NLRB’s Proposed Rule for Joint Employer Relationships

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By:  Claudia D. Orr

The National Labor Relations Board (“the Board”) is comprised of five members, appointed by the president, who serve for five years.  One member’s term expires each year. As the composition of the Board changes, so do some of its positions.  The Board’s position on “joint employers” has changed again, and this time employers can celebrate.

The concept of joint employers is important under the National Labor Relations Act (“NLRA”) and has real consequence to employers. In 2015, a divided Board in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), overruled long time precedent making it significantly easier to find a joint employment relationship. A petition for review was filed and, in December 2017, a new Board majority restored the prior more stringent standard.  But, this change was short lived. In February 2018, that decision was vacated, reverting back to the more relaxed standard for imposing a joint employment relationship. Currently, there is an appeal pending before the US Court of Appeals for the District of Columbia Circuit, challenging the Board’s authority in adopting the easier standard.

This makes a girl’s head spin.  But the dance is not over.  The Board now proposes to adopt the more stringent standard through rulemaking and issued its Notice of Proposed Rulemaking and Request for Comments concerning the Standard for Determining Joint-Employer Status on September 14, 2018.  

So what are the two standards?  Under the more stringent, traditional standard, there must be evidence that the putative joint employer actually exercised ‘“direct and immediate’ control over the essential working conditions of another company’s workers.” Under the Browning-Ferris majority’s relaxed standard, “a company could be deemed a joint employer even if its ‘control’ over the essential working conditions of another business’s employees was indirect, limited and routine, or contractually reserved but never exercised.”

Why does it matter?  When a joint-employer relationship is found, the Board can compel the putative “joint employer” to engage in good faith bargaining with the union that represents the employees who work for the other employer.  Also, both employers can be found jointly and severally liable for unfair labor practices regardless of who committed the act. Additionally, picketing may occur lawfully at the putative joint employer (whereas if it was not so deemed, the picketing would be unlawful). In short, which standard applies will matter to your company if it, although a non-union employer, is deemed a joint employer with all of the obligations of a union shop and the liabilities for the unfair labor practices of its joint employer.

After 27 pages of background and miscellaneous information, the Board’s notice sets out the new proposed rule as follows:

An employer, as defined by Section 2(2) of the National Labor Relations Act (the Act), may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.  A putative joint employer must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.

Following the proposed rule are a dozen examples which include situations where employers hire contractors via business contracts, employers use temporary staffing agencies, companies supply line workers to manufacturers, franchisors and franchisees relationships etc. Comments on the proposed rule may be submitted to the Board on or before November 13, 2018.

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) and an arbitrator with the American Arbitration Association.  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. September 2018.

DOLLAR GENERAL PAYS BIG DOLLARS IN ADA LAWSUIT

By: Carol G. Schley, Clark Hill PLC

            A recent decision from the federal Sixth Circuit Court of Appeals (which includes Michigan) is a reminder to employers that even small steps taken to reasonably accommodate an employee’s disability can avoid significant liability down the road.

            In E.E.O.C. v. Dolgencorp., LLC, Linda Atkins was a sales associate for a Dollar General store. During her employment, she received pay raises and a promotion to lead sales associate. Ms. Atkins had type II diabetes which required her to quickly consume glucose when she experienced low blood sugar in order to avoid seizing or passing out.  Because of her condition, Ms. Atkins asked her supervisor if she could keep orange juice at her cash register, but this request was denied.  Subsequently, she experienced two diabetic attacks while at work.  For each attack she consumed orange juice from the store’s cooler, and then reimbursed the store for the cost of the juice.

            In 2012, two managers investigated employee theft and “shrinkage” issues at the store.  When she was interviewed, Ms. Atkins informed the managers of the two circumstances where she suffered a diabetic attack and reimbursed the store for orange juice she consumed.  The managers informed Ms. Atkins that her conduct violated Dollar General’s “grazing policy” (which said employees could not consume store food before paying for it) and they fired her on the spot.

            Ms. Atkins filed a charge with the EEOC, which proceeded to file a lawsuit on her behalf asserting that Dollar General violated the Americans with Disabilities Act (“ADA”).  The jury found in favor of Ms. Atkins, awarding her $27,565 in back pay, $250,000 in compensatory damages, and $445,322 in attorney’s fees.  Dollar General appealed.

            On appeal, Dollar General argued that the jury erred in finding that it failed to accommodate Ms. Atkins’ disability.  On this issue, the court noted that Dollar General faced “a steep hill.”  First, Dollar General asserted that there were other ways that Ms. Atkins could have addressed her diabetic episodes (e.g., by consuming glucose tablets or eating honey, candy or peanut butter crackers) and, therefore, Dollar General had no obligation to allow her to keep orange juice at her register.  The court rejected this argument, finding that because Dollar General failed to fulfill its duty under the ADA to explore alternative reasonable accommodations with Ms. Atkins when she first asked to keep orange juice at her register, it could not now claim her disability could be accommodated in different ways.  “The store manager categorically denied Atkins’ request, failed to explore any alternatives, and never relayed the matter to a superior.  That was Dollar General’s problem, not Atkins’ – or at least a reasonable jury could conclude.”  Second, the court of appeals found that Ms. Atkins presented sufficient evidence at trial for the jury to conclude that the alternatives to orange juice proposed by Dollar General were not reasonable.

            The Court of Appeals also upheld the jury’s determination that Dollar General terminated Ms. Atkins because of her disability.  Dollar General claimed it had a non-discriminatory basis for terminating her, i.e., her violation of the “grazing policy.”  However, the court held that, “a company may not illegitimately deny an employee a reasonable accommodation to a general policy and use that same policy as a neutral basis for firing him.”  The court held that Dollar General’s failure to provide any accommodation to Ms. Atkins presented direct evidence of discrimination in violation of the ADA.  “Atkins never would have had a reason to buy the store’s orange juice during a medical emergency if Dollar General had allowed her to keep her own orange juice at the register or worked with her to find another solution.”

            This case boils down to what appears to be no recognition by Dollar General’s managers that Ms. Atkins’ situation implicated the ADA.  Both the manager who rejected her request to keep orange juice at her register, and the two managers who fired her after she revealed she consumed orange juice from the store cooler, made no attempts to engage in the interactive process with her as required under the ADA.   Had Dollar General granted Ms. Atkins’ request to keep orange juice at her register, or granted her a reasonable exception to the “grazing policy,” it most likely would not have been found liable for over $700,000 in damages and attorney’s fees.  The takeaway is that an employer must have a clear and comprehensive written disability accommodation policy, and managers must be knowledgeable of the policy and thoroughly trained so that they can competently recognize, report and handle ADA issues that arise in the workplace.  Finally, it is important to engage legal counsel to assist with such issues to avoid potential mistakes and costly liability.

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.  September 2018

Is There Any Value Left To The Tender Back Doctrine?

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By: Claudia D. Orr

The United States Court of Appeals for the Sixth Circuit just ruled that the tender back doctrine does not apply to claims brought under Title VII or the Equal Pay Act. See McClellan v Midwest Machining, Inc.  What is the tender back rule and why does it matter so much?

The tender back rule is a legal concept related to release agreements.  For example, if you pay a former employee money (often severance at time of termination) in exchange for a release of all claims and she changes her mind and wants to sue, the former employee can, provided at or before the time of filing the lawsuit the former employee “tenders back” the money paid in consideration of the release.

I have used the tender back rule many times to obtain dismissal of lawsuits.  I have even had release agreements enforced by the court when the former employee failed to sign the agreement or wrote “refused” on the signature line but then kept the money that had been paid.  Ah, good times for a defense attorney. You can’t keep the money paid for the release and file suit without returning it.

So now that you know what the tender back rule is, let’s look at the case at issue. Plaintiff Jena McClellan began working for Defendant Midwest Machining, Inc. (“MMI”) in 2008. In August 2015, after McClellan announced she was pregnant, her supervisor allegedly began making negative comments and showed annoyance at her absences for prenatal appointments. Three months later, McClellan was fired.

At the termination meeting, McClellan was handed an agreement that provided severance in exchange for a release of all past, current and future claims. McClellan later testified she felt bullied at the meeting and pressured to sign when she did not have a clear understanding of which claims were being released.  McClellan signed the agreement and accepted the payments totalling $4000.

Three quick learning points:  First, you cannot release future claims, so that reference makes no sense to me. Second, the agreement should specifically mention state and federal civil rights laws so there is no confusion that they are within the scope of the release.  Third, never force the individual to make their decision at the meeting or the agreement may be set aside due to coercion or duress.  Always provide a couple of days and state the deadline in the agreement.

After releasing all claims, McClellan filed a charge with the Equal Employment Opportunity Commission and received her notice of right to sue. McClellan filed suit in the United States District Court for the Western District of Michigan, alleging MMI paid her less than male coworkers because of her sex (in violation of the Equal Pay Act) and that she was discharged because of her pregnancy (in violation of Title VII, as amended by the Pregnancy Discrimination Act). McClellan also alleged the same wrongdoing under Michigan’s Minimum Wage Law and the Elliott-Larsen Civil Rights Act.

Defense counsel for MMI advised McClellan’s attorney of the release agreement. In response, her attorney sent a letter “rescinding” the agreement and enclosing a check for $4000. MMI’s attorney mailed the check back and filed a motion to dismiss based on the release and failure to tender back the payment at or before the time suit was filed.

While the district court found there were genuine issues of material fact concerning whether McClellan “knowingly and voluntarily” signed the agreement, it nonetheless granted MMI’s motion to dismiss because McClellan had failed to tender back the consideration she had been paid.  On appeal, the Sixth Circuit reversed, concluding that “the tender-back doctrine does not apply to claims brought under Title VII and the Equal Pay Act…”

The appellate court first noted that the district court failed to recognize that the tender back rule is grounded in state contract law. Thus, agreements tainted by “mistake, duress, or even fraud are voidable at the option of the innocent party,” but “before the innocent party can elect avoidance, she must first tender back any benefits received under the contract.”  “If she fails to do so within a reasonable time after learning of her rights…she ratifies the contract and so makes it binding.”

The court reviewed its prior unpublished decisions addressing the tender back rule’s application to claims brought under other federal statutes and found that many of its unpublished decisions upheld the tender back rule. The only published opinion by the court held that the plaintiff was not required to tender back the consideration before pursing a claim under the Age Discrimination in Employment Act (“ADEA”).

That decision had relied upon the Supreme Court’s ruling in the context of the Federal Employers Liability Act. In addition, in 1998, a highly divided Supreme Court found the tender back rule inapplicable to claims brought under the ADEA in Oubre v Entergy Operations, in part because the release at issue failed to comply with the requirements for a valid release of ADEA claims.

After reviewing opinions from other circuits, the Sixth Circuit concluded that the tender back rule should not apply to claims under Title VII or the Equal Pay Act. Thus, as with the ADEA, any sums paid for the release “shall be deducted from any award determined to be due to the injured employee.” The appellate court also concluded that, even if applicable, McClellan attempted to tender back the $4000 and there is no requirement that it occur before filing suit, as long as it is returned “within a reasonable time after learning of her rights”.

The dissent found the tender back doctrine to be centuries old in the common law and applicable to claims under Title VII and the Equal Protection Act because Congress failed to specifically to over ride it and displace it when passing these laws. The dissent also distinguished releases of ADEA claims given the specific detailed requirements for such releases as required by the Older Worker Benefit Protection Act. The dissent (Judge Thapar) has become my new hero, but unfortunately his opinion is not the one that now is binding on us.

 So, we have long known there was an issue with the tender back rule when it came to claims under the Age Discrimination in Employment Act (“ADEA”).  But I had hoped that this quirk was because of the protections afforded to the older worker. Sorry, but as someone who is now in her early 60s, I find it offensive that Congress believed it necessary to provide those 40 and older with 21 days to think about whether to sign a release agreement (because apparently us “older” workers need that much time to understand what we are reading, if we can even find our readers during that 3 weeks) and then another 7 days to revoke it (so that when our kids see what we have signed and say “hell no” there is still a chance to get us out of the agreement) and a warning that “you should see an attorney before you sign this”! Sorry, I digress. Seriously, I just thought (or lived under the delusion) that the inapplicability of the tender back rule to ADEA claims was more protectionism afforded us “seniors”.

So, knowing that a release of claims under the ADEA had to tell the former employee to see a lawyer before they sign it (and no good ever comes of that), I would often suggest to clients that we not add all of the bells and whistles to have a valid ADEA release if the amount of consideration was relatively small and the strength of such a claim relatively weak.

After all, what are you really buying if the former employee can still sue, use the severance you paid to fund the lawsuit and, after defending against the claims for a couple of years, the court may consider offsetting the amount against a judgement.  When you consider that most lawsuits are either dismissed or settled, is the previously paid amount truly offset against the settlement?  The plaintiff just demands more and the employer tries to offer less and it all gets lost in the negotiation. So, again I ask, what are you buying if you don’t get the freedom from suit? This is a game changer. Always work with an experienced employment attorney, such as the author, when you are determining whether to offer an employee severance, in exchange for a release.

 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) and an arbitrator with the American Arbitration Association.  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. August 2018.

THE TERRIBLE TRIO -POOR STRATEGY, DOCUMENTATION AND TESTIMONY

By: Claudia D. Orr

Under federal law, retaliation claims are more dangerous than discrimination claims because of the differences in proofs.  But, because retaliation claims “arise” following the exercise of rights (generally by the employee, but not necessarily so), there is usually an opportunity to work with experienced employment attorneys to avoid such claims. In the published opinion of Rogers v Henry Ford Health System, the federal Court of Appeals for the Sixth Circuit reinstated a retaliation claim that may have been avoidable with better strategy, testimony and documentation.  Let’s look at what went wrong.

The Plaintiff, Monica Rogers, has been employed by the Henry Ford Health System (“HFHS”) for over 30 years, mostly in the Human Resources Department.  She is African American and, at the time the lawsuit was filed, she was in her sixties. In 2007, Rogers became a Consultant in the Organizational Human Resources Development (“OHRD”) Department. The OHRD Consultant was a newly created position requiring a bachelor’s degree, but HFHS waived this requirement for her.  As I often tell my clients, no good deed ever goes unpunished…

Between 2008 and 2013, Rogers received mixed performance reviews from three different direct supervisors. While there was some positive feedback, there was considerable criticism concerning interpersonal problems (e.g., more focused on what other employees are doing than on her job, initiating harmful gossip, inciting negativity in workforce, etc.). Given her affect on the team, Rogers was referred to the Employee Assistance Program as part of a formal disciplinary action.

In 2012, two Senior OHRD Consultants left but were not replaced. Rogers began preforming some of their duties and, by the end of 2012, Rogers began asking for a reclassification to Senior OHRD Consultant. This position requires a Master’s Degree, which Rogers does not have. Recall she does not even have her bachelor’s degree.  Rogers thought the requirement should be waived again. When it was not, Rogers filed an internal complaint of race/age discrimination. On July 3, 2013, a month after Roger’s internal complaint was found to lack merit, Rogers initiated a charge alleging discrimination and retaliation with the Equal Employment Opportunity Commission (“EEOC”).

In August and September 2013, several coworkers began to express concerns about Roger’s behavior indicating she was acting euphoric, laughing really loud, swaying back and forth, touching a coworker with both hands during a meeting and other strange and erratic behavior.  One coworker expressed concern because he was aware that Rogers had taken a bat to the car windows of her husband’s mistress’s vehicle.

Based on the reports, the Vice President of Human Resources (“VP of HR”) met with Rogers, placed her on paid leave, and referred her to the EAP for a fitness for duty examination. Rogers met with an HFHS physician for the examination, who cleared her to return to work.  According to Rogers, the physician “said to her ‘I don’t know why they sent you down here’ and apologized.” It escapes me why an employer would ever use one of its own physicians for this purpose.  Always consult with your employment attorney before taking any action that implicates the Americans with Disabilities Act because it is a very complicated law and requires high level analysis and strategy.  At this point, Rogers filed her second EEOC charge claiming retaliation for having previously filed her earlier charge.

A week after returning to work, the VP of HR again met with Rogers to provide her with career options. According to Rogers, she was told she could take a severance package or she could accept a transfer to HFHS’s subsidiary Health Alliance Plan (“HAP”) where she would work in Human Resources as a Business Partner.  According to the VP of HR, she was provided a third option: remaining in her current OHRD Consultant position.

Apparently, the “three” choices were not well documented in any writing that Rogers signed, or this issue would not have been in dispute. Document, document, document!  Rogers should have been given a memo that made it clear that she could remain in her current position, but that she was being offered an exciting new opportunity at HAP that was hers if she was interested.  And, in my opinion, suggesting to an employee who has two pending EEOC charges that she should consider going away for some severance is a horrible idea because it shows you don’t want her there and are willing to pay her to go away.  If you are willing to pay the employee/charging party some severance, it should be through the EEOC’s mediation process and in settlement of the charges.

There is one further unfortunate bit of evidence. The VP of HR testified that “he gave Rogers the option of transferring to HAP because: ‘that way it would not put her right in the same area … you know, because we knew that at that point that she had an outstanding EEOC complaint and we just thought that that would give her kind of some space from all of that.’”  Not good.  The testimony tied the transfer to the pending EEOC charges.

While Rogers took the transfer at the same pay and has received pay increases since, she testified that her opportunities at HAP are more limited and it is an inferior position within the HFHS structure. She remains employed there today in HR.

After the EEOC found probable cause that Rogers was placed on administrative leave and reassigned in retaliation for having filed her previous charge, Rogers filed suit. The federal district court granted the summary judgment motion filed by HFHS, dismissing Rogers’ complaint and finding that she had failed to make out a case of discrimination or retaliation. Rogers timely appealed.

The dismissal of the discrimination claims was affirmed. There is no need to run through the Sixth Circuit’s analysis, but suffice it to say that Rogers was unable to show that she was qualified for the Senior OHRD Consultant position she sought (which required a Master’s Degree) or that HFHS had treated anyone similarly situated more favorably.

In reversing the dismissal of the retaliation claim, the Sixth Circuit noted that, unlike discrimination claims which require a materially adverse employment action, in the context of a retaliation claim, the plaintiff only needs to show that the challenged action ‘“well might have dissuaded a reasonable worker from making or supporting a charge of discrimination’. This showing is less burdensome than what a plaintiff must demonstrate for a Title VII discrimination claim.”

The court found that a “reasonable factfinder could conclude that Rogers suffered materially adverse actions” when “Rogers was referred to a fitness-for-duty exam, placed on leave…offered a choice about her future employment with HFHS”.  Moreover, HFHS failed to rebut Rogers’ assertion that her position at HAP was inferior to her OHRD Consultant position. Since, the cumulative effect could dissuade a reasonable employee from filing a charge of discrimination, an adverse action was established. Rogers only had to show a causal connection between the adverse actions and the filing of her first charge.  The court found the approximate two month temporal proximity between the two events satisfied this element.

HFHS stated a legitimate non-retaliatory reason for sending Rogers for the fitness-for-duty exam, which Rogers was unable to show to be pretext (complaints about her bizarre behavior). However, after these concerns were addressed, and HFHS’s own doctor cleared Rogers to return to work, the court found there was no basis to present her with career choices. And, the testimony of the VP of HR tying those choices to the EEOC charges sealed the reversal and reinstatement of the retaliation claim. There is a short dissenting opinion, but the retaliation claim is reinstated. Incidentally, the EEOC filed an amicus brief on appeal, weighing in. So, we know this was an important case to it.

The circumstances above played out over a period of just a few months and are a perfect example of when an experienced employment attorney, such as the author, should be consulted. When you see the claims headed your way, step out of the way and call for help.

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. August 2018.

Michigan AG and Civil Rights Commission at odds over LGBT protections

By: Miriam L. Rosen 

There’s a battle brewing in Michigan…and this time it isn’t over college football.

In May 2018, the Michigan Civil Rights Commission (“MCRC”) issued a statement re-interpreting the Elliott-Larsen Civil Rights Act, the state civil rights law, to cover discrimination based on sexual orientation and gender identity.  The MCRC took this action knowing that the state Attorney General disagreed with that position. Claudia Orr discussed this development in her post, Recent Developments Related to LGBTQ Rights, in the June 13, 2018 Detroit SHRM Digest.

On July 20, 2018, Attorney General Bill Schuette, who is currently running for governor, fired back at the MCRC in an Attorney General Opinion Letter (“AG Opinion”) stating that Michigan’s civil rights law does not  protect LGBT workers from discrimination based on their sexual orientation or gender identity.

The AG Opinion asserts that the MCRC did not have the authority to expand the law “because it conflicts with the original intent of the Legislature as expressed in the plain language of the Act, and as interpreted by Michigan courts.” According to the AG Opinion,  “[t]he word ‘sex’ was understood in 1976, when [state civil rights law] was enacted, to refer to the biological differences between males and females, not to refer to the concepts of sexual orientation or gender identify. “

The MCRC is not backing down, however.  In statement released on July 23, 2018, the  MCRC indicated that it would continue to follow its interpretive statement that the word “sex” in Michigan’s civil rights law protects lesbian, gay, bisexual, and transgender workers.  The MCRC’s position is that as “an independent, constitutionally created and established body,” it “is not bound by the opinion of the Attorney General.”

Where does this leave employers in Michigan? 

For employers with 15 or more employees covered by Title VII of the Civil Rights Act, the federal civil rights law, the EEOC has already taken the position that sexual orientation and gender identity are protected under that law.  But employers – both large and small – covered by Michigan’s Elliott-Larsen Civil Rights Act should understand that the MCRC will now accept and investigate claims of LGBT discrimination under state law.

One thing is certain…this dispute about which government entity has authority to interpret state civil rights law will be settled in court, not on the football field.

This article was written by Miriam L. Rosen, who is Chair 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. July 2018.

House of Representatives Introduces Bi-Partisan Anti-Workplace Harassment “EMPOWER Act”

By: Zeth D. Hearld

On July 17, 2018, a bipartisan group in the House of Representatives introduced new legislation in an effort to deter and reduce workplace harassment in light of the #MeToo movement. The proposed legislation, entitled the “Ending the Monopoly of Power Over Workplace Harassment through Education and Reporting Act” or the “EMPOWER Act” includes public disclosure requirements for employers, bans the use of certain types of nondisclosure/non-disparagement agreements, and provides alternative options for reporting workplace harassment. The protections of the Empower Act would apply to job applicants and employees as well as independent contractors, interns, and volunteers.

Content of the Proposed Legislation

  • Employer Obligations

The EMPOWER Act would make it an unlawful employment practice for employers to:

…enter into a contract or agreement with an employee or applicant, as a condition of employment, promotion, compensation, benefits . . . or as a term, condition, or privilege of employment, if that contract or agreement contains a non-disparagement or nondisclosure clause that covers workplace harassment…

In other words, the legislation would ban nondisclosure clauses in applications or employment contracts that cover sexual harassment or retaliation against employees for “reporting, resisting, opposing, or assisting in the investigation of workplace harassment.” However, the legislation would not apply to nondisclosure agreements that are included in separation agreements if the legal claims arose prior to the execution of the settlement agreement.

Notably, the Act would also create new reporting requirements for certain public companies related to workplace harassment settlements and judgments. The Act would require any employer that files a Form 10-K with the SEC to report the number of sexual harassment claims settled annually. Significantly, the Act would also require these employers to report whether any “judgments or awards (including through arbitration or administrative proceedings)” was entered against the company as well as the amount paid of the judgment, whether in whole or in part.

The Act would also prevent employers from receiving tax deductions for payments made due to harassment judgments or for attorneys’ fees related to workplace harassment litigation.

  • Employee Reporting Options

The Act would create a new “tip-line” with the EEOC that would allow employees to confidentially report workplace harassment, sexual harassment, and sexual assault. The EEOC would operate the tip-line in addition to the agency’s standard, formal complaint process. Although confidential, the tip-line would not be anonymous. In addition, the operators of the tip-line would be required to educate callers on additional methods of reporting, including filing a formal charge with the EEOC. The EMPOWER Act would not change the EEOC’s current investigatory powers. Employees would still have the ability to file sexual harassment and retaliation charges with the EEOC regardless of use the new tip-line.

  • EEOC Training

The Act also would require the EEOC to “provide for the development and dissemination of work-place training programs and information” regarding workplace harassment and sexual harassment. The new training would cover actions that constitute workplace harassment, the rights of individuals and how to report harassment, how bystanders can intervene or report witnessed harassment in the workplace, and methods of prevention for employers and managers.

Impact

The EMPOWER Act is a direct reaction to the #MeToo movement.  Notably, reporting on the Harvey Weinstein scandal and the subsequent flood of revelations demonstrated how some employers have used nondisclosure and nondisparagement agreements to conceal inappropriate behaviors. These legal limitations prevented employees from speaking out and allowed hostile work environments to fly under the radar for extend periods. The Act mirrors several state laws that have banned nondisclosure agreements, such as California, New Jersey, New York, Pennsylvania, and Washington.

Employers should monitor the progress of the EMPOWER Act.  While it not clear whether the proposed legislation will pass, it does have bipartisan support as well as the support of the general public.  Similar bipartisan legislation was proposed in the Senate in June, but it has not had any traction and will likely be delayed due to the U.S. Supreme Court nomination process.

This article was written by Zeth D. Hearld, who is an employment attorney with Kitch Drutchas Wagner Valitutti & Sherbrook. He can be reached at zeth.herald@kitch.com or at (313) 965-7846.

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. July 2018.

Parental Leave Settlement Ensures Dads Equal Bonding Time

By: Miriam L. Rosen

In its July 2014 Enforcement Guidance on Pregnancy Discrimination and Related Issues, the EEOC made clear that while leave related to pregnancy, childbirth, or related medical conditions can be limited to women affected by those conditions, parental leave must be provided on an equal basis to men and women.

The EEOC showed that its guidance has real teeth when it filed a lawsuit in August 2017 against cosmetic giant, Estee Lauder, alleging that the company’s parental leave policy provided new fathers with less paid time off than new mothers received. The lawsuit also alleged that the policy denied new fathers the same return-to-work benefits that new mothers received, including modified work schedules.

Under a consent decree filed on July 12, 2018, the EEOC and Estee Lauder agreed to resolve the lawsuit by providing a $1.1 million settlement for the over 200 new fathers allegedly denied the same leave rights as new mothers.  In the settlement, Estee Laude denies any violation of the law.

In addition to the financial settlement, Estee Lauder also amended its paid parental leave policy to provide that all new parents can take up to 20 weeks of paid leave to bond with a newborn and six weeks of flexible work arrangements after they return to work following the birth of a child.  Under the revised policy, leave for child bonding time is separate from any short-term disability leave that is available to mothers for pregnancy-related medical conditions, childbirth, or child-birth related medical conditions.

In light of the EEOC’s lawsuit against Estee Lauder, employers may want a refresher on some of the other aspects of the agency’s 2014 enforcement guidance.  According to that guidance:

  • Discrimination claims under the Pregnancy Discrimination Act can be based not only on current pregnancies, but also on past pregnancies, an employee’s potential or intention to become pregnant in the future, infertility treatments, the use of contraception, abortion, and lactation.
  • Absent proof of a bona fide occupational qualification, employees cannot be compelled to take leave simply because they are pregnant.
  • A broad range of pregnancy-related conditions, such as limitations related to walking, carpel tunnel syndrome, sciatica, mandatory bed rest, depression, and nausea, may be considered disabilities under the Americans with Disabilities Act.

Of course, a key takeaway for employers considering how to structure a parental leave policy is the distinction between leave for bonding time – which under the EEOC’s guidance must be made available on an equal basis for fathers and mothers – and leave related to medical conditions associated with pregnancy which is available to new mothers.  Employers should consult with employment counsel to assist in developing legally compliant parental leave policies.

This article was written by Miriam L. Rosen, who is Chair 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. July 2018.

Supreme Court Overturns Precedent in Ruling that Public-Sector Unions are Prohibited from Requiring Nonmembers to Pay Fees

By: Kristen L. Cook

Supreme Court Overturns Precedent in Ruling that Public-Sector Unions are Prohibited from Requiring Nonmembers to Pay Fees

On June 27, 2018, the United States Supreme Court issued an opinion in Janus v. American Federation of State, County, and Municipal Employees, Council 31, No. 16-1466 (2018) which held that requiring public-sector union members to pay agency fees violates the First Amendment.  The decision overruled a 1977 Supreme Court case, Abood v. Detroit Board of Education, 431 U.S. 209 (1977).  In Abood, the court upheld public-sector unions’ imposition of mandatory agency fees to support union activities such as collective bargaining and contract administration.  The fees could not be used for political purposes.

In Janus, Petitioner Mark Janus, an employee of the Illinois Department of Healthcare and Family Services, argued that he should not be required to pay an agency fee of $44.58 per month.  Janus had refused to join AFSCME because he opposed its public policy positions, including with respect to collective bargaining.  He asserted that AFSCME’s bargaining behavior did not appreciate Illinois’ fiscal crises and that the union did not bargain in the best interests of Illinois citizens.  The complaint alleged that all nonmember fee deductions constituted coerced political speech and that “the First Amendment forbids coercing any money from the non-members.”

By way of background, while workers have had the option to opt out of union membership, they were still required to pay what is known as an agency fee (also known as “fair share” or “representation” fees) in non-right-to-work states in order to cover the costs of their collective bargaining representation.  When no agency fee is required (such as in right-to-work states), all bargaining unit employees continue to be covered by the collective bargaining agreement regardless of whether they choose to pay union dues or representation fees.  In other words, non-paying employees still receive the benefits of the applicable collective bargaining agreement, including wages, benefits and representation in grievances and arbitrations.

The Court in Janus reconsidered and rejected a number of the Abood Court’s arguments, including the risk of so-called “free riders” as a justification for imposing agency fees.  Specifically, the unions argued that without agency fees, nonmembers could enjoy the benefits of union representation without having to shoulder any of the costs.  The Court, however, noted that “free rider-arguments…are generally insufficient to overcome First Amendment Objections.”  It found that to hold to the contrary would have “startling consequences.” In reaching its decision, the majority stated:

Compelling a person to subsidize the speech of other private speakers raises similar First Amendment concerns…As Jefferson famously put it, ‘to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhor[s] is sinful and tyrannical.’…We have therefore recognized that a ‘significant impingement on First Amendment rights’ occurs when public employees are required to provide financial support for a union that ‘takes many positions during collective bargaining that have powerful political and civic consequences.’

The majority discussed several areas of “great public concern” that it found that unions have influenced through their speech in collective bargaining, including how public money is spent; climate change; sexual orientation and gender identity; and minority religions.  The Court ultimately held that the balance of the State’s interests—in this case the interest in “bargaining with an adequately funded exclusive bargaining agent”—and employees’ free speech rights tipped in favor of the employees such that mandatory agency fees are not justified.

According to U.S. Department of Labor, 7.2 million public sector employees belonged to a union as of 2017—roughly equal to the number of private sector employees union members. The union membership rate of public-sector workers, however, is more than five times that of private sector workers (34.4 % compared to 6.5 % as of 2017).  Some estimate that as many as 400,000 public-sector union members may stop paying fees following the Court’s decisions.  Among the largest public-sector unions are the Service Employees International Union, AFSCME, National Education Association, and American Federation of Teachers.   

Currently, 28 states, including Michigan, are right-to-work states.  This means that employees in these states, including public-sector employees, were not required to pay agency fees even prior to the Janus decision.  To this extent, public-sector employees in right-to-work states will see minimal change following Janus.  The decision does, however, lend support to right-to-work laws, particularly on the issue of whether it is constitutional for right-to-work legislation to be applied to state employees.  Further, police and fire unions in Michigan were expressly exempted from right-to-work laws.  Pursuant to the Court’s opinion, this exemption is now effectively lost.

As has been the case in Michigan and other states following the passage of right-to-work laws, there is an ongoing political debate regarding the viability of public-sector unions after Janus.  Supporters argue that workers will not pay for services when not required to do so, thereby leaving the unions with insufficient funding.  The majority in Janus disagreed that the decision would mean the end of public-sector unions, noting that unions continue to operate and represent their members in jurisdictions that do not require agency fees (i.e., right-to-work states).  The fate of public-sector unions is yet to be seen.  Private sector employees in non-right-to-work states remain unaffected by Janus and may still be required to pay agency fees as the First Amendment applies only to state actors.

This article was written by Kristen L. Cook, who is a member of the Legal Affairs Committee of Detroit SHRM and an employment attorney with Kitch Drutchas Wagner Valitutti & Sherbrook. She can be reached at kristen.cook@kitch.com or at (313) 965-286.

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. July 2018.

New NLRB Guidance will ease restrictions on workplace policies

By: Miriam L. Rosen

After years of decisions by a National Labor Relations Board (“NLRB”) that seemed to have lost sight of how work rules impact the practical realities of the workplace, employers recently received some relief.   On June 6, 2018, NLRB General Counsel Peter Robb issued a new Guidance Memorandum setting out how the NLRB’s Regional Offices should interpret workplace policies.

Under the previous administration, the NLRB targeted a variety of standard employee handbook policies finding that the policies “chilled” employees’ rights to engage in “protected concerted activity” under the National Labor Relations Act (“NLRA”).   As a result,  many employers re-wrote common-sense policies, such as those on conduct, civility, and confidentiality, to avoid running afoul of the NLRB.

With a shift in the NLRB’s composition, the Board issued The Boeing Company case in December 2017 establishing a new and more practical standard for reviewing employment policies.   The new Boeing standard focuses on balancing a work rule’s possible negative impact on employees’ abilities to exercise their NLRA-protected rights and the rule’s connection to an employer’s business interest in maintaining workplace productivity and discipline.  The new Guidance Memo stems from the Boeing decision and provides specific examples of how the NLRB will evaluate various policies.

The Guidance groups work rules into three broad categories: rules that are generally lawful to maintain; rules that require individualized scrutiny; and rules that are unlawful. The Memo provides examples of common workplace policies likely to fall into each category:

Category 1 Rules:   Generally, these rules are lawful because when reasonably interpreted the rule does not prohibit or interfere with the exercise of NLRA-guaranteed rights, or because the potential negative impact on protected rights is outweighed by the business justifications for the rule. The Memo provides the following examples of rules that fall into this category include:

  • Civility rules (e.g., “disparaging, or offensive language is prohibited”);
  • No-photography rules and no-recording rules;
  • Rules against insubordination, non-cooperation, or on-the-job conduct that adversely affects operations;
  • Disruptive behavior rules (e.g., “creating a disturbance on company premises or creating discord with clients or fellow employees is prohibited”);
  • Rules protecting confidential, proprietary, and customer information or documents;
  • Rules against defamation or misrepresentation;
  • Rules against using employer logos or intellectual property;
  • Rules requiring authorization to speak for the company; and
  • Rules banning disloyalty, nepotism, or self-enrichment.

Category 2 Rules:  These are rules that are not clearly lawful or unlawful. As a result, these rules must be evaluated on a case-by-case basis to determine whether the rule would interfere with NLRA protected rights, and if so, whether any adverse impact on those rights is outweighed by legitimate business reasons.   Examples of Category 2 Rules include:

  • Confidentiality rules broadly encompassing “employer business” or “employee information” (but not confidentiality rules regarding customer or proprietary information, or, as noted below, confidentiality rules more specifically directed at     employee wages, terms of employment, or working conditions);
  • Rules regarding disparagement or criticism of the employer;
  • Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf);

Category 3 Rules:  These are rules that are generally unlawful because they prohibit or limit NLRA-protected conduct. As a result, the negative impact on NLRA rights outweighs any justifications for the rule. The Memo provided the following examples of rules in this category.

  • Confidentiality rules specifically regarding wages, benefits, or working conditions; and
  • Rules against joining outside organizations or voting on matters concerning the employer.

What this means for employers:  

Under the previous administration, the NLRB gave employers little latitude in crafting and maintaining workplace rules that generally existed to ensure that businesses could operate  efficiently.  Employers “scrubbed” policies and employee handbooks to minimize the risk of NLRB unfair labor practice charges.  This new Guidance opens the door for employers to once again review employee handbooks and other policies using the three categories outlined in the Memo. In revising policies, employers can now consider the underlying business reasons for the rule, not just the – often remote – possibility that the rule could impact protected concerted activity.  Employers should consult with an experienced employment attorney in revising employment policies consistent with the new Guidance.

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.

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.