Employment Law Spotlight

Employment Law Spotlight

Providing Developments & Insight on Trending Topics in Employment Law

OFCCP Issues New Sex Discrimination Rule

Posted in Discrimination

We have made progress as a country in opening career opportunities for women that were, for decades, the province of men. Yet, there is more work that lies ahead to eradicate sex discrimination. This is why it is important that we bring these old guidelines from the ‘Mad Men’ era to the modern era, and align them with the realities of today’s workplaces and legal landscape.

Patricia A. Shiu, OFCCP Director

CheckboxOn June 14, 2016, the United States Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published its final rule establishing requirements that federal contractors and subcontractors must meet under Executive Order 11246 to ensure nondiscrimination in employment on the basis of sex. Up until this week, the OFCCP’s sex discrimination guidelines had gone unchanged since the 1970s.

The new rule specifically addresses sex-based employment issues present in today’s workplace, including compensation discrimination, sexual harassment, failure to provide workplace accommodations for pregnancy and related conditions, discrimination on the basis of gender identity and transgender status, family caregiving discrimination, and discrimination based on gender norm stereotypes.

The requirements under the rule are largely in line with Title VII and the Equal Employment Opportunity Commission’s interpretation of Title VII, and therefore requirements for federal contractors and subcontractors are largely unchanged by this rule. The rule is organized into eight sections and concludes with an appendix, which contains nonbinding “best practices” to prevent sex discrimination. These are some highlights of the rule. Continue Reading

NLRB “Quickie Election Rule” Upheld by Fifth Circuit

Posted in NLRB

On June 11, 2016, the United States Court of Appeals for the Fifth Circuit upheld the National Labor Relations Board’s (the “NLRB’s” or the “Board’s”) regulations enacted last year, radically altering the traditional rules governing union elections.

As we have discussed previously, the new regulations, which took effect on April 14, 2015, and are referred to collectively as the “quickie election rule,” dramatically shorten the potential election timeline – and, consequently, shorten the period of time an employer has to respond to and defend against an election petition. Specifically, the new rule permits electronic filing of election petitions; requires employers to file a statement of position outlining all pre-election hearing issues within seven days after the petition is filed or else risk waiving such issues; mandates that pre-election hearings commence within eight days of the filing of an election petition; requires employers to provide the union with voter information (including modern forms of contact information like personal email addresses) within two days of any direction of election; defers resolution of many voter eligibility issues until postelection; and denies parties the opportunity to file a post-hearing brief as an automatic right. Continue Reading

Understanding the New Overtime Regulations

Posted in FLSA

Today, the U.S. Department of Labor (“DOL”) issued the final version of the much-anticipated new Fair Labor Standards Act (“FLSA”) regulations regarding the salary threshold for exempt employees. This post provides employers with insight into how to understand, and ultimately apply, the new regulations, which will affect employers of all sizes in all industries across the country.

I. HISTORY OF THE NEW OVERTIME REGULATIONS

The FLSA provides an exemption from the overtime pay requirement for workers employed as executive, administrative, and professional employees (“exempt white-collar employees”). The FLSA also exempts from overtime pay highly compensated employees (“HCEs”).

To be exempt, an employee must meet three criteria: (a) the employee must be paid on a predetermined “salary basis” (i.e., the employee’s predetermined salary cannot be reduced because of variations in the quality or quantity of work performed); (b) the employee’s salary must meet a minimum salary threshold (currently $455 per week; i.e., $23,660 per year); and (c) the employee must meet the “duties” test of the applicable exemption (i.e., the employee must perform certain white-collar job duties).

On March 13, 2014, President Barack Obama signed a memorandum directing the DOL to update the FLSA’s overtime regulations governing exempt white-collar employees. On July 6, 2015, the DOL announced the much-anticipated proposed regulations, which, among other things, more than doubled the salary threshold required for an employee to qualify as an exempt white-collar employee. In July, we advised that the proposed overtime regulations would have a significant impact on all industries and that employers should analyze their current workforce and anticipate where changes should be made rather than wait for the proposed overtime regulations to be finalized.

The DOL received more than 270,000 comments regarding the proposed overtime regulations, and on March 15, 2016, the DOL sent the proposed overtime regulations to the Office of Management and Budget (“OMB”). Read more >>

Comparing the Defend Trade Secrets Act and the Uniform Trade Secrets Act

Posted in Trade Secrets

trade secrets text - file cabinet label, bronze holder against grunge and scratched wood

As we have previously discussed on the blog, President Obama signed the Defend Trade Secrets Act (DTSA) into law on May 11, 2016. Fortunately, while the law has many new components that businesses need to consider, parts of the DTSA are derived from the Uniform Trade Secrets Act (UTSA). The UTSA has been adopted, in various forms, by 47 states to date. Therefore, there is a large body of state law that has developed on the UTSA that may be applicable to the DTSA. This latest blog entry in our series on the DTSA analyzes some of the differences and similarities between the DTSA and UTSA, specifically the acts’ “trade secrets” and “misappropriations” definitions and their statutes of limitations. Read more >>

House Judiciary Committee Passes Defend Trade Secrets Act

Posted in Trade Secrets

trade secrets text - file cabinet label, bronze holder against grunge and scratched wood

Wow, that was fast! We recently blogged about the revised Defend Trade Secrets Act, which passed the Senate on April 4, 2016, by an 87-0 vote. On April 20, the House Judiciary Committee unanimously passed the same bill. The next step is for the full House to consider the bill, and then it goes on to the president’s desk. This is expected to happen quickly.

As we reported, one controversial aspect of the bill is its provision for ex parte seizure of “property necessary to prevent the propagation or dissemination of the trade secret.” Amendments made to the original bill by the Senate were intended to address the concern that this remedy could be abused. The amendments included making the remedy available only in “extraordinary circumstances,” placing limits on the scope of the seizing official’s authority, and expressly stating that any injunction issued under the act may not conflict with applicable state law prohibiting restraints on employment. Read More >>

Yes, Attorneys Too Can Blow the Whistle: But When and How Hard?

Posted in Whistleblowing

Whistle BlowerAccording to the United States Securities and Exchange Commission (“SEC” or the “Agency”), an attorney – or any individual, for that matter – should not have to first report misconduct to the SEC to fall under the protections of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or the “Act”). In an amicus brief submitted in late March 2016, the SEC requested a broader reading of Dodd-Frank in support of a former in-house attorney for Vanguard Group Inc., a mutual fund company. The attorney, David Danon, had filed an action in the United States District Court of Philadelphia in December 2015 claiming that Vanguard had wrongfully terminated him after he raised concerns internally about alleged tax violations.

Under the Dodd-Frank whistleblower program, an individual who reports violations of law or misconduct is entitled to a monetary incentive for reports leading to a successful SEC enforcement action that recovers above $1 million in monetary sanctions and protection under the anti-retaliation provisions of the Act. Previously, these incentives and protections were understood to apply only to those who first reported violations of law or misconduct to the SEC. Danon, however, did not reach out to regulators until his employment was terminated after he allegedly reported the wrongdoing internally. In its brief to the district court, the SEC advocated for a much broader reading of the Act regardless of when the report is made to the SEC to avoid creating a two-tiered system that discourages internal reporting. The SEC noted that internal reporting is an “important component of the overall design of the whistleblower program.” Additionally, the SEC argued that if its interpretation was not adopted, its authority to pursue enforcement actions against employers who retaliate against employees who report internally would be “substantially weakened.” The Agency sought parity for individuals regardless of when they blow the whistle and to whom they report first. The Second and Fifth Circuits are currently split on the proper interpretation of the Act, leading to the question of whether this issue may one day reach the Supreme Court. Continue Reading

Epic Verdict in Trade Secrets Case

Posted in Trade Secrets

Last week, a federal jury in Wisconsin awarded almost $1 billion to Epic Systems Corporation in its trade secrets case against Indian consulting company Tata Consulting Services, Ltd., and its American unit, Tata America International Corporation. Epic provides software for medical groups, hospitals, and integrated health care organizations. Tata was hired by one of Epic’s customers, Kaiser Permanente, to provide consulting services in connection with the Epic software. A whistle-blower alerted Epic in 2014 that TCS employees were accessing Epic’s computer network without authorization, and using the information obtained to assist Tata in the development of competing software. Read More >>

New York: Paid Leave

Posted in FMLA

bigstock-New-York-Stamp-14516816Until now, within the U.S., only California, New Jersey, Rhode Island, and Washington have had paid family leave statutes, none of which offers benefits longer than six weeks. New York now joins those states offering a paid family leave program for its workers, but New York’s program will be the most robust, providing 12 full weeks of job-protected leave. Both the benefit amount and length of paid family leave will be gradually phased in beginning in 2018.

Specifically, New York employees will be eligible for paid leave under the New York paid family leave law:

  • to provide care for a family member made necessary by a serious health condition;
  • to bond with their child during the first 12 months after birth or after the placement of the child with the employee for adoption or foster care; and
  • because of any qualifying exigency arising out of the fact that the spouse, domestic partner, child, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the armed forces of the U.S.On January 1, 2018, employees will be eligible to receive up to eight weeks of paid family leave per year and 50 percent of their average weekly wage (capped at 50 percent of the statewide average weekly wage). On January 1, 2019, employees will be eligible to receive up to 10 weeks of leave and 55 percent of their average weekly wage (capped at 55 percent of the statewide average weekly wage). Thereafter, the benefit increases such that by 2021, employees can get up to 12 weeks and 67 percent of their average weekly wage (capped at 67 percent of the statewide average weekly wage).
  • Unlike the Family and Medical Leave Act (“FMLA”), which applies only to companies with 50 or more employees, New York’s plan applies to all employees, regardless of company size. New York’s plan also grants paid leave, unlike the FMLA, which provides for only unpaid job protection. And unlike under the FMLA, which provides protection only for individuals who have been employed by a company for more than one year, employees are eligible for paid leave in New York after only six months of employment.

The program is not funded by employers, but instead will be funded through nominal employee payroll deductions. Nonetheless, this new plan invites questions from employers who already have paid leave policies. Employers are encouraged to review their current policies and practices to get ready for New York’s new plan.

Defend Trade Secrets Act Close to Becoming Law

Posted in Trade Secrets

On April 4, 2016, the Senate unanimously passed the Defend Trade Secrets Act, bringing a federal civil remedy for trade secret misappropriation one step closer to becoming law. House Judiciary Chairman Bob Goodlatte released a statement a few days later saying he planned to move the legislation through the House Judiciary Committee in the coming weeks. Given the signals that a federal civil trade secret law is imminent, this article will address the basics of the bill just passed by the Senate, so that any businesses and employers with trade secret issues can begin planning for changes that may be needed in written employment policies, nondisclosure policies, and litigation strategy.

Currently, trade secrets lack a federal civil remedy. They are instead protected by state law under the Uniform Trade Secrets Act (UTSA), and enforceable in federal court only under a particular state’s law and if there is diversity jurisdiction. The idea behind the proposed federal legislation is in part to provide a uniform body of law and to strengthen the enforcement procedures available. The federal bills deviate from current enforcement under the UTSA in some significant ways, including as follows:

Remedies – ex parte seizure

Both House and Senate bills provide for ex parte seizure of “property necessary to prevent the propagation or dissemination of the trade secret.” The federal proposals contain restrictions designed to balance the rights of the trade secret holder with those of the alleged misappropriator and third parties who may be harmed by a seizure. The Senate version would allow ex parte seizure only in “extraordinary circumstances.” It further requires any seizure order to delineate clearly the scope of the seizing officials’ authority, including the hours during which the seizure may be executed, and whether force may be used to access locked areas. Both the Senate and House versions contemplate that the seizure order shall be made by federal law enforcement. The Senate version appears to allow the state or local authorities to “participate” only if allowed by court order, and prohibits an applicant or its agent from participating in the seizure.

Both versions of the act provide a cause of action for wrongful or excessive seizure. A successful claimant under this provision could recover damages for lost profits, costs of materials, loss of good will, punitive damages for bad faith conduct, and attorneys’ fees. The language of any final version of this cause of action will likely provide limiting parameters to these remedies, and will be important to any decision regarding whether to seek an ex parte seizure order. Continue Reading

Second Circuit Defines Test for Individual Liability Under the FMLA

Posted in FMLA

Employment_186440912In Graziadio v. Culinary Institute of America, et al., 15-888-cv (2d. Cir. Mar. 17, 2016), the United States Court of Appeals for the Second Circuit reversed the district court’s grant of summary judgment in favor of the employer and individual defendant on the question of individual liability based on a human resource professional’s exercise of control over the plaintiff’s Family and Medical Leave Act (FMLA) rights.

Background. When plaintiff Cathleen Graziadio attempted to return to work from FMLA leave to care for her sons, the director of Human Resources refused to allow her return until she provided new documentation supporting her leave. Over several weeks, Graziadio tried to determine how to remedy the deficiencies in her FMLA paperwork and return to work, but the director of Human Resources failed to provide a meaningful response. According to Graziadio, communications broke down as a result of the director of Human Resources and she was terminated for job abandonment. Graziadio subsequently sued for interference and retaliation under the FMLA and discrimination under the Americans with Disabilities Act.

Control Over FMLA Rights Is Key. Under the FMLA, an individual may be held liable if he or she is considered an “employer,” defined as “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” To determine whether an individual is an “employer” under this provision, the Second Circuit concluded that the economic-reality test used to analyze whether an individual is an “employer” under the Fair Labor Standards Act should also be applied to the FMLA.

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