Author: mbudka

Supreme Court Rules Amazon’s Workers Don’t Have to be Paid for Security Checks

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iStock_000006056297SmallYesterday, the Supreme Court ruled 9-0 (in a rare, labor and employment law unanimous decision) that workers supplied by a staffing agency for positions in Amazon’s warehouses do not have to be paid for time spent in security screening lines, reversing a federal appeals court ruling that found workers should be paid because the screenings were a necessary part of their jobs and benefited their employer. The Supreme Court disagreed. “The security screenings at issue are noncompensable postliminary activities,” the Justices wrote. “The workers were employed not to undergo security screenings, but to retrieve products from warehouse shelves and package them for shipment.”

The case is Integrity Staffing Solutions, Inc v. Jesse Busk and Laurie Castro, U.S. Supreme Court, No. 13-433.

Update on the EEOC’s Fight Against Separation Agreement Language Allegedly Limiting Employee Rights

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EEOC LOGOAs we have blogged about before (see related post links below), the EEOC has said one of its priorities is to challenge separation agreements that, in its view, interfere with the ability of employees to file charges with the EEOC or participate in investigations.

On December 2, the EEOC’s efforts in this area took another hit. A Colorado judge tossed out the EEOC’s claims against CollegeAmerica Denver Inc. relating to the company’s separation agreements, although the judge permitted the EEOC’s claims of retaliation to move forward. EEOC v. CollegeAmerica Denver Inc. The court ruled that the EEOC had not made an adequate effort to conciliate the claims relating to the separation agreements.

Earlier this year, a similar case against CVS also was dismissed on other grounds before the court addressed the separation agreement issue. The EEOC recently appealed the CVS decision to the 7th Circuit.

And it’s not just about separation agreements anymore either; in September, the EEOC sued Doherty Enterprises for using pre-employment arbitration agreements that allegedly interfered with the rights of employees to file charges and participate in investigations. EEOC v. Doherty Enterprises Inc.

Though the EEOC hasn’t had much success in court to date, companies should review their separation and arbitration agreements to ensure that they carve out employee rights relating to the EEOC process. Otherwise, they risk ending up in the EEOC’s cross hairs.

The Duel over Dual Minimum Wage Rates Heats up in Illinois

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money-flowerIllinois might be headed toward two minimum wages—one for the City of Chicago and another for the rest of the state. Today, the Chicago City Council unanimously voted to increase Chicago’s minimum wage from $8.25 to $13.00 an hour by 2019. The Council’s vote was over the objection of both local businesses on the one hand, and labor advocates and political opponents on the other, who said the increase was not high or fast enough.

The move is not unique. Seattle made headlines in June when it voted to raise its minimum wage to $15.00 an hour, the highest in the country, in what seems to be turning into a national trend toward significant minimum wage hikes at the local level.

In Springfield, business interests are pressing state lawmakers to prevent Chicago from having a higher minimum wage than the rest of the state. At the same time, supporters of a plan to increase the statewide minimum wage to $10.00 an hour pushed for more votes in the Illinois House during their final 2014 session.

It remains to be seen if there are enough votes in Springfield, either to limit Chicago’s minimum wage increase, or to push for a similar statewide increase. In the meantime, employers in Illinois with employees in Chicago and in other parts of the state will need to adjust to the different wage levels.

EEOC Lawsuits Shine a Spotlight on Wellness Programs

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wellnessThese days, many large employers have some form of wellness program, designed to help their employees address medical and lifestyle issues. Many employers reward employees who participate with discounts on insurance premiums or other incentives. Some “punish” employees who do not participate by, for example, adding surcharges to their premiums.

Two lawsuits filed recently by the Equal Employment Opportunity Commission (EEOC) have raised concerns about wellness programs as they relate to workers’ privacy, voluntary and mandatory participation requirements, and incentive rules under the Americans with Disabilities Act (ADA) that forbids employers from requiring medical exams and making disability-related inquiries.

Last August, the EEOC made history when it filed its first-ever suit alleging that a wellness program violated the ADA. In the suit (EEOC v. Orion Energy Systems, Civil Action 1:14-cv-01019) the EEOC claims Orion Energy Systems, Inc. (a Wisconsin-based company) required employees to take medical exams and allegedly fired a worker when she objected to, and refused to participate in, a wellness program that included a health risk assessment, a medical history questionnaire, and activity on range-of-motion machines. Then, in a lawsuit filed last week against Flambeau, Inc., (also a Wisconsin-based company) (EEOC v. Flambeau, Inc., Civil Action No. 3:13-cv-00638), the EEOC alleged an employee’s insurance coverage was canceled because the company shifted the full cost of his health insurance premium to him after he failed to complete biometric testing and a questionnaire about health risks. You can read more about this suit in the EEOC’s Press Release.

Employers with wellness programs are advised to ensure their programs are voluntary and offer reasonable alternatives for people otherwise unable to participate.

Judge in Chicago Dismisses EEOC Suit Challenging CVS Health’s Severance Agreements

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EEOC ImageAs we reported earlier this year (EEOC Files Suit Over Separation Agreement Language), the Chicago District Office of the Equal Employment Opportunity Commission (EEOC) filed suit against CVS Pharmacy alleging that the company’s standard separation and release agreements were “overly broad, misleading, and unenforceable.” Specifically, the EEOC argued that provisions in CVS’s agreements infringed on the employees’ rights to file discrimination charges and participate in EEOC investigations.

On October 7, 2014, U.S. District Court Judge John W. Darrah issued a Memorandum Opinion and Order granting CVS’s Motion for Summary Judgment and dismissing the EEOC’s lawsuit against CVS. Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 14-cv-863 (N.D.Ill.2014).

Judge Darrah did not rule on the issue of whether the terms and conditions of CVS’s Severance Agreement are enforceable.  He dismissed the lawsuit because the EEOC did not fulfill the administrative prerequisite of attempting to conciliate with CVS before filing the lawsuit.  Nevertheless, in a footnote in the opinion, Judge Darrah indicated that the settlement agreement properly carved out employee rights to participate in EEOC investigations and also indicated that any attempt to restrain such participation would be unenforceable in any event.

It is unfortunate that Judge Darrah did not have an opportunity to squarely address the challenge presented by the EEOC, but the opinion is still a setback for the EEOC in its efforts to invalidate private settlement terms.  The EEOC may appeal the dismissal to the 7th Circuit and we will keep you posted on new developments, including the outcome of a similar case filed by the EEOC in a different district court.

 

EEOC’s Transgender Claims Gain Momentum

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EEOC LOGOThe Equal Employment Opportunity Commission (EEOC) made history recently by filing its first lawsuits alleging sex discrimination against transgender individuals.

The EEOC says Michigan-based RG & GR Harris Funeral Homes, Inc. and Florida-based Lakeland Eye Clinic discriminated against two transgender workers when they fired them for not conforming to “the employer’s gender-based expectations,” according to statements from the EEOC. Both complaints were brought under Title VII of the Civil Rights Act of 1964, on a gender-stereotyping theory.

Although the suits are the first of their kind to be filed by the EEOC, transgender individuals have been filing suits under state discrimination laws for several years. Earlier this year President Obama made it illegal for federal contractors to discriminate based on gender identity; however, the EEOC’s position that transgender individuals are protected by Title VII’s gender discrimination provisions is not clear on the face of Title VII and, until now, has not been tested in court.

Abercrombie & Fitch Hijab Case Heading To Supreme Court

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HijabLast week, the Supreme Court announced that it will decide whether Abercrombie & Fitch’s refusal to hire a woman wearing a Muslim hijab (that they said conflicted with their dress code), constituted religious discrimination.

The EEOC is appealing the Tenth Circuit Court of Appeals’ ruling that the retailer could not be found liable for discrimination against the job applicant because she didn’t say she needed a religious accommodation during her interview.

The Court will hear arguments next year, and we will keep you posted as the case develops.

Illinois Joins Push to “Ban the Box”

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btbEffective January 1, 2015, most Illinois employment agencies and private employers will be prohibited from asking about applicants’ criminal background until the applicant reaches the interview stage of the hiring process, or, if there is no interview, until the applicant has been given a conditional offer of employment.  The Job Opportunities for Qualified Applicants Act (House Bill 5701) provides very limited exceptions.  For most Illinois employers, the Act will require changes to the application process.

The Illinois Job Opportunities for Qualified Applicants Act is the latest in a surge of “Ban the Box” legislation around the country.   Illinois becomes the 5th state to enact such “Ban the Box” legislation that covers private employers, joining Hawaii, Massachusetts, Minnesota and Rhode Island.  Seven cities (Baltimore, Buffalo, Newark, Philadelphia, Rochester, Seattle, San Francisco) also have similar provisions.  

Illinois employers and employment agencies should review application materials to remove questions about criminal history by the end of the year.

The IRS Says (Again) That Certain Employer Payment Plans Won’t Fly

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affordable-care-act-generic-graphic-hearstThe IRS recently issued two new Q&As to underscore that arrangements allowing employers to reimburse employees on a pre-tax basis for premiums used to purchase individual health coverage, either inside or outside of a public exchange, violate Affordable Care Act’s insurance market reforms. While duplicative of previous IRS publications on the subject, these Q&As are in plain English.

This rule applies only to individual premiums and not to pre-tax plans like HRAs and FSAs.

To drive the point home, the IRS notes that employers offering such an arrangements will be subject to a $100/day per covered employee penalty.

Federal Contractor Alerts

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United States FlagLGBT Discrimination

White House officials announced this week that President Obama intends to sign an executive order banning federal contractors from discriminating against employees based on sexual orientation or gender identity.

Many states and local governments already have laws, applicable to all employers, banning this type of discrimination. Last year, the Senate passed the Employment Non-Discrimination Act that would have prohibited this type of discrimination against all workers in the United States, but the bill stalled in the House.

Obama’s executive order would protect up to sixteen million employees working for employers with federal contracts. In the meantime, federal contractor employers may wish to consider reviewing their non-discrimination and non-retaliation policies to ensure that sexual orientation and gender identity are explicitly covered.

$10.10 Minimum Wage for Employees of Federal Contractors

Seeking to fulfill President Obama’s executive order (issued in February), the Labor Department proposed a rule this week to raise the minimum wage for employees of federal contractors to $10.10 an hour.

The wage increase would benefit about 200,000 workers, an estimate that was not available when the executive order was announced. If enacted, the rate would apply to contracts issued on or after Jan. 1, 2015. The DOL is expected to issue the final rule on October 1, 2014.