Bama Legislators Say Nay to Unfair PayAlabama passed the Clarke-Figures Equal Pay Act which will go into effect in August, making Alabama the 49th state to enact legislation designed to fight wage inequality. While Alabama employers have been subject to federal laws regarding wage equality for years, Alabama workers may now also sue for wage discrepancies under Alabama law and in Alabama courts. Here are five things that you need to know about the Clarke-Figures Act.

  1. Equal Pay for Equal Work. The act prohibits employers from paying any worker at a wage rate less than that paid to employees of another race or sex for equal work where the jobs require equal skill, effort, education, experience, and responsibility under similar working conditions. There is an exception for payments made pursuant to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based upon any factor other than race or sex. While this standard sounds a lot like the standard in the federal Equal Pay Act, it may be very different than the legitimate, nondiscriminatory reason standard under Title VII.
  2. Applicants Do Not Have to Provide Wage History. Employers may not refuse to interview, hire, promote, or employ an applicant and may not otherwise retaliate against an applicant for refusing to provide wage history information during the application or interview process. The law does not preclude an employer for asking about wage history, but employers cannot hold it against an applicant that refuses to provide it.
  3. Potential Damages. A successful plaintiff can recover an amount equal to the wages that were lost because of the violation, plus interest. This is different than the recovery available under Title VII (i.e., back wages, compensatory damages, punitive damages and attorneys’ fees) or the Equal Pay Act (i.e., lost wages, liquidated damages equal to the lost wages, and attorneys’ fees). If an employee pursues claims under both the new Alabama law and federal law and receives a recovery for both, the employee must return to the employer the lesser of the two amounts recovered.
  4. Two Years to File a Lawsuit. Employees have two years after the alleged discrimination to file a lawsuit. An employee who chooses to file suit must allege with particularity that:
    1. the employee was paid less than someone else for equal work despite having equal skill, effort, education, experience, and responsibility; and
    2. the wage schedule at issue was not correlated to any of the above-mentioned exceptions.

While it is possible that an employee may choose to only file suit under the new Alabama law, employers should expect claims to also be filed under the applicable federal laws, such as Title VII and the Equal Pay Act (which provide for attorneys’ fee awards and more potential damages).

  1. Recordkeeping Requirement. State law now requires Alabama employers to comply with the recordkeeping requirements established by the Department of Labor pursuant to the Fair Labor Standards Act.

 

It is unclear how much use this new law will get. Only time will tell.

Case of the Big Bus Driver: Seventh Circuit Joins Other Circuits in Rejecting Obesity, without Other Physiological Condition, as ADA ImpairmentObesity has been recognized as a disease by the American Medical Association, National Institutes of Health, and the World Health Organization. Does that mean obesity qualifies as a physical impairment under the Americans with Disabilities Act (ADA)? Stated differently, may an individual claim that he is disabled under the ADA, based solely on the fact he or she is obese? According to the circuit courts that have addressed the issue, the answer is clearly no.

In Richardson v. Chicago Transit Authority, the Seventh Circuit joined the Second, Sixth and Eighth Circuits (and the majority of district courts) as the latest court to hold that obesity alone is not a physical impairment as contemplated by the ADA. Relying on the plain language of the EEOC regulation implementing the ADA, the Seventh Circuit found that obesity may be a physical impairment as contemplated by the ADA only if it is the result of an underlying physiological disorder or condition.

AN ADA REFRESHER

The ADA prohibits employment discrimination based on an individual’s disability. To succeed on an ADA claim, a person must first show he is disabled under the act. The ADA defines a “disability” as: “(A) a physical or mental impairment that substantially limits one or more major life activities of [an] individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment.” While Congress has not defined “impairment,” the EEOC defines a “physical impairment” as “[a]ny physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more body systems, such as neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitourinary, immune, circulatory, hemic, lymphatic, skin, and endocrine.” EEOC guidance, which interprets both the ADA and the EEOC regulation, states:

It is important to distinguish between conditions that are impairments and physical, psychological, environmental, cultural, and economic characteristics that are not impairments. The definition of the term “impairment” does not include physical characteristics such as eye color, hair color, left-handedness, or height, weight, or muscle tone that are within “normal” range and are not the result of a physiological disorder.

THE UNDERLYING FACTS

Mark Richardson worked for Chicago Transit Authority (CTA) as a bus operator. In early February 2010, Richardson missed work because he had the flu. He later attempted to return to work, but was told he could not due to his uncontrolled hypertension. He was transferred to Temporary Medical Disability—Area 605. In September 2010, Richardson was deemed “physically fit to work as a bus operator.” But he was required to complete a safety assessment because he weighed over 400 pounds. CTA’s bus seats were not designed to accommodate drivers weighing over 400 pounds.  The safety assessment was not favorable, finding that Richardson should not operate a CTA bus at any time.

After the assessment, CTA proposed transferring Richardson back to Area 605 so he could work with doctors to lose weight. In exchange for the transfer, Richardson would be required to release various legal claims. Richardson refused. In March 2011, CTA still transferred Richardson to Area 605. In October 2011, CTA informed Richardson he would need to submit medical documentation to extend his time in Area 605 beyond February 2012. CTA terminated Richardson in February 2012 after he failed to submit the required documentation.

THE RICHARDSON HOLDING

After exhausting his administrative remedies, Richardson filed suit alleging CTA violated the ADA by refusing to allow him to return to work as a bus operator because he was obese. The district court granted summary judgment in CTA’s favor, finding that Richardson’s obesity did not qualify as a protected physical impairment under the ADA.

The Seventh Circuit affirmed the district court’s ruling on appeal. In reaching its ultimate conclusion, the Seventh Circuit found that:

(1) the ADA’s definition of physical impairment is inextricably tied to a physiological disorder or condition; and

(2) the natural reading of the EEOC’s “interpretive guidance is that an individual’s weight is generally a physical characteristic that qualifies as a physical impairment only if it falls outside the normal range and it occurs as the result of a physiological disorder.”

The Seventh Circuit rejected Richardson’s alternative argument that CTA violated the ADA because it perceived his obesity to be a physical impairment. The court found that to succeed on that claim, Richardson had to demonstrate that CTA took action against him based on the belief that his condition was an ADA impairment and not merely a physical characteristic. Richard did not make that showing, according to the Seventh Circuit, because he could not demonstrate CTA believed his obesity was caused by a physiological disorder or condition.

The Seventh Circuit also recognized that the medical community and federal and state policymakers have identified obesity as a disease, but noted that the ADA is not a public health statute. The court noted that a determination that obesity alone is an ADA impairment could have unavoidable, nonrealistic consequences as up to 40% of the American population would immediately have an ADA impairment.

TAKEAWAYS

  • As the Seventh Circuit is the fourth federal court of appeals to reject obesity as an ADA impairment, the issue appears to be settled for now.
  • Employers should nevertheless exercise caution when faced with a request for an accommodation from an obese employee. An obese employee may still have an ADA-covered disability — provided there is an underlying physiological disorder or condition, such as hypothyroidism.
  • Employers should also be mindful that obese employees often suffer from medical conditions that are ADA-impairments, such as diabetes or heart disease. In those instances, whether the employee is obese should not matter in determining whether the employee is entitled to the protections afforded by the ADA.

We’ve posted on this topic several times before but the battle between independent contractors and employees continues.

Here’s a brief refresher on the basics of why proper classification of employees as independent contractors or employees matters:

  • Employees (not independent contractors) are entitled to workers’ compensation and unemployment benefits.
  • Employees (not independent contractors) have taxes withheld on payroll. Independent contractors are subject to self-employment taxes.
  • Federal and state employment discrimination laws cover employees, not independent contractors.
  • A company’s potential liability can depend on the individual’s status as an employee or independent contractor.

However, the legal landscape on how to classify a worker as an employee or independent contractor keeps changing, especially state-by-state.

Recent Developments in the Battle of Independent Contractors vs. EmployeesJust last month, the California state Assembly passed legislation that changes the landscape for workers in California and labels workers who perform services for hire (also known as “gig” workers) as employees (not independent contractors) by default. The new bill is the result of a 2018 California Supreme Court decision, Dynamex v. Superior Court, in which the court held that to classify a worker as an independent contractor, a company must show three things (now referred to as the “ABC” test): (a) the company does not directly control the worker, (b) the work falls outside the company’s usual course of business, and (c) the worker is customarily engaged in an independently established trade. And in May 2019, the Ninth Circuit, in Vazquez v. Jan-Pro Franchising International, Inc., held that Dynamex applies retroactively—i.e. to cases before the Dynamex decision was issued.

But recent guidance from the Department of Labor’s Wage and Hour Division (WHD) and the National Labor Relations Board (NLRB) indicates a shift of classifying similar “gig” workers as independent contractors, not employees like the California bill proposes. The WHD issued an opinion on April 29, 2019, refining the definition of independent contractor and focusing on the so-called “economic reality test,” which considers the degree of economic dependence the worker has on his or her employer. The WHD described it as “the touchstone of employee versus independent contractor status.” And just a few weeks later the NLRB issued an advice memorandum classifying a group of Uber drivers as independent contractors under the National Labor Relations Act, finding that Uber drivers have “significant opportunities for economic gain and, ultimately, entrepreneurial independence.”

So, what does all this mean? Employers should keep a careful watch on developments in this area of the law and particularly in the state(s) in which they do business. There is no one-size-fits-all approach to determining whether an individual is an employee or independent contractor, and the laws keep changing.