On March 7, 2018, the United States Court of Appeals for the Sixth Circuit reversed a district court decision and ruled in favor of a transgender employee who claimed she was terminated by her employer based on her sex pursuant to Title VII of the Civil Rights Act of 1964. Aimee Stephens, formerly known as Anthony Stephens, worked as a funeral director at R.G. and G.R. Harris Funeral Homes, Inc. The funeral home had a dress code policy, requiring male employees to wear suits and female employees to wear skirts and business jackets. The funeral home provided free suits to the male employees, but did not (at least initially) provide female employees with any clothing to comply with the company’s dress code policy. Stephens informed the funeral home that she would be transitioning from male to female and therefore would begin to dress to be in compliance with the company’s dress code for females. Shortly thereafter, Continue reading
By Sharon Gold
The EEOC released its fiscal year charge data and for another year in a row, retaliation is the most filed charge. Behind retaliation are charges for race, disability and sexual discrimination. The full list of charge data is:
- Retaliation: 41,097 (48.8 percent of all charges filed)
- Race: 28,528 (33.9 percent)
- Disability: 26,838 (31.9 percent)
- Sex: 25,605 (30.4 percent)
- Age: 18,376 (21.8 percent)
- National Origin: 8,299 (9.8 percent)
- Religion: 3,436 (4.1 percent)
- Color: 3,240 (3.8 percent)
- Equal Pay Act: 996 (1.2 percent)
- Genetic Information: 206 (0.2 percent)
[These percentages add up to more than 100 because some charges allege multiple bases.]
Any employer who has been through litigation concerning a retaliation claim knows Continue reading
The U.S. Court of Appeals for the Second Circuit recently held that Title VII prohibits discrimination on the basis of sexual orientation in Zarda v. Altitude Express, No. 15-3775 (2d Cir. 2018). With this decision, the Second Circuit joins the Seventh Circuit as the second court to recognize sexual orientation as a protected class under federal law.
Donald Zarda was a skydiving instructor who claimed that he was terminated from his position after he told a client that he was gay. He sued his former employer and its owner, alleging that Title VII and New York law prohibit discrimination based on sexual orientation. The lower court granted partial summary judgment in favor of the employer on the ground that Title VII does not protect gay and lesbian employees. Zarda died in a skydiving accident prior to trial, so Continue reading
By Mitzi Wyrick
Based on a recent court ruling, what you say in unemployment proceedings can now lead to a lawsuit. In Hickey v. General Electric Company, 2017-SC-000135-CL, the Kentucky Supreme Court held in a unanimous opinion that employers may be sued for making false statements during unemployment proceedings. This ruling means that employers may have to face a claim for punitive damages if they are found to have made a false statement during an unemployment proceeding.
The dispute arose over whether Logan Hickey voluntarily quit his employment or was fired. Hickey was hired to work the first shift on the production line at General Electric Company (“GE”) in May 2015. At the time he applied, Hickey stated that he was capable of and available for work on any shift. In August 2015, Hickey was reassigned to a second-shift position. After working several days, Hickey claimed Continue reading
By Julie Laemmle
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.
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.
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