Tag Archives: employment law

Supreme Court Rules Discrimination Against LGBTQ Employees Is Discrimination On The Basis Of Sex

In a landmark decision in Bostock v. Clayton County, the Supreme Court of the United States ruled discrimination against LGBTQ employees violates Title VII of the Civil Rights Act of 1964. The 6-3 ruling is significant in that it did not rely on technical grounds, but rather on the legal analysis that disparate treatment of employees based on sexual orientation or gender identity is, by definition, discrimination based on sex. This decision upended what had been settled law until, at least, 2010, which generally held that Title VII’s protections do not extend to discrimination based on sexual orientation or gender identity.

Starting in 2011, the U.S. Equal Employment Opportunity Commission (EEOC), which is responsible for enforcing Title VII, interpreted Title VII to prohibit discrimination against LGBTQ employees, however, many courts did not agree. Eventually, the U.S. Department of Justice under the current administration took the opposite position of the EEOC, creating conflicting interpretations within the executive branch. Indeed, as the Court noted in Bostock, U.S. Congress has repeatedly tried to amend Title VII to expressly prohibit discrimination based on sexual orientation and gender identity to resolve the conflict between these varying interpretations. There is no doubt that this decision is historic and will have the most immediate impact on employers in states where LGBTQ employees are not already protected by state laws or where state laws only provided weak protections. Title VII applies to both the private and public employers with 15 or more employees and to the federal government, employment agencies, and labor organizations.

Although the Supreme Court limited its decision to Title VII, since the decision is rooted in an analysis of the meaning of protections from discrimination “based on sex,” we can expect it will form the basis for future courts to apply greater protections under other federal and state laws outside of Title VII that prohibit sex-based discrimination but were not previously interpreted to protect against discrimination based on sexual orientation or gender identity. The message to businesses is clear: Title VII does not condone discrimination based on sexual orientation or gender identity and that is also likely true of an array of other anti-discrimination laws.

Questions? Let me know.

Going Gaga Over Gag Orders

Letterboard with acronym NDA for "non disclosure agreement"

In the era of #MeToo, the gag order (legally speaking, non-disclosures or confidentiality clauses) has come under attack as a tool that silences victims and is responsible for compounding the damage to victims by keeping them from telling their stories. This issue took center stage in a recent Democratic Primary debate when Michael Bloomberg was chastised about confidentiality orders his employees signed and pressured by the other candidates to release these employees.

The victim oppression concern is a valid one with an intuitive appeal.  Why should victims be silenced?  Isn’t it in our collective best interests to hear from them so we can help them heal and protect the rest of us from predators?  While these sentiments address serious societal concerns, they also oversimplify the role of confidentiality clauses by narrowly casting them only as tools used only to hide bad behavior.  Often, they are tools that facilitate settlement and efficient resolutions of disputes that offer benefits that are less obvious than the victim-silencing purpose dominating the public discourse.

Imagine for a moment that you are a CEO of a small sales organization and a direct report accuses you of gender discrimination in the way you assign sales leads after you were selected for the position over that colleague. Suppose that you have strong evidence the claim is baseless because the manner in which leads are assigned is fully supported by objective performance evidence. Consider that defending against this baseless claim (a) will cost upward of $250,000 your company cannot afford to spend without diverting resources from significant business needs, (b) will disrupt your business, and (c) may even be in the hands of an insurer who can pressure you to settle. On top of that, do not forget that even after you present compelling objective evidence, you still must overcome the emotional appeal of the alleged victim with the jury.  Now, imagine if you can resolve this case for $7,500.  Would you want to settle such a claim?  Of course not.  But does it make good business sense?  Perhaps.

Even if paying the claim might be a sound economic decision, there are other concerns to weigh.  What would happen if it came out that you resolved this case? Would it look like you did something wrong?  Would it hurt your reputation?  Would it hurt your business?  Would it jeopardize the stability of the workforce? Would it invite others to bring baseless claims for a payday?

One way to balance these concerns and make a good business decision is to resolve the case with an agreement that includes a non-disclosure clause.  It is not a perfect answer and, in certain states, it is not allowed (see this legal alert), at least, to the extent it requires a person to keep the underlying allegations confidential. Nevertheless, it is an important incentive to resolve a claim. The accuser is able to resolve a case, the accused is able to continue business operations, and would-be con artists are not as incentivized to bring copycat claims to chase a windfall.

Alternatively, imagine, after getting a coveted promotion, you learn your boss selected you because he/she expected you would show your appreciation with sexual favors. Soured on the work culture and feeling like you’ve been stigmatized, you assert a claim, settle, and resign.  You have a right to put this behind you and move on, but are concerned it will affect you in unanticipated ways.  How will potential employers react if they learn you claimed you were promoted based on your boss’s sexual interest in you and not your merit?  Will referral sources, clients, and other contacts view you negatively?  Do you want to leave open the possibility that the boss or others who are privy to the situation will trash your reputation?  Would you prefer a confidential settlement to protect yourself?

The ways in which confidentiality settlement allow parties to get beyond these types of concerns and to a settlement influences the entire system.  For example, consider whether settlement would be less likely if these concerns could not be mitigated.  Moreover, consider whether attorneys representing employees would be less willing to take a case if the only chance for recovery was to win a trial with all the associated risks and costs.

In these ways, confidentiality clauses are helpful and efficient. Moreover, the view that confidentiality clauses are aimed only at keeping victims from talking about their experiences is overstated.  Certainly, that happens and is a matter of public concern, but, often, confidentiality clauses serve other goals and facilitate settlement.  Indeed, many times the accuser has already told his/her version of events in a publicly-filed complaint or by testifying at a hearing, meaning confidentiality only practically applies to the amount of money paid to settle, not the underlying conduct.

Likewise, the idea that these agreements hide the conduct of serial abusers is also misplaced.  Generally, a confidential settlement would need to be disclosed in litigation alleging similar conduct by another victim.  Indeed, most confidentiality agreements are required to include an exception allowing information about a complaint to be produced if sought in a subsequent legal matter.

None of this is to say that confidentiality clauses are not overused and abused.  Concerns that they can be a tool of victim oppression are serious and warranted.  Victims have been silenced unfairly and unjustly.  These instances, however, do not mean that all confidentiality clauses should be viewed as markers of victim oppression. It is important to weigh the range of competing factors served by confidentiality agreements, so we can take a more balanced view without presuming they are only a means to silence victims and protect harassers and predators.

Questions? Let me know.

What Employers Need To Know: New Jersey’s Appellate Division Issues Historic Ruling On Medical Marijuana Users’ Rights in the Workplace

Marijuana Medical PrescriptionEver since the use of properly prescribed medical marijuana became legal in New Jersey, Courts have grappled with reconciling state and federal laws protecting employees from disability discrimination, and employers’ rights to maintain workplaces free of drug use. In simple terms, New Jersey law permits the use of medical marijuana, which is illegal under federal law. With limited exceptions, the decisions in these cases have come down in favor of employers’ right to enforce workplace drug rules. Generally, courts have permitted employers to discipline, terminate, or refuse to hire employees who use medical marijuana, even if there is no evidence of use or impairment in the workplace.

This week, New Jersey’s Appellate Division joined the minority of courts that have found an employee may be able to state a disability discrimination claim against an employer who takes an adverse employment action due to the employee’s use of medical marijuana.

What Happened?

In 2015, the employee, a funeral director, was diagnosed with cancer and was prescribed and used medical marijuana as authorized by New Jersey’s Compassionate Use Act as part of his treatment. In 2016, the employee was in an auto accident while working and he was taken by ambulance to a hospital. The employee advised hospital staff he was authorized to use medical marijuana. The treating doctor responded that “it was clear [the employee] was not under the influence of marijuana [and, thus, his marijuana use was not a cause of the accident], and therefore no blood tests were required.”

While the employee recuperated, his father took his medical prescription and marijuana license to his son’s supervisor and explained what had happened and why the hospital had not given a drug test. Later that day, the employer called and spoke to the employee’s father to advise that a blood test was required before the employee could return to work.

Later that evening, the employee went to a facility to take a urine and breathalyzer test; however, the results of those tests were not provided to the employer and were not part of the case record.

The next day, the employee returned to the funeral home, not as an employee, but because a close friend’s family member had died. While there, he and his supervisor spoke briefly about his job status. His supervisor said he had not heard from “corporate” but did not see how it would be a problem since the employee had a prescription for his marijuana use. The employee told the supervisor, “I only take it when I am home, not at work because I don’t want to jeopardize my license for what I have worked so hard for.”

The employee eventually returned to work, but, shortly after his return, his supervisor advised him that “corporate” was unable to “handle” his marijuana use and that his employment was “being terminated because they found drugs in your system”, though no test had actually been provided to the employer. In a subsequent letter, the company told the employee it had terminated him not because of his drug use, but because he failed to disclose his use of medication that might adversely affect his ability to perform his job duties. According to a company policy, “employees must advise their immediate supervisor if they are taking any medication that may adversely affect their ability to perform assigned duties safely.”

The employee brought an action alleging he had been a victim of disability discrimination.

What did the Courts decide?

The trial court dismissed the employee’s claims, finding that New Jersey’s Compassionate Use Act “does not contain employment-related protections for licensed users of medical marijuana.” The employee appealed.

On appeal, a three-judge panel of New Jersey’s Appellate Division reversed the dismissal in a unanimous decision. The Appellate Division acknowledged that the Compassionate Use Act unambiguously states it does not “require . . . an employer to accommodate the medical use of marijuana in any workplace.” Nevertheless, the appellate panel found that the New Jersey’s Law Against Discrimination might require such an accommodation. Although the Compassionate Use Act does not make illegal an employer’s adverse action against an employee for medical marijuana use, by the same token, the Appellate Division stated it does not immunize an employer’s conduct that might otherwise have been a violation of the Law Against Discrimination. For this reason, the Appellate Division reversed the trial court’s dismissal and permitted the case to proceed.

What do employers need to know?

At the outset, it is important to understand that the Appellate Division did not rule that this employee had been a victim of disability discrimination. In fact, the Court expressly recognized that the case was at the earliest stages, and the employer had pled potentially valid defenses.  The Court ruled only that the case could not be dismissed on its face.

Although this precedent is now binding on state trial courts in New Jersey, it is far from settled law, and may well be subject to an appeal to the New Jersey Supreme Court. However, New Jersey employers need to be mindful that they no longer have a free pass to take adverse employment actions against employees and candidates solely because they use medical marijuana; those affected by such decisions will be emboldened by this new case, and their lawyers will be confident that a lawsuit challenging the adverse actions is more likely to survive a motion to dismiss at the beginning of the case. As the law in New Jersey now stands, employers are not required to accommodate medical marijuana use, but there is now an increased risk if they refuse. Additionally, various bills have been proposed and are being considered by the New Jersey legislature, which, if adopted, may expand employee rights in this area of the law.

In other words, stay tuned, because we have certainly not heard the last word on this topic. With that said, employers remain free to take adverse action if an employee shows any sign of impairment from use of medical marijuana, or, for that matter, any other drug, legal or not.

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If you have any questions about this legal alert or if you run across a related issue in your workplace, please feel free to contact Adam Gersh or any other member of Flaster Greenberg’s Labor & Employment Department.

Walmart Takes a Seat in California

walmart.jpg

Walmart reportedly agreed to pay $65 million to settle a case brought on behalf of nearly 100,000 current and former California cashiers who claimed the company violated their rights under a state law dating back to 1911 when it failed to provide them with seating.  The workers claimed Walmart, which denied any wrongdoing, breached its duty to make seating available “when the nature of the work reasonably permits.”

Walmart claimed that the nature of the cashier job did not reasonably permit seating, because placing stools or chairs at the store’s cash registers would pose a safety risk and hinder productivity. However, Walmart had a policy of offering stools to cashiers with medical conditions or disabilities, and store managers had the discretion to provide stools to cashiers on a case-by-case basis.

In a court filing, Walmart and counsel for the cashiers said the settlement, if approved, would be the largest ever under California’s unique Private Attorney General Act, which allows workers to sue their employers on behalf of the state and keep a portion of any award.

Curiously, other major retailers in California faced similar lawsuits, but Walmart did not act proactively to address this issue.  Even putting aside the anticipated benefit of improved employee relations resulting from voluntary compliance, with the benefit of hindsight, one has to wonder if the cost of compliance, even if it were to result in reduced productivity, would have been less than the cost to settle.

Savvy employer takeaways: Employers need to look carefully at their duty to offer reasonable accommodations to employees and to engage in an interactive process to make sure that the employer can justify any denied accommodation.

Questions? Let me know.

U.S. Dept. of Labor Makes Its Move

Employment attorney adam gersh

As long-time readers of this blog may recall, since 2015, the U.S. Department of Labor  has been trying to update its Fair Labor Standards Act  regulations to qualify more employees for overtime pay. For basic exemptions, meaning those that are not industry-dependent such as the administrative, executive and professional exemptions, employers may generally classify as exempt from overtime pay only employees who meet both a duties test and a salary test.  Since 2004, federal law allowed employers to designate salaried workers who earn at least $455/week (the equivalent of $23,660/year) and meet certain “white collar exemption” duties-test requirements as exempt from overtime.  This month, the DOL issued a proposed rule to increase that salary exemption to $679/week (equivalent to $35,308/year).  If adopted, salaried employees who meet an applicable duties test and earn more than $455/week but less than $679/week will no longer be exempt from overtime under the basic exemptions.  Importantly, the DOL proposed rule will allow employers to use nondiscretionary bonuses (for example incentive bonuses tied to productivity or profitability) and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the salary test.  The DOL is also proposing to increase the exemption that applies to highly compensated employees.  Currently, salaried employees who earn at least $100,000/year in salary are exempt from overtime regardless of whether they satisfy the applicable duties test.  Under the proposed rule, the highly compensated employee salary threshold will increase to $147,414/year, meaning employees paid less than that threshold amount will be subject to a duties test or other exemption.  The proposed rule does not seek a change to any of the duties tests for the basic exemptions.

Savvy employer takeaways: Employers need to evaluate their payroll to identify salaried employees who meet the applicable duties test but may no longer be exempt and assess whether increasing the employee’s salary or making the employee overtime eligible makes more sense.  Employers also need to consider applicable state law, which may be more restrictive than the exemptions permitted under the FLSA.

Questions? Let me know.

Crash Course: The Intersection of Race Relations, Employee Relations, and Social Media

Race relations have taken center stage in our 2016 presidential election and in our headlines, so naturally topics of race relations have permeated the workplace.  This raises important issues for employers, especially when faced with employees who openly protest racial discrimination in society at large because such protests may be controversial and increasingly public due to the proliferation of social media.  Most important, employers need to know federal anti-discrimination and anti-retaliation protections may be interpreted by courts to extend to certain types of employee informal protests of discriminatory employment practices, including making complaints to management, writing critical letters to customers, protesting against discrimination by industry or society in general, and expressing support for co-workers who have filed formal charges.

Specifically, 42 U.S.C. § 1981 (“Section 1981”) was enacted to deter racial discrimination in the formation and enforcement of contracts, and also prohibits retaliation, both in and out of employment.  In interpreting Section 1981, the courts of Pennsylvania, New Jersey, and Delaware, among others, held that its protections extend to prohibit retaliation that punishes an individual for opposing conduct that violates Section 1981, whether that individual or some third party was the victim of the § 1981 violation.  In other words, an employee who protests discrimination may have anti-retaliation protections even when the forms of protest may be controversial and even if the employee was not individually a victim of the discrimination that is the subject of the protest.

In a recent employment case, L Brands/Victoria’s Secret Stores, LLC (“Victoria’s Secret”) terminated a district manager for what it perceived to be racist Facebook posts.  As an example, the employee used her Facebook feed to repost a picture depicting a person wearing a Ku Klux Klan-reminiscent white, hooded robe with the Los Angeles Clippers logo and the number 42, and was captioned “Game 5 in LA is Free Sheet Night…Donald Sterling Bobble head doll night too!,” a reference to the headlines about racist actions of Sterling, the Clippers’ owner at the time. When Victoria’s Secret was notified about the posts, it investigated and terminated the employment of the district manager.  The district manager brought suit under Section 1981 alleging she was the victim of retaliation for protesting discrimination by Sterling and others on Facebook.  Victoria’s Secret won the case (at least at the trial level) by showing that, irrespective of the district manager’s subjective intent, the message of the post was so unclear that no reasonable jury could find that this image objectively complained about or protested incidents of race discrimination prohibited by Section 1981.  In this case, the court’s decision rested on its finding that there was no clear connection between the alleged protected conduct and a contractual right and, in any event, the court found no reasonable person could have believed that the underlying incident complained about constituted unlawful discrimination.  As the court further explained, an “oblique reference” to or “mere mention of race” or race-based discrimination does not constitute protected opposition to violations of Section 1981, rather it must be an objectively identifiable protest of discriminatory practices in the formation and/or enforcement of contracts.

Employers can take little comfort in Victoria’s Secret’s win, however, because it was essentially based on the Court’s determination that the content of the district manager’s post was not clear enough to trigger anti-retaliation protections.  Arguably, the result would have been much different if the employee were clearer about her own feelings and tied them to a contract, even if her form of protest was offensive to Victoria’s Secret and its customers.

The takeaway:  Employers must be cautious and should consult with counsel before disciplining employees for conduct that could be construed as protesting discrimination, even when the employee’s conduct appears offensive on its face.

Questions? Let me know.

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