In September, President Trump nominated management-side labor and employment lawyer Peter Robb to replace Richard Griffin, whose term expired on November 4, 2017, as general counsel to the National Labor Relations Board.  Yesterday, the United States Senate confirmed Robb’s appointment to the position.

As general counsel, Robb will play an important role at the NLRB.  He is now responsible for overseeing the Board’s regional offices and legal staff nationwide.  He also has broad discretion to investigate and prosecute unfair labor practice cases that are filed with the Board.

Robb’s confirmation solidifies Republican control of the Board, which already consisted of three Republican and two Democrat Members.  With Robb’s confirmation complete, many expect the Board to reverse significant pro-labor decisions rendered during the Obama-era.  It should be noted, however, that Republican Board Member and Acting Chairman Philip Miscimarra’s term ends on December 16, 2017, leaving another vacancy for President Trump to fill.

As always, we will keep an eye on developments at the National Labor Relations Board, reporting significant decisions and events here on our blog.

An ever-increasing number of employers are sponsoring wellness incentives as a means of encouraging employees to developing healthy habits. In turn, employers gain healthier, more productive work forces.  Wellness incentive programs aren’t without their risks, however.  In this podcast, Denise Elliott discusses whether employees are covered by workers’ compensation benefits for injuries sustained while participating in an employer-sponsored wellness program.

LGBTQ workplace rights is perhaps the most rapidly evolving area in employment law.  On October 4, 2017, United States Attorney General Jeff Sessions formally weighed in on the topic.  He issued a memorandum to all federal prosecutors declaring that Title VII of the Civil Rights Act of 1964 does not prohibit employment discrimination based on transgender status.  According to the memo, “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status.”

So, does the Attorney General’s memo mean that employers can freely discriminate on the basis of gender identity?  Not exactly.  A number of federal courts have held that employment bias based on an individual’s transgender status is a form of unlawful sex discrimination under Title VII (the United States Courts of Appeals for the First, Sixth, and Eleventh Circuits have all issued such rulings, as have several federal district courts).  Attorney General Sessions’ memo certainly does not preempt these rulings.  Additionally, the Equal Employment Opportunity Commission has issued enforcement guidance stating that the Commission also views gender identity as a protected trait under the Law.

Employers must also be aware of state laws on the issue.  Currently, 19 states’ anti-discrimination laws bar employment discrimination based on gender identity for at least some workers.  Pennsylvania is among those states.  Governor Tom Wolf has signed two executive orders relevant to the subject:  one prohibiting discrimination against state employees based on their sexual orientation, gender identity, or HIV status; the other banning state contractors from discriminating against their LGBTQ employees.  The Pennsylvania Human Relations Commission has also indicated that it will investigate all complaints of gender identity discrimination in the workplace as a form of unlawful sex bias, including complaints against private sector employers.

While the law regarding transgender individuals’ employment rights remains in flux, employers are well-advised to address the issue with sensitivity and diligence.  Treating transgender employees the same as their similarly situated, non-transgender co-workers remains the best way for all employers to avoid liability for gender identity discrimination.

Most employers take proactive steps to prevent and eliminate workplace harassment. Until recently, courts recognized and rewarded the proactive approach.  Businesses in Pennsylvania, New Jersey and Delaware could avoid liability for hostile work environment claims if they rooted out the problem before it became “severe and pervasive.”

Courts had long held that a single slur, even if highly offensive, was not pervasive and therefore could not trigger employer liability.  The United States District Court for the Middle District of Pennsylvania upheld that standard in Castleberry v. STI Group, a 2015 case involving African American workers who were subjected to a racial slur and threatened with termination in a single incident.  The District Court dismissed the claim.

On appeal, the Third Circuit overturned the District’s ruling.  In doing so, the Court noted that the “plaintiffs alleged that their supervisor used a racially charged slur in front of them and their non-African-American co-workers…Within the same breath, the use of this word was accompanied by threats of termination (which ultimately occurred).”  Under these facts, the Third Circuit held that a single, isolated slur constitutes severe conduct that could create a hostile work environment.

Castleberry is now the law of the land for all Pennsylvania employers (and those in New Jersey and Delaware) who are subject to federal anti-discrimination laws. And it is certainly bad news for employers.  The ruling makes it much easier for a hostile work environment plaintiff to survive summary judgment, leading to increased defense costs and greater potential for a costly verdict.

In light of the Third Circuit’s holding, employers would be wise to take inventory of its anti-discrimination and anti-harassment policies to ensure that they are up to date and prohibit all occurrences of discriminatory harassment. Supervisors and managers should also be made aware that even a single, isolated racial slur can now lead to liability.

We will continue to monitor Third Circuit cases that develop under Castleberry and any updates will be reported here on our blog.

Prior to June 20, 2017, a powerful tool was available to employers and workers’ compensation carriers to cap exposure on long term workers’ compensation claims.  That tool, provided by the Act 44 amendments in 1996, was called an impairment rating evaluation (IRE) and generally worked like this: once a claimant had received 104 weeks of total disability benefits and had reached maximum medical improvement, the employer could request an IRE.  A doctor was assigned to perform the evaluation and was required by statute to consult the most recent version of the American Medical Association’s guidelines.  If, under those guidelines, the IRE doctor determined that the claimant’s injury caused less than 50% whole body impairment, the employee’s workers’ compensation benefits could be modified from total to partial disability status, with a corresponding time limitation on future indemnity benefits.  The process was helpful in resolving serious injury cases, where the employee was too disabled to work but had reached a medical plateau.

Pennsylvania workers’ compensation law places no cap on the length of time in which a claimant can receive total disability benefits.  Partial disability benefits, however, are capped at 500 weeks.  Thus, via the IRE process, it was possible to prevent a claimant from receiving total disability benefits indefinitely by modifying their status to a maximum of 500 weeks of partial disability benefits.

On June 20, 2017, the Pennsylvania Supreme Court changed all of this with its decision in Protz v. Workers’ Compensation Appeal Board.  In that case, the Court held that the IRE process was unconstitutional because the legislature is not permitted to delegate its authority to issue impairment rating guidelines to a non-legislative body (i.e. the American Medical Association).  Since the IRE provisions are legislated to be applied under the most current version of the American Medical Association guidelines (which are frequently updated), the Supreme Court struck down the IRE provisions of Pennsylvania’s Workers’ Compensation Act as an unconstitutional delegation of legislative authority.

The immediate impact of Protz on future claims is clear – unless the Pennsylvania Supreme Court reconsiders and reverses its decision, the IRE process is no longer available to employers and workers’ compensation insurance carriers.  This means that it will be considerably more difficult to cap exposure on workers’ compensation claims where an employee has received 104 weeks of temporary total disability benefits and has reached maximum medical improvement.  Indeed, a reversion to the use of vocational experts to establish job availability is likely, where light duty work at the time-of-injury employer is not available.  For claims where the IRE process was used prior to the court’s decision in Protz, outcomes are less clear.

Employers who are litigating a modification of benefits based on an IRE would do well to withdraw the modification petition.  Now that the IRE process has been deemed unconstitutional by the Pennsylvania Supreme Court, an IRE can no longer serve as a valid basis for future modification of benefits.  Without a valid basis to litigate a modification petition, employers who continue to rely on an IRE in litigation are exposed to penalties and unreasonable contest fees.

Likewise, employers who are actively seeking to obtain an IRE should refrain from doing so.  Again, the evaluation cannot provide a valid basis for modification of benefits, and the Bureau of Workers’ Compensation has also indicated that it will no longer assign IRE physicians in the wake of Protz.

So what about claims where benefits have been modified or a claimant’s status has been changed as the result of a past IRE where the claimant failed to appeal?  Employers likely have no affirmative obligation to restore the pre-IRE, pre-modification status quo, but claimants may file petitions seeking to do just that.  While Pennsylvania law typically prevents the retroactive application of judicial decisions to matters that have been fully and finally determined, it is unclear how workers’ compensation judges, the Appeal Board, and Pennsylvania Courts will approach the issue. In cases where an employer obtained a modification of benefits because of an IRE and the claimant did not appeal, the doctrine of res judicata may serve to prevent re-litigation of the case.

We will continue to monitor the status and impact of Protz; additional developments will be reported here on our blog.

Workplace rights for LGBT individuals has been a rapidly developing area of the law.  A little over two years ago, former President Obama signed an executive order prohibiting federal contractors from discriminating against employees on the basis of their sexual orientation or gender identity.  The Office of Federal Contract Compliance Programs followed suit by issuing regulations protecting the rights of LGBT workers employed by federal contractors and subcontractors.  Then, the Equal Employment Opportunity Commission published guidance suggesting that the Agency considers sexual orientation and gender identity to be protected by Title VII of the Civil Rights Act of 1964.  Despite these developments, no federal appellate court had ever ruled that Title VII protects workers from discrimination on the basis of sexual orientation.  That changed earlier this week.

In a groundbreaking 8-3 decision, the U.S. Court of Appeals for the Seventh Circuit (having jurisdiction in Illinois, Indiana, and Wisconsin), ruled that sexual orientation is a protected trait under Title VII and that employers may not discriminate against employees on that basis.  The case, Hively v. Ivy Tech Community College of Indiana, involved an openly lesbian professor who had worked for the college as an adjunct staff member for over fourteen years.  She applied for six different full-time jobs during her tenure and was rejected for each of them.  Then, the college failed to renew her adjunct contract in 2014.  She filed a Charge of Discrimination with the EEOC alleging that she was discriminated against on the basis of her sexual orientation.

The district court dismissed her case on the basis that sexual orientation was not recognized as a protected trait under Title VII.  On appeal, the Seventh Circuit reversed.  It held that sexual orientation was a protected characteristic because, in essence, actions taken on the basis of sexual orientation are a “subset of actions taken on the basis of sex,” which is protected by Title VII.  The Court reasoned that sexual orientation discrimination claims are “no different from the claims brought by women who were rejected for jobs in traditionally male workplaces, such as fire departments, construction, and policing. The employers in those cases were setting the boundaries of what jobs or behaviors they found acceptable for a woman (or in some cases, for a man).”

The Seventh Circuit’s ruling is not binding precedent on Pennsylvania employers.  However, as we reported last year, at least one federal district court in the Commonwealth considers sexual orientation to be a protected trait under Title VII.

The Seventh Circuit’s ruling may ultimately prove to have a much broader impact.  The Hively decision now means that circuit courts are officially split on the issue of whether Title VII protections include sexual orientation (last month, the Eleventh Circuit held that sexual orientation and gender identity are not protected under the statute).  When federal circuit courts provide conflicting rulings on the same legal question, the Supreme Court of the United States is more likely to issue its own ruling on the subject in order to ensure consistent application of the law.

We will continue to monitor any future developments on the subject.  As always, we’ll report any updates right here.

In 2015, we discussed the new joint-employer standard that was articulated by the National Labor Relations Board in Browning-Ferris Industries of California, Inc.  As a reminder, the NLRB held that a joint-employer relationship may be found if two or more entities “are both employers within the meaning of common law, and if they share or co-determine those matters governing the essential terms and conditions of employment,” such as wages, hours, work assignments, and control over the number of workers and scheduling.  The Board further found that a joint employer is not required to exercise its authority to control terms and conditions of employment, and recognized that control may be “reserved, direct and indirect.”

The effect of this new, employee-friendly standard was a broadening of the Board’s criteria used to consider whether a joint-employer relationship exists.  In other words, it became much more likely that companies that use contract or contingent labor could face liability as the joint employer of those workers.  The story doesn’t end there, however.

The Browning-Ferris decision was appealed, and the appeal is currently pending before the United States Court of Appeals for the D.C. Circuit.  If the court’s remarks during oral arguments that were recently held are any indication of the fate of the new joint employer standard, employers have reason for cautious optimism.

The D.C. Circuit’s panel of judges described the Board’s new test as “unworkable,” with one jurist remarking that the NLRB had “dropped the ball” in its 2015 decision.  She openly questioned whether the Board was capable of policing the line between genuine joint employment and contractor relationships.  Other members of the panel criticized the new test as “unclear.”

While there is no guarantee that the D.C. Circuit will overturn the NLRB’s decision in Browning-Ferris, early signs certainly seem to indicate that such an outcome is quite possible.  We will continue to monitor the status of this case and will report any further developments right here on our blog.  In the meantime, the NLRB’s decision still stands and employers should continue to operate accordingly.

The Pennsylvania Department of Labor and Industry recently announced that all employers in the Commonwealth will be required to pay their share of unemployment compensation taxes online.  The new rule takes effect January 1, 2017 and aims to reduce paperwork while streamlining the payment process.  The time for making these electronic payments will depend on whether an employer is considered “contributory” or “reimbursable” under the Unemployment Compensation Law.

Private, for-profit entities are contributory employers and pay unemployment taxes based on a contribution rate and their taxable wage base.  For these employers, the electronic payment requirement begins with the first calendar quarter filing period in 2017.

Political subdivisions and some nonprofit organizations may qualify as a reimbursable employer under the Law.  Reimbursable employers pay back the Unemployment Compensation Fund for the amount of unemployment benefits charged to their account.  These entities are billed either monthly or quarterly and must begin using the electronic payment system with the first 2017 benefit charge period.

Of course, the new rule comes with a set of teeth to encourage participation.  Failure to comply with the electronic payment requirement may result in a penalty of 10% of the payment up to a maximum of $500.00 per occurrence.  The minimum penalty for noncompliance is $25.00 per occurrence.

Employers that are unable to comply with the electronic payment requirement can submit a request for a waiver.  The Department will review each request and issue determinations on a case-by-case basis.  Waiver request forms are available  online.

The electronic payment process will be managed through the Unemployment Compensation Management System, which can be accessed here.  The site also contains useful information about how to register for and make electronic payments.

With the holiday season officially upon us, many employers are finalizing plans to host a party for their employees.  These festivities offer a time for colleagues to celebrate the year’s accomplishments, to extend season’s greetings, and to bond with one another in a less formal environment.  Sometimes, though, the holiday cheer can turn into a nightmare for employers.

By keeping an eye out for the many issues that may arise during an office holiday party, and by sticking to a few simple rules, you can ensure that your organization stays on the “nice” list this year.

Remember that Holidays Aren’t the Same for Everyone

Title VII of the Civil Rights Act of 1964 and many state laws, including the Pennsylvania Human Relations Act, protect employees from discrimination based on race, sex, national origin, and religion, among other things.  Unfortunately, holiday celebrations have landed some employers in legal hot water during the most wonderful time of the year, including: disciplining a Muslim employee for refusing to participate in Christmas activities (EEOC v. Norwegian Am. Hosp.) and forcing a Jehovah’s Witness employee to use vacation time to skip a holiday party (Westbrook v. NC A&T State Univ.).  You can avoid these potential problems by taking the following steps:

  • Hold holiday parties off-premises and during non-work hours if possible.
  • Make attendance optional. If the party is held outside of work hours and optional, then employees who may not celebrate holidays for religious or ethnic reasons can miss the party without forfeiting pay or suffering discipline.
  • Consider offering a “holiday party” or “end of year party” instead of a celebration linked to a particular religious observance. Although you may not get sued for simply having a “Christmas Party” or “Hanukkah Party,” adding religious overtones to your celebration may leave some workers feeling alienated or unwelcome.
  • If an employee has a religious or cultural objection to participating in your company’s holiday celebration, explore whether there’s a reasonable accommodation that will alleviate that employee’s concerns.

Keep an Eye Out for Bad Santas

Cultural and religious issues aren’t the only ones that can cause headaches for employers this time of year. In Brennan v. Townsend & O’Leary Enterprises, Inc., an employer held a holiday party for its employees.  A supervisor dressed as Santa Claus and asked his female subordinates to sit on his lap while he asked questions about their love lives.  One female employee sued on the basis of sexual harassment.  Ultimately, the case went to trial, where a jury awarded the employee $250,000.  The verdict was overturned on appeal, but the employer’s legal costs in defending the claim figure to be astronomical.

Work to prevent similar unfortunate scenarios by reminding employees that while holiday parties are meant to be fun and informal, they are still work-related functions and employment policies, including your anti-harassment policy, apply.  At your party, everyone should treat each other with same dignity and respect as they do during a normal workday.  Employees should be encouraged to report any questionable behavior so that it can be immediately corrected if necessary.  If you follow our blog, you already know that your workplace should be free from sexual harassment; your holiday party should be too!

If you’re Serving Egg Nog (or Other Alcoholic Beverages)…

Many employers choose to serve alcohol to add to the cheer and festive atmosphere at their holiday parties.  There’s usually nothing wrong with this from a legal perspective, and employees often appreciate the ability to enjoy an adult beverage while having a good time with work colleagues.  Serving alcohol at a work function does have its risks, though.  For instance, personal inhibitions often dissolve the more one drinks.  So what can you do to slow employees down while still keeping the party going?  Well…

  • Offer a certain number of drink tickets to each employee. By limiting the number of drinks available to your workers, you’re taking a big step toward keeping someone from drinking too much.
  • Fill your drink menu with beverages that contain relatively low amounts of alcohol. Stick to beer and wine, and leave the hard stuff at home.  Also offer plenty of non-alcoholic drink choices.
  • Make food available to help slow the absorption of alcohol.
  • Consider finding a few volunteers who will not drink (good luck!) and monitor the party. These folks can see whether someone has had too much to drink and help arrange for cabs and/or designated drivers.
  • Close the bar well before the event is over. Allow an hour or so for employees to continue mingling after last call.
  • Provide some form of transportation to and from the event.

Although there are ways for your festivities to turn into trouble, you certainly don’t need to be a Grinch to avoid the hassle.  Just remember that establishing and following a set of reasonable ground rules will foster a safe and happy holiday event for everyone.