Wyatt Employment Law Report

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Employer Mandate Reporting and Penalty Provisions Delayed Until 2015 – Can Employers Take a Breath Now?

The Obama Administration announced late on July 2nd that the employer mandate reporting and penalty provisions of the Affordable Care Act (ACA) will be delayed until 2015.  The announcement does not provide details, but states that the employer reporting requirement and employer mandate penalties will not apply until 2015.  Under the ACA, certain large employers must provide health insurance coverage to employees or face a penalty.  Unfortunately, this announcement has raised more questions than answers.  As of today, other ACA provisions, such as the individual mandate, certain required health insurance provisions, health care marketplaces/exchanges and subsidies for certain individuals, are still scheduled to be effective January 1, 2014.  The Administration has announced that guidance will be issued next week, so stay tuned!

Click Here for the White House release

Click Here for the Treasury blog

Click Here for the Health Care website

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EEOC Cites Strategic Enforcement Plan In Recent Litigation Activity

eeocBy Michelle D. Wyrick

A quick look at the EEOC’s press releases announcing the lawsuits it has recently filed demonstrates the agency’s apparent commitment to its Strategic Enforcement Plan.  For example, the EEOC filed two lawsuits, one against a BMW manufacturing facility and one against Dollar General, alleging that the employers violated Title VII of the Civil Rights Act by using criminal background checks that resulted in employees being fired or being screened out for employment.  The EEOC asserts that in both instances the employer’s criminal background check policy has a disparate impact on African Americans.  In its press release, the EEOC said: “Eliminating barriers in recruitment and hiring, especially class-based recruitment and hiring practices that discriminate against racial, ethnic and religious groups, older workers, women, and people with disabilities, is one of six national priorities identified by the Commission’s Strategic Enforcement Plan.”  The EEOC cited the same national priority in announcing other lawsuits, including a suit against a pizza restaurant and bar for allegedly refusing to hire a class of African-American applicants for certain positions and suits alleging disability discrimination under the Americans with Disabilities Act and religious discrimination under Title VII.

The EEOC’s Strategic Enforcement Plan for fiscal years 2013 through 2016 (http://www.eeoc.gov/eeoc/plan/sep.cfm) identifies six national priorities:

  • Eliminating class-based barriers in recruitment and hiring;
  • Protecting immigrant, migrant, and other vulnerable workers;
  • Addressing emerging and developing issues;
  • Enforcing equal pay laws;
  • Preserving access to the legal system; and
  • Preventing harassment through systemic enforcement and targeted outreach.

In addition to filing suits designed to eliminate class-based barriers in recruitment and hiring, the EEOC has also recently filed suits targeting “emerging and developing issues in equal employment law.”  Last month, the EEOC filed suit against a nursing and rehabilitation center, alleging that it violated the Genetic Information Nondiscrimination Act (“GINA”) by asking for family medical history during the hiring process.  The EEOC’s complaint alleges that the nursing and rehabilitation center requested family medical history as part of post-offer, pre-employment medical exams.  The EEOC has also cited its priority of addressing emerging and developing issues in announcing lawsuits under the Americans with Disabilities Act. 

Earlier this week, the EEOC filed suit against a transportation company alleging violations of the Equal Pay Act and Title VII.  Referring to its priority of enforcing equal pay laws, the EEOC alleges that a female human resources director was paid substantially less than her male predecessor. 

Similarly, the EEOC has focused on “[e]liminating policies and practices that discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or that impede the EEOC’s investigative or enforcement efforts.”  The EEOC cited this goal in announcing a lawsuit against a staffing a recruitment company for allegedly retaliating against an employee who filed a discrimination charge.

Finally, the EEOC has also cited its priority of preventing harassment through systemic enforcement in filing lawsuits alleging racial and sexual harassment and retaliation.  The EEOC filed suit against a company that the EEOC alleges subjected an African-American employee to racial and sexual harassment and retaliated against him because he reported the harassment to company officials and then filed a discrimination charge with the EEOC.  In addition, the EEOC recently filed suit under Title VII against an Italian restaurant for allegedly subjecting female employees to sexual harassment and firing a manager who complained about the harassment. 

The EEOC’s recent litigation activity indicates that the EEOC is aligning its enforcement efforts with the objectives identified in its Strategic Enforcement Plan.  Employers should be aware of the EEOC’s objectives and be proactive in addressing any areas that could result in a charge or lawsuit based on one of the EEOC’s national priorities.  Judging from lawsuits that the EEOC has recently filed, such areas include background checks, pre-employment medical exams, compensation practices, and disciplinary action against employees who have reported or complained about alleged harassment.

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The Other Supreme Court Decisions: Employers Should be Celebrating Too!

By Emily C. Lamb and Chelsea Painter*

The Supreme Court issued rulings in more than one case on Monday, June 24, 2013.  Rulings were issued in two important employment law cases, Vance v. Ball State University and University of Texas Southwestern Medical Center v. Nassar.  These rulings further define “Supervisor” under Title VII and approve a higher standard of proof for retaliation claims than for status-based discrimination claims, respectively.  Also, the Supreme Court granted the NLRB’s Petition for Certiorari in NLRB v. Noel Canning.

The U.S. Supreme Court Narrowly Defines “Supervisor” For the Purpose of Title VII

Under Title VII, an employer’s liability for workplace harassment is largely dependent upon whether the alleged harasser is the complainant’s supervisor.  If the harasser is merely the victim’s co-worker, an employer is liable only if it was negligent i.e., if the employer knew or reasonably should have known about the harassment but failed to take remedial action.  However, if the harasser is the victim’s supervisor, the employer’s liability depends on whether adverse action was taken against the victim.  If such action was taken, an employer is strictly liable for the harassment.  If not, an employer may escape liability under the reasoning of Burlington Industries, Inc. v. Ellerth and Faragher v. Boca Raton and their progeny if the employer can show that (1) the employer exercised reasonable care to prevent and correct any harassing behavior; and (2) that the plaintiff unreasonably failed to take advantage of the preventative or corrective opportunities offered by the employer.  The alleged harasser’s status as a supervisor is therefore crucial in determining the proper framework to analyze harassment claims.

On Monday, June 24, 2013, the United States Supreme Court resolved the dispute concerning the definition of “supervisor” with its Opinion in Vance v. Ball State University.  In a 5-4 majority opinion delivered by Justice Alito, the Court held that for the purpose of Title VII, only those employees who are empowered to take “tangible employment actions against the victim, i.e., to effect a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits” qualify as “supervisors” whose actions may make the employer vicariously liable under the Ellerth/Faragher framework.  If a harassing employee lacks such authority, the employer can only be held liable for negligently controlling work conditions.  The Court specifically rejected the “nebulous definition” of “supervisor” advocated in the EEOC Guidance and adopted by several courts of appeals.  “The ability to direct another employee’s tasks is simply not sufficient” to justify vicarious liability.  Instead, a negligence framework is appropriate in evaluating an employer’s liability for the acts of such employees.  It was also reasoned that in a “great many” cases, it will be known, prior to litigation, whether an alleged harasser was a supervisor.  In other cases, such will become clear after discovery or will be resolved at summary judgment, thus resulting in a more efficient legal system.

Justice Ginsburg’s dissenting opinion (in which Justices Breyer, Sotomayor and Kagan joined) argued that the Court’s decision to exclude those employees who control the day-to-day schedules and assignments of others from the definition of “supervisor” is out of touch with the realities of the workplace, “where individuals with the power to assign daily tasks are often regarded by other employees as supervisors.”  They argued that the holding “relieves scores of employers of responsibility” for the behavior of workers they employ and ignores EEOC Guidance suggesting that the authority to direct an employee’s daily activities establishes supervisory status under Title VII.  The majority dismissed these concerns, reasoning that the EEOC’s broad definition is unworkable and that a narrower definition limiting supervisors to those with the power to take tangible employment action still gives victims an opportunity to seek redress under the co-worker harassment theory.

The United States Supreme Court Approves a Higher Standard of Proof for Retaliation Claims than for Status-Based Discrimination Claims

On Monday, June 24, 2013, the U.S. Supreme Court decided University of Texas Southwestern Medical Center v. Nassar, in which a 5-4 majority led by Justice Kennedy held that retaliation plaintiffs must prove that retaliation was the “but-for” cause of the challenged employment action, not merely a “motivating factor” for the employer’s action.  Traditional status-based discrimination under 42 U.S.C. §2000e-2 need not show “but-for” causation.  Rather, it will suffice if it is shown that the motive to discriminate was one of the employer’s motives.  However, the Court reasoned that because the antiretaliation provision is located in a different section than the status-based discrimination provision,  the two claims are not interchangeable, and therefore, the standards of causation for each may be differentiated.  Furthermore, §2000e-2(m)’s plain language addresses only “race, color, religion, sex, and national origin discrimination and says nothing about retaliation,” whereas another part of the Civil Rights Act of 1991, §109, expressly refers to all unlawful employment actions.  Moreover, the detailed way Title VII was drafted differentiates it from other, more broad, and generalized statutes that have interpreted retaliation to be an “implicit corollary of status-based discrimination.”  Finally, the Court explained that Congress’s approach to the ADA further confirms the inapplicability of Section 2000e-2(m) to retaliation because the ADA (which was enacted just one year before Title VII) shows that when Congress elected to address retaliation as part of a detailed statute, “it did so in clear textual terms.”

A dissent led by Justice Ginsburg (in which Justices Breyer, Sotomayor and Kagan joined) criticized the use of a different standard for retaliation and discrimination claims, stating: “The court shows little regard for the trial judges who will be obliged to charge discrete causation standards when a claim of discrimination ‘because of,’ e.g., race is coupled with a claim of discrimination ‘because’ the individual has complained of race discrimination. And jurors will puzzle over the rhyme or reason for the dual standards.”

U.S. Supreme Court Grants the NLRB’s Petition for Certiorari in NLRB v. Noel Canning

On Monday, June 24, 2013, the U.S. Supreme Court granted certiorari, agreeing to “consider whether President Obama’s recess appointments to the panel (Board) heading the NLRB’s judicial processes and union election functions were valid under the U.S. Constitution.”  This means that the Supreme Court will address the validity of President Obama’s recess appointments to the Board, as well as the extent of the President’s power to appoint individuals to various federal agencies and departments without the advice and consent of the Senate.  In addition to the issues raised in the Board’s petition, the Court directed the parties to brief and argue whether the President may exercise such power when the U.S. Senate is convening every three days in pro forma sessions.

Although Noel Canning cast doubt on the hundreds of decisions the NLRB made in the past year, employers should not expect much change at the NLRB.  The Board has summarily rejected any arguments related to invalid appointments.  Employers can expect the Board to continue to issue decisions until Chairman Mark Pearce’s term expires on August 27, 2013, eliminating the NLRA-required three member quorum, or until the Senate confirms President Obama’s nominations or President Obama makes additional recess appointments to the Board.

Ms. Painter is a Summer Associate at Wyatt, Tarrant & Combs, LLP.