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Category — Legal and HR

Keeping Internal Investigations Confidential: That’s Not Legal?

While speaking at a conference this year, I asked members of the Human Resources community to raise their hands if they routinely instructed employees not to discuss internal investigations.  No surprise, most of the hands (maybe all of them) went up.

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For many good reasons, most employers instruct employees to keep the fact of and contents of investigations confidential.  For example, when investigations become public, employees often become less willing to come forward and discuss the nature of the investigation.  Also, in most instances the nature of the investigation involves sensitive information, like a harassment complaint.  Yet, the National Labor Relations Board (NLRB) has indicated that reasons such as these are not legally sufficient to tell employees to keep their mouths shut.

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May 9, 2016   No Comments

Supreme Court Revisits “Trial by Formula” Approach in FLSA Collective Action

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In 2011, the U. S. Supreme Court issued a landmark decision regarding certification of employment discrimination class actions. The opinion, Wal-Mart v. Dukes, rejected the “trial by formula” approach of allowing a random sample of the class members’ claims to be tried, with the results of those trials to be applied to the entire class. Among other problems, the Court found that this shortcut approach deprived defendants of the ability to litigate statutory defenses to individualized claims. Dukes, however, did not reach the narrower issue of whether “representative,” “sample” or “anecdotal” evidence” is ever appropriate in a class-action employment case.

Since Dukes, there has been plenty of disagreement on the true meaning of the Court’s prohibition of a “trial by formula.”  Employers argue that the Dukes opinion means representative evidence is prohibited in class actions.  So, class actions are not appropriate unless class-wide liability and damages can be established with common evidence. Employees, in contrast, argue that Dukes was limited to the facts of that case and the Employers’ argument is contrary to the efficiency purposes underlying class-action lawsuits.

Last month, the Supreme Court issued its opinion in the Fair Labor Standards Act (FLSA) collective action case of Tyson Foods v. Bouaphakeo.  The Tyson decision was highly anticipated because it was expected to provide guidance on the prohibition of a “trial by formula”, and it was the first class-action decision in the employment context following the death of Justice Antonin Scalia, the author of the Dukes decision.  Employers hoped that the Court would extend Dukes and issue a per se rule that “representative” or “sample” evidence may not be used in the class action context. But, the Court declined to do so.  Whether this case is limited to the FLSA or has broader ramifications is yet to be seen and surely will be litigated.

At issue in Tyson was whether a class of employees had not received statutorily mandated overtime pay for time spent putting on and taking off (“donning and doffing”) protective equipment.  The time spent donning and doffing (and unpaid wages for the same) varied depending on the tasks performed by the individual workers.  So, common evidence could not be used to establish class-wide damages.  Further, Tyson did not track this time, making it impossible to determine the exact time each individual was allegedly shortchanged wages.  This, of course, is an all-too-common scenario under the FLSA.

Since the claims related only to overtime, each employee had to show he or she worked more than 40 hours a week, inclusive of donning and doffing time. Tyson argued that the variance in donning and doffing time demonstrated that the employees’ claims were not sufficiently similar to be resolved on a class-wide basis.  The lower court allowed the employees to use “representative” evidence to make their case to the jury.  So, for example, the employees used a statistical expert who conducted representative time studies to determine the average number of minutes that the employees spent on donning and doffing equipment.  The end result of this analysis was that employees in one department averaged 18 minutes per day donning and doffing while in another department they averaged 21 minutes per day. This study, in conjunction with time records, was used by a second expert to determine which employees were entitled to overtime based on adding in the donning and doffing time.

Despite the employer’s arguments, the Supreme Court rejected a categorical exclusive of representative or sample evidence in class actions.   Rather, the Court explained that the propriety of using representative or statistical evidence depends on the degree to which the evidence is reliable in proving or disproving the elements of the case. Thus, if the sample could have been used to establish hours worked in each individual’s action, that sample is likewise a permissible means of establishing the employee’s hours worked in the class action.  Because Tyson did not maintain records, representative evidence was the only way for the employees to demonstrate the hours worked donning and doffing.  In distinguishing Dukes, the Court explained that unlike the Tyson case had the Dukes case been individually litigated there would have been little or no role for representative evidence.

Some have suggested that the Court’s acceptance of representative evidence in Tyson is limited to the instances where the employer breaches its obligation to keep records of employees’ compensable work under the FLSA. It remains to be seen, however, whether this limited reading is they way lower courts interpret the case.  Further, as the dissent noted, even this limited application still leaves employers with a difficult choice: either track any time that might be the subject of an innovative lawsuit, or defend class actions against representative evidence that unfairly homogenizes an individual issue.  So, even a limited reading of this case leaves employers in a difficult position under the FLSA going forward.  This important issue bares watching, and we will of course report on future decisions.

May 2, 2016   No Comments

Does Title VII Protect Against Sexual Orientation Discrimination? The Answer May Be Changing

Recent laws in North Carolina and Mississippi and the subsequent backlash are all over the news.  The U.S. Supreme Court’s decision in Ogberfell v. Hodges making gay marriage legal across the country is not even a year old.  The Fourth Circuit Court of Appeals very recently rule in favor of the right of transgender high school students to use bathrooms for the gender with which they associate.  LGBTQ rights are at the forefront like never before.  Employment discrimination is no exception.  The Equal Employment Opportunity Commission (“EEOC”) has recently filed two separate suits in Pennsylvania and Maryland district courts challenging the long-held belief that Title VII does not protect against discrimination based on sexual orientation.

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For many years courts held that because sexual orientation was not explicitly mentioned in the text of Title VII, the statute afforded no protection to employees based on their physical and emotional attraction.  Cases in numerous federal courts of appeal held that Congress had to explicitly protect this class of employees to allow for claims of sexual-orientation discrimination.

However, much like the American public, courts have slowly begun to change their minds.  More than ten years ago a federal court in Oregon found sexual orientation discrimination to be rooted in discrimination “because of sex.”  The court found that a jury could find a harasser would have acted differently if the homosexual female plaintiff had been a male dating a woman.  The court took this “but for gender” idea from the 1978 Supreme Court decision in Los Angeles Dep’t of Water & Power v. Manhart where the court said a practice is unlawful if the evidence shows the treatment of a person would have been different but for that person’s sex.

Other courts have taken the approach that discrimination based on sexual orientation is discrimination based on gender stereotypes.  The U.S. Supreme Court held in Price Waterhouse v. Hopkins (also in 1978) that such discrimination is illegal under Title VII.  Massachusetts, Ohio and Oregon federal courts have expanded on this ruling to address sexual-orientation discrimination.

Another approach to including protections based on sexual orientation is labeling it as discrimination “by association.”  In applying Title VII’s prohibition of race discrimination, courts have consistently held the statute prevents discrimination based on an employee’s association with a person of another race.  The reasoning is that discrimination based on an employee’s relationship with a person of another race requires an employer to consider race.  When you couple this argument with language in the Price Waterhouse decision that states Title VII treats race, sex, religion, color, and national origin equally, it creates what many consider a strong argument for protecting employees based on their sexual orientation:  if you discriminate against someone for their sexual orientation based on their relationship with someone of the same sex, you have to consider their sex, which is unlawful.

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The EEOC validated all three of these arguments an administrative appeal decision last summer, which as now been cited by a New York federal court in upholding a jury finding of sexual-orientation discrimination, including an award of punitive damages.  The EEOC already considers this the legal framework for including sexual-orientation discrimination under Title VII, and so last month it filed its first two sex discrimination lawsuits based on sexual orientation.  While Congress has not changed Title VII’s language, its interpretation by the EEOC and more and more courts is effectively including sexual orientation.  Wise employers will take note and review their policies, their training for managers and HR officials, and carefully consider all employment decisions where an employee’s sexual orientation might be at issue.

April 25, 2016   No Comments

HR’s Work Is Never Done: New California FEHA Regulations Require Revision of Anti-Harassment Policies

On April 1, 2016, new regulations from California’s Fair Employment and Housing Council will go in effect. These new regulations state that “[e]mployers have an affirmative duty to create a workplace environment that is free from employment practices prohibited by the Act,” and require changes in employment policies. As a result, employers should carefully review their existing policies to ensure compliance with these new standards and act quickly to make any needed changes before April 1. [Read more →]

February 24, 2016   No Comments

You’re invited to attend Troutman Sanders’ 2015 Labor & Employment and Benefits Seminar

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Troutman Sanders invites in-house counsel, HR professionals and other executives and managers charged with labor and human resources responsibilities to attend a half-day labor & employment seminar to learn the latest news on recent employment cases, hear best practices in HR strategies and understand how to remain compliant with key HR laws.

Seminar topics include:

  • Impacts of DOL’s New FLSA Regulations
  • Implications of Supreme Court DOMA Decision
  • Expanded Job Flexibility for Foreign Nationals
  • Avoiding Pitfalls in Background Screening
  • Conducting Successful Workplace Investigations
  • Legal Issues Involved in Using Independent Contractors and Temporary Employees
  • Bring Your Own Device (B.Y.O.D.) Policies and Employer Privacy Issues
  • Effective Workplace Crisis Management Tips

To RSVP for this program, please click here.

CLE and SHRM credits pending.

October 7, 2015   No Comments

Can Employers Prohibit Secret Workplace Recordings?

Our very own HR Law Matters contributor Jim McCabe has written an insightful analysis on whether employers can prohibit employees from secretly recording conversations in the workplace.  The article was published yesterday on Law 360 and can be viewed here.

The article discusses the types of legal challenges to policies and practices limiting secret workplace recordings that have been brought under federal whistleblower statutes, federal nondiscrimination laws, and the National Labor Relations Act.

Jim’s article reviews these challenges and offers thoughts on the risks employers face when they consider enacting or enforcing such policies on secretly recording conversations in the workplace.  He offers considerations all employers must weight before deciding to take an action — such as terminating an employee — for secretly recording conversations.

This article is a must-read for employers, whether they have such a policy, have considered creating one, or just want to be sure they are aware of the benefits and risks such a policy could have for their workplace.  If you have more questions or want to discuss this topic further, be sure to call or email Jim — he’d be happy to hear from you.

March 10, 2015   No Comments

President Employs More Executive Measures to Press Equal Pay Agenda

Yesterday, President Obama signed an executive order and issued a presidential memorandum pressing his equal pay agenda.  The executive order establishes that workers cannot be prevented from discussing their pay with other employees or applicants.  Its declared target is to support efforts to eradicate gender-based pay disparities.  Its aim though is probably more akin to using a hand-held mirror to shoot over your shoulder at the target.

Protecting an employee or applicant because they’ve “inquired about, discussed or disclosed the compensation of the employee or applicant or another employee or applicant” will have only a minimal effect, if any, on pay equity.  Its greater effect will be to offer employees a means to claim retaliation if, for instance, no pay raise results or any similar adverse job action occurs after the employee was known to have discussed his pay.  This executive order will at least spur employers to redouble their efforts to keep comprehensive HRIS data and use vigorous disposition codes for documenting all types of workplace results for applicants and employees alike.

The presidential memorandum mandates that the Department of Labor create a rule requiring federal contractors and subcontractors to submit summary data on the compensation paid to their employees, including data by sex and race.  Obviously, such a rule would normally include classifying the compensation by not only sex and race, but by job title, job grade or some measure differentiating the types of jobs involved.  However, this summary data is likely going to be calculated merely by dividing the total compensation for all employees of a particular sex or race by the number of employees of that race or sex.  Federal contractors already compile comprehensive information examining their compensation practices annually as part of their affirmative action obligations, but now they will be required to submit a snapshot of that data to the Department of Labor each year.  The federal government claims it needs this information because of a “lack of data as a barrier to closing the persistent pay gap for women and minorities.”  However, if the Department of Labor’s past practices are any indication, the compensation data will be collected in such a summary fashion that it is virtually worthless as a statistical indicator of pay discrimination.  Soon the Department of Labor will be able to claim that overall disparities in compensation between genders or races (which could be driven by one or two highly-paid individuals or which could be the result of perfectly defensible pay decisions) justifies launching a widespread investigation of the employer.  How this new data ends up being used against employers in the future will determine whether underpaid workers are benefited or instead whether employers are bludgeoned by submitting unreliable data that will supposedly reveal unlawful pay practices.

So the new federal executive order and presidential memorandum are not nearly as precise as the President intends.  At least the approach of requiring a wage disclosure notice (as New York and California have done) where new employees are alerted to the wage rate for each position protects workers from being shortchanged in straight-time and overtime pay.  These new orders are not nearly so precise nor useful to the workplace.

April 9, 2014   No Comments

Important Court Ruling: Employee Waivers of “Collective Action” Right Are Enforceable

Have you (or others at your company) considered using mandatory arbitration agreements with your employees?  The idea is to require an employee who ends up in an employment dispute to handle that dispute before an arbitrator, rather than by filing a lawsuit.  But are these agreements valid and enforceable?  A recent decision by the Eleventh Circuit Court of Appeals (which handles cases from all federal courts in Georgia, Alabama and Florida) has a lot to say about the overall effectiveness and enforceability of mandatory arbitration agreements.

Last week, the Eleventh Circuit joined four other Circuit courts in holding that an arbitration agreement that waives an employee’s ability to participate in a “collective action” (a little different than but similar to a class action) brought under the Fair Labor Standards Act (FLSA) (the federal wage and hour law) is enforceable under another law known as the Federal Arbitration Act (FAA).

In the case of Walthour et al. v. Chipio Windshield Repair, LLC et al., a group of window repairers originally filed suit against their employer in federal court in Georgia for allegedly failing to pay them overtime wages.  The employer tried to take the case out of court because the employees had signed mandatory arbitration agreements.  In line with an increasingly popular trend among employers, the arbitration agreement also included a waiver of the employees’ right to take part in a class or collective action (allowing each one to only bring an individual claim).  The employees opposed the effort to force them out of court and into individual arbitrations, arguing that their right to file a collective action under the FLSA was a non-waivable, substantive legal right and that the arbitration agreements were invalid because they purported to waive that right.

Following a recent series of pro-arbitration U.S. Supreme Court decisions, the Eleventh Circuit found that the arbitration agreement’s waiver of each employee’s ability to participate in a collective FLSA action was legal and enforceable under the FAA.  The court noted that the FAA embodies a broad federal policy favoring arbitration agreements and seeks to relieve congestion in the courts by providing parties with an alternative method for dispute resolution that is speedier and less costly than litigation.  In accordance with this federal policy favoring arbitration, the Eleventh Circuit ruled that courts are obligated to enforce arbitration agreements as written absent a “contrary congressional command.”  Looking to the FLSA, the FAA, and other appellate court decisions across the country, the Eleventh Circuit held that even though the FLSA allows for collective actions to be brought, that right is not substantive, and it can be waived by employees – and it was in this case.

In an upcoming article in Troutman Sanders LLP’s Employment & The Law newsletter, we will discuss in detail the pros and cons of implementing mandatory arbitration agreements in the workplace.  Ultimately, it is a decision each employer should make (in consultation with a trusted employment lawyer).  This Eleventh Circuit decision in the Walthour case certainly is something important to consider as part of your company’s decision-making on using or not using mandatory arbitration agreements.

March 27, 2014   No Comments

What Does The Paid Sick Leave Movement Mean For Your Company?

The media has been full of stories recently about efforts by the city councils in New York City and Philadelphia to pass laws requiring employers to provide employees with paid sick leave.  While it appears that the New York City law will come into effect, as it has enough support in the council to overcome the expected veto of Mayor Bloomberg, the Philadelphia city council does not have enough votes to override Mayor Nutter’s veto.

When the New York City law comes into effect, it will join the ranks of San Francisco, Portland, Seattle, Washington, D.C., and the state of Connecticut, each of which have passed laws in recent years requiring employers to provide employees with paid sick leave.  At the federal level, the proposed Healthy Families Act, which would require employers to provide paid sick leave, also appears to be gaining traction, particularly in the face of lobbying efforts in many states to pass laws that would specifically preempt efforts by localities to require that employers provide paid sick leave.  Where has all this interest in paid sick leave come from?

[Read more →]

April 16, 2013   No Comments

Forget Sequestration: Here’s What You Need to Know About the OFCCP’s Expanded Compensation Investigation Procedures

A few days ago, I watched the PBS special, MAKERS: Women Who Make America, about the women’s movement and women’s struggles for equality at home and at work. The documentary highlighted the combined efforts of women across the country in their fight to eradicate gender discrimination, sexual harassment, and unequal pay in the work place. One thing that was particularly shocking was how members of the federal government in the past fought hard to maintain the status quo and keep women out of the workforce.

Oh how times have changed.

Now, there are not only federal laws – such as Title VII and the Equal Pay Act – that prohibit unequal treatment of women in the workplace, but the government is also taking an aggressive approach to ferreting out compensation disparities for female, minority, disabled, and veteran employees of federal contractors and subcontractors.

And we were worried about sequestration. [Read more →]

March 5, 2013   No Comments