Employment Law Alert

Employment Law Alert

News and Updates on Employment Law

Court Compels Arbitration of Lawsuit Filed by Employees Discharged After Discovery of Personal Text Messages About a Coworker on a Company-Issued iPad

Posted in Policies/Handbooks

A recent decision from the District of New Jersey granting a motion to compel arbitration not only reinforces the strong federal policy in favor of arbitration, but also highlights issues pertaining to company-issued devices and employees’ personal use of these devices.

While employed by Anheuser-Busch, Victor Nascimento received a company-issued iPad. Nascimento and other employees exchanged text messages about a coworker over their personal cell phones outside of the work day, but the messages were received on Nascimento’s company-issued iPad because the iTunes account on his iPad was linked to his personal cell phone. The company-issued iPad was later reassigned to the coworker who was the subject of the text messages, and that person discovered the text messages on the device and inferred that they were about him. Following an investigation by Anheuser-Busch, Nascimento and several other employees were fired. The terminated employees later sued Anheuser-Busch, alleging violations of the Law Against Discrimination.

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EEOC Issues New Enforcement Guidance on Retaliation

Posted in Discrimination

According to the Equal Employment Opportunity Commission (“EEOC”), retaliation has become the most frequently alleged basis of discrimination of all charges received by the EEOC. In light of this, and after allowing for public comment on the EEOC’s proposed enforcement guidance issued earlier this year, on August 29, 2016, the EEOC issued its new Enforcement Guidance on Retaliation and Related Issues. This replaces the EEOC’s Compliance Manual Section 8: Retaliation, which was issued in 1998. The enforcement guidance sets forth the EEOC’s position on retaliation and addresses retaliation under each of the statutes enforced by the EEOC by providing a number of illustrative examples. Helpful to employers, the enforcement guidance concludes by providing employers “promising practices” to reduce the risk of violations. A general outline of the enforcement guidance follows.

Elements of a Retaliation Claim
Section II of the enforcement guidance explains the elements of a retaliation claim, illuminating what constitutes protected activity, what a materially adverse action is, and what causal connection is needed to support a finding of retaliation. Although these three elements are not new to an alleged claim of retaliation, the enforcement guidance provides definitions and examples of what does and does not establish each element of a retaliation claim. For instance:

  • Protected Activity: There are two instances in which an individual is protected from retaliation and can establish the first element of a retaliation claim. That is, protected activity includes (1) “participating” in an EEOC process (e.g., “having made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under an EEOC enforced statute”) or (2) “opposing” discrimination either explicitly or implicitly (e.g., communicating opposition, accompanying a coworker to file a complaint, or refusing to obey an order reasonably believed to be discriminatory).
  • Materially Adverse Action: To satisfy the second element of a retaliation claim an individual must prove a materially adverse action was taken against him or her. A materially adverse action is “any action that might well deter a reasonable person from engaging in protected activity.” It can include work-related actions (e.g., denial of a promotion or refusal to hire) or actions that are not work-related (e.g., “an action that has no tangible effect on employment”).
  • Causal Connection: Lastly, unlawful retaliation is only established if it is proven that the employer took the materially adverse action because the individual engaged in protected activity. In private sector, state, and local government retaliation cases, the individual must establish a “but-for” retaliatory motive. Whereas, federal sector Title VII and ADEA retaliation is prohibited if it was a “motivating factor.”

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Ninth Circuit Holds Class Action Waivers Illegal Under the NLRA

Posted in Alternative Dispute Resolution

On August 22, 2016, in Morris v. Ernst & Young, LLP, the Ninth Circuit Court of Appeals joined the Seventh Circuit Court of Appeals in holding that class action waiver provisions in arbitration agreements governing employment disputes are illegal under the National Labor Relations Act (NLRA or the Act) because these waivers interfere with the right of employees to engage in concerted activity protected by Section 7 of the Act (Section 7). The holdings of these courts are in indirect conflict with an opinion of the Fifth Circuit Court of Appeals, which upheld the validity of such waivers in the face of a challenge under Section 7. Employers in jurisdictions whose courts have not yet decided this issue, and who employ such waivers in their arbitration agreements or otherwise, should be prepared for attacks on their arbitration agreements by employees seeking to bring class or collective actions or by the National Labor Relations Board (NLRB).

Background
Ernst & Young (E&Y) required its employees to sign agreements that they would (1) not join with other employees in bringing legal claims against the company and (2) pursue any claims against the company only through arbitration. Although former employee Stephen Morris had signed such a “waiver” agreement, he filed a complaint against E&Y under the Fair Labor Standards Act (FLSA) and the California labor laws in federal district court alleging the company had misclassified him as an “exempt” employee and had improperly failed to pay him overtime. Morris brought the Complaint as a class and collective action on behalf of similarly situated employees. Another former employee, Kelly McDaniel, who had also signed a waiver agreement, later joined the action. Based on the signed waiver/arbitration agreements, the district court dismissed the case and ordered individual arbitrations. The court rejected plaintiffs’ argument that the “waiver” agreements violated the National Labor Relations Act (NLRA), the Norris LaGuardia Act, and the FLSA.

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Massachusetts Passes Toughest Pay Equity Legislation in the Nation

Posted in Wage & Hour

Earlier this month, Massachusetts became the latest state to pass expansive pay equity legislation to combat the gender wage gap, surpassing even the rigorous new requirements passed by New York and California in late 2015. Notably, Massachusetts is the first state to ban employers from requesting salary history as part of the interview or employment application process. The legislation, which passed unanimously and was signed into law by Governor Charlie Baker, will go into effect on January 1, 2018. To prepare for its implementation, employers with employees in Massachusetts should begin to adjust their hiring process and compensation policies, and consider conducting a self-evaluation of their pay practices to take advantage of Massachusetts’ law’s affirmative defense.

New Standard
Expanding on the federal Equal Pay Act’s mandate of “equal pay for equal work,” the Massachusetts law will require “equal pay for comparable work.” The law prohibits discrimination by paying a different wage, including “benefits or other compensation,” to members of the opposite sex who are performing comparable work, which means work that is (1) “substantially similar in that it requires substantially similar skill, effort and responsibility” and (2) “is performed under similar working conditions.” The legislation goes on to define “working conditions” as “circumstances customarily taken into consideration in setting salary or wages, including, but not limited to, reasonable shift differentials, physical surroundings and hazards encountered by employees performing a job.” This definition follows the trend established by New York and California, broadening the standard for pay equity by including more positions when comparing compensation.

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NJ Supreme Court Broadens Scope of LAD’s “Marital Status” Protection

Posted in Discrimination

On June 21, 2016, in Smith v. Millville Rescue Squad, the Supreme Court of New Jersey addressed the scope of the marital status protection afforded to employees by the Law Against Discrimination (LAD). The Court ruled that the LAD’s marital status provision is not limited to the state of being single or married but protects employees who have announced “they will marry, have separated, have initiated divorce proceedings or have obtained a divorce.”

Background
From 1998 until 2006, Robert Smith was employed by the Millville Rescue Squad (“MRS”) as its Director of Operations. His wife was also an MRS employee. In 2005, he began an extramarital affair with a volunteer under his direct supervision. His wife learned of the affair and informed the CEO of the MRS, who was Smith’s direct supervisor. The volunteer subsequently left the MRS, but the affair continued. After leaving his marital home, Smith informed the CEO that his marriage had collapsed. During a February 2006 meeting, the CEO told Smith he had “had eight months to make things right with [his] wife[,]” that “he did not think there was any chance of reconciliation . . . and that he believed there would be an ‘ugly divorce.” The CEO informed Smith he would bring the issue before the MRS’s Board of Directors. Shortly thereafter, the MRS terminated Smith’s employment.

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Arbitration Clause Held Too Vague to Cover Statutory Claims

Posted in Alternative Dispute Resolution

Employers drafting arbitration clauses for employment contracts and others drafting arbitration agreements generally need to be familiar with the line of New Jersey cases involving arbitration clauses, including the Appellate Division’s recent opinion in Anthony v. Eleison Pharmaceuticals LLC, Docket No. A-932-15T4 (App. Div. July 18, 2016), where the court held that an arbitration clause that does not include reference to a waiver of plaintiff’s statutory rights or a jury trial does not constitute a valid waiver of the right to have claims decided in a judicial forum.

In Anthony, the plaintiff filed a five-count complaint in Superior Court against Eleison, including four alleged violations of the New Jersey Wage Payment Act for failing to pay him once a month, failing to pay him minimum wage, failing to pay him overtime compensation, and failing to pay him upon separation of his employment. Central to the dispute was plaintiff’s employment contract which contained the following dispute resolution provision: “The parties agree that should any dispute arise out of this Agreement, a phased dispute resolution process shall resolve the dispute.” The “phased” process culminated in binding arbitration. In response to the complaint, defendants filed a motion to compel arbitration, arguing in part that plaintiff had agreed to the dispute resolution provision in his employment contract, and, thus, to arbitration. The trial court agreed, finding that the arbitration provision was clear and the dispute “arose out of the Agreement.”

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Second Circuit Holds Human Resources Director May Be Individually Liable Under FMLA

Posted in Family Leave

Employers should be aware that the United States Court of Appeals for the Second Circuit has held, in Graziadio v. Culinary Institute of America, that supervising employees can be held individually liable under the Family and Medical Leave Act (“FMLA”) for retaliation and interference with an employee’s FMLA rights. The Court also formally adopted standards for FMLA interference claims and for claims brought pursuant to the associational discrimination provision of the Americans With Disabilities Act (“ADA”).

Background

The plaintiff, Cathleen Graziadio, was a Payroll Administrator at the Culinary Institute of America (“CIA”). At issue in Graziadio’s lawsuit were two FMLA leaves – one to care for a son with diabetes, and the second to care for another son who fractured his leg and required surgery. In connection with her first FMLA leave, Graziadio submitted a medical certification to the CIA without incident. When Graziadio attempted to return to work and use intermittent FMLA leave, CIA Human Resources Director, Shayan Garrioch, informed Graziadio that she needed to submit an updated certification to support the intermittent leave to care for her son with diabetes, as well an initial certification to support FMLA leave to care for her son suffering from a leg injury. Graziadio responded with multiple emails and phone calls to Garrioch, seeking clarification as to exactly what paperwork was needed and making clear her desire to return to work. Instead of providing specific instructions, Garrioch simply requested “additional paperwork,” prompting Graziadio to make repeated requests for clarification as to what specific paperwork was required. Although Garrioch ignored Graziadio’s request for clarification, Graziadio submitted a new FMLA certification, which went unacknowledged. Eventually, communications between Garrioch and Graziadio broke down completely and Graziadio was terminated for job abandonment.

Graziadio filed suit in the Southern District of New York against CIA and Garrioch, alleging interference with FMLA leave, FMLA retaliation, and associational discrimination under the ADA. The district court granted defendants’ motion for summary judgment and dismissed all claims.

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The EEOC Finalizes Wellness Program Guidance, Issuing Final Rules on Workplace Wellness Programs and a Sample Notice

Posted in Employee Benefits

After much anticipation (and confusion) regarding legally permissible parameters for certain employer-sponsored wellness programs, on May 16, 2016, the Equal Employment Opportunity Commission (“EEOC”) issued two final rules concerning wellness programs that offer incentives in exchange for health information from employees and their spouses. Specifically, the rules describe how wellness programs can comply with Title I of the Americans with Disabilities Act (“ADA”) and Title II of the Genetic Information Nondisclosure Act (“GINA”). According to the EEOC’s press release, the rules provide guidance under the ADA and GINA consistent with the relevant provisions of the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Affordable Care Act (“ACA”). The EEOC’s proposed regulations were discussed in a previous post following our presentation entitled “Wellness Programs for a Healthy Workplace” at the Fifth Annual Gibbons Employment & Labor Law Conference. Then, in June, the EEOC issued a sample notice for employer-sponsored wellness programs. Here, we parse the rules into bright-line takeaways for employers.

The ADA Final Rule
The ADA final rule provides guidance to employers who wish to use incentives to encourage employee participation in wellness programs that involve disability-related inquiries and/or medical examinations. Thus, employers whose wellness programs screen for health-related factors such as high blood pressure or cholesterol and who use incentives to encourage employees to participate in these screenings must be aware of the final rule. The final rule applies to all wellness programs that include disability-related inquiries and/or medical examinations (not just those wellness programs that are part of a group health plan). What should employers know to comply?

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Federal Judge Imposes Nationwide Preliminary Injunction on DOL’s New “Persuader” Rule

Posted in Labor

On June 27, 2016, in National Federation of Independent Business v. Perez, Judge Sam R. Cummings of the United States District Court for the Northern District of Texas issued a nationwide preliminary injunction precluding the United States Department of Labor (“DOL”) from enforcing its recently introduced rule interpreting the Labor-Management Reporting and Disclosure Act’s (“LMRDA”) “advice” exemption. 81 Fed. Reg. 15,924 et seq.

Background
As discussed in our previous blog, the LMRDA requires employers and labor relations consultants, often referred to as “persuaders,” to file reports with the government detailing expenditures, activities, agreements, and arrangements undertaken to persuade employees regarding their rights to join or refrain from joining unions, but these requirements are waived if the consultants do nothing more than “giv[e] or agree[] to give advice to [the] employer.” Under the DOL’s previous interpretation of this “advice” exemption, employers and their consultants were not required to publicly disclose their arrangements unless a “persuader” made direct contact with company employees. The new rule reinterprets the meaning of “advice” so that employers and consultants must file reports whenever “[a] consultant undertakes, or agrees to undertake, ‘persuader activities’” – even if the consultant “has no face-to-face contact with employees” and has limited his or her engagement to “indirect persuasion.”

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U.S. Supreme Court Clarifies Statute of Limitations for Constructive Discharge Claims

Posted in Discrimination

On May 23, 2016, the U.S. Supreme Court, in Green v. Brennan, held that the statute of limitations for a constructive discharge claim begins to run when the employee gives notice of his or her resignation, not at the time of the employer’s last allegedly discriminatory act giving rise to the resignation. The “constructive discharge” doctrine refers to a situation in which an employer discriminates against an employee to the point that the employee’s working conditions become so intolerable that a reasonable person in the employee’s position would feel compelled to resign.

The Court’s decision in Green resolves a split in authority between federal appeals courts and provides greater certainty regarding when an employee’s constructive discharge claim accrues. Although the Green case arose in the context of a federal employee, its holding applies equally to public and private sector employment.

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