March 2016

soccer1This morning came word that members of the U.S. National Women’s Soccer Team are filing a discrimination complaint against the U.S. Soccer Federation on the grounds that they are paid less than their male counterparts.

According to press reports, “the filing, citing figures from the USSF’s 2015 financial report, says that despite the women’s team generating nearly $20 million more revenue last year than the US men’s team, the women are paid almost four times less.”

U.S. Soccer issued its own release arguing: “While we have not seen this complaint and can’t comment on the specifics of it, we are disappointed about this action. We have been a world leader in women’s soccer and are proud of the commitment we have made to building the women’s game in the United States over the past 30 years.”

This is not the first time this argument has been raised. But it continues the forceful arguments of female athletes arguing that the pay disparity is at a minimum, unfair, or in other cases, illegal.

For example, Connecticut attorney Kelly Burns Gallagher has been talking about the disparities in the triathlon world for a while.  The 50 Women to Kona movement notes that “At the World Championships for the Ironman Triathlon in Kona, Hawaii, the professional men have 50 qualifying spots and the professional women have only 35.  We are asking you to help stop this unequal allocation by sending a message to the World Triathlon Corporation and its CEO, Andrew Messick.”

And recently in tennis, a tennis tournament directly resigned after suggesting that women tennis players owe their success to their male counterparts.

There is no doubt that the argument of equal pay for female athletes has strong appeal. I’ve watched the women’s World Cup, for example, with the same enthusiasm as I do the men’s World Cup (and written about my love of U.S. Soccer too).  Tennis has, for the most part, adopted the laudable position that tournament payouts should be the same for men and women.

But the lawyer in me recognizes that the legal issues aren’t neat and tidy. We’ve seen it come up in golf where LPGA golfer Stacy Lewis recently argued that LPGA players should be paid the same as their male counterparts on the PGA.

In that case, however, there are arguments that each tour has different endorsement deals, different sponsors and different viewer audiences.

The Equal Pay Act (which may or may not get the soccer players to victory, depending on the legal arguments raised) mandates that that men and women be given equal pay for equal work in the same establishment. The jobs need not be identical, but they must be substantially equal.  Title VII can also be raised; it does not require that the job of the person claiming discrimination be substantially equal to that of a higher paid person of the other sex, but unlike the EPA, Title VII requires proof of intent to discriminate on the basis of sex.

So how does one make a claim under the EPA? Simply stated, by showing that the jobs require substantially equal skill, effort and responsibility, and that are performed under similar working conditions within the same establishment defined as follows (and as noted by the Workplace Fairness site):

  • Skill: measured by factors such as the experience, ability, education, and training required to perform the job.
  • Effort: the amount of physical or mental exertion needed to perform the job.
  • Responsibility: the degree of accountability required in performing the job.
  • Working conditions: encompasses two factors: (1) physical surroundings like temperature, fumes, and ventilation, and (2) hazards.

It is this argument that the soccer players will likely try to advance. But as noted by The New York Times, there are likely to be several arguments that U.S. Soccer will respond with including that the law allows for different payments on factors other than gender:

U.S. Soccer could counter that the players’ pay is collectively bargained, and that the players agreed to all issues, including compensation and working conditions like whether the team must play on artificial turf on not. (The federation and the women’s players’ union are continuing discussions on compensation in a new collective bargaining agreement amid the current action.)

U.S. Soccer also receives substantially higher payouts from FIFA, world soccer’s governing body, for participation in the men’s World Cup. But the women’s complaint seems to take aim at a bigger share of domestic revenue, like sponsorships and television contracts.

Who will win? My guess is that we won’t know because ultimately U.S. Soccer and the soccer players will reach an agreement, perhaps as part of a new bargaining agreement.  But the arguments about pay disparity between male and female athletes and coaches will live on.

nevermindThe Supreme Court today issued a decision in one of the most anticipated cases of the session on whether public employees could be forced to pay fees to a union that they didn’t want to belong to.

And in doing so, the court showed what happens in 4-4 splits: Nothing.

Well, that’s not entirely accurate: The court did issue a one sentence “per curiam” ruling in Freidrichs v. California Teachers Association: “The judgment is affirmed by an equally divided Court.”

And because the lower court ruling affirmed the use of these fees, public unions live to see another day.

That’s it? Yep.  We’ll have to wait until the court is back to a full contingent and hears a similar case.

It reminds me of that old routine by the glorious Gilda Radner: Never Mind!

 

yankees3With Opening Day of baseball season nearly upon us, it’s time again to bring back a “Quick Hits” segment to recap a few noteworthy (but not completely post-worthy) employment law items you might have missed recently.

  • The U.S. Department of Labor released the final version of new “persuader” rules which will become effective April 25, 2016.  The new rules revise the “advice” exemption and will require a larger universe of consultants, lawfirms, and employers to report their labor relations advice and services.  You can find many recaps of the new rule (here and here, for example).  For Connecticut employers, if you haven’t had to worry about “persuader” reporting before (and don’t know what it is), it’s not likely to change things much, though for law firms and consultants, it may have a more significant impact.
  • Not every U.S. Supreme Court case is a big one.  The latest example of that is the Tyson Foods, Inc. v. Bouaphakeo et al. case that was issued last week. In that case, the court ruled that employees could use representative evidence to establish liability and damages for class certification purposes in a donning and doffing case. As another blog post stated sufficiently, this decision allowed employees to rely on a “time study conducted on a sample of class members to calculate an average donning/doffing time, which is then extrapolated to each member of the class — even if the actual time spent on the activity in question varies dramatically among employees and even if some of the class members failed to prove damages at all based on that time study.”  For most employers, however, the decision will have limited utility. Donning and doffing cases are, for example, fairly rare.
  • An interesting case up for oral argument at the U.S. Supreme Court today looks at the limited circumstances in which an employer can recover attorneys’ fees as a “prevailing party” in a Title VII suit.  The SCOTUSBlog has more on this case here.
  • Tax season has renewed fears regarding the privacy of W-2 forms.  A spear-phising e-mail scheme has been making the rounds of late, as this post reminds us.

 

It’s been a big couple of days for court opinions. Today’s turn: FMLA lawsuits.

When we last talked about the FMLA, it was in the context of the fact that sometimes things about the law are bit complicated.

Well, if you didn’t like the intricacies of the FMLA before, this new decision isn’t going to make things better for you.

In a split from other federal employment laws, the Second Circuit last week held that some employees may be held individually liable for employment claims brought under the FMLA.

The case, Graziadio v. Culinary Institute of America, is sending shock waves throughout the employment law blogosphere (see some posts here and here).

And because the Second Circuit covers Connecticut, employers, supervisors and HR personnel need to read this one very carefully.  FMLA training should be part of training already but this case emphasizes the need to be careful.

So, what’s the court’s test to determine if a manager or supervisor can be individually liable for FMLA violations? The court said it will look to at least four factors:

  1. Whether the manager or supervisor had the power to hire and fire the employees;
  2. Whether the manager or supervisor supervised and controlled employee work schedules or conditions of employment;
  3. Whether the manager or supervisor determined the rate and method of payment; and
  4. Whether the manager or supervisor maintained employment records.

Because the court said this was a nonexclusive list of factors, there could be others. Not that we’ll find that out here, but something to be aware of.

In this case, the court said that there was substantial evidence of the test being met regarding the HR manager. For example, because the employee was fired for job abandonment and the VP of Administration deferred to human resources, it found that the HR manager handling the FMLA leave ended up having hiring/firing authority.

And because the HR manager was overseeing the terms of the FMLA leave, the court found the supervisor also controlled the schedule and condition of employment.

While evidence of the other two factors may not work in favor of individual liability, the court said the evidence was enough anyways.

Nevertheless, on the overarching question of whether (HR Director) Garrioch controlled plaintiff’s rights under the FMLA, there seems to be ample evidence to support the conclusion that she did: deposition testimony and email exchanges demonstrate a) that Garrioch reviewed Graziadio’s FMLA paperwork, b) that she determined its adequacy, c) that she controlled Graziadio’s ability to return to work and under what conditions, and d) that she sent Graziadio nearly every communication regarding her leave and employment (including the letter ultimately communicating her termination). Indeed, Garrioch specifically instructed [others] that they were not to communicate with Graziadio and that Garrioch alone would handle Graziadio’s leave dispute and return to work. …Given all this evidence, we conclude that a rational jury could find, under the totality of the circumstances, that Garrioch exercised sufficient control over Graziadio’s employment to be subject to liability under the FMLA.

Before we get to the takeaways, there’s also another portion of the court’s decision worth noting (as The Employer Handbook blog also noted).  It shows how e-mail isn’t necessarily the best approach to trying to resolve FMLA issues. A phone still works too and the HR Director’s failure to close the lines of communication seemed to worked against her:

Finally, [after many e-mails, HR Director Garrioch] announced that she would no longer be able to discuss this matter over email and asked [Plaintiff] Graziadio to please provide three dates/times for this week that you are available to come into work and meet with me.

In an excruciating exchange, Graziadio and Garrioch then proceeded, over any number of days, to email back and forth about scheduling a meeting without actually arranging it: Garrioch would ask for dates and times, Graziadio would respond that she was “available whenever,” Garrioch would again ask for specific times, Graziadio would insist that she was “available any time or day,” and so on. Early on in this exchange, Graziadio also forwarded Garrioch an updated FMLA certification for Vincent, but Garrioch did not acknowledge receipt of the certification or otherwise respond to that email. At another point, Graziadio attempted to circumvent the circular exchange by simply “requesting to return to work” on a “full time regular schedule.” Garrioch rejected this request and again insisted that Graziadio appear for a meeting before she could return to work.

Ultimately, no one set a time for a meeting, and Graziadio, facing persistent involuntary leave, retained an attorney.

This case is likely to change the way FMLA claims are litigated in the state. Individual supervisors and/or HR directors may now be brought in as additional parties on the defense side.  While employers may indemnify those individuals in nearly all of those cases, it still can be quite unnerving to be a party to a lawsuit.

If you have employment practices liability insurance, it may be time to review that policy to ensure that it covers supervisors who may be sued individually as well.

And, as a reminder, FMLA is not the easiest of statutes to follow. Be sure to stay on top of the certification process and document the steps you have taken.  Individuals may face liability for the actions if they don’t.

gavelIn an decision of first impression in Connecticut, a federal court on Friday ruled that a transgender discrimination claim based on a failure to hire can proceed under both Title VII and Connecticut’s counterpart, CFEPA.

While the groundbreaking decision in Fabian v. Hospital of Central Connecticut (download here)  is sure to be the subject of discussion, as the court notes, Connecticut has — in the interim — passed a state law explicitly prohibiting discrimination on the basis of gender identity. Thus, for a few years now, Connecticut has already explicitly prohibited transgender discrimination under state law. (The case was based on facts that occurred before passage of the state’s anti-discrimination law.)

But the decision obviously goes further than that and takes up the logic advanced by the EEOC and others of late — namely that Title VII’s prohibition of discrimination “because of…sex” should be read to include transgender discrimination.  The court’s opinion should be mandatory reading not only in the state, but for practitioners nationwide faced with similar claims.

The decision addresses the notion of gender-stereotyping discrimination noting that such discrimination is sex discrimination “per se”.  In the court’s view, the Supreme Court’s decision years ago in Price Waterhouse has led to a “significant shift in the direction of decisions examining alleged discrimination on the basis of transgender identity”.

In doing so, the court notes the split in the circuits that has been developing, even though the Second Circuit hasn’t truly spoken yet on the issue:

In sum, discrimination on the basis of transgender identity is now recognized as discrimination “because of sex” in the Ninth Circuit (as Schwenk recognized the abrogation of Holloway), the Sixth Circuit (as recognized in Smith), and in the Eleventh Circuit (as recognized in Glenn); and the E.E.O.C. (in Macy) and has agreed with that authority.  Discrimination on the basis of transgender identity is regarded as not constituting discrimination “because of sex” in the Tenth Circuit (under Etsitty). The continued vitality the pre–Price Waterhouse decisions in the Seventh and Eighth Circuits (Ulane II & Sommers, respectively)  is unclear.

Judge Underhill, who penned the decision, then goes on to discuss the language of “because of…sex” found in the statute itself.  He notes that:

discrimination on the basis of gender stereotypes, or on the basis of being transgender, or intersex, or sexually indeterminate, constitutes  discrimination on the basis of the properties or characteristics typically manifested in sum as male and female — and that discrimination is literally discrimination “because of sex.”

On the basis of the plain language of the statute, and especially in light of the interpretation of that language evident in Price Waterhouse’s acknowledgement that gender-stereotyping discrimination is discrimination “because of sex,” I conclude that discrimination on the basis of transgender identity is cognizable under Title VII.

For employers in Connecticut, this decision is likely to be closely followed by other federal courts in Connecticut. Judge Underhill is well-regarded and until this decision gets reviewed by the Second Circuit, it’s hard to see how other judges in Connecticut will decline to follow it.

In other words, employers in Connecticut should be alert that a plaintiff may make a gender identity claim under Title VII in Connecticut.

But, as I noted at the top, this decision’s impact in Connecticut may be more muted because Connecticut has now explicitly protected gender identity in the state’s anti-discrimination statutes.

Nevertheless, the decision is an important one to read in the field of gender identity claims.

U.S. Department of Labor Headquarters
U.S. Department of Labor Headquarters

Over the last few days, Twitter has been a-twittering with buzz that the Department of Labor has sent the final overtime rules to the OMB.

This is the equivalent of one department sending another one an e-mail with the new rules. Why? Because it’s just the next step in getting the rules approved.  But nothing more than that. Moreover, this step always happens in the issuance of regulations.

And here’s the really important point: We still don’t know what these final rules will be.

So ask yourself, is it really worth getting excited about one department sending the rules to another?

That said, SHRM had some additional information from a speaker at a conference this week about when we can actually expect to see the new rules:

At the SHRM Employment Law & Legislative Conference yesterday, Tammy McCutchen, an attorney with Littler in Washington, D.C., and a former administrator of the DOL’s Wage and Hour Division, advised attendees to keep an eye on reginfo.gov, which tracks government agencies’ regulatory actions as they are submitted for review to OMB. Sure enough, the rule appeared on the site late March 14.

At the conference, McCutchen told attendees she believed the rule would work its way quickly through OMB and most likely be published by July 7, and take effect on Labor Day, Sept. 5. Alternatively, she said, the rule would be published the Friday before Labor Day, Sept. 2, to take effect Nov. 1—just prior to Election Day.

If you recall, I first reported on the timing of this back in November 2015.  In that post, I reported on what I heard at the ABA Labor & Employment Law conference — “late 2016”.

Despite all the Twitter posts this week: Things are still on target.

For employers in Connecticut, this is really wait-and-see territory.  First, we don’t know what the new overtime rules are going to be. And second, Connecticut has it’s own rules and we will need to analyze the interaction between existing state laws and these new federal overtime regulations.

Remember: Keep Calm & Carry On.

Next week, I will be speaking at the CBIA Annual HR Conference along with my colleague Jarad Lucan about why you should care about the NLRB.

Unfortunately, if you don’t already have tickets, it’s sold out. It’s being held at the Radisson in Cromwell, Connecticut and features some great topics for consideration. 

But the basic gist of our presentation will be a continuation of some of the themes I’ve talked about before on the blog (here, here and here, for example) — namely that the NLRB is continuing to expand its sphere of influence.

Naturally, our presentation is entitled: “The NLRB in 2016: Why it May Be Your Biggest Headache — Particularly If You Don’t Have a Union.”

For employers that are used to dealing with unions in their workplace, many of these issues won’t be a surprise.

But as I’ve talked about before, the NLRB has been critical of even those employers without unions.  The Triple Play case regarding discipline of employees for comments on Facebook is a perfect example.

For employers then, it’s important to understand the concept of “protected concerted activities” and the fact that any employee — whether a union member or not — may be protected by federal law for his or her actions.

If you’re attending the CBIA’s HR Conference next week, feel free to say “hi”.  Should be a great event.

starrAs I return from some time off, my colleagues, Gary Starr and Chris Engler, have dug a bit deeper into the Connecticut Supreme Court decision from last week and issued this alert which we have also sent to clients. 

A deeply divided Connecticut Supreme Court recently issued a long-awaited decision, Standard Oil v. Administrator, regarding who is an independent contractor.  The reason this is significant is that companies that utilize the services of independent contractors are not responsible for, among other taxes, unemployment compensation contributions.  The Board of Review of the Employment Security Appeals Division has long interpreted the statute liberally and in this case concluded that the first two prongs of the “ABC” test required that the workers be treated as employees.  The Connecticut Supreme Court overturned that ruling, finding that the workers were indeed independent contractors.

(For background on the cases, see my prior posts here and here.)

The ABC test requires a company seeking an exemption from the tax to meet all aspects of the statute.

  • Part A focuses on the company’s direction and control over the workers.
  • Part B looks at whether the work was performed at the company’s place of business or whether the work performed is integral to the company’s business.
  • Part C, which was not at issue in the case, is focused on whether during and after providing services to the company, the independent contractor held himself out as offering the same services to others and has continued in the business of providing the same services.

Installers/technicians performed installation and repair work on oil furnaces and security systems that were sold by Standard Oil.  Standard Oil treated them as independent contractors.

The Connecticut Supreme Court found that the installers/technicians owned their own tools and vehicles, were licensed and certified, and were not supervised at their worksites by a representative of Standard Oil.  The work of the installers/technicians was not inspected by the company, either during or after the work.  The installers/inspectors were allowed to hire their own assistants.  The installers/technicians were free to accept or reject any assignment without adverse consequences and determined when they were available to work, but once they accepted an assignment, they had to perform the work within the time frame set by the customer and the company.  The installers/technicians performed the same work as part of their own businesses.  The company provided no employee benefits.  The installers/technicians were not required to be trained by the company nor were they required to display the company’s logo on their clothing or vehicles.  They were not paid by the hour.  Each signed an independent contractor agreement.  Based on these factors the Court concluded that the company satisfied the exemption under Part A.

There was a significant dispute between the majority and dissent opinions on whether Part B was satisfied.

The focus of the dispute and the critical factor was whether the work was performed at the company’s “place of business.”  This was a matter of statutory interpretation that involved analyzing the plain words, examining the language in the context of the broader statute, and reviewing the legislative history and case law from other states.

The majority’s ultimate conclusion was that “the meaning of ‘places of business’ in the present context should not be extended to the homes in which the installers/technicians worked, unaccompanied by the [company’s] employees and without . . . supervision.”  Thus, the company satisfied the criteria for the exemption under Part B.

This decision is welcome news for companies that use independent contractors.

But while there is euphoria in the ultimate decision, it is important to realize that Part C was not at issue in the case, but may be for other companies who use independent contractors.

Additionally, the Department of Labor may seek to have the statute amended to reverse this decision and to compel companies to pay into the unemployment compensation trust fund.

For companies who use independent contractors it is critical to obtain and follow legal advice to make sure such relationships can hold up under scrutiny of the ABC test, while also recognizing that federal agencies use other criteria in determining whether the worker is an employee or independent contractor.

Late this morning, the Connecticut Supreme Court released one of its most important decisions on employment law in years. I’ve been talking about it prior posts but its decision is a welcome surprise for employers who feared the worst. 

Because I’m out of the office for a few days, I’ve asked my colleague Chris Engler to give a brief recap.  My thanks to him.   We will have more in the upcoming days. 

The long-awaited decision in Standard Oil v. Administrator, Unemployment Compensation has arrived, and it brings good news for employers.

As you might recall, the Board of Review of the Employment Security Appeals Division had found that certain workers were employees of Standard Oil instead of independent contractors. The Board of Review’s analysis concluded that all three prongs of the ABC test rendered the workers to be employees.

The Connecticut Supreme Court has disagreed. Regarding part A, which focuses on the employer’s direction and control over the workers, the Court relied on the fact that the workers owned their own tools and vehicles, were independent licensed and certified, and were not supervised at their worksites by a representative of Standard Oil. As the Court further noted, “the installers/technicians were free to accept or reject any assignment offered to them without adverse consequences.”

Turning to part B of the test, which looks at whether the work was performed at the employer’s place of business, the Court looked at the case law from numerous states to guide its analysis. Its ultimate conclusion was that “the meaning of ‘places of business’ in the present context should not be extended to the homes in which the installers/technicians worked, unaccompanied by the plaintiff’s employees and without the plaintiff’s supervision.” (The “plaintiff” here was Standard Oil, the employer.) The Court specifically stated its goal of avoiding a broad interpretation of this part of the ABC test.

This decision is pleasant news for employers, especially those who use independent contractors to visit and service customers’ sites. It also suggests that the Supreme Court is taking a firmer stance against the Employment Security Division’s broad interpretations of who is eligible for unemployment benefits.

Employers who use independent contractors should breathe a sigh of relief.  But employers who use them should be sure to follow legal advice to make sure the relationships can hold up under court scrutiny

Lucan_J_WebstarrMy colleagues Gary Starr and Jarad Lucan return today with a post that we have sent out as client alert, but which may be of interest to readers of the blog as well.  It tackles the subject of protected concerted activity.  (Hint: It may be broader than you think.)

Is a non-union employee who speaks out about employment matters protected by the National Labor Relations Act?  If so, under what circumstances?

That question is critically important because if the employee is protected and is fired, the employer may have to reinstate him, pay back pay, and post a notice that the employer violated employee rights.

The answers are not so simple.

Was the employee griping to management about work?  Did he take any action to mobilize employees to support him?  Was he seeking to induce group or collective action?

A recent Third Circuit decision (MCPC Inc. v. NLRB) addressed this situation.  A computer engineer went to lunch with his boss and three co-workers to build team spirit, as the company was aware that it was understaffed and wanted to bolster morale.  During lunch the computer engineer complained that there were too few engineers to do all the work and that the company should have hired more engineers rather than a $400,000 per year executive, whom he named.  Two employees at the lunch agreed.

The manager reported the conversation to the company CEO, who was particularly disturbed by the disclosure of the new executive’s salary, which was confidential.  There was an investigation into how the computer engineer knew the executive’s salary.  It was found that a project he was working on allowed him to view confidential information.  The CEO then met with the computer engineer and asked how he obtained the confidential information.  The computer engineer did not give a straight answer.  He first said he found it on the Internet and denied that he had gone into the HR data base.  He next said the executive’s salary was water cooler scuttlebutt, and then claimed he had heard it from two employees.

Shocked at hearing this explanation, the CEO spoke with one of these long-time employees, who denied providing any confidential information.  The CEO concluded that the computer engineer had breached the company’s confidentiality policy, had lied to him, and was not trustworthy.  As the business required maintaining confidentiality of customer data, the CEO fired the computer engineer for lying and disclosing confidential information.

The fired employee fought his discharge at the National Labor Relations Board (NLRB).  After a hearing, an administrative law judge (ALJ), concluded that the computer engineer’s lunch comments were protected, that the Company’s confidentiality policy was overly broad and unlawful, and that the firing was unlawful. The NLRB upheld that decision ordering reinstatement and back pay.  An appeal followed.

The Court noted that the computer engineer had not discussed the work situation with others before the lunch nor did he seek support from others afterwards.  The Court held, however that prior action, being selected as a spokesperson, or having plans to pursue the issue with others afterwards is not required for protected activity.  What does matter is whether the conduct was taken with the intent to induce or effect group action in furtherance of group interests.  As the computer engineer’s complaints related to work, they were protected as two co-workers had agreed with his views.

While the NLRB ended its analysis there, the Court determined that the Company had the right to explain the reason for the termination.  There needed to be a review whether the Company would have fired the computer engineer for a reason that did not involve protected activity, such as his evasiveness, dishonesty, and lack of trustworthiness.

The computer engineer’s shifting explanations raised issues of honesty and trust and could be independent reasons for the firing.  As neither the ALJ nor the NLRB had considered the alternative basis for the discharge and had not explored whether the reasons were a pretext for an unlawful firing, the Court sent the case back for a further examination of the employer’s rationale.  The Court told the NLRB to examine whether the company had established the importance of integrity and honesty in its business and whether employees had been disciplined in the past for similar activities.

We recommend before firing any employee to closely review the facts when an employee is raising concerns about work.

Is he simply griping on his own account or serving as a spokesperson for others?  Have others agreed with him?  If so, he probably is engaged in “protected concerted activity.”  This can occur even if there is no union and no union organizing taking place.  If the comments warrant discipline, conduct a review of what expectations have been violated; are those expectations in writing and narrowly drawn to be enforceable; and have others been disciplined in the past for similar activities.  Undertaking this review in advance could save 5 years of litigation and legal fees.  Further, a review of the policy relied on to support discipline is required as the NLRB has been scrutinizing policies to favor employee rights.

This case is another reminder that terminations should occur only after analysis and reflection and policies need to be carefully drafted to satisfy the NLRB.