Amid the headlines of last week’s Supreme Court decisions was a one applying disparate impact analysis to claims under the Fair Housing Act “FHA”. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., No. 13-1371. (We report on these FHA cases because FHA concepts frequently overlap with employment discrimination law, and because we regularly handle FHA matters given this overlap.) A public interest group sued Texas under the FHA, arguing that Texas’ points system used to allocate federal tax credits to builders of low-income housing had a disparate impact by favoring construction of low-income housing units in predominantly black urban areas, thereby reinforcing segregated housing patterns. The Court unsurprisingly held that the FHA allows for disparate impact analysis. But, the Court added some useful language about the “business necessity” defense. For example, the Court recognizes that decisions challenged under disparate impact theory often involve a “mix of factors, both objective…and, at least to some extent, subjective….” The Court noted that disparate impact claims include a “robust causality requirement” that courts must “examine with care” at both the pleading and summary judgment stage, with an eye toward “prompt resolution” of these cases. These are some unexpected and extremely helpful words that should encourage employers and sway courts in future disparate impact cases.
Labor and Employment Law Blog
The DOL released its long-awaited Notice of Proposed Rulemaking to update the salary requirements for the FLSA’s white collar exemptions (e.g., executive, administrative, and professional employees). Some highlights of the Proposed Rule:
- Raise the standard salary level test from $455/week ($23,660 annually) to $970/week ($50,440 annually) (2016 figures)
- Raise the salary requirement for Highly Compensated Employees from $100,000 to $122,148 annually
- Automatic update the salary level requirements going forward
- Revise the duties tests “to ensure that these tests fully reflect the purpose of the exemption”
Many employees currently classified as exempt from overtime are likely to lose the exemption because of the increased salary level test. The 295-page Notice, Fact Sheet, and additional resources can be found at http://www.dol.gov/whd/overtime/NPRM2015/.
This morning, the U.S. Supreme Court struck down state laws the prohibit gay marriage in Obergfell v. Hodges, No. 14-556 (June 26, 2015), First, the Court held that the Fourteenth Amendment requires a State to license a marriage between two people of the same sex. Second, the Court held that the Fourteenth Amendment requires a State to recognize a same sex marriage licensed and performed in another State that does recognize that right.
The Court noted the many areas of life in the U.S. affected by marital status, such as taxation, hospital access, medical decision making authority, adoption rights and much more. But this is a labor and employment blog, so we focus on the effect on employers. First, as the Court recognized, the case will affect workers’ compensation laws in states that provide spousal benefits to spouses of workers’ compensation claimants, but do not recognize gay marriage. Second, the case may significantly affect employers in states that have mini-FMLA statutes with respect to leave to act as a caregiver for a spouse, but that do not recognize same sex marriage. Third, the case may affect employee health and life benefits with respect to spousal coverage depending on applicable state laws and the nature and language of each particular plan. Fourth, the case may affect spousal pension benefits to the extent that pension plans excluded same sex marriage from the definition of spouse. Employers should promptly revisit these affected areas and revise applicable policies, practices, and benefits accordingly.
By Joe Hunt
Someone repeatedly defecated in the warehouse and the employer conducted an investigation. Two employees were at work at the time of the foul conduct; the employer ordered them to give a DNA sample – by submitting to a cheek swab. A laboratory then compared the employees’ DNA to DNA from the feces. It was a technical yet simple test – the analysis identified genetic spacers, which vary drastically from person to person. The employees sued under the Genetic Information Nondiscrimination Act (“GINA”), claiming the employer had unlawfully obtained their genetic information. The employer argued that “genetic information” as used in GINA refers only to information about a person’s chances of coming down with a disease or disorder, not to spacers between the genes.
On summary judgment, the court ruled that the analysis of genetic spacers was still genetic information because it was analysis of DNA and detected genotypes and mutations. Thus, the company violated GINA. The court then held a trial on damages and the jury awarded over $2.2 million. It’s a case of the employer seeking too much proof. Sometimes you have to act on the suspicion alone. Lowe v. Atlas Logistics Grp. Retail Servs. Atlanta, LLC, 2015 U.S. Dist. LEXIS 58546 (N.D. Ga. May 5, 2015), No: 1:13-CV-02425 (N.D. Ga. June 22, 2015).
By Doug Towns
Employers that rely primarily on independent contractors continue to come under scrutiny. Recently, an Uber driver, Barbara Anna Berwick, brought a suit under California law arguing that she should be reimbursed for various expenses, including tolls and parking tickets, associated with her personal car that she used to carry Uber customers. Contending that the driver was an independent contractor, not an employee, Uber argued it did not have to reimburse her for these expenses. Ultimately, a California Hearing Officer concluded that the driver was an employee, at least for purposes of getting reimbursement. Uber Technologies, Inc. v. Berwick, No. 11-46739 (Cal. Lab. Comm’n June 3, 2015). The key fact was that the driver provided the very service that Uber provides – transportation.
Click here for additional information about the case.
By Bill Wright
The Colorado Supreme Court considered whether a state law prohibiting discrimination based on an employee’s “lawful” off-work activities applies to the employee’s use of medical marijuana as permitted under state law. Coats v. Dish Network, No. 13SC394 (Colo. June 15, 2015). Everyone agrees the plaintiff made a sympathetic case. He is a quadriplegic and used medical marijuana to ease painful muscle spasms caused by his condition. The employer however had a drug policy that made no exception for medical marijuana. When the plaintiff tested positive for THC in a random drug test, and affirmed that he planned to continue using the substance for his condition, the employer discharged him. He sued, alleging discrimination based on his “lawful” (in Colorado) off-work use of medical marijuana, but the Colorado Supreme Court has now ruled that his claim fails. As a matter of plain meaning, to be “lawful” an activity must comport with all applicable law – including both state and federal.
The ruling preserves employers’ zero-tolerance drug policies in Colorado and may provide useful support for employers in other states as well. So long as federal law classifies marijuana under the Controlled Substances Act, it is not “lawful,” even though the federal government chooses not to prosecute.
In its seemingly unending quest to reverse long-settled employer defenses, the National Labor Relations Board (“NLRB” or “Board”) has instructed an Administrative Law Judge to reconsider his decision denying reinstatement to an employee fired for dishonesty. The employee had been improperly denied a Weingarten representative in an investigatory interview. However, the employee had not been terminated for requesting a Weingarten representative, he was terminated for the dishonesty that came to light during the investigatory meeting. Historically and at least since 1984, the NLRB had denied reinstatement as remedy for a Weingarten violation unless the employee was discharged for asserting his/her right to a Weingarten representative. Absent that circumstance, the usual remedy is a cease and desist order and a notice posting. Notwithstanding the 30 years of precedent, the NLRB announced a new standard that will require reinstatement of an employee discharged based on misconduct that occurs during an unlawful interview, unless the employer can show it would have terminated the employee absent the misconduct. In other words, as described by Dissenting Member Johnson, the NLRB is adopting a “fruit of the poisonous tree” standard. No matter how egregious the misconduct, if it is discovered during an unlawful interview, the employee will be entitled to seek reinstatement. Although it is impossible to predict where the Board will strike next, unionized employers are well-advised to ensure compliance with the Weingarten rule, in view of this new “get out of jail free card.”
E.I Dupont de Nemours and Co., Inc., 362 NLRB No. 98 (May 29, 2015).
The U.S. Supreme Court just issued its much-awaited religious discrimination decision in EEOC v. Abercrombie & Fitch, 575 U.S. ___ (June 1, 2015) (No. 14-86). Samantha Elauf applied for a job with A&F and was denied the job because she wears a headscarf or “hijab” as part of her faith. A&F deemed all headwear a violation of its “look policy”. The EEOC obtained summary judgment at the trial court level, but the 10th Circuit reversed, holding that, to later claim failure to accommodate, Elauf had to have actually requested religious accommodation.
In an 8-1 decision, the Supreme Court held that Title VII does not give employees an affirmative duty to request religious accommodation. According to Justice Scalia, the 10th Circuit had confused knowing (e.g., did the employer know a religious accommodation was necessary) with intending (e.g., did the employer intend to reject her application because a religious accommodation might be necessary). According to the Court, knowledge is mostly irrelevant under Title VII.
It is critically important to note that, in this case, A&F had some knowledge that Elauf’s hijab was a religious practice. The Court states that its decision does not address whether an employer violates Title VII by taking action against an employee because he or she engages in some practice, if the employer has no idea that the practice is religious. The case only stands for the idea that an employer may not stick its head in the sand to avoid accommodating a religious practice when the employer “at least suspects” that the employee’s practice is, in fact, religious in nature.
Must federal construction contractors pay for employees’ lodging near a job site? In Weeks Marine, the Department of Labor took the position that a contractor’s failure to reimburse employees for lodging – where the employees travelled away from their homes and lived near the job site – was a de facto kick back of Davis-Bacon Act wages and was prohibited if the lodging primarily benefitted the contractor. Click here for the full advisory.
Recently in Chesapeake Energy Corp., 362 NLRB No. 80 (Apr. 30, 2015), the NLRB held fast to its ruling in D.R. Horton, Inc., 357 NLRB No. 184 (2012). The employer required its employees to sign an arbitration agreement as a condition of employment. The agreement required “binding arbitration to resolve all disputes” between employees and the company, and specifically identified claims under the NLRA, among other statutes. The agreement also prohibited employees from bringing class or collective actions. The Board ruled the agreement violated Section 8(a)(1) of the Act for two reasons—first, the all-encompassing language would lead employees to believe they could not file unfair labor practice charges with the Board, and second, the total proscription of class or collective actions would take away “the core substantive right” of collective legal action protected by the Act. The Board’s decision does not change the current state of the law. Rather, it shows the Board has dug in its heels where mandatory arbitration and class action waivers are concerned. For other entries on D.R. Horton, click here.