Bring in the TV Cameras: NLRB and D.C. Circuit Find Employees Airing Grievance in Media is Protected Activity

TV SalesmanAn employee goes on television and maligns his bosses for a new company policy with half-truths—and his bosses fire him for disloyalty. Sounds justified, right? Wrong. A National Labor Relations Board (NLRB) decision (recently affirmed by a D.C. Circuit panel) said as long as the employee’s statements to the media are not “flagrantly disloyal” or “maliciously untrue” the conduct is legally protected, concerted activity. Employees have the right to engage in protected, concerted activity surrounding a labor dispute, but employers also have the right to terminate insubordinate employees who make damaging statements about the company—and in DirecTV, Inc. v. NLRB, the D.C. Circuit found that the employee protection trumped the employer’s prerogative.

Facts of the Dispute

DirecTV wanted to see each of its television receivers connected to landline phones in customers’ homes. This connection enabled customers to have certain enhanced features and benefitted DirecTV by allowing them to track customer viewing habits. To further that goal, DirecTV instituted a new policy for its installation contractors to promote more land-line connections whereby the technicians would be back-charged or docked up to $5 for each customer installation performed that did not connect the receiver to the phone line. This new sales incentive did not sit well with the technicians who had a hard time convincing customers to connect the receivers to the phone line because customers could receive the full range of TV channels without the landline connection. Some of the technicians thought the sales advice suggested that they mislead or lie to customers about the necessity of a phone connection, and did not end up resulting in increasing connection numbers. One manager jokingly instructed technicians that they should tell customers that the TV system would “blow up” without a phone connection, and other supervisors, according to the technicians, instructed them to simply connect the phone line without telling the customer or try to advise customers that the receiver would not work without the phone connection.

After unsuccessfully talking with management to try and get the policy changed, nonunion technicians working for DirecTV’s installation contractor contacted a local news network to air their grievances on the evening news. The TV reporter interviewed the technicians as a group in their company uniforms. Not surprisingly, the interview painted an unflattering picture of DirecTV, with the technicians stating “if we don’t lie to the customers, we get back charged for it” and “we’ve been told to tell the customer whatever it takes to get that phone line into that receiver.”

After the interview aired DirecTV told the contractor that the technicians involved in the interview were not to be in customers’ homes, resulting in their being fired, even those who did not speak on air. Shortly thereafter, the fired employees filed an unfair labor practice grievance with the NLRB.

Legal Protections for Complaining Employees

Generally, employees (even nonunionized employees) in a labor dispute can appeal to third parties to win over support for their cause, but employers also have the prerogative to fire employees where, for instance, an employee publicly criticizes the company even if the criticism was an attempt to draw support to the labor dispute. The NLRB concluded that an appeal to a third party relating to an employment-related dispute can be protected concerted activity even if the third-party appeal is disloyal and disparaging as long as it relates to an ongoing dispute and does not rise to the level of “flagrant disloyalty” or contain “maliciously untrue statements.” In this case, there was no dispute that the technicians’ appeal related to a labor dispute because the pay-docking grievance.

The big question before the D.C. Circuit was whether the interview statements were “so disloyal, reckless or maliciously untrue as to lose the Act’s protection” and centered on the employees’ intent. Prior precedent held that employees have the right to support a consumer boycott of the employer’s products as long as they do not go beyond the dispute to disparage the employer’s product itself. George A Hormel and Co v NLRB. Here, the Board concluded there was no evidence that the technicians intended to cause customers to cancel their service—they were simply seeking public support for their cause and only after their attempts to resolve the dispute with the company failed. The company argued that the focus should not be on the employee’s actual intent, but on what an objective, reasonable observer would infer from the employees’ actions. The Board found, and the D.C. Circuit affirmed, that it could consider subjective intent when assessing whether a third party appeal rises to the level of flagrant disloyalty and concluded that the technicians did not specifically intend to inflict harm on the company and did not act recklessly without regard to the financial consequences to the company, but intended only to garner public support for their position. The Board also found that “for the most part” the technicians’ statements in the news were accurate representations of what the company had told the technicians and “any arguable departures from the truth … were not more than good-faith misstatements” but not malicious falsehoods.

A scathing dissenting opinion found that “when these technicians falsely accused their employer during a television broadcast of certain outrageous business practices, they crossed a line—from labor dispute to public disparagement; from concern about wages and working conditions to a vendetta aimed at undermining the Companies’ reputation” to make it “not a close case.” She noted that the DirecTV policy did not, in fact, require the technicians to lie and did not seriously encourage them to scare customers into accepting an unnecessary service. She further noted that prior precedent rejected the taking of a subjective approach to disloyalty, and that evaluation of whether an act was sufficiently disloyal to warrant termination was an objective one and was shown in this case by the technicians’ acts

Employer Takeaways

The balance between employees’ rights to engage in protected conduct and the employers’ right to fire insubordinate employees will not always yield consistent results. But in cases where it seems that termination is warranted for disloyalty the employees’ subjective intent—whether flagrant and malicious or purely seeking support for their cause—will likely be the determining factor. This protection is in play for concerted activity even in nonunion settings, as was the case here. Employers beware when making termination decisions on the basis of disloyalty—the NLRB doesn’t think things are cut and dried.

When to Say When? Fifth Circuit Rules on When an Accommodation Isn’t Working

Businessman presenting work safety concept, hazards, protections, health and regulations

In a published opinion, the Fifth Circuit has held that an employee’s poor performance in a light-duty position can relieve the employer from any further obligation to find a reasonable accommodation under the Americans with Disabilities Act (ADA). This opinion highlights the importance of the interactive process, and emphasizes that both the employer and the employee must put forth a good faith effort to make an accommodation work.

In Dillard v. City of Austin, Texas, Dillard was injured on-the-job, and then took 12 weeks of Family and Medical Leave Act (FMLA) leave. After his FMLA leave expired, the City continued his leave through a 180-day “Return to Work” program. At the end of that program, Dillard was still unable to return to work, but the City again allowed him to remain on leave. Nearly a year after the accident, Dillard was medically cleared for “limited duty” or “administrative duty” work and sought to return to work.

The City offered Dillard a temporary position as an administrative assistant. Dillard, a manual laborer, expressed doubt about whether he would be able to do the job, but accepted the position. Because he had no secretarial experience, the City offered him several opportunities for typing classes and computer training, but Dillard failed to sign up. Instead, he admitted that he frequently came to work late and left early. When he was at work, he admitted that he made personal calls, played computer games and surfed the internet. He let his supervisors know that he was unhappy in the administrative position and asked to be moved to a different job more suited to his experience. Instead of moving Dillard to a different position, the City terminated him due to his poor performance.

Dillard sued the City under the ADA for discriminatory termination and failure to accommodate. He claimed that the City failed to act in good faith to find a more suitable position to accommodate his disability once it became obvious that the administrative position was a poor fit.

The Fifth Circuit disagreed and affirmed the lower court’s grant of summary judgment in the City’s favor. The Court found that Dillard’s admittedly poor job performance in the light-duty position was not just a legitimate non-discriminatory reason for his termination, but was also evidence that the plaintiff – not the City – caused a breakdown in the interactive process to accommodate his disability. The Court emphasized that

“the interactive process is a two-way street; it requires that employer and employee work together, in good faith, to ascertain a reasonable accommodation.”

The Court stated that once Dillard accepted the secretarial position, “the ball was in his court:  it was up to him to make an honest effort to learn and carry out the duties of his new job with the help of the training the City offered him.” Because Dillard failed to make an effort to succeed in the light-duty position, the Court found that the City was under no further obligation to try to accommodate his disability.

What Should Employers Do?

The Fifth Circuit’s decision should reassure employers that if they are acting in good faith, they are fulfilling their responsibility under the ADA. In providing reasonable accommodations, employers should do what they can to help the employee succeed but do not have to put up with poor performance.

School of Hard (Dread) Locks: EEOC Loses Appeal Over Hairstyle Ban

School of Hard (Dread) Locks: EEOC Loses Appeal Over Hairstyle BanLast week the Eleventh Circuit Court of Appeals affirmed a lower court’s dismissal of a case the EEOC filed over a job applicant’s short dreadlocks. In 2010, Chastity Jones, an African American, applied for a position with CMS, a claims processing company in Mobile, Alabama. Ms. Jones showed up for her interview in a blue business suit and wearing her hair in short dreadlocks. After the interview, the human resources manager told Ms. Jones that she could not hire her with the dreadlocks. Ms. Jones replied that she would not cut her hair and CMS told her that she would not be hired. CMS had a race-neutral grooming policy that said that “Hairstyle should reflect a business/professional image. No excessive hairstyles or unusual colors are acceptable.”

The EEOC’s Complaint stated that dreadlocks are a method of hairstyling for black hair and are culturally associated with black persons. As such, the EEOC claimed that a prohibition of dreadlocks in the workplace constitutes race discrimination. The district court dismissed the complaint, finding that Title VII prohibits discrimination based on immutable characteristics, such as race, color, or natural origin and “a hairstyle, even one more closely associated with a particular ethnic group, is a mutable characteristic.” On appeal, the EEOC argued that dreadlocks are a natural outgrowth of the immutable trait of race and that targeting dreadlocks can be a form of racial stereotyping.

The EEOC pled the case as a disparate treatment case, rather than a disparate impact case—but attempted to make both arguments to the Court. The Eleventh Circuit opinion spends some time distinguishing the two types of claims and ultimately, based its analysis on only the disparate treatment theory. It began by noting that Title VII does not define “race” and neither does an EEOC regulation. The Court spends several pages examining dictionary and other sources for such a definition, but finally decides that case law teaches that Title VII protects against discrimination based on immutable characteristics. The protection with respect to immutable characteristics does not extend solely to cultural practices like hairstyle or language use. The Court noted that the distinction is a difficult one:  Discrimination on the basis of black hair texture (an immutable characteristic) is prohibited by Title VII, but adverse action on the basis of a black hairstyle (a mutable choice) is not.

The opinion also takes some digs at the EEOC for citing its own Compliance Manual which the Court felt was inconsistent with positions that the EEOC had taken earlier. The Manual contains a statement that Title VII prohibits discrimination against a person because of cultural characteristics often linked to race or ethnicity . . . such as a person’s grooming practices. However, in 2008 the EEOC took a completely different position in an administrative appeal where it held that a grooming policy interpreted to prohibit dreadlocks and similar hairstyles lies “outside the scope of federal employment discrimination statutes” even when the prohibition targets “hairstyles generally associated with a particular race.” The Court noted that the Compliance Manual position is also contrary to current caselaw.

Finally, the Court addressed requests by parties to interpret Title VII more expansively by eliminating the biological conception of race and instead to use cultural characteristics with race. The Court writes extensively about the difficulties in using “culture” as the basis for discrimination law due to the ever-changing concepts found under that interpretation. The opinion states that even if the court proved sympathetic to the “race as culture” argument, how would an employer know definitively what cultural practices are associated with a particular “race” and if those practices deserve protection under Title VII? Ultimately, the Eleventh Circuit found that the case law in this matter bound them to find that the EEOC’s claims were properly dismissed.

For employers, the primary take-away from this decision is that a race-neutral grooming policy, as seen above, appears to be blessed by some of the courts. However, the opinion does leave some wiggle room against a policy that would be based on black hair texture, as opposed to hairstyle—but is that really something an employer would do? The more interesting part of this opinion is the pages of dicta dealing with the race vs. culture conflict. It is not likely the last opinion we will see on the subject.

Repercussions of Retaliation: EEOC Revises its Guidance on Retaliation

Repercussions of Retaliation: EEOC Revises its Guidance on RetaliationFor the first time in 18 years, the U.S. Equal Employment Opportunity Commission (EEOC) has issued revised guidance (the Guidance) regarding retaliation. The Guidance, which broadens and clarifies the definition of protected applicant/employee activities, became effective August 29, 2016. There have been seven U.S. Supreme Court decisions addressing retaliation since the EEOC’s last update in 1998. The Guidance accounts for expansions in the case law and Supreme Court guidance on this issue. (It also addresses when the EEOC believes you are interfering with an employee’s right to a reasonable accommodation under the ADA, but that is for another blog post.)

What Constitutes Protected Activity?

The first element of a retaliation claim is that the applicant/employee engaged in some protected activity. Protected activity includes participating in an EEO process or reasonably opposing conduct made unlawful by law. As noted in the Guidance, “[t]he plain terms of the participation clause prohibit retaliation against those who ‘participate in any manner in an investigation, proceeding, or hearing’ under the statute.” 42 U.S.C. 2000e-3(a).

An employee engages in protected activity when he or she participates in an EEO process—makes a charge, testifies, assists, or participates in any manner in an investigation, proceeding, or hearing. The Guidance explains that the “Commission has long taken the position that the participation clause broadly protects EEO participation regardless of whether an individual has a reasonable, good faith belief that the allegations are, or could become, unlawful conduct.” So, although the complaint itself may not be valid, the protection from retaliation still attaches to it. Additionally, the Guidance explains that the participation clause should not be limited to administrative charges or lawsuits filed to enforce EEO rights– it also encompasses an employer’s internal EEO complaint process.

Protected activity also includes an applicant/employee’s opposition to unlawful conduct. Therefore, an employer must not punish an applicant/employee for voicing or otherwise communicating opposition to a perceived EEO violation. This protection, unlike the participation clause, is limited to employees/applicants who act with reasonable good faith and believe that the conduct they oppose is actually unlawful. According to the EEOC, it may be reasonable for an applicant/employee to complain about behavior that has not yet risen to the level of severe or pervasive (but could) as well as behavior that the EEOC considers unlawful, even if some courts disagree with that interpretation (e.g., discrimination based on sexual orientation or gender identity).

The Guidance cites the Supreme Court’s 2009 holding in Crawford v. Metropolitan Government of Nashville and Davidson County, in which the Court explained that workers who complain about unlawful employment practices and workers who reveal unlawful employment practices when they are questioned by an internal company investigator are both protected from retaliation. Referencing the Crawford opinion, the Guidance explains that opposing discriminatory practices has an “expansive definition.” The Guidance also acknowledges that the same activity may qualify as protected under both the participation clause and opposition clause.

A Materially Adverse Action is not the same as an Adverse Employment Action

The Guidance reiterates the Supreme Court’s decision in Burlington Northern & Santa Fe Railway Co. v. White and states clearly that adverse actions for retaliation purposes are broader than adverse actions for a Title VII violation. To trigger the retaliation protection, the action need only deter a reasonable employee from complaining about discrimination. The EEOC’s non-exhaustive list of potentially materially adverse actions include:

  • Disparaging the person to others (like coworkers) or in the media;
  • Threatening reassignment;
  • Engaging in abusive verbal or physical behavior that may not be sufficiently severe or pervasive to qualify as illegal harassment; and
  • Threatening to take action against close family.

So, just because the action doesn’t affect pay or benefits, it could still qualify as retaliation. The Guidance warns there are no bright line rules for defining potentially material adverse actions.

For Non-Federal Employers, the Employee Still Has to Prove “But-For” Causation

The Guidance acknowledges the Supreme Court’s “but-for” causation standard from University of Texas Southwest Medical Center v. Nasser, but points out that “but-for” does not mean “sole cause.” According to the EEOC, retaliation is a “but-for” cause if it was the straw that broke the camel’s back—even if there were other motivating factors. Evidence of retaliation could include suspicious timing, oral or written statements from decision makers, the different application of rules to the complaining party, or inconsistent or shifting explanations. Facts the EEOC cites that may defeat a claim of retaliation are more limited—the employer didn’t know about the protected activity or it had a legitimate and nonretaliatory reason for the decision.

Recommended Best Practices

Don’t despair—although almost anything could be deemed protected activity or retaliation, the Guidance lists a number of “Promising Practices” you can follow. Hopefully, you are already following some or all of them, but here they are:

  1. A Written Nonretaliation Policy. The EEOC wants you to have a separate policy with examples of what not to do and proactive steps to avoid actual or perceived retaliation. If all of your EEO policies mention retaliation, you are probably okay but make sure this is clear in your policy.
  2. Train Employees and Supervisors. You should make sure all of your folks know that retaliation is against your policy and the law. Include a separate retaliation section in your annual EEO/harassment training.
  3. What to Do When a Complaint is Filed. Reassure the employee and any witnesses that you will not tolerate any retaliation and how they can report any retaliation they think is occurring. Also, you should provide tips to the managers about avoiding even the appearance of retaliation.
  4. Proactive Follow Up After a Complaint. Check in with the complaining party and the manager to see how it is going and address problems as or before they arise.
  5. Review of Employment Actions to Ensure EEO Compliance. HR should be a little more involved with any performance evaluations, pay changes, assignment changes, etc. The manager still needs to supervise the complaining party and needs to know the best way to do it.

In light of the fact that retaliation claims have become the most common EEO claim, composing 44.5 percent of the charges the EEOC received in 2015, you should familiarize yourself with the updated guidance and begin putting these best practices in practice.

Taking a Bite Out of Crime…and Maybe the Employer? OSHA Fines Company Following Criminal Assault on Employee

Taking a Bite Out of Crime…and Maybe the Employer? OSHA Fines Company Following Criminal Assault on EmployeeThe Occupational Safety and Health Administration (OSHA) recently reminded us that every employer needs a violence in the workplace policy or risk citation for third party criminal actions. The OSH Act’s general duty clause requires employers to provide a workplace free from recognized hazards likely to cause death or serious physical harm to employees. OSHA clearly believes that third party criminal activity can be a recognized hazard and employers have an obligation to address it. It has gone so far as to issue Guidance for Preventing Workplace Violence for Healthcare and Social Services Workers to provide guidance to the healthcare industry on how to handle potentially dangerous patients or environments.

The Facts

Epic Health Services’ employees go into patient homes to provide home health services. According to OSHA, a number of Epic employees reported problems ranging from verbal assaults to domestic violence in the home to being physically groped. One nurse said the father in a home in which she provided services to a child attempted (sometimes successfully) to grope her and commented about her body and later physically assaulted her. (He was later charged with rape and sexual assault.) OSHA found that other employees had told Epic about the father’s prior assaults and the nurse said Epic did not warn her of the danger.

The Citation

OSHA cited Epic for exposing “employees to the risks of physical assaults as they provided nursing care services to both clients and family members and had no system for reporting threats or incidents of violence.” Additionally, OSHA cited Epic for “failing to report all instances of workplace violence, regardless of the severity.” OSHA characterized this as a willful violation– the employer “either knowingly failed to comply with a legal requirement (purposeful disregard) or acted with plain indifference to employee safety.” The fine is $98,000, which is, of course, not the end of the story–the nurse is suing the company for negligence.

Policy Options

What can employers do to both protect their employees and prevent such citations? OSHA suggests the following:

  • A written violence workplace prevention program
  • A hazard assessment and security procedures for each patient/client
  • Procedures to reduce the risk, including an option for employees to refuse to provide services in a hazardous situation (with no fear of retaliation)
  • Training
  • Procedures for when a violent incident occurs, including incident reports and investigation
  • A system for employees to report all workplace violence, regardless of severity

While some of these recommendations are unique to the healthcare industry, most are not. This applies to any employer whose employees interact with the public, are sent to other sites to perform work, or work with other people (who are not always stable).

Oh, and don’t forget that the cost of OSHA citations just increased significantly. The best practice is to let your employees know that you care about their safety, that they can report concerns and that you take them seriously, even if the threat involves a customer or patient. Not surprisingly, the best way to prove that you care is to have a written policy and enforce it.

Bend Don’t Break: The EEOC Says Inflexible Attendance Policies Violate the ADA

Bend Don’t Break: The EEOC Says Inflexible Attendance Policies Violate the ADAIn managing employee attendance, be careful about policies that suggest automatic termination after a certain number of absences as the Equal Employment Opportunity Commission (EEOC) believes such policies violate the Americans with Disabilities Act (ADA). The EEOC has filed suit against Wayne Farms, a poultry plant, alleging the company’s attendance policy, which allegedly required the mandatory termination of an employee who accumulated more than 9 occurrences in 12 months violated the ADA.

The Alleged Facts.

Although the case is filed as a purported class action, the allegations center around two employees, Latonya Hodges and Salvadora Roman. The Complaint alleges that Hodges missed work because of her asthma and was ultimately terminated under the attendance policy in 2011. The Complaint also mentions Salvadora Roman, an employee who missed work because of her Carpal Tunnel Syndrome and quit coming to work in 2012 after she hit 10 occurrences (assuming she was terminated). According to the Complaint, Wayne Farms should have offered both employees “flexibility in its attendance policy or other reasonable accommodations”, including leave or transfers.

The EEOC alleges that Wayne Farm’s attendance policy applies “to all absences, including  absences caused by an employee’s disability unless the employee is granted leave under the Family Medical Leave Act (FMLA) or is granted leave for holidays, pre-approved vacations, death in the immediate family, court subpoena as a witness, jury duty, pre-approved medical leave of absence, military leave, worker’s compensation disability, pre-approved personal leave and pre-approved appointments with Government agencies.” The EEOC claims that once an employee accrues ten absences within a year, even if the employee has an excuse that the absence was related to a disability, that employee is automatically terminated under Wayne Farms’ policy. According to the EEOC’s reading of the policy, it “in effect, acts as a qualification standard, employment test or other selection criteria that screens out or tends to screen out individuals with disabilities and is not job-related or consistent with business necessary, in violation of” the ADA.

Of course, we have not heard Wayne Farms’ response, although it apparently wonders why the EEOC is only now pursuing a matter first raised nearly five years ago. In a news report, the Company stated that it is “completely confident that management met all legal and contract obligations” to the employees and mentioned that neither employee raised issues under the union contract. The Company intends to vigorously defend the action.

What You Can Do in the Meantime.

Given the EEOC’s focus on Wayne Farms’ attendance policy, employers with strict attendance policies, particularly those with point levels, should look closely at their policies. Consider deleting language that suggests an employee will “automatically be terminated” or other inflexibility. Although supervisors want bright lines, the law does not permit them. The ADA requires employers to consider the facts of each case and, in some instances, provide leave as a reasonable accommodation.

Check Your Neutral Policies: The EEOC Joins the ACLU’s Challenge to Dignity Health’s Exclusion of All Care Related to Sex Transitions as Sex Discrimination

Check Your Neutral Policies: The EEOC Joins the ACLU’s Challenge to Dignity Health’s Exclusion of All Care Related to Sex Transitions as Sex DiscriminationThe ACLU filed a complaint against Dignity Health, claiming that the total exclusion of care related to “sex transformation surgery” in Dignity’s employee health insurance plan is unlawful sex discrimination. Now the EEOC wants a piece of the action and is seeking permission to file an amicus brief urging the California federal court not to dismiss the ACLU’s suit challenging the health care conglomerate’s denial of coverage for a male nurse’s sex reassignment surgery.

Dignity Health asserts that the exclusion applies to all of its employees and is therefore non-discriminatory. The ACLU and now the EEOC argue that the exclusion violates Title VII because in reality it only affects transgender individuals who seek to transition.

In its amicus brief, the EEOC points to the Supreme Court’s 1989 opinion in Price Waterhouse v. Hopkins, holding that discrimination against a woman for masculine behavior (i.e., nonconforming to gender stereotypes) qualifies as sex discrimination. The EEOC asserts that the same reasoning in Price Waterhouse applies to discrimination against a transgender individual who seeks a medically necessary surgery to transition to his or her true gender. The Sixth and Ninth Circuits have extended Title VII’s protection to transgender individuals who do not conform to their assigned gender. Not all courts agree on Title VII’s breadth. In a recent opinion surveying the current legal landscape on this issue, the Seventh Circuit reaffirmed its long-standing precedent that Title VII does not provide a remedy for claims of discrimination based on sexual orientation.

As a practical matter, these filings in the Dignity Health  case show that an employer’s categorical policy, even one that applies to all employees, may still be challenged if it disproportionally affects a protected class under Title VII. The question will come down to whether transgender is a protected category or not. Cautious employers may want to review policies to make sure they are not the next target.

FAR Council and DOL Issue Final Rule Implementing Fair Pay & Safe Workplaces Executive Order

FAR Council and DOL Issue Final Rule Implementing Fair Pay & Safe Workplaces Executive OrderThe Federal Acquisition Regulatory Council and the Department of Labor published a final rule, implementing the Fair Pay and Safe Workplaces Executive Order (also known as the “blacklisting” Executive Order), on August 24, 2016. The Executive Order, implemented by the final rule, requires federal prime contractors and subcontractors under covered procurements (i.e., ones where the estimated value exceeds $500,000) to disclose to the government certain labor violations.

Among the labor laws listed in the Executive Order and the final rule, violations of which must be reported, are:

  1. the Davis-Bacon Act
  2. the Service Contract Act
  3. the Fair Labor Standards Act
  4. the Occupational Safety and Health Act of 1970
  5. the Migrant and Seasonal Agricultural Worker Protection Act
  6. the National Labor Relations Act

While prime contractors are to disclose labor law violations in their bids or proposals, the final rule provides that subcontractors generally are to “disclose details regarding labor law decisions rendered against them . . . directly to [the Department of Labor] for review and assessment instead of to the prime contractor.”

The final rule – which is over 500 pages long including comments – contains an effective date of October 25, 2016, but also includes various “phase-in process[es]” for certain prime contractors and subcontractors. For instance, the “reporting disclosure period” for prime contractors initially is limited to one year and will gradually increase to three years by October 25, 2018.

The penalties for non-compliance are not entirely clear, but they may range from being found “nonresponsible,” to losing a bid protest, and/or to being accused of failing to comply with various federal laws requiring truthful statements to the government. Given the fast-approaching effective date, federal prime contractors and subcontractors would be well-advised to familiarize themselves with the content of the new rule and to do so promptly.

West Coast—Time to Check Your Employment Agreements: Ninth Circuit Negates No-Class Action Clause in Arbitration Agreements

West Coast—Time to Check Your Employment Agreements: Ninth Circuit Negates No-Class Action Clause in Arbitration AgreementsThis week, the Ninth Circuit held that Ernst & Young’s (E&Y) arbitration agreement that prohibited its employees from filing class actions violates the National Labor Relations Act (NLRA). E&Y required as a condition of employment that its employees sign an agreement stating that they could not bring any class action or concerted claim regarding wages, hours, and terms and conditions of employment. Instead, an employee bringing those claims would arbitrate as single plaintiff.

Two former E&Y employees brought a class and collective action alleging that E&Y misclassified its workers to deny overtime under the Fair Labor Standards Act (FLSA). Pursuant to the employment agreement, a district court ordered individual arbitration of the claims and dismissed the case. The employees appealed claiming that the employment agreement’s waiver of collective actions violated numerous federal statutes, including the NLRA and the FLSA.

The Ninth Circuit found the arbitration agreement violated Sections 7 and 8 of the NLRA, which protect concerted employee activity to improve working conditions. It held that the requirement that all claims be individually arbitrated was an “interference” with the rights the NLRA guarantees. Specifically, the Court stated:

“Sections 7 and 8 make the terms of the concerted action waiver unenforceable. The ‘separate proceedings’ clause prevents concerted activity by employees in arbitration proceedings, and the requirement that employees only use arbitration prevents the initiation of concerted legal action anywhere else. The result:  interference with a protected Section 7 right in violation of Section 8. Thus, the ‘separate proceedings’ terms in the Ernst & Young contracts cannot be enforced.”

The opinion reconciles its decision with the Federal Arbitration Act by stating that the problem is not arbitration, but the prohibition on concerted legal claims. The dissent, by Judge Ikuta, took issue with this and pointed out that the United States Supreme Court has held that waiver of class actions is typical in the arbitration context because class procedures create a scheme that is inconsistent with the FAA. As noted by Judge Ikuta, arbitration provides benefits of speed and informality—neither of which would be accomplished by class or collective actions. The dissent cited numerous examples where Courts had held that arbitration requirements were not vacated by federal statutes.

Within the Ninth Circuit’s jurisdiction, this decision may cause some immediate heartburn for employers and they may need to consider revising agreements. As we have noted before, collective and class actions on overtime issues are juicy temptations for plaintiff lawyers. Under this decision, even if there is an arbitration agreement prohibiting such actions, we should expect employees to take advantage of this new avenue for such claims.

Sixth Circuit Confirms That The ADA Does Not Require Employers To Create Permanent Light Duty Positions For Disabled Employees

Sixth Circuit Confirms That The ADA Does Not Require Employers To Create Permanent Light Duty Positions For Disabled EmployeesGiving an employee temporary light duty does not mean you have to create a permanent light duty position as a reasonable accommodation, at least according to a recent Sixth Circuit case. Here are the facts the Court considered in Meade v. AT&T Corporation:

Stephen Meade worked for AT&T as a facility technician, installing and maintaining telephone and internet equipment. After working for over 30 years, he suffered a job-related injury that resulted in a blood clot in his leg. Meade’s physician released him to return to work with temporary limitations that prevented him from working as a facility tech. When Meade returned to work, AT&T allowed him to perform light-duty tasks around the office. After AT&T learned that that his limitations were permanent, it offered Meade 40 weeks of termination pay, and provided options for Meade to apply for and obtain another position with AT&T.  Following his termination, Meade did not apply for any positions; instead, he filed a lawsuit alleging that AT&T failed to reasonably accommodate his disability. Specifically, he claimed that AT&T should have allowed him to continue to perform light-duty work indefinitely.

Rejecting Meade’s claim, the court found that AT&T’s refusal essentially to create a permanent light-duty position did not violate the ADA. The district court granted summary judgment in favor of AT&T, and the Sixth Circuit affirmed.

The ADA requires an employer to provide reasonable accommodations, not any accommodation that an employee requests. The Sixth Circuit’s opinion underscores the fact that every possible accommodation is not necessarily reasonable. Here, the court found that requiring an employer to transform a temporary light-duty accommodation into a newly-created light-duty permanent position is unreasonable.

Employers in the Sixth Circuit can rest easy knowing that a short-term assignment of light duty tasks will not be construed as an agreement or obligation to create a permanent light duty position.