I Wish They All Could Be California Non-Binary: Governor Brown Signs Law Approving New Gender Status

I Wish They All Could Be California Non-Binary: Governor Brown Law Approving New Gender StatusMale and female are no longer the only gender identifiers available, at least in two states. California’s Gov. Jerry Brown has signed into law the Gender Recognition Act which (1) allows individuals to identify as non-binary and (2) makes it easier for individuals to change their gender identifier in certain state records. In the past, for a person to have their gender changed on a birth certificate or driver’s license, they had to present proof that they had undergone treatment to change their gender (with male and female as the only options) and have a court hearing. The new law allows someone to change their gender simply by filing an affidavit under penalty of perjury that the request is to conform the person’s legal gender to the person’s self-identified gender identity. Under the new law, a person can attest to a gender identity of female, male or non-binary.

The law also specifically addresses California drivers’ licenses. In 2019, an applicant for a new license or a renewal can choose a gender category of female, male, or non-binary.

California joins Oregon as the only two states so far that have adopted this third category of gender.

How Will This Affect an Employer?

While neither the California nor Oregon laws appear to require employers to change any of their forms, the establishment of the new non-binary gender category may make the use of a universal form difficult if you have employees in those states.

Another Shameless Self Promotion: Vote for Labor & Employment Insights as The Best Legal Blog

Dear Readers,

We’re honored to announce that our Labor & Employment Insights blog has been nominated to compete in The Expert Institute’s Best Legal Blog Contest – one of the largest competitions for legal blog writing online today.

From a field of hundreds of potential nominees, our blog received enough nominations to participate. Now that the blogs have been nominated and placed into their respective categories, it is up to their readers to select the very best.

Each blog will compete for rank within its category, while the three blogs that receive the most votes in any category will be crowned overall winners.

Are we your “write” choice?

Another Shameless Self Promotion: Vote for Labor & Employment Insights as The Best Legal BlogFor more than a year now, we’ve strived to provide informative, timely and interesting posts on changes in labor and employment law. If you’ve appreciated our writings, we’d appreciate your vote!

How to Vote

Simply click here or on the nominee badge to cast your vote for our Labor & Employment Insights blog. Information about the competition can be found on The Expert Institute website.

About The Expert Institute

Founded in 2011, The Expert Institute is a technology-driven platform for connecting qualified experts in every field with lawyers, investment firms and journalists looking for technical expertise and guidance. The Expert Institute combines a vast database of prescreened experts with a talented case management team capable of custom recruiting experts to fit the specific needs of our clients. The Expert Institute also maintains one of the internet’s most visited blogs on expert witnesses, in addition to an extensive case study archive and expert witness resource center.

Federal Agencies Announce Plan B for the Contraceptives Mandate

Federal Agencies Announce Plan B for the Contraceptives MandateThe triumvirate of federal agencies (HHS, DOL, IRS) responsible for enforcing the Patient Protection and Affordable Care Act (the ACA, often called Obamacare) released final interim rules significantly expanding exceptions from what has become known as the “contraceptives mandate.” This mandate, which has been the subject of extensive and ongoing litigation and political debate, will now not apply to employers, group health plans, insurance issuers, and individuals who object to the mandate “based on sincerely held religious beliefs.” It will also not apply to nonprofits, closely held for-profit entities, and individuals who object “based on sincerely held moral convictions.”

What is the Contraceptives Mandate?

Under the ACA, employers, group health plans and insurance issuers must provide coverage without cost sharing for women’s preventative care and screenings. Under the Obama administration, the Health Resources and Services Administration interpreted this to require coverage for contraceptives, such as birth control medication. Originally, there was an exemption available only for nonprofit “religious employers” with religious objections to contraceptive coverage. The exemption was later expanded to “houses of worship and their integrated auxiliaries” and eventually to closely held, for-profit entities with similar religious objections, such as Hobby Lobby. See Burwell v. Hobby Lobby Stores, Inc.

What entities are eligible for the exception?

The entities who object to any involvement in the provision of coverage for contraceptives based on sincere religious beliefs or moral convictions (Objecting Entities) are excepted from the application of the contraceptives mandate. In regards to sincerely held religious beliefs, essentially all nongovernmental employers may be Objecting Entities. In regards to sincerely held moral convictions, only the following may be Objecting Entities: (1) a nonprofit organization, (2) a closely held for profit entity or (3) an institution of higher education in its arrangement of student health coverage. The agencies provide no guidance as to what it means to have sincere religious beliefs or moral convictions but explain that the mechanisms for making such determinations are a matter of “well-settled” state law.

Are there steps to becoming an Objecting Entity?

No. Entities claiming an exemption from the contraceptives mandate were previously required, in general, to seek an “accommodation” and provide certain notices. Now, there are no applicable certification or reporting requirements, although the accommodation process is still being made available on an optional basis.

If I become an Objecting Entity, can I just stop offering coverage for contraceptives?

No. Under ERISA, a group health plan will still be required to list contraceptives as specific exclusions from coverage and provide notices regarding the reduction in coverage to all persons covered under the plan.

If I am an employer or issuer, can I offer a plan that does not cover contraceptives?

Yes. Even governmental employers may do so. Even if an employer or issuer is not an Objecting Entity, one or more of its employees or covered individuals may be an “Objecting Individual” – that is, an individual who objects to coverage for contraceptives based on sincere religious beliefs or moral convictions. The regulations specifically allow for such “willing entities” to offer a separate plan or benefit package to Objecting Individuals that does not include coverage for contraceptives.

If I am an employer or issuer, do I have to offer a plan that does not cover contraceptives?

No. The preambles to the regulations provide that this “individual exemption” cannot be used to force an employer or issuer to provide coverage omitting contraceptives.

Will the regulations be challenged?

Yes. The regulations will almost certainly be immediately challenged on procedural grounds based on their adoption as “interim final rules,” which makes the regulations immediately effective and circumvents the notice and comment period required by the Administrative Procedures Act. Additionally, the substance of the regulations will undoubtedly be challenged in multiple ways, particularly where the exemption is provided based on “moral convictions.”

Sessions Changes DOJ Course on Title VII Enforcement for Transgender Issues

Sessions Changes DOJ Course on Title VII Enforcement for Transgender IssuesU.S. Attorney General Jeff Sessions issued a memo to all U.S. Attorneys revising how the Department of Justice will address gender identity claims under Title VII. In 2014, the Obama Administration DOJ stated that gender identity discrimination, including that against transgender individuals, was illegal under Title VII’s prohibition against sex discrimination. AG Sessions’ memo reversed that practice, concluding instead that federal law does not prohibit discrimination based on gender identity, per se.

What does “per se” mean?

As outlined in the memo, issued on Wednesday, October 4, 2017, the DOJ has decided to look strictly at the words of Title VII. While the statute prohibits discrimination “because of . . . sex,” the AG notes that it does not specifically refer to or protect “gender identity.” The AG’s memo does recognize that the Supreme Court bars “sex stereotypes” where they cause disparate treatment of men and women. However, the AG does not believe that the language of Title VII prohibits employment practices that take account of the sex of employees, but do not impose different burdens on similarly situated members of each sex. For example, the AG points out that Title VII would not cover claims based on sex-specific bathrooms. As such, the critical issue is whether members of one sex are exposed to adverse terms or conditions of employment that are not placed upon members of the other sex.

The memo states that the DOJ will continue to affirm “the dignity of all people, including transgender individuals” and does not condone the mistreatment of people based on gender identity.

How will this affect employers?

If your business is one of the rare ones that has been the subject of a DOJ investigation based on claims of gender identity discrimination—that should end. However, it is unclear how this will affect the more common way that the government enforces employment discrimination laws—through the EEOC, an agency that is not under the DOJ. We have already seen one instance this year in a Second Circuit case in which the EEOC has taken the position that sexual orientation is covered by Title VII while the DOJ is arguing that it is not.

Most importantly, as the AG memo acknowledges, the Supreme Court has recognized that gender stereotyping, which is usually a large part of any transgender or gender identity claim, is still illegal.

Murphy’s Law: Will the Supreme Court End Employment Contract Arbitration Clauses?

Can you prevent employees from pursuing class actions if you have the right employment agreement? Employment agreements routinely include arbitration clauses that require employees to waive their right to pursue work-related claims through collective or class actions. Instead, employees agree to resolve disputes through individual arbitration. But the validity of these arbitration clauses is unclear and is now before the United States Supreme Court. The Supreme Court heard oral argument earlier this week in National Labor Relations Board v. Murphy Oil, USA, Inc. and two other consolidated cases about whether such clauses violate the National Labor Relations Act (which governs employer-employee relations) or whether the Federal Arbitration Act (which governs arbitration agreements) trumps the NLRA.

The cases that the Supreme Court is reviewing come out of the Fifth, Seventh and Ninth Circuit Courts of Appeal. The Fifth Circuit held that an employer lawfully enforced an arbitration clause in its employment agreement and did not violate the NLRA. The Seventh and Ninth Circuits held the opposite—finding similar arbitration clauses unenforceable because the NLRA prohibits class waivers in employment agreements.

Employment contract arbitration clauses are currently enforceable in the Second, Fifth, and Eighth Circuits (shown in green below) and unenforceable in the Seventh and Ninth Circuits (shown in red below).

Murphy’s Law: Will the Supreme Court End Employment Contract Arbitration Clauses?

Why Murphy Oil Matters

The Supreme Court’s decision in Murphy Oil is worth watching. If the Supreme Court holds that these arbitration clauses do not violate the NLRA (or that the FAA overrides the NLRA), employees who have signed such clauses will be required to litigate employment-related disputes on an individual basis before an arbitrator. Conversely, if the Supreme Court finds that these clauses violate the NLRA, employees can pursue lawsuits on a collective or class basis, notwithstanding an employment agreement that purportedly waives such rights.

How Best to Structure Arbitration Clauses

Employers can likely avoid these issues entirely with careful drafting of their employment agreements. In particular, if an employment agreement gives an employee the opportunity to “opt out” of the agreement (thus making the agreement voluntary, not mandatory), an arbitration clause and class action waiver is likely enforceable. An opt-out clause should clearly inform the employee of their right to opt out of arbitration and also require the employee to affirmatively notify their employer of their desire to opt out. Ironically, allowing employees the option to resolve employment-related disputes in arbitration may help defend a later challenge to the enforceability of the arbitration agreement if the employee had the option to “opt out” but chose not to do so.

The Poster Post – DOL Updates to Your Employees’ Favorite Area of the Break Room

The Poster Post – DOL Updates to Your Employees’ Favorite Area of the Break RoomThe United States Department of Labor (DOL) has revised mandatory federal posters on the Fair Labor Standards Act (FLSA) and the Employee Polygraph Protection Act (EPPA). By law, employers must display official DOL posters where employees and job applicants can readily see them. Here’s a general overview of the applicable statutes and the specific updates:

FLSA Poster Updates

As we all know, the FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in federal, state, and local government. Covered non-exempt workers are entitled to a minimum wage (currently not less than $7.25 per hour). Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.

The updated FLSA poster has the following changes:

  • The posting requirement is now at the top of the poster, as opposed to within the “Additional Information” section.
  • The “Child Labor” section removed the specific hours and days in which 14- and 15-year- olds may work, as well as the hours when work must begin and end.
  • The “Tip Credit” section now reads: “Employers of ‘tipped employees’ who meet certain conditions may claim a partial wage credit based on tips received by their employees,” instead of “Certain other conditions must also be met.”
  • A “Nursing Mothers” section has been added: “The FLSA requires employers to provide reasonable break time for a nursing mother employee who is subject to the FLSA’s overtime requirements in order for the employee to express breast milk for her nursing child for one year after the child’s birth each time such employee has a need to express breast milk. Employers are also required to provide a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by the employee to express breast milk.”
  • The poster removes the maximum amount of civil penalties from the “Enforcement” section. This is a result of the fact that agencies across the federal government must adjust their penalties for inflation each year. Currently, the maximum civil monetary penalties for violations are:
    • Violation of recordkeeping, monetary, certificate or other statutes, regulations or employer assurances: $1,005
    • Violation of child labor standards: $12,278
    • Violation of child labor standards that causes the serious injury or death of a minor: $55,808
    • Willful or repeated violation of child labor standards that causes the serious injury or death of a minor: $111,616
    • Repeated or willful violation of minimum wage and/or overtime laws: $1,925
  • In the “Additional Information” section, the following changes have been made:
    • The Commonwealth of Puerto Rico has been added to the locations in which special provisions apply to workers.
    • The law regarding employees under 20 years of age being paid $4.25 per hour during their first 90 consecutive calendar days of employment has been removed.
    • Statements regarding independent contractors have also been added. They state:
      • Some employers incorrectly classify workers as “independent contractors” when they are actually employees under the FLSA. It is important to know the difference between the two because employees (unless exempt) are entitled to the FLSA’s minimum wage and overtime pay protections and correctly classified independent contractors are not.

EPPA Poster Updates

The EPPA generally prevents private sector employers from using lie detector tests, either for pre-employment screening or during the course of employment, with certain limited exceptions.  Employers generally may not require or request any employee or job applicant to take a lie detector test, or take any action because an individual refuses to take a test or exercises other rights under the EPPA. The EPPA does not apply to federal, state, and local government agencies.

On the updated EPPA poster, the “Enforcement” section no longer includes the maximum amount of civil penalties (up to $10,000) because, as noted above, the penalties must be adjusted for inflation each year. Currently, the maximum civil monetary penalty is $20,111.

Where to Find Updated Posters

Don’t have your updated posters yet? Don’t worry. DOL provides the posters at no cost. All DOL posters can be viewed, downloaded, and ordered here. The EPPA poster can also be accessed here, and the FLSA poster can be accessed here.

Topple of Estoppel? Eleventh Circuit Deals Blow to Bankruptcy Disclosure Defense in Discrimination Suit

Topple of Estoppel? Eleventh Circuit Deals Blow to Bankruptcy Disclosure Defense in Discrimination Suit

Employees who sue their employers must disclose that lawsuit if they file for bankruptcy—right? Maybe not. In Slater v. U.S. Steel Corp., the Eleventh Circuit overruled prior precedent and impaired a valuable defense for early dismissal or settlement with bankrupt plaintiffs. This decision will affect strategy for employers that face litigation from bankrupt plaintiffs.

Legal Background

Judicial estoppel is an equitable defense that bars a plaintiff’s claim when he or she takes differing positions in court cases with an intent to make a mockery of the judicial system. Until now, courts in the Eleventh Circuit (that is federal courts in Alabama, Georgia and Florida) have applied the defense when a plaintiff pursues a lawsuit in one court and then files for bankruptcy without disclosing the employment lawsuit as an asset in the bankruptcy case. Courts apply the judicial estoppel defense in these circumstances to prevent plaintiffs from obtaining a windfall by concealing an asset that could be used to pay creditors (i.e., the potential recovery in the employment lawsuit).

Companies defending claims filed by bankrupt plaintiffs have prevailed on the judicial estoppel defense by reviewing sworn bankruptcy filings to see if their plaintiff failed to disclose the employment claim. If the plaintiff failed to notify the bankruptcy court about the employment claim, the employer could win the case based entirely on that failure to disclose.

The Slater Case

Ms. Slater was pursuing gender discrimination and retaliation claims against her former employer, U.S. Steel. After the company learned that Ms. Slater had filed for bankruptcy but failed to list her employment claim as an asset, U.S. Steel moved for summary judgment based on judicial estoppel. Relying on prior Eleventh Circuit caselaw, the district court granted the motion. Unfortunately, in an en banc decision (which means the entire court participated), the Eleventh Circuit not only overturned the district court’s decision, it overruled prior precedent, changing the law in the circuit. As a result, defendants will be less likely to prevail on this defense at the early stages of litigation.

The Eleventh Circuit reaffirmed that courts may apply judicial estoppel only when the employer can establish two things:

  • First, the plaintiff took a position under oath in the bankruptcy proceeding that was inconsistent with the plaintiff’s pursuit of the lawsuit; and
  • Second, the plaintiff intended to make a mockery of the judicial system.

What evidence is necessary to find that a plaintiff intended to make a mockery of the judicial system? Prior Eleventh Circuit decisions (Barger v. City of Cartersville and Burnes v. Pemco Aeroplex) endorsed a rule that the mere fact of the plaintiff’s nondisclosure is sufficient to show such intent, even if the plaintiff later corrected her bankruptcy disclosures. In the Slater casethe court granted en banc review to reconsider this precedent and overruled the prior Barger and Burnes decisions. Accordingly, courts in the Eleventh Circuit may no longer infer a plaintiff’s intent to misuse the judicial system without considering the individual plaintiff and the circumstances surrounding the nondisclosure of a lawsuit in the bankruptcy schedules. Among other factors, courts may consider the plaintiff’s level of sophistication, her explanation for the omission, whether she subsequently corrected the disclosures, and any bankruptcy court motions or orders concerning the nondisclosure.

According to the en banc panel, overruling prior precedent on judicial estoppel brings the Eleventh Circuit in line with the law in the Sixth, Seventh, and Ninth Circuits. On the other hand, the Fifth and Tenth Circuits still recognize that knowingly omitting a cause of action from bankruptcy schedules is enough to support the “intent to make a mockery of the judicial system” prong of the judicial estoppel defense.

Now What?

In the Eleventh Circuit, winning a case based on judicial estoppel because a plaintiff did not disclose a claim on bankruptcy disclosures just got harder. Merely relying on plaintiffs’ sworn bankruptcy schedules is no longer sufficient to prove the intent element of the judicial estoppel defense. Courts must now undertake a more rigorous inquiry of the plaintiff’s intent. Plaintiffs will be able to present self-serving factual arguments regarding the circumstances surrounding nondisclosure of a cause of action in bankruptcy.

Fortunately for defendants, Chief Judge Carnes wrote a concurring opinion clarifying that the judicial estoppel defense is not eradicated. In spite of the Eleventh Circuit’s new requirement to consider the “surrounding circumstances,” courts are “not required to accept the testimony of the plaintiff that her misstatements . . . were not made with intent to mislead, even if that testimony is uncontradicted.” If a bankrupt plaintiff denies any intent to mislead the court or creditors by not disclosing a cause of action, the court has the “authority and responsibility to find the facts and not blindly accept [such] testimony.”

The Case of the Breastfeeding Narc: 11th Circuit Confirms Lactating Employee is Covered Under Pregnancy Discrimination Act

The Case of the Breastfeeding Narc: 11th Circuit Confirms Lactating Employee is Covered Under Pregnancy Discrimination ActDoes an employee’s protection under the Pregnancy Discrimination Act (PDA) stop when the employee ceases to be pregnant?  The 11th Circuit Court of Appeals was confronted with this question in Stephanie Hicks v. City of Tuscaloosa, in which Ms. Hicks, a police officer who returned from maternity leave and unsuccessfully sought some accommodation related to breastfeeding. The police department said the requested accommodation was not required and she ultimately left her job, alleging she had been constructively discharged. The 11th Circuit stated that a “plain reading” of the PDA showed that breastfeeding is covered and affirmed the jury verdict in Hicks’ favor.

Factual Background

Stephanie Hicks was an investigator on the narcotics task force of the Tuscaloosa Police Department. After she became pregnant, her supervisor allowed her to work on pharmaceutical fraud cases so she could be off on nights and weekends. Before she left for her FMLA pregnancy leave, Hicks received exceptional performance reviews. However, on her first day back at work after her leave, she was written up. She submitted that some of her superior officers negatively commented on the length of her FMLA leave. The City claimed that Hicks was not willing to meet the demands of a narcotics officer and subsequently transferred her out of that unit and into a patrol unit. The City wrote a letter stating the reasons for her demotion and included an incident where officers came to Hicks’s home to get her police car and she did not come out because she was breastfeeding.

One of the big differences between a narcotics officer and a patrol officer is that a patrol officer must wear a ballistic protective vest all day. Hicks’s doctor wrote a letter to the police chief asking that she be considered for alternative duties because the restrictive ballistic vest could cause breast infections that could lead to problems with breastfeeding. Hicks asked for a desk job so that she would not be required to wear a vest. The Police Department instead only offered her two options:  1) don’t wear a vest; or 2) wear a “specially fitted” vest that left gaping holes. For safety reasons, Hicks did not choose either option and resigned. She sued the City and a jury found in her favor on constructive discharge, pregnancy discrimination, and FMLA interference, awarding her $374,000. The City appealed, arguing that it reassigned Hicks because of her poor performance rather than discrimination.

The Eleventh Circuit’s Take

The 11th Circuit found that Hicks was both discriminated against on the basis of her pregnancy and retaliated against for taking FMLA leave.  Under the PDA, an employer may not discriminate against an employee on the basis of pregnancy, childbirth or “related medical conditions.” The 11th Circuit held that lactation is a related medical condition to pregnancy and therefore, a termination based on a woman’s need to breastfeed violates the PDA. The court went on to make the somewhat obvious statement: “Breastfeeding is a gender-specific condition because it clearly imposes upon women a burden that male employees need not—indeed, could not—suffer.”

However, the court noted, there is an abundance of case law stating that Title VII and the PDA do not mandate that employers  have to provide “special” accommodations to breastfeeding workers. The opinion recognizes that Hicks had a unique case. While the City may not have been required to provide Hicks with special accommodation for breastfeeding, the City’s action in refusing an accommodation offered to other employees compelled her to resign and supported the jury’s verdict. The court went on to cite Young v. United Parcel Service a case that recognized a Title VII claim for a pregnant woman where her employer failed to accommodate her in a lifting restriction, but accommodated other similar non-pregnant employees on worker’s comp. Given these facts, the court upheld the jury verdict.

What Did We Learn?

This decision clearly shows that a breastfeeding employee is still protected under the PDA and employers should take note. While it is not an absolute protection from any supported non-discriminatory adverse employment action, employers should be careful about loose comments about the employee and certainly should engage in an interactive process if approached about a reasonable accommodation. While the 11th Circuit made some blanket statements that breastfeeding employees don’t have to be treated as special, they surely were not ignoring an employer’s obligation under the FLSA that mandates employers to provide reasonable break time for employees to express breast milk for a nursing child for up to one year after the child’s birth. The employer must also provide the lactating employee a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public.

Refer This: Referral Sources Can Be a Legitimate Business Interest for Non-Compete Purposes in Florida

Refer to This: Referral Sources Can Be a Legitimate Business Interest for Non-Compete Purposes in FloridaCan relationships with referral sources give rise to a legitimate business interest sufficient to enforce a non-compete? The answer is yes, at least in Florida.

A Little Helpful Background

Generally speaking, non-compete agreements (that prevent a former employee from working for your competitor) are not enforceable unless they protect an employer’s “legitimate business interest.” Non-competes that merely serve to prevent ordinary competition are generally not enforceable because they are simply a restraint on trade. Rather, there has to be something that would give the former employee an unfair advantage in future competition with the employer. This “something more” is oftentimes referred to as a legitimate business interest.

An employer seeking to enforce a non-compete with a former employee must convince the court that it is seeking to protect a legitimate business interest (not just trying to keep the employee from competing). In other words, if there is a legitimate business interest at stake, the court might enforce the non-compete; if there is no legitimate business interest, then the court likely will not. Note that non-compete law is entirely state specific—so check your state statute and caselaw.

What Happened in Florida Last Week (Other than the Hurricane)

Now, back to Florida. Last week, the Supreme Court of Florida ruled that a home healthcare company’s referral sources can be a legitimate business interest. There were two separate cases, both involving a marketing representative for a home healthcare company. Both marketing reps’ job duties primarily consisted of cultivating relationships with referral sources (usually healthcare providers), so those referral sources would refer patients (i.e., paying customers) to the home healthcare companies.

Both of the marketing reps signed non-competes prohibiting them in one way or another from soliciting referral sources for competing home healthcare companies. During their respective employments, the marketing reps developed relationships with referral sources, presumably using their employer’s funds to do so. Subsequently, both of the marketing reps resigned their employment, went to work for competitors, and solicited the referral sources that they had worked with during their prior employment. The former employers said this behavior violated their non-competes (with one even alleging that the employee “absconded” with the referral source list).

The original employers suffered a loss in new patient referrals and revenue, and they filed suit. Florida’s lower courts split on this issue. One court dismissed the case finding that referral sources did not constitute a legitimate business interest. The other court entered a temporary injunction in the employer’s favor, with an implicit finding that referral sources did constitute a legitimate business interest.

The Supreme Court of Florida construed Florida’s non-compete statute and held that it did not exclude referral sources from being a potential legitimate business interest. The court further held that home health service referral sources can be a protected legitimate business interest under Florida’s non-compete statute because they are a home health company’s “most important business asset.” In its unanimous opinion, the court wrote:

“Moreover, it seems obvious that allowing an employee to work for a short period, receive pay to cultivate referral sources using a [home health company’s] resources, and then remove advantageous information to a direct competitor to solicit those same referrals – all of which was precluded by a non-compete contract that the employee signed – would not only condone but actually encourage unfair competition.”

The issue of whether referral sources are legitimate business interests may be hotly contested under many states’ non-compete laws. The Florida high court was quick to caution, however, that its ruling was industry-specific and depended on the facts and circumstances of each non-compete case.

Employers should be cautious not to interpret this decision as a ruling that all relationships with referral sources can give rise to a legitimate business interest sufficient to enforce a non-compete. As lawyers are fond to say, it all depends.

Blocked Shot? Employer Runs into Religious Issues with Mandatory Flu Vaccines

Blocked Shot? Employer Runs into Religious Issues with Mandatory Flu VaccinesIf you require your employees to get a flu shot, what do you do with the ones who refuse on religious grounds? As with so much in employment law, it depends. In Equal Employment Opportunity Commission v. Mission Hospital, a federal district court in North Carolina denied the hospital’s motion for summary judgment, finding that there were disputes of fact as to whether the Mission Hospital discriminated against three employees on religious grounds.

Mission Hospital’s Flu Vaccine Program

Mission Hospital requires some employees to get flu shots. Foreseeing that some people object to getting flu shots, the hospital provided notices that all employees must be vaccinated by December 1 and that requests for exemption must be filed by September 1. The notice provided instructions specifically about religious exemptions. So far, so good.

The hospital publicized the flu shot requirement in a number of ways—flyers, screensavers, bulletin board postings and other advertisements. It also included the requirement in the offer letter to one of the three employee claimants. So the hospital made clear that it really wanted employees to get the flu shot, and it gave employees a way to get an exemption.

According to the court’s opinion, since 2010, Mission Hospital had granted religious exemptions to 250 employees who timely requested an exemption. Apparently, the claimants in this case all missed the hospital’s deadline to request an exemption and were terminated for failure to get the shot (or obtain a timely exemption). The EEOC said Mission Hospital treated the claimants differently because of their religious beliefs in violation of Title VII and filed a lawsuit.

The Law

As we all know, Title VII prohibits discrimination based on religion. Under the law, “religion” need not be a mainstream or widely recognized or practiced religion. In the Fourth Circuit (which includes North Carolina), to prove a threshold (or prima facie) case of religious discrimination, a plaintiff must establish that he or she (1) has a bona fide religious belief that conflicts with an employment requirement, (2) informed the employer of the belief, and (3) was disciplined for failure to comply with the conflicting employment requirement. If a plaintiff establishes a prima facie case, the defendant then must demonstrate that it could not reasonably accommodate the employee’s religious needs without undue hardship. Undue hardship in the religious accommodation context is different than in the ADA disability discrimination context. A religious undue hardship requires only that the employer establish that the accommodation would have required more than de minimis cost.

The Court’s Denial of Summary Judgment

The court assumed for purposes of summary judgment that the claimants established a prima facie case and had sincerely held religious beliefs. Again, the religious beliefs were not necessarily widely held. The claimants professed to believe that (1) “injecting the flu vaccine into my body is morally wrong because my body is a temple given by God”, (2) “I am healed by plants, fruits, and grains” (not chemicals), and (3) “injecting chemicals and diseases into my veins is not something God intends and is wrong.” The hospital did not deny the exemptions based on the religious beliefs but because each claimant missed the September 1 deadline to request the exemption.

The court did not probe into whether the claimants’ professed religious beliefs were sincerely held and seemed to suggest that a reasonable jury could find that these are not sincerely held or religious. The court also noted that a reasonable jury could side with the EEOC and find that the hospital’s refusal of the exemption was discrimination based on religion.

Lessons Learned for Your Flu Shot Program

  • If you want to require employees to get a flu shot, expect some push back. Employees with medical issues and religious beliefs should be given a way to opt out.
  • On the religious side of things, don’t get hung up on whether the employee’s reason sounds “religious” to you. The law broadly defines religion, and it doesn’t take much to qualify as a sincerely held religious belief. Don’t do or say (or allow your supervisors to do or say) things that suggest you think an articulated religious belief is bogus. That is a quick way to get the EEOC’s attention.
  • Be sure to treat employees the same whether they want or don’t want the vaccine. In this case, the EEOC said that Mission Hospital gave employees who missed the December 1 deadline for getting the flu shot a grace period, but did not provide a similar grace period for those who missed the September 1 exemption request deadline. The court noted that a jury could find that the hospital was treating employees who did not request a religious exemption more favorably.

You don’t want to be in court over your flu shot program. Be fair, be flexible, and remember that you may have less than 100 percent participation and, absent a compelling argument that everyone must be vaccinated, there is probably not much you can do about it.

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