Labor and Employment Law Blog

Common-Law Employee, But No Contract

By Bill Wright

In Faush v. Tuesday Morning, Inc., No. 14-1452 (3d Cir. November 18, 2015), the court addressed race discrimination claims brought by a former temporary worker against the company he was assigned to assist. The plaintiff signed up with a staffing firm and was assigned to help set up a new retail store. While there, he alleges that the store manager accused him of theft, the manager’s mother sent him to work with the trash, and a store employee used a racial epithet. The plaintiff brought claims under both Title VII and Section 1981. The court determined the store manager’s authority to reject any unsatisfactory worker and his direct supervision of the temporary workers created at least a fact dispute about whether the store was the plaintiff’s employer, jointly with the staffing firm. This was enough for the Title VII claim to proceed. On the other hand, the store had no contract with the plaintiff, and so the Section 1981 claim was properly dismissed. Common-law, joint employer status apparently is not contract-based. However, the court called for changes to Title VII so it would clearly cover all clients of staffing firms. The fear is that clients and staffing firms might create careful contracts that assign all Title VII liability to the staffing firm. Watch for further calls for temporary staffing reform.

Handbook Revisions Due

Bill Wright

The U.S. Court of Appeals for the District of Columbia sided with the NLRB on 3 common employer policies. These rules violate the NLRA on their face:

  • The “investigative confidentiality rule.” The company had a rule that “prohibited employees from revealing information about matters under investigation.” This was overly broad. Sure, EEO investigations should be kept confidential – the EEOC says so. But that doesn’t mean that absolutely every investigation should be confidential.
  • The “electronic communications rule.” The company policy said: “employees should only disclose information or messages from (the company’s electronic communications systems) to authorized persons.” This violated the NLRA because a reasonable person might not know this rule applied only to confidential information in an email.
  • The “working hours rule.” The company’s policy said it might discipline employees for “performing activities other than Company work during working hours.” Did you spot the error? Yep, the policy said “working hours” when it should have said “working time.” “Hours” include breaks.

On the other hand, the company’s “complaint provision” did NOT violate the NLRA. The policy directed employees to voice complaints to an immediate superior or to HR and went on to say “complaining to your fellow employees will not resolve problems. Constructive complaints communicated through the appropriate channels may help improve the workplace for all.” This language did not forbid communications among employees; it only exhorted employees not to communicate.

Time to re-edit those policies. Hynudai America Shipping Agency, Inc. v. NLRB, No. 11-1351 (D.C. Cir. November 6, 2015)

OSHA Fines to Increase Dramatically

By Rod SmithPat Miller, Chuck Newcom,and Matt Morrison

For the first time in 25 years, OSHA fines likely will be increasing. The change will take effect no later than August 1, 2016, and each year thereafter. A relatively obscure provision in the 2015 budget bill passed by Congress, and signed into law by President Obama on Monday, November 2, 2015, allows OSHA fines to keep pace with inflation.

Click here to read the full OSHA Alert.



Wellness Rewards Under GINA

By Brooke Colaizzi

The EEOC has issued proposed regulations addressing the legality of inducements for spousal participation in wellness programs under the Genetic Information Nondiscrimination Act (GINA). The original GINA regulations prohibited employers from offering inducements to an employee for providing genetic information, including genetic information about employees’ spouses. The EEOC has now declared that employers may offer limited inducements (financial or in-kind), whether in the former of incentives or penalties to be avoided, to spouses covered by an employer’s group health plan who receive health or genetic services offered by the employer to provide information about their current or past health status as part of a health risk assessment. Inducements are still illegal as to spouses’ other genetic information or genetic tests, as well as the genetic information or tests of an employee’s children. The total inducement provided to a spouse may not exceed the total cost of coverage for the plan in which the employee and any dependents are enrolled minus 30 percent of the total cost of self-only coverage.

The EEOC is accepting comments on the proposed regulations until December 29, 2015. If you have a wellness plan and have not reviewed its provisions recently, now is a good time to evaluate whether the plan complies with the proposed regulations under both the ADA and GINA.

Colorado Vacation Pay Update

By Andy Volin

Earlier this month, we alerted you that the Colorado Department of Labor was considering an enforcement position with respect to “use it or lose it” vacation policies. The CDOL recently issued a FAQ document about Colorado’s 2015 Wage Protection Act, which included 2 questions and answers about these policies. CDOL website with link to FAQ PDF

We don’t think these answers are clear, because while on the one hand they permit “use it or lose it” policies, on the other hand they state such policies can’t be used to deprive an employee of earned vacation time. The CDOL also indicated it will look at these policies on a case by case basis, and consider the following non-exhaustive list of factors: “The employer’s historical practices;” “Industry norms and standards;” “The subjective understandings of the employer and employee,” and “And any other factual considerations which may shed light on when vacation time becomes “earned” under the agreement in question.”

In light of this, we repeat our prior recommendation to review your vacation policies, and consider whether there are better alternatives to “use it or lose it,” such as capping the amount of vacation that can be earned, or substituting Paid Time Off (“PTO”) for vacation and sick pay. Prospective changes to policies are permissible, but changes that diminish vacation that has already been earned should be avoided.

Colorado Vacation Pay Alert

By Andy Volin

Colorado employers should check their vacation policies to make sure they aren’t “use it or lose it” type policies. The Colorado Department of Labor is soon to announce new enforcement provisions that will prohibit any forfeiture of earned vacation pay. We will alert you when the CDOL finalizes this rule. In the meantime, consider alternatives to “use it or lose it” vacation, such as capped vacation (it only accrues up to a certain level, and more is not earned until the employee uses what has already been earned). Another alternative is prospectively ending vacation in favor of starting something similar, such as Paid Time Off (“PTO”), which can be used for sickness, vacation, or any other reason.

Not Just For Facebook

By Emily Keimig

The issue of cross border data transfer—including employee data— that is.

Four years ago, Austrian law student Max Schrems attended a semester abroad study at Santa Clara University in Silicon Valley, where he heard one of Facebook’s privacy lawyers speak. In the wake of that class, Schrems launched an attack on Facebook’s data protection practices, asserting that they failed to comply with the EU’s more stringent privacy laws because among other things, they exposed those protected by such laws to the perils of Snowden-esque surveillance. Today Schrems claimed victory.

For years, U.S. companies with employees and business dealings in Europe relied upon the “Safe Harbor” agreement. Safe Harbor is an agreement between the EU and the US intended to facilitate transfer of private data (names, other identifying information, birthdate, health information, employment information and the like) between the two regions. Safe Harbor provided a means by which those companies doing business in the two regions could transfer data without risk of running afoul of the different legal requirements and frameworks of the US and the EU.

Today, the European Court of Justice (“ECJ”) ruled that Safe Harbor is invalid. While the case originally challenged practices by Facebook, the implications of the ECJ’s ruling flow not only to tech giants like Facebook and Google, but to thousands of US companies in all business sectors. Any US company that transfers personal data, including employment data, from or to a country in the EU should examine its practices and compliance strategies in light of the demise of Safe Harbor.

Click here to the Court of Justice of the European Union Press Release.

EEOC to Pay One Mmmillion Dollars

By Bill Wright

In EEOC v. Global Horizons, Inc. et al., No. CV-11-3045-EFS (E.D. Wash.), the court determined that the EEOC had conducted a shoddy administrative investigation and lacked a factual basis to pursue its theory of joint-employer liability against the defendants. The court invited the defendants to petition for attorney fees. They requested over $1,200,000. The court hasn’t yet finished the math. (It asked for more information about reasonable attorney rates in certain parts of the country.) But it looks fairly certain that the EEOC will have to pay over $1,000,000. I hear taxpayers all over the U.S. yelling, “Ouch!”

For its part, the EEOC argued that such a large award of attorney fees will discourage it from pursuing Title VII cases in the future. The court responded that its aim was “to discourage the filing of groundless and frivolous Title VII lawsuits – lawsuits which place a significant burden on the employer, both of time and expense, to defend against the serious Title VII charges.” That’s a lesson the EEOC could take to heart. But will it?

Curing Cat’s-Paw

By Bill Wright

In a Title VII retaliation claim, a plaintiff has to prove protected conduct was the “but-for” cause of the materially adverse action. Can a plaintiff prove “but-for” causation relying on the supposed retaliatory animus of someone other than the decision maker? Yes, but not if the decision-maker acts independently of the so-called “cat’s paw.”

In Thomas v. Berry Plastics Corp., No. 14-3200 (10th Cir. Sept. 25, 2015), plaintiff was subject to 13 disciplinary actions over 7 years and was on a last chance agreement. After the shift-lead blamed plaintiff for a quality control issue, the manager fired plaintiff. Plaintiff appealed internally, and two independent managers affirmed the discharge. In court, plaintiff tried to show that the shift-lead was biased because he had not included exculpatory information in his report. The court ruled the evidence failed to show bias, but also ruled that the employer’s internal review of the discharge decision was independent of the shift-lead’s information in that it provided the plaintiff an opportunity to tell his side of the story.

Just hearing the discharged employee out may be enough to show independence. Also, apparently, employers may cure any lack of independence with a review process that occurs after the decision. It is never too late to show independence.

Federal Contractors Beware – Part 8

By Lori Wright Keffer

On September 7, 2015, President Obama issued an executive order that will require federal contractors and subcontractors to provide their employees with up to seven or more paid sick leave days a year. The Order gives requirements for accrual, carryover, and payout of the leave, including that: (i) employees must accrue at least 1 hour of paid sick leave for every 30 hours worked (up to at least 56 accrued hours); (ii) unused paid sick leave hours carry over to the next year; but (iii) employers don’t have to pay employees for unused accrued sick leave upon termination. Employees may use the leave to care for themselves, a family member, or even a loved one, or for absences resulting from stalking, sexual assault, or domestic violence. For additional information regarding the specific requirements and conditions of the Order, see

Stay tuned for the details. The Secretary of Labor will issue regulations by September 30, 2016 and the Order is to apply to federal contracts entered into after January 1, 2017. Non-federal contractors should also beware, as this looks like another example of the Administration laying the groundwork to expand federal contractor requirements to all employers over time.

See our other previous posts warning Federal Contractors:

Federal Contractors Beware – Part 1
Federal Contractors Beware – Part 2
Federal Contractors Beware – Part 3
Federal Contractors Beware – Part 4
Federal Contractors Beware – Part 5
Federal Contractors Beware – Part 6
Federal Contractors Beware – Part 7