Today, February 26, 2020, the National Labor Relations Board (NLRB) published its final rule for whether affiliated businesses are “joint employers” for purposes of labor law. This rule has broad reach in the franchising and staffing industries.

The new rule replaces a test created by the NLRB under the Obama Administration in 2015 in Browning-Ferris Industries. Under Browning-Ferris Industries, a company could face joint employer liability if it had “indirect control” over another company’s employees or reserved the right to exert control over another company’s employees.

This new rule replaces the Browning-Ferris Industries test with the joint employment test that was in place before  2015. Companies are only joint employers if the second company has “substantial direct and immediate control” over another company’s employees. That substantial direct and immediate control must be over one or more essential terms and conditions of employment, such as wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.

If a company is found to be a joint employer, it can be held liable for the labor law violations of the employing company, regardless of who committed the violation.

The rule will take effect on April 27, 2020. The significance of this rule is that it cannot be simply undone by a subsequent Board under another administration with a decision in a case. A different administration would have to go through the notice-and-comment rulemaking process.

See: https://www.nlrb.gov/sites/default/files/attachments/basic-page/node-7581/fact-sheet-joint-employer-final-rule.pdf and https://www.nlrb.gov/sites/default/files/attachments/basic-page/node-7581/press-release-joint-employer-final-rule.pdf.

Office romances happen, whether HR or management is aware or not. When they do, management and HR are often at a loss as to what to do.  For starters, don’t bury your head in the sand. Here are 3 tips to deal with romance in the workplace. Happy Valentine’s Day

1. Have a sexual harassment policy.

Have a sexual harassment policy. And don’t just have one—have a well-written and updated policy. The policy should define sexual harassment. Unwelcome advances are sexual harassment. Employees should understand from reading the policy that having their romantic advances rejected once should be enough to refrain from further advances.

Things become trickier when a couple was dating and now is not. They still must work together. While romantic advances may have been welcomed at one time in an office romance, once they are not welcome anymore by one or both parties, they should stop immediately. Your policy should clearly reflect that.

Some lawyers and HR professionals advocate for so-called “love contracts.” Love contracts are agreements signed by employees at the outset of a consensual relationship that spell out the parameters for their behavior in the office and what will happen in the event that the employees breakup or either employee changes jobs creating a potential conflict of interest. These documents can serve as useful guidance to the employees, but they do not deflect potential liability in the event of a lawsuit for sexual harassment or sex discrimination. Use them with caution.

Consider whether more guidance can be provided in a fraternization and nepotism policy, making the need for individual discussions and love contracts unnecessary.

2. Handle break ups appropriately.

As noted above, once the relationship ends, as many will, management and HR should be prepared to handle the fallout. If one employee continues to pursue the other, the employee should be warned that his/her conduct is no longer welcome and a violation of policy. Off duty conduct may spill into the workplace. Gossip may ensue. The quicker an employer can intervene and cut off the distraction (or potential liability) the better. Ultimately, if one employee cannot seem to get over the breakup; continue to work peacefully in the workplace; or stop pursuing the other employee, the employer may face the tough decision of terminating or re-assigning that employee.

3. Forbid relationships between managers and subordinates.

The harassment, fraternization, and/or conflict of interest policies should clearly forbid romances or other relationships between a manager and a subordinate in the manager’s line of authority. Even if no unfair influence is exerted, the potential for it is enough to warrant avoiding the potential issue. In addition, even if no favoritism is exerted by the manager, other subordinate employees will view the relationship as unfair. Every raise, promotion, praise, or feedback will be viewed as the product of unfair treatment. That apparent conflict of interest is enough to warrant a blanket prohibition on relationships between managers and anyone in their line of authority. If one develops, either the manager or the subordinate must leave the company or transfer to another role where the apparent conflict does not exist—no exceptions.

 

The federal Equal Employment Opportunity Commission (EEOC) released its fiscal year 2019 data on charges filed with the agency. For the fiscal year that ended September 30, 2019, there were 72,675 charges filed nationwide. The most frequently filed charge basis continues to be retaliation–representing 53.8% of all charges (39,110 charges). Retaliation was followed by disability (33.4%), race (33.0%), and sex (32.4%).The full breakdown is as follows:

  • Retaliation: 39,110 (53.8 percent of all charges filed)
  • Disability: 24,238 (33.4 percent)
  • Race: 23,976 (33.0 percent)
  • Sex: 23,532 (32.4 percent)
  • Age: 15,573 (21.4 percent)
  • National Origin: 7,009 (9.6 percent)
  • Color: 3,415 (4.7 percent)
  • Religion: 2,725 (3.7 percent)
  • Equal Pay Act: 1,117 (1.5 percent)
  • Genetic Information: 209 (0.3 percent)

Of course, these numbers add up to more than 100%. That is because charges often contain allegations of more than one type of discrimination, harassment, and/or retaliation.

In 26,221 charges, there were allegations of harassment. Of those, there were 12,739 sexual harassment charges, a decrease from FY2018, which saw a spike following the #metoo movement. The data for charges to the EEOC in Ohio, largely mirrored these percentages. Notably, this data does not include charges filed with the Ohio Civil Rights Commission (OCRC) that were not also filed with the EEOC.

What does this mean for employers? When you get a complaint of harassment, discrimination, or pay discrimination, it is important to avoid retaliation and instruct managers on the risks of retaliation following a complaint. Acting improperly after a complaint of discrimination or harassment–even one found to be baseless–can easily become the basis for a valid retaliation claim.

Chief Justice John Roberts is worried that lowering the bar for proving intent for age discrimination could result in social media memes becoming key indirect evidence of discriminatory intent.

On January 15, 2020 in oral argument, when the plaintiff in Babb v. Wilkie suggested that showing that age was a “motivating factor” in an employment action, rather than showing that it was the determining factor, Justice Roberts suggested that uttering “OK, Boomer” in a joking manner during the application and interview process could support a claim for hiring discrimination based on age. C.J. Roberts worried that loosening the test for age discrimination could result in over-regulation of speech in the workplace.

The Solicitor General argued that employees must prove that they would not have experienced the adverse employment action “but for” age–a much more strict standard and one that is used by many courts.

“OK, Boomer” has become a running joke in the generational divide between Baby Boomers and Millennials and Generation Zs who are entering the workforce in large numbers.

The federal Department of Labor finalized regulations–to take effect in March 2020–loosening the test for joint employment. Employers that rely heavily on temporary and/or staffing agencies for workers and businesses that have franchisor-franchisee contracts will find some relief in the new test. Recall that the Obama administration in 2016 expanded joint employment liability through a guidance memo calling for greater scrutiny of joint employment relationships. The Trump DOL rescinded that guidance in 2017, reverting back to the policies of joint employer regulations in place since the late 1950s. These new rules give the 2017 rescission of the Obama guidance memo the force of law.

Under the new regulations, a four-factor balancing test is used to determine if two businesses are joint employers:

  1. whether the business can hire or fire employees;
  2. whether the business controls the employees’ schedules and conditions of employment to a “substantial” degree;
  3. whether the business sets the employees’ pay rates and the methods by which they are paid; and
  4. whether the business maintains the employees’ employment records.

If two businesses are determined to be joint employers, they share joint liability for wage violations, including the failure to pay overtime and minimum wage.

These regulations do not affect joint employer liability for OSHA, labor law, discrimination laws, or for tax purposes. The National Labor Relations Board (NLRB), which enforces labor laws, and Equal Employment Opportunity Commission (EEOC), which enforces discrimination laws, both plan to propose new joint employer tests and regulations.

OFCCP published an updated Federal Contract Compliance Manual (FCCM) on December 30, 2019. Federal contractors and subcontractors should take notice of the changes. All businesses should use this as a reminder to review contracts and purchase orders and re-determine whether they are a covered federal contractor or subcontractor with affirmative action obligations.

Notable changes in the updated FCCM:

  • New protected classes: sexual orientation, gender identity, and discussing or inquiring about compensation
  • Updated language for Section 503 (disability) and VEVRAA (protected veterans) nondiscrimination and affirmative action requirements
  • Revised to align with recent directives:
    • Focused Review Directive – focused reviews on just one area of compliance – either under E.O. 11246, disability, or veterans regulations
    • Transparency Directive – new procedures setting forth the process for compliance evaluations
    • Compensation Directive – new procedures on conducting compensation analyses, determining similarly situated employee groups, and statistical modeling
    • Functional Affirmative Action Program (FAAP) Directive –  updates to the functional affirmative action plan requirements
  • Updated to reflect current procedures for desk audit data requests and itemized listing letter
  • Added a sample Onsite Review Plan

OFCCP has detailed the changes here, and there is a link to the new FCCM here.

The National Labor Relations Board (“NLRB” or “Board”) in a series of policy moves and case decisions has taken a more employer-friendly turn. Of note:

  1. Caesars Entertainment, which said that employers can restrict work email use to business use and prevent employees from using work email for union organizing or union business;
  2. Apogee Retail, which said that employers can prohibit employees from discussing pending workplace investigations; and
  3. “Quickie election” rules scaled back.

What does this mean for you? If you carefully revised your employee handbook during the Obama-era NLRB and carefully attempted to avoid “Section 7 Rights” issues, you may be able to revise the handbook again—particularly conduct, confidentiality, photography, investigation, and social media policies. In addition, you no longer have to fear a quickie union election after a brief organizing campaign.

In Caesars Entertainment Corp. d/b/a Rio All-Suites Hotel & Casino, No. 28-CA-060841, 368 NLRB 143 (2019), in a split 3-1 decision, the NLRB overruled its prior controversial Purple Communications decision from 2014. In Caesars, the NLRB held that employers do not violate federal labor laws by restricting use of their work email systems for nonbusiness purposes, restoring the law that was in place since 2007 in Register Guard. The Obama-era Purple Communications decision held that employees could use employer-provided work email systems to engage in concerted activity, including union business and organizing, so long as it was on non-work time. Purple Communications is no longer the law.

In Apogee Retail LLC dba Unique Thrift Store & Kathy Johnson, No. 27-CA-191574, 27-CA-198058, 368 NLRB 144 (2019), in a split 3-1 decision, the NLRB overruled its prior controversial Banner Health System decision from 2015. In Apogee Retail, the Board held that employers can prevent employees from discussing confidential workplace investigations while the investigation is still ongoing. Previously, the Obama-era Board held that requiring confidentiality of investigations violated workers’ rights to discuss the terms and conditions of their employment and engage in organizing.

In Apogee Retail, the Board applied the new 2017 test for balancing workers’ rights against workplace rules, such as those in employee handbooks. The Board now weighs workplace rules by placing them in one of three categories: (Category 1) rules that are presumptively legal because they do not affect workers’ rights or because the employers’ reasons for maintaining them outweigh any infringement of workers’ rights; (Category 2) rules that more strongly affect workers’ rights but may be legal on a case-by-case basis if employers can justify them; and, (Category 3) rules that are always illegal. The Board placed rules restricting discussion of pending investigations into Category 1, which are presumptively legal. A workplace rule that more broadly restricted discussing closed investigations would fall into Category 2, according to the Board.

Finally, the NLRB scaled back Obama-era regulations permitting “quickie elections” in the union election process. The new rules ease several deadlines and direct that certain disputes must be resolved before an election vote, rather than after. Employers will have 5 days—as opposed to 2—to respond to a Notice of Petition for Election. Employers will have at least 14 business days—as opposed to 8 calendar days—between a pre-election hearing notice and the pre-election hearing. Most notably, union representation elections may still be scheduled at “the earliest practicable date,” but the rule clarifies that elections will not normally be scheduled earlier than 20 business days after the decision and direction of election. These new rules will be in place 120 days after December 18, 2019.

The rate of lawsuits filed in federal courts related to website and app accessibility has now hit a rate of one-an-hour—that’s 8 per day, 40 per week, and possibly over 2,000 lawsuits this year. Research of federal dockets shows that cases settle—and settle fast. Most cases do not go into discovery and do not even last 60 days before they are voluntarily dismissed. Why? It’s cheaper to settle than defend. And the lawyers filing these cases know that.

The startling statistic is that many defendants in these cases have been sued more than once—25% of cases are filed against a defendant that has already been sued and settled with another plaintiff.

Who Is Most at Risk? Top Industries:

  • Retail;
  • Hospitality and tourism;
  • Food Service;
  • Banking and credit unions; and
  • Entertainment venues.

 

Top 5 Jurisdictions (for the second year, in order):

  1. California,
  2. New York,
  3. Florida,
  4. New Jersey, and

What Can You Do?

  1. Assemble a team including e-commerce, marketing, IT, web developers, compliance, legal and senior leadership.
  2. Develop a plan to bring all websites for all brands into compliance.
  3. Get into full compliance with WCAG 2.0 AA quickly.
  4. Place someone in charge of maintaining ongoing compliance and periodic auditing.

Source Data: UsableNet: ADA Midyear Report

 

The Department of Labor unveiled its final rule updating the salary threshold for so-called “white collar” exempt employees. The final rule, effective January 1, 2020, raises the salary threshold to qualify for one of the “EAP” exemptions to $35,568 per year or $684 per week. The current threshold is $23,660 per year. The Obama administration had proposed a $47,476 cutoff, which was struck down in a court challenge.

Recall that the EAP exemptions are the executive, administrative, and professional exemptions to the overtime provisions of the Fair Labor Standards Act (FLSA). Employees must meet the duties of one or more of the EAP exemptions–plus be paid at least the weekly salary threshold.

Employers with exempt workers making less than $684 per week (or $35,568 per year) should evaluate whether to reclassify the workers as non-exempt, and pay them overtime for hours worked over 40 in a workweek, or raise their salaries.

Notably, the new rule raises the “highly compensated” worker threshold from $100,000 to $147,414. This exemption covers highly compensated workers who perform some managerial duties, but has a less strict duties test.