Wyatt Employment Law Report


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Where Wage Disparity Exits, Court Holds that Employers have Heavy Burden to Prove the Reason for Disparity

By Julie Laemmlewage increase

The Fourth Circuit recently issued a decision in EEOC v. Maryland Insurance Administration, No. 16-2408 (4th Cir. Jan. 5, 2018), joining the Third, Sixth and Tenth Circuits in finding that the statutory language of Section 206(d) of the Equal Pay Act (“EPA”) requires an employer to provide evidence that the employer’s affirmative defenses do in fact explain the wage disparity; it is not enough for the employer to possibly explain the wage disparity.

The Fourth Circuit denied summary judgment because there were fact issues for trial as to whether the salary difference between the male and female employees was due to factors other than gender.  The Court explained the parties’ respective evidentiary burdens as follows:

  • The employee must show that the employer paid different wages to an employee of the opposite sex for equal work on jobs requiring equal skill, effort and responsibility under similar working conditions.
  • The employee does not have to establish that males, as a class, receive higher wages than females as a class; rather, the employee must demonstrate that there is discrimination in pay against the employee with respect to only one employee of the opposite sex.
  • It is irrelevant to the employee’s initial burden that other employees of the opposite sex perform substantially identical work as the employee, but make less money than her.
  • If the employee meets the initial burden and proves that a disparity exists, the employer must prove that the disparity was justified by one of four affirmative defenses: a seniority system; a merit system; a pay system based on quantity or quality of output; or, a disparity based on any factor other than gender.
  • If an employer fails to establish one or more of these affirmative defenses, the employee will win summary judgment. In contrast, it is a heavy burden for the employer to establish one of the four affirmative defenses as a matter of law.

Take away for employers:  Several circuits require that employers explain the reason for the wage disparity in terms of concrete facts, not in terms of what may have caused the wage disparity.  Wage disparity claims are gaining steam and are in the news across the nation.  Employers are wise to review their wage practices now to ensure that wage disparity does not exist because once these claims are brought, the employers’ evidentiary burden will be heavy.


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The Tax Cuts and Jobs Act Makes Some Settlements More Expensive for Employers

By Michelle D. Wyrick

A little-known provision in the Tax Cuts and Jobs Act should be of great interest to employers.  In response to the #MeToo movement and the recent surge of sexual misconduct allegations, Congress included a provision in the Act that precludes employers from deducting (1) settlements or payments relating to sexual harassment or abuse if the settlement or payment is subject to a nondisclosure agreement or (2) attorneys’ fees relating to such a settlement or payment.  The provision applies to amounts paid or incurred after December 22, 2017.

Previously, employers could deduct as ordinary and necessary business expenses all settlement payments arising out of a business matter as well as related attorneys’ fees.  The new law will make sexual harassment settlements more expensive for employers who include confidentiality provisions in their settlement agreements.  Employers will have to choose between deductibility and confidentiality.

The Internal Revenue Service (“IRS”) is expected to issue guidance to clarify some of the questions surrounding the new law.  For example, it is not clear whether an employer can deduct payments relating to a confidential settlement agreement that contains a broad release of claims, including claims for sexual harassment, even if no actual sexual harassment claims were asserted in the underlying litigation.  And, if a confidential settlement agreement settles litigation involving sexual harassment claims and other claims, can the settlement payments be apportioned among claims, allowing the employer to deduct a portion of the settlement payment?

Until the IRS weighs in, employers should tread carefully in this area and consider the potential added tax burden of settling sexual harassment claims.  In some circumstances, employers may deem confidentiality to be worth the extra cost.  One thing is clear – settling sexual harassment claims on a confidential basis just got more expensive.


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DOL Announces Test for Determining Intern Status under the FLSA

By Amanda Warford Edge

As many employers have begun thinking about their summer hiring needs, the Department of Labor (“DOL”) has announced that going forward, it will apply the “primary beneficiary” test to determine whether interns working for “for-profit” employers are employees under the Fair Labor Standards Act (“FLSA”). The DOL’s announcement provides much-needed clarity to employers, as it comes in the wake of a growing number of federal appellate court decisions that have rejected the DOL’s former six-factor test to determine internship status. Indeed, with this announcement, the DOL has Continue reading


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The Importance of Regular Harassment Training in the Workplace

By Sharon Gold

The end of 2017 saw a barrage of sexual harassment allegations in the news and, subsequently, the termination of multiple high profile men in the entertainment and corporate industries.  TIME magazine named the “Silence Breakers” as its “Person of the Year” for exposing the harassment that pervades the entertainment industry.  Thousands of women and men came forward on social media with the #METOO campaign with their own stories of harassment in the workplace.  What can an employer do to end harassment in the workplace?

Long before the recent wave of allegations, the EEOC created a Task Force and issued a report of recommendations to decrease sexual harassment in the workplace.  The primary findings were: Continue reading


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NLRB establishes new policy governing employee handbooks and workplace policies

By Mitzi Wyrick

In Boeing Co., 365 NLRB No. 154, the National Labor Relations Board (“NLRB”) overturned the standard established in Lutheran Heritage Village-Livonia, 343 NLRB No. 646 (2004) for weighing the legality of employee handbook rules and workplace policies.  In Lutheran Heritage Village-Livonia, the NLRB created confusion for employers when it ruled that employers violated the National Labor Relations Act (“NLRA”) by maintaining workplace rules that did not explicitly prohibit protected activities, were not adopted in response to such activities and were not applied to restrict such activities, if the rules would be “reasonably construed” by an employee to prohibit the exercise of Section 7 rights under the NLRA.

Under Lutheran Heritage, employers were found to have violated the NLRA for having seemingly innocuous policies prohibiting “loud, abusive or foul language,” rules subjecting employees to discipline for an “inability or unwillingness to work harmoniously with other employees,” and rules prohibiting “negative energy or attitudes.”  Confusingly, under Lutheran Heritage, some rules Continue reading


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Kentucky Supreme Court Reasserts Constitutional Power, Opens Door to Class Actions

By Thomas E. Travis

With the Kentucky Supreme Court’s recent ruling in McCann v. The Sullivan University System, Inc., employers should take heed to potential class action exposure in cases related to alleged violations of Kentucky’s wage and hour statute. However, the Court, in its text-centric opinion, appears to have issued a broader warning shot as to how to interpret Kentucky statutory causes of action in light of the Kentucky Rules of Civil Procedure.

The underlying dispute arose when Sullivan University hired McCann as an admissions officer in 2006 at its campus in Fort Knox, later transferring her to its Spencerian College campus in Louisville in 2007. After a prolonged tilt in federal court, McCann filed a state court motion under Kentucky Rule of Civil Procedure 23 to certify a class action on behalf of admissions officers for back overtime pay. KRS 337.385—Kentucky’s wage and hour statute—neither Continue reading


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Emanuel Fills Last NLRB Seat

By Edwin S. Hopson

On September 26, 2017, William J. Emanuel, a Republican,  was sworn in as a Member of the National Labor Relations Board.  Emanuel’s term will end August 27, 2021. The Senate had confirmed his nomination by a vote of 49-47 after Democrats filibustered his appointment.

Prior to his appointment, Emanuel was a shareholder with Littler Mendelson, P.C., a law firm representing management in labor and employment matters.  He had also practiced labor law with several other firms.

With this new Member, the NLRB is once again at full strength – three Republicans and two Democrats.