Labor Department Withdraws 2015-16 Joint Employment, Independent Contractor Guidance

By Todd Lebowitz on June 7, 2017 Posted in Independent Contractor

Did the new Labor Secretary finally throw employers a bone? We think so, but it’s too early to tell whether it’s delicious bacon-flavored or some generic processed meat flavor.

On June 7, 2017, the Department of Labor (DOL) announced it was withdrawing the 2015 and 2016 informal guidance on joint employment and independent contractor misclassification.

The guidance memos had been written by the previous Wage and Hour Administrator, David Weil. The Independent Contractor memo indicated that the DOL would consider many independent contractor relationships to be misclassified – in other words, that the contractors were really employees under wage and hour law. The Joint Employment memo explained the concepts of vertical and horizontal joint employment and, similarly, concluded that the DOL was looking to find joint employment in all directions.

There has been no new Wage and Hour Administrator appointed to succeed David Weil, but Secretary of Labor Alex Acosta has now taken his first significant step toward signaling increased protections for companies against rampant misclassification and joint employment claims. The withdrawal of these guidance memos, however, creates uncertainty. To borrow an analogy from the legislative healthcare debate, this is just Repeal — not Repeal and Replace. Continue Reading

New NYC Law Requires Written Agreements for Solo Contractors, Even Nannies and Babysitters!

By Todd Lebowitz on May 19, 2017 Posted in Independent Contractor

bigstock-New-York-Stamp-14516816 Do you have a nanny or a housekeeper? A regular babysitter? If so, pay attention.

Anyone hiring a solo independent contractor in New York City will need to comply with the Freelance Isn’t Free Act, which takes effect May 15, 2017. Anyone. Individuals included.

The Act requires a written agreement for all contracts where the value of services is $800 or more, either in a single contract or in the aggregate over the past 120 days. The law covers all contracts with “freelance workers,” which are defined to be individual independent contractors, whether operating as an individual or under a corporate name, such as an LLC. The law does not apply to employees, to contractors that have employees, or to contractors that consist of more than one individual. The law also does not apply to lawyers, doctors, or sales representatives, even if operating as solo independent contractors. Read more >>

Editor’s Note: For more information, tips, and developments on issues related to joint employment and independent contractor misclassification issues, follow Todd Lebowitz’s blog, WHO IS MY EMPLOYEE?

New York District Court Holds That Title VII Protects Against Sexual Orientation Discrimination

By Saima Sheikh and Amanda Van Hoose Garofalo on May 16, 2017 Posted in Discrimination, New York

Choosing your way UPDATE:

On May 22, 2017, in Melissa Zarda et al. v. Altitude Express d/b/a Skydive Long Island et al., the Second Circuit agreed to hold an en banc hearing to determine whether an estate for a gay man, who alleged he was terminated as a result of a customer complaint related to his sexual orientation, may revive its previously dismissed case against the deceased’s former employer. By granting the en banc hearing, the Second Circuit is agreeing to reconsider its current precedent that Title VII does not protect against discrimination based on sexual orientation.

On June 1, 2017, the Second Circuit invited the Equal Employment Opportunity Commission (“EEOC”) to participate as amicus curiae and write a brief answering the question “Does Title VII of the Civil Rights Act of 1964 prohibit discrimination on the basis of sexual orientation through its prohibition of discrimination ‘because of sex’?” The EEOC has previously filed an amicus brief in the Christiansen case arguing that Title VII protects against sexual orientation discrimination based on the well settled precedent that it is sex discrimination under Title VII to discriminate against someone who fails to conform to gender norms (i.e., being attracted to the same sex is non-conformance to gender norms). It is likely that the EEOC will take a similar position in this case.

The fact that the Second Circuit decided to rehear this case and that it specifically invited the EEOC to act as an amicus, makes it appear likely that the Second Circuit is poised to follow the Seventh Circuit’s lead and find sexual orientation discrimination to be prohibited under Title VII through its prohibition on the basis of sex.

ORIGINAL:

Following the Supreme Court decision that same sex marriages are legal, there has been a movement to further expand rights and protections against sexual orientation bias. That trend is appearing in federal courts, where plaintiffs are asking the courts to recognize, under federal law, that sexual orientation is a protected class. Although the Second Circuit seems somewhat reluctant to join the bandwagon, the momentum seems to be headed that way.

In a March 27, 2017, ruling in Christiansen v. Omnicom Group Inc. et al., a gay advertising executive at an Omnicom subsidiary alleged (among other things) that his employer violated Title VII by discriminating against him for his failure to conform to gender stereotypes. Christiansen asked the full Second Circuit to overturn its precedent in Simonton v. Runyon from 2000 that Title VII does not protect individuals alleging discrimination based on sexual orientation. Concluding that it lacked the power to reconsider its standing precedent, the panel held that Christiansen had stated a plausible gender stereotyping claim under the U.S. Supreme Court’s decision in Price Waterhouse v. Hopkins and ordered the lower court to consider that part of the suit. In a concurring opinion, Chief Circuit Judge Robert Katzmann opined sexual orientation discrimination is a form of sex discrimination, stating that “such discrimination treats otherwise similarly-situated people differently solely because of their sex” and that “sexual orientation cannot be defined or understood without reference to sex.” Judge Katzmann surmised that sexual orientation should be encompassed by Title VII, expressing hope for an “appropriate occasion” for the Circuit to reconsider its 2000 precedent. Continue Reading

Recent Developments in Transgender Issues

By Amanda Van Hoose Garofalo on May 3, 2017 Posted in Discrimination

Discrimination underlined with red marker

UPDATE: Transgender Individuals Have Right to Choose Their Gender Appropriate Bathroom

On May 30, 2017, in Ashton Whitaker v. Kenosha Unified School District et al., the Seventh Circuit upheld a preliminary injunction requiring a Wisconsin school district to permit a trans male individual to use the men’s restroom. In so doing, the Seventh Circuit ruled that both Title IX of the Civil Rights Act, and the Equal Protection Clause, mandated that transgender students be permitted to use the bathroom of their choice. The court based its decision on the well-established precedent that federal law prohibiting discrimination based on sex, also protects individuals against discrimination for gender non-conformance. The court found that not permitting a trans individual to use the bathroom that conforms with his/her identity is discrimination on the basis of gender non-conformance.

This decision is likely to impact the Gloucester County School Board v. G.G. case (which was previously discussed in our blog post) currently pending before the Fourth Circuit. Additionally, employers should heed this warning and ensure that they are not only permitting transgender employees to utilize the restroom of their choice, but also not requiring the trans individual to comport with the gender norms of his/her sex assigned at birth.

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On February 22, 2017, the Trump Administration rescinded the Obama Administration’s guidance related to transgender students’ access to bathrooms and locker room facilities that align with their gender identity, which was discussed in our September 21, 2016, blog post. Trump’s Administration stated that the Obama guidance was inconsistent with the language of Title IX and that the issue should be left to the states.

As a result of the revocation of guidance specifically at issue in that case, and despite the plaintiff’s urging to the contrary, the Supreme Court on March 6, 2017, held that the challenge in Gloucester County School Board v. G.G., (which was discussed in our September 21, 2016, blog post) was now moot and refused to hear the case any further. The Supreme Court remanded to the Fourth Circuit. On April 7, 2017, although the opinion was full of sympathy for the student, even comparing him to abolitionists and those who fought against marriage inequality and segregation, the Fourth Circuit denied the student’s request that his challenge of the school board’s bathroom rule be heard prior to graduation and repealed the order barring its enforcement. The Fourth Circuit stated that the Trump Administration’s repeal of the Obama Administration’s guidance shifted the focus to the specific wording of Title IX, rather than the issue of agency deference, which was previously at issue. This shift required repeal of the previous restraining order. Continue Reading

Employers Will No Longer Be Permitted to Ask About Previous Pay in New York City

By Amanda Van Hoose Garofalo and Amy J. Traub on April 16, 2017 Posted in New York

bigstock-New-York-Stamp-14516816 On Wednesday, April 12, 2017, the New York City Council passed a law amending the New York City Human Rights Law (NYCHRL) to add a protective class – salary history. The NYCHRL applies to all employers with four or more employees. The amendment prohibits employers in New York City from asking about or using a job applicant’s wage history (including benefits) in hiring decisions or negotiating terms of employment. Employers are, however, permitted to ask about objective measures of an applicant’s job performance, such as revenue, sales, or other production reports. The motivation behind the legislation is an attempt to curtail the gender wage gap and disparity in pay among races.

The New York City Commission on Human Rights enforces this amendment, as it does the NYCHRL, and offenders could receive penalties akin to the fines levied against companies for other forms of discrimination – up to $125 for an unintentional violation and up to $250,000 for an intentional malicious violation. Additionally, there is a private right of action for employees to sue.

The new law is on Mayor DeBlasio’s desk for signature, but it is anticipated that he will sign the bill without hesitation. Not only did the mayor’s spokesperson confirm that he worked closely with City Council on this bill, but the mayor also signed a similar bill for New York City agencies last year.

In order to avoid violation of the new law, employers should revise former job applications and ensure that their hiring personnel are trained on the new law in order to avoid asking an applicant about pay history. Additionally, employers should update their handbooks to confirm compliance with this new law.

A Shift Toward Employers?

By Elliot Azoff and Amanda Van Hoose Garofalo on March 9, 2017 Posted in NLRB

Policies and Procedures As most employers are now aware, the National Labor Relations Board (NLRB, or the “Board”) in recent years has adopted more restrictive, non-employer-friendly approaches to what it will permit in workplace policies. These rules have been applied to union employers and just as vigorously to unorganized employers. Management labor lawyers have been placing their clients on guard to prevent them from running afoul of the National Labor Relations Act (NLRA). Now that a new administration is in charge, employers are left wondering (and hoping) whether there will be a shift in this trend.

The answer would appear to be YES.

Cellco Partnership d/b/s Verizon Wireless Inc., is a recent example of the NLRB’s heavy-handed approach in reviewing employers’ policies in employee handbooks. The Board’s current standard deems a handbook provision unlawful if employees “would reasonably construe” the policies as prohibiting concerted activity protected under Section 7 of the NLRA, and the Board uses no common sense in applying this standard. Consistent with this approach, the NLRB ruled, over a well-reasoned dissent, in Verizon Wireless Inc. that the employer-maintained handbook rules at issue unduly restricted employee communications and behavior and hence were unlawful. Continue Reading

New York Appellate Court Declines to Enforce Noncompetes Against Employees Terminated Without Cause

By Saima Sheikh on February 14, 2017 Posted in New York

bigstock-New-York-Stamp-14516816 A recent decision by the New York Supreme Court, Appellate Division for the First Department, Buchanan Capital Markets, LLC v. DeLucca, 144 A.D.3d 508 (1st Dep’t. 2016), suggests that noncompetition restrictions against employees who have been terminated without cause are unenforceable. The court stated that “covenants not to compete in employment agreements … are not enforceable if the employer … does not demonstrate continued willingness to employ the party covenanting not to compete.”

Buchanan Capital Markets, LLC (BCM), a financial services firm, terminated several employees who were financial and operations principals in connection with the sale of the company, but gave the employees the option to reapply to the successor firm. The employees had signed employment agreements with BCM’s predecessor company that contained two-year post-employment noncompetition and customer nonsolicitation restrictions. Following their terminations, the employees went to work for a competitor, and several BCM clients left BCM to do business with the competitor. Subsequently, BCM sought a preliminary injunction to enforce the noncompetition and customer nonsolicitation restrictions and to order the former employees to return to BCM its proprietary business information. To obtain a preliminary injunction under the state laws of New York for a violation of a noncompetition restriction, an employer must demonstrate a likelihood of success on the merits, irreparable injury, and a balance of equities in its favor. The trial court concluded that BCM had not met these factors and denied BCM’s application for a preliminary injunction. Continue Reading

Joint Employment Update: What’s The Status of Browning-Ferris and the NLRB?

By Todd Lebowitz on January 30, 2017 Posted in NLRB

In August 2015, the NLRB rewrote the book on joint employment, declaring in the Browning-Ferris case that the right to exercise minimal control, even if not actually exercised, was enough to create a joint employment relationship. (Read more here.) Previously, joint employment under the National Labor Relations Act (NLRA) required the actual exercise of a meaningful level of control.

But what’s happened since then? What happens next? What should employers expect in 2017 regarding joint employment under the NLRA?

Let’s start by looking at the case itself. Browning-Ferris is on appeal, with oral argument scheduled in the D.C. Court of Appeals on March 9, 2017 (that’s also National Crabmeat Day, for you crustacean lovers). So that decision should clear things up, right? Wrong.

First, the Court of Appeals is unlikely to reverse the NLRB. The Court of Appeals must generally defer to the Board’s interpretation of the NLRA, unless it determines that the Board acted arbitrarily or contrary to the facts. Continue Reading

Probationary Periods: A Window Worth Closing

By Marc Antonetti and Jacqlyn Rovine on January 10, 2017 Posted in Policies

Time To Evaluate Typewriter Probationary periods are a tool long used to test the viability of job candidates. They can provide a window into an employee’s suitability and qualifications for a position. In an economy that continues to have high unemployment, recent graduates, those looking to change careers and those interested in a specific company may be particularly open to a probationary period that lets them get their foot in the door. However, without adequate protections, when completed, a probationary period may create an expectation on behalf of the new employee – and, more importantly, in the eyes of a court – that the employee cannot be fired at will. This is just one of several reasons you might consider eliminating probationary periods as a hiring tool, unless your company has a unionized workforce.

This is not to say that probationary periods cannot serve a useful purpose, particularly when an employer has a unionized workforce. Under most collective bargaining agreements, employers can terminate employees only if they can demonstrate “just cause” and exhaust the grievance or arbitration procedures. But when an employer has negotiated for a probationary period for new hires as part of its collective bargaining agreement with a union, a new hire can be terminated during that period consistent with the employment-at-will standard, meaning that the employer can terminate the employee for any legal reason or no reason at all. Given how difficult it can be to terminate a union employee, negotiating a probationary period clause into a collective bargaining agreement can be an extremely valuable tool to ensure that you are hiring the right employees for the job – especially if you may have to live with them for a long time.

New Year, New Minimum Wage (Orders) in New York

By Amy J. Traub and Amanda Van Hoose Garofalo on January 3, 2017 Posted in Wage and Hour

bigstock-New-York-Stamp-14516816 As most employers are likely aware, effective Dec. 31, 2016, new minimum wages went into effect in New York. The rates vary for employers, depending on size and location. For those who may have missed this change, the new minimum wages are listed in the table below.

Additionally, New York employers may or may not know that the New York State Department of Labor (NYSDOL) had several proposals pending that would affect employees’ pay. For instance, the NYSDOL had a proposal to raise the minimum salary threshold in order for an employee to qualify as exempt from overtime under New York law. There had been little to no conversation about the progress of the recent proposal on the NYSDOL website, but the proposal has in fact passed, and has been implemented by the new wage orders, making the new salary thresholds (and other requirements contained in the proposal) effective as of Dec. 31, 2016. Below are some highlights of the provisions of the wage orders; however, employers should be cautioned to consult with an employment attorney prior to implementing any of the changes provided below, as different requirements or restrictions may apply to a specific industry. Please feel free to contact a member of the BakerHostetler employment team, who would be happy to guide you on this process. Continue Reading