 2018 decision in Epic Systems v. Lewis. In effect, the proposed bill would bar employers from requiring class action waivers and mandatory arbitration, thus allow workers to bring employment claims as a group as well as bring claims to court.

The Restoring Justice for Workers Act was introduced in the House of Representatives by Rep. Jerrold Nadler, D-New York (who also sponsored a similar bill in early March), and Rep. Bobby Scott, D-Virginia, and in the Senate by Sen. Patty Murray, D-Washington. The purpose of the bill is “to prohibit forced arbitration in employment disputes” among other things.

Epic Systems decided that employees may be required to waive their rights to bring an employment claim as a class. The proposed bill argues that mandatory arbitration of individual claims prevents employees from protecting their rights, since a class action can be more affordable and less intimidating. The bill would also amend the National Labor Relations Act to prohibit employers from stopping employees from bringing class actions in employment claims, whether in agreements or practices.

Proponents for the proposed bill believe that arbitration clauses are often overlooked in employment agreements and protect the employer and abusers, while dissuading victims from coming forward.

Read more about other recent proposed bills seeking to reverse the Epic decision in our Carmody@Work Blog.

On May 3, 2019, the Equal Employment Opportunity Commission (“EEOC”) announced that it would collect EEO-1 Component 2 pay data from required EEO-1 filers (“Filers”) for the calendar years 2017 and 2018 by September 30, 2019.

This announcement was a result of a federal district court’s decision in a case titled National Women’s Law Center, et al. v. Office of Management and Budget, et al..

By way of background, in September 2016, the EEOC proposed expanding the EEO-1 reporting to include compensation data, called “Component 2” data. In August 2017, the Office of Management and Budget (“OMB”) stayed (or paused) the EEOC’s obligation to collect Component 2 pay data. In November 2017, the National Women’s Law Center and other plaintiffs sued to challenge the OMB’s decision to stay.

In April 2019, the federal district court ruled in favor of the plaintiffs and ordered the EEOC to (1) select two years for which it would collect the Component 2 pay data and (2) to issue a Press Release announcing its obligation to collect data and the two years for which it would collect. Thus, the EEOC made its announcement on May 3.

What does this mean for us?

This announcement only applies to required Filers, which are:

  • private employers with 100 or more employees; or
  • private employers with fewer than 100 employees if that employer is owned by or affiliated with a company that employees over 100 employees; or
  • federal contractors with 50 or more employees that are not otherwise exempt.

What do I have to file?

If you are a Filer, you are required to report:

  • annual compensation data based on Box 1 of the Form W-2 for all employees by race, ethnicity and sex and within the 12 proposed pay bands for the 10 EEO-1 job categories for the calendar years 2017 and 2018.
  • all hours worked for the same categories for the same calendar years.

It should be noted that the United States Department of Justice filed an appeal of the federal district court’s decision on May 3. Despite the appeal, the EEOC will move forward with collecting the data. We will keep you updated of any developments.

The 2019 Human Resources Roundtable Breakfast Series begins on Tuesday, May 22nd!

Topic: “Your Leave of Absence Toolkit: We will review policies, request forms and form letters to help HR professionals manage employee leaves of absences.

For more information and to register, please click here.

The U.S. Supreme Court will hear three cases in the next term to determine whether Title VII of the Civil Rights Act protects employees from workplace discrimination based on sexual orientation, gender identity or sex stereotyping.

Federal courts have been divided on whether Title VII protects employees from sex discrimination based on sexual orientation or gender identity.  The Supreme Court will hear two of the cases together in order to resolve a circuit split on the issue. One of the cases, from New York, ruled that Title VII prohibits discrimination on the basis of sexual orientation. The other case, from Georgia, ruled the opposite, namely that Title VII does not apply to discrimination based on sexual orientation. The third case, from Michigan, found that Title VII protects an employee from sexual discrimination on the basis of gender identity or expression.

Connecticut law already provides some of the most robust protections against discrimination based on sexual orientation and gender identity.  However, the Supreme Court’s decision will likely provide a definitive answer as to whether such protections also arise under federal law. In addition, the Court’s decision could have an impact on the next Presidential campaign and other states’ discrimination laws.

Stay tuned as we track the latest developments in labor and employment law!

Employment discrimination charges are at a twelve-year low, the U.S. Equal Employment Opportunity Commission (“EEOC”) reported last week. The EEOC released data for charges of workplace discrimination in fiscal year 2018. However, the number of sexual harassment charges increased, likely due to the #MeToo movement which has focused on publicizing and eradicating sexual harassment in the workplace.

The Numbers

The EEOC is the first stop for an employee to bring a charge against an employer raising employment discrimination, harassment or retaliation claims in violation of a variety of federal laws. In 2018, the EEOC took in 76,418 charges (8,000 less than 2017). Sexual harassment claims typically make up nearly one third of all sex discrimination charges with the EEOC. The recent data shows sexual harassment complaints have increased by 13.6 percent from last year, a likely effect of the #MeToo movement.

The Reasons

As the unemployment rate is low and worker demand is up, there are fewer job rejections and employee terminations for employees to contest. Additionally, with the recent public outcry against workplace discrimination, employers have taken steps to educate its employees in awareness and prevention of such activity. Employer education remains one of the most important aspects of reducing and preventing workplace discrimination. Contact us to provide workplace discrimination prevention for your employees!

The American Bar Association (“ABA”) published an article written by Alan H. Bowie, Jr. titled Updates from the NLRB and the Office of The General Counsel in its 2019 Section of Labor and Employment Law Winter Newsletter.  His article summarizes updates from the National Labor Relations Board (“NLRB”) and the Office of NLRB General Counsel given at the ABA’s 12th Annual Labor and Employment Law Conference.

NLRB updates were given by current Board Members Chairman Jonathan Ring, Lauren McFerran, Marvin Kaplan, and William Emanuel.  The Board Members covered topics ranging from the use of rulemaking to establish the current board’s position on laws, internal ethics and the recusal process, and the use of alternative dispute resolution to resolve NLRB cases more efficiently.  As we previously reported, the issue of Board Member recusals became a hot topic after the Board was required to vacate the Hy-Brand decision.

The updates from the Office of the NLRB General Counsel were given by Assistant General Counsel for the NLRB Alice Stock.  Attorney Stock discussed the Office’s first-year case statistics under new General Counsel Peter Robb, the General Counsel’s approach to case handling, and his position on certain NLRB laws.

Overall, the respective updates indicated that the NLRB and Office of the General Counsel are looking to prioritize efficiency and restore “balance” to the agency and the laws.  For the full article, click here.

The Federal Department of Labor (“DOL”) recently proposed two new rules addressing joint employer status and overtime pay calculation under the Fair Labor Standards Act (“FLSA”). These proposals are significant because the underlying regulations had not been updated in decades.

Joint Employer Status

On April 1, 2019, the DOL proposed the new rule for determining joint employer status. The proposed rule would establish a four-factor test that would consider whether the potential joint employer actually exercises power to:

  • hire or fire the employee;
  • supervise and control the employee’s work schedules or conditions of employment;
  • determine the employee’s rate and method of payment; and
  • maintain the employee’s employment records.

The proposed rule also includes 9 examples analyzing potential joint employer relationships, which will be open to the public for comment.

This proposed rule would be the first major revision of the joint employer regulations since 1958. In addition, it would cement the current administration’s position on joint employer status.  Recall that the DOL under President Obama issued guidance in 2016 that scrutinized joint employer relationships. In 2017, the current administration rescinded that guidance. Thus, finalizing this new rule would completely overturn the previous administration’s rule and reinforce the new administration’s position.

Overtime Pay Calculation

Last week, the DOL proposed another new rule to clarify and update the regular rate requirements for purposes of calculating overtime under the FLSA. The FLSA generally requires that employers pay overtime of at least one and one-half times the regular rate for hours worked in excess of 40 hours per workweek. Under the current rules, employers are discouraged from offering more perks (e.g., gym memberships or bonuses) because it may be unclear whether those perks must be included in the calculation of an employee’s regular rate of pay.

The proposed rule clarifies whether certain kinds of perks, benefits, or other miscellaneous items must be included in the employee’s regular rate. For instance, the rule clarifies that the following perks are excluded from the employee’s regular rate of pay:

  • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts;
  • payments for unused paid leave, including sick leave;
  • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
  • reimbursed travel expenses that do not exceed the maximum travel reimbursement permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements;
  • discretionary bonuses;
  • Benefit plans, including accident, unemployment, and legal services; and
  • Tuition programs, such as reimbursement programs or repayment of educational debt.

The overtime calculation rule has been submitted for public comment. Click this link to submit a comment. The joint employer status rule is being finalized and will be published for public comment soon. We will keep you updated on the developments. Please feel free to contact us if you have any questions.

On March 27, 2019, the U.S. House of Representatives passed the Paycheck Fairness Act addressing the gender pay gap by bolstering the Equal Pay Act. The bill, sponsored by Rep. Rosa DeLauro, D-Conn, would protect employees from pay discrimination and hold employers accountable for pay discrimination on the basis of sex. Among other changes, the Paycheck Fairness Act would prohibit employment policies or practices that bar employees from discussing their salaries, and it would increase penalties for violations of the Equal Pay Act.

The Past and Present: Equal Pay Act

The Equal Pay Act bans pay discrepancies between men and women who hold substantially the same jobs unless wages are based on seniority, merit, quality or quality of work, or any factor other than sex. An employer may use any of those four factors as a defense against claims of wage discrimination. As noted in the findings of Congress in the Paycheck Fairness Act, gender-based wage discrimination still persists, undermining women’s financial security and burdening the progress of commerce.

The Future: Paycheck Fairness Act

Rep. DeLauro first introduced the bill in 1997, which would: 

  1. Prohibit retaliation against employees who discuss their salaries with other employees.
  2. Prohibit employers from using an applicant’s prior salary as a mechanism for setting salaries; prohibit employers from requesting salary history from applicants or previous employers (although salary history may be used as part of negotiations following a job offer).
  3. Require the Equal Employment Opportunity Commission to gather compensation data from employees based on sex, race, and national origin to track discriminatory patterns or practices.
  4. Require the Department of Labor to inform and incentivize employers to make efforts to eliminate the pay gap between the sexes. Enhance the current penalties to add compensatory damages and punitive damages (these are the same remedies available for other civil rights violations).

What’s Next

The House passed the Paycheck Fairness Act and now it goes to the Senate for a vote. With a historic number of women in the Senate and the momentum of the #MeToo Movement, the bill has a chance to move beyond the Senate. If the Senate passes the Act, then it goes to the President before becoming law.

Stay tuned for other exciting labor and employment news!

On March 14, 2019, the U.S. Department of Labor, Wage and Hour Division (“DOL”) released an opinion letter clarifying the DOL’s position on designating and taking leave under the Family and Medical Leave Act (“FMLA”). Specifically, the DOL stated that employers cannot delay the designation of FMLA-qualifying leave or designate more than 12 weeks of leave (or 26 weeks for military caregivers) as FMLA leave. This opinion is at odds with a 2014 Ninth Circuit ruling.

The Law

The FMLA grants eligible employees of covered employers up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons, or up to 26 weeks to care for a family member who is a covered servicemember. Employees may choose, or employers may require employees, to substitute accrued paid time off for FMLA leave. This means that the paid leave provided by the employer will run concurrently with the unpaid FMLA leave.

The Opinion Letter

The opinion letter reiterated that when an employer determines that a leave qualifies for FMLA, the employer must notify the employee of the FMLA status within five days. Ultimately, the DOL clarified that an employer may not permit employees to use other available paid leave instead of or before taking FMLA leave.

The opinion letter also tackled the issue of whether an employer may designate FMLA leave beyond the 12-week entitlement (or 26 weeks with respect to military caregivers). Employers are prohibited from doing so according the DOL. This does not mean, however, that employers cannot or should not allow employees to take additional unpaid or paid leave. It just means that the FMLA leave entitlement may not be expanded by paid leave.

Opinion letters are issued by the DOL to help employers and employees understand and comply with federal labor laws.

Recently, Democratic federal legislators proposed a bill to bar companies from requiring employees to sign mandatory arbitration agreements and also from preventing employees from bringing class actions.

Proposed Bill

The proposed bill, the Forced Arbitration Injustice Repeal Act (“FAIR Act”), sponsored by Connecticut Senator Richard Blumenthal and New York Congressman Jerrold Nadler, would ban mandatory arbitration in employment agreements, prohibiting employees from taking their claims to court.  It would also bar agreements that prevent workers from bringing class action claims against their employers.

Reactions to the Epic Systems v. Lewis Decision

This past summer, the United States Supreme Court ruled in an appropriately named case, Epic Systems v. Lewis, that mandatory arbitrations provisions, as well as waiver of class action claims in employment agreements, were enforceable.  Proponents for employees regard the Epic case as a blow to employees’ rights by preventing them from going public with claims, having their day in court and obtaining potentially larger jury awards, among other reasons.  In the midst of the recent #MeToo movement and pressure by employees to end mandatory arbitration at high profile companies such as Google and Vox Media, there is a concern that allowing employers to keep claims private and separate will in turn sweep legitimate claims under the rug.  Those who favor the Epic decision believe that arbitration provides a more civilized way of dealing with employment disputes because arbitration tends to be faster, cheaper, less obtrusive and private.  The FAIR Act would reverse the Supreme Court’s ruling in Epic.

Future Path of the FAIR Act

While similar bills have been proposed in recent years without moving forward, the FAIR Act has more support in the House of Representatives than in it has had in the past.  However, it will face more opposition in the Republican-controlled Senate and it is probably unlikely that President Trump would sign a bill reversing a decision written by his first Supreme Court appointee.

Stay tuned as we keep you updated with the issues that affect you!