May 2024 Employment Law Update
EMPLOYMENT LAW UPDATE
May, 2024
By Bob Gregg
rgregg@boardmanclark.com
Boardman Clark LLP
Wisconsin SHRM Legislative Sponsor
www.boardmanclark.com
LEGISLATION AND ADMINISTRATIVE ACTIONS
This has been a very active month regarding federal employment rules.
Pregnant Workers Fairness Act – Final Rule. On April 15, 2024, The EEOC issued its Final Rule to implement the Pregnant Workers Fairness Act (PWFA). The Rule becomes effective July 19, 2024. The rule is extensive and is available at https://www.federalregister.gov/documents/2023/08/11/2023-17041. Though the PWFA is a Title VII sex discrimination law, much of the rule language and requirements follows the American With Disabilities Act reasonable accommodation principles.
Joint Employer Rule Repealed. Congress has repealed the only recently implemented National Labor Relation Board Joint Employer Rules. These rules had increased the number of organizations which could be jointly liable for employment issues. Joint employment still continues to be a legal liability issue as it did prior to the more expansive new rules. The Congressional action just rolls back the expansion as it applies to labor relations and unfair labor practices. The Congressional action follows the decision in Chamber of Commerce, et al. v. NLRB, et al. (E.D. TX, 2024), in which the court vacated the rules, barring their enforcement.
New FLSA Salary and Overtime Rules. On April 23, 2024, the Department of Labor issued a Final Rule on overtime pay and salaried basis. This will significantly increase the exempt salary requirements. Legal challenges to the rules have already started. For more information, see the HR Heads Up article referenced at the end of this Update.
Federal Trade Commission Rule Bans Noncompete Agreements. On April 23, 2024, the FTC issued a Final Rule banning most noncompete clauses. For Further details see the HR Heads UP article listed at the end of this Update. Courts have been more restrictive in enforcement of these agreements for some time and a number of states have banned them. So, this new rule follows an already existing trend.
Department of Education Issues Title IX Rule Amendments. Title IX prohibits sex discrimination in educational programs in institutions receiving federal funds. It covers employees, students or other program participants. On April 19, 2024, the U.S. Department of Education issued Amendments which make significant changes in the scope of coverage and requirements of the Title IX regulations. A detailed description of these is in the article Department of Education Issues Amendments to Title IX which is referenced at the end of this Update.
TRENDS
Right to Disconnect After Working Hours – Protecting Employees’ Personal and Family Time. The Right to Disconnect Act has been introduced in California. The proposed law would give employees the right to ignore work-related, non-emergency calls, texts, and emails when the regular workday ends, or on weekends. There could be fines for violations if the employer attempts such an off-work time contact. Employees working remotely from other states for a California employer would also be covered., but those living in California but working remotely for employers in other states would not be covered. This is the first state attempt to pass such a law in the United States. New York City considered it but did not pass a disconnect ordinance in 2018. However, a number of European countries and Canada have Right to Disconnect laws.
Another Warning to Beware Legal Advice From AI. New York City set up a small business AI chatbot advice service to help small businesses understand employment laws and regulations. The chatbot generated answers to basic questions as to how the laws would apply. However, it was shown to give misleading advice, even the opposite of the law. For instance, the chatbot advised employers that it is legal to fire an employee who has complained about sexual harassment; and that employees are required to disclose pregnancy to their company or face termination. The website had a disclaimer that it might “occasionally produce incorrect answers.” It also stated that it was “not legal advice.” However, that appeared to be exactly the reason the city set up the small business employment law advice site. This is one more warning about using caution when consulting AI.
LITIGATION
Constitution – First Amendment
Legislator Fires Officer Manager For Reporting Mold. The First Amendment protects public sector employees who speak out on matters of “public interest.” These can include workplace issues which effect that person and other employees, clients, or the public. A regional office manager for a state legislature representative noticed odd odors and she and others began experiencing headaches. She suspected some pollutant in the office. However, the representative and the landlord did nothing to investigate. She contacted the state Republican House Caucus Coordinator, who advised her to buy a test kit to try to identify the issue and said she would be reimbursed. The manager did as she was advised. She opened an air vent, saw a lot of black gunk. The test swab showed several types of toxic mold. She reported this to the landlord and the state representative she worked for. Rather than expressing concern and gratitude for identifying serious health risks, the state representative responded with an angry, profane email including “Who the F_ _ _ gave you permission to do this!” He then demanded both the office manager and the Caucus Coordinator be fired. The office manager was fired. She then filed a First Amendment retaliation case. The court found the manager had engaged in protected activity. Her report of mold was a matter of public interest in protection of other employees, those who come to the office, and the public in general. A discharge in retaliation for doing so was actionable under the First Amendment. Ingram v. Dunbar (3rd. Cir. 2024).
Discrimination
Age
“You’re Old and Walk Funny.”—Comments Overcome Employer’s Defense. A 62-year-old quality control engineer filed a case for age and disability discrimination after being discharged. The employer claimed that the discharge was for insufficient performance and incidents of inaccurate work. The engineer, however, showed evidence that younger employees made similar or worse errors without suffering any critique or consequences. Also, his manager made a number of derogatory comments about his age and the difficulty he had walking due to bone spurs. These included the comments that “You’re old and walk funny” and that he “walked crooked like Fred Sanford” (the elderly TV character in Sanford and Son). The court found that there was evidence of performance problems, so, the employer could have had a valid reason for the discharge. However, the manager’s negative age and disability-related comments were enough to cast doubt on the legitimacy of the employer’s defense. They showed the discharge could be tainted by discriminatory bias. Thus, this case will go to a jury to decide. Brown v. FCA U.S. LLC (E.D. MI, 2024).
Standard of Proof
“Similarly situated” must be equivalent, not just somewhat akin. An employee can prove discrimination by showing that another “similarly situated,” “comparative” employee did essentially the same thing and was not discharged. A male employee was discharged for inappropriate behavior toward others. He filed a Title VII case claiming that a female employee had also engaged in inappropriate behavior toward others and was not discharged. However, the court found the two situations were not similarly situated. Though “inappropriate behavior” may be on the same continuum, the two employees were at very different ends of that continuum and could not be compared. The male employee’s inappropriate behavior involved grabbing another employee’s butt and pressing against the employee. The female employee had been rude and belligerent toward others when she thought she was denied a special benefit; there was no sexual behavior involved in any way. The sexual behavior of the fired employee was severe and far outweighed any comparison to the female’s rude behavior. So, they were not similarly situated. The court approved the summary judgment against the male employee. Choate v. Atlanta Radio LLC (11th Cir., 2024).
Race
Racist Comedian at Corporate Event Creates Case. A hospital’s board chair and its CEO hired a comedian to provide the after-dinner entertainment at a management retreat. The CFO raised a concern that the comedian’s usual routine had inappropriate racial and sexual content. She suggested a different entertainer should be used. This concern was not heeded. At the event, the White comedian impersonated Black people, did stereotyped characterizations of Black people, and a number of demeaning jokes about women. Following the even the CFO wrote a letter of objection to the discriminatory performance, and stated the hospital should issue a letter expressing the performance did not reflect the values of the organization. The CEO disagreed, and felt no action was needed. Soon after, the CEO fired the CFO. She then filed Title VII and 42 U.S.C. Sec. 1981 cases for retaliation. The hospital defended by claiming the discharge was not due to the concerns about the discriminatory performance. Instead, it was “interpersonal business issues,” the CFO’s poor management of her team, and communication issues. The court did not find these reasons credible. There was no contemporaneous documentation of the supposed problems. Just prior to her complaint, the CEO gave her a glowing evaluation and praised her establishment of a “cohesive team,” which was “engaged, enthusiastic, and happy.” The court found all evidence of any problems had been put together after the complaint. The CEO’s post hoc documentation appeared to be a pretext to retaliate after the complaint about the comedian he had hired. The lengthy racist-sexist performance at a large company event was sufficiently overt and sever to create a hostile environment and support a case of retaliation for protected activity under Title VII and Sec. 1981. Coffman v. Grand View Health Foundation LLC, et al. (E.D. PA, 2024).
Race Based Staffing – Care Service Catered to Whites Only Requests. A care service will face trial due to charges it honored patients’ requests to have only White nurses and caregivers. Two Black nurses filed Title VII discrimination cases alleging the company posted scheduling sheets listing whether a patient wanted White only caregivers and assigned people based on this racial preference. If there were not enough White employees to meet the need, the company would pass over Black workers and call in off-duty White employees for extra shift overtime work. The plaintiffs were often passed over, were not eligible for the extra overtime compensation given to Whites only, and the open catering to racial discrimination created a racially hostile environment. Brewer v. Chapters Health System, Inc. (M.D. FL, 2024).
Race and Disability
Staffing Agency will Pay $2.2 Million for Discriminating Against White, Black and Asian Employees. A staffing agency will pay $2.2 million to settle an EEOC charge that it engaged in preferentially recruiting and placing only Hispanic workers in “low-skilled” positions and rejected White, Asian and Black candidates. The settlement also covers Americans With Disabilities Act violations for referring only workers who had no history of any previous injury, regardless of whether the injury had any relevance to the ability to do the job. In RE Baron HR (EEOC Settlement, 2024).
Sex
Union Liable for Sex Discrimination in Hiring Hall. Unions as well as employers can be sued for discrimination. Longshoremen Assoc. #1413-1465 v. Mass. Commission Against Discrimination (Mass. App. 2024) involved a hiring hall process, in which the union chose which people were assigned to work. A female forklift driver was repeatedly denied placement. Even when there were no other qualified people available, the union bypassed her and assigned men who did not have forklift qualifications. The union had a pattern of assigning women to only the lowest paid, non-skilled work. It did not grant full union membership with pension rights to women. The court upheld an arbitration award to the plaintiff of $50,000 plus full union membership and retroactive seniority and pension benefits.
OTHER RECENT ARTICLES
These additional, recent articles can be found at BoardmanClark.com in the Labor & Employment section:
U.S. Supreme Court Makes Employment Discrimination Claims Easier to Prove
Federal Trade Commission Issues Nationwide Ban on Non-Compete Agreements
DOL Issues Final Overtime Rule
Department of Education Issues Amendments to Title IX Regulations
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