Recent Developments Related to LGBTQ Rights

By: Claudia D. Orr

Legal nerd that I am I find it fascinating how the law develops and, in this case, law that affects the LGBTQ community. Today I report how the rights of the LGBTQ community took a giant step forward in Michigan, while the United States Supreme Court ruled in a case that placed a Colorado baker’s freedom of religion and expression at odds with a gay couple trying to buy their wedding cake.

Let’s start with the recent change in Michigan.  Last fall, the Michigan Civil Rights Commission (“MCRC”) fully intended to interpret the prohibition against sex discrimination as also prohibiting discrimination based on sexual orientation and gender identification. The MCRC would be following the Equal Employment Opportunity Commission’s (“EEOC”) lead in this regard.  However, during the public meeting on the issue, an assistant attorney general told the MCRC that it did not have the authority to reinterpret the Elliott-Larsen Civil Rights Act in this manner and, if it did so, the MRCR would not have governmental immunity and would be subject to lawsuit. Well, the MCRC obtained other legal opinions and has decided to push forward with its plan.  Thus, the Michigan Department of Civil Rights is now taking complaints of discrimination based on sexual orientation and gender identity.

So, why does this matter if the EEOC was already taking such complaints?  Glad you asked. It matters not only because it’s a public statement of support for the LGBTQ community in the State of Michigan, but also because claims filed under Title VII (and other federal civil rights laws) must be initiated within 300 days with the EEOC, whereas claims under state law have a three year statute of limitations.  Also, some employers are too small to be subject to the federal law (which only applies to employers with 15 or more employees) and there is no individual liability under Title VII whereas there is under the state’s civil rights act.  So, this is more than a statement of support.  In some cases this decision can have real consequences.

Let’s now turn to the recent Supreme Court decision.  In Masterpiece Cakeshop Ltd v Colorado Civil Rights Comn’n, a gay couple had asked the bakeshop and its owner to prepare a wedding cake for their wedding reception.  At the time of their request, Colorado did not recognize same sex weddings, so the couple intended to marry in Massachusetts (which allowed for same sex marriages), and then return to Colorado for a celebration with family and friends.  Jack Phillips, the baker and owner of the bakery, refused to make a wedding cake for the couple, but would sell them any other bake goods.  The couple filed a charge of discrimination with the Colorado Civil Rights Commission (“the Commission”).

The Commission determined that the bakeshop was subject to the “public accommodations” section of the state civil rights law and found for the gay couple. It ordered Phillips “to cease and desist from discriminating against…same-sex couples by refusing to sell them wedding cakes or any product [they] would sell to heterosexual couples.”  It also required the bakery to provide its staff with training on the public accommodations section of the state discrimination law. The appeals process began and the case eventually ended up before the United States Supreme Court where Justice Kennedy wrote the lead opinion.

A divided Supreme Court recognized that “gay persons and gay couples cannot be treated as social outcasts or as inferior in dignity and worth. For that reason the laws and the Constitution can, and in some instances must, protect them in the exercise of their civil rights.  The exercise of their freedom on terms equal to others must be given great weight and respect by the courts.  At the same time, the religious and philosophical objections to gay marriage are protected views and in some instances protected forms of expression.” “[W]hile those religious and philosophical objections are protected, it is a general rule that such objections do not allow business owners and other actors in the economy and in society to deny protected persons equal access to goods and services under a neutral and generally applicable public accommodations law.”

The court continued its analysis by also recognizing that it would be assumed that a member of the clergy who objects to gay marriage would not be compelled to marry a same sex couple because of the clergy’s right to free exercise of religion.  However, such exceptions should be confined or “a long list of persons who provide goods and services for marriages and weddings might refuse to do so for gay persons, thus resulting in a community-wide stigma inconsistent with the history and dynamics of civil rights laws that ensure equal access to goods, services, and public accommodations.” While all of this is a very strong statement of civil rights for gay couples, there is a twist in this case that resulted in a favorable ruling to the bakery and its owner.

So, how is it that the Supreme Court ruled in favor of the baker?  Here, Phillips argued “that he had to use his artistic skills to make an expressive statement, a wedding endorsement in his own voice and of his own creation.  Phillips argued that this contention has a significant First Amendment speech component and implicates his deep and sincere religious beliefs.” Remember, at the time Phillips refused the couple’s request, same sex couples could not marry in Colorado.

The court recognized that Phillips’ First Amendment rights needed to be considered in any ruling in this case.  The court found, however, that the Commission not only failed to give Phillips’ First Amendment rights a neutral and respectful consideration, but actually demonstrated an open and impermissible hostility towards his sincerely held beliefs. It quoted one of the commissioners who had stated during the hearing:

Freedom of religion and religion has been used to justify all kinds of discrimination throughout history, whether it be slavery, whether it be the holocaust, whether it be – I mean, we – can list hundreds of situations where freedom of religion has been used to justify discrimination.  And to me it is one of the most despicable pieces of rhetoric that people can use to – to use their religion to hurt others.

The court found it significant that none of the other commissioners objected to the description of this one man’s faith as “despicable rhetoric” or by the comparison of his firmly held beliefs to defenses of the holocaust or slavery.  The court also found it interesting that the Commission had previously approved of bakers who refused to prepare cakes on the basis of conscience when the requested cake contained anti-gay slurs, along with religious text. Phillips argued, and the court agreed, “the Commission had treated the other bakers’ conscience-based objections as legitimate, but treated his as illegitimate – thus sitting in judgment of his religious beliefs themselves.”  The court found that the “Commission’s treatment of Phillips’ case violated the State’s duty under the First Amendment not to base laws or regulations on hostility to a religion or religious viewpoint.”

The court concluded by stating “[t]he outcome of cases like this in other circumstance must await further elaboration in the courts, all in the context of recognizing that these disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.”  Thus, the ruling is narrow and based on the open hostility shown by the Colorado Commission to the sincerely held beliefs of the baker.

We will need to wait for another case, where such hostility is not shown by the government, to see how the interests and rights are balanced against one another. In the meantime, if you need assistance with revising your company’s discrimination/harassment policies or training your employees on their rights and obligations under civil rights laws, you should consult with an experienced employment attorney, such as the author.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. June 2018.

An EPIC decision on arbitration has implications for employers

By: Miriam L. Rosen

In a much anticipated decision, the United States Supreme Court ruled on May 21, 2018 that class action waivers in mandatory employment arbitration agreements are enforceable under the Federal Arbitration Act (“FAA”). Epic Systems Corp. v. Lewis, No. 16-285, 584 U.S. __ (2018).    The Epic decision resolves a long-simmering controversy over whether an employer can force an employee to arbitrate a claim as an individual as opposed to joining a class or collective action.  As the result of this decision, employers may require employees to agree to mandatory arbitration terms that prohibit collective or class action claims.

This dispute pitted the interpretation of the FAA, which promotes resolution of claims through arbitration, against the National Labor Relations Board’s expansive interpretation of the employees’ rights to engage in concerted activity under the National Labor Relations Act (“NLRA”).    The Epic case, a consolidation of three separate cases, involved individual employees who had previously signed arbitration agreements waiving the right to join a class claim. The employees each sought to participate in a FLSA class action lawsuit, but their employers asserted that the arbitration agreements precluded participation in the class actions. The employees argued that they could not be forced to give up their rights to engage in “protected concerted activity” under the NLRA by waiving the right to join a class claim.  Essentially, the employees claimed that their NLRA rights “trumped” the arbitration agreement.

In its 5-4 decision, the Supreme Court held that class action waivers in mandatory employment arbitration agreements are enforceable under the FAA.  Writing for the Court’s majority, Justice Neil Gorsuch stated that the FAA’s mandate for enforcing arbitration agreements could not be construed to conflict with the NLRA’s protection of concerted activity because the NLRA secures rights to organize and bargain collectively, but does not include a right to bring a class or collective action.

In a bit of a slap down to the NLRB for its aggressive position in this matter, the Supreme Court noted that “[t]his Court has never read a right to class actions into the NLRA – and for three quarters of a century neither did the National Labor Relations Board.”

Practically, what does the Epic decision mean for employers?

Employers can rely on arbitration agreements to preclude litigation of class claims. This is particularly good news for employers in industries such as health care, food services, and retail that tend to experience higher levels of FLSA class action litigation.

On the other hand, employers must still evaluate whether arbitrating claims on an individual basis is in their best business interests.   While arbitration is often viewed as a less costly and more efficient alternative to litigation, that is not necessarily the case.  Requirements for discovery, briefing, experts, and hearing time along with the fees for private arbitrator may mean that the cost advantage does not really exist.  In addition, from an efficiency stand point arbitrating multiple individual claims may be a less attractive alternative than responding to a single class claim.

Employers should also consider how employees and the public may react to compelled arbitration of sexual harassment and discrimination claims. Such a requirement is often viewed as an attempt to shroud systemic misconduct.  In addition, in light of recent events, there has been speculation that Congress may act to limit mandatory arbitration of sexual harassment and discrimination claims.

So, what employers can take away from this epic decision is that arbitration agreements prohibiting class claims are now another viable tool available to employers seeking to limit employment related liability.  Like any other tool, employers will need to evaluate the effectiveness of that tool for their individual workforce.

This article was written by Miriam L. Rosen, who is a member of the Legal Affairs Committee of Detroit SHRM and Chair of the Labor and Employment Law Practice Group in the Bloomfield Hills office of McDonald Hopkins PLC, a full service law firm. She can be reached at mrosen@mcdonaldhopkins.com or at (248) 220-1342.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. June 2018.

TWO RECENT DOL OPINION LETTERS PROVIDE EMPLOYERS WITH GUIDANCE ON TRAVEL TIME AND FREQUENT BREAK PERIODS UNDER FMLA

By: Claudia D. Orr

For more than 70 years, the Wage and Hour Division of the Department of Labor (“DOL”) had issued “opinion letters” providing guidance to employers seeking direction on discrete issues.  But this practice ended under the Obama Administration in 2010.  However, in June 2017, the DOL announced that this service would be reinstated, and it has.  The DOL recently issued two opinion letters addressing compensation for frequent 15-minute breaks taken under the Family and Medical Leave Act (“FMLA”) and for non-exempt employees’ travel time. Let’s see how these discrete issues were framed by employers and addressed by the DOL.

First, an employer asked whether it had to compensate an employee who was seeking intermittent FMLA leave at the frequency/duration of one 15-minute break every hour during the work day, thus reducing the employee’s work during an 8-hour shift to just 6 hours. The DOL began with the general rule set forth in 29 CFR 785.18  that any rest period of 20 minutes or less must be compensated because such breaks primarily benefit the employer by having a reenergized employee thereby promoting efficiency.  However, the DOL recognized that, in some circumstances, short rest breaks may be primarily for the employee’s benefit and need not be compensated.  Citing, Spiteri v AT&T Holdings, Inc, 40 F Supp 3d 869 (ED Mich, 2014)(frequent breaks to accommodate an employee’s back pain were for employee’s benefit and did not need to be paid).

In the new opinion letter, the employee was seeking FMLA leave, as an accommodation for the employee’s serious health condition. FMLA leave may be unpaid.  Thus, these short rest periods do not have to be paid. However, the employee remains entitled to take the same number of paid breaks as all other employees. Thus, if the employer generally grants two 15-minute paid breaks to its non-exempt (hourly) employees, this employee must also receive two 15-minute paid breaks, but the other six breaks may be unpaid. DOL Opinion Letter FLSA 2018- 19.

In the second opinion letter, the DOL addressed travel time under the Fair Labor Standards Act (“FLSA”).  DOL Opinion Letter FLSA 2018-18.  Generally, an employer must compensate a non-exempt employee for all hours actually worked, which includes travel time within a work day.  Travel to work at the beginning of the shift and travel home at the end of the day is generally unpaid under the Portal to Portal Act which amended the FLSA in 1947.  But these are very basic principles that quickly become complicated when an employee travels in an emergency situation, on a one-day assignment in another city, overnight away from their home community, or on their day off.

When an employee travels on business overnight and on her day off, the analysis begins with a focus on the employee’s “normal work hours.”  Generally, if the travel occurs outside of normal work hours, it is not compensable, but if it is within normal work hours, it is. The idea being that the employee is substituting travel during the normal working hours for other duties.  For example, if an employee who generally works Monday – Friday 9am to 6pm, travels on an overnight trip on Sunday from 4pm to 8pm, only two hours of the travel time is compensable (4pm to 6pm) because this travel cut across the employee’s normal work hours.  This general rule gets further complicated by the mode of transportation, and whether the employee is a passenger.

If you do not have a brain cramp yet, you will when you hear this employer’s issue. How do you make this determination when the employee has no fixed or “normal” work hours?  First, the DOL cautioned that it carefully scrutinizes an employer’s claim that an employee has no regular working hours.  However, if time “records do not reveal any normal working hours, the employer may instead choose the average start and end times for the employee’s workdays.  As another alternative, in the rare case in which employees truly have no normal work hours, the employer and employee (or the employee’s representatives [i.e., the union]) may negotiate and agree to a reasonable amount of time or timeframe in which travel outside of employees’ home communities is compensable.”

The DOL indicated that, generally, these two methods will be appropriate and not result in finding a violation, but there may be other reasonable methods.  The DOL’s letter continued addressing several other specific issues raised by the employer including what happens when an employee decides to drive their car instead of travel by plane, etc. No kidding, the regulations make these kinds of distinctions, making a well-drafted compliant travel policy important for employers having non-exempt employees who travel.

As you can see, the opinion letters are fact specific and not all requests result in a response. However, when issued, the opinion letters fill in many of the gaps left by the regulations and court opinions.  Thank you DOL.  If you have a wage/hour issue, you should consult with an experienced employment attorney, such as the author.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. May 2018.

COURT UPHOLDS TERMINATION OF EMPLOYEE WHO REPORTED HARASSMENT

By: Carol G. Schley, Clark Hill PLC

In a recent case from the Michigan Court of Appeals, the court found that an employer acted lawfully when it terminated an employee who reported sexual harassment by a co-worker, but not the employee accused of the harassing conduct.  The reason for this somewhat unusual outcome was the behavior of the terminated employee after she initially reported the harassment.

In Heyer v Effex Management Solutions LLC, Sheri Heyer worked as a first shift human resources coordinator for Effex, and shared her desk and computer with employees who worked on the second and third shifts.  When she arrived at her desk on June 2, a photograph of a penis appeared on her computer screen.  A review of her computer showed that the image was also shared on the Facebook page of an employee who worked the prior shift, Aaron Johnson.  Heyer called her supervisor to report the incident and followed up with an email in which she said that Johnson “was a huge liability and needs to go!”

A few weeks later, on June 29, Heyer learned that Effex had reprimanded Johnson with respect to the incident she reported, although she did not know what action was taken.  That same day, she received an apology note from Johnson.  In response to this note, Heyer sent Johnson an email, copied to her supervisor, which said in part:

           [You] should be embarrassed!

            The thing that concerns me the most is that you are working around all these young girls.  THAT makes me sick to my stomach.

            You should have been fired!!!!

            Did you know that this is sexual harassment and how serious that is???

            I have proof of EVERYTHING to protect myself!

            I have told everyone what you did.

            It has been left un-punished in my opinion.

            I think you are a major liability to Effex!

Effex determined that this email was unprofessional and threatening, and it terminated Heyer’s employment.  Subsequently, Heyer emailed her supervisor seeking reinstatement, but also admitting that her email to Johnson “was not professional.”  After Effex refused to reinstate her, Heyer filed a lawsuit asserting retaliatory discharge under Michigan’s Elliott-Larsen Civil Rights Act (“ELCRA”), claiming that her June 29 email was a report of sexual harassment and therefore protected activity, and that Effex unlawfully retaliated against her by terminating her because she made the report.

On a motion for summary disposition, the trial court found in favor of Effex, and the Court of Appeals affirmed.  While the court found that Heyer’s June 29 email did constitute protected activity (since it related to her original report of sexual harassment by Johnson), it also found that Effex did not terminate Johnson because she reported sexual harassment, but because she sent a threatening and unprofessional email to Johnson.  The court noted that Effex did not take any adverse action against Heyer after she first reported Johnson’s conduct on June 2, which supported Effex’s position that her termination was unrelated to her report of sexual harassment. The court also noted that, “Heyer admitted at her deposition that she sent the [June 29] email to ‘scare’ Johnson, not to report his activity.  A month after her termination, Heyer admitted that her email was unprofessional and could be interpreted as a threat against Johnson.  Heyer is not protected against her own misconduct, misconduct she personally admitted after the fact.”  Finally, the court found that the fact that Johnson was reprimanded for his harassing conduct but kept his job, while Heyer was terminated, was insufficient to establish a claim of unlawful retaliation, since both of the employees were at-will, Effex did not have a mandatory progressive discipline policy, and Effex had discretion to use progressive discipline on a case-by-case basis.

While employers are prohibited from retaliating against employees for reporting harassment, Heyer is a reminder that such employees are still required to perform their jobs satisfactorily, and are not immune from being reprimanded or terminated when they engage in workplace misconduct.  The circumstances of Heyer are somewhat unusual given the inflammatory tone of Heyer’s email to Johnson and her subsequent admission that it was unprofessional and meant to scare him.  In many cases, whether an adverse employment action can and should be taken against an employee who has reported harassment may not be clear cut.  In such circumstances, it is best to assess any employment-related decision, prior to making it, with the assistance of legal counsel.

Carol G. Schley is a member of the Detroit SHRM Legal Affairs Committee and an attorney at the law firm Clark Hill PLC.  She can be reached at cschley@clarkhill.com or (248)530-6338.                                

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  May 2018

COURT CONFIRMS JOB APPLICANTS CAN BRING DISPARATE IMPACT CLAIMS UNDER THE ADEA

By: Carol G. Schley, Clark Hill PLC

A recent decision from the Seventh Circuit Court of Appeals held that disparate impact claims under the Age Discrimination in Employment Act (“ADEA”) are not only available to employees, but to job applicants as well.  Based upon this holding, the court allowed an older applicant’s claim against an employer to proceed, which alleged that a job description requiring a maximum level of experience adversely impacted older job applicants.

The case, Kleber v. CareFusion Corp., involved an experienced 58-year-old attorney who applied for an in-house counsel job at CareFusion.  While the job posting sought someone who could “assume complex projects,” it also stated that applicants should have “3 to 7 years (no more than 7 years) of relevant legal experience.”  Although Kleber had many more years of experience, he applied for the position.  He was not selected for an interview and CareFusion hired a 29-year-old for the position.

Kleber subsequently filed a lawsuit against CareFusion, asserting that the job description’s requirement of a maximum number of years of work experience was “based on unfounded stereotypes and assumptions about older workers, deters older workers from applying for positions … and has a disparate impact on qualified applicants over the age of 40.”  CareFusion argued that the maximum experience requirement was lawful because CareFusion was concerned that more experienced workers would “not be satisfied” with the job’s “less complex duties,” leading to retention issues.  CareFusion also argued that, based upon the language of the ADEA, only employees, not job applicants, could assert claims of disparate impact under the statute.  In the trial court, CareFusion prevailed, and Kleber’s lawsuit was dismissed.  However, on appeal, the 7th Circuit Court of Appeals reversed.

The language of the ADEA analyzed by the Court of Appeals was 29 U.S.C. §623(a)(2), which  provides that it is unlawful for an employer “to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age….”  CareFusion argued that because this section of the ADEA did not specifically reference job applicants, its protections did not extend to them.  CareFusion also cited a 2016 case from the 11th Circuit which supported its argument that disparate impact claims could not be brought by job applicants.  However, the court rejected CareFusion’s arguments, finding that the statute’s “broad language easily reaches employment practices that hurt older job applicants as well as current employees.”  The court held that where an employer requires a minimum or maximum number of years of experience for a position, it is “classifying its employees” as that phrase is used in the statute. The court further held that the phrase “any individual” in the statute is broad and includes job applicants.  Thus, the court held that the ADEA covered the situation at issue before it, i.e., where the employer “classified” its employees in manner that required a maximum number of years of experience for a position, resulting in an alleged disparate impact on older applicants, like Kleber.

The court further held that its conclusion was consistent with the purpose of the ADEA, which is “to prohibit arbitrary age discrimination in employment.”  According to the court, “[t]here can be no doubt that Congress enacted the ADEA to address unfair employment practices that make it harder for older people to find jobs.”   The Kleber court thus reversed the lower court’s dismissal of Kleber’s disparate impact claim, and allowed the claim to proceed to trial in the lower court.

While Michigan is not within the jurisdiction of the 7th Circuit Court of Appeals, the Kleber case is a reminder to employers that job requirements that appear neutral on their face may run afoul of the ADEA (and Michigan’s equivalent statute, the Elliott-Larsen Civil Rights Act) if, when applied, they tend to negatively impact employees and applicants on the basis of their age.  Therefore, employers should carefully review their employment practices and documents (job postings, job descriptions, employee handbooks, etc.) to ensure that they do not include requirements that may adversely impact individuals on the basis of their age or other protected classifications.  As it is not always easy to spot problematic areas that may run afoul of anti-discrimination laws, especially when the practice or language used is neutral on its face, it is advisable to undertake these tasks with the assistance of legal counsel.

Carol G. Schley is a member of the Detroit SHRM Legal Affairs Committee and an attorney at the law firm Clark Hill PLC.  She can be reached at cschley@clarkhill.com or (248)530-6338.                              

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  May 2018

OFCCP On Mission To Listen To Contractors

By: Julia Turner Baumhart

The Office of Federal Contract Compliance Programs (OFCCP) recently announced it is planning to listen to federal contractors.  It plans to do so by surveying those contractors that completed an agency compliance review between October 1, 2012 and September 30, 2017.  Through this anonymous survey, OFCCP will ask for concrete suggestions on improving interactions between the agency and the contractor community.  Implicitly acknowledging these relationships need to improve, the surveys will cover communications, transparency, and timeliness.

To those who have been paying attention to the recent news out of OFCCP, the agency’s listening posture should not come as a surprise.  Rather, OFCCP, under the leadership of recently appointed Director Ondray Harris, appears headed toward both downsizing and a major attitude adjustment.  Evidence of both can be found in the OFCCP’s input to the fiscal year 2019 budget proposed by the Trump Administration, and a series of OFCCP-hosted stakeholder meetings in January 2018, as well as the newly announced anonymous survey effort.

            According to the proposed FY 2019 budget for the U.S. Department of Labor, which houses OFCCP, the OFCCP’s estimated obligations for FY 2019 total $9.1 million, down 12.3% from current spending levels.  This translates to a 14.2% reduction in headcount, to an historic low of 450 employees — in contrast to the recent high of 788 employees in FY 2010.  Some of the forecasted reduction has already come from two rounds of buyout offers during the final months of 2017; other downsizing has been or will be achieved through attrition and an ongoing unofficial hiring freeze.

            Both the FY 2019 budget proposal and the recent stakeholder meetings signaled a welcome shift in agency attitude. The January 2018 stakeholder meetings, led by OFCCP Director Harris, Senior Advisor Craig Leen, and Director of Policy Debra Carr, invited a number of federal contractors, representatives of civil rights groups, and representatives of several membership organizations, to three separate sessions.  In meeting with federal contractors, Director Harris shared his goals for a new and improved OFCCP.  The agency’s primary goal is to focus on developing apprenticeship programs in order to fill a defined skills gap nationwide and to develop better parity in the workforce.  Other primary goals include (1) incentivizing employers to voluntarily comply with agency regulations; (2) increasing outreach for individuals with disabilities; and (3) increasing agency transparency through compliance assistance.  The OFCCP, as led by Director Harris, recognizes that some 98% of contractors undergoing audits are found to be in full compliance, and so the agency going forward is planning an “innocent until proven guilty” approach rather than its old standard operating procedure, which assumed the opposite.

            These goals are amplified in the FY 2019 budget proposal, which identifies technical assistance for federal contractors as one of two main priorities.  Along with increased emphasis on systemic discrimination (the other budget priority), OFCCP plans to implement technical assistance through several initiatives.  These initiatives include, in addition to the focus on apprenticeship programs, improving training for compliance officers; developing regional contractor training programs; reconstituting the Reagan-era contractor recognition programs; and reorganizing (and probably closing) many of OFCCP’s district and area offices.  It is anticipated that several “skilled regional centers,” staffed by experienced and specialized compliance officers, will more efficiently replace many of the 50-plus local offices.

            Harris quietly started his role as OFCCP’s newest Director on December 10, 2017, squelching speculation that the agency would soon merge into the EEOC.  Harris had joined the Department of Labor in June 2017 as a senior advisor.  He is a former management-side employment and labor lawyer in private practice, and also a former Department of Justice appointee, both of which should position him well for leading change at OFCCP.

            Seemingly in keeping with its kinder and gentler approach, OFCCP mailed its Corporate Scheduling Announcement Letters to contractors on February 1, 2018, using the following guidelines:

  • Setting no more than ten establishments of a single contractor on the audit scheduling list and no more than four establishments per contractor in the same district office;
  • Intending to set no establishment on the audit scheduling list that had closed an audit within the last five years.

OFCCP started sending the actual audit scheduling letters on a rolling basis on March 9, 2018.

And now, OFCCP’s latest announced effort at transparency:  seeking out contractor suggestions on how the agency can best improve its relationships with the business entities it audits.  Contractors are keeping their fingers crossed that OFCCP truly is signaling the start of a new era.

This e-blast was written by Julia Turner Baumhart, who is a member of the Detroit SHRM Legal Affairs Committee.  Ms. Baumhart is a partner in the labor and employment firm of Kienbaum Opperwall Hardy & Pelton, P.L.C. in Birmingham, Michigan and can be contacted at jbaumhart@kohp.com or (248) 645-0000. 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  April 2018. 

Can Prior Salary Still Be A Factor In Setting New Hire Salary? Not Allowed, According To Ninth Circuit!

By: Julia Turner Baumhart

What employer has not considered an applicant’s prior salary as at least a factor in determining what compensation to offer a newly hired employee?  Surely, employers routinely ask applicants for prior salary information.  Employers, however, may find themselves hard pressed to defend their actions if the U.S. Court of Appeals for the Ninth Circuit makes inroads with its novel interpretation of the Equal Pay Act’s “any factor other than sex” affirmative defense.  This is because the Ninth Circuit determined that – not only can the employer not consider prior salary as the only factor in setting a newly hired employee’s salary – the employer cannot even consider it as one factor among many.

In its recent en banc opinion, Rizo v. Yoving, six judges on an eleven-judge panel interpreted the following “equal pay for equal work” provision of the EPA:

No employer . . . shall discriminate, . . . between employees on the basis of sex by paying wages to employees . . . at a rate less than the rate at which he pays wages to employees of the opposite sex . . . for equal work on jobs the performance of which requires equal skill, effort, and responsibility . . . except where such payment is made pursuant to . . . a differential based on any factor other than sex.

Previously, the same court had held that prior salary, at least when considered in combination with other factors such as prior experience and education, could indeed be considered a factor other than sex under the EPA.

The Rizo panel overruled the earlier Ninth Circuit decision, even though it did not need to.  And in doing so, it went far beyond the standard generally accepted among other appellate courts, which is that prior salary can at least be considered as a factor in determining what salary to offer.  Rather, according to Rizo, “prior salary, whether considered alone or with other factors, is not job related and thus does not fall within an exception to the Act that allows employers to pay disparate wages.”  And to make sure its decision left no room for debate or disagreement, the majority characterized the question before it as “simple” and the answer to the question as “clear.”

In reality, it is neither.  As if to underscore its commitment to making new law, the majority answered a “question” that it was not even asked.  The employer in question admittedly used prior salary as the only factor in setting the salaries of its newly hired employees, male and female, meaning there was no need for the majority to depart from the existing consensus permitting use of prior salary as a factor among others.  It could have (and should have) limited its ruling to salary systems – like the one before it – that used prior salary as the sole factor.  So the question before it was not the “simple” one it claimed to be answering.

And the answer itself was far from “clear,” as demonstrated by the fact that five of the eleven en banc judges authored or joined separate opinions, all of which agreed that prior salary – at least in most circumstances – could be at least a factor among many.

Whether the Rizo opinion will find advocates who succeed in expanding its novel holding to the other circuits is an open question.  The Ninth Circuit is by far the largest judicial circuit in the country.  It is the only circuit with so many active judges that it hosts three en banc panels, rather than the usual one.  It also is frequently reversed by the U.S. Supreme Court.  Moreover, disagreements between the Ninth Circuit and the Sixth Circuit (with jurisdiction over the Michigan, Ohio, Kentucky and Tennessee federal courts) are frequent.  Nevertheless, local employers should take heed from the Rizo opinion and think carefully before considering prior salary in setting salary offers to newly hired employees.

This e-blast was written by Julia Turner Baumhart, who is a member of the Detroit SHRM Legal Affairs Committee.  Ms. Baumhart is a partner in the labor and employment firm of Kienbaum Opperwall Hardy & Pelton, P.L.C. in Birmingham, Michigan and can be contacted at jbaumhart@kohp.com or (248) 645-0000. 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  April 2018. 

Conservative Justices Rule in FLSA Case

 

By:  Claudia D. Orr

 

When I saw that the US Supreme Court had ruled that service advisors at automobile dealerships were exempt employees under the Fair Labor Standards Act (“FLSA”), I have to admit I was not very excited.  That would be a narrow ruling, and I don’t represent any car dealerships.

But, there is something important in the decision – the five conservative justices of the court (Justices Thomas, Roberts, Kennedy, Alito and Gorsuch) expressly rejected the idea that the FLSA exemptions are to be narrowly construed.  This is a big change from how the FLSA has been applied by the Department of Labor. The other four justices (Justices Ginsberg, Breyer, Sotomayor, and Kagan) sharply dissented.

An exempt employee is not entitled to overtime pay and, in a few limited professions, the employee is also exempt from minimum wage requirements. The case, Encino Motorcars, LLC v Navarro, ___ S. Ct. ___ (2018), will be helpful to employers when they defend the exempt status of an employee.  This case may also provide insight into the high court’s rulings in future employment cases.

However, employers located in Michigan, Ohio, Kentucky and Tennessee are also subject to the rulings of the federal Sixth Circuit Court of Appeals which requires employers to bear a “heightened” burden of proof, more than a preponderance (or a mere tipping of the scales of justice), when proving an employee is an exempt employee. So, while the exemption itself is no longer to be narrowly construed, the burden of proof still remains high for employers in the Sixth Circuit.

Position descriptions should be reviewed every few years because duties change and positions morph. For example, a manager who was previously classified as exempt under the executive exemption may now only manage one full time employee and is no longer eligible for the exemption.  Some positions are easily assigned the status of exempt or non-exempt, but some are more difficult.  Those positions should always be reviewed with experienced employment counsel, such as the author.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. April 2018.

Sixth Circuit Rules Title VII Bars Transgender Discrimination

 

By: Karen L. Piper

 

The Sixth Circuit Court of Appeals ruled that discrimination based on transgender or transitioning status is covered by Title VII.  The case involved a Detroit-area funeral home which discharged a male employee shortly after he notified his employer that he was transitioning to female and intended to dress and present as a woman at work.  The funeral home’s owner held a sincere religious belief that “a person’s sex is an immutable God-given gift” and he would be “violating God’s commands” if he were to allow this employee to “deny [his] sex while acting as a representative of [the] organization.” EEOC v. RG & GR Harris Funeral Homes, Case No. 16-2424 (6th Cir. March 7, 2018).

The employee filed a charge of discrimination with the EEOC.  The EEOC determined the funeral home had discriminated against the employee based on sex and gender identity.  The EEOC filed suit on behalf of the employee in federal district court in Detroit.  The employer promptly sought dismissal of the lawsuit.  The court ruled Title VII does not cover claims based on an employee’s transgender or transitioning status but does cover claims based on an employee’s failure to conform to sex- or gender-based stereotypes.  The case proceeded on this theory.

Following completion of discovery, both sides moved for summary judgment.  The court ruled there was evidence the employer discriminated on the basis of gender nonconformity, but requiring the funeral home to allow the employee to present as a woman at work substantially burdened the funeral home owner’s exercise of his religious beliefs.  The court granted judgment in favor of the funeral home.  The EEOC appealed.

The Sixth Circuit Court of Appeals (covering Michigan, Ohio, Kentucky and Tennessee) affirmed the district court’s ruling that the employer had discriminated against the employee because he did not conform to gender stereotypes.  The employer had terminated the employee shortly after he notified the employer that he planned to dress and present as a woman, contrary to the stereotype that men should dress and present as men.

The Court reversed the district court’s initial ruling that transgender and transitioning status were not protected by Title VII.  The Court asked if the employee would have been fired if he were a woman seeking to comply with the female dress code.  “The answer quite obviously [was] no.”  That “in and of itself confirm[ed] that [the employee’s] sex impermissibly affected the employer’s decision.”  Thus, discrimination against a transgender or transitioning person is necessarily discrimination based on gender-nonconformity and covered by Title VII.

Having found the employer had engaged in unlawful discrimination, the Court reviewed the employer’s defenses.

The Court rejected a new defense that had been raised in briefs filed by some of the “friends of the court” – that the employee’s claims were barred by the “ministerial exception.”  This exception bars discrimination claims brought by employees who work in a ministerial role for a religious organization.  The defense did not apply here because the funeral home was not a religious organization.  It is not affiliated with any church; its articles of incorporation do not express a religious purpose; its employees are not required to hold any particular religious belief; and it employs and serves individuals of all religions.  The employee did not meet any of the tests for serving in a ministerial role: religious job title, religious training, serving as an ambassador of faith or in a leadership role in a religious community, or performing religious functions for the organization.

The Court ruled that allowing the employee to present as a woman at work did not substantially burden the funeral home owner’s religious exercise.  And, even if it did, the EEOC’s enforcement of Title VII was the least restrictive means of furthering the government’s compelling interest in eliminating workplace discrimination.  The Court rejected the district court’s suggested less restrictive means of furthering this interest, i.e., having the employer adopt a gender-neutral dress code.  The case involved much more than a dress code.  The employee planned to present as a woman, including dressing as a woman, using the women’s restroom, etc.  Having decided the employer’s defense did not excuse its discrimination, the Court granted summary judgment to the EEOC.

This issue of whether Title VII includes protection against discrimination on the basis of gender identity, per se, is a form of sex discrimination likely will have to be decided by the United States Supreme Court.  For now, because many courts have ruled Title VII protects against discrimination on the basis of gender nonconformity, employers faced with issues involving a transgender or transitioning employee should consult experienced employment counsel, such as the author, for guidance on how to address these issues.

This article was written by Karen L. Piper, who is Chair of the Legal Affairs Committee of Detroit SHRM, and a Member of Bodman PLC, which represents employers, only, in Workplace Law. Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com. For further information, go to: http://www.bodmanlaw.com/attorneys/karen-l-piper.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information are included in the re-post of the article. March 2018.

“PS” To February’s Wages and Fringe Benefits Act Article

By: Claudia D. Orr

In February I wrote an article entitled “Michigan Appellate Court Calls for a Conflict Panel to Decide Issue under Michigan Wages and Fringe Benefits Act (“WFBA”).  I was pretty excited that, in Ramos v Intercare Community Health Network, the Court of Appeals not only issued a published opinion concerning the WFBA, but had called for a special conflict panel to decide whether the prior holding in Reo v Lane Bryant, Inc, 211 Mich App 364 (1995), should be overturned.

In Reo, the Court of Appeals had examined whether an employee had the right to be free of retaliation/discrimination where the employee had exercised a right on the act on his own behalf. The Reo court held that the “employee must be exercising a right afforded by the act on behalf of another employee or other person.  Simply exercising a right on one’s own behalf would not bring an employee within the purview of [MCL 408.483].”  The majority in Ramos disagreed with that holding, but was bound to follow the precedent.

The Ramos court’s request for a special panel to revisit the holding in Reo was summarily denied by an order of the Court of Appeals on February 21, 2018.  I am now slightly less excited about the Ramos opinion, but it is still a treat to have a published opinion addressing a Michigan wage law.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. March 2018.

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