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Baker’s Dozen: 13 Hot Employment Law Topics for 2017

Presented byWhitney R. Brown, Brett A. Janich, and Albert L. Vreeland

Lehr Middlebrooks Vreeland & Thompson, P.C.Your Workplace is our Work®

Copyright 2016 Lehr Middlebrooks Vreeland & Thompson, P.C. All rights reserved. Reproduction or use of these materials, including for in-house training, without authorization of

the authors is prohibited.

MANAGING EMPLOYEE SPEECH AND CONDUCT IN POLITICALLY

TURBULENT TIMES

2

Politics in the Workplace

Damned If You Do• Title VII: Title VII and other federal/state anti-

discrimination laws potentially require employers to accommodate various expressions of employees’ protected characteristics. As such, it is easy to imagine a scenario in which an employer’s ban on political speech clashes with an employee’s desire to express religious, racial, or gender-based beliefs in the form of political speech.

3


Damned If You Do• NLRA: Section 7 enshrines the right of

employees to engage in concerted activity for their “mutual aid or protection,” protecting political speech by employees when it relates to labor and employment issues (e.g., increase of the minimum wage or immigration reform).

• First Amendment: Restriction of political speech by public employers (or retaliation on the basis of such speech) may create valid claims.

4


Damned If You Don’t• Potential for the creation of a hostile work

environment.

5


Tips(1) Private employers may craft broad policies

discouraging political speech, but include caveats that permit concerted activity.

(2) Take advantage of heightened political atmosphere to review established anti-discrimination policies.

6

EEOC SUBSTANTIVE AND PROCEDURAL UPDATE

7

EEOC Update

National Substantive Area Priorities• Eliminating Barriers in Recruitment and Hiring

• Protecting Vulnerable Workers, Including Immigrant and Migrant Workers

• Ensuring Equal Pay for All Workers

• Preserving Access to the Legal System

• Preventing Systemic Harassment

8

EEOC Update

National Substantive Area Priorities• Addressing Emerging and Developing Issues

– Inflexible leave policies and qualifications standards (ADA)

– Accommodating pregnancy and disability-related limitations (PDA, ADA)

– LGBT discrimination (Title VII)

9

EEOC Update

National Substantive Area Priorities• Addressing Emerging and Developing Issues

(cont.)– Complex employment relationships: on-demand

employment, independent contractor labels, joint employment and temporary staffing

– “Backlash” discrimination against Muslims, Sikhs, persons of Arab, Middle Eastern, or South Asian descent.

10

EEOC Update

Retaliation Guidance (August 2016)• EEOC will look to categorize even internal

complaints as “participation” in the EEOC Charge process.‒ Participation is typically defined as litigation-related

activity (e.g., filing a Charge, filing a lawsuit, serving as a witness in an EEOC investigation of a Charge, testifying by deposition or in court in a lawsuit).

‒ Participation is protected even if the participant lacks a reasonable good faith belief in the underlying allegations. It protects even false and malicious statements.

11

EEOC Update

Retaliation Guidance (August 2016)• Internal complaints (like an employee complaining

to Human Resources or a supervisor) have historically been categorized as “opposition.”– To be protected, opposition activity must be based

on a reasonable, good faith belief that the conduct the employee opposes is a violation of the law.

12

EEOC Update

Retaliation Guidance (August 2016)• EEOC will treat managers and HR employees

acting within ambit of their job duties as potentially engaging in protected activity.

• EEOC will regard as protected individuals those who raise discrimination allegations but are not covered by the applicable law (e.g., someone complains of experiencing age discrimination even if he is under 40).

13

EEOC Update

Retaliation Guidance (August 2016)• If EEOC determines that the legitimate, non-

retaliatory reason advanced by the employer is false, it will likely presume the actual reason is retaliation.

• EEOC views ADA as prohibiting not just retaliation, but interference, with ADA rights. Interference could include intimidation, coercion, or actions that do not even rise to the retaliation standard of being materially adverse.

14

EEOC Update

15

EEOC Respondent Portal

EEOC Update

New Charge Handling Procedures• EEOC now permits Charging Parties or their

attorneys to receive a copy of the employer’s position statement and exhibits.– No reciprocity for the employer; however.

• The investigator is charged with excluding confidential information when showing the position statement and exhibits to the employee.

16

EEOC Update

EEO-1 Electronic Submission• EEO-1s must be electronically uploaded

beginning with the 2017 reports (due March 31, 2018).– Paper reports may be submitted only with permission.

17

NLRB UPDATE

18

Collective Action Waivers

• DR Horton (2012): The NLRB ruled that arbitration agreements requiring employees to waive their right to lead or participate in class or collective actions are illegal under the NLRA, as they violate the right of employees to engage in concerted activity.

• DirecTV v. Imburgia (2016): Latest in a substantial line of Supreme Court precedent upholding the enforceability of class or collective action waivers. - Until this year, every federal appellate court that

examined the issue followed the Supreme Court’s lead, including the 2nd, 5th, and 8th Circuits.

19

Collective Action Waivers

• Lewis v. Epic-Systems, Corp. (2016): Breaking with the Supreme Court, the 7th Circuit adopted the NLRB’s DR Horton reasoning in ruling that such waivers impede on concerted activity, thereby creating a circuit split. The 9th Circuit has since sided with the NLRB as well.- Given the circuit split, this issue will likely be resolved

by the Supreme Court in the near future.

20

Joint Employer Standard

• Browning-Ferris (2015): The NLRB significantly altered the long-time joint employer standard, ruling that an employer’s control over the terms and conditions of employment no longer needed to be direct and immediate in order for it to be deemed a joint employer, determining instead that joint employer status is satisfied even when an employer only has indirect control over such matters.

21

Contingent Workforce Bargaining

• Miller v. Anderson, Inc. (2016): The NLRB ruled that a bargaining unit may consist of both employees solely employed by a “user” employer (a company that uses temporary workers) andemployees jointly employed by the user employer and a temp agency.- Past precedent required that both employers consent

to such a mixed bargaining unit, but the Miller ruling deemed employer consent irrelevant if the permanent workforce and the contingent workforce share a “community of interest” in working conditions.

22

Contingent Workforce Bargaining

Miller (cont.)- Factors to be considered in a “community of interest”

analysis include shared job duties, integration of permanent and temporary workforces, common supervision, and other similarities in working conditions.

• The impact of Miller is augmented by Browning-Ferris, as the broadening of the joint employer standard increases the likelihood of contingent workforce bargaining opportunities.

23

2016: AN ACTIVE YEAR FOR OSHA

24

Electronic Reporting

• Effective January 1, 2017 for workplaces with 250 or more employees

• Submit 2016 injury and illness data (Form 300A) electronically by July 1, 2017.

• All forms for 2017 data (300A, 300, and 301) must be submitted by July 1, 2018.

• Beginning in 2019, all information must be submitted by March 2.

25


• Requirement also applies to employers with 20-249 employees in specified “high-risk industries”

• Including all employers in the agriculture, utilities, construction, and manufacturing industries

• Must submit their Form 300A by July 1 in 2017 and 2018, and by March 2 every year thereafter.

26


• For those employers who utilize an alternative to the OSHA Form 301 (such as a workers’ compensation first report of injury), these changes will require that the employer also complete the OSHA Form 301.

• OSHA intends to publish data on its website.

27

Employee Reporting Procedure

• By November 8, 2016, employers must establish “a reasonable procedure” for employees to report work-related injuries and illnesses promptly and accurately.

• OSHA’s rule does not require procedure be in writing, but must be able to prove its existence to OSHA – so, yes, it does.

• Although training not required, must be able to prove employees were given information about the procedure.

• Must tell all employees: (a) they have the right to report work-related injuries and illnesses; and (b) the company is prohibited from discharging or in any manner discriminating against employees for reporting work-related injuries or illnesses.

28

But There’s More: Drug Testing Guidance

• The new rule also “clarifies the existing implicit requirement that an employer’s procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting.”

• “Nothing in the final rule prohibits employers from disciplining employees for violating legitimate safety rules”

29

Drug Testing Guidance

• But “blanket post-injury drug testing policies deter proper reporting” and therefore a blanket testing requirement will violate the new rule.

• In OSHA’s view, you can only conduct post-accident testing in “situations in which employee drug use is likely to have contributed to the incident, and for which the drug test can accurately identify impairment caused by drug use.”

• OSHA’s examples: bee stings and carpel tunnel injuries

• Would require a case by case assessment30


• Exception for testing required by law (DOT, workers’ comp)

• Currently under court challenge

• Rule on hold until December 1, 2016

31


• Consider revising the policy to require testing only when there is a reasonable possibility that drug use contributed to the cause of the accident. Specific suspicion of the employee is not necessary.

• Also, if possible, consider limiting drug screens to tests which measure current impairment, not just prior use.

• As an alternative, if you’re concerned about drug use, you could also increase the frequency of random testing.

32

DOL UPDATE(THE PERSUADER RULE)

33

Persuader Rule Under Court Scrutiny

• As of July 2016, DOL changed to its regulations governing “persuader” activities, which include assistance and counsel to employers to avoid union organizing or responding to a union organizing campaign.

• According to the new rules, any agreements to provide services relating to union activity must be reported to DOL and publicly disclosed.

• Examples include supervisor training, drafting of sample employee communications, providing labor advice, assisting in response to an organizing campaign and drafting campaign materials.

• New rule currently on hold while reviewed by the courts.34

Increased Fine Structure for OSHA Violations

35

Type of Violation Current Maximum Penalty

New Maximum Penalty

SeriousOther-Than-SeriousPosting Requirements

$7,000 per violation


Failure to Abate$7,000 per day beyond the abatement date

$12,471 per day beyond the abatement date

Willful or Repeated



Ditto for FMLA and FLSA Violations

• Minimum wage and overtime - The civil penalty for repeated or willful violation of the minimum wage and overtime provisions in the FLSA will increase from $1,100 to $1,894 per violation.

• Child labor - The civil penalty for violations will increase from $11,000 to $12,080.

36

Criminal Prosecutions

• DOL and DOJ will team to criminally prosecute worker safety cases.

• Greater fines and jail time (6 months in jail or $10,000 fine per violation)

37

FEDERAL CONTRACTOR AND SUBCONTRACTOR UPDATE

38

Federal Contractor Update

Minimum Wage

• $10.20/hour (or $6.80/hour for tipped employees)

• Effective January 1, 2017

39


Sex Discrimination Update• OFCCP updated sex discrimination regulations on

June 15, 2016; effective date of August 15, 2016.• Included pregnancy, gender identity, transgender

status, and sex stereotyping in definition of “sex”• With respect to compensation discrimination,

OFCCP’s definition of “similarly situated” may be broader than what has developed under Title VII caselaw. OFCCP contends it will follow Title VII caselaw.

40


Sex Discrimination Update• Includes as prohibited sex discrimination:

– “Denying transgender employees access to the restrooms, changing rooms, showers, or similar facilities designated for use by the gender with which they identify;”

– “Treating employees or applicants adversely because they have received, are receiving, or are planning to receive transition-related medical services designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth.”

41


Sick Leave• Applies to:

– Procurement contract for construction covered by DBA;

– Contract for services covered by SCA;– Contracts for concessions, including contracts

excluded from coverage under the SCA;– Contracts related to federal property or lands;– Contracts related to offering services to federal

employees, their dependents, or to the general public.

42


Sick Leave• Effective for contracts where solicitation issued

— or contract awarded outside of solicitation process — on or after January 1, 2017.

• Requires 56 hours or more of paid sick leave annually.– Employees must earn at least one hour of paid sick

leave for every 30 hours worked.

• Leave must carry over year to year.

43


Sick Leave• Accrued sick leave does not have to have a

cash value payable at termination.

• Leave must be reinstated if employee is rehired within 12 months after a separation.

• Leave cannot be contingent on employee finding someone to cover their shift.

44


Sick Leave• Leave may be used for absence for:

– Physical or mental illness, injury, or medical condition;– Obtaining diagnosis, care, or preventive care from a

health care provider;– Illness or treatment for a close family member;– Counseling, seeking relocation, seeking assistance,

taking legal action, or for injury or health care treatment related to domestic violence, sexual assault or stalking.

45


Sick Leave• Documentation may be required for the first

three reasons for sick leave for employee absences of 3 or more consecutive days. For safety-related leave, certain minimum necessary information requested.

46


Pay Transparency• Executive Order 11246: Federal contractors and

subcontractors are prohibited from discriminating against employees or applicants who inquire about, discuss, or disclose their compensation.– Employees with access to this data as part of their job

duties are not privileged to disclose the compensation of others.

47

Federal Contractor UpdatePay Transparency

Covered contractors must add posting and handbook language:

48

The contractor will not discharge or in any other manner discriminate against employees or applicants because they have inquired about, discussed, or disclosed their own pay or the pay of another employee or applicant. However, employees who have access to the compensation information of other employees or applicants as a part of their essential job functions cannot disclose the pay of other employees or applicants to individuals who do not otherwise have access to compensation information, unless the disclosure is (a) in response to a formal complaint or charge, (b) in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or (c) consistent with the contractor’s legal duty to furnish information.https://www.dol.gov/ofccp/PayTransparencyNondiscrimination.html


Fair Play and Safe Workplaces Rule• Required covered contractors and subcontractors to disclose

violations of fourteen labor and employment laws (and state law equivalents) when bidding for new government contracts.

• For contracts of $1 million or more, contractors could not require employees or independent contractors to enter arbitration agreements covering sexual assault or Title VII claims.

• Paycheck transparency: Effective January 1, 2017, requires contractors to provide detailed hours worked information with paychecks. Contractors must also inform individuals working under a covered contract if they are being treated as an independent contractor.

49


Fair Play and Safe Workplaces RuleMost parts were preliminarily enjoined by a federal court on October 24, 2016. OFCCP has issued an internal memorandum instructing its employees not to attempt to enforce the enjoined provisions of the Rule.

50


Fair Play and Safe Workplaces Rule• Required covered contractors and subcontractors to disclose

violations of fourteen labor and employment laws (and state law equivalents) when bidding for new government contracts.

• For contracts of $1 million or more, contractors could not require employees or independent contractors to enter arbitration agreements covering sexual assault or Title VII claims.

• Paycheck transparency: Effective January 1, 2017, requires contractors to provide detailed hours worked information with paychecks. Contractors must also inform individuals working under a covered contract if they are being treated as an independent contractor.

51


EEO-1 Pay Band Reporting• Federal contractors and subcontractors covered

by Executive Order 11246 with 100 or more employees must file revised EEO-1 with pay data for 2017 by March 31, 2018.– EEO-1 pay band data discussed in subsequent

section.

52


Section 503 Reminder• Section 503 (individuals with disabilities) Rules were

amended for plans effective on or after March 24, 2014.

• The amended rule required contractors to invite its employees to voluntarily identify as a person with a disability the first year of coverage and at five year intervals thereafter.

• And, at least once during the five year interval, the contractor must remind employees that they may voluntarily update their disability status at any time.

53

ISSUES FOR JOINT EMPLOYERS AND

TEMPORARY EMPLOYERS

54

Joint Employment Issues (NLRA)

• Browning-Ferris -- The right to unionize and the obligation to bargain collectively

• NLRB may deem a company a joint employer even if it doesn't exercise control in a direct and immediate way.

• The Board may also declare a company a joint employer even if it doesn't exercise any authority at all in practice, as long as it has the authority to control employees.

55

Joint Employment Issues (NLRA)

• McDonald’s franchise cases – coordinated complaints by NLRB across the US

• NLRB arguing McDonald’s is responsible for alleged unfair labor practices by its franchisees during the minimum wage protests.

• The dilemma – too much control leads to joint-employer liability, but insufficient control over employment practices may create liability as well.

56

Joint Employment Issues (FLSA)

• On January 16, 2016, DOL issued its guidance for when employers will be considered joint for wage and hour liability.

• Two types of joint employer relationships:– “Horizontal” joint employment – such as a waitress

working for two separate restaurants operated by the same entity.

– “Vertical” joint employer relationship: “such employee employed by a staffing agency, subcontractor, or labor provider and the ‘economic realities’ show that the employee is economically dependent on, and thus employed by, another entity involved in the work.”

57

Factors Showing Joint Employment

• The extent to which the potential joint employer directs, controls, or supervises the work performed

• The extent to which the potential joint employer has the power to directly or indirectly control the conditions of employment

• The permanency and duration of the relationship between the employee and the potential joint employer

• The extent to which the employee’s work is repetitive or rote

58

Factors Showing Joint Employment

• The extent to which the employee’s work is an integral part of the potential joint employer’s business

• Whether the work in question is performed on the potential joint employer's premises

• The extent to which the potential joint employer performs administrative functions on the employee’s behalf (e.g., processing payroll or providing workers' compensation insurance)

59

LEAVE UPDATE

60

Leave As An Accommodation

EEOC Leave Guidance (May 2016)• Employers must avoid applying general leave

policies in a discriminatory fashion when the leave is disability-related (e.g., requiring certification where it is not routinely required by the leave policy).

• Where leave is not available under an employer’s established leave policy, an employer must consider granting an employee with a disability unpaid leave as a reasonable accommodation.

61

Leave As An Accommodation

EEOC Leave Guidance (May 2016)• Employers may establish maximum limits on

leave under their existing leave policies, but their reasonable accommodation obligations may require granting leave beyond the maximum.

• 100% Healed Policies violate the ADA if an employee can return to work with a reasonable accommodation.

62

When Leave Is Not Reasonable

EEOC Leave Guidance (May 2016)• However, employers must remember that there

are limits on the reasonability of leave as an accommodation.

• In particular, employers should know that requests for indefinite leave and/or indefinitely continuing requests for definite leave are not reasonable accommodations.

63

Paid Sick Leave Expansion

• In recent years, numerous states, counties, and cities have passed paid sick leave laws/ordinances. This trend will likely continue — particularly in jurisdictions that employ ballot initiatives — as such measures are widely popular.

• Likewise, per a recent Executive Order, federal contractors are now also subject to paid leave requirements.

64

PREGNANCY ACCOMMODATION UPDATE

65

Pregnancy Accommodations

• Pregnancy-related restrictions may be subject to accommodation under the ADA:– “A pregnancy-related impairment that substantially

limits a major life activity is a disability under the first prong of the definition.”

• Or the PDA:– “Women affected by pregnancy shall be treated the

same for all employment-related purposes…as other persons not so affected but similar in their ability or inability to work.”

66


Young v. UPSThe Supreme Court ruled that other persons could include any group for which accommodations were provided and where the policy placed a significant burden on pregnant workers for which the employer did not have a sufficiently strong reason to justify the burden.

67


Young v. UPS• Significant burden: Large proportion of non-

pregnant workers accommodated while a large proportion of pregnant workers left in the cold.

• Sufficiently strong reason: The employer’s justification for its policies isn’t dubious. For instance, if the employer is accommodating three large categories of workers, but not a smaller subset of pregnant employees, we might not believe the employer really couldn’taccommodate pregnant workers as well.

68


Legg v. Ulster County (2nd Cir.)• Legg worked for Ulster County jail. She became

pregnant (high risk). Her doctor requested she be given a position with no inmate contact.

• The sheriff declined, stating that light duty assignments were discretionary for workplace injuries only.

• Legg got bumped by two inmates in a fight at seven months pregnant. She did not return to work after that until having the baby.

69


Legg v. Ulster County (2nd Cir.)• In holding that Legg had made a prima facie

showing, the Court said that the fact that light duty was restricted to employees with workplace injuries was “enough, if left unexplained, for a reasonable jury to conclude that it is more likely than not that the policy was motivated by discriminatory intent.”

70


Legg v. Ulster County (2nd Cir.)• The Court also said that because the employer

failed to accommodate 100% of pregnant employees, the policy created a significant burden on pregnant employees.

• The Court found that the County’s provision of light duty to those with work-related injuries suggested that the County did not have sufficiently strong reasons for denying Legg light duty.

71


Hicks v. City of Tuscaloosa (N.D. Ala.)• Police officer returning from pregnancy was not

given private place to pump, received her first-ever negative evaluation, and overheard her supervisor saying she wanted to get rid of her.

• Officer was also denied requested desk duty because bullet-proof vest interfered with lactation. Instead, she was told to wear a larger vest or not wear one at all while patrolling.

Verdict: $374,000** Reduced to $161,319.92

72


EEOC ActionOn June 14, 2016, the EEOC issued two resource documents:

• Legal Rights for Pregnant Workers under Federal Law

• Helping Patients Deal with Pregnancy-Related Conditions and Restrictions at Work (a guide for doctors)

73


State ActionSeventeen states (and some municipalities) have passed laws requiring private employers to reasonably accommodate pregnant workers:

74

CaliforniaColorado (effective 8/10/16)ConnecticutDelawareD.C.HawaiiIllinoisLouisianaMaryland

MinnesotaNebraskaNew JerseyNew YorkNorth DakotaRhode IslandUtah (effective 5/10/16)West Virginia

USING BACKGROUND CHECKS IN HIRING

75

Background Check Developments

• Regulatory entities are primarily focused on ensuring accuracy in background checks.- Federal Trade Commission (“FTC”)

- Consumer Financial Protection Bureau (“CFPB”)

- E.g., in October 2015, the CFPB fined two screening firms $13 million in connection with accuracy failings.

76

Background Check Developments• Fair Credit Reporting Act (“FCRA”): Such suits —

which mainly focus on violations of the FCRA’s employee notification requirements — continue to plague employers, particularly because such actions are not restricted by a damages cap (raising the potential for costly verdicts) and do not require a showing of actual damages (allowing them to be brought for minor violations of the statute).– Singleton v. Domino’s Pizza, LLC (2013): $2.5M

settlement in connection with FCRA class action– Spokeo, Inc. v. Robins (2016): Recent Supreme Court

ruling may cut back on suits for minor violations of the FCRA.

77

Ban the Box

• Widespread Reform: Over the past decade, numerous jurisdictions have passed “ban the box” legislation, which limits employers’ ability to inquire about applicants’ criminal records.- States: 24 have legislation applicable to public sector

employers, and 8 also restrict private employers.

- Municipalities: Countless, including Birmingham (with respect to employment with the City)

78

Ban the Box

• Delayed, Not Prevented: None prevent employers from inquiring about an applicant’s criminal record; instead, they push inquiries to later in the application process and/or allow applicants to explain their records.

• Continued Focus: Given the current vibrancy of the criminal justice reform movement, such legislation will likely continue to spread.

• Limitations: However, restrictions on the consideration of criminal records in hiring decisions do have their limits, as demonstrated in EEOC v. Kaplan Higher Education Corp. (6th Cir. 2014).

79

COVENANTS NOT TO COMPETE

80

Alabama’s New Non-Compete Law

• The old non-compete statute dates back to 1925.

• Expressly disfavored restrictive covenants – void unless within an exception

• Left it to judges to decide whether restrictions were enforceable

• The Alabama Supreme Court changed the law – often.

81

The New Law

• Effective January 1, 2016

• Creates “presumptions” about when non-competes will be enforced

• Ties the degree of restriction to the type of relationship between the parties

82

The Presumptions of Enforceability (b2b)

• No-hire agreements for key employees: a position “uniquely essential” to the business

• Exclusive business dealings: agreement between two businesses

• Sale of business: one year or less are presumed to be reasonable

• Business dissolution: same geographic area

83

The Presumptions of Enforceability (Non-Competition)

• “Employee or agent” can agree with a “commercial entity” not to engage in a similar business within a specified territory.

• Restraints of two years or less are presumed to be reasonable.

• Not limited to employers -- could include independent contractors, staffing agency employees and other contingent workers.

84

The Presumptions of Enforceability (Non-Solicitation)

• “Employee or agent” can agree with a “commercial entity” not to solicit the current customers of the commercial entity subject to reasonable time constraints.

• Restraints of eighteen months or less (or as long as post-termination pay continues, whichever is longer) are presumed to be reasonable.

• Again, not limited to employer-employee relationships

85

Protectable Interest Required

• Restrictions have to be tailored to protect:– Trade secrets and confidential information

(such as pricing, customer lists, marketing plans and business strategy);

– Customer contacts and customer good will; and/or

– Specialized and unique training (but more than mere job skills).

86

Enforcement

• Must be in writing and signed by all parties

• If the agreement overreaches, the law allows (but does not require) a court to reform it as necessary to preserve the protectable interest.

• Non-compliant agreements not saved by adopting the law of another state

87

CAT’S PAW LIABILITY

88

Traditional Formulation

• Black Letter Law: Employment discrimination liability exists where — despite the absence of any evidence of discriminatory animus by the decision maker — the employment action was infected by the discriminatory behavior of a supervisor, whose recommendation regarding the employment action the decision maker accepted without an independent investigation.

• Current Supreme Court Precedent: The Supreme Court has always declined to extend Cat’s Paw liability beyond the realm of supervisory employees.

89

Expansion?

• Current Precedent (cont.): Staub v. Proctor Hosp., 562 U.S. 411, 422 n.4 (2011) (“We express no view as to whether the employer would be liable if a co-worker, rather than a supervisor, committed a discriminatory act that influenced the ultimate employment decision.”)

• Circuit Dissent: However, two Circuits have recently purported to apply the Cat’s Paw theory in the context of a non-supervisory employee’s discriminatory behavior.- Velazquez-Perez v. Developers Diversified Realty Corp.,

753 F.3d 265 (1st Cir. 2014)

- Vasquez v. Empress Ambulance Service, Inc., 835 F.3d 267 (2d Cir. 2016)

90

Avoiding Liability

• Real World: What does this expanded version of the Cat’s Paw theory look like in practice?

• Practical Considerations: Given the ascendancy of this expansion trend, employers should take the following steps to ensure that they are shielded from an increase in liability.

– Remove discretionary responsibility from non-supervisors.

– Increase non-discrimination training of non-supervisors.

– Expand investigatory duties of decision makers.

91

PAY ISSUES

92

Pay Issues

EEO-1 Pay Band Reporting• Applies to employers with 100 or more

employees.• Effective for 2017:

– Employer picks a pay period between October 1 and December 31, 2017.

– Must report by March 31, 2018.– Going forward, EEO-1s are due every March 31.

93

Pay Issues

EEO-1 Pay Band Reporting• Affected employers report employees by sex,

race/ethnicity, job categories (e.g., 1.1 -Executive/Senior Level Officials and Managers), pay bands (12), and hours worked.

94

Pay Issues

EEO-1 Pay Band Reporting• Get pay data from W-2, Box 1.• Hours worked is for the full year, not the pay

period sample.– For nonexempt employees, report actual hours

worked.– For exempt employees, report actual hours worked if

you keep such records, or (more likely) report 40 hours/week for full-time employees and 20 hours/week for part-time employees.

95

Pay Issues

EEO-1 Pay Band Reporting• Will be reported in aggregate (by region and

industry).

• Will be analyzed as part of initial EEOC charge analysis.

• Available by FOIA request if suit filed against employer.

96

Pay Issues

Pay Discrimination and Equity• Does the gender wage gap really exist?

– EEOC and state/local civil rights agencies get fewer than 1,000 pay charges per year.

– OFCCP’s efforts for past eight years have uncovered fewer than 500 alleged victims over 25,000 audits.

– The aggregate pay gap of 17-21% is significantly explained by educational choices, career choices, and career interruptions related to childbirth and childrearing.

– Among unmarried workers without children, the gap is 6%.

97

Pay Issues

Pay Discrimination and Equity• To root out individual instances of unexplained

pay disparity, compensation review may be worthwhile, especially because alleged violations of the Equal Pay Act do not require proof of discriminatory intent. Instead, once a plaintiff proves that there is a disparity in pay between two individuals performing substantially similar jobs, the employer bears the burden of showing a factor other than sex is responsible for the disparity.

98

Pay Issues

Pay Discrimination and Equity Changes in State Law

• Massachusetts: Effective January 1, 2018, employers cannot ask applicants about salary history. Employers have an affirmative defense for claims of pay discrimination if they have completed a self-evaluation of pay practices in the past three years.

99

Pay Issues

Pay Discrimination and EquityChanges in State Law

• California Fair Pay Act: Took effect January 1, 2016. Expanded scope of potential comparators by work and location; shifted burden of proof to employers where pay disparity exists for substantially similar work.

• Connecticut: Enacted law prohibiting employers from instructing employees not to disclose pay.

100

Pay Issues

Pay Discrimination and EquityChanges in State Law

• Louisiana: Equal Pay state law extended to private sector employers and larger public sector employers. Also included a pay transparency provision.

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