LaborSphere, Author at Laborsphere

The DOL’s Upcoming Proposed Revisions to the FLSA’s White Collar Exemption Regulations

This month the Department of Labor is expected to propose, for the first time since 2004, revised regulations concerning the executive, administrative, professional, outside sales, and computer exemptions under the Fair Labor Standards Act. These revisions were prompted by President Obama’s March 13, 2014 memorandum to the Secretary of Labor, which stated that the exemptions “have not kept up with our modern economy” and which “direct[ed] [the DOL] to propose revisions to modernize and streamline the existing overtime regulations.” After the memorandum was issued, the agency began writing proposed regulations and announced on May 5, 2015, that it had completed drafting them and had submitted them (as required by Executive Order 12866) to the Office of Management and Budget for review.

Procedurally, the “proposed rules” will be published in the Federal Register (an action known as a “Notice of Public Rulemaking” or “NPRM”) for public comment following the OMB’s review, and the DOL has stated that it expects to take this step this month. After the public comment period closes, the DOL will consider the public comments in drafting “final rules;” submit them for a final review by the OMB; and then publish them in the Federal Register with an effective date on which they become law. Although implementation of the final rules may not occur until well into 2016, traditionally the final rules do not differ substantially from the proposed rules. Accordingly, employers should get a sense this month of what the future regulatory landscape will look like.

So what can we expect from these revisions? As an initial matter, it’s almost certain that the DOL will raise the $455 minimum salary requirement, which hasn’t changed since 2004. With regard to the other revisions, however, the DOL’s drafting process has been opaque, and official pronouncements have been largely limited to the Presidential Memorandum and the DOL’s description of the regulatory action on its Spring 2015 agenda, neither of which provide any specific detail. Nonetheless, unofficial pronouncements (including the Secretary of Labor’s remarks before the International Association of Firefighters on March 18, 2014) have repeatedly stressed the DOL’s position that the current regulations result in too many employees falling under the exemptions, particularly retail managers who spend a large portion of their time performing non-exempt duties. Accordingly, there is speculation that the DOL may eliminate the “concurrent duties” provision of 29 CFR 541.106, which provides that simultaneously performing both exempt and nonexempt duties will not automatically disqualify an otherwise exempt employee from the executive exemption. There is also speculation that the regulations may impose a set percentage cap on the amount of time an exempt employee may spend on non-exempt duties, similar to exemption provisions under some state laws (such as California and Connecticut) and to some provisions of the pre-2004 FLSA regulations.

In any event, one thing is certain – some employees who are properly classified as exempt under the current regulations will no longer be exempt under the new rules. Employers will shortly have a preview of just how drastic these changes will be, and should begin evaluating their compliance with the regulations well in advance of the implementation of the final rules.

New Guidance Regarding Employee Handbooks Part Five: Rules Restricting Employees From Leaving Work: What Are The Boundaries?

This post is the fifth in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules Here, Employee Conduct Rules, Rules Related to Company Logos, Copyright, and Trademark and Rules Restricting Photography and Recording. While the recent guidance was issued by the National Labor Relations Board (NLRB), (found here) this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.

Restrictions on Leaving Work: Language to Avoid

Although the NLRB acknowledges that employers have a legitimate interest in keeping employees from leaving their posts without warning, they are also adamant that one of employees’ most fundamental rights under Section 7 of the NLRA is the right to go on strike. Accordingly, it is important to make sure that any employer policies restricting employees’ ability to leave work cannot be reasonably read to prohibit walkouts or protected strike activity. While context always matters, the NLRB provides a few clear guidelines to keep in mind when reviewing or drafting policies restricting employees’ ability to leave work.

• DO NOT use words such as “strike” or “walkout” when describing prohibited activity.

• DO NOT prohibit “work stoppages” or “disruptions.”

• DO NOT impose a broad ban on employees entering the employer’s property without permission. This could be interpreted as denying off-duty employees access to outside non-working areas, which is often interpreted as a violation of Section 7.

Permissible Policies Placing Restrictions on Leaving Work

Obviously, employers do have the ability to keep their employees from abandoning their posts for reasons unrelated to protected concerted activity. It appears that it is acceptable to have a relatively broad policy, as long as it avoids the specific language mentioned above. The NLRB has provided two examples of policies that restrict employees’ ability to leave work without infringing on their Section 7 rights:

• “Leaving Company property without permission may result in discharge.”

• Policy prohibiting employees from “[l]eaving Company premises during working shift without the permission of management.”

As always, it is important to remember that policies that do not strictly adhere to these rules can be found to be permissible under the right circumstances. For example, the NLRB found that a broad “no walkout without permission” rule was reasonably read to ensure that patients at a dementia facility were not left without adequate care (rather than as a complete ban on strikes) when taken in context. See Wilshire at Lakewood, 343 NRLB 141, 144 (2004), vacated in part, 345 NLRB 1050 (2005), enforcement denied on other grounds, Jochims v. NLRB, 480 F.3d 1161 (D.C. Cir. 2007). Accordingly, always be mindful of the particular circumstances of the employer in question when crafting policies of this nature.

Supreme Court Rules EEOC Conciliation Efforts are Subject to Limited Judicial Review

In Mach Mining, LLC v. EEOC, decided April 29, 2015, the United States Supreme Court unanimously held that federal courts have the authority to review whether the EEOC satisfied its statutory obligation to engage in conciliation before filing suit against an employer.

Rejecting the EEOC’s position that its conciliation efforts are beyond judicial review, the Court stated that absent such review, “the Commission’s compliance with the law would rest in the Commission’s hands alone.” However, the Court held that the “scope of the judicial review is narrow.” The review examines whether the EEOC has properly informed the employer about the specific allegations of discrimination, including what practice has harmed which employees, and whether the EEOC tried “to engage the employer in some form of discussion (whether written or oral), so as to give the employer an opportunity to remedy the allegedly discriminatory practice.”

Background

In Mach Mining, a woman filed a charge with the EEOC claiming that the company had refused to hire her as a coal miner because of her sex. The EEOC found reasonable cause to believe that Mach Mining had engaged in unlawful hiring practices. The EEOC sent a letter to the parties inviting them to participate in “informal methods” of dispute resolution and stating that a Commission representative would contact Mach Mining to begin the conciliation process. About a year later, the EEOC sent Mach Mining a second letter stating that “such conciliation efforts as required by law have occurred and have been unsuccessful” and further efforts would be “futile.” There was no record of what, if anything, occurred during the time span between the first and second letter Mach Mining received from the EEOC.

Mach Mining argued in the district court that the EEOC failed to conciliate in good faith before filing a lawsuit. The EEOC sought summary judgment, claiming that its conciliation efforts are not reviewable and that, in any event, the two letters the EEOC sent to Mach Mining were sufficient proof of its efforts. The trial court denied the motion but the Seventh Circuit reversed, holding that the EEOC’s conciliation efforts were not subject to judicial review.

Supreme Court Decision

In reaching its decision, the Supreme Court first stated that the EEOC’s duty to conciliate is a mandatory prerequisite to the EEOC filing a lawsuit. Further, the Court reasoned that there is a “strong presumption favoring judicial review of administrative action” and that nothing in Title VII overcomes that strong presumption. The Court analyzed the scope of the judicial review and rejected both the EEOC’s minimalist “facial examination of certain EEOC documents” and Mach Mining’s proposal for an in depth review. The Court instead settled on a limited judicial review of the EEOC’s conciliation efforts.

The Court stated that a sworn affidavit from the EEOC attesting that it has performed the conciliation obligations required by Title VII but its efforts failed “will usually suffice to show that it has met the conciliation requirement.” But if an employer provides credible evidence—either in the form of an affidavit or otherwise—that the EEOC “did not provide the requisite information about the charge or attempt to engage in a discussion about conciliating the claim, a court must conduct the factfinding necessary to decide that limited dispute.” If the court finds for the employer, the remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance.

Implications

For employers, the implication of the Mach Mining decision is somewhat mixed. The decision makes clear to employers and to the EEOC that federal courts do have the authority to review whether the EEOC has met its pre-suit conciliation obligations and provides certain guidance regarding the adequacy of EEOC’s efforts. However, the scope of that judicial review is a “relatively barebones review.” Going forward, employers should document any conciliation efforts so that, if necessary and as outlined by the Court, the employer can demonstrate that the EEOC did not provide the requisite information about the charge or failed to engage in a discussion about conciliating the claim.

FMLA’s New Definition of “Spouse” Halted in Four States

The Department of Labor’s revised definition of “spouse” under the FMLA was recently struck down in Texas. On March 26, 2015, in Texas v. United States, the United States District Court for the Northern District of Texas granted a request made by the states of Texas, Arkansas, Louisiana, and Nebraska for a preliminary injunction with respect to the Department of Labor’s Final Rule that revised the regulatory definition of “spouse” to include same-sex partners under the Federal Family and Medical Leave Act (“FMLA”).

After the Supreme Court struck down Section 3 of the Defense of Marriage Act (“DOMA”) in United States v. Windsor, which defined spouse under federal law, as a person of the opposite sex, President Obama called for a review of all relevant federal statutes to implement the decision. Under the then-existing FMLA regulation defining spouse, eligible employees in same-sex marriages recognized in their “state of residence” could take FMLA leave to care for a same-sex spouse with a serious health condition. However, this definition did not allow an eligible employee to take FMLA leave on the basis of the employee’s legal same-sex marriage if the employee lived in a state that did not recognize same-sex marriage.

On February 25, 2015, in order to provide FMLA rights to all legally married same-sex couples consistent with the Windsor decision, the Department of Labor issued a Final Rule revising the definition of spouse under the FMLA. Essentially, the Rule provided that any eligible employee who is in a legal same-sex marriage can take FMLA leave to care for his or her spouse, regardless of the state in which that employee resides. To determine who could be considered a spouse, the revised definition looks to the law in the “state of celebration,” that is, the jurisdiction in which the marriage was entered into, instead of the law of the state in which the employee resides. The Rule was to be effective March 27, 2015.

On March 18, 2015, the State of Texas filed a Complaint for Declaratory and Injunctive Relief and Application for Temporary Restraining Order, arguing that the Final Rule should be enjoined because Texas law does not recognize same-sex marriages. On March 25, 2015, Texas amended its Complaint to add Arkansas, Louisiana and Nebraska as plaintiffs. The other plaintiff states have similar restrictions on state recognition of same-sex marriages. The court granted the plaintiffs’ request for a preliminary injunction, holding that Congress intended to preserve a state’s ability to define marriage without being obligated under the laws of another jurisdiction which may define it differently. The court concluded that the DOL exceeded its authority in changing the definition because it forced employers to choose between complying with the FMLA and with other certain state laws prohibiting the recognition of same-sex marriages.

The DOL’s Final Rule has been temporarily stayed in Texas, Arkansas, Louisiana and Nebraska. While the preliminary injunction remains in effect, the DOL cannot take any action to enforce the “state of celebration” rule in those four states.

What is the bottom line for employers? Employers outside of Texas, Arkansas, Louisiana and Nebraska should review their FMLA policy to ensure that it includes the new definition of “spouse.” Employers should also make sure that human resources personnel, supervisors and managers are aware of the new definition and its impact on employees requesting leave under the FMLA. Employers doing business in Texas, Arkansas, Louisiana and Nebraska should monitor the developments in Texas v. United States to determine if the new definition of spouse will be implemented in those states.

EEOC Takes on Transgender Discrimination under Title VII

On April 21, 2014, the U.S. District Court for the Eastern District of Michigan ruled that the EEOC may proceed with sex discrimination claims on behalf of a transgender plaintiff. This litigation is one of two actions filed by the EEOC in September 2014 alleging that employers violated Title VII by discriminating against transgender employees on the basis of sex.

While the EEOC acknowledges that transgender status is not explicitly protected under Title VII provisions, the Commission has taken the position since 2012 that discrimination against an individual because that person is transgender nevertheless constitutes sex discrimination under the theory of sex-stereotyping, i.e., taking an adverse action against an employee on the basis of that person’s nonconformance to sex- or gender-based preferences.

Federal Courts Permit Transgender Plaintiffs’ Claims under Sex Stereotyping Theory

The Commission’s two federal complaints, EEOC v. Lakeland Eye Clinic, P.A. (No. 8:14-cv-2421) in the Middle District of Florida and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. (No. 2:14-cv-13710) in the Eastern District of Michigan, both involve transgender women who allege they were fired soon after notifying their employers that they would begin transitioning from presenting as a man to presenting as a woman. The parties settled the Florida case, but the Michigan litigation is continuing after the court’s denial of the employer’s motion to dismiss. While reiterating that “transgender” is not a protected status under Title VII, the court noted a Sixth Circuit decision holding that an employer’s treatment of a transgender employee in consideration of the employer’s sex- or gender-based preferences, expectations, or stereotypes, i.e., sex stereotyping, is actionable under Title VII. District courts in the Third, Fifth, and D.C. circuits have also held that sex stereotyping is a viable theory for transgender employees and allowed those employees’ Title VII claims to survive dismissal.

Employer Takeaways

Given the EEOC’s increased focus on transgender workers’ rights, employers should revisit their policies, such as dress code and grooming policies, to consider how they may affect transgender employees. In addition to prohibiting discriminatory treatment of transgender employees with respect to hiring, firing, and compensation decisions, employers should also develop, or improve upon, their protocol for handling an employee’s gender transition. A recent EEOC administrative decision (in which it found that the Army discriminated against a transgender employee) provides guidance on the type of employer actions that are likely to constitute unlawful discrimination against a transitioning employee:

• An employer should not limit a transgender employee’s access to a single stall restroom, even if equal in quality to the common restrooms.

• An employer should not condition recognition of a transgender employee’s gender identity (i.e., the name or pronoun used when addressing the employee) on that individual’s completion of certain surgical procedures that render the individual physically male or female.

• An employer may be held liable for harassment if supervisors or coworkers refuse to address the transgender employee by his or her transgender name and/or by pronouns that are associated with that individual’s desired gender identification.

New Guidance Regarding Employee Handbooks – Part Four: Permissible Rules Restricting Photography and Recording: A Snapshot

This post is the fourth in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules, found here and regarding Employee Conduct Rules, found here and regarding Rules Related to Company Logos, Copyright, and Trademark. While the recent guidance was issued by the National Labor Relations Board (NLRB) (view the full Memorandum here), this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.

When Do Restrictions on Photography and Recording Go Too Far?

When it comes to rules restricting an employee’s ability to take photographs or make recordings, the NLRB recognizes that employers have legitimate interests, such as maintaining the confidentiality of business records and protecting the privacy of employees and customers. However, those interests must be balanced against employees’ rights under Section 7 of the NLRA to take photographs or make recordings in furtherance of protected concerted activity, such as documenting unfair labor practices or health and safety violations. Accordingly, the key when drafting or reviewing such policies is to ensure they are sufficiently limited in scope and could not reasonably be read to prohibit taking pictures or making recordings on non-work time.

While context always matters, a few key guidelines emerge from the NLRB report:

• DO NOT impose a broad ban on use of recording devices on employer property.

• DO NOT impose a broad ban on use or possession of personal electronic devices, such as cell phones, computers, or data storage devices.

• DO NOT prohibit employees from using personal electronic equipment “while on duty,” as this could be interpreted to restrict such use during rest and meal breaks occurring during an employee’s shift.

Finding a Policy That Protects Employers’ Interests and Section 7 Rights

The NLRB has provided one example of a policy that strikes the right balance:

• “Due to the potential for issues such as invasion of privacy (employee and customer), sexual or other harassment (as defined by our harassment/discrimination policy), [and] protection of proprietary [information, employees] may not take, distribute, or post pictures, videos, or audio recordings while on working time. [Employees] also may not take pictures or make recordings of work areas. An exception to the rule concerning pictures and recordings of work areas would be to engage in activities protected by the National Labor Relations Act including, for example, taking pictures of health, safety and/or working condition concerns or of strike, protest and work-related issues and/or other protected concerted activities.”

This policy was found to be narrowly tailored enough to protect employees’ Section 7 rights while still addressing the legitimate interests of the employer.

As always, it is important to remember that context matters when evaluating employer policies, handbooks, and rules. For instance, the NLRB has found that a no-photography rule instituted in response to a breach of patient privacy at an employer with a well-understood and strong privacy interest did not infringe on employees’ Section 7 rights because it would not be reasonably understood to limit taking pictures for protected concerted purposes. See Flagstaff Medical Center, 357 NLRB No. 65, slip op. at 5 (Aug. 26, 2011), enforced in relevant part, 715 F.3d 928 (D.C. Cir. 2013). Therefore, be sure to consider the particular circumstances of the employer and how employees could reasonably interpret policies restricting photography and recording when reviewing policies of this nature.