Author: LP

New EEOC Guidance Highlights Religious Accommodations

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EEOC ImageThe U.S. Equal Employment Opportunity Commission has issued new, detailed guidelines for employers with respect to required accommodation of religious dress and grooming under Title VII of the Civil Rights Act. Businesses covered by Title VII must permit applicants and employees to follow religiously mandated dress and grooming practices unless it would pose an undue hardship to the operation of an employer’s business.

While the laws themselves are not new, the guide and fact sheet provide clear, practical advice for employers and offer several real-world examples from recent EEOC cases.

Religious Garb and Grooming in the Workplace: Rights and Responsibilities

Fact Sheet on Religious Garb and Grooming in the Workplace: Rights and Responsibilities

Supreme Court Expands Sarbanes-Oxley Whistleblower Protections

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gavelpictureYesterday, the Supreme Court handed down its decision in Lawson v. FMR LLC, holding 6-3 that employees of public companies’ private contractors are protected by the Sarbanes-Oxley Act’s whistleblower protections.  The Sarbanes-Oxley Act (“SOX” — which was enacted in 2002 following the collapse of Enron) includes a provision that protects whistleblowers from adverse employment action for reporting corporate misconduct by public companies.  The Court’s ruling clarifies who can bring a whistleblower claim under SOX, concluding that both employees of public companies and employees of their contractors can raise a claim of retaliation under the Act.

So how does yesterday’s decision impact private employers?  For most employers the impact is somewhere between nothing and minimal.  However, private companies that are contractors of publicly traded companies — and in particular private companies that are closely related to public companies — should take care to respond to concerns raised by their employees about the conduct of their public client to avoid any adverse employment action in response.

Fewer EEOC Charges in 2013 than 2012

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graphThe EEOC’s recently released 2013 charge statistics show the agency received 5,685 fewer charges in 2013 than it did in 2012. This more than 5% reduction is somewhat surprising after three years of near flat charge filings.

Charges were down slightly for race, national origin, religion, and disability discrimination claims and more markedly for sex discrimination claims (-8.8%) and age discrimination claims (-6.4%). The only major area where the EEOC saw more charges in 2013 was retaliation claims (+1.8%).

While it’s difficult to draw conclusions from a single year’s data, the increase in retaliation claims is a good reminder of the importance of how an employer responds to a complaint of discrimination or harassment.

Court Reaffirms Burden of Proof for Retaliatory Discharge Claims

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gavelpictureIn Phillips v. Continental Tire, the federal Court of Appeals sitting in Chicago confirmed that to prove retaliatory discharge under Illinois law, an employee must establish that he was terminated “primarily in retaliation for” his protected activity. The court found that it wasn’t enough that the employee’s protected activity (here, filing a worker’s comp claim) set into motion a string of events that ended in termination.

Continental Tire’s policy required that an employee submitting a worker’s compensation claim to submit to a drug test and provided that failure to do so would result in termination. Jeff Phillips tried to file worker’s compensation but refused to submit to a drug test. Continental Tire terminated his employment for refusing the drug test and Phillips sued claiming retaliatory discharge on the theory that because the drug test was triggered by his worker’s comp claim, they were “causally related.”  The Seventh Circuit rejected Phillips’ argument, finding that “[c]ausation requires more than a discharge in connection with filing a claim” — “[t]o establish causation, the employee must affirmatively show that the discharge was primarily in retaliation for [his] exercise of a protected right.”

We’ve recently seen a small uptick in worker’s compensation retaliation claims, so the Phillips decision is a helpful reminder of the high bar for establishing retaliatory discharge. Still, employers should take extra care in terminating an employee who has filed a worker’s comp claim or engaged in other protected activity.

Illinois Supreme Court Upholds Constitutionality of the Employee Classification Act

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gavelpictureOn February 21, 2014, in Bartlow v. Costigan , the Illinois Supreme Court unanimously upheld the constitutionality of the Employee Classification Act (ECA).

The ECA is aimed at cracking down on misclassification of employees as independent contractors in the construction industry. The ECA deems an individual performing services for a “contractor” as an employee of the contractor unless the individual can meet certain specific tests (e.g., is the individual free from the direction and control of the contractor? Is the service performed by the individual outside the usual course of services performed by the contractor?). A “contractor” is any person or firm “who engages in construction.”  One of the complaints from employers about the ECA is that “construction” is broadly defined to include everything from “maintenance” and “landscaping” to more traditional construction tasks such as “remodeling,” “wrecking,” and “refurbishing.”

The Bartlow case hinged on whether or not the ECA was impermissibly vague and violated procedural due process rights.  After years of back and forth in lower courts, the Supreme Court rejected all of the plaintiff’s constitutional challenges.  With regard to the plaintiff’s vagueness argument, the court held that “a person of ordinary intelligence could understand the conduct prohibited under the act” and that recent amendments to the law essentially rendered the plaintiff’s other concerns moot.

Employers who were hoping the law might be repealed or modified by the state legislature or overturned by the Illinois Supreme Court need to recognize that it is here to stay.  If your business is connected in any way to the construction industry, as broadly defined under the statute, you need to scrutinize your use of independent contractors to ensure it is in compliance with the ECA.

EEOC Files Suit Over Separation Agreement Language

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The EEOC filed suit Friday in U.S. District Court for the Northern District of Illinois claiming that CVS Pharmacy violated Title VII by using separation agreements that allegedly limited the rights of employees to communicate with the agency, file charges, and participate in investigations (EEOC v. CVS Pharmacy Inc., Civil Action No. 1:14-CV-683).  EEOC ImageThe EEOC specifically took issue with provisions in the separation agreements requiring employees to notify CVS if they receive a subpoena, deposition notice, interview request, or other inquiry from any investigator, attorney, or other third party; prohibiting employees from disparaging the company; prohibiting employees from disclosing confidential information; releasing “charges” against the company relating to “unlawful discrimination;” and agreeing not to sue the company.  As one of the remedies requested, the EEOC wants the court to give employees who were subject to the agreements the opportunity to file a charge within three hundred days, basically restarting their limitations period.  If the case moves forward, it will be interesting to see whether the court agrees with the EEOC’s position.  After all, the employees who signed the agreements presumably did so precisely because they had no intention of taking any sort of legal action against CVS.  Unfortunately, these types of cases often get settled early, allowing the EEOC to declare victory, but leaving employers uncertain about the law governing their agreements.    

Minimum Wage Under New Federal Contracts to Increase to $10.10/hour

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??????????????????????????????????????????????????????????????During last night’s State of the Union Address, President Obama announced that he would issue an Executive Order raising the minimum wage for employees working under new federal contracts to $10.10.  President Obama pushed Congress to raise the regular  minimum wage to $10.10 per hour and peg it to inflation.  The general minimum wage increase is being championed by Democrats in both Houses of Congress, but with the current congressional deadlock, its passage remains unlikely.

Supreme Court says safety gear = clothes. Should I care?

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gavelpictureYes, at least a little. It’s true that the Supreme Court’s decision today in Sandifer v. United States Steel Corp. only directly impacts employers whose employees are unionized, wear safety gear and aren’t paid for the time spent “donning and doffing” their safety gear before and after their shift.  However, Sandifer is a unanimous decision (other than a footnote with which Justice Sotomayor disagreed) from the Supreme Court that relies on a common sense interpretation of the statutory language and reaches an employer-friendly result.  The decision also includes an interesting discussion of the de minimis rule (which employers often rely on to avoid paying employees for incidential, very short periods of off the clock work).  It remains to be seen how courts will interpret today’s decision.

Do you E-Verify?

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United States FlagMore than half a million U.S. employers are now enrolled in the E-Verify program. The E-Verify program is an electronic system that employers can use to verify eligibility to work in the United States.  And while the system initially faced significant challenges and skepticism (due in large part to reliability issues), the program has improved and become more accepted.  Illinois’ ban on using E-Verify no longer applies and many states have made use of E-Verify mandatory.  Whether to use E-Verify is a very company-specific decision, but more and more businesses are deciding it makes sense.

To commemmorate the 500,000 participant milestone, the U.S. Citizenship and Immigration Services (USCIS) has released a new video that introduces the program’s benefits.  USCIS has also launched an updated E-Verify website.

Supreme Court to Hear Arguments on whether FICA is Owed on Severance Pay

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taxToday the Supreme Court will hear arguments in the case of U.S. v. Quality Stores.  The issue before the Court is whether FICA needs to be withheld and paid on severance payments.  The question is whether severance payments are “remuneration for employment” which are taxable for FICA purposes (as the IRS and Obama administration argue) or “supplemental unemployment benefits” which aren’t taxable for FICA purposes (as the former employer Quality Stores argues).  In September 2012, the 6th Circuit Court of Appeals ruled in Quality Stores’ favor, holding that the severance payments to former employees were not taxable under FICA and that the amounts paid to the government should be refunded.   While the amount at issue in the Quality Stores case is relatively modest, a decision in Quality Stores’ favor would open the door to employers across the country seeking FICA refunds.  We expect a decision in June and will post an update when it’s issued.