22 Jul LB4HR July 2018
Welcome to Legal Briefs for HR, an update on employment issues sent to more than 6000 individual HR professionals, in-house counsel and business owners plus HR and legal professional organizations (who have been given permission to republish content via their newsletters and websites). My mission is to help you stay in the know about employment issues. Back issues are posted at www.munckwilson.com under News & Knowledge/Legal Briefs for HR and you can also join the group by clicking on “Subscribe” at the bottom of the page.
Enjoy your summer vacation and look what’s waiting for you, when you get back:
- Nixing Noncompetes – Eleven Attorneys General (CA, DC, IL, MA, MD, MN, NJ, NY, OR, PA and RI) have asked eight large fast-food companies to turn over their franchise agreements and other statements which may contain noncompete and/or no-poaching language, on the belief that such clauses are harmful to both low-wage earners (by limiting their mobility) and States’ economies. The restauranteurs under scrutiny are Arby’s, Burger King, Dunkin’ Donuts, Five Guys, Little Caesar’s, Panera Bread, Popeye’s and Wendy’s. They are taking a page out of the playbook of the U.S. Department of Justice, which went after companies who agreed not to poach each other’s employees as a violation of antitrust laws.
- Time Out – Following up on my discussion of the Severson decision in LB4HR #6 (11-9-17), in April the U.S. Supreme Court refused to hear an appeal of the 7th Circuit’s decision that a multi-month, non-FMLA leave of absence is not a reasonable accommodation under the ADA. Central to the earlier decision was the idea that “[t]he ADA is an anti-discrimination statute, not a medical-leave entitlement.” The fact that the Supremes let that decision stand has piqued the interest of employers, both in and outside of the 7th Circuit. It remains a tricky analysis, so tread carefully.
- The Supremes (aka Robed Ones)
- Come Together (Not) – On May 21 in Epic Systems v. Lewis, SCOTUS decided that an employer’s pre-dispute contractual provision which requires employees to bring their beefs individually instead of as a group can be enforced and are not trumped by the National Labor Relations Act. The NLRA’s right to engage in concerted activity does not encompass class or collective actions, which are enforceable under the FAA. Side note – employers in CA, no need to celebrate because you are still subject to collective actions under the Private Attorney General Act (PAGA). A 2014 CA Supreme Court decision held that FAA has no preemptive effect on PAGA.
- Heavier Paycheck – On July 27 in Janus v. AFSCME Council 31, SCOTUS decided (5-4) that mandatory public sector union dues are unconstitutional. Such fees are already not allowed in the 28 states, including Texas, which are “right to work” but in many of those states the law applies to private sector employers only. According to the U.S. Department of Labor’s Bureau of Labor Statistics, more than half of the country’s union membership is concentrated in seven states (CA, IL, MI, NJ, NY, OH and PA). If you are not sure whether the states you have employees in are “right to work” or not, check out http://www.nrtw.org/right-to-work-frequently-asked-questions.
- Newbie – Justice Anthony Kennedy’s retirement announcement was quickly followed by President Trump’s nomination of D.C. Circuit Court Judge Brett Kavanaugh (a former Kennedy clerk). Big labor is not happy and is tossing out gems like he’s a “narrow-minded elitist” and he has a “dangerous track record of protecting the privileges of the wealthy and powerful at the expense of working people.”
- #MeToo Moments
- Jump on the Train – Effective October 9, New York employers must provide annual sexual harassment training for all employees. Employers must also have a written sexual harassment prevention policy which complies with the elements stated in the law. There is an even more onerous version for NYC employers, to include annual, interactive training of all employees, including interns.
- Better Behave on that Train – HR 5857, if passed, will require passenger transportation providers (e.g., airlines, trains, railroads, buses) to add policies which prohibit and address sexual assault and harassment of employees and passengers. Full text of the bill is posted at https://democrats-transportation.house.gov/imo/media/doc/Bill%20Text%20Stop%20Sexual%20Assault%20and%20Harassment%20in%20Transportation%20Act.pdf
- Keep It Simple – The State of Maine mandates display of a workplace poster on sexual harassment which meets the statutory requirements; one of those requirements is that the text may meet but not exceed 6th grade literacy standards.
- Um, This Happened at a Law School – The University of Denver will pay $2.66 million and provide other changes in policy/procedure in settlement of an equal pay lawsuit. In the suit, female full professors at the Sturm College of Law alleged they were paid lower salaries than their male counterparts, while doing substantially similar work. On average, the women’s pay was $19,781/year less than the men. Additional relief includes pay increases for seven female professors, annual publication of salary and compensation information to tenure, tenure-track and contract faculty and hiring of a labor economist to do an annual pay equity study.
- Expensive Car Parts – Ford Motor Company will pay $10 million to settle sexual and racial harassment claims alleged to have occurred in two Chicago-area plants. In addition to the money, the company will  conduct regular training at the two plants for the next five years;  report all employee-filed complaints to the EEOC;  monitor the workforce for additional problems; and  continue to disseminate its anti-harassment and anti-discrimination procedures to all job applicants and employees.
- Poor Pay Perpetuated (No More) – In an en banc opinion, the 9th Circuit Court of Appeals, overturned its prior 2017 decision and declared that employers cannot pay women less than men for the same work based on their previous salaries because such practice allows employers to “capitalize on the persistence of the wage gap” and perpetuates the problem. Rizo v. Yovino (9th Cir. 4-18) The Fresno County Office of Education pay policy was to add 5% to the prior wage when hiring new employees. It argued this policy was gender-blind, objective and fell within the Equal Pay Act’s exception which permits use of a “factor other than sex.”
- Prevent Defense – As part of your new or renewed anti-harassment training, you know that if a manager or supervisor engages in harassment of an employee and there was a tangible job detriment to the victim, it’s a strict liability standard and you’re going to open your wallet. You also know that if the same thing happens without a tangible job detriment, you may avoid liability if you can prove up the affirmative defense created by SCOTUS in the Ellerth –Faragher decision. You also know that the affirmative defense has two parts – you must show that the employer was reasonable in its efforts to prevent and remedy harassment AND the alleged victim was unreasonable in not coming forward to report the behavior (to give you an opportunity to fix it). A recent 3rd Circuit decision is an eye-opener because it cites to the #MeToo movement and excuses the plaintiff’s failure to come forward, even after years of bad behavior by her boss. They found her lapse reasonable because of her legitimate fear of the consequences of ratting out the man. They did say that “generalized and unsupported fear of retaliation” won’t work but in this case, the plaintiff had specific reasons for staying mum that they found to be plausible. Minarsky v. Susquehanna County et al (3rd Cir. 7-3-18).
- In My Humble Opinion – The DOL’s Wage and Hour Division has resumed issuing opinion letters. Here’s their latest bits of wisdom:
- On The Road Again – Employers know that a nonexempt worker is normally not paid for traveling between home and work each day, but that rule changes if the work requires an overnight stay out of town. In those cases, the travel time which occurs during the employee’s normal working hours (regardless of the day of the week, so on Saturdays and Sundays too) is treated as “hours worked” and is compensable. One inquiring mind asked how to calculate that pay if the employee has no normal working hours? In response, the DOL WHD says they will not find a FLSA violation if the employer uses one of two methods –  look at a range of workdays and choose an average start and stop time; or  negotiate an agreed-upon start and stop time with the employee, to be applied in these instances.
- Give Me a Break – Under the FLSA, employee’s rest breaks of 20 minutes or less are normally with pay because they are seen as being for the benefit of the employer. But what do you do when an employee has a doctor’s note that says the employee needs a 15-minute break every hour as an accommodation? DOL opines that this frequency of taking rest breaks is for the benefit of the employee, not the employer, so they can be without pay.
- Garnishment – The DOL WHD addressed the question of which lump-sum payments given to an employee are “earnings” subject to garnishment? The simple test is whether the payment is in the nature of a payment for the employee’s personal services. The opinion letter contains lengthy lists of what is earnings and what is not earnings at https://www.dol.gov/whd/opinion/CCPA/2018/2018_04_12_1NA_CPPA.pdf. Enjoy!
- Employee or Contractor? – On April 20, the California Supreme Court issued its much-anticipated decision in Dynamex Operations West Inc. v Superior Court, setting forth a new standard for employee vs contractor analysis under CA Wage Orders. With this decision, reliance on the Borello factors is toast and guidance is now taken from Martinez v. Combs, 49 Cal. 4th 35, 64 (2010) and a new “ABC” test. The ABC test consists of three factors –  the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;  the worker performs work that is outside the usual course of the hiring entity’s business; and  the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. If the employer wants to treat that individual as a contractor, all three parts of the ABC test must satisfied.
- Whaaaaat Did You Say? – A NIOSH study published in the American Journal of Industrial Medicine on March 14 says that high noise levels at work are associated with hearing loss and elevated blood pressure and cholesterol levels. Ear plugs, anyone?
- Simply the Best – I see a lot of my readers in Texas on the Fortune 100 Best Companies to Work For . . . Congratulations, and keep up the great work!:
- Texas Health Resources in Arlington (#15)
- USAA in San Antonio (#19)
- Camden Property Trust in Houston (#24)
- David Weekly Homes in Houston (#36)
- Hilcorp Energy Company in Houston (#67)
- Ryan, Inc. in Dallas (#71)
- NuStar Energy in San Antonio (#72)
- TDIndustries in Dallas (#73)
- Encompass Home Health in Dallas (#76)
- Alliance Data Systems in Plano (#82)
- The Container Store in Coppell (#93)
- AT&T in Dallas (#100)
- Speechify – Thanks to the following for their invitations to speak and please join me, if you can:
- Texas Workforce Commission’s Texas Business Conference, in Arlington on July 19 & 20
- Texas Ass’n of Business Employment Relations Symposium, in San Antonio on July 24 & 25
- Texas Workforce Commission’s Texas Business Conference, in Abilene on July 27
- S.H.E. Summit BACARDI Dallas is COMING SOON — August 16, 2018!!
I am excited to share that Munck Wilson Mandala is bringing S.H.E. Summit BACARDI to Dallas on August 16th. S.H.E. Summit is a female empowerment and networking event that brings leaders, change makers, and influencers together to discuss change and advancement for women inside and outside the workplace. The event has been in NYC and Miami and we are really excited to show what Dallas can do! This event will be a remarkable opportunity to support female leadership and the male advocates that assist in paving the way for change in the workplace and within our communities.
S.H.E. Summit Bacardi Dallas will feature S.H.E. Summit CEO and founder Claudia Chan, creator and co-founder of OrangeTheory Fitness Ellen Latham, nationally recognized journalist and Emmy Award winner Shelly Slater, regional president, North America Bacardi Pete Carr, and a long list of other dynamic speakers and panelists with incredible personal and professional stories. See more about the program here: www.shedallas.com
S.H.E. Summit BACARDI Tickets
S.H.E. Summit BACARDI Dallas website www.shedallas.com
Special Discount Registration for LB4HR Subscribers ONLY!! Now through July 31st, use code: LB4HR to receive Early Bird pricing ($30 in savings) on your attendee ticket to S.H.E. Summit Bacardi Dallas!! Click here for registration details. I hope to see you there!
- Stated Differently – Here are some hot topics for you multi-state employers:
- California – Effective July 1, 2018, the FEHA prohibition against national origin discrimination is expanded to  greatly broaden the definition of “national origin”;  beef up the prohibition against “English only” rules including a ban on discrimination based on accents unless the accent “interferes materially” with the ability to perform the job;  expanded definition of retaliation, to include a threat to contact immigration authorities about the applicant’s/employee’s immigration status or the status of family members;  ban inquiries on immigration status unless such inquiry is necessary to comply with federal law, and more.
- Dist. of Columbia – On June 19, D.C. voters OK’d an increase in the minimum wage from the current rate of $12.50/hour to $15/hour by 2020, with subsequent increases tied to the Consumer Price Index. The measure also slowly increases the minimum wage for tipped employees until it reaches parity with the non-tipped rate, by 2026. Congress must approve before the measure can be enacted but they rarely say “no” to D.C.
- Georgia – Effective July 1, GA is the 16th state to ban use of hand-held wireless telecommunication devices while driving. The only exceptions (to avoid fines of up to $150) are calling to report a traffic accident, criminal activity, a medical emergency or a hazardous condition.
- Hawaii – Add another state to the list of those who restrict employers’ ability to ask about job applicants’ pay history during the pre-hire process. The new statute can be found at https://www.capitol.hawaii.gov/session2018/bills/SB2351_CD1_.PDF
- Texas – A federal court judge held that Title VII does protect transgender individuals from employment discrimination based on their gender identity. Wittmer v. Phillips 66 (S.D. Tex. 4-4-18)
- Texas (Austin) – Effective 10-1-18, employers in Austin with more than five employees will be required to provide sick pay to employees. Smaller employers have until October 2020 to comply. The sick pay is earned at a rate of one hour for every 30 hours worked and is capped at 64 hours per year for employers with 15 or more employees and 48 hours for those with less than 15 employees. See http://assets.austintexas.gov/austincouncilforum/0E-20180215135505.pdf for all the details.
- Vermont – Effective July 1, employers may not ask a prospective employee about or seek information regarding his or her compensation history (which includes base pay, bonuses, benefits, fringe benefits and equity-based pay). It remains OK to confirm salary after an offer of employment, if the candidate volunteers that information during the pre-hire process, and it’s OK to ask the prospect about his or her salary expectations.
- For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State), follow me on Twitter. I’m at @amross.
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