Micah T. Saul

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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.

Public employers in Pennsylvania beware: if you implement an attendance policy designed to get your employees to show up for work, you may commit an unfair labor practice!  If your employees are represented by a labor union, and your policy outlines disciplinary action, then you must bargain with the appropriate union before issuing discipline under the policy.  The employer in Chester Upland Sch. Dist. v. Pa. Labor Relations Bd., learned that the hard way.

In that case, the public school district unilaterally adopted a new attendance and punctuality policy.  The new policy applied progressive discipline to employees who reached a certain number of absences due to personal illness.  The updated policy was adopted shortly after the expiration of a collective bargaining agreement between the district and its employees.

Upon learning of the change, the employees’ union filed an unfair labor practice charge, arguing that the district committed an unfair labor practice by adopting the policy without engaging in collective bargaining.  The union pointed to the prior collective bargaining agreement’s sick leave provisions, which provided each employee with eleven sick days per school year and was silent on discipline.  The district countered that the updated policy did not impose a new source of discipline; employees were always subject to discipline for attendance violations.  Rather, according to the employer, the new policy simply advised employees as to how attendance issues were tracked for disciplinary purposes.

The Pennsylvania Labor Relations Board rejected the employer’s arguments, finding that the district committed an unfair labor practice by unilaterally changing the terms and conditions of employment through adopting the new attendance policy.  The district appealed to the Commonwealth Court, which upheld the Board’s determination.  The Court provided several reasons for doing so.

First, it recognized the PLRB’s long history of treating sick leave policies as mandatory subjects of collective bargaining.  Second, the Commonwealth Court held that new policy did not simply explain how the district tracked absences for disciplinary purposes; instead, it specifically imposed progressive discipline for using sick days.  An employer’s unilateral changing of terms and conditions of employment, explained the Court, is an unfair labor practice regardless of whether it happens during the term of a CBA, following the expiration of a CBA or during the course of negotiations.  Moreover, the new policy directly conflicted with the express terms of the collective bargaining agreement, which did not provide for disciplinary action.

This case serves as an important reminder to public employers in Pennsylvania that when adopting new policies, a careful examination of the appropriate collective bargaining agreements is required.  Before implementing new rules that can result in disciplinary action, negotiation is typically required.  Adopting new disciplinary rules without engaging in collective bargaining will not withstand the scrutiny of the PLRB or Pennsylvania courts.

U.S. Citizenship and Immigration Services (UCIS) has released a revised version of the I-9 Employment Eligibility Verification Form.  The revised form must be used exclusively beginning on January 22, 2017; until then, employers may use either the new version or the old version (which is dated 3/8/2013).  Most of the revisions to the I-9 operate to allow for easier electronic completion, while others aim to streamline the employment eligibility verification process.  Changes to the form include:

  • Drop-down menus in (electronic format)
  • On-screen instructions for completing the form (electronic format)
  • Prompts to ensure the entry of accurate information (electronic format)
  • More space for providing additional information
  • Areas to enter the names of multiple preparers or translators

Despite these changes, the purpose of the I-9 Form remains the same: to verify the identity and employment eligibility of individuals seeking work in the United States.  Electronic and printable versions of the revised I-9 can be accessed here.

Earlier in the year, we reported on a temporary injunction issued by a federal district court Judge in Texas.  The injunction prevented the Department of Labor from enforcing the so-called “persuader rule.”  The rule sought to require all employers, consultants, and lawyers to disclose and report labor relations services, including  fee arrangements and a description of the services provided to employers by attorneys and consultants.

After issuance of the temporary injunction, the federal government filed a motion to seeking to set aside the Judge’s order in an effort to clear the way for enforcement of the rule.  The National Federation of Independent Business, which sought the temporary injunction on behalf of employers, filed its own motion to make the injunction permanent.

On November 16, 2016, the Court denied the government’s motion and granted the National Federation of Independent Business’s, permanently prohibiting the federal government from enforcing the persuader rule.  This is a big win for employers everywhere as they will not face consequences for failing to disclose the labor relations advice given by their consultants and attorneys.

The government has appealed, but the Fifth Circuit is not expected to consider the case before the end of President Obama’s term in January.  It is expected that President-elect Trump’s administration will either reverse the persuader rule outright or allow it to die by withdrawing the appeal.  We will continue to monitor the issue and report any further developments here.

On September 28, 2016, the United States House of Representatives passed a bill that would postpone implementation of the FLSA’s new salary threshold for “white-collar” overtime exemptions. As we noted earlier this month, the Department of Labor’s regulation will more than double the minimum weekly salary requirement to $913 and is set to take effect December 1. The recently passed House bill would push the effective date to June 1, 2017.

Employers shouldn’t get their hopes up for breathing room, however. Even if the bill makes it past the Senate and onto President Obama’s desk, the Commander-in-Chief has threatened a veto. With the overwhelming majority of congressional Democrats supporting the salary requirement increase, the chances that Congress will override the President’s veto are slim.

So, employers should stay the course and continue planning as if the new regulations will take effect on December 1, 2016. A helpful list of considerations and action steps can be found here.

Since 2012, the United States Department of Labor (DOL) reports that it has recovered over $40 million in back wages for employees in the oil and gas industry.  Employers in the industry can expect claims to rise as the DOL continues its enforcement initiatives.  The leading cause of back pay awards? Worker misclassification.  The DOL’s nearly 1,100 investigations into the oil and gas industry’s workforce classifications have focused primarily on two areas; independent contractors and white-collar exemptions.

Misclassifying Employees as Independent Contractors

Many employers in the energy sector commonly pay certain types of workers on a per diem or flat rate basis, irrespective of the number of hours that they work.  Oftentimes, these workers are classified as independent contractors and many even enter into independent contractor agreements with their employers.  As many companies in the oil and gas industry have learned the hard way, these factors alone are not enough to establish the existence of an independent contractor relationship.  Instead, there are a number of criteria that must be met in order for a worker to be properly classified as an independent contractor (and lawfully exempt from minimum wage and overtime provisions of the Fair Labor Standards Act).  Employees in the energy sector who are misclassified as independent contractors are often entitled to considerable back pay due to the considerable amount of overtime that they work.

Misclassifying Employees as Exempt Based on Job Title

The DOL’s investigations of oil and gas employers also commonly uncovers employees who are misclassified as exempt from minimum wage and overtime requirements under the Fair Labor Standard Act’s white collar exemptions. These employees are frequently and improperly considered by their employers to qualify for the executive, administrative, or professional exemptions in particular.  Employers operate under the inaccurate assumption that these exemptions apply based upon the employees’ job titles which regularly include one or more of the following “buzzwords”: manager, foreman, engineer, technician, and specialist.  As the DOL has made clear, however, job titles are not determinative of exempt status.  Instead, employees’ salary levels and job duties are the true measure of whether they are eligible for these exemptions.

Employers in the oil and gas industry (and in general) are well-advised to ensure proper classification of workers who they consider as independent contractors or as exempt from minimum wage and overtime under a white collar exemption.  In the meantime, the DOL can be expected to continue pursuing its misclassification enforcement initiative.