LB4HR – July 2016
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), to help them stay in the know about employment issues. Anyone is welcome to join the email group . . . just let me know via reply email 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.” A big welcome to new subscribers who attended my presentation to the Lubbock SHRM chapter earlier this week!
Happy Independence Day and here is an early serving of fireworks for you to enjoy:
1. Lil’ Help from Lubbock – Just three days before the U.S. Department of Labor’s “persuader rule” was set to take effect, a U.S. District Court Judge issued a June 27 preliminary injunction to stop it in its tracks. As written, the rule would have required disclosure of confidential client information, exposing the details of consultants’ assistance in preparing employers faced with labor union elections, and gutted the attorney/client privilege where the consultant is a lawyer. Under the existing rule, broad disclosure of such details under the LMRDA is not required so long as the consultant does not have direct interaction with employees. The new rule nukes that exception and applies the disclosure requirement to both direct and indirect persuasion activities. Agreements to provide such services entered into before July 1, 2016 are not subject to LM-20 reporting requirements and if the injunction is made permanent, all employers can breathe and little easier and tip their hats to the business coalition which made it possible. Big thanks to the National Federation of Independent Business, the Texas Association of Business, the Lubbock Chamber of Commerce, the National Association of Home Builders and the Texas Association of Builders. Several federal lawsuits had been filed, but this group got ‘er done!
2. Texas Two Step – The same judge who ruled on the DOL’s persuader rule is being given the opportunity to push back on the EEOC, too. In August 2014, U.S. District Court Judge Sam Cummings dismissed a lawsuit filed by the State of Texas against the EEOC. Texas was asking the court to enjoin enforcement of the EEOC’s “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Under Title VII” because it conflicted with state law which banned the hiring of felons in certain jobs. The lower court dismissed the case for lack of standing because Texas had not yet been subject to any enforcement action under the guidance. Texas appealed and on June 27, 2016 the 5th Circuit remanded the case back to the district court, stating Texas did have standing and its challenge could proceed. The Court found that the increased regulatory burden and a required analysis which amounted to being pressured to change State law were sufficient to show an actual or imminent concrete injury. Voila! Standing! Texas v. EEOC (5th Cir. June 2016)
3. Immigration Expansion Nixed – A divided Supreme Court affirmed the 5th Circuit’s November 2015 decision to uphold a lower court’s injunction, stopping enforcement of Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) and parts of Deferred Action for Childhood Arrivals (DACA). The intent of President’s Obama’s November 2014 action was to use executive power to allow nearly half of the estimated 11 to 12 million unauthorized immigrants in the U.S. to defer deportation and receive work authorization. Twenty-six states, led by Texas, challenged the president’s action as unconstitutional. With the Obama administration winding down, focus shifts to Congress to address immigration reform.
4. Use It or Lose It – U.S. Citizenship and Immigration Services announced on June 16 that they will begin shutting down idle E-Verify accounts on August 1, 2016. An account that has not been accessed by the employer for nine months will be humanely put to sleep.
5. Scratch That – On June 22, 2016 the Chair of the EEOC announced they are backing off of their original plan to “enrich” the Standard Form 100 (aka EEO-1 Report) with a demand for extensive compensation information on all workers. Instead, the agency plans to issue a revised proposal in the months ahead that will minimize the burden on employers.
6. Prevent Defense – Yes, I am hankering for college football to begin. And the EEOC wants employers to take a knee and listen up to their “Select Task Force on the Study of Harassment in the Workplace.” The bottom line is that the agency thinks much of what employers are doing in the way of harassment prevention is not working and to be fair, the charge stats posted on the agency website seem to bear this out. Specifically, the agency reports that fully one-third of all 90,000 charges filed last year include claims of workplace harassment and that three out of four folks who experienced harassment remained silent and told no one, for fear they would not be believed or would be blamed and that the response would be either no action or retaliation. The components of a successful program are top leadership support, a robust policy and complaint/investigation procedure and comprehensive training, especially of your managers and first-line supervisors (who are in the best position to prevent the conduct and spring into action when the conduct occurs). The report is 109 pages long, with footnotes, but worth a read. A link to a copy of the report is contained within the June 20 press release, posted at https://www.eeoc.gov/eeoc/newsroom/release/6-20-16.cfm.
7. No Flip Flops – This is not a commentary on summer attire . . . it’s the opinion of the U.S. Supreme Court, as applied to the U.S. Department of Labor’s unexplained change of positon on the FLSA. Here’s the story . . . in 1966, Congress created a FLSA exemption for “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles.” The DOL responded in 1970 by carving service advisors out of the exemption since their focus is services for the car and not the car itself. In 1973, the 5th Circuit disagreed with the DOL and said the service advisors could be exempt, and DOL issued an opinion letter in 1978 which concurred. A 1987 revision to the DOL WHD Field Operations Manual stated service advisors could be exempt and noted the applicable reg would be revised soon. In 2008 (yes, that’s 21 years later), DOL issued a NPRM to change the reg to make those service advisors exempt, but in 2011 it dropped processing of the NPRM and issued a final rule making those service advisors non-exempt. Still with me? Five Los Angeles-area service advisors sued their employer in 2012 for failure to pay overtime. The district court ruled them “exempt” but the 9th Circuit reversed and said “nonexempt.” Final word is from the Supremes, who reversed the 9th Circuit and chided the DOL for barely offering any explanation for the change and undermining decades of industry reliance on the prior DOL policy. Parting shot from the robed ones? “An unexplained inconsistency in agency policy is a reason for holding an interpretation to be an arbitrary and capricious change from agency practice . . . an arbitrary and capricious regulation of this sort is itself unlawful.” Encino Motorcars v. Navarro (U.S. June 2016).
8. Sex Discrimination Guidelines, Hot Off the Presses – The DOL’s OFCCP issued a new final rule on sex discrimination which takes effect on August 15, 2016. This is the first major update to the rule since 1970 and expands the definition of “sex” to include gender identity, transgender and sex stereotyping. Other concerns for federal contractors addressed in the rule are pregnancy/childbirth and related medical conditions, fringe benefits, and workplace harassment. The new rule is posted at https://www.gpo.gov/fdsys/pkg/FR-2016-06-15/pdf/2016-13806.pdf.
9. Next Up . . . National Origin Guidelines – These guidelines have not been updated since 2002, so now is your chance to read the 57-page guidance and make comments before July 5. The document is available via a link within the press release at https://www.eeoc.gov/eeoc/newsroom/release/6-2-16a.cfm.
10. Employment Law Conference – If it’s July in Texas, that means Texas SHRM State Council and Texas Association of Business (TAB) are banding together for their annual Employment Relations Symposium at La Cantera in San Antonio! Yours truly is pleased to be among the host of speakers who will do our best to bring you up to speed with the latest developments and share practical advice with HR folks, attorneys, business owners and others tasked with managing employment concerns. Mark your calendar for a reception from 6 to 7 p.m. on Wednesday, July 20 and the educational sessions on Thursday and Friday. Info on the agenda and registration can be done via the TAB website at http://web.txbiz.org/events/Employment-Relations-Symposium-2016-387/details.
11. Stated Differently – Here are some hot topics for you multi-state employers:
1. Colorado – Effective January 1, 2017, private sector employees have a right to inspect their own personnel file. Current employees are allowed to inspect the file once per year and former employees are allowed one inspection after employment ends. Public sector employees already have this right.
2. Illinois (Chicago) – If signed by Mayor Emanuel (which is expected), the Chicago Minimum Wage and Paid Sick Leave Ordinance will take effect July 1, 2017 and require most Chicago employers to provide up to 40 hours of paid sick leave to covered employees (those who work at least 80 hours within any 12-day period), per year.
3. Maryland – Effective October 1, 2016, the MD unemployment insurance law is amended to add significant penalties for employers who misclassify workers as independent contractors. A knowing misclassification will cost $5000 per employee, with subsequent misclassifications costing $10,000 a pop. The agency will collect on the unpaid taxes and add a fee of 2% per month if the employer fails to pony up the back-tax within 45 days. An individual who advises an employer to misclassify is subject to a $20,000 penalty. MD will also notify “sister” agencies (e.g., workers’ comp, insurance and comptroller) of the error so that they can jointly show the employer the error of its ways.
4. Maryland – Effective July 1, 2016, most MD employers will be required to offer their employees a retirement savings plan or participate in the MD Small Business Retirement Savings Program and Trust. Employers will remit employee payroll contributions into an IRA account and MD will act as the program’s fiduciary.
5. New Jersey – The NJ Supreme Court interprets the state’s anti-discrimination law which identifies marital status as a protected category, to expand such protection to individuals who are separated, in the process of divorcing or are divorced. Smith v. Millville Rescue Squad (N.J. Sup. Ct. June 2016).
6. New Jersey – The NJ Supreme Court held that employers may not require employees to contractually agree to a shorter limitations period in which to file a claim under the State’s employment anti-discrimination law, the NJ Law Against Discrimination. At issue was a provision in an employment application form which said any claim or lawsuit related to employment must be brought by the employee within six months after the date of the employment action that is the subject of the claim or lawsuit, and any contrary statutory limitations period was expressly waived. NJLAD provides a two-year limitations period. Rodriguez v. Raymours Furniture Co. (N.J. Sup. Ct. June 2016).
7. New York (New York City) – Effective January 1, 2017 existing single-occupant restrooms must be labeled as gender neutral and signs indicating one gender or the other must be removed. The ordinance does not affect large restrooms with multiple stalls and it does not require businesses to build new single-occupant restrooms.
8. Ohio – Ohio is the 25th state to legalize medical marijuana, effective September 1, 2016. The law contains several layers of protection for employers including the ability prohibit drugs at work, test for drugs and take adverse employment actions based on use, possession or distribution of drugs, including medical marijuana.
9. Tennessee – Effective July 1, 2016 employers who wish to prohibit employees and visitors to their workplace from bringing in guns or other weapons must update their signage which communicates this ban. Under existing law the employer could display statutory language or the well-known icon of a weapon overlaid with a red circle and slash. The revised law requires display of “NO FIREARMS ALLOWED” measuring at least one inch high and eight inches wide, with the tagline of “as required by T.C.A. §39-17-1359.”
12. 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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