LB4HR – March 2017
Welcome to Legal Briefs for HR, an update on employment issues sent to over 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. Anyone is welcome to join the email group . . . just reply via email that you’d like to be added to the list and you’re in! Back issues are posted at www.munckwilson.com under Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.”
In honor of all of the busted NCAA brackets, here is my version of workplace March Badness:
- Slam Dunk – President Trump’s proposed budget includes a 20.7% reduction in the U.S. Department of Labor’s (DOL) budget, which amounts to a cut of about $2.5 billion. Several training programs were specifically identified to be terminated but it’s expected that a chunk of change will be taken away from enforcement activities.
- Fast Break for Fiduciaries – Back on April 8, 2016 the DOL issued a final rule expanding the types of persons who would be seen as fiduciaries with regard to employee benefit plans, including certain investment advisors. The rule was to take effect April 10, 2017 but that probably won’t happen, due to a flurry of notices issued by the White House and the DOL. On Feb. 3, President Trump issued an executive order seeking review of the rule. On March 2, DOL replied by proposing to extend the effective date on parts of the rule by 60 days. This left some worried that they would be found out of compliance if a retroactive effective date came into play at the end of the review. To calm those fears, the DOL issued a temporary enforcement policy on March 10 saying there would be no enforcement for non-compliance with the final rule during the gap period (i.e., time between April 10 and when the effective date is officially extended) if the extension is granted. If the extension is not granted, the DOL will tread lightly and not take enforcement action based on non-compliance if the non-compliance is corrected within a “reasonable” amount of time. Here is the word from the horse’s mouth: https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2017-01
- Time Out – The Family and Medical Leave Act (S. 337/H.R. 947), if passed, will provide workers with paid time off, for events similar to those addressed via FMLA, via payroll contributions chipped in by both the employer and the employee of 2/10 of 1% of the employee’s pay (2 cents per $10 in wages) each. The funds would be paid to and applications for paid leave would be evaluated by a new office within the Social Security Administration.
- Pick and Roll – A quick visit to the ICE website shows that enforcement activity is picking up, including raids on eight Asian restaurants in MS (55 detainees) and 248 arrests in PA, WV and DE in a two-week period. And a CA District Court judge wrote to Attorney General Sessions, decrying the use of the courthouse as “bait” in rounding up undocumented immigrants. See http://newsroom.courts.ca.gov/news/chief-justice-cantil-sakauye-objects-to-immigration-enforcement-tactics-at-california-courthouses. Your spring-cleaning “to do” list should include a check of your Form I-9 files, to ensure they are accurate and complete. ICE has historically given advance notice of a workplace visit but recent “audits” have been unannounced, perhaps in an attempt to promote “self-deportation.”
- Death Penalty – A bipartisan group of Congressional reps introduced the Sarah Grace Farley Kluger Act which, if passed, will amend FMLA by adding “death of child” as a qualifying reason for a parent to take job-protected time off under FMLA. They explain that it’s just common sense that a parent who takes FMLA to care for a terminally ill or injured child should also be able to take time off for bereavement.
- Blowing the Whistle – The Dodd Frank Act (DFA) protects whistleblowers by stating that employers may not “discharge, demote, suspend, threaten, harass, directly or indirectly, or in any manner discriminate against, a whistleblower in the terms and conditions of employment.” But who is a whistleblower? What conduct confers whistleblower status? The DFA says a whistleblower is “any individual who provides . . . information relating to a violation of the securities laws to the [SEC].” But the anti-retaliation language in the DFA goes broader by saying an employer may not discharge, demote et al in retaliation for  providing information to the SEC;  initiating, testifying in, or assisting an SEC investigation or action; or  making disclosures that are protected by SOX or any other law, rule or regulation subject to the jurisdiction of the SEC. The SEC takes the position that complaints made to the SEC and complaints made internally, to the employer, trigger the anti-retaliation protection even though the whistleblower definition is narrower. The Fifth Circuit was the first to weigh in on the ambiguity, in 2013, deciding that only those who complain to the SEC are whistleblowers. In 2015, the 2nd Circuit held the opposite view by deferring to the SEC’s interpretation. On March 8,2017, the 9th Circuit sided with the 2nd and held that internal complaints are worthy of DFA’s protection. Somers v. Digital Realty Trust Inc. (9th 3-17). It looks like this one will be headed to the Supreme Court sooner or later.
- Zone Defense – A split 11th Circuit (GA,AL, FL) panel decided that Title VII does not recognize sexual orientation as a protected category. Evans v. Georgia Regional Hospital (11th 3-17). The case involved a gay woman who identifies with the male gender. The court dismissed a portion of the district court’s order relating to a gender nonconformity claim, stating that the appellant could bring a separate claim for this reason. The case was remanded to allow re-pleading as a gender stereotype claim. As observed in past editions, this split in opinion is likely headed to the Supreme Court for final resolution. Also, more than half of the U.S. states protect against sexual orientation discrimination in employment, in the private sector, public sector or both. The Human Rights Campaign website keeps tabs on changes in state law at http://www.hrc.org/state_maps.
- Shot Blocked – OSHA issued a beefed-up record-keeping rule for employers which took effect January 18, 2017. H.J. Res. 83 was introduced in Congress on February 21, to block the new rule. The House of Reps gave it a “thumbs up” on March 1 and the measure is now in the Senate.
- Crying “Foul” – The EEOC has installed a new On-Line Inquiry and Appointment System in five cities, allowing complainants to file a charge of discrimination or retaliation on-line. The test cities are Charlotte, Chicago, New Orleans, Phoenix and Seattle and individuals who live within 100 miles of those cities are permitted to use the new portal. Check it out at https://publicportal.eeoc.gov/portal/Login.aspx?ReturnUrl=%2fPortal%2f. A nationwide roll-out will follow, if the test goes well.
- No Traveling – A revised “travel ban” issued by the White House was stopped in its tracks by a U.S. District Court judge in HI, hours before it was to take effect. The Temporary Restraining Order is based on a determination that the E.O. violates the Constitution’s First Amendment protection against religious discrimination. A second judge, in MD, blocked the ban citing to likely violations of the Immigration and Nationality Act, which bans discrimination based on nationality, and the First Amendment of the U.S. Constitution (aka the Establishment Clause).
- Training Camp – Federal government contractors, be looking at your new or renewed contracts for a requirement that you provide privacy training to employees who  have access to a system of records;  create, collect, use, process, store, maintain, disseminate, disclose, dispose, or otherwise handle personally identifiable information; or  design, develop, maintain, or operate a system of records. See FAR 52.224-3.
- JuCo Transfer Making Some Noise – In a recent decision which addressed employer handbook policies (and whether they tend to deter employees from discussing their terms and conditions of employment), the NLRB’s acting chair penned a partial dissent which has tongues wagging. Acting Chairman Phillip Miscimarra (who was elevated to that role by the Trump administration) wrote that the standards set in two decisions, Lutheran Heritage Village-Livonia (2004) and Purple Communications, Inc. (2014) should be replaced. Under Lutheran, an employer’s policy or rule will be invalid if it can be “reasonably construed” as banning employees from discussing their terms and conditions of employment. The Acting Chairman would like to see a balancing test that looks at both the employer’s reason for the rule and the rule’s potential for chilling employees’ protected conduct. Under Purple Communications, an employer who provides employee with email access are presumed to be able to use that system for organizing activity when they are not working (subject to a limitation that will almost never happen). The Acting Chairman would like to see a return to the prior standard, under Register Guard (2007) which allowed nondiscriminatory limits on employees’ use of employer-provided email.
- Calendar That – Flip that fresh 2017 calendar to June and mark June 12 and 13 as the 24th Annual University of Texas School of Law Labor and Employment Law Conference, to be held at the AT&T Conference Center on the UT campus. Yours truly is chairing this year’s conference, will speak on a topic, and can attest that the planning committee has assembled a meaty slate of topics and speakers to educate, bemuse and amuse you. Info is posted at https://utcle.org/conferences/EL17. I hope to see YOU in Austin! You can also hear me speak at the April 27 Texas Business Conference Employment Law Update hosted by Texas Workforce Commission at the Gaylord Texan (Grapevine TX); info is posted at http://www.twc.state.tx.us/texas-business-conferences
- Stated Differently – Here are some hot topics for you multi-state employers:
- Arizona – The AZ Supreme Court unanimously upheld Prop 206, which increased the state’s minimum wage to $10/hour effective January 1, 2017 and will require employers to provide paid sick leave to employees effective July 1, 2017. A legal challenge by the AZ Chamber of Commerce and related business groups failed. In 2016, AZ voters approved of the measure by an 18% margin. The minimum wage will rise to $12/hour by 2020 and will then be tied to the consumer price index.
- Kentucky – The 6th Circuit will not vacate its November 2016 order, which opened the door for local governments (and not just states or territories) to enact right-to-work ordinances. A group of unions moved to vacate the order as moot, after KY became a right-to-work state in January.
- Ohio – Effective March 21, 2017 employers can no longer ban an individual with a concealed carry handgun license from having a firearm or ammo in the individual’s private vehicle while parked on the employer’s premises so long as  the gun and/or ammo is locked in the trunk, glove box or other enclosed compartment of the vehicle when the license holder is not in the vehicle;  the gun and/or ammo remain in the vehicle when the license holder is in the vehicle; and  the license holder’s vehicle is parked in a permitted location.
- Rhode Island – A police sergeant who was denied a promotion sued the department and individual decision-makers under the RI Fair Employment Practices Act. The department moved to dismiss the individual defendants and the U.S. District Court certified the question of individual liability under FEPA to the RI Supreme Court. The Supreme Court held that FEPA does not provide for individual liability of an employee of an defendant employer. Mancini v City of Providence et al (R.I. 3-17)
- Utah – The Employee Performance Act (S.B. 201), if passed, will take steps designed to ensure equal pay for equal work. These measures include regulation of how employee performance is evaluated, a gender wage study and establishment of occupational pay indices which would be updated annually.
- 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.
Until next time,
Audrey E. Mross
Labor & Employment Attorney
Munck Wilson Mandala LLP
600 Banner Place
12770 Coit Road
Dallas, TX 75251
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