Laborsphere

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.

New Guidance Regarding Employee Handbooks Part Three: How Much Do Employers “Own” Their Logo, Copyright and Trademark?

This post is the third in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules here and regarding Employee Conduct Rules here. 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.

“Use” Logos, Copyrights and Trademarks – Fair or Unfair?

The NLRB recognizes that employers have a right to protect their intellectual property, including logos, copyright and trademarks. However, that protection can only go so far. Specifically, the NLRB has determined that employees are allowed “fair use” for non-commercial purposes such as on picket signs, leaflets and other protest material. In establishing this rule, the NLRB has reasoned that employer’s proprietary interests are not implicated by employees’ use of the names, logos or trademarks when engaging in collective action under Section 7 of the NLRA. As such, a broad ban on use of company logos, copyrights or trademarks impinges on “fair use” and will be viewed with disfavor by the NLRB.

As has been repeated in prior posts, context always matters when evaluating employer policies, rules and handbooks. However, there are a few clear guidelines for employers when reviewing language as to use of logos, copyrights and trademarks:

• DO NOT impose a broad ban on any use of company logos, trademarks, graphics, or advertising materials in social media or otherwise.

• DO NOT impose a vague ban on use of “other people’s property,” such as trademarks “without permission.”

• DO NOT prohibit use of the employer’s name, logo or trademark. This impinges on employee’s right to work together, collectively, and organize.

• DO require employees to respect laws, permitting fair use.

Examples of Policies That Protect Intellectual Property While Permitting “Fair Use”

The NLRB has provided two examples of policies that strike the right balance. Employers should consider whether there provisions satisfy their concerns with protection of intellectual property and find ways to adjust, if necessary, to also allow employees’ fair use.

• “Respect all copyright and other intellectual property laws. For [the Employer’s] protection as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks and other intellectual property, including [the Employer’s] own copyrights, trademarks and brands.”

• “DO respect the laws regarding copyrights, trademarks, rights of publicity and other third-party rights. To minimize the risk of a copyright violation, you should provide references to the source(s) of information you use and accurately cite copyrighted works you identify in your online communications. DO not infringe on [Employer] logos, brand names, taglines, slogans, or other trademarks.”

These examples strike the right balance because they do not impose a strict ban on intellectual property. Rather, they remind employees of applicable law and provide guidance on how others’ intellectual property may be used property and lawfully.

Ninth Circuit Calls Into Question “No Reemployment” Provisions In California Settlement Agreements

On April 8, 2015, in Golden v. California Emergency Physicians Medical Group, the Ninth Circuit Court of Appeals broadly interpreted California’s statutory provisions regarding restrictive covenants in the context of reviewing a common clause included by employers in settlement agreements. Though the Court declined to decide the ultimate issue – the validity of “no reemployment” clauses – the Court’s broad reading of California’s restrictive covenant statute is alarming.

After he was let go from his employment with California Emergency Physicians Medical Group (“CEPMG”), Dr. Robert Golden (“Golden”) filed a lawsuit in state court alleging a number of statutory wrongful termination claims. After CEPMG removed the case, the parties reached an oral settlement agreement. Later on, CEPMG memorialized the oral agreement into a written settlement agreement, which contained a provision that precluded Golden from returning to work at CEPMG – i.e., a “no reemployment” clause. Specifically, the no reemployment clause at issue provided, in relevant part, that Golden waived all rights to employment with CEPMG or at any facility that CEPMG may own or with which it may contract in the future. The no reemployment clause further provided that if CEPMG contracted to provide services to, or acquires rights in, a facility that is an emergency room at which Golden was employed, the company had the right to terminate Golden, without incurring any liability.

Golden refused to sign the written settlement agreement and CEPMG moved to enforce it. Ultimately, a District Court ordered Golden to sign the settlement agreement, finding that it did not run afoul California law because it was not a non-compete agreement. Golden appealed.

Before the Ninth Circuit, Golden argued that the no reemployment provision in the settlement agreement violated California Business and Professions Code section 16600 (“Section 16600”), which contains California’s statutory restrictions on restrictive covenants. CEPMG argued that because the no reemployment provision was not a non-compete agreement – i.e., it did not preclude Golden from working for one of CEPMG’s competitors – it was not unlawful.

The majority of the three-judge panel held that the District Court’s interpretation of Section 16600 was incorrect. The Court noted that the California Supreme Court had not specifically addressed whether Section 16600 applied only to “typical so-called ‘non-compete covenants.’” However, it noted that the language of Section 16600 was extremely broad – making unlawful “every contract by which anyone is restricted from engaging in a lawful profession, trade, or business of any kind.” Examining the few exceptions that the California Legislature had carved out to Section 16600, the Court found that the context of the statute suggested that California had intended it to apply more broadly because of the particularity of the exceptions. The Ninth Circuit, thus, held that “the crux of the inquiry under [S]ection 16600 is not whether the contract constituted a covenant not to compete, but rather whether it imposes ‘a restraint of a substantial character’ regardless of ‘the form in which it is cast.’” Although the Court declined to determine, for itself, the exact boundaries of Section 16600, it remanded the case to the District Court for it to determine the validity of the agreement using a broader interpretation of Section 16600.

Infamously, California has some of the toughest limitations on restrictive covenants in the nation. Yet, employers have routinely included the type of provision at issue in Golden in employment settlement agreements, without concern.

It is unclear how Golden will be interpreted over time, particularly what restrictions courts may determine to be “of a substantial character.” Notably, the potential restraint on Golden as a result of the agreement was arguably more expansive than is typically the case, given CEPMG’s large market share and the potential for the immediate termination of Golden’s employment if CEPMG expanded. Nonetheless, Golden is a clear declaration that Section 16600 is not limited solely to traditional non-compete agreements.

Golden follows other recent decisions, enforcement actions and agency opinions which collectively have challenged the assumption that various common settlement and separation provisions are valid and enforceable. For example, as noted here,the EEOC has been challenging the validity of cooperation, non-disparagement, non-disclosure, and release provisions in separation agreements, arguing that they interfered with employees’ rights to file administrative charges and participate in EEOC investigations. Similarly, as noted here, the SEC recently for the first time used its enforcement powers under Rule 21F-17 of the Whistleblower provisions of the Dodd-Frank Act to impose a civil penalty on an employer for using a confidentiality agreement during internal investigations which, in the SEC’s opinion, restricted an employee’s ability to report potential securities violations. Finally, as discussed here, the NLRB has recently opined that handbook confidentiality provisions intended to protect confidential information and trade secrets may have the effect of unlawfully inhibiting employees from engaging in protected activities under the NLRA, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.

These developments collectively challenge many of the benefits and protections afforded to employers by resolving disputes or potential disputes through separation, severance, release and settlement agreements. Employers should thus reevaluate the provisions they have traditionally used, to ultimately determine whether utilizing such agreements is indeed an effective deterrent against future potential disputes, or worth the potential litigation that may result from using language that is unlawful under Section 16600.

Twenty-Seven Day Elections (Or Less) Likely Under NLRB’s New Quickie Election Rules

The NLRB’s “quickie election” rule goes into effect today. And while the National Labor Relations Board (NLRB) has avoided a clearly mandated time frame for processing union representation petitions, employers can expect elections to be held just 27-days (or less) after petition filing under the NLRB’s new representation election rule.

In speaking to interested stakeholders during an informational training session held on April 7^th, Peter Sung Ohr (“Ohr”), Regional Director of the NLRB’s Region 13, described a timeline whereby union petitions will be processed and served electronically on employers the same or next day after filing. Pre-election hearings will be scheduled eight days later, but absent significant questions concerning representation or jurisdiction, issues of individual employee eligibility will not be litigated or resolved pre-election. Assuming consecutive-day hearings, elimination of rights to file post-hearing briefs, and a three-day period for the receipt of hearing transcripts, it is likely that Regional Director hearing decisions and directions of election will issue within four-days of scheduled hearing dates.

The NLRB’s new election rule directs Regional Directors to schedule elections for the “earliest date practicable.” While an employer has two-days post-decision to provide the petitioning union a final voter eligibility list (containing employee names, work locations, shifts, job classifications, available home addresses, personal email address and home/personal cellphone numbers), the Regional Director could order an election held a few days afterwards, assuming the union is willing to waive a 10-day voter list review period.

The Board’s new election procedures are expected to shorten the average election period in contested cases from 42- to 27-days, with unions driving election timelines in individual cases. The NLRB will start applying its new election procedures to all petitions filed on and after April 14^th. New representation case forms are now available on the NLRB’s website. Noncompliant employers risk waiver of rights to challenge petitioned-for bargaining units and overturned elections under the NLRB’s new election rule.