U.S. Equal Employment Opportunity Commission (EEOC) Chair Jenny Yang announced the agency’s intention in 2015 to propose new regulations addressing the interplay between corporate wellness programs and federal anti-discrimination statutes.  The EEOC raised eyebrows recently by launching its first-ever series of lawsuits under the Americans with Disabilities Act (ADA) directly challenging wellness programs.  Many critics complained the agency engaged in litigation against employers without giving them needed clarity on how not to run afoul of the ADA, as well as the Genetic Information Nondiscrimination Act (GINA).  The interplay between corporate wellness programs and the Affordable Care Act only heightens the need for additional clarity from the EEOC.  “That is an area that we think is very important for us, as a commission, to provide guidance on — how the Affordable Care Act interacts with the ADA and other laws such as GINA,” said Yang.

The EEOC’s fall 2014 regulatory agenda lists two rules—to amend regulations under the ADA and GINA respectively—for which notices of proposed rulemaking are slated for February.  The ADA-related rule aims to tackle “financial inducements and/or penalties” under health plan wellness programs, as well as other aspects of wellness programs, and their interaction with the ADA.  The other rule seeks to address inducements to workers’ spouses or other family members who answer questions about current or past medical conditions. The EEOC said voluntary wellness programs are permissible, but they must be genuinely voluntary.

While offering clarity remains the goal, the EEOC stops short of guaranteeing that the notices of proposed rulemaking will actually issue in February 2015.   “The [February 2015] date is somewhat of a target; it’s not a fixed date,” said Yang. “I wish I could give you a more certain prediction, but I can say that it’s something we’re going to be focusing on.”

On December 3, 2014, the United States Department of Labor’s Office of Federal Contract Compliance Program (“OFCCP”) announced a final rule implementing President Obama’s Executive Order 13672 (“EO 13672”) which prohibits discrimination on the bases of sexual orientation and gender identity in the federal contracting workforce. EO 13672 does not directly impact employment considerations outside the federal contracting context. The OFCCP also updated its “Frequently Asked Questions” document concerning the changes implemented, as well as addressing employer exemptions under the new rule. The rule goes into effect 120 days after its publication in the Federal Register and applies to federal contracts entered into or modified on or after that date.

The OFCCP designed the new rule to address problems associated with employment discrimination on the basis of sexual orientation and gender identity and to ensure a fair and inclusive work environment in the context of Federal contractors. The OFCCP noted that contractor employees who face discrimination on the basis of sexual orientation or gender identity on the job may experience lower self-esteem, greater anxiety and conflict, less job satisfaction, receive less pay and have less opportunity for advancement. The OFCCP designed the new rule to address these issues.

The new rule implements EO 13672, by amending certain sections within Title 41 of the Code of Federal Regulations. The new rule requires contractors to incorporate new language into the equal opportunity clauses currently used in covered subcontracts and purchase orders. Additionally, the new rule requires contractors to notify job applicants and employees of their non-discrimination policy by posting specific notices, provided by OFCCP, in conspicuous places.

When soliciting for employees, the new rule requires federal contractors to expressly state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, “sexual orientation, gender identity,” or national origin. Contractors must also ensure that facilities provided for employees are not segregated by any of the covered basis which now includes sexual orientation and gender identity.

Although designed to safeguard against sexual orientation and gender identity discrimination, this rule does not require contractors to set goals for employing persons on the basis of sexual orientation or gender identify, collect and maintain statistics on applicants or employee on the basis of sexual orientation or gender identity, or conduct statistical analysis of applicants or employees on the basis of sexual orientation or gender identity.

Most importantly, the new rule makes no changes to the existing religious exemption allowing religiously affiliated contractors (religious corporations, associations, educational institutions, or societies) to favor individuals of a particular religion when making certain employment decisions.

Until its publication in the Federal Register, non-exempt employers should prepare for the new rule and its changes by updating its current contracts and purchase orders to include the necessary language; update job applications and job postings to comply with the new rule; and watch for the notice posting issued by OFCCP to publish in the workplace.

On December 12, 2014, a divided National Labor Relations Board issued and adopted a final rule amending its representation–case procedures—which drastically speeds up the union election process.  The rule will be published in the Federal Register on December 15, and will take effect on April 14, 2015.

The new rule requires businesses to postpone virtually all litigation over eligibility issues until after workers vote on whether to join the union.  The regulation also eliminates a previously-required 25-day period between the time an election is ordered and the election itself, and it requires employers to furnish union organizers with all available personal email addresses and phone numbers of workers eligible to vote in a union election.  (The NLRB’s Purple Communications’ decision handed down on December 11, 2014 essentially prohibited employers from denying union organizers access to company email.) The rule also, for the first time, allows for the electronic filing and transmission of union election petitions.

NLRB Board Chairman Mark Gaston and Members Kent Y. Hirozawa and Nancy Schiffer approved the final rule.  Board Members Philip A. Miscimarra and Harry I. Johnson III dissented.  The rule includes detailed explanations regarding the rule’s impact on current procedures and the views of the majority and dissenting members.  The regulatory shift represents a clear victory for a labor movement that has often felt taken for granted by the Obama administration, while a legal challenge from business groups is all but certain.

http://www.nlrb.gov/news-outreach/news-story/nlrb-issues-final-rule-modernize-representation-case-procedures

On June 24, 2013, the United States Supreme Court narrowed the definition of “supervisor” as it relates to racial and sexual harassment claims, thereby raising the burden of proof for employees and former employees to prove liability on the part of their employer.

Under Title VII, an employer’s liability for workplace harassment depends on the status of the alleged harasser.  If the harassing employee is the plaintiff’s co-worker, the employer is liable only if it was negligent in controlling working conditions.  In cases in which the harasser is a “supervisor,” however, different rules apply.  If the supervisor’s harassment results in “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits”—the employer is strictly liable (i.e., the employer is held responsible for the employee’s actions regardless of the employer’sculpability or fault).  Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 761 (1998).  But if no tangible employment action is taken, the employer may escape liability by establishing, as an affirmative defense, that (1) the employer exercised reasonable care to prevent and correct any harassing  behavior and (2) that the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided.  Faragher v. Boca Raton, 524 U. S. 775, 807 (1998); Ellerth, 524 U.S. at 765.

On June 24, 2013, the U.S. Supreme Court decided the case of Vance v. Ball State University, No. 11-556, — U.S. — (2013). The African-American plaintiff-employee asserted that another White employee—who the plaintiff-employee alleged was her supervisor—glared at the plaintiff-employee, slammed pots and pans around her and blocked her on an elevator.  The trial court held that the employer was not responsible for the White employee’s alleged actions because, although she may have directed some of her work duties, she could not take tangible, adverse employment actions against the plaintiff-employee, and was therefore not a supervisor.  The Supreme Court agreed with the lower court’s ruling.  In affirming the ruling, the Supreme Court held that for purposes of an employer’s liability for an employee’s actions under Title VII, an employee is a “supervisor” only if he or she is empowered by the employer to take tangible employment actions against the victim. The Court based its holding on the framework adopted in Ellerth and Faragher which draws a sharp line between co-workers and supervisors and implies that the authority to take tangible em­ployment actions is the defining characteristic of a supervisor.

The Supreme Court’s ruling in Vance is a victory for employers.  The group of employees deemed to be supervisors is now more limited and somewhat easier to delineate.  Unless the employer has vested the individual with the power to hire, fire, promote, demote, transfer or discipline the complaining employee, the court must conduct the analysis regarding the employer’s liability under the co-worker framework for employer liability (which requires the plaintiff-employee to prove employer negligence in order to recover against the employer). An employee’s authority to take tangible actions may be proved or disproved by concrete evidence such as job descriptions and testimony as to past practices.  The Court’s adoption of this more narrow definition of “supervisor” will likely result in the issue of supervisor liability being decided more frequently at the summary judgment stage of litigation.

This Newsletter is a publication of the Labor and Employment Department of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi. This Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.

IRS Circular 230 Notice

Steve Carmody
Labor and Employment Practice Group Chair

At the end of the 2013 term, the United States Supreme Court decided a case involving a former employee’s claim for discriminatory harassment and retaliation under Title VII.  In doing so, the nation’s highest court tightened the parameters necessary for employees to bring retaliatory discharge claims against their former employers.

Mississippi is an “employment at-will” state—meaning that employees for an indefinite term can have employment terminated “at the will” of the employer (or the employee) without legal repercussion.  In other words, an employer can generally fire an employee for good reason, bad reason or no reason at all.  There are certain federal and state law limitations to the “employment at-will” doctrine, such as Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, other federal laws and Mississippi common law regarding wrongful discharge.

On June 24, 2013, the U.S. Supreme Court decided the case of University of Texas Southwestern Medical Center v. Nassar, No. 12-484, — U.S. – (2013), which involved Nassar, a physician who was formerly employed at both the University of Texas and at Southwestern Medical Center.  Nassar alleged that his supervisor at the University harassed him on the basis of his religion and ethnic heritage.  Nassar resigned his position with the University, but secured a permanent position at the Medical Center.  However, shortly after resigning, another faculty member allegedly learned of Nassar’s complaints and objected to the permanent offer of employment with the Medical Center.  Nassar’s job offer was subsequently withdrawn and the physician sued for both harassment and retaliation under Title VII.

A jury awarded Nassar over $3 million in damages.  However, the Medical Center appealed, arguing that the trial judge erred in instructing the jury that it only had to find that retaliation was a motivating factor for the supervisor’s action (i.e., a mixed motive instruction).  Instead, the Medical Center argued that the trial court should have instructed the jury that it had to find that the adverse employment action would not have happened “but-for” the supervisor’s desire to retaliate.  In affirming the lower court’s ruling to set aside the jury award, the U.S. Supreme Court agreed with the Medical Center and held that employees “must establish that his or her protected activity was a ‘but-for’ cause of the alleged adverse action by the employer.”

The Supreme Court’s opinion in Nassar creates a different and more stringent standard of proof for retaliation cases, as opposed to “regular” employment discrimination cases arising under Title VII (or other discrimination statutes).  In typical discrimination cases, employers face exposure in “mixed motive” situations—that is, if a jury finds that wrongful discrimination was just a motivating factor (as opposed to the motivating factor) for an adverse employment decision.  For employers, the Nassar opinion provides important diminution of potential liability in retaliatory discharge cases.

This Newsletter is a publication of the Labor and Employment Department of the law firm of Brunini, Grantham, Grower & Hewes located in Jackson, Mississippi. This Newsletter is not designed or intended to provide legal or professional advice, as any such advice requires the consideration of the facts of the specific situation.

IRS Circular 230 Notice

Steve Carmody
Labor and Employment Practice Group Chair