Employment Law Alert : Gibbons P.C.: Labor Relations, Employment Contracts, Employee Benefits, & Wrongful Discharge Lawyers & Attorneys

As with the other protections afforded individuals under the NYCHRL, the unemployed also are protected against retaliation for engaging in “protected activity” by reporting or complaining about discrimination that violates the NYCHRL. Therefore, it is forseeable for an applicant to make an internal complaint with the employer who posts the job, and then bootstrap a retaliation claim to the underlying discrimination claim by alleging that the applicant was further barred -- or retaliated against -- based on the internal complaint. Consequently, when faced with an unsuccessful applicant’s complaint, employers should be careful to conduct a review of the claim and to be able to explain why the employer’s decision was unrelated to the applicant’s complaint.

The Amendment should not be interpreted to prohibit currently lawful hiring strategies. For example, during an interview, the employer can seek information about the applicant’s skills, abilities and experience. Related to the individual’s experience, the employer may ask about the circumstances under which the applicant’s prior employment ended.

Since damages including injuntive relief, back pay, front pay and penalties up to $250,000 are available under the NYCHRL, employers should take the time now to review their hiring policies and job postings to avoid using language that may run afoul of the Amendment. Employers also should inform those responsible for making hiring decisions about the Amendment and that unemployment status alone may not be used to disqualify an applicant.

For questions regarding the Amendment to the NYCHRL and related litigation, please feel free to contact an attorney in the Gibbons Employment & Labor Department.

Mitchell Boyarsky is a Director in the Gibbons Employment & Labor Law Department.

The EEOC’s focus on the protection of LGBT employees follows its April 2012 decision in Macy v. Holder, Appeal No. 0120120821 (April 20, 2012), about which we previously blogged, in which the EEOC determined that Title VII affords protection to these employees. The EEOC also takes the position that discrimination based on sex includes discrimination based on a failure "to conform to socially-constructed gender expectations."

Director Gigante cited the rise in pregnancy-related charges filed by older women and discussed the interplay between the Americans with Disabilities Act, the Americans with Disabilities Act Amendments Act, the Pregnancy Discrimination Act, and the Family Medical Leave Act in pregnancy-related discrimination claims. The EEOC is particularly interested in cases alleging failure to accommodate pregnant employees.

The panel also discussed disability discrimination and failure to accommodate claims, with a particular focus on no-fault attendance and fixed leave policies, both of which have been the subject of litigation by the EEOC. Employers should carefully review their attendance and leave policies to ensure that they do not run afoul of the anti-discrimination laws. Director Gigante emphasized that employers should determine the individual needs of the disabled employee in order to identify reasonable accommodation. While it is important to initiate the accommodation process to ensure compliance, Director Gigante noted that the employer need not accept the specific accommodation requested by the employee and that undue hardship to the employer remains a valid consideration.

With respect to recruitment and hiring, Director Gigante reiterated the EEOC’s continuing concern with facially-neutral pre-employment tests and requirements that have a disparate impact on employees belonging to a protected class. Moreover, employers can expect close scrutiny if they elect to use background checks and criminal history reports to screen applicants. It is critical that employers be familiar with the EEOC’s April 2012 guidance on the use of criminal background checks, including the need to perform individualized assessments, and with any state or local laws that may impose further limitations. In addition, the EEOC’s Plan specifies that it will specifically target a number of additional discriminatory recruitment and hiring practices, including exclusionary practices and policies, channeling/steering individuals into jobs due to their status in a particular group, and restrictive application processes.

For information on how employers can protect their businesses and comply with the law, or for an audit of workplace policies and practices, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.

Susan L. Nardone is a Director in the Gibbons Employment & Labor Law Department. Daniel A. Schleifstein, an Associate in the Gibbons Employment & Labor Law Department, co-authored this post.

Unlike New Jersey, Oregon, or Washington, D.C., which have passed similar laws prohibiting discrimination against the unemployed, the New York City statute goes one step further in providing persons aggrieved by a violation of the law with a private right of action. Such individuals can file a complaint with the New York City Commission on Human Rights, or commence an action in court against the employer. Like any other plaintiffs alleging discrimination under the NYCHRL, they will be entitled to collect compensatory and punitive damages, as well as their attorneys’ fees should they succeed in establishing their claims. The statute of limitations for such claims is three years and it runs from the date of the alleged discrimination.

While the amendments to the NYCHRL are expansive, they are not limitless. There is nothing in the amendments which prohibit an employer from:

• considering an applicant’s status as unemployed “where there is a substantially job-related reason for doing so” or “inquiring into the circumstances surrounding an applicant’s separation from prior employment;”
• considering or advertising any substantially job-related qualifications such as holding a valid professional or occupational license; a certificate, registration, permit, or other credential; a minimum level of education or training; or a minimum level of professional, occupational, or field experience;
• determining that only its current employees will be considered for employment or given priority for employment; or
• determining compensation or terms and conditions of employment based on the applicant’s actual amount of experience.

Employer Takeaways

As of June 11, 2013, persons who are “unemployed” – currently 9.1% of the New York City population – will represent a new class of potential plaintiffs who may file discrimination lawsuits. Any employers with a workforce in New York City should immediately suspend any practices of barring applicants merely because they are unemployed. In addition, employers should train managers, as well personnel in their Human Resources Departments, on the changes to the law to ensure that the hiring process complies with the new law. Finally, New York City employers should immediately review their job postings (both in print and online) to ensure they comply with the new amendments to the law.

For assistance with matters involving compliance with the New York City Human Rights Law, please contact an attorney in the Gibbons Employment & Labor Law Department.

Peter J. Dugan is an Associate in the Gibbons Employment & Labor Law Department. Christopher Fox, a paralegal at Gibbons, assisted in the preparation of this article.

Using “A Summary of Your Rights Under the Fair Credit Reporting Act”

An employer must provide an employee/potential employee with the form “A Summary of Your Rights Under the Fair Credit Reporting Act” before taking any adverse action based on a consumer report regarding an applicant/employee. This report may be obtained following separate written notice to, and written permission from, the applicant/employee. Further, the form also must be provided to an applicant/employee before an employer obtains an “investigative consumer report” on an applicant/employee. An investigative report is more detailed, and somewhat more intrusive, than an consumer report because it seeks information concerning a consumer’s character, general reputation, personal characteristics or mode of living, and is obtained through personal interviews with that consumer’s neighbors, friends, associates or acquaintances.

For answers regarding matters involving compliance with the FCRA’s regulation of employment background checks, please feel free to contact any attorney in the Gibbons Employment & Labor Department.

Mitchell Boyarsky is a Director in the Gibbons Employment & Labor Law Department.

Employers must obtain a signed acknowledgment from employees within 30 days of the employee’s receipt. It is the first of its kind for NJ employers to require employees to sign an acknowledgment of having received the notice. The notice must be posted and distributed in English and Spanish and in any other language the State has made the poster available -- if the employer reasonably believes the alternative language is the first language of a significant portion of its workforce.

Some Questions Remain

Employers may receive more guidance from the New Jersey Department of Labor and Workforce Development once it issues the form “notice” to be posted and distributed. The New Jersey Wage and Hour Law (WHL) provides for penalties for non-compliance. It is not clear whether a violation of this new law will trigger the standard penalties under the WHL. Also, it is not clear whether an employer’s failure to provide the notice could be used as evidence in litigation in support of a claim for higher damages.

Guidance for Employers

The notice and distribution requirement applies to employers with 50 or more employees. However, the New Jersey Law Against Discrimination, which prohibits gender-based discrimination in compensation and benefits in the workplace, applies to all employers. Title VII of the Civil Rights Act of 1964 and the Equal Pay Act, which similarly prohibit gender discrimination, have other thresholds. For example, Title VII applies to employers with 15 or more full or part-time employees. Although employers who are covered by these statutes may be exempt from the new posting requirement, employers still must comply with the federal and state anti-discrimination obligations.

Pay discrimination has become a hot issue. A recent, major initiative of both the Equal Employment Opportunity Commission and the equivalent state agencies has been to address compensation inequality based on gender. Employers should take the time in light of this new notice obligation to audit their compensation practices and systems (with counsel) to identify any disparities and/or prepare to defend against them if challenged through documentation and/or reasonable explanations.

Criminal Background Inquiries for Newark Employers

Effective November 18, 2012 based on a newly enacted Ordinance, employers of 5 or more employees who employ persons -- or take applications for employment -- in the City of Newark are generally prohibited from (1) conducting pre-application criminal background checks and inquiries and (2) denying employment based on the results of a criminal background check conducted post-offer unless the employer first conducted an individualized analysis of the criminal background using factors listed in the new Ordinance. An employer may discuss an applicant’s criminal background pre-offer if the applicant discloses his/her criminal history voluntarily and without solicitation. There exist some exemptions from the Ordinance, such as mandatory state and federal regulations requiring an employer to consider a criminal history for hiring decisions.

Requirements to Conduct Criminal Background Checks

An employer may not inquire about an applicant’s criminal background pre-offer unless it has made a “good faith determination that the relevant position is of such sensitivity that a criminal history inquiry is warranted.” If an employer conducts a criminal background check on an applicant post-application after a conditional offer has been made, the employer must provide the applicant prior notice and obtain an authorization to conduct the check (similar to an employer’s requirement under the state and federal Fair Credit Reporting Act). The notice also must inform the applicant that he/she will be afforded the opportunity to present evidence regarding the accuracy and relevance of the background check results.

Permissible Consideration by Employer

An employer may inquire about (1) convictions for up to 8 years from sentencing; (2) disorderly persons convictions or municipal ordinance violations for up to 5 years from sentencing; and (3) pending criminal charges (including cases continued without a finding prior to a dismissal). Certain exceptions exist for violent crimes.

Prohibited Actions

Employers may not inquire about, require a candidate to disclose or take any adverse action based on: (1) an arrest or criminal accusation not currently pending; (2) records which have been erased, expunged or subject to an executive pardon; and (3) a juvenile adjudication of delinquency or records which have been sealed.

Required Analysis to Use Criminal History for Hiring Decisions

An employer must consider the following factors when basing a hiring decision on a criminal background:

• The nature of the crime and relationship to the duties of the position;
• Information pertaining to the degree of rehabilitation and good conduct;
• Whether the job provides the applicant the opportunity to commit a similar offense;
• The length of time that elapsed since the offense; and
• A certificate of rehabilitation issued by a state or federal agency.

The employer is required to document its analysis of these factors using an “Applicant Criminal Record Consideration” form.

Notification to Applicant and Opportunity to Review Decision

If an employer makes a hiring decision based on an applicant’s criminal record history, it must notify the applicant of the rejection, provide the applicant a copy of the criminal record inquiry and a copy of the Applicant Criminal Record Consideration form. The employer also must state the reason for the adverse decision and include consideration of the factors listed above. Finally, the employer must advise the applicant of the opportunity to review the decision and the manner for the applicant to present evidence relevant to the employer’s consideration. The applicant has 10 days from receipt of the notification to respond. If an applicant timely responds, the employer must consider the applicant’s evidence prior to making a final decision. The employer must document the evidence received from the applicant as well as its final decision and notify the applicant of the final decision in a reasonable amount of time following receipt of the applicant’s evidence.

It remains to be seen how the new law will be enforced. For now, the Mayor of Newark is authorized to create an office of agency to implement and enforce the Ordinance. Penalties will range between $500 to $1000 per violation. However, the Ordinance does not address whether there exists a private right of action to enforce it.

These obligations will require employers to re-visit their background check procedures and hiring guidelines with regard to criminal backgrounds. It will take time to see how the Ordinance impacts the local economy of Newark.

For assistance with matters involving employee notices and criminal background checks, please contact an attorney in the Gibbons Employment & Labor Law Department.

Mitchell Boyarsky is a Director in the Gibbons Employment & Labor Law Department.

Grey-Allen appealed the order granting summary judgment on her retaliation claim. The defendants appealed the order denying their motion for judgment as a matter of law of for a new trial. On appeal, the Second Circuit affirmed the District Court’s decision.

Anti-Retaliation Protections

In granting summary judgment, the District Court concluded that although Grey-Allen was investigating an allegation of sexual harassment, the investigation was not connected to any charge of discrimination filed with the EEOC. In interpreting the language of the “participation clause” of Title VII, the Second Circuit looked to other Courts of Appeals which consistently have held that the protections afforded to employees under Title VII from retaliation do not apply to an internal investigation by an employer that is not associated with a formal EEOC proceeding.

Alter Ego Liability

The Circuit Court concluded that Hugh Benjamin’s high managerial rank and significant control over the company’s operations sufficiently enabled a jury to reasonably conclude he was a proxy or alter ego of the company. The Court also ruled that, although the District Court’s jury instructions on the alter ego theory were an error because they lowered the threshold to find Hugh Benjamin an alter ego, the error was harmless because a reasonable juror could not find that he was not an alter ego given the facts of the case. Significantly, he reported directly to the President, exercised managerial responsibility for the company’s day-to-day operations and was a corporate shareholder. Thus the Second Circuit affirmed the District Court’s ruling that the Farragher/Ellerth defense was not available to the company.

Analysis for Employers

Before a formal charge of discrimination has been filed, an employer has a better chance of withstanding a retaliation claim based on its taking action against an employee who participates in an internal investigation. Often an employer may not receive immediate notice from a state agency or the EEOC when a complaint is filed. Therefore, an employer still may be at risk when acting based upon its findings in an investigation and negatively affects an employee who participates in the investigation. Nevertheless, the earlier it implements remedial steps, the better its chances to overcome a retaliation claim. Furthermore, the employer should appropriately document its findings and formulate well-reasoned bases for any response it implements. Finally, employers should train managers to understand potential ramifications resulting when company policy is violated by senior managers. Gibbons attorneys in the Employment & Labor Department are available to assist employers in workplace investigations and related litigation.

Mitchell Boyarsky is a Director in the Gibbons Employment & Labor Law Department.

According to the new guidance, “[t]o establish that a criminal conduct exclusion that has a disparate impact is job related and consistent with business necessity under Title VII, the employer needs to show that the policy operates to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position.” The EEOC suggests that an employer can consistently meet this test by (a) validating the screen using the Uniform Guidelines on Employee Selection Procedures or (b) developing a targeted screen that takes into account the Green factors and then offers an opportunity for an individualized assessment. The individualized assessment gives the applicant/employee notice of the results and then an opportunity to offer additional information demonstrating why the exclusion should not apply.

According to the EEOC, the employer must have some basis for drawing a connection between the crime and its importance to the job, such as "fact-based evidence, legal requirements, and/or relevant and available studies." By way of example, a policy that excludes an applicant convicted of theft or dishonesty for a position in which the applicant would have access to personal financial information or money where the conviction occurred in the four years prior to the application may be an appropriate targeted exclusion if the employer can explain, with reference to some fact or study, why the policy was adopted. The examples the EEOC gives include national criminal data and recidivism research.

Also of note in the guidance:

• Title VII does not preempt federal laws that prohibit employment of individuals with specific convictions in certain industries or positions in the public and private sector.
• State and local laws are preempted by Title VII if they result in an unlawful employment practice. This means that following a state or local law is not a defense - the employer must still show job relatedness and business necessity.

The EEOC offers a number of “Employer Best Practices,” including the elimination of policies that exclude individuals because of any criminal record, the development of narrow policies and practices that closely correlate the essential job requirements with the specific offense, documented justification for the policy procedure, and training of managers.

For a related article on the new EEOC Guidance, including commentary by Gibbons Employment & Labor Law Director, Susan L. Nardone, click here. To discuss any of your company’s employment or e-discovery needs, contact any attorney in the Gibbons Employment & Labor Law Department.

Susan L. Nardone is a Director in the Gibbons Employment & Labor Law Department.

Writing for the Court, Chief Justice Roberts officially recognized the ministerial exception and rejected the Sixth Circuit’s analysis, emphasizing that:

members of a religious group put their faith in the hands of their ministers. Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs. By imposing an unwanted minister, the state infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments.

Accordingly, the Court concluded that the ability of religious groups to choose who will preach their beliefs, teach their faith, and carry out their mission is paramount. The Court, however, stopped short of defining the term “minister,” and stated that it was reluctant “to adopt a rigid formula for deciding when an employee qualifies as a minister.”

As it related to Perich, the Court held that she was covered by the ministerial exception “given all the circumstances of her employment.” Among the factors weighed by the Court were: (1) the School held Perich out as a minister, (2) Perich’s title as minister reflected a significant degree of religious training followed by a formal process of commissioning, (3) Perich held herself out as minister of the Church by, amongst other things, claiming a special housing allowance on her taxes that was available only to employees earning their compensation “in exercise of the ministry,” and (4) Perich’s job duties reflected a role in conveying the Church’s message and carrying out its mission.

Despite its refusal to define “minister” in its “first case involving the ministerial exception,” the Court did provide guidance regarding the extent to which ministers perform secular duties and vice versa – the extent to which lay employees perform duties performed by ministers. Specifically, the Court found that the Sixth Circuit gave too much weight to the fact that lay teachers (who were not commissioned ministers) performed the same religious duties as called teachers. Further, the Court found that the Sixth Circuit placed too much emphasis on the fact that Perich performed secular duties. Under these facts, Perich’s religious duties consumed only 45 minutes of each workday. As Chief Justice Roberts noted, the issue of whether someone is a minister “is not one that can be resolved by a stopwatch. The amount of time an employees spends on particular activities is relevant in assessing that employee’s status, but that factor cannot be considered in isolation, without regard to the nature of the religious functions performed” as well as the other considerations discussed above. Moreover, the Court made clear that the ministerial exception is not limited to the head of a religious organization.

What is important for religious employers to remember is that the Court’s decision in Hosanna-Tabor Evangelical Lutheran Church does not create a blanket exception from all wrongful termination lawsuits for religious group employers. Rather, the decision merely creates an exception for those employees who qualify as “ministers,” which is a case-by-case determination. Accordingly, before taking any adverse actions against employees, religious group employers should continue to evaluate their decisions and consider: (1) whether the employee qualifies as a minister, and (2) whether there is any legal risk in taking action. Attorneys in the Gibbons Employment & Labor Law Department can assist with any questions that you may have.

Peter J. Dugan is an Associate in the Gibbons Employment & Labor Law Department.