Over the last week, two unrelated stories caught my eye.  For employers, they are a reminder that claims of pay inequality based on gender are still something to be concerned about. 

Photo Courtesy Library of Congress c. 1943

The first story is that Governor Malloy announced plans for a new study to examine “factors that contribute to the gender wage gap in Connecticut’s workforce.” 

The study will be run by  new Connecticut Department of Labor Commissioner Sharon Palmer and Department of Economic Development Commissioner Catherine Smith.  The Governor has asked the commissioners to make recommendations on the issue by October 2013.   

I’ve talked about this issue before; there are some who believe that the wage gap is overstated.  But the study will make headlines this year and this renewed focus in Connecticut on the issue should have employers revisiting their own practices.

The second story illustrates the claim in much more real world terms and shows the perils of trying to navigate your way through such claims. 

In Morse v. Pratt & Whitney, decided last week, a federal court — among other issues — denied an employer’s motion for summary judgment on an Title VII unequal pay claim.

Continue Reading Gender Inequality Claims Make Headlines in Case and in New Study

Finally, today is Election Day.  

And while the pundits tonight will all look forward to what the next four years might bring, it’s worth taking a quick peek back at Obama’s (first?) four years with a review of some of the posts from 2008-9.

Before his term, there were predictions that he would be good for employers, or bad for employers.   But I think that its fair to say that, with the notable exception of the NLRB, there really haven’t been a lot of changes to employment laws for the last four years.

You can chalk it up to a variety of reasons — bad economy, Washington gridlock, to name a few — but compared with the prior four years, in my view, employers haven’t had to worry about a lot of federal legislative developments.  (The rise in social media’s impact on employment, I would argue, has been much more significant.)

In 2008 alone, you had the Americans with Disabilities Amendment Act and the expansion of FMLA for military leave.  You also had new regulations for the Family Medical Leave Act.   

Remember what Obama pledged to get done?  A look at what happened showed a stalling out on a variety of issues.  Here are a few examples:

•Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act. (NLRB strengthened though impact lessoned as various proposals have been tied up in courts; EFCA never passed and has no reasonable likelihood of doing so)

•Obama and Biden will raise the minimum wage and index it to inflation. (While the minimum wage did increase in July 2009 to $7.25, that was as a result of a 2007 compromise bill. No further changes to minimum wage have been made since.)

•Obama and Biden will expand FMLA to cover businesses with 25 or more employees. They will expand the FMLA to cover more purposes as well, including allowing workers to take leave for elder care needs; allowing parents up to 24 hours of leave each year to participate in their children’s academic activities; and expanding FMLA to cover leave for employees to address domestic violence. (No substantive changes to FMLA have been made.)

• As president, Obama will initiate a strategy to encourage all 50 states to adopt paid-leave systems. (Connecticut did pass paid sick leave, but no strong federal support was seen.)

Other bills that have not yet passed include the Employment Non-Discrimination Act, which would prohibit employers from discriminating against employees because of their sexual orientation. 

So what did occur? Among other things: Passage of The Lilly Ledbetter Fair Pay Act (though query whether this has had much impact in the workplace).  And nursing mothers received additional federal protections under “Obamacare”.  The EEOC also released new guidance on the use of criminal records and credit reports.   But overall, the impacts on employers have probably been far less than forecasted.

What do the next four years hold? For that, we’ll just have to wait until tonight.

There are lots of items I had hoped to write about but, as many of you have observed, there’s only so much time in the week.  So, it’s time to bring back the recurring “Quick Hits” feature to highlight some tidbits worthy of your consideration:

Another manic Monday. So it’s time to roll out another edition of quick hits where I highlight stories you might have missed over the last week or two.

 

If you should never judge a book by its cover, you can never judge a legislative bill from its title.

After all, you would think that a bill about "Penalties for Violations of Certain Personnel Files Statutes" (H.B. 6185) would actually be a bill about those violations.

While that may have been in the original bill, a Senate amendment to that bill — which passed both chambers yesterday — makes some of the most sweeping changes we have seen in some time to the state’s laws banning employers from discriminating based solely on gender in the amount of compensation paid to employees. (The amendments’ provisions are mainly lifted from Senate Bill 362 (S.B. 362).)

This bill — which now moves on to the Governor for signing — will be effective October 1, 2009 if and when signed.

Summary of Key Provisions

The key provisions of the measure:

  • allow employees to go directly to court to file gender wage claims;
  • expand possible employer defenses against gender wage claims;
  • permit, rather than requires, a court to order awards when an employer is found to violate the law;
  • extend the period to make a claim of discrimination (the statute of limitations) from one to two years following a violation (or in some cases, three years);
  • expand the whistleblower protections to include those who testify or assist in a gender wage proceeding;
  • permit possible compensatory and punitive damages for violations of the whistleblower protections; and

The Office of Legislative Research has a thorough summary here.  Among other provisions that employers may find interesting, the bill also allows employees to ask the court for legal or equitable relief, but the labor commissioner will not have that option. The bill allows employees to seek attorney’s fees and costs (but eliminates the labor commissioner’s ability to seek such fees.) 

Of course, there is still a provision in there about violating the personnel files act. Employers who violate the provisions of that act are subject to a $300 civil penalty for each violation. 

In some ways, the bill is a codification of some of the changes that were made at a federal level under the Ledbetter Fair Pay Act. For example, under this bill, the starting of a statute of limitations period would be relaxed.  It would occur::

when a discriminatory compensation decision or practice is adopted, when an individual is subject to a discriminatory compensation decision or practice, or when an individual is affected by application of a discriminatory compensation decision or practice, and shall be deemed to be a continuing violation each time wages, benefits or other compensation is paid, resulting in whole or in part from such a decision or practice.

What Does This Mean For Employers and What Defenses Are Available?

For employers, the bill is definitely a mixed bag. On the one hand, it greatly expands the type of claim and the time for bringing a claim for employees and adds a great deal more gravitas to the state’s wage discrimination laws. On the other hand, it does provide some additional defenses for employers to use, which, in turn, allows employers to plan their business in a way that is in compliance with the law.

What are those defenses to a claim of wage discrimination? According to the bill, an employer must demonstrate that such differential in pay is made pursuant to "(1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) a differential system based upon a bona fide factor other than sex, such as education, training or experience."

The last category of a "bona fide factor defense" will only apply if the employer demonstrates that the factor  (A) is not based upon or derived from a sex-based differential in compensation, and (B) is job-related and consistent with business necessity.

And even then, the employee can overcome the "bona fide factor defense" if he or she can demonstrate that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.

I’ll continue reviewing the bill (which was just passed in its current form last night) and will post  details on an upcoming program recapping this bill soon.

Since it is another snowy day here in Connecticut, it seems like another opportune time to post about some of the items worth reading and catching up on over the last few days.

    • Economy in Government Contracting.  Denies federal contractors reimbursement for funds spent on activities designed to persuade employees to join or to not join a union, such as printed materials, consultants or meetings (activities sometimes known as "union busting"). 

    • Notification of Employee Rights Under Federal Labor Laws.  Requires all federal contracts to require contractors to post a notice informing employees that they have a right either to join or  to not join a union. A prior order from President Bush, required contractors to post a notice informing employees that they had a right not to join a union.

    • Nondisplacement of Qualified Workers Under Service Contracts.  Requires all federal contracts to include a provision requiring any contractor who assumes the contract from a previous contractor to retain that previous contractor’s qualified employees.

  • The Point of Law forum picks up on the recent story of Connecticut’s Attorney General suggesting that AT&T be prohibited from laying off workers.  The real question is whether this is a unique situation or whether other employers could face similar action if they engaged in layoffs.  
     
  • Despite the rhetoric surrounding the Employee Free Choice Act, union rolls in Connecticut actually grew from 15.6 to 16.9 percent of the workforce.  However, what is unclear from these statistics is the reasons WHY the rolls grew.  It is also too early to call this a trend but it is obvious that unions have at least stopped the constant drain. 
     
  • The Florida Employment Law Blog discusses the new Ledbetter Fair Pay Act and suggests that one effect of the claim is to allow those receiving retirement benefits to sue.  It’s an interesting theory and we’ll have to see if courts interpret the law to allow for such claims. 

The Act also provides an avenue for retired employees to sue their former employers years after separation for their lost pensions. In theory, each time a former employee receives a pension check, the amount of which may have been determined as the result of past discriminatory pay practices, a new statute of limitations period begins to run. These potential plaintiffs would have the right to have their pension benefits recalculated if they were determined in a discriminatory fashion. Accordingly, companies may face the threat of litigation from former employees whose employment relationship ended years ago.

  • Finally, the Ohio Employer’s Law Blog has summarized various ways to avoid a lawsuit. As Jon is quick to note, "there is no sure-fire method to prevent a lawsuit from being filed", but these tips can provide a mental checklist for employers to consider to try to avoid litigation. 

Dear Mr. President:

Congratulations on your inauguration today!  I hope you enjoy the day because when you wake up tomorrow, I suspect that you’ll realize there are a lot of items on your "to-do" list (though taking out the garbage probably isn’t on there anymore.)

With two wars and a recession to deal with,  I wanted to bring to your attention an area of law that you might dismiss or overlook as trivial – employment laws.  The truth is that federal employment laws should be a cornerstone of your administration because it is these laws that regulate the employers that you need to hire people and get this country out of the economic funk it seems to be in. 

You might have missed it with your transition plans, but already employment laws in the United States have changed fairly significantly in 2009. Employers are having to now address amendments to the Americans with Disabilities Act, which broaden the scope of who is disabled.  You can read about those changes here.

And just last week, new regulations went into effect changing the way some issues are handled under FMLA. (Don’t get me started on the differences in FMLA and CTFMLA).  New rules regarding E-Verify are also effective on February 20, 2009

Now there is speculation about a whole host of other employment law bills that Congress is considering.  Your campaign website certainly listed a wide assortment of changes you’d like to see.

Some bills are now a foregone conclusion, such as the Lilly Ledbetter Fair Pay Act, which survived a cloture vote in the Senate last week and is primed for passage.  But others remain under consideration, such as the Employee Free Choice Act.  Your recent comments suggest that you are looking for a compromise on EFCA, perhaps.

This blog has remained a decidedly a-political one, so you won’t hear grandstanding from me about how these laws will "hurt" employers or don’t go far enough to protect unions or employees.   Rather, let me suggest that you review these proposed bills through a prism that you seem to favor: Is there a problem with our current laws and what is it? Does this particular bill fix the problem? If it does, does it create new problems that didn’t exist before?

Whatever you decide, you should understand the impact that even a bill as innocent as the Ledbetter Fair Pay Act has on employers. Passage of the Fair Pay Act will, in essence, require employers to better document their compensation decisions and then retain documentation of such decisions for years, if not decades.  So, while the bill allows workers who may have been discriminated against to sue, it creates more work for human resources professionals.  Is this a good use of resources? Perhaps. But it is a classic example of how a bill that is designed to "fix" one area of the law, will create other issues that may be unintended consequences.  

My only advice (and as lawyers, we get paid to give advice, so when it is free, take it with a grain of salt) is to seek the counsel of those moderates who understand the impact that every new law has on how businesses are able to function.  And be wary of those on both sides who suggest that without passage of certain laws, businesses or unions will not survive. The truth is always somewhere in between.

One of Hartford’s most famous residents, Mark Twain, once said "Independence …. is loyalty to one’s best self and principles, and this is often disloyalty to the general idols and fetishes."    The crowds in DC today are a testament to the belief in your character and principles.   I look forward to seeing how this all plays out in the months and years ahead.

I wish you and your family well over the next four years.  And should you ever need some counsel on employment laws, of course, I’ll be more than willing to assist.

Warmest regards,  Daniel A. Schwartz

P.S. My kids say hi to Malia and Sasha. 

To the surprise of absolutely no one, the U.S. House of Representative overwhelmingly passed two employment law bills addressing compensation issues.  

The Lilly Ledbetter Fair Pay Act, HR 11, pretty much split among party lines 247-171. The Paycheck Fairness Act, HR 12, passed 256-163.  

The bills now move on to the Senate, where the vote is expected to be closer.  

 

One of the more interesting television shows out there now is the Emmy award-winning  "The Amazing Race". At the start of the show, the host shouts, "Ready, Set, Go!" and off the contestants go on a race around the world places as yet unknown.copyright 2009 Daniel A. Schwartz All Rights Reserved

That, in essence, is what 2009 is shaping up to be in employment law: a race to change things as fast as you can with the final destination (and pitstops) as yet unknown.

This week, for example, two employment-law bills are on the fast-track for passage in the U.S. House, but it’s being done so quickly that you may have a tough time catching up. 

Several Washington, D.C.- based blogs (including the Washington Labor & Employment Wire) are reporting this site that two pay-related bills are on the fast-track for consideration by Congress, perhaps in an effort to get them on to President-Elect Obama’s desk by the time inauguration rolls around.

From the Washington D.C. Employment Law Update:

…House Majority Leader Steny Hoyer (D-Md.) announced that two employment-related bills will reach the House floor later this week. Both the Paycheck Fairness Act (H.R. 1338) and the Lilly Ledbetter Fair Pay Act (H.R. 2831) were introduced and easily passed the House during the last Congress, but stalled in the Senate due primarily to Republican opposition and a presidential veto threat. It is noteworthy that both bills are being sent directly to the House floor instead of being vetted through the committee process….

The Paycheck Fairness Act [version that]… will reach the House floor this week aims to do the following:

  • Amend the Fair Labor Standards Act (FLSA) to allow victims of pay discrimination to potentially recover more remedies than those currently provided in the FLSA

  • Enforce a new concept of “equal pay for comparable work”

  • Prohibit employers from reducing other employees’ wages to achieve pay equity

  • Require employers to disclose job categories and pay scales as needed to enforce the law

  • Prevent employers from relying on the “factor other than sex” affirmative defense in wage discrimination cases; instead, employers must additionally prove that such factor is “job related” and serves a “legitimate business purpose.” An employee could rebut this claim by showing that an “alternative employment practice” exists that could achieve the same business purpose

  • Entitle employees to unlimited punitive and compensatory damages, regardless of whether the wage discrimination was intentional.

You can view some of my earlier posts about the Paycheck Fairness Act starting here.  As I said then, this bill will re-emphasize to employers the importance of documenting pay decisions. 

On the Lilly Ledbetter bill, I summarized it and discussed the issues related to it in posts such as this one.   My comments then are fairly relevant to today as well:

The issue in Ledbetter case was, in many ways, a technical question of how far back an employee should be able to go to challenge past pay practices — in other words, about deadlines and "statute of limitations". The Supreme Court said that the 180-day deadline found in the statute should apply. Should the statute of limitations remain at 180 days? 1 year? 2 years? 5 years? 20 years? I don’t suggest to know what the right answer is. Ultimately, the answer to that question will help shape the Paycheck Fairness Act bill’s final outcome and it should be the one that the politicians focus on.   Employers would certainly like shorter statute of limitations and have good arguments that because supervisors leave, short statute of limitations prevent stale claims from being brought. But employees have decent arguments that a longer statute of limitations should apply because discriminatory pay practices are often learned of only after they occur.
 

For employers, the debate over the Paycheck Fairness Act is one worth paying attention to because the real-world consequence of the bill’s passage (whether now or next year) will be to increase the importance of documenting pay practices and to give employers another reason to preserve such documents for future litigation.

Hopefully, as the bill progresses, we’ll see more debate on the pros and cons on having longer deadlines to file suits.

With the bills on the fast-track, i doubt we’ll see much substantive debate on the bills, which is unfortunate. In the election, the concept of "change" was thrown about. This week is the first real sign that, for employment law issues, change is here.

With the election just two weeks away, employers can start to draw a sharper focus on the national issues at stake in the upcoming Presidential election. That said, much of what will happen will also depend on what happens with various Congressional races.  In other words, even if Senator McCain is elected President, we’re still likely to see various issues raised in the next session of Congress.

Michael Moore has a terrific piece this week outlining the various bills that are likely to get debated after the election.  I’ll be discussing some of them in upcoming posts (as well as issues relating to Connecticut’s races), but Michael’s post provides a good roadmap to the bills.

Among them:

Employee Free Choice Act (H.R. 800 and S. 1041)

Summary:  The EFCA amends the NLRA to change the procedures for union certification and first contract negotiation.

Employment Non-Discrimination Act (H.R. 3685/ no Senate Bill)

Summary:  ENDA adds sexual orientation to the protected classes under Title VII for all employers except religious organizations.

 Ledbetter Fair Pay Act (H.R. 2831/ S. 1843)

Summary:  FPA overturns the Supreme Court’s decision in Ledbetter v. Goodyear Tire and Rubber Co. effectively eliminating the 180 or 300-day statute of limitations for filing a wage-related discrimination claim.

 

Paycheck Fairness Act (H.R. 1338/ S. 766)

Summary:  PFA changes the burden of proof in gender based pay claims requiring the employer to affirmatively demonstrate that any pay differential is not based on sex.

 

RESPECT ACT (H.R. 1644/ S. 969)

Summary:  The so-called Re-Empowerment of Skilled and Professional Employees and Construction Tradesworkers (RESPECT) Act would change the NLRA definition of “supervisor” to exclude “working supervisors” who do not spend a majority of their worktime in strictly managerial duties excluding the tradition duties of assigning work and directing the activities of others.

The post also discusses the impact that each bill would have on existing law and the candidates’ respective positions. 

(For another take, see The Word on Employment Law’s collection of posts on the issues here.)