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Employment & Labor Litigation TrendsHR Day on the Hill

January 2015

Presented by:

Catharine Morisset Catharine.Morisset@jacksonlewis.com

David NenniDavid.Nenni@jacksonlewis.com

Who said it?

“The minute you read something that you can't understand, you can almost be sure that it was drawn up by a lawyer. ”

-- Will Rogers

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Today’s Goals

Identify litigation trends by:

Exploring some recent case law

Reviewing EEOC enforcement activities

Listening to our President

Considering NLRB activism

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Trends

Healthcare & Protected Leave

Big Money Lawsuits: Wage & Hour Class

Actions

Systemic Discrimination

Liabilities for Independent Contractors

Wage & Hour More Overtime Compensable time?

Protected classes Disability! Age Transgender? Religious Accommodation Employers’ real motives

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United States Supreme Court

Burwell v. Hobby Lobby StoresU.S. Supreme Court – June 2014

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Burwell v. Hobby Lobby StoresU.S. Supreme Court – June 2014

HHS’s regulations under the ACA generally require group health plans to provide preventive care for women without cost-sharing.

Included 20 specific FDA-approved contraceptive methods; 4 may prevent a fertilized egg from implanting in the uterus.

Hobby Lobby challenged the ACA’s contraceptive mandate on the grounds that the mandate violated their religious freedom under the Religious Freedom Restoration Act of 1993 (RFRA) because it believed contraception was morally wrong

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Hobby Lobby

The regulations provided an exemption from the contraceptive mandate for religious employers (churches and other houses of worship).

The regulations also provided an accommodation for other non-profit religious organizations (such as schools and hospitals) that object to providing one or more methods of contraceptive coverage on religious grounds.

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Hobby Lobby

Whether a business can be required to provide its female employees with health insurance that includes access to free birth control, even if doing so violates the religious beliefs of the family that owns the business? No.

Held (5-4) Closely-held corporations cannot be required to provide contraceptive

coverage as mandated by the ACA. Provided no clarifying definition of “closely-held” Concerns only the contraceptive mandate. Does not provide a shield for employers who might seek to cloak racial

discrimination in religious belief.

The Court did not address claims that the regulations violated the First Amendment rights of Hobby Lobby and Conestoga.

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Integrity Staffing Solutions, Inc. v. BuskU.S. Supreme Court Decision – June 2014

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Integrity Staffing Solutions

The FLSA requires an employer to pay a minimum wage for time spent working on the job

The federal Portal-to-Portal Act creates an exception for activities that are “preliminary” or “postliminary” to the employee’s “principal activity or activities.”

In Steiner v. Mitchell, the Supreme Court held that any activity that is “integral and indispensable” to the employee’s principal activities is itself a principal activity and therefore compensable.

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Integrity Staffing Solutions

Warehouse workers filled orders placed on Amazon.com.

Employees were required to pass through a security screening at the end of their shift to prevent theft.

Employees were not compensated for this time.

Workers sued Integrity Staffing Solutions for FLSA violations.

The District Court dismissed the complaint, but the Ninth Circuit reversed, holding that an activity is “integral and indispensable” and therefore compensable when (1) it is necessary to the work performed, and (2) it is done for the benefit of the employer.

The Ninth Circuit held these two prerequisites were satisfied because screenings were done to prevent employee theft.

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Integrity Staffing Solutions

Whether time spent in security screenings is compensable under the Fair Labor Standards Act (FLSA), as amended by the Portal-to-Portal Act? No.

Held:

Time was not compensable.

Security screening is just part of “egress” and no extra pay is due, just like punching a clock at the end of the shift.

Time did not constitute a “principal activity” nor was it “integral and indispensable” to the workers’ other principal activities.

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Different Result in Washington?

Washington has its own wage-hour law; no Portal to Portal Act

“Hours worked” = all hours during which “employee is authorized or required, known, or reasonably believed to be on duty on the employer’s premises or at the prescribed work place.” WAC 296-126-002(8)

Includes travel time, meeting time, training time, waiting time, on-call time, preparatory time, concluding time, and meal periods where not relieved from duty; fact specific inquiry

Stevens v. Brink’s Home Security, 162 Wn.2d. 42 (2007) (“on duty” travel time to worksite in company vehicle).

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Washington State:State Courts

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“Summary judgment to an employer is seldom appropriate in the WLAD cases because of the difficulty of proving a discriminatory motivation.”

- Scrivener v. Clark College, 181 Wn.2d 439 (2014)

Washington State:State Courts

Scrivener v. Clark College, 181 Wn.2d 439 (2014)/ 55 year old P was a adjunct English instructor; applied for tenure

College instead hired 2 teachers under 40

Rejected: “Off-putting by some passive students because of such an up-front style”; should have faced her class more

President’s “State of the College” address:

“The most glaring need for diversity [in Clark College's workforce] is in our need for younger talent. 74% of Clark College's workforce is over forty. And though I have a great affinity for people in this age group, employing people who bring different perspective will only benefit our college and community.”

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Washington State:State Courts

Scrivener v. Clark College, cont’d

How much evidence does an employee need to show pretext in order to survive summary judgment? Not much.

Supreme Court Held: Reversed; P gets her trial Issue is whether age discrimination was “substantial factor,” not

the “determining factor” Employer may be motivated by both legitimate and unlawful

reasons College’s reasons for not hiring P were ambiguous At SJ, employee need not prove that the employer’s articulated

reasons had no factual basis, were not really motivating factors, “Stray remark” cases called into question

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Washington State:State Courts

Kumar v. Gate Gourmet, 180 Wn.2d 481 (2014) Employer’s business = meals for airlines. Due to regulations, employees are prohibited from bringing

personal food into the workplace. Employer provided employees with vegetarian and meat-based

meals. A group of employees alleged that various animal by-products

made their way into the vegetarian meals and eating meat violated certain employees’ religious beliefs.

Employees argued that employer’s meal policy had a disparate impact on certain religions and that the employer failed to accommodate those same religions

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Washington State:State Courts

Kumar v. Gate Gourmet, cont’d

Does the WLAD require reasonable accommodations for employees’ religious beliefs? Yes.

Supreme Court: Reversed lower court. Failure to accommodate a religious practice requires: (1) a bona

fide religious belief; (2) notice to the employer of that belief and a conflict; and (3) a response by the employer subjecting the employee to actual or threatened discrimination.

While the WLAD does not expressly provide for this cause of action, failure to reasonably accommodate is discrimination.

Employer’s Defenses: Unreasonable and Undue Hardship.

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INDEPENDENT CONTRACTORS

Washington State:State Courts

Currier v. Northland Services, Inc., 182 Wn. App. 733 (2014) A true independent contractor truck driver overheard 2d

independent contractor driver make racially discriminatory comments about African Americans and Latinos.

The independent contractor truck driver reported the statements to the employer and was terminated two days later.

Files complaint with SOCR; sues for retaliation under the WLAD

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Washington State:State Courts

Currier v. Northland Services, Inc., cont’d

Does the WLAD apply to alleged discrimination solely between two independent contractors? Yes.

Trial Court: Verdict for plaintiff: $ 600,968.69 Appellate Court: Affirmed. WLAD protects “any person” engaging in statutorily protected

activity from retaliation by an employer or “other person.”

Retaliation only need to be a “substantial factor,” not the “main reason”

Close temporal proximity between protected activity and termination is enough to establish causation

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Washington State State Courts:

Wrongful termination in violation of public policy

Piel v. City of Federal Way, 177 Wn.2d 604 (2013).

Becker v. Cmty. Health Sys., Inc., 182 Wn. App. 935 (2014).

Rose v. Anderson Hay & Grain Co.,183 Wn. App.785 (2014).

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Who said it?

“A lawyer with his briefcase can steal more than a hundred men with guns.”

-- Mario Puzo, The Godfather

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Washington State:Federal Courts

Federal Court Reported Cases: Trial and Appellate

Disability!

Age

Published: USERRA

Unpaid Wages/Overtime

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Washington StateFederal

Is regular and predictable attendance an essential job function? Maybe not.

Alexander v. Boeing Co., No. C13-1369RAJ (W.D. Wash. July 28, 2014) Migraine sufferer since at least 2000 Policy changed to no longer allow

employees to work from home on sick days

Employee exhausted FMLA Boeing said regular and predictable

attendance = EJF

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Washington StateFederal

Alexander v. Boeing Co., cont’d

“Essential functions” means the fundamental job duties

Plaintiff's job: coordinate suppliers, schedulers, engineers, etc. to ensure that parts shipped to arrive at final assembly on time

Majority of plaintiff's job accomplished over computer and phone

Issue for trial: whether plaintiff could perform essential job functions if had she been provided a reasonable accommodation of flexible or partial days that had been successful in the past

Issue for trial: Direct evidence that Boeing's reason for termination was discriminatory: plaintiff's absenteeism resulted from her migraines

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Washington StateFederal

Who is a “supervisor” under the WLAD? It depends.

Ellorin v. Applied Finishing, Inc., 996 F. Supp. 2d 1070 (W.D. Wash. 2014).

Sex discrimination and HWE

Alleged harasser = facility & operations manager and did not direct any employee work, hire/fire, no authority to promote, did not conduct performance reviews

Individual liability test = different than Title VII. • What was person’s involvement in the employment policy or

decisions that result in discrimination?

• Was harasser fulfilling job-related duties at the time the conduct occurred?

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Washington State: Federal

Ellorin v. Applied Finishing, Inc., cont’d

Vicarious liability test: Only when the employer has empowered that employee to take tangible employment actions against the victim. Vance v. Ball State, -- U.S. --, 133 S.Ct. 2434 (2013).

Employee must show that alleged harasser could play a significant, possibly determinative role, in such matters as "hiring, firing, failing to promote, [or] reassignment with significantly different responsibilities”

Held: questions of fact.

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Washington State:Federal

Ellorin v. Applied Finishing, Inc., cont’d

Retaliation: Title VII = “but, for” under 2013 S.Ct. case; WLAD = “substantial factor” in employer’s decision to take challenged employment action

Held: 8 month gap between protected activity and lay-off was too long to establish causation

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Who said it?

“I have ways of making money that you know nothing of.”

-- John D. Rockefeller

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Wage and Hour

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Wage and Hour IssuesFAIR LABOR STANDARDS ACT

A QUAGMIRE FOR EMPLOYERS

• A 1937 anti-depression law that employers largely ignored. Commonly misviewed as only a minimum wage law

• Recently discovered as a way to recover large attorneys’ fees awards

• Low hanging fruit because so many employers are not in full compliance

• Double damages available under WA’s similar law

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Some FLSA Issues

Whether or not an individual is an employee “exempt from overtime”? “White collar exemptions”

Whether the company’s method of payment is compliant with the minimum wage (e.g., piece rates)

The proper methods of calculating “regular rates” for overtime rates (e.g., what is included in total compensation, bonuses, tips, commissions, special pay, etc.)

When is an independent contractor really an independent contractor not subject to overtime requirements?

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Some FLSA Issues

What counts as time worked (e.g., “waiting to be called”, travel pay, training, medical visits, etc.)?

What work is off the clock, when is work on the clock (rest and meal breaks, “donning and doffing cases”, using smart phones and laptops and working away from the office)?

Volunteers and unpaid interns

Failure to maintain required payroll records

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Number of FLSA Lawsuits Filed in Federal District Courts, Fiscal Years 1991-2014

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A record 8,126 FLSA cases were filed between 4/1/13 and 3/31/14

FLSA cases have jumped 438 percent since 2000.

Washington State

Wilson v. Maxim Healthcare Servs., No. C14-789RSL (W.D. Wash. Dec. 22, 2014) Staffing Recruiters alleged misclassified

under “administrative” exemption under FLSA; class certified.

O'Hearn v. Les Schwab Warehouse Ctr., Inc., No. C13-2005 TSZ (W.D. Wash. Nov. 24, 2014) Assistant Store Managers were re-

classified as non-exempt; claimed misclassified before that as “executives” or “administrative” under WA law; class not certified.

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FLSA Changes Ahead?

On March 13, 2014, President Obama directed the Department of Labor to propose revisions to modernize and streamline overtime regulations. Aimed at salaried workers

with “supervisory” duties Aimed at $455/week

salary basis test

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Title VII Changes Ahead?

President Obama 1st to use “transgender” in State of the Union Address

On July 2014, he signed an executive order making it illegal to fire or harass employees of federal contractors based on their sexual orientation or gender identity.*

The order also explicitly banned discrimination against transgender employees of the federal

government.

39*These classes already protected under WLAD.

EEOC’s Strategic Plan

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EEOC Initiatives

Pre-employment screening (criminal and credit history)

Unemployment as job-related

Equal pay for women

Pregnancy discrimination

Physical standards

Disqualification for medical conditions

Severance agreements

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EEOC Remains Aggressive

EEOC’s Systemic Enforcement Priorities

In FY 2014, EEOC secured:

$296.1 Million for victims of employment discrimination in private sector and state and local government workplaces through mediation, conciliation, and other administrative enforcement

$22.5 million for charging parties through litigation,

$74 million for federal employees and applicants

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EEOC FY 2014 Merit Suits

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Age Disability

Equal Pay Act GINA

Title VII

Title VII

Disability

133 Merit Suits Filed FY 2014

EEOC Remains Aggressive

Charge Statistics: FY 2014

88,778 private sector charges (down 5K)

Don’t have breakdown yet

Likely that retaliation will remain most frequently-cited basis for claimed discrimination

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2013 EEOC Charge StatisticsWashington State

Religion Color Retaliation (All)

Age Disability Equal Pay Act

GINA

1,285 Total Charges

Disability

Retaliation

Age

Religion

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EEOC Trends

With every EEOC charge, think possible systemic investigation or potential class

Get rid of skeletons in the closet

Do not inadvertently expand the scope of a potential lawsuit or investigation by:

• Disclosing information that was not requested

• Providing the EEOC with everything that is requested

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Some Recent NLRB Developments

The New Board: Reconstituted and Ready to Move

The Quickie Election Rule (eff. April 14, 2015)

Email use and Purple Communications, Inc.

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Key Changes

Before: Elections usually held within 6 weeks or lessNow: held in as little as 12-14 days?

Changes: Employer must post notices within 2 days of petition Employer must submit its Statement of Position within 7 days of

election petition Employer must produce list of voters within 2 days (not 7) Pre-election hearing scheduled within 8 days No longer a right to file post-hearing brief (oral argument) Appeals deferred until after election

http://www.jacksonlewis.com/resources.php?NewsID=5024.

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Why Change?

The longer it takes for an election to be held, the more opportunity the employer has to lawfully provide employees with its views as well as facts regarding the union and collective bargaining.

The longer the time to an election, the less likely it is for a union to win.

Unions have long complained that pre-election litigation of unit composition and voter eligibility issues led to election delays that diminished the possibility of union election victories.

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What are the Legal and Practical Ramifications?

“Quickie elections” predicted to help unions organize more employees.

Fewer hearings creates uncertainty. Ambiguity over inclusions in voting group.

Employer doubt as to who its supervisors are.

Lawful, honest employer education of voters typically reduces union support once employees hear both sides. Cutting the “campaign” period reduces opportunity for employee education.

A great deal of immediate work demanded of employers: distracts from employee education (and running the business).

Release of employees’ personal information to facilitate personal, phone, and electronic campaigning by union.

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Employee Use of Employer Email System

Purple Communications, Inc., Dec. 11, 2014

Employers cannot restrict employees’ use of company email systems to business use during nonworking time.

Does not require employers to grant email access to employees who had not previously been given access.

Employers can limit such use if “special circumstances” exist (limited)

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Employee Use of Employer Email System

Purple Communications, Inc., cont’d

Why This Matters:

Your current policies are likely unlawfully overbroad

Exposure to organizing efforts

Monitoring exposes employer to potential charges based on surveillance if there is known union activity

Monitoring may also make defending unfair labor practice charges based on organizing activity more difficult to defend.

Higher risk for wage-hour or privacy claims?

Productivity?

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Questions?

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Handbook?

Training?

Thank You!

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