Big changes in the political winds?

I've written a lot since starting this blog about the various bills introduced in the House and Senate to amend Title VII and other employment law statutes. Indeed, one of my very first posts asked whether federal legislation would bring us new protected classes. Following my lead, the National Law Journal has nicely summarized the assorted employment law reforms Congress has introduced this session:

• Ledbetter Fair Pay Act: reverses the Ledbetter decision by setting forth that each discriminatory paycheck is a discrete act of discrimination for purposes of triggering Title VII's statue of limitations.
• American with Disabilities Restoration Act: amends the definition of "disability" to undo a decade of Supreme Court precedent.
• Employment Non-Discrimination Act: adds protections for sexual orientation and gender identity to Title VII.
• Genetic Information Non-Discrimination Act: prohibits employment decisions based on genetic information.
• Civil Rights Tax Relief Act: eliminates taxation of non-economic damages received by employment plaintiffs.
• Equal Remedies Act: removes Title VII's caps on compensatory and punitive damages.
• Arbitration Fairness Act: invalidates pre-dispute arbitration agreements requiring arbitration of employment disputes.

Some of these reforms, namely ending the loophole that allows companies to invidiously discriminate on the basis of sexual orientation, are long overdue. Others, such as the ADA Restoration Act, the Equal Remedies Act, and Ledbetter Fair Pay Act, will have far greater and more onerous consequences for employers. Because the Democrats don't have enough votes to overturn a Presidential veto, most of these bills currently are nothing more than political rhetoric. If, however, a Democrat wins the White House, 2009 will be a very interesting year, as companies should expect sweeping changes to federal employment laws, the likes of which have not been seen for more than a decade.

UPDATED - New rules require termination of illegal immigrants

The Department of Homeland Security has announced new rules on the safe-harbor procedures for employers who receive SSA No-Match Letters. These rules require employers to terminate any employee who uses a fake social security number or otherwise cannot be documented as legal. The DHS has also published an interactive Safe Harbor Information Center for employers.

The regulations describe with specificity what steps employers should take upon receipt of a no-match letter:

1. Verify within 30 days that the mismatch was not the result of a record-keeping error on the employer’s part;
2. Request that the employee confirm the accuracy of employment records;
3. Ask the employee to resolve the issue with SSA;
4. If these steps lead to resolution of the problem, follow instructions on the no-match letter itself to correct information with SSA, and retain a record of the verification with SSA; and
5. Where the information could not be corrected, complete a new I-9 form without using the questionable Social Security number and instead using documentation presented by the employee that conforms with the I-9 document identity requirements and includes a photograph and other biographic data.

Employers unable to confirm employment through these procedures risk liability for violating the law by knowingly continuing to employ unauthorized persons.

Costs of compliance will potentially be high, especially for those employers that rely upon unskilled labor. Costs of non-compliance, however, could potentially be devastating. Employers cannot ignore these new rules. If you choose to disregard a No-Match Letter, and it is later determined that some of the employees listed are not authorized to work, your receipt of the letter is evidence that you have knowingly continued to employ unauthorized workers, which could lead to significant criminal and civil sanctions.

Bill Proposes Elimination of Damages Caps

On the heels of the passage of the Lilly Ledbetter Fair Pay Act, Congress continues to try to tinker with the federal employment discrimination laws. Senator Edward Kennedy has introduced legislation that would eliminate the caps on the amount of non-economic compensatory damages and punitive damages plaintiffs can recover in employment discrimination cases under Title VII and the ADA -- the Equal Remedies Act of 2007. Senator Kennedy bases this legislation on the inequities in available damages between race and national origin discrimination and all other forms of discrimination prohibited by Title VII and the ADA (sex, religion, disability, etc.). Employees suing under Title VII or the ADA are capped in the amount of damages they can recover, while employees suing under 42 U.S.C. 1981, which only prohibits race and national origin discrimination, has no such limits. Of course, the Senator could just propose capping damages under Section 1981. As with most of the other pro-employee legislation currently pending in Congress, there is little chance of President Bush actually signing the Equal Remedies Act into law. January 2009, however, is not that far off.

A weighty issue...

In June, I reported on a small but growing trend of overweight employees trying to claim coverage under the Americans with Disabilities Act. Perhaps because these claims are seldom brought, the Boston Globe reports that Massachusetts is considering legislation to cover "fat" (as well as "short") as a protected class. Such legislation finds support in studies which show that obesity holds back one's career. One possible explanation is that obesity is linked to greater health costs, which in turn raise group health plan rates.

One could argue that this legislation is superfluous because the ADA already protects these employees. While courts almost uniformly find that obesity is not a protected disability (as compared to morbid obesity), health conditions associated with obesity (such as diabetes, joint problems, respiratory difficulties, high blood pressure) are most likely protected. Moreover, because it is not only unlawful under the ADA to discriminate because of an employee's disability, but also because the employee is regarded as having a disability, it is arguably unlawful to refuse to hire, to discipline, or to terminate an overweight employee because of the risk of increased health costs from obesity-related illnesses.

Arbitration Fairness Act would ban mandatory ADR of employment disputes

Mandatory arbitration agreements have long been favored as a tool by employers to limit the risks associated with jury trials. If the Democrats have their way, however, that tool may soon no longer be available. The Arbitration Fairness Act is currently pending in both the House and the Senate. These bills would amend the Federal Arbitration Act to render invalid and unenforceable pre-dispute arbitration agreements that require arbitration of employment disputes. Such disputes could only be arbitrated if the employer and employee agree to submit to arbitration after the dispute arises. The law's purpose is to prevent those with less bargaining power, such as employees, from being forced to arbitrate and give up their right to a jury trial. If this bill becomes law (which is doubtful as long as there is a Republican in the White House), arbitrations of employment disputes will all but disappear. It is hard to imagine a situation where a plaintiff would agree to give up a jury trial to have a dispute decided by a panel of arbitrators. If you currently use or would like to use arbitration as a means to resolve claims by your employees, you should write your Congressperson and Senator and urge opposition of these bills.

Immigration Reform Bill Would Overhaul Employee Verification Process

Everyone should be familiar with the I-9 form. With that form, employers simply review certain identification documents submitted by job applicants to assure the government they appear to be valid and the person appears to be authorized to work in the U.S. An immigration reform bill pending in the Senate, however, would radically overhaul that system by requiring employers to verify electronically the identity of all U.S. workers, no matter how long they have been at their job. Employers who don't comply would be subject to fines, while employees rejected by the government database would have to challenge its accuracy to keep their jobs. If the bill becomes law, employers would have 18 months to comply for all new hires, and three years for all current employees. Not surprisingly, the proposal has drawn complaints from business and civil liberties groups. I will let everyone know if and when this bill becomes law.

Are new protected classes on the horizon?

While some companies voluntarily choose to implement policies that state that they will not discrimination on the basis of sexual orientation, under federal law and the law of most states (including Ohio) it is perfectly legal for employers to make employment decisions based on that characteristic. With the Democrats now controlling Congress, however, change in the law might be on the horizon. Pending in Congress is the Employment Non-Discrimination Act of 2007. That bill would prohibit would prohibit discrimination on the basis of perceived or actual gender identity (which is defined as gender-related identity, appearance, or mannerisms or other gender-related characteristics of an individual, with or without regard to the individual's designated sex at birth) or sexual orientation (which is defined as homosexuality, heterosexuality, or bisexuality). While most reasonable people can agree in principle that discrimination in any form is wrong, I question the inclusion of "perceived" in the bill's protection, especially when courts often protect sexual stereotypes as a form of gender discrimination. This bill is still a long way from becoming law, but it does bear watching as passage in its current form would potentially open a new floodgate of litigation.

Another bill that is currently pending on Capitol Hill is the Genetic Information Nondiscrimination Act of 2007. Among other changes, that bill, which overwhelmingly passed by a vote of 420-3 in the House, makes it an "unlawful employment practice," as that term is used by the Equal Employment Opportunity Commission, for an employer, employment agency or labor organization to use genetic information in making hiring, firing, or promotion decisions. In other words, genetic discrimination would be treated in the same way as other forms of discrimination. While I'm not sure how an employer would necessarily acquire employees' genetic information, given the overwhelming support in the House, it's fair to assume this bill will soon become law, and also bears watching.