Employer Law Report

Sixth Circuit: Employer can’t enforce shorter contractual statute of limitations period to bar Title VII action

A federal lawsuit alleging discrimination under Title VII must be filed within ninety days after the EEOC has completed its handling of the related discrimination charge and issued its Notice of Right To Sue. Some employers attempt to shorten the time for filing discrimination charges by getting employee or applicants to sign agreements to that effect. On Sept. 25, 2019, in Logan v. MGM Grand Detroit Casino, the 6th Circuit Court of Appeals ruled that efforts to shorten the statute of limitations for Title VII cases are not enforceable.

The Circuit Court overturned a district court decision that found that Barbrie Logan’s sex discrimination lawsuit could not proceed because it was barred by a six-month statute of limitations to which she agreed when she applied for employment with MGM. In overturning the lower court’s decision, the 6th Circuit stated,

“The limitation period of Title VII is part of an elaborate pre-suit process that must be followed before any litigation may commence. Contractual alteration of this process abrogates substantive rights and contravenes Congress’s uniform nationwide legal regime for Title VII lawsuits.”

Two hundred and sixteen days after resigning her employment with MGM on Dec. 4, 2014, Ms. Logan filed an EEOC charge alleging that she was constructively discharged due to sex discrimination in violation of Title VII. The EEOC issued a right to sue notice in November 2015 and she filed suit in federal district court on Feb. 17, 2016—440 days after resigning. MGM filed a motion for summary judgment, arguing that both the EEOC charge and her subsequent federal lawsuit were barred by the contractual 6 month statute of limitations. A magistrate judge of the district court agreed and issued a report recommending that summary judgment be entered in MGM’s favor. The district judge adopted the magistrate’s recommendation and entered judgment for MGM.

After a detailed discussion of the Title VII charge process and enforcement scheme, the 6th Circuit reversed. Noting that “[i]n crafting Title VII, Congress chose ‘[c]ooperation and voluntary compliance…as the preferred means’ for eradicating workplace discrimination,” the court stated that

“[a]ny alterations to the statutory limitation period necessarily risk upsetting this delicate balance, removing the incentive of employers to cooperate with the EEOC, and encouraging litigation that gives short shrift to pre-suit investigation and potential resolution of disputes through the EEOC and analog state and local agencies.”

In this way, according to the court, Title VII claims are distinguishable from claims of discrimination brought under 42 U.S.C. Section 1981 and claims brought pursuant to ERISA (regarding which the 6th Circuit previously has endorsed shorter contractual statutes of limitations.)

How does this affect those in Ohio?

In Ohio, employees challenging an adverse employment decision as having been based on their protected status under Ohio Chapter 4112 (similar in most respects to the protected statuses found in Title VII) have the option to file a lawsuit directly in the court of common pleas rather than a charge with the Ohio Civil Rights Commission. Therefore, when an employee chooses to forego the charge filing process with the OCRC to enforce his or her rights, Ohio employers should argue for enforcement of a shorter contractual statute of limitations because the Logan court’s analysis would no longer be applicable. As we previously reported, federal courts in Ohio already have upheld employers’ rights to enforce contractual statutes of limitations in employment actions that did not raise claims under Title VII.

DOL increases salary threshold for white collar exemptions to $35,568

After more than 15 years, the U.S. Department of Labor (DOL) is updating the overtime regulations under the Fair Labor Standards Act (FLSA). The FLSA entitles most employees to minimum wage and overtime pay for all hours worked over 40 in a workweek. However, employees who meet the salary threshold and the relevant duties test qualify for the executive, administrative, professional exemption (white collar exemption), and are not entitled to overtime pay. On Sept.24, 2019, the DOL issued a news release announcing its final rule regarding overtime regulations.

Effective Jan. 1, 2020, the new salary threshold for white collar exemptions will increase to $684 per week, which is the equivalent of $35,568 per year for a full-time employee. Currently, the salary level is set at $455 per week ($23,660 annually for a full-time employee).

In addition to the increased salary threshold, the final rule:

  • Raises the annual compensation level for “highly compensated employees” to $107,432 per year, up from the currently-enforced $100,000 amount
  • Allows employers to include nondiscretionary bonuses and incentive pay (including commissions) paid at least annually to account for up to 10 percent of the salary threshold
  • Revises the special salary levels for employees in U.S. territories and the motion picture industry

According to the DOL, these changes will mean 1.3 million additional American workers are eligible for overtime pay under the FLSA. The DOL notes that the “increases to the salary thresholds are long overdue in light of wage and salary growth since 2004.”

A previous rule issued under the Obama Administration in 2016 was blocked by a federal judge before the rule could go into effect. The 2016 rule was more expansive than the 2019 final rule announced on Sept. 24, 2019.

Takeaways

For full-time employees with salaries below $35,568, employers will need to consider whether to implement salary increases to ensure the salary threshold for white collar exemptions is met or to convert those employees to non-exempt status. Conversion would require those employees to track their hours and make them eligible for overtime pay. This is also a good time for employers to review job descriptions to ensure they accurately reflect the work performed and to ensure those duties still qualify under one of the white collar exemptions for exempt employees.

NLRB sides with Kroger’s action to remove union representatives from company property

On Sept. 6, 2019, the National Labor Relations Board (NLRB) granted a significant win to employers, ruling that businesses can lawfully limit the rights of nonemployee union supporters to access company property that is otherwise open to the public. In a 3-1 decision, the Board ruled that Kroger did not violate the National Labor Relations Act (NLRA) when it removed nonemployee union supporters from the parking lot of a Kroger store. The decision overruled a 2016 ruling by an NLRB administrative judge that Kroger had illegally barred two nonemployee representatives of the United Food and Commercial Workers Union from petitioning customers in the parking lot of a store in Portsmouth Virginia. The nonemployee union representatives were there to solicit customer support for the union’s protest over a decision to close the store and relocate employees to a different location 25 miles away.

The administrative law judge who initially heard the case ruled in favor of the union, noting that the grocery store’s managers had previously allowed several charitable entities to distribute literature and sell goods outside the store’s entrance. Applying Sandusky Mall Co., 329 NLRB 618 (1999), the administrative law judge held that Kroger violated the NLRA and discriminated against the union by regularly granting access to company property to civic, charitable and promotional activities by nonemployees while prohibiting nonemployee union representatives from petitioning on company property. Continue Reading

Misclassifying employees as “independent contractors” does not violate NLRA

The decision to classify a worker as an independent contractor, rather than as an employee, carries significant legal implications. Misclassifying employees as independent contractors can result in employer liability for unpaid payroll taxes, unpaid unemployment and workers’ compensation premiums, and responsibility for failure to provide the various rights afforded under employment laws to employees but not to independent contractors. A careful approach, including legal advice, is always wise in evaluating whether a worker can properly be classified as an independent contractor. However, the National Labor Relations Board (NLRB) has taken one element of risk out of the decision.

In a recent case involving a transportation company, the NLRB concluded that the company had misclassified some of its drivers as independent contractors. But, the NLRB also concluded that the misclassification, standing alone, did not constitute a violation of the National Labor Relations Act (NLRA). The case is Velox Express, Inc. 15-CA-184006, 368 NLRB No. 61

The NLRB Administrative Law Judge (ALJ) who initially heard the case had concluded that the fact of misclassification violated the NLRA rules which protect the rights of employees to join unions. Independent contractors, unlike employees, do not have the right to organize. The ALJ felt that by classifying the drivers as independent contractors Velox had inherently interfered with their right to organize. On appeal the NLRB overruled the ALJ’s decision. The NLRB concluded that just the fact of misclassification does not inhibit or otherwise interfere with the rights of employees to organize.

This decision does not mean that employers can let down their guard when making classification decisions. Misclassification can still bring significant legal risk under tax law, employee benefits law, and other laws protecting employee rights. Misclassification can also indirectly lead to problems under the NLRA. In the Velox case the company had terminated one of its drivers after she complained about being misclassified. The NLRB ruled that since the driver was, in fact, an employee, she had the right under the NLRA to complain on behalf of herself and others about what she felt was a misclassification. So, although the misclassification, standing alone, was not an NLRA violation, the adverse action taken against a complaining employee was.

New York’s new discrimination law—Aberration or the start of a trend?

Employers with facilities in New York are probably aware of the significant piece of anti-discrimination legislation Gov. Cuomo signed recently. The new law:

  • expands coverage to all employers regardless of size;woman in conference room
  • expands protections against discrimination to certain non-employees;
  • increases the statute of limitations for sexual harassment claims from one to three years;
  • adds punitive damages and mandatory attorneys’ fees as potential remedies;
  • prohibits mandatory arbitration of discrimination claims;
  • adds to the notice requirements an employer must provide regarding its sexual harassment policy, including in the language identified by any employee as their primary language; and
  • places significant specific restrictions upon the use of non-disclosure agreements

While these changes are certainly significant, the more troubling aspect of the law for employers and their counsel may be its expansive definition of sexual harassment as well as its open dismissiveness of federal law. Continue Reading

Are Ohio workers’ compensation laws changing?

As we reported in June, the Ohio legislature attempted to make substantial changes to workers’ compensation laws as part of the overall budget. However, after the House and Senate could not reach an agreement on many parts of the budget, Gov. DeWine permitted the legislature additional time to reach a compromise. The actual budget submitted to and signed by the governor contained NO changes to the workers’ compensation laws. Conspicuously absent from the budget was the House’s proposal requiring any applicant for workers’ compensation benefits to disclose whether they were a citizen or not. Further, the budget did not include any provision for first responders with post traumatic stress disorder (PTSD) to obtain workers’ compensation benefits. Hence, for now, the Ohio workers’ compensation laws have not changed.

Rumors exist that legislators intend to introduce specific legislation to address these proposed changes as well as other changes. Stay tuned and we will keep you updated should the legislature introduce any new bills to change the Ohio workers’ compensation laws.

Myths, rumors and clarification on the status of the H-4 EAD

In February of this year, USCIS announced that the proposed rule to eliminate the ability of foreign nationals in H-4 status to apply for an Employment Authorization Document (EAD) was sent to the Office of Management and Budget (OMB) for final approval. Five months later, OMB has still not released the proposed rule for publication. The delay likely reflects substantive issues and is more than mere bureaucratic delay. In the meantime, the H-4 EAD is alive and well. The proposed rule must still clear several administrative hurdles before it becomes effective and can be implemented. Continue Reading

EEO-1 reporting: Pay data filing begins July 15, 2019

 The Equal Employment Opportunity Commission (EEOC) has announced the filing window for the newly required Component 2 pay data opens July 15, 2019. Private employers with at least 100 employees are required to submit pay data for calendar years 2017 and 2018 by Sept. 30, 2019. This new requirement is ordered by the court decision in the National Women’s Law Center v. Office of Management and Budget case.

The EEOC has taken a number of steps to assist employers with this new filing requirement.

Continue Reading

#MeToo: Looking to best teaching practices for effective training

When did canned web-based presentations become the norm for harassment, discrimination and other inappropriate workplace conduct training? Companies who rely on pre-prepared, generic materials often find those trainings for HR, management, supervisors and employees to be ineffective, particularly now that #MeToo is a part of our vocabulary. For the employer who has the goal of efficient and effective HR trainings, it is helpful to look to best teaching practices. Educators know that teaching a lesson in a memorable and engaging way will help student retention…algebra or workplace harassment alike. Simply put, face-to-face, interactive training is the most effective way to communicate key concepts and reduce complaints related to workplace behavior.

True engagement requires connection

We all have a favorite teacher. Perhaps it was your third-grade teacher, who smiled as they asked how you were doing each day. Maybe it was a college professor whose lectures were so engaging that you couldn’t help but absorb their every word. My favorite was one I had in high school, who used storytelling in his teaching. He was an expert at weaving in vivid details of his life into his lessons; memories of being a young boy in South Africa, or the experience of the first time he held his newborn son into his lessons. I will always remember these lessons in vivid detail because true engagement requires connection. In order to affect learning and ultimately change behavior, one has to make a genuine connection with another person to bring about new understanding. My high school teacher did this, and undeniably your favorite teacher did too.

Building a culture of transparency in the age of #MeToo

Discrimination manifests in many shapes and sizes, through workplace harassment, sexual harassment or retaliation (to name a few). In the age of #MeToo, employers are seeking efficient and effective HR trainings for their workers that will resonate with their employees, and will produce more than just a printed certificate of completion. Trainings that push past the discomfort of the topic, engage their audience, generate thought and encourage open discussion will ultimately have the greatest impact on employee behavior. The more we engage our employees in these trainings, the more likely our workplaces will develop a culture of transparency. This will aid in helping your employees feel comfortable coming forward with situations they feel the need to discuss.

Efficient and effective HR training as risk management

It’s far more pleasant to educate your staff than to prepare for a deposition. Training is an essential part of the defense to harassment, discrimination, or retaliation charges and lawsuits. Further, the EEOC strongly recommends these trainings, and are required by law in some states. In short, harassment and other improper workplace conduct is not just a legal risk; it is a day-to-day damage that can effect employee morale, retention, attendance and more. Effective training is your best chance to actually change employee behavior.

Porter Wright holds effective, in-person training for HR, management, supervisors and employees for many businesses. If you have interest in talking about cost-effective training sessions, visit the HR Audit page at porterwright.com.

Are changes coming to the FMLA?

It has been a decade since the United States Department of Labor (DOL) made any changes to the FMLA regulations, but we now have an indication that the DOL is at least willing to consider issuing new regulations at some point in the next few years. The United States Office of Management and Budget announced that, by April 2020, the DOL will “solicit comments on ways to improve its regulations under the FMLA to: (a) better protect and suit the needs of workers; and (b) reduce administrative and compliance burdens on employers.”

Employers interested in offering suggestions for the DOL’s consideration will be invited to do so. No promises, however, that the DOL will actually make any changes or that the changes, if made, will meaningfully address the aforementioned “administrative and compliance burdens.” But this is a start.

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