Washington D.C. Employment Law Update

Bills Target NLRB's Specialty Healthcare Decision, Union Election Proceedings

Ilyse Schuman — Fri, 14 Jun 2013 15:06:28 -0500

Members of the House and Senate reintroduced legislation on Thursday that would prevent the formation of “micro units” and guarantee workers the right to secret ballot representation elections.

Representation Fairness Restoration Act

The first bill, the Representation Fairness Restoration Act (H.R. 2347, S. 1166) would effectively undo the criteria used to determine an appropriate bargaining unit established by the National Labor Relations Board’s Specialty Healthcare decision. The Board in Specialty Healthcare determined a petitioned-for unit will be deemed appropriate so long as that unit consists of a clearly identifiable group of employees. If an employer contends that the unit should include additional employees, it is incumbent upon the employer to show that the employees in a larger unit share an "overwhelming" community of interest with those in the petitioned-for unit. Many have argued that this decision has resulted in much smaller “micro” bargaining units that are easier to organize and more difficult for employers to administratively manage.

To remedy this outcome, the proposed Representation Fairness Restoration Act introduced by Rep. Tom Price (R-GA) and Sen. Johnny Isakson (R-GA) would amend the National Labor Relations Act (NLRA) to revise the proper bargaining unit standard. Among other requirements, the bill would compel that the Board determine the appropriate bargaining unit prior to an election. Employees in the unit would be required to share a “community of interest,” as evidenced by the following factors: (1) similarity of wages, benefits, and working conditions; (2) similarity of skills and training; (3) centrality of management and common supervision; (4) extent of interchange and frequency of contact between employees; (5) integration of the work flow and interrelationship of the production process; (6) the consistency of the unit with the employer's organizational structure; (7) similarity of job functions and work; and (8) the bargaining history in the particular unit and the industry.

Two years ago the House of Representatives passed the Workforce Democracy and Fairness Act (H.R. 3094), a bill containing identical language addressing bargaining unit determination, but that legislation was never considered by the Senate.

In a press release, Sen. Isakson said:

I’m proud to reintroduce the Representation Fairness Restoration Act that reinstates the traditional standard for determining appropriate bargaining units. When the NLRB decided to allow micro unions, they significantly tipped the scales in favor of unions and neglected our nation’s long-standing precedents of collective bargaining. This ruling makes it easier for unions to gain access to employees and makes it nearly impossible for employers to manage such fragmentation of their workforce.

Secret Ballot Protection Act

The second bill introduced on June 13, the Secret Ballot Protection Act (H.R. 2346), would amend the NLRA to guarantee the right to secret ballot union representation elections. Introduced by Rep. Phil Roe (R-RN), the legislation would make it an unfair labor practice for an employer to recognize a union that has not been selected via secret ballot and make it unlawful for a union that has not been chosen as the employees’ exclusive representative in a secret ballot election conducted by the NLRB to cause or attempt to cause an employer to recognize or bargain with it. More information on this bill can be found here.

In a press release, Rep. Roe stated:

This legislation sides with every American worker because it protects his or her right to a secret ballot during union elections. This has nothing to do with whether you are pro- or anti-union; this is simply about giving workers the protection and freedom they deserve to make the best decision for themselves and their families without fear of retribution.

California Private Sector Employment Legislation Update

Governmental Affairs Team — Wed, 12 Jun 2013 15:03:40 -0500

By Chris Cobey

May 31 was the deadline for most California state bills to pass their house of origin to be further considered in this year’s legislative session, so the winnowing proceeds.

Key bills, including the minimum wage increase (AB 10), passed their house of origin, and will proceed through the committee and floor review process in the other chamber.

A Senate-passed bill (SB 400) would extend current employment protections for employees who are victims of domestic violence and sexual assault to employees who are known or suspected victims of stalking, and require that an employer provide them with reasonable accommodations, which could be any of more than a dozen possible accommodations listed in the current version of the bill. The bill is scheduled to be heard June 12 in Assembly Labor and Employment. The 13-page committee report lists 17 business and employer groups as opposing the measure in its current form.

An exception to the May 31 deadline is a bill (AB 880) designated as an “urgency” measure. This bill, which was amended on May 28 to make it an urgency bill, would assess penalties against employers with 500 employees or more who choose to enroll in the MediCal program. An urgency bill requires passage by a two-thirds majority in both the Senate and the Assembly – and the Democrats have such majorities in each house. Although resisted strongly by the business community, the bill seems an even-money bet to pass in some form, urgency or otherwise.

For employers with unionized employees, another bill of interest would create a new evidentiary privilege, making confidential most communications between a union agent and union member (AB 729). This bill passed the Assembly and is pending in the Senate Judiciary.

The Legislature will take its summer recess beginning July 4 through August 4. The last day for any bill to be passed is September 13. The Governor must sign or veto by October 13 any bill passed by the Legislature on or before September 13 and in the Governor’s possession after September 13.

* * *

The following is a brief summary of significant bills affecting California private employers¹ now pending in the Legislature and their status in the legislative process.

AB 10 would raise the minimum wage, in steps, to $9.25 per hour by 2016, and provide that the minimum wage could increase, but not decrease, as adjusted by the California Consumer Price Index. Passed Assembly; to Senate pending referral.

AB 155 (last amended May 29) would require an employee to elect to inspect or copy, or receive a copy of, or any combination thereof, his or her employment records. The employer would be required to comply with such elections, but may charge employees the actual cost of reproduction. The bill would entitle a former employee terminated for workplace violence or harassment only to receive a copy of the records without any charge imposed by the employer. The bill would define “actual cost of reproduction” to mean only the per page cost to the employer for the physical duplication of the records. Passed Assembly; to Senate pending referral.

AB 263 (last amended May 24) would, among other things, add a new portion to the Labor Code prohibiting specified "unfair immigration-related practices," increase civil penalties to as high as $10,000 per employee per violation for any retaliation against an employee, and would require a court to order the appropriate government agencies to suspend or revoke an offending employer’s business license. Passed Assembly; to Senate pending referral.

AB 442 would expand the civil penalty and the payment of restitution of wages to the employee for a Labor Commissioner citation against an employer by also subjecting the employer to payment of liquidated damages to the employee. Passed Assembly; pending in Senate Labor and Industrial Relations.

AB 556 (last amended April 11) would add the protected category of “military and veteran status” to the Fair Employment and Housing Act’s employment provisions and related provisions. Passed Assembly; pending in Senate Judiciary.

AB 729 would create an evidentiary privilege shielding communications between a union agent and a represented worker. Passed Assembly; pending in Senate Judiciary.

AB 880 (last amended May 28) would require a large employer (500 or more employees) to pay the Employment Development Department an “employer responsibility penalty” for each covered employee enrolled in Medi-Cal based on the average cost of coverage provided by large employers to their employees, including both the employer’s and employee’s share of the premiums; would assess interest of 10% per annum on employer responsibility penalties not paid on or before the date payment is due; would require a large employer subject to an employer responsibility penalty to pay a penalty for any such payment that is more than 60 days overdue. This bill would also make it unlawful for a large employer to, among other things, designate an employee as an independent contractor or temporary employee, reduce an employee’s hours or work, or terminate an employee if the purpose is to avoid the imposition of the penalty; a violation of those provisions would result in a penalty of 200% of the penalty amount the employer would have paid for the applicable period of time. The bill would also prohibit a large employer from discharging or taking other action against an employee who enrolls in a public health benefit program or obtains advanced premium tax credits through the California Health Benefit Exchange and would make the willful refusal of the employer to rehire, promote, or otherwise restore the employee or former employee a misdemeanor. The bill would authorize an employee to file a complaint with the Division of Labor Standards Enforcement of the Department of Industrial Relations if the employee is discharged, threatened with discharge, demoted, suspended, or in any other manner discriminated or retaliated against in the terms and conditions of employment by his or her employer because the employee exercised his or her rights under these provisions. By establishing a new crime, this bill would impose a state-mandated local program. This measure is designated as an urgency bill (requiring two-thirds vote to pass each house; would take effect on signing by the Governor). Pending Assembly passage (exempt from May 31 passage-by-house-of-origin deadline).

AB 1082 would require an employer who employs 50 or more full-time equivalent employees to annually report to the Employment Development Department specified information relating to the average number of hours each employee worked per week in a calendar year and whether those employees were enrolled in minimum essential coverage under an eligible employer-sponsored health care plan. Pending in Assembly Appropriations.

AB 1385 would require the Department of Industrial Relations to procure a case management system that has the capability to provide the public with free, web-based access to a searchable database containing information regarding the final disposition of all complaints, citations, and administrative proceedings of the department. Pending in Assembly Labor and Employment.

AB 1387 would increase the car wash employer’s bond requirement amount from $15,000 to $150,000, but would exempt an employer from that requirement if the employer has a collective bargaining agreement in place that meets specified criteria and would delete the existing sunset date for the statute governing car washes, thus extending those provisions indefinitely. Passed Assembly; to Senate pending referral.

SB 168 would make a successor farm labor contractor liable for wages and penalties owed by a predecessor farm labor contractor. Passed Senate; pending in Assembly Labor and Employment.

SB 292 would clarify that no evidence of sexual desire is required for proof of a claim of sexual harassment; intent of bill is to negate what the bill’s author suggests is the outlier holding in Kelley v. Conco Companies (2011) 196 Cal.App.4th 191, which held that a plaintiff in a same-sex harassment case must prove that the harasser harbored a sexual desire for the plaintiff in order to survive summary judgment. Passed Senate; pending in Assembly Labor and Employment.

SB 390 creates a criminal provision in the Labor Code allowing the Labor Commissioner to pursue a criminal misdemeanor prosecution against employers that do not remit payroll taxes. Passed Senate; pending in Assembly Labor and Employment.

SB 400 would extend the protections available to persons in FEHA-protected categories to victims of stalking; would also prohibit an employer from discharging or in any manner discriminating or retaliating against an employee because of the employee’s known status as a victim of domestic violence, sexual assault, or stalking; would require the employer to provide reasonable accommodations for such a victim; would create a private right of action for an aggrieved employee to seek enforcement of these victim status protection and reasonable accommodation provisions; would permit the recovery of reasonable attorney’s fees by a prevailing employee only. Passed Senate; pending in Assembly Labor and Employment.

SB 404 would add "familial status" as a protective status under the Fair Employment and Housing Act The concept of “familial status” is very broadly defined in the bill. Passed Senate; pending referral in the Assembly.

SB 435 would require employers of piece rate workers to pay those employees for any rest breaks mandated by law and set the rate of pay for rest and recovery periods for piece rate workers. Passed Senate; pending in Assembly Labor and Employment.

SB 462 would authorize the award of attorney's fees and costs in an action brought for the non-payment of wages, fringe benefits or health and welfare pension fund contributions, where the prevailing party is not the employee, contingent on a finding by the court that the employee brought the court action in bad faith. Passed Senate; pending referral in the Assembly.

SB 556 would expand employers’ liability for damages caused by an independent contractor or the independent contractor's employees, including wage and hour violations, penalties, fines and willful misconduct if the contractor or its employees were uniformed similar to that of the contracting entity or drove a vehicle with the contracting entity’s logo. Passed Senate; pending referral in the Assembly.

SB 607 (“Workplace Flexibility Act”) would have allowed individual employees to propose alterative work schedules to employers, such as 10 hours a day for four workdays a workweek, with the ninth and tenth hours being paid at the regular rate of pay, and overtime for any hours beyond 10 hours in a day or 40 in a workweek. Failed passage on 3-1 vote in Senate Labor and Industrial Relations; reconsideration granted.

SB 648 would extend the same prohibitions on the smoking of tobacco products to electronic cigarettes. Passed Senate; pending referral in the Assembly.

SB 655 purports to codify the California Supreme Court's decision in Harris v. City of Santa Monica (2013) 56 Cal.4th 203 on mixed motives in discrimination cases. Passed Senate; pending in Assembly Judiciary.

SB 776 would modify existing law concerning permissible credits employers may take against the obligation to pay the general prevailing rate of per diem wages for prevailing wage payments, and would prohibit credit from being granted for employer payments made to monitor and enforce laws related to public works if those payments are not required by a collective bargaining agreement. Passed Senate; pending in Assembly Labor and Employment.

Contact Chris Cobey (ccobey@littler.com) with any questions on these or other bills.
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¹ Except bills concerning workers’ compensation and unemployment insurance.

Supreme Court Upholds Decision Approving Class Action Arbitration

Class Action Avoidance and Defense Group — Tue, 11 Jun 2013 06:50:08 -0500

By Robert Friedman

Yesterday, in Oxford Health Plans LLC v. Sutter, the United States Supreme Court issued a unanimous opinion affirming the arbitrator’s construction of an arbitration agreement that did not expressly address class actions. The parties had agreed to allow the arbitrator to decide this issue. The arbitrator ruled that broad language in the arbitration agreement addressing causes of action and remedies in arbitration permitted class arbitration. The Supreme Court, while not necessarily agreeing with the arbitrator’s rationale, held that the arbitrator’s decision under Section 10(a)(4) of the Federal Arbitration Act could not be disturbed unless the arbitrator “strayed from his delegated task of interpreting a contract” and imposed his own policy choice. “All we say is that convincing a court of an arbitrator’s error—even his grave error—is not enough. So long as the arbitrator was ‘arguably construing’ the contract—which this one was—a court may not correct his mistakes under §10(a)(4).”

After concluding that the price of agreeing to arbitration is the potential for mistakes by the arbitrator, Justice Kagan wrote that the “arbitrator’s construction holds, however good, bad, or ugly.” Because the parties had agreed to allow the arbitrator to decide whether the agreement permitted class arbitration, the Supreme Court did not decide and expressly held open the issue of whether the availability of class arbitration is a question for the court or the arbitrator in the first instance.

This decision reiterates the perils of leaving the issue of class arbitration unaddressed or “silent” in an arbitration agreement and then allowing the arbitrator to decide the issue. So long as the arbitrator purports to interpret the agreement, the interpretation will not be disturbed. Businesses should review their existing arbitration policies and implement express class action waivers, which are enforceable under the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011). A more in-depth analysis of this decision and its implications for employers can be found here.

Littler Shareholder Johan Lubbe Testifies at Senate Foreign Relations Committee Hearing

Ilyse Schuman — Fri, 07 Jun 2013 11:01:06 -0500

Speaking on behalf of several U.S. retail and apparel industry trade associations, Littler Shareholder Johan Lubbe testified before the Senate Foreign Relations Committee on Thursday about efforts to address worker safety conditions in Bangladesh. The hearing was held to discuss the national and international response to recent industrial accidents in Bangladesh, including the Rana Plaza garment factory collapse that killed more than 1,000 workers this year, and the Tazreen factory fire that killed more than 100 workers in 2012.

During the hearing Lubbe explained the reasons why the retail garment industry in the United States and Canada have declined to sign on to a safety accord developed by the IndustriALL Global Union and UNI Global Union, and are instead forming their own coalition to tackle international safety issues. According to Lubbe, the issues facing retail apparel companies that do business in Bangladesh “are extremely complex and systemic” and do not lend themselves to a simple “one-size-fits-all” solution. Said Lubbe: “Any solution requires that all stakeholders work together to develop a system wide solution that will not only provide a long-term and sustainable solution to ensure worker safety in the Bangladesh garment industry, but will also maintain the viability of the country as a key manufacturer and supplier to markets around the world.”

Lubbe explained the many hurdles to conducting business in Bangladesh. First and foremost, he claimed, “is the Bangladeshi government itself” which is reportedly corrupt and financially involved in the factories themselves. In addition, the infrastructure and lack of enforcement of building codes, among other problems, are not what they should be.

Following the Rana Plaza collapse, several U.S. and European retailers as well as the IndustriALL Global Union met to finalize an Action Plan for fire and building safety in Bangladesh. At this meeting, IndustriALL wound up drafting its own set of principles, which it labeled the “Accord on Fire and Building Safety in Bangladesh,” and gave companies two days in which to sign. Among other provisions, the Accord “requires a five-year commitment from participating retailers to conduct independent safety inspections of factories, and pay up to $500,000 per year toward operational costs,” Lubbe testified. Although many European retailers have agreed to the Accord, only three U.S. companies have signed on.

When asked why U.S. retail support for the Accord is lacking, Lubbe stated “while U.S. retailers share IndustriALL's goal to improve worker safety in Bangladesh and to make tangible progress on the ground, U.S. retailers cannot in good conscience sign the Accord because the current language presents potentially unlimited legal liability given its vague and ambiguous terms.” Lubbe’s concerns include the fact that the Accord “creates legal enforceable obligations, but what is enforceable is vague and uncertain. The obligations are described in broad vague terms and it is left to arbitration to resolve disputes.” He noted also that it “shifts some of the basic government regulatory functions, such as inspections, onto the retailers.” In addition, the agreement’s arbitration provisions effectively permit third parties to set garment prices. Lubbe concluded that the Accord is not the “sole response and solution to the situation in Bangladesh.”

In response to Sen. Tim Kaine’s (D-VA) question as to why European companies do not share the same problems with the Accord, Lubbe explained that European retailers do not function in the same litigious environment as do companies in the U.S. Lubbe said that the binding contract that is the Accord would “become a basis for litigation,” and that “with demise of the Alien Tort Statute,” litigants would find ways to sue companies in the U.S. for actions occurring abroad. Lubbe noted also that Europeans operate under a system with a more institutionalized partnership with trade unions.

Lubbe concluded that there is a strong need for shared responsibility that will include all stakeholders, and that the U.S. retail apparel industry is committed to improving working and safety conditions abroad. To that end, Lubbe explained that the U.S. and Canadian retail and apparel industry has formed an alliance to develop “a single, unified action plan” that will “achieve immediate, sustainable, effective and long-lasting change for the garment industry and its workers in Bangladesh.” Lubbe noted that the U.S. and Canadian effort is “a work in progress,” but that a comprehensive plan will be available in July 2013.

Suspension of GSP

During the hearing several lawmakers as well as panelists advocated for the suspension or withdrawal of Bangladesh’s Generalized System of Preferences (GSP). The GSP is a program “designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 127 designated beneficiary countries and territories.” Notably, the AFL-CIO has issued a petition in 2007 to limit or withdraw the country’s GSP benefits.

Sen. Kaine asked Lubbe whether withdrawing the GSP “might send the reputational signal that the government is serious” about the worker safer conditions in Bangladesh. Lubbe said that the apparel industry will support whatever the government decides, but is concerned about the potential unemployment that might result.

Sen. Robert Menendez (D-NJ) appeared to be a proponent of suspending GSP, saying “we have been sabre rattling. . . . When do we go from sabre rattling to some action?”

Lewis Karesh, Assistant U.S. Trade Representative for Labor, said that his office will make a recommendation regarding the GSP issue to the White House by the end of June. He said that suspending GSP would provide the U.S. with leverage to force changes to health and safety standards in Bangladesh. Karesh claimed that among other serious concerns are the “pattern of harassment” of unionists and the infringement on freedom of association and collective bargaining.

Echoing this sentiment was Robert Blake, Assistant Secretary of State for South and Central Asian Affairs with the U.S. State Department, who claimed that “had there been a union representative on the ground at Rana Plaza, that tragedy would not have happened.” He noted that following the building collapse 27 trade unions have registered in Bangladesh. Suspending GSP “would send significant signal,” he claimed, adding that the European Union could follow suit.

Eric Biel, Acting Associate Deputy Undersecretary for International Affairs with the Department of Labor’s Bureau of International Labor Affairs, stressed the role of the private sector in preventing these tragedies. He said that the goal is to work with the government, workers, and other interested parties to ensure job creation “goes hand in hand” with worker rights and increased safety.

An archived webcast of the hearing and links to panelists’ testimony will be made available here.

Federal Bill Would Institute Social Media Password Protection

Ilyse Schuman — Wed, 29 May 2013 11:12:36 -0500

Just weeks after Colorado became the tenth state to enact password protection legislation, Reps. Ed Perlmutter (D-CO) and Peter Welch (D-VT) have introduced a similar bill at the federal level. The Password Protection Act of 2013 (H.R. 2077) would prevent employers from requiring job applicants and current employees from disclosing their passwords to their social media sites as a condition of employment. Specifically, the bill would amend Section 1030 of Title 18 of the U.S. Code – Fraud and related activity in connection with computers – to make it unlawful if an employer:

for the purposes of employing, promoting, or terminating employment, compels or coerces any person to authorize access, such as by providing a password or similar information through which a computer may be accessed, to a protected computer that is not the employer's protected computer, and thereby obtains information from such protected computer.

The measure would also prevent an employer from discharging, disciplining, discriminating against, or threatening to take adverse action against applicants or employees who refuses to disclose their passwords or who have filed a complaint or otherwise assisted in an action under this bill.

The legislation contains exceptions for, among other things, the protection of an employer’s intellectual property, trade secrets, or confidential business information.

Violations of this law could result in a fine, imprisonment for up to one year, or both.

In a press release, Rep. Welch said:

Employees have a legitimate expectation of privacy when using Facebook or Twitter. This legislation will prevent fishing expeditions into employees’ private lives. While an employer may have a valid concern about the business impact of an employee’s online activity, demanding passwords and unfettered access to private accounts is an over-the-top solution.

Photo credit: Warchi

Obama Re-Nominates NLRB General Counsel, EEOC Member

Ilyse Schuman — Wed, 29 May 2013 10:50:47 -0500

President Obama seeks to seat Chai Feldblum as a member of the Equal Employment Opportunity Commission (EEOC) for another term and has re-nominated Lafe E. Solomon to be General Counsel (GC) of the National Labor Relations Board (NLRB) for a four-year term. While Feldblum has been a confirmed EEOC Commissioner of the five-member panel since December 2010, Solomon has been working as Acting GC of the NLRB since former GC Ronald Meisburg stepped down in June 2010. Obama first nominated Solomon to fill the GC position in January 2011, although the Senate has yet to confirm his nomination.

Feldblum’s current term expires on July 1, 2013. If re-confirmed, she will serve as an EEOC member until July 1, 2018.

Solomon’s re-nomination is bound to be more contentious, as he has issued a number of controversial memorandums during his stint as the NLRB’s Acting GC. For example, Solomon raised eyebrows regarding his office’s take on employer social media and acceptable handbook policies, arbitration deferral, the use of Section 10(j) injunctions, and default settlement language, among other areas. Earlier this year, Solomon issued a report responding to a number of practice and procedural questions related to Board operations posed by labor attorneys during a recent American Bar Association Midwinter Meeting.

Last week, a Senate panel advanced nominations of Mark Gaston Pearce (D), Sharon Block (D), Richard Griffin (D), Harry I. Johnson, III (R) and Philip A. Miscimarra (R) to serve as Board members. It is unclear if the full Senate will be receptive to this slate of Board candidates, or whether those opposed to Griffin’s and Block’s nominations – the two recess appointees – will filibuster their nominations. It is possible that Solomon’s nomination will be thrown into the mix.

House Subcommittee Questions Recent EEOC Activities

Ilyse Schuman — Thu, 23 May 2013 16:44:10 -0500

During a House Subcommittee hearing, Equal Employment Opportunity Commission (EEOC) Chair Jacqueline Berrien responded to questions about recent agency enforcement and regulatory initiatives. Among other topics, Berrien touched on an employer’s use of credit, criminal, and unemployment histories in making employment decisions, as well as the agency’s renewed focus on systemic discrimination cases.

Subcommittee Chairman Rep. Tim Walberg (R-MI) opened the hearing by commenting that the agency has “traditionally focused its enforcement activities on individual complaints of discrimination,” but that under the recently-approved Strategic Plan, the agency has “shifted more attention toward systemic discrimination that involves an alleged pattern or practice of discrimination. The commission has set a goal that up to 24 percent of all litigated cases be systemic in nature.” Walberg criticized this approach as not being in the best interest of employers and employees. He said that many such investigations “are launched without any employee alleging discrimination.” What purpose does it serve, he asked, when the EEOC investigates businesses without any evidence of wrongdoing? He claimed that the EEOC should not be diverting its resources to investigating “a hunch.”

In addition, Walberg mentioned also that the EEOC “has pursued new policies surrounding the use of criminal and credit background checks, which may affect employers’ ability to effectively protect their workers and customers.” The agency issued revised enforcement guidance on the use of conviction and arrest records in August 2012 and held a hearing to examine the use of an employee’s or applicant’s credit history in 2010. According to Walberg, the guidance on the use of conviction and arrest records puts many employers at risk of violating various state and federal laws that require them to pursue background checks on certain categories of employees. He also found fault with the lack of public opportunity to comment on this guidance.

Rep. Suzanne Bonamici (D-OR) asserted that her state, Oregon, passed a ban on using an applicant’s credit history in making employment decisions and that about eight other states have done so as well. Berrien said that as part of the overall Strategic Plan the agency is examining various barriers to recruitment and hiring, including an individual's unemployment and credit history.

Rep. Larry Bucshon (R-IN) also questioned Berrien about the EEOC’s revised criminal records guidance and pointed out that Berrien was subjected to a background check for her current position. Thus, he stated, it was hypocritical and amounted to agency “overreach” for the EEOC to impose limits on the same private employer practice.

In response, Berrien claimed that the EEOC guidance does not prevent an employer from conducting background checks entirely, but rather addresses what an employer can and cannot do with that information.

Another lawmaker asked Berrien about the status of the Senate Appropriations Committee’s directive to the EEOC “to report to the Committee . . . the steps it has taken to alleviate confusion about the new guidance.” Berrien claimed that the agency has another month in which to provide this information.

Rep. Walberg also expressed concern about the Strategic Enforcement Plan’s delegation of certain enforcement authority to the EEOC’s general counsel. Walberg said that doing so jeopardizes the checks and balances system that is in place when a full commission operates. Berrien countered that the Strategic Enforcement Plan was adopted by a majority of Commission members, and that the general counsel regularly reports to the Commission on important litigation issues.

Berrien also defended the agency’s record, stating the EEOC has made significant progress in resolving charges of discrimination and reducing inventory of unresolved charges. Notably, the inventory of unresolved private sector charges has been reduced by nearly 20% since FY 2010, she claimed. Ranking subcommittee member Joe Courtney (D-CT) noted that despite the EEOC’s progress, the agency’s case backlog continues to grow, a situation that is exacerbated by agency budget cuts and the sequester.

Additional Anti-Discrimination Legislation

During the hearing, Rep. Courtney focused on advancing various pieces of anti-discrimination legislation. First, he noted that the bi-partisan Employment Non-Discrimination Act (ENDA), which prohibits employment discrimination based on an individual’s sexual orientation or gender identity, has recently be reintroduced in both houses of Congress. “I urge Chairman Walberg and Chairman Kline to work with Representatives [Jared] Polis and [Ileana] Ros-Lehtinen, the bill's bipartisan sponsors, to bring this long overdue legislation back before the Committee for its immediate consideration.”

Courtney also pressed for consideration of the Protecting Older Workers Against Discrimination Act (POWADA). According to Courtney, “this legislation has been modified since it was originally brought before the Committee under Chairman Miller's leadership and is now a bipartisan bill sponsored by Senators Grassley and Harkin in the Senate. I believe we too could find common ground on this bill to protect this nation's older workers.”

Finally, Courtney urged consideration of the Paycheck Fairness Act, “which has been passed twice by this House on a bipartisan basis should be brought up for immediate consideration so that gender-based pay discrimination is finally put on equal footing with our other civil rights laws.” This measure stalled in the Senate last year.

A webcast of the hearing can be found here.

Photo credit: EEOC

Senate Panel Advances NLRB Nominees

Ilyse Schuman — Wed, 22 May 2013 15:38:21 -0500

On Wednesday, the Senate Committee on Health, Education, Labor and Pensions (HELP) voted to send the nominations of Mark Gaston Pearce (D), Sharon Block (D), Richard Griffin (D), Harry I. Johnson, III (R) and Philip A. Miscimarra (R) to the full Senate for consideration. While the votes in favor of Johnson and Miscimarra were unanimous, the Committee voted 18-4 in favor of Pearce, and 13-9 in favor of Block and Griffin. The votes approving Block and Griffin were the most divisive, as they are the two members seated via recess appointment in January 2012. Federal courts are divided as to the constitutionality of these appointments, a matter that is likely headed to the Supreme Court.

Last week the Committee held a more extensive hearing to discuss the nominees. Many of the same arguments both for and against the nominees made last week were reiterated during Wednesday’s executive session. On the whole, Republican members of the Committee expressed more concern about seating Block and Griffin and suggested that it would be better if they resigned and allowed President Obama to name two new Board appointees in their stead.

It is believed that all five nominees will be presented to the Senate as a package. Although Democrats hold a narrow majority in the Senate, it is uncertain whether they would be able to muster the 60 votes needed to thwart a potential filibuster of the nominations. At the end of August, Chairman Pearce’s term expires.

Photo credit: MBPhoto, Inc.

Supreme Court to Decide Which Employees Are Covered by Whistleblower Law

Ilyse Schuman — Tue, 21 May 2013 12:25:58 -0500

On Monday the U.S. Supreme Court agreed to consider the scope of the Sarbanes-Oxley Act of 2002 (SOX) whistleblower protections. Specifically, in Lawson v. FMR LLC, the Court will decide whether an employee of a privately held contractor or subcontractor of a public company is protected from retaliation under SOX.

The two plaintiffs in this case worked for privately held companies that operated a family of mutual funds. Mutual funds generally do not have their own employees, but rather contract with “investment advisors” that manage the funds, including “making day to day investment decisions, performing a range of management and administrative tasks, and preparing reports for shareholders and the SEC. Employees in the mutual fund industry ordinarily work for mutual fund adviser or sub-advisers, not for a mutual fund itself.”

The mutual fund company is subject to the provisions of the Sarbanes-Oxley Act of 2002 (SOX). The plaintiffs sued their individual private companies for retaliation after complaining about a variety of perceived fraudulent financial activity, including alleged improper fee retention, and inaccurate and illegal pay calculations. Section 806 of SOX, codified at 18 U.S.C. § 1514A, offers whistleblower protections for employees who are retaliated against for reporting fraud. Specifically, § 1514A: Civil action to protect against retaliation in fraud cases, states that no publicly traded company “or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because” the employee has disclosed information or assisted in any investigation involving fraud.

The district court found that these whistleblower protections extended to employees of private agents, contractors, and subcontractors to public companies, so long as the reported violations related to fraud against shareholders. On appeal, the U.S. Court of Appeals for the First Circuit came to a different conclusion:

We conclude that only the employees of the defined public companies are covered by these whistleblower provisions; the clause "officer, employee, contractor, subcontractor, or agent of such company" goes to who is prohibited from retaliating or discriminating, not to who is a covered employee and so does not violate the rule against rendering superfluous any statutory language.

If we are wrong and Congress intended the term "employee" in § 1514A(a) to have a broader meaning than the one we have arrived at, it can amend the statute. We are bound by what Congress has written.

It will now be up to the Supreme Court to determine the reach of these whistleblower protections. According to the plaintiffs in their petition for Supreme Court review, “this case presents a question of pivotal importance to the integrity of the securities markets and to the preservation of investor confidence.” In contrast, the defendants in this matter warn of “the adverse practical consequences of imposing massive liability and costs on private businesses that Congress expressly sought to avoid,” and that “extending whistleblower protection to the employees of privately held companies doing business with public companies would extend protection far beyond the scope envisioned by Congress.”

Photo credit: Devonyu

Bills Would Expand Pregnancy, Nursing Workplace Rights

Ilyse Schuman — Fri, 17 May 2013 16:28:00 -0500

This week members of the House and Senate introduced legislation designed to improve protections for pregnant and nursing employees. On Tuesday lawmakers reintroduced the Pregnant Workers Fairness Act (H.R. 1975, S. 942), a bill that would require employers to make reasonable accommodations for pregnant employees and job applicants as well as those with limitations related to childbirth. Modeled after provisions in the Americans with Disabilities Act (ADA), the Pregnant Workers Fairness Act would institute certain anti-discrimination and retaliation protections for workers who request a reasonable accommodation related to their pregnancy, childbirth, or associated medical conditions, and prevent employers from requiring that a pregnant employee take leave if she could perform her job with a reasonable accommodation. The bill would also make it unlawful for an employer to require an applicant or employee affected by pregnancy or childbirth to accept a particular accommodation.

The same rights and remedies afforded by Title VII of the Civil Rights Act would apply to any violations of the Pregnant Workers Fairness Act. Public sector employees would be given similar remedies available under related civil rights statutes. Finally, the measure would direct the Equal Employment Opportunity Commission (EEOC) to issue regulations implementing the law within two years of the bill’s enactment.

The second measure introduced this week would expand the pool of employees who receive certain nursing mother rights. The Affordable Care Act amended the Fair Labor Standards Act (FLSA) to require employers with 50 or more employees to provide rest breaks and space for non-exempt employees who are nursing mothers to express breast milk. The Supporting Working Moms Act (H.R. 1941, S. 934) would include salaried workers by amending Section 13 of the FLSA. According to a press release:

Current law provides mothers who are classified as non-exempt employees with reasonable break times to express milk in a private, non-bathroom environment while at work. The Supporting Working Moms Act would expand this provision to cover approximately 12 million salaried women who work in traditional office environments. Employers are not required to compensate an employee for the break time to express milk, and an employer with fewer than 50 employees who is unable to meet the requirements under the provision is exempt if it would pose an undue hardship.

All of these bills have been referred to committee.

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EEOC Updates Disability Guidance Documents

Ilyse Schuman — Fri, 17 May 2013 15:14:11 -0500

Pursuant to the agency’s Strategic Plan, the Equal Employment Opportunity Commission (EEOC) has revised and updated four disability guidance documents. Among other goals outlined in the Strategic Plan is to ensure the EEOC “provides up-to-date guidance on the requirements of antidiscrimination laws.” To that end, the agency has made available revised question and answer documents on how the Americans with Disabilities Act (ADA) applies to applicants and employees with cancer, diabetes, epilepsy, and intellectual disabilities.

According to the EEOC:

the revised documents reflect the changes to the definition of disability made by the ADA Amendments Act (ADAAA) that make it easier to conclude that individuals with a wide range of impairments, including cancer, diabetes, epilepsy, and intellectual disabilities, are protected by the ADA. Each of the documents also answers questions about topics such as: when an employer may obtain medical information from applicants and employees; what types of reasonable accommodations individuals with these particular disabilities might need; how an employer should handle safety concerns; and what an employer should do to prevent and correct disability-based harassment.

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Senate Committee Questions NLRB Nominees as Third Circuit Declares Recess Appointments Unconstitutional

Ilyse Schuman — Thu, 16 May 2013 16:27:12 -0500

The three National Labor Relations Board members up for reconsideration and two new Board nominees faced pointed questions from the Senate Committee on Health, Education, Labor and Pensions (HELP) on Thursday. Last month, President Obama announced his intent to re-name Mark Gaston Pearce (D) as Chairman of the National Labor Relations Board (NLRB), as well as seat the two Republican nominees, Harry I. Johnson, III and Philip A. Miscimarra, to the agency. In February, the President re-nominated Democrats Sharon Block and Richard Griffin to the Board after the U.S. Court of Appeals for the D.C. Circuit ruled that their January 4, 2012 recess appointments were unconstitutional. The hearing was held the same day the Third Circuit released its decision in NLRB v. New Vista Nursing & Rehabilitation, which reached a similar conclusion. Specifically, the Third Circuit held that the recess appointment of former Board member Craig Becker was invalid because it was not made during an intersession recess, which would invalidate the Block and Griffin appointments as well.

Committee Chairman Tom Harkin (D-IA) claimed that it was “deeply disappointing” to see what is happening to the Board in recent years, and placed the blame on “political squabbling.” According to Harkin, the Board has not had five confirmed members in a decade.

Ranking member Lamar Alexander (R-TN) agreed that it is important to have five confirmed members, but emphasized that there exists “a troubling lack of respect” for the constitutional mandate that there be a separation of powers in our government, namely the Senate’s responsibility to provide advice and consent over executive nominees. He claimed that President Obama “made recess appointments while the Senate was not in recess. This was unprecedented.” Said Alexander, “the Senate must decide when we’re in session. Not the President.”

Alexander explained that since the January 4, 2012 recess appointments, the Board has issued 910 published and unpublished decisions; 206 of which were issued after Noel Canning, the case in which the U.S. Court of Appeals for the D.C. Circuit ruled that the recess appointments were unconstitutional. All of these decisions, Alexander noted, can be appealed and vacated.

Alexander supported the nominations of Pearce, Johnson and Miscimarra, but said he would not approve the nominations of Griffin and Block, the two recess nominees.

Sen. Patty Murray (D-WA), on the other hand, urged the Senate to consider all five nominees as a package. Sen. Elizabeth Warren (D-MA) agreed, even though she expressed concern that one of the nominees was specifically hired by the Chamber of Commerce to curb NLRB’s regulatory authority. She believed that the need to have a fully functioning Board overrode any concerns she had about individual members.

During the hearing, each member was asked specific questions about their philosophies about labor law in general, and how the Board has acted in certain situations in particular.

Chairman Pearce was grilled the most given his leadership role. Sen. Harkin asked him why he feels the Board should continue to operate given the Noel Canning decision. Pearce responded that the decision conflicts with the conclusions of three other courts of appeals, and that “historically, the NLRB has functioned in the wake of constitutional challenges. We owe it to the public to continue to work.” He pointed out that the National Labor Relations Act affords no private right of action. Therefore, “the Board is the only forum. . . .the statute of limitations on unfair labor practices continues to run,” and that the Board’s obligations are not suspended while litigation over the legitimacy of the Board is pending.

Sen. Alexander asked Pearce about the Board’s efforts to expand the information that must be provided on the Excelsior list. He said that under Pearce’s direction, the Board has led a regulatory effort to include other information such as email addresses and telephone numbers. Alexander asked whether, if re-confirmed, would Pearce continue to pursue these efforts, and if so, why would he not allow employees to opt out of this requirement? Pearce answered that “Excelsior is decades old. . . . We are creatures or victims of technology,” and that it is “appropriate and responsible” for the Board to “look at technological advances that are typical in communications between employees and employers.” He said that all manners of communication would be evaluated and taken into consideration. Alexander urged Pearce to consider privacy considerations as well as technological ones.

Sen. Johnny Isakson (R-GA) asked Pearce why the NLRB has undone decades of precedent in its Specialty Healthcare decision. In this case, the Board changed the criteria for assessing appropriate bargaining units. Under the new standard, employers have the burden of proving excluded employees share an “overwhelming community of interest” with the proposed unit – a new and uncertain standard. The decision essentially makes it easier for unions to create smaller “micro” units within a workplace. Pearce responded that “it has been a tenet of the law to determine an appropriate – not the most appropriate – unit,” and that the decision in Specialty Healthcare is “consistent with assessments of what would be an appropriate bargaining unit.”

Recess nominees Richard Griffin and Sharon Block were asked why they have not resigned in the wake of Noel Canning. Richard Griffin claimed that since the Supreme Court has not rendered a final judgment on the matter, “I felt it was important to conduct the work I took an oath to continue to do.” Nominee Sharon Block agreed, saying that the “public we serve relies on us. It is incumbent upon me to continue to provide this service while the issue is being resolved.”

When asked what his concerns would be if confirmed, nominee Harry Johnson stated that “if good faith employers cannot operate” due to regulatory impediments, “there will not be jobs, not be employees, and there would not be viable labor unions.” Nominee Philip Miscimarra said that one factor every labor law case has in common is that “at least two people see something different. If confirmed, I will approach every decision with an open mind . . . and be open to differing views.” In addition, he stated that it is important to “apply the law as written in keeping with what Congress intended.”

Sen. Robert Casey, Jr. (D-PA) asked whether he supports the Board’s rulemaking authority. Miscimarra answered that he does, but that any consideration would depend on careful consideration of the need for the rule, any authorization in the NLRA for the rulemaking, the content of the rule, and the process for receiving public input.

Sen. Bernard Sanders (I-VT) predicted that the Committee would approve the five nominees along party lines, and that once the nominations are put before the full Senate, Republicans would threaten to filibuster the nominations, and that the Democrats would not be able to garner the 60 votes needed to overcome a filibuster. Thus, come the end of August when Chairman Pearce’s term ends, the Board would be left without a quorum and thus be rendered dysfunctional.

Sen. Harkin concluded the hearing by noting that the Committee will meet to vote on advancing the nominations next Wednesday, May 22, 2013.

A webcast of the hearing can be found here.

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Senate Committee Advances Nomination of Thomas Perez to be Labor Secretary

Ilyse Schuman — Thu, 16 May 2013 12:04:13 -0500

On Thursday morning, the Senate Committee on Health, Education, Labor and Pensions (HELP) voted 12-10 along party lines to advance the nomination of Thomas Perez to be the next Secretary of Labor. Now that Perez’s nomination has been reported favorably out of committee, it will next be considered by the full Senate.

Committee Chairman Tom Harkin (D-IA) emphasized that since the last committee hearing held to consider Perez’s nomination, there has been an “unprecedented level of disclosure” regarding Perez’s involvement in an alleged quid pro quo agreement with the City of St. Paul, Minnesota while serving in his current role as Assistant Attorney General of the Department of Justice’s Civil Rights Division. In Magner v. Gallagher, the city had challenged the use of statistics as evidence of race discrimination under the Fair Housing Act (FHA). The DOJ was reportedly concerned that the U.S. Supreme Court could strike down this practice and find that disparate impact claims are not cognizable under the FHA, so it allegedly encouraged the city to withdraw its lawsuit. In exchange, according to the accusations, the DOJ would decline to intervene in an unrelated False Claims Act (FCA) lawsuit. The FCA case at issue, United States ex rel. Newell v. City of Saint Paul, was brought by a private whistleblower charging that St. Paul violated the FCA by falsely certifying that it was using federal funds to create jobs for low income workers of all races, when the programs were allegedly focusing only on minority employment. Harkin argued that his investigation into the matter has shown that Perez’s actions were entirely “ethical and appropriate,” and expressed dismay over the delay regarding Perez’s consideration.

Ranking member Lamar Alexander (R-TN), however, claimed that sufficient information has not been provided regarding the Magner and Newell cases, and stated that Perez participated in an “extraordinary amount of wheeling and dealing” regarding the two lawsuits. According to Alexander, Perez “did not discharge his duties to protect the whistleblower in this matter,” and that it was “premature to report Mr. Perez’s nomination” out of committee.

Sen. Barbara Mikulski (D-MD) claimed she is the only one on the committee who knows Perez, and considers him “a fine nominee.” She cited a letter written by the Maryland Chamber of Commerce that said: “Mr. Perez proved himself to be a pragmatic public official,” and that “despite differences of opinion,” Mr. Perez proved himself to be “fair and collaborative. . . Our experience with Mr. Perez in Maryland would bode well for the Nation.”

A webcast of the committee’s executive session can be found here.

EEOC Settles First Case Alleging Genetic Information Bias

Ilyse Schuman — Wed, 15 May 2013 10:40:09 -0500

Last week the Equal Employment Opportunity Commission (EEOC) settled its first lawsuit involving a discrimination claim based on an applicant’s genetic history. The lawsuit alleged that Fabricut, a fabric distributor, violated the Genetic Information Nondiscrimination Act (GINA) when it requested a family medical history in its post-offer medical examination to a temporary employee and then violated the Americans with Disabilities Act (ADA) by denying a regular position to the temporary employee because it regarded her as having carpal tunnel syndrome.

After offering the plaintiff a permanent position, the company subjected her to pre-employment drug testing and a physical exam. The exam included a questionnaire that asked her to disclose the existence of medical conditions – including heart disease, hypertension, cancer, tuberculosis, diabetes, arthritis, and mental disorders – that ran in her family. The applicant was also subjected to further medical evaluations to determine whether she suffered from carpal tunnel syndrome.

In addition to the ADA claim based on the company’s conclusion that she suffered from carpal tunnel syndrome – despite her own physician’s finding to the contrary – the plaintiff alleged that the medical questionnaire violated her rights under GINA. Among other provisions, Title II of GINA prohibits the use of genetic information in making employment decisions, restricts acquisition of genetic information by employers and other entities covered by Title II, strictly limits the disclosure of genetic information, and prohibits retaliation against employees who complain about genetic discrimination. GINA was enacted in 2008, and took effect in 2009. The agency issued final regulations on Title II a year later.

According to EEOC, the lawsuit and settlement were both filed on May 7, 2013. The company has agreed to pay the plaintiff $50,000, as well as take remedial actions. In a press release, EEOC Regional Attorney Barbara Seely said: “We believe that when Fabricut fully understood and appreciated what happened, it took action to remedy the situation, as this quick settlement demonstrates,” adding, “Although GINA has been law since 2009, many employers still do not understand that requesting family medical history, even through a contract medical examiner, violates this law.”

EEOC Holds Public Meeting to Discuss Wellness Programs

Governmental Affairs Team — Tue, 14 May 2013 15:19:17 -0500

By Ilyse Schuman and Sherron McClain

On May 8, 2013, The Equal Employment Opportunity Commission (EEOC) held a public meeting that addressed the interaction between employer-sponsored wellness programs and federal equal employment opportunity statutes enforced by the EEOC. Commissioners Constance Barker, Victoria Lipnic, Chai Feldblum, and Commission Chair Jacqueline Berrien were present and joined by seven panelists representing business, advocacy groups and providers. Opening statements by Commissioners Barker, Lipnic, and Feldblum all noted the increased attention that that the nation’s collective health and employer-sponsored wellness programs have received in recent years. Commissioner Barker further noted that the Commission’s focus is on ensuring that groups protected by federal employment laws receive equal access to wellness programs and are permitted to enjoy the rewards offered for choosing those programs.

The Affordable Care Act (ACA) includes provisions designed to encourage the use and effectiveness of wellness programs. However, uncertainty surrounding the treatment of wellness programs under the Americans with Disabilities Act (ADA) and restrictions imposed by regulations issued under the Genetic Information Nondiscrimination Act (GINA) may have the opposite effect. The uncertainty centers on whether the use of financial incentives, in the EEOC’s view, renders a wellness program “involuntary.”

As Christopher Kuczynski, EEOC Acting Associate Legal Counsel, stated in his testimony:

The statute, the legislative history, and EEOC's ADA regulations do not elaborate on the meaning of the word "voluntary." However, EEOC's Enforcement Guidance on Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act (ADA) (Employee Inquiry Guidance) explains that where a wellness program includes disability-related questions and/or requires medical examinations, the program must be voluntary, and that "voluntary" means that the employer neither requires participation in the program, nor penalizes employees who do not participate. The guidance says nothing directly about wellness program incentives and their impact on voluntariness. At the time the guidance was issued, financial incentives were not a feature of most wellness programs.

With financial incentives now a key component of many wellness programs, this question remains unanswered.

Commissioner Feldblum’s opening statement acknowledged that employers and their employees deserve clarity regarding the relationship between wellness programs and federal employment laws and suggested that the Commission could provide such clarity by addressing questions such as:

What accommodations are required for disabled employees who participate in wellness programs?
When is a medical examination or inquiry part of an employee health program?
When is a program-related medical exam or inquiry “voluntary,” and therefore permissible under the ADA?

In her opening statement, Commissioner Lipnic pointed out that wellness programs implicate many statutes enforced by the EEOC, including the ADA, GINA, Title VII, the Age Discrimination in Employment Act (ADEA), and possibly other statutes; and that the Commission’s duty is to articulate a position on this topic with enough clarity to ensure that stakeholders are on “sure footing.” Relevant questions include:

Does a wellness program’s compliance with the Health Insurance Portability and Accountability Act (HIPAA) satisfy EEO requirements?
When is a program “voluntary”?
If financial incentives comply with HIPAA, are they “voluntary” under the ADA?
Does it matter whether the incentive is a carrot or reward versus a stick or penalty?
How do standards for voluntary wellness programs under GINA relate to standards under the ADA?

Commissioner Lipnic emphasized that the purpose of the meeting was educational, and not indicative of whether the Commission will issue guidance on any of the topics discussed.

After brief statements by each of the panelists, the Commissioners asked several rounds of questions, including the following:

Commissioner Barker requested that several panelists submit language after the meeting to help the Commission define voluntariness in the context of wellness plans. Commissioner Barker then asked if the panelists had any response to the statement of Judith Lichtman of the National Partnership for Women & Families regarding the potential disparate impact that wellness programs had on groups protected by civil rights laws, by imposing higher costs and withholding rewards because of health problems that disproportionately affect these groups. One panelist agreed that health care programs should not be punitive, stated that she did not believe that a “voluntary” wellness program necessarily prohibits all incentives, and offered to work with the Commission to determine which incentives should be deemed impermissibly coercive. Another panelist pointed out that wellness programs do not work well without health assessments, and that a blanket prohibition of incentives would be at odds with other initiatives implemented by the current Administration.

Commissioner Feldblum asked each panelist to address whether employee participation in cholesterol and blood sugar screening is a voluntary medical examination if: 1) screening is simply offered for free with no other incentive or penalty; 2) failure to participate in screening resulted in termination; 3) employees received a Starbucks gift card for participating; 4) employees received a $100 credit on their $300 monthly health care premium if they participated, or a $100 surcharge if not. All of the panelists agreed that scenarios 1 and 3 were voluntary medical examinations and that scenario 2 was not. The panelists disagreed on whether scenario 4 represented a voluntary medical examination.

Commissioner Lipnic asked if there was any real difference between the reasonable alternative standard under the Health Insurance Portability and Accountability Act (HIPAA) and the reasonableness standard under the ADA. Several panelists agreed that the two standards are similar enough to address the concerns presented by the Commission.

Commissioner Barker expressed concern that soon, both the Affordable Care Act (ACA) and HIPAA will use 30% of the cost of coverage as a benchmark for the maximum allowable amount of health-based incentives, and that the Commission should not create an arbitrary maximum allowance. She then asked the panelists if an employer complies with relevant EEO laws if it complies with HIPAA’s guidelines on maximum incentives. Three panelists answered “yes” and three answered no. Two of the panelists who answered “no” pointed out that while the 30% standard will soon exist under the ACA and HIPAA, HIPAA does not address voluntariness and therefore is not completely analogous to the Commission’s efforts regarding wellness programs.

Other questions raised by the Commissioners included whether the ADA limits the type of voluntary inquiries employers are allowed to ask, whether the concept addressed in the preamble to HIPAA’s 2006 Enforcement Rule is the same as “voluntariness,” how to ensure that sensitive information remains confidential and wellness programs remain affordable, whether the ACA encourages collection of medical information in the aggregate, and whether the ADA’s protection against the misuse of medical information is sufficient to address discrimination concerns.

Although the Commission did not clearly state what position, if any, it would take with respect to wellness programs under the ADA, the testimony of Acting Associate Legal Counsel Kuczynski was telling. He concluded that:

Guidance from the Commission will promote both uniformity in the handling of charges alleging violations of the ADA with respect to wellness programs, and voluntary compliance to prevent discrimination from occurring in the first place.

More information on the EEOC meeting, including written statements of the panelists and Commissioners, can be found here.

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EEOC Seeks Comments on its Draft Principles for a Quality Control Plan

Ilyse Schuman — Tue, 14 May 2013 12:00:00 -0500

The Equal Employment Opportunity Commission (EEOC) is seeking input from “individuals, employers, advocacy groups, agency stakeholders and other interested parties” on its Quality Control Plan (QCP) draft principles. The QCP’s purpose is to revise the standards used to assess the quality of the agency’s investigations and conciliations of discrimination complaints. In February 2012 the EEOC approved a more comprehensive Strategic Plan, which outlines the agency’s goals and achievement benchmarks for enforcing the various anti-discrimination laws under its jurisdiction, as well as its mission to carry out education and outreach efforts. Pursuant to this Strategic Plan, the EEOC is to develop and approve a QCP that will measure the agency’s performance in handling discrimination claims.

After an initial call earlier this year for written comments and consideration of suggestions during a public meeting on the QCP, the EEOC suggests that a “quality investigation” is one that involves the following steps:

The Commission identifies the bases, issues, and relevant allegations of the alleged unlawful employment action in a charge.
The Commission conducts an investigation consistent with its Priority Charge Handling Procedures (PCHP).
The Commission applies the law to the facts to determine if there is reasonable cause to believe that unlawful employment discrimination has occurred.
The Commission communicates with the Charging Party and the Respondent (or with their lawyers, if represented) to obtain sufficient information to make its determination.

The plan defines a quality conciliation as one in which:

The Commission seeks targeted, equitable relief.
The Commission informs the parties of the proposed categories of relief and how monetary terms were reached.
The Commission responds appropriately to reasonable offers made by the parties.

The standard of review for assessing the quality of the EEOC’s investigations and conciliations will be “whether the actions taken were reasonable given the totality of the circumstances, including available resources.” The QCP will not assess the performance of any one investigator or other EEOC staff member. The agency emphasizes that the QCP will not establish a set investigation level for each charge, particularly given the different charge priority categories and resources available.

In addition, the EEOC explains that “the quality indicia set forth in the QCP are not to be confused with the statutory provisions set forth in Title VII, the ADEA, ADA, EPA, and GINA. Those federal statutes do not set out quality standards for individual investigations or conciliations.”

Comments on the draft principles for the QCP must be submitted by 5:00 pm EST on May 24, 2013 at strategic.plan@eeoc.gov or received by mail at Executive Officer, Office of the Executive Secretariat, U.S. Equal Employment Opportunity Commission, 131 M Street, NE, Washington, D.C. 20507.

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Bills Seek to Limit NLRB, Union Authority

Ilyse Schuman — Mon, 13 May 2013 18:38:29 -0500

Before adjourning for a week-long recess, lawmakers in both the House and Senate introduced several bills addressing labor union and National Labor Relations Board activity.

The first bill reintroduced by Rep. Steve King (R-IA) would amend the National Labor Relations Act (NLRA) to allow employers to refuse to hire undercover union organizers, commonly known as “salts.” The Truth in Employment Act (H.R. 1746) would add the following provision to Section 8(a) of the NLRA: “Nothing in this subsection shall be construed as requiring an employer to employ any person who seeks or has sought employment with the employer in furtherance of other employment or agency status.”

In a press release, Rep. King said that his bill:

would help restore the balance of rights between employers, employees, and labor unions by ensuring that employers are not forced to hire individuals who only want to damage their company.

These 'salting' activities should not be confused with legitimate union organizing, and companies should not be forced to 'play dumb' and hire people working on behalf of their competitors. The Truth in Employment Act will go a long way towards protecting small businesses from sabotage, extortion, and frivolous lawsuits, and it should be enacted immediately as a common-sense clarification to federal labor law.

Under current law, an employer cannot discriminate against a “salt” simply because of an alleged conflict of interest or due to “potential” violation of company policies. The employer does have the right to require the salt to perform work in the normally expected manner. The extent of “salting” in use by unions is uncertain, as some salts identify their union affiliation and others do not.

Rep. Steve Stockman (R-TX) introduced the second labor-related bill, the Union Coercion Prevention Act (H.R. 1815) which seeks to “protect workers from the corrupt and coercive ‘Card Check’ system of organizing labor unions.” Among other changes, this bill would mandate that a designated representative of employees for the purpose of collective bargaining be selected by secret ballot in an election conducted by the Board and:

That, for purposes of determining the majority of the employees in a secret ballot election in a unit, the term “majority” shall mean the majority of all the employees in the unit, and not the majority of employees voting in the election.

The measure would also make several process and procedural changes to the representation election process. These amendments are designed to preempt regulatory efforts to establish expedited representation elections. For example, the bill would stipulate that:

No election shall be conducted less than 40 calendar days following the filing of an election petition. The employer shall provide the Board a list of employee names and home addresses of all eligible voters within 7 days following the Board’s determination of the appropriate unit or following any agreement between the employer and the labor organization regarding the eligible voters.

Finally, Senator Lamar Alexander (R-TN) introduced a companion bill (S. 850) to the House-approved Preventing Greater Uncertainty in Labor-Management Relations Act. Both bills are designed to limit the activities and enforcement power of the National Labor Relations Board until the Senate validly confirms a quorum, the U.S. Supreme Court rules on the constitutionality of President Obama’s three Board recess appointees, or until the 113th Congress adjourns. The Republican-controlled House narrowly passed this measure on April 12. The Senate counterpart is unlikely to advance in the Democrat-controlled chamber. Meanwhile, the Obama Administration on April 25 filed a petition with the U.S. Supreme Court seeking review of the U.S. Court of Appeals for the District of Columbia Circuit’s finding in Noel Canning v. NLRB that the recess appointments were unconstitutional.

Arbitration Fairness Act Reintroduced

Ilyse Schuman — Mon, 13 May 2013 18:25:38 -0500

A bill that would significantly restrict the ability for employers to arbitrate employment disputes was reintroduced in the House and Senate last week. The Arbitration Fairness Act of 2013 (H.R. 1844, S. 878) – introduced by Rep. Henry “Hank” Johnson (D-GA) and Sen. Al Franken (D-MN) – would amend the Federal Arbitration Act (FAA) to invalidate all predispute arbitration agreements that require the arbitration of any employment, antitrust, or consumer dispute, or conflict arising under any statute intended to protect civil rights. This Act would not apply to arbitration provisions contained in collective bargaining agreements.

This legislation broadly defines “employment dispute” as “a dispute between an employer and employee arising out of the relationship of employer and employee as defined by the Fair Labor Standards Act.” The definition of “consumer dispute” is similarly broad enough to encompass a wide range of legal conflicts. If enacted, this bill would essentially eliminate arbitration as a litigation alternative for employee claims – as well as those brought by clients/customers – unless the parties agree to the arbitral forum post-dispute. The provisions of this bill would take effect on the date of enactment, and would apply to any dispute or claim arising on or after that date.

As discussed in a press release, the impetus for the Arbitration Fairness Act is a series of Supreme Court cases sanctioning the use of arbitration agreements in a variety of circumstances.

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California Private Sector Employment Legislation Update

Governmental Affairs Team — Mon, 13 May 2013 15:58:45 -0500

By Chris Cobey

As many are aware, the California Legislature and Governor’s office are controlled by one party, unlike Washington, D.C. Thus, unlike in Washington, legislation introduced by the majority party in Sacramento has an excellent chance of passage by the Legislature. In fact, to date, virtually all committee and floor votes on bills affecting most private sector employers have been essentially party-line votes. There is less certainty in predicting what bills passed by the Legislature will be signed by Governor Brown, and thus become law.

Under the Legislature’s 2013 calendar, a bill must be passed by its house of origin by May 31. The Legislature will take its summer recess from July 4 through August 4. The last day for any bill to be passed is September 13. The Governor must sign or veto by October 13 any bill passed by the Legislature on or before September 13 and in the Governor’s possession after September 13.

Following is a brief summary of significant bills¹ affecting private sector employers in California now pending in the Legislature, and their status in the legislative process.

AB 10 would raise the minimum wage, in steps, to $9.25 per hour by 2016, and provide the minimum wage could increase, but not decrease, as adjusted by the California Consumer Price Index. Pending in Assembly Appropriations.

AB 263, which would, among other things, add a new portion to the Labor Code prohibiting specified "unfair immigration-related practices," is pending before the Assembly Appropriations Committee. The bill would also increase civil penalties to as high as $10,000 per employee per violation for any retaliation against an employee. Pending in Assembly Appropriations.

AB 442 would expand the civil penalty and the payment of restitution of wages to the employee for a Labor Commissioner citation against an employer by also subjecting the employer to payment of liquidated damages to the employee. Passed Assembly; pending in Senate.

AB 729 would create an evidentiary privilege shielding communications between a union agent and a represented worker. Pending Assembly passage.

AB 880 would require a large employer (500 or more employees) to pay the Employment Development Department an employer responsibility penalty for each covered employee enrolled in Medi-Cal based on the average cost of coverage provided by large employers to their employees, including both the employer’s and employee’s share of the premiums; would assess interest of 10% per year on employer responsibility penalties not paid on or before the date payment is due; would require a large employer subject to an employer responsibility penalty to pay a penalty for any employer responsibility penalty payment that is more than 60 days overdue. This bill would also make it unlawful for a large employer to, among other things, designate an employee as an independent contractor or temporary employee, reduce an employee’s hours or work, or terminate an employee if the purpose is to avoid the imposition of the penalty. A violation of those provisions would result in a penalty of 200% of the penalty amount the employer would have paid for the applicable period of time. The bill would also prohibit a large employer from discharging or taking other action against an employee who enrolls in a public health benefit program or obtains advanced premium tax credits through the California Health Benefit Exchange and would make the willful refusal of the employer to rehire, promote, or otherwise restore the employee or former employee a misdemeanor. The bill would authorize an employee to file a complaint with the Division of Labor Standards Enforcement of the Department of Industrial Relations if the employee is discharged, threatened with discharge, demoted, suspended, or in any other manner discriminated or retaliated against in the terms and conditions of employment by his or her employer because the employee exercised his or her rights under these provisions. By establishing a new crime, this bill would impose a state-mandated local program. Pending in Assembly Appropriations.

AB 1082 would require an employer who employs 50 or more full-time equivalent employees to annually report to the Employment Development Department specified information relating to the average number of hours each employee worked per week in a calendar year and whether those employees were enrolled in minimum essential coverage under an eligible employer-sponsored health care plan. Pending in Assembly Appropriations.

AB 1385 would require the Department of Industrial Relations to procure a case management system that has the capability to provide the public with free, web-based access to a searchable database containing information regarding the final disposition of all complaints, citations, and administrative proceedings of the department. Pending in Assembly Labor and Employment.

AB 1387 would increase the car wash employer’s bond requirement amount from $15,000 to $150,000, but would exempt an employer from that requirement if the employer has a collective bargaining agreement in place that meets specified criteria, and would delete the existing sunset date for the statute governing car washes, thus extending those provisions indefinitely. Pending in Assembly Appropriations.

SB 168 would make a successor farm labor contractor liable for wages and penalties owed by a predecessor farm labor contractor. Pending Assembly passage.

SB 292 would clarify that no evidence of sexual desire is required for proof of a claim of sexual harassment. The intent of this bill is to negate what the bill’s author suggests is the outlier holding in Kelley v. Conco Companies (2011) 196 Cal.App.4th 191, that a plaintiff in a same-sex harassment case must prove that the harasser harbored a sexual desire for the plaintiff in order to survive summary judgment. Pending Assembly passage.

SB 390 creates a criminal provision in the Labor Code allowing the Labor Commissioner to pursue a criminal misdemeanor prosecution against employers who do not remit payroll taxes. Pending Senate passage.

SB 400 would extend the protections available to persons in FEHA protected categories to victims of stalking; would also prohibit an employer from discharging or in any manner discriminating or retaliating against an employee because of the employee’s known status as a victim of domestic violence, sexual assault, or stalking; would require the employer to provide reasonable accommodations for such a victim; would create a private right of action for an aggrieved employee to seek enforcement of those victim status protection and reasonable accommodation provisions; would permit the recovery of reasonable attorney’s fees by a prevailing employee only. Pending Senate passage.

SB 404 would add an additional protective status to the Fair Employment and Housing Act of "familial status," a concept that is very broadly defined in the bill. Pending in Senate Appropriations.

SB 435 would require employees of piece rate workers to pay those employees for any rest breaks mandated by law, and set the rate of pay for rest and recovery periods for piece rate workers. Passed the Senate; pending in the Assembly.

SB 462 would authorize the award of attorney's fees and costs in an action brought for the non-payment of wages, fringe benefits or health and welfare pension fund contributions, where the prevailing party is not the employee, contingent on a finding by the Court that the employee brought the court action in bad faith. Pending in Senate Appropriations.

SB 556 would expand employers’ liability for damages caused by an independent contractor or the independent contractor's employees, including wage and hour violations, penalties, fines and willful misconduct if the contractor or its employees were uniformed similar to that of the contracting entity, or drove a vehicle with the contracting entity’s logo. Pending in Senate Labor and Industrial Relations.

SB 607 (“Workplace Flexibility Act”) would have allowed individual employees to propose alternative work schedules to employers, such as 10 hours a day for four workdays a workweek, with the ninth and tenth hours being paid at the regular rate of pay, and overtime for any hours beyond ten hours in a day, or forty in a workweek. Failed passage on 3-1 vote in Senate Labor and Industrial Relations; reconsideration granted.

SB 648 would extend the same prohibitions on the smoking of tobacco products to electronic cigarettes. Pending in Senate Judiciary.

SB 655 purports to codify the California Supreme Court's decision in Harris v. City of Santa Monica (2013) 56 Cal.4th 203 on mixed motives in discrimination cases. Pending Senate passage.

SB 776 would modify existing law concerning permissible credits employers may take against the obligation to pay the general prevailing rate of per diem wages for prevailing wage payments, and would prohibit credit from being granted for employer payments made to monitor and enforce laws related to public works if those payments are not required by a collective bargaining agreement. Passed Senate; pending in Assembly.

Contact Chris Cobey (ccobey@littler.com) with any questions on these or other pending California legislation.
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¹ Except bills concerning worker’s compensation and unemployment insurance.

NLRB's Posting Rule Invalidated by D.C. Circuit

Labor Management Relations Practice Group — Wed, 08 May 2013 16:40:11 -0500

The U.S Court of Appeals for the D.C. Circuit recently struck down the National Labor Relations Board’s August 2011 Notice Posting Rule, which would have required employers to conspicuously display a notice informing employees of their rights under the National Labor Relations Act (the “Act”). In National Association of Manufacturers, et al. v. NLRB, the court invalidated the rule because it found all three of the rule’s enforcement mechanisms unlawful. A majority of the court also found that the rule exceeded the Board’s rulemaking authority as delegated by Congress. To learn more about the decision, please continue reading at Littler's Labor Relations Counsel.