703 labor and employment law hot topics - slide handout
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Labor & Employment Hot Topics
Women, Influence & Power in LawThe Capital Hilton, Washington, DC
Friday, September 19, 2014
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Kari PottsCorporate Counsel
Valmont Industries, Inc.
Presented by:
Linda GadsbyVice President and
Deputy General CounselScholastic
Linda HeadleyShareholder
Littler
Karen McWilliamsVice President
Associate General CounselE*Trade Financial Corporation
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What are the Hot Topics?
• Arbitration Agreements• Managing Leave Laws• EEOC Trends• Whistleblower/ Retaliation Claims• Supreme Court Trends
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USE OF ARBITRATION AGREEMENTS: PROS & CONS
LABOR & EMPLOYMENT HOT TOPICS
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To have or not to have:
Arbitration Agreements?
The Issue
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• Costs of Arbitration vs. Litigation
– Processing Costs– Increased Usage– Attorneys’ Fees– Dispositive Motions– Settlements– Insurance Discount
Advantages & Disadvantages
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• Splitting the Baby• Appellate Rights and Options
(or the Lack Thereof) • Speed• Privacy• Runaway Juries• Predictability
Advantages & Disadvantages
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• Do you want them?– FLSA and discrimination can be included– Generally are enforceable (but then the NLRB...)– One BIG lawsuit v. 1000’s of Individual Arbitrations?
• Drafting Issues– Opt out?
Class Action Waivers
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MANAGING LEAVE LAWS: ADAAA, FMLA AND STATE LAWS
LABOR & EMPLOYMENT HOT TOPICS
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So Why All the FMLA/ADA Talk?
• The infamous “Bermuda Triangle”– FMLA, ADA, WC
• Concept is not new—why increased focus?– Employees are starting to understand
it– Aggressive agency enforcement– Recent changes to the ADA have
rendered many FMLA serious health conditions also disabilities
– Merging of lines between ADAAA and FMLA
Source: My Humble Opinion
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Problems with Intermittent &Reduced Schedule Leaves
• Periodic appointments, prenatal care/morning sickness, treatments, flare-ups of chronic conditions
• Calculation problems– 12 workweeks may not = 480
hours• Unpredictable absences• The Monday/Friday
absentee • When it NEVER EVER
EVER runs out
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Solutions: Certification Issues
• Require complete certification– 15 day time limit– “Complete and sufficient” – Seven (7) day cure with
specifics on Designation Notice
– Clarify/authenticate• Second Opinions
– Use sparingly– Have health care providers
share medical information—cut out employer as middle man
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Intermittent & Reduced Schedule Leaves: Solutions (cont’d)
• Tracking of Leave Time– Calculating leave
• 12 workweeks may not = 480 hours• Rotational shifts [current conflict in
the courts]• Agreeing—in writing—with exempt
employees on their regular work schedule
– Consider requiring employee to report/verify FMLA absences in writing
– Check those certifications—expired?
– Recertification for other reasons?
– Consider recertifying each year
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The 2009 Amendments and Why They Matter
• The ADA Amendments Act (“ADAAA”)
• Effective January 1, 2009• Congress’s purpose to restore
the broad intent/coverage of the ADA
• Net result: much more likely that employees qualify as “disabled” and that employers have obligations to them under the Act
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So What Has Changed?
• Easier to show that an “impairment” “substantially limits” a major life activity – much lower threshold – It is time for us to let this go—and instruct our managers,
supervisors and HR colleagues accordingly• Episodic or short term conditions may count and there is no
minimum duration required – The quandary of the short-term injury
• Inactive conditions are viewed as active• Mitigating measures no longer considered in the “disability”
determination
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What next once FMLA is over?...or never applied?
EEOC long-held position—now aggressively enforcing
Employer may have leave obligations to employees under ADA:
*regardless of FMLA coverage or eligibility
*regardless of policies or practices
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Leave Obligations under the ADA
• Medical leave: a little, or a lot—may be a reasonable accommodation
• Inflexible leave policies:– neutral absence control, no-fault
type policies are ILLEGAL under the ADA
– Attendance policies are on the EEOC’s radar
• EEOC: No bright line standard of when leave is enough!
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EEOC: Must Have Interactive Process
“All I can tell...what we see in [litigation]... The leave ran out, they were gone, that was it. The problem is [not]
whether employers have a generous leave or ungenerous leave; but the concept of an interactive process in this area seems to have gone out the window for many…. And I think that was the problem
... nobody ever thought it was important to call the employee ... to sit down with the employee, ... respond in any meaningful, substantive way, ...
‘How are we going to deal with this leave problem?’”
EEOC Regional Attorney John Hendrickson in 2011
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More “hot issues” under leave laws...
• Light duty– No duty to have but if
you do...
• Telecommuting– Growing trend to allow
all to participate in such policies—even if not workable for business operations...
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Leave at the State Level•California•Connecticut•Washington DC•Hawaii•Illinois•Kentucky•Maine•Maryland•Massachusetts•Minnesota
•New Jersey•Oregon
•Rhode Island•Vermont•Washington •Wisconsin
16 states
Remember that local laws may also apply, and list changes regularly!
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EEOC FOCUS:BACKGROUND CHECKS, RELEASES; PREGNANCY ACCOMMODATION AND MORE
LABOR & EMPLOYMENT HOT TOPICS
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EEOC Charges Soar32% Increase Since 2006
70,000
75,000
80,000
85,000
90,000
95,000
100,000
105,000
2006 2007 2008 2009 2010 2011 2012 2013
99,42193,727
2006: 75,768
2011: 99,947Highest Total Ever!
www.eeoc.gov
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Monetary Value is Growing
• In 2013, the EEOC collected more than $More than four times the amount in 2009
In 2013, the EEOC collected more than $372.1 million from employers –
A New Record!
2009
$86M
2010
$346M
2013
$372M
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EEOC Trends
• Retaliation claims were the most frequently filed Charges at 41.1%
• Race, Sex, Disability and Age claims were next:– Race discrimination
(35.3%)– Sex discrimination (29.5%)– Disability discrimination
(27.7%)– Age discrimination (22.8%)
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Criminal Background Checks
• EEOC/FTC statements on background checks
• Guidance on use of arrest and conviction records
• Lawsuits against major corporations for class action claims of disparate treatment for use of criminal background screens
--BAN THE BOX
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The Funny Thing About Pregnancy
• What the ADA says about pregnancy– Healthy pregnancies– Pregnancies with complications
• The Pregnancy Discrimination Act• The impact of state and local law• Pros and cons of treating pregnancy
the same as a covered disability• What is the EEOC saying?
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• Long awaited guidance issued on July 14, 2014• Expansive view of PDA claims and rights• PDA requires pregnant employees to be treated the
same, not better than, other workers• Healthy and routine pregnancy exception under ADA is
gone• Reasonable accommodation obligation exists for
pregnant employees as if routine pregnancy is a disability (ADA)
• Light duty only for workers comp employees is gone —pregnant employees get it as well
• Employer policies, including limited sick leave, will be scrutinized
New EEOC Guidance on Pregnancy Discrimination
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• More aggressive enforcement of PDA• More ADA/PDA cross-over cases• A guidance does not have formal authority of regulations,
courts can ignore• Supreme Court decision in pending case Young v UPS
may contradict– Issue: whether and to what extent employers must provide
pregnant employees with work accommodations• What to do:
– Review benefits...and leave, light duty and accommodation policies
– Train managers on new focus on PDA and issues– Change perspective: EEOC has announced: It is a new day!
Result for Employers of New EEOC Guidance
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• EEOC has sued both CVS (Chicago) and College America (Phoenix) for requiring employees to sign releases that are allegedly “overbroad, misleading and unenforceable...”
• Problem provisions:– Employee will not:
• contact any government agency to complain• cooperate in or forward complaints of others to agency• disparage company• file other claimsEEOC: These “chill rights” of employees
– Disclosure of any non-compliance with regulatory requirements• Still acceptable provisions:
– Waiver of right to recover money
Release Agreements Under Attack by EEOC
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• “Must have” provisions:– Nothing prohibits employee from filing charge or participating in
investigation with government agency– Nothing in release affects employee rights to engage in concerted activity
under Section 7 of NLRA– Specific statement with listed applicable paragraphs that nothing in such
paragraphs is intended to restrict above rights (such as non-disparagement, confidentiality, cooperation, covenants not to sue, etc.)
• Review release agreements on a regular basis to stay ahead of EEOC
• Avoid retaliation connected to violation of release terms if anti-discrimination laws are impacted by same
• New York EEOC recent cause finding on settlement agreement they approved!!!
• See Littler ASAP : http://www.littler.com/publication-press/publication/they-really-mean-it-eeoc-sues-another-employer-allegedly-overbroad-rel
Release Agreements Under Attack by EEOC
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SURGE OF RETALIATION AND WHISTLE BLOWER CLAIMS: NEW AND OLD RISK AREAS
LABOR & EMPLOYMENT HOT TOPICS
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Types of Whistleblower Claims?
• Retaliation under Discrimination Laws: Title VII, ADEA, ADA
• Retaliation under FLSA, OSHA, etc• Sarbanes Oxley• Dodd-Frank• False Claims Act• Affordable Care Act
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Most Popular Whistleblower Claim?
• Retaliation under federal discrimination laws?• In 2013 - 41% of all charges filed with EEOC under
any statute that EEOC administers raised retaliation claims
• This seems to be the whistleblower claim most employers experience
• Involves an underlying claim of discriminatory treatment
• Companies often win the basic claim and lose the retaliation claim
• Human nature issue: We don’t like those who complain about us...or our friend...
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Then...there are the other federal statues
• 22 federal whistleblower statutes• Most administered by OSHA• Whistleblower claims are key issues for all
employers• Prevention is vital
– Train managers– Hotlines?
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SOX Hot Topics:
1. Broad coverage: employees of private companies who provide services to public companies and employees of employees of public companies
2. What invokes coverage of whistleblower under SOX? – Complaint that “definitely and specifically” relates to one of
provisions in statute – Then...If employee has a “reasonable basis” to believe related to
SOX– Newest...no need for “definite and specific”—enough if employee
has reasonable belief that conduct in complaint “relates to” SOX violation
3. Allegation of shareholder fraud not required4. OSHA can order interim reinstatement—creates employer
dilemma5. Front pay a remedy if reinstatement not available
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Dodd-Frank Hot Topics:
1. Who is whistleblower? Must they go to SEC?– Statute requires complaint to SEC– Regulations- Internal complaint is enough– Courts split:
• 5th circuit Asadi v GE Energy—must be complaint to SEC, Colo, Califfollowed.
• NY and Mass district follow SEC regulation—internal is enough 2. Bounty awards: limited use –only 6 awards since inception –
4 in 2013– And in 2013 a $14 million bounty was issued—new trend?– Attorneys are not eligible
3. No jury trials or punitive damages under D-F4. No waivers of SOX/D-F claims and SEC discourages any
attempt to deter complaints—will go after companies and lawyers if participate in contract drafting that create disincentive for filing claims
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False Claims Act: A Hot Topic
FCA applies to federal contractors who submit fraudulent claims for payment to the government
• In 2009 expanded to cover situations where no claim is submitted to govt.
• Failure to return accidental payments is now covered
• FCA anti-retaliation provision now protects not only qui tam relator but any employee who objects to what employee believes is fraud, kickback, or lesser crimes even though no qui tam action is filed
• Reported violations:– Testing company’s use of doctors not
approved by Medicare to supervise tests
– Misrepresentations on patent application causing inflation of price of pharma product bought by govt.
• Can result in millions of dollars of liability for Companies and millions paid to “relator” = whistleblower
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Affordable Care Act Retaliation Provision: A Hot Topic
• Protects any employee:– who reports an alleged
violation of ACA to employer, govt or attnygeneral of state
– Testifies, assists or participates in proceeding dealing with ACA violation
– Refuses to participate in activity that violates ACA
– Receives a health insurance tax credit
– Receives a federal subsidy
• Applies to:– All employees public and
private– Former employees– Job applicants
• Elements:– Ee engages in protected
activity– Er knew or suspected
such involvement– Ee suffers adverse
action– Protected activity caused
adverse action
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Affordable Care Act Retaliation Provision: A Hot Topic
• How to bring claims?– Similar to SOX– OSHA whistleblower
group handles– File within 180 days– Remedies:
• Reinstatement, back pay, restore benefits and attorney fees and costs
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ACA Anti-Retaliation Provision – similar to system for SOX cases
• Retaliation Complaints adjudicated by OSHA– Complaint must be filed within 180 days of alleged
violation– One of 22 federal whistleblower statutes– Remedies include reinstatement, back wages, restoration
of benefits, and may also include attorneys’ fees and costs
-- See OSHA Interim Final Rule at p 16; see also 29 C.F.R. 1984.104(e).
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Reducing the Risk of Retaliation Claims
Limit the number of individuals aware of the identities of whistleblowers
Do not seek to identify anonymous whistleblowers
Provide training for managers at all levels
Adhere to best practices for employee evaluations• Document fully and accurately• Review performance honestly and timely
Exercise extra caution with employees who may use whistleblowing as an offensive strategy
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TRENDS FROM RECENT SUPREME COURT CASES
LABOR & EMPLOYMENT HOT TOPICS
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Supreme Court Trends:
• For-Profit Religious corporations are protected under Religious Freedom Restoration Act
Women, Influence& Power in Law
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Holding of Burwell v Hobby Lobby
– For profit, closely held corporations are “persons” entitled to bring claims under Religious Freedom Restoration Act
– ACA’s coverage mandate as to 4 forms of contraception placed a “substantial burden” on the religious beliefs of entities seeking exemption
– While giving corporate employees free access to these 4 forms of birth control was “a matter of compelling interest” to the federal government, ACA’s coverage mandate was “not the least restrictive means” of achieving that goal
• Penalties for non-compliance are steep:– Hobby Lobby would incur $473
million in penalties annually to fail to provide the 4 objected to methods of contraception or $26 million if dropped coverage.
• Less restrictive option is available as provided for non-profit religious organizations – Fill out form certifying religious
objection to birth control – But see: Wheaton College v
Burwell currently pending before Court and the temporary injunction granted pending Court’s consideration...
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Points for Employers to assert religious objections:
– Must have expressed religious tenets in number of tangible ways as to expressions of faith and religious purpose to = free exercise of religion
– There is to be no analogy between objections to ACA birth control mandateand objections to anti-discrimination laws:
“The Government has a compelling interest in providing equal opportunity in the workforce without regard to race...”
– Attack on religious exemption language:• ENDA v EO on LGBT protectionStay current on changes in the law—many do not like this decision and seeking to overturn legislatively
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Supreme Court Trends:
• For-Profit Religious corporations are protected under Religious Freedom Restoration Act
• Changing Clothes is Clarified (and court is interested in pre and post work activities)
Women, Influence& Power in Law
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Sandifer v United States Steel, Jan. 27, 2014What Does “Changing Clothes” Mean?
• In union setting, Section 3(o) of FLSA allows time spent “changing clothes” to be excluded from compensable time by CBA or by custom and practice
• Facts:– Steelworkers get ready for work by donning flame-
retardant jackets, pants, and hoods, hard hats, gloves, wristlets, leggings, steel-toed boots, safety glasses and ear plugs.
– The union contract states that employees are NOTcompensated for time spent “donning and doffing protective clothes.”
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• Employees bring suit under FLSA, seeking compensation for time spent “changing clothes”
• A split in the circuits: – 7th Circuit: ear plugs are not
clothes; – 11th Circuit: clothing is anything
you wear, including “accessories” suchas ear plugs.
Employees: We want pay for changing clothes
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• U.S. Supreme Court: Not as broad as “anything one wears,” but “items covering the body commonly regarded as articles of dress.”
What Are Clothes?
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• Employees claim:– putting on protective
clothes over street clothes is not changing clothes
• Court rejects this, finds that changing clothes includes:– not only putting on
substitute clothing but also “altering dress.”
What Does It Mean to “Change” Clothes?
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CLOTHES NOT CLOTHES
Flame‐retardant jackets Safety glasses
Flame‐retardant pants Ear plugs
Flame‐retardant hoods Respirators
Hard hats
Snoods
Wristlets
Work gloves
Leggings
Metatarsal boots
The Supreme Court List: Clothes v Not Clothes
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• If the vast majority of time is spent putting on “clothes,” then the entire time qualifies as “putting on clothes” time
• If the vast majority of time is spent putting on “non-clothes,” then the entire time does not qualify as “putting on clothes” time
• Court discounted use of “de minimus” approach
So, How Does It Work?
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Supreme Court Trends:
• For-Profit Religious corporations are protected under Religious Freedom Restoration Act
• Changing Clothes is Clarified (and court is interested in pre and post work activities)
• Broad expansion of SOX
Women, Influence& Power in Law
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• Lawson v FMR LLC March 4, 2014• Sarbanes-Oxley Act: a post-Enron response to
massive corporate scandals– Set new standards for public companies and their boards,
managers and accountants• Anti-retaliation provisions: prohibit a public company
or “an officer, employee, contractor, subcontractor or agent of such company” from discriminating against “an employee” because the employee blew the whistle
• Applied to 4,500 public companies in the U.S.
Massive Expansion of Sarbanes-Oxley Act “SOX”
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• Various employees of private companies blow the whistle, are allegedly terminated/discriminated against, and file civil actions under SOX.
• Lawson involved employees of private companies who performed services for Fidelity Mutual Funds, a public employer– One complained of cost accounting methodologies– Second complained he was terminated for pointing out
inaccuracies in a mutual fund filing• Mutual funds have no employees—they use
contractors to provide their services • “Split in the circuits”: 1st Cir vs DOL ARB
The Question: Does SOX apply to private company employees?
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• U.S. Supreme Court: SOX covers all
– Public companies– Private companies which provide
services to public companies –contractors/subcontractors and their employees
– Employees of a public company’s employees are also covered
Lawson v. FMR LLC
The Answer:Yes. SOX applies to private employees
Virtually everyone is covered...
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Virtually every business in the U.S. is now covered by SOX• Public companies• Private companies that provide services to public
companies– Accountants– Lawyers– Pest control, cleaning, etc.
• Contractors of contractors• The housekeeper or babysitter of an employee of a
publicly held company
Practical Implications
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FLSA• Is time spent in security screenings compensable under the FLSA? Integrity
Staffing Solutions, Inc. v. Busk (security screening v theft prevention)
EEOC
• Whether EEOC’s statutorily required efforts to conciliate to informally resolve claims is beyond judicial review? Mach Mining v EEOC
Pregnancy Discrimination Act
• Is pregnant employee entitled to same accommodation as nonpregnantemployee with similar limitations? Young v UPS
(UPS only offers light duty to injured workers, those who are ADA accommodation eligible and those who lost DOT certification)
Will new PDA guidance from EEOC influence the Court?
Pending Supreme Court Cases:
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Kari Potts
Corporate Counsel
Valmont Industries, Inc.
Linda GadsbyVice President and
Deputy General CounselScholastic
Linda HeadleyShareholder
Littler
Karen McWilliamsVice President
Associate General CounselE*Trade Financial Corporation