Labor and Employment Law Update The Good, the Bad, and the Ugly Presented by: Alexis C. Knapp, JD, SPHR Littler Mendelson, PC

Plans for Today

•  Goals for this webinar •  Agenda

–  Agency update –  Background checks –  Wage and hour overhaul/hot

topics –  Union law run amok—the NLRB in

your workplace –  Social media issues –  Leave and accommodation

challenges –  Separation update: developments

in unemployment benefits and separation agreement

•  Disclaimers

Agency Update—General

•  EEOC, DOL and other federal agencies have bigger budgets and more investigators than ever before

•  Their tactics are more aggressive

•  Informational campaigns to employees

•  Lofty enforcement agendas

2013 Charge Allegations

Basis  of  Charge  Filing   FY  2006   FY  2008   FY  2013  

RETALIATION   22,555   32,690   38,539  

RACE   27,238   33,937   33,068  

SEX/GENDER   23,247   28,372   27,687  

AGE   16,548   24,582   21,396  

DISABILITY   15,575   19,453   25,957  

NATIONAL  ORIGIN   8,327   10,601   10,642  

RELIGION   2,541   3,273   3,721  

TOTAL  CHARGES   75,768   95,402   93,727  

Responding to EEOC Charges

•  Miller v. Raytheon (5th Cir. 2013) –  Errors in an employer’s statement of position

considered circumstantial evidence of discrimination—jury verdict for employee affirmed

–  Implications?

•  Strategic Recommendations RE: Statements of Position –  GET MORE TIME IF YOU NEED IT –  Tell a story that makes sense –  Do not over-state –  Ensure you have documents and/or witnesses to prove

up anything in the SOP –  Know that if you identify things that you do not provide

now, they will ask for them later –  Remember your audience –  Remember it’s discoverable (and maybe admissible?)

Poll Question

•  Does your company currently conduct background checks?

Criminal Background Checks

•  Substantive –  “Ban the box” legislation (30+ states) –  Other state law issues –  Disparate impact

•  Aggressive enforcement by the EEOC •  Individualized analysis •  Relevant factors •  No blanket policies

•  Procedural –  Fair Credit Reporting Act (FCRA) –  FTC enforcement –  Initial consent, pre-adverse, adverse notices –  Class action litigation—numerous seven-

figure settlements in 2013 alone

President Obama’s Push for Wage and Hour Reform: “Giving America a Raise”

•  March 13, 2014: President Obama directed U.S. Secretary of Labor Thomas E. Perez to "modernize and streamline” the white collar regulations (29 CFR 541)

•  Experts are anticipating the following: –  Increase minimum salary for white collar

exempt employees (now $455 per week; $23,660/yr)—could it double, or more?

–  Revise or remove the “concurrent duties” element of the Executive exemption (impact on managers who perform some of the same duties as their direct reports)

–  Changes to the Computer Professional exemption

–  Focus on restaurant, retail, healthcare, financial services, hospitality and information technology

“Giving America a Raise”—cont’d

•  Will occupy significant Agency resources for awhile

•  New regulations probably 12-18 months away

•  Congress could step in and deny funding—so midterm elections may have an impact

•  On the heels of a recent minimum wage increase for federal contracts to $10.10/hour (via Executive Order/Feb. 2014)

More Hot Wage and Hour Topics

•  Misuse of the independent contractor classification

•  Overuse of the Administrative Exemption

•  Not appropriately counting “work time” (work-related activities)

•  Time worked is sacred—PAY IT (federal and state law issue)

•  Remember 25+ states require more than the FLSA

•  Do not rely on your competitors’ practices

Why We Pay So Much Attention to Wage and Hour •  Remember: most aggressive DOL in history •  Can be easy money for the plaintiff’s bar •  The damages are staggering

–  Intent does not matter –  Two or three year look-back –  Every person in the position? –  Liquidated damages (i.e., double) –  Attorney’s fees –  Civil/criminal and employer/individual

•  Average FLSA/state law wage settlements average $4.8 M, discrimination lawsuits = $600k

The NLRB is Alive and Well in the Non-Union Workplace

•  The National Labor Relations Act, the NLRB, and “protected, concerted activity”

•  Some handbook policies drawing NLRB attention –  Social media –  Confidentiality (including pay secrecy) –  Employee (mis)conduct –  Contact with outsiders –  At-will employment disclaimers that

cannot be modified –  Complaint/dispute resolution policies –  Loitering/visitors/solicitation

•  Confidentiality of investigations?

•  So where does that leave good old-fashioned “insubordination?”

A Few Examples... •  Cruz-Moore/HUB

–  Employee complains on Facebook about a co-worker saying she did not help clients enough, and asks her fellow co-workers their opinions. Co-workers respond with various comments, including: •  “What the f***. Try doing my job. I have 5 programs.” •  “What the h***. We don’t have a life as is. •  “Tell her to come do my f****** job n c if I don’t do enough.” •  “I think we should give our paychecks to our clients, so they can ‘pay’ the rent.’”

–  Employees fired for violating the organization’s anti-harassment/anti-bullying policy –  NLRB REVERSED THESE TERMINATIONS

•  Knauz BMW –  Policy that states “No one should be disrespectful or use profanity or any other

language which injures the image or reputation of the Dealership” –  UNLAWFUL

•  Costco Wholesale Corp. –  Social media policy that allowed for discipline of employees for their on-line statements

that damage the company, defame any individual or damage any person’s reputation. –  UNLAWFUL

Another Example... •  Triple Play Sports Bar, 34-CA-12915 (Jan. 3, 2012)

–  Facts •  Employee becomes frustrated with her manager’s method of

withholding taxes from her paycheck •  She logs onto Facebook and posts “my manager is an a**hole” •  Another employee “liked” the post •  They are both terminated for “performance reasons”

–  NLRB judge orders reinstatement of the employees, because they were engaged in protected, concerted activity discussing issues related to work

–  The co-worker’s “like” of the Facebook status constituted “participation in the discussion that was sufficiently meaningful as to rise to the level of concerted activity” under the NLRA (!?!??!)

•  These organizations were all non-unionized!

•  We are living in a new day

The NLRB—A Week in Review

•  This Monday: The Fifth Circuit upheld an NLRB order finding an employer engaged in an unfair labor practice by maintaining an overly-restrictive confidentiality clause. Flex Frac Logistics, LLC v. NLRB, Civ. A. No. 12-60752 (March 24, 2014).

•  Yesterday, March 26, 2014: the NLRB upheld a decision that Northwestern University football players on scholarship are EMPLOYEES under the Act—and why this should keep you up at night.

Poll Question

•  Has social media found its way into your workplace and created issues within your company?

More Social Media Issues

§  Social  media  policies—customized  

§  PrevenPon  versus  discipline  (watch  for  SecPon  7  acPvity)  

§  When  it  finds  its  way  into  the  workplace  

§  Password  protecPon  laws  

§  Hundreds  of  cases  filed  

•  United States v. Windsor, 570 U.S. ___ (June 26, 2013): the provision of DOMA denying federal benefits to same sex spouses is unconstitutional.

•  Leave to care for a spouse with a serious health condition

•  The FMLA’s definition of “spouse” –  “Spouse means a husband or wife as defined or recognized under State law for

purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized.” 29 C.F.R. §825.122

•  Where the employee resides –  Does the state recognize same sex marriage? –  CA, CT, DE, IA, MA, ME, MD, MN, NH, NY, RI, VT, WA and Washington D.C. –  The DOL’s August 9, 2013 memo to agency employees

•  But what if a particular state does not recognize the marriage? –  The risk of counting it as FMLA

•  The ironic result of the holding in some jurisdictions—can it really mean less leave?

Same-Sex Marriage and FMLA: The U.S. Supreme Court and the DOL

Pregnancy and Accommodation

•  What the law says now –  Healthy pregnancies –  Pregnancies with complications –  What the ADAAA did to the analysis

•  The EEOC’s 2012-2016 Strategic Enforcement Plan –  Among the “emerging issues” the Commission

plans to target is “accommodating pregnancy when women have been forced onto unpaid leave after being denied accommodations routinely provided to similarly situated employees.”

•  The limits to prior light duty/pregnancy case law

•  State and local law

•  The Pregnant Workers Fairness Act

Leave as an Accommodation

•  Stop relying on FMLA •  There is no set period of time that

will always be “enough” •  Document your communication

efforts •  Don’t be afraid to ask (properly) •  The standard for undue hardship •  What are your replacement plans? •  The EEOC is being aggressive on

this issue

What is Your Policy RE: Responding to Unemployment Claims?

•  The Federal Unemployment Insurance Integrity Act (2011) and amendments to state law (2013)

–  State laws require employers/agents to timely and adequately respond to UI claims

–  A pattern of failure to do so will result in the employer’s account being charged benefits (regardless of former-employee’s eligibility)

–  Civil and criminal penalties may apply

Unemployment, cont’d

•  When benefits are awarded: to contest or not to contest? –  Sworn testimony –  Free discovery –  Are you prepared?

•  Do not make promises about what the company will/will not do in this process

•  Do not promise a result •  Unemployment benefits are not

on the table as part of a separation/severance agreement

Time to Revisit Severance Agreements

•  The EEOC is on the attack RE: reserving employee rights to participate with agency –  EEOC v. CVS Pharmacy, Inc. (Filed

2/7/14 in N.D. Ill.)

•  Will the NLRB join in the fun?

•  One size does NOT fit all –  Reasons –  Age of employee –  Number of affected employees –  Midstream and final releases –  Other issues?

•  Basic consideration reminders

Miscellaneous Reminders

•  Privilege issues—emails are forever

•  “Confidential”—what it is, and what it is not

•  Frivolous charges and lawsuits must still be answered

What To Do Now

•  It is time to really look at your handbook

•  Hit the pause button on conduct-based terminations

•  Get help with statements of position

•  Audit your pay practices and your classifications

•  Carefully review your pre-hire processes

•  Get your leave processes cleaned up (and train your employees)

Alexis  C.  Knapp,  JD,  SPHR  Li>ler  Mendelson,  PC  

QUESTIONS?

G&A Partners

info@gnapartners.com (800) 253-8562

*This webinar has been recorded and will be posted on the G&A website by Friday