DOL set to publish guidance on independent-contractor status

Later this morning, I’ll board a flight for New York City to tape a segment for John Stossel’s Fox News show, to air Friday at 8 pm on Fox Business. We’ll be discussing the over-complexity of labor and employment laws, and their over-regulation of American businesses.

I’m certain one topic to be covered is our wage-and-hour laws. Serendipitously, according to Employment Law 360 [subscription required], Department of Labor Wage and Hour Division administrator David Weil recently announced that he will shortly publish an “administrator interpretation” to clarify who qualifies as an independent contractor.

The distinction between employee and contractor continues to beguile employers, and is ripe for problems under both wage-and-hour laws (among other legal entanglements). Individuals continue to file multi-million dollar class-action lawsuits claiming mis-classification as contractors cost them years of unpaid overtime. And, courts continue to take a hard line against companies that try to skirt their legal responsibilities via these mis-classifications.

Is it too much to hope for a reasonable interpretation from administrator Weil that permits bona fide contractors to remain classified as such? He speaks of a "holistic," as opposed to "mechanical" approach, which "requires a careful consideration of the economic realities and multiple aspects of the relationship." Expect a fuzzy standard with lots of gray area, which will continue to cause employers fits. Or, in other words, expect the status quo to continue, with employers who classify all but the clearest of workers as employees taking a huge wage-and-hour gamble.

Defining the three-headed associational disability claim

You likely know that the ADA protects employees from discrimination “because of the known disability of an individual with whom the qualified individual is known to have a relationship or association.” But did you know that the ADA has three different theories to define this associational disability?

1. Expense (the cost of insuring the associated disabled person under the employer’s health plan);
2. Disability by association (a fear by the employer that the employee may contract the disability, or the employee is genetically predisposed to develop a disability that his or her relatives have); and 
3. Distraction (the employee is inattentive at work because of the disability of the associated person).

In Williams v. Union Underwear Co., (6th Cir. 6/5/15) [pdf], the court rejected the plaintiff’s attempt to use each of these theories to challenge his termination after his wife was diagnosed with Wagner’s Vascular Disease, which weakened her immune system. Other than the coincidental timing between the the wife’s diagnosis and the alleged beginning of Williams’s adverse treatment at work, the court could not find any other evidence of disability discrimination. Absent something in addition to timing, the court could not conclude that Williams had presented sufficient evidence to get his discrimination claim to a jury.

We, as employers, often treat employee’s with family medical issues with kid gloves. We not only worry about potential liability under the ADA, but also the FMLA. Yet, these employees are not bulletproof. In Williams, the plaintiff had suffered years of marginal performance, and the employer had enough. Without something in addition to the mere fact that his wife suffered from a rare disease, this court was unsympathetic to his claim, which should provide hope to employers that want to hold all employees accountable to reasonable performance standards.

WIRTW #369 (the “see me, hear me”) edition

It’s been awhile since I’ve updated everyone on when and where you can hear me speak, and I’ve got a bunch coming up in the next few weeks. So, here you go:

• Later today, I’m presenting on managing generational issues in the workplace at the Lakeland Community College 8th Annual Small Business Symposium.
• On June 10, at 2 pm, I’m presenting a webinar on how to create a safer, OSHA-compliant workplace, for HRdirect.
• On June 16, at noon, I’m presenting a webinar on OSHA compliance and workplace safety, for the West LegalEdcenter.
• On June 17, at 1 pm, I’m part of a panel webinar on the NLRB’s new “quickie” election rules, for Strafford.

Here’s the rest of what I read this week:

Discrimination

• Five harassment “must haves” for employers — via Robin Shea’s Employment & Labor Insider
• Caitlyn Jenner’s Unveil Forces the Discussion of Transgender at Work — via Blogging4Jobs
• Employer’s search for “devious defecator” backfires after suspects sue under genetic privacy law — via ABA Journal
• Is It OK To Ask An Older Job Candidate If She Can Handle Supervising Young People? — via Evil Skippy at Work
• New DOL rules could blacklist fed contractors — via Business Management Daily
• Allergic At Work Is Not Allergic To Work — via The Labor Dish
• This employer had a “no pregnancy in the workplace” policy. No, really. It did. — via Eric Meyer’s The Employer Handbook Blog
• Employee Stressed Out By Manager Is Not Disabled And May Be Terminated — via Employment Law Worldview
• Now you know: rent two not one units for employee lodging — via Overlawyered

Social Media & Workplace Technology

• Should Companies Be Giving Fitbits To Employees? — via Workplace Diva
• How Wearable Technology Will Affect the Workplace — via Employment Intelligence
• More Bosses Expected To Track Their Staff Through Wearables In The Next 5 Years — via Forbes
• The Inbox – Orwell’s Big Brother Has An App For That — via Suits by Suits
• Aspects of Private Social Media Groups May Be Protectable Under Illinois Trade Secret Law — via Trading Secrets

HR & Employee Relations

• Flexibility and Job Satisfaction: Are Employers Listening? — via Next Blog
• June 1, 2015, Hazardous Communication Requirements Now In Effect — via OSHA Law Blog
• Is Your Employee’s Injury Reportable Under OSHA? — via The Emplawyerologist
• Planning Maternity or Paternity Leave: A Professional’s Guide — via Harvard Business Review

Wage & Hour

• How Fowl! Is An Employee’s Text and His Girlfriend’s Report Enough to Establish Notice of Need for FMLA Leave? Not So Fast… — via Jeff Nowak’s FMLA Insights
• Can An Employee Assert State Law Wage Claims Based on Alleged Wrongful Tax Withholding? — via Minnesota Employer
• Department of Labor Seeks Information about Employees’ Use of Smartphones — via Wage & Hour Insights 
• Survey Shows Corporate Counsel Especially Fear Class Actions: With Good Reason! — via Wage & Hour - Development & Highlights
• General Release Obtained By Defendant in Non-FLSA State Court Case Did Not Waive FLSA Claims — via Overtime Law Blog

Labor Relations

• NLRB Issues Charge Against Ikea — via Labor Relations Today
• NLRB Ambush Election Rules Upheld by Texas Federal Court — via Hunton Employment & Labor Law Perspectives™
• Worse Than Feared … NLRB Reports First Month of Ambush Election Rules Yields More Petitions, Dramatically Quicker Elections — via Management Memo
• Federal Court affirms that federal contractors have to inform workers of unionization rights — via Mike Haberman’s Omega HR Solutions

Transgender rights take center stage

It’s been a big week for the rights of transgender Americans.

• Caitlyn (née Bruce) Jenner had her coming out party on the cover of Vanity Fair and become the quickest person to reach 1 million followers on Twitter, in less than four hours, besting President Obama’s record from two weeks ago.

• The EEOC published a guide addressing the rights of LGBT employees working in the federal sector [pdf], and continues to litigate cases under Title VII’s sex-discrimination prohibitions on behalf of transgender employees.

• OSHA published a statement of “best practices” for bathroom access for transgender employees [pdf], clarifying that employees should be entitled to use the bathroom of the gender with which they identify, and that no employer should require an employee to use a specific gender’s bathroom, or a segregated transgender-only bathroom facility.

While we wait for the law the catch up to society’s opinion on LGBT rights (i.e., same-sex marriage rights and official statutory extension of Title VII’s protections to LGBT employees), our federal agencies are doing the best they can to modernize these laws for us. If you are still discriminating against LGBT employees, it’s time to stop. You are officially behind the times. It was not that long ago that LGBT rights were a joke. Now, we are on the verge of a breakthrough. Are you going to ride the wave, or hold onto the jam of the door that Caitlyn Jenner just kicked down kicking and screaming. The choice, for now, is yours, unless you run afoul of the EEOC, OSHA, or a court, each of which is doing is best to do what Congress has, thus far, refused.

Did the 6th Circuit just guarantee jury trials in off-the-clock wage/hour cases?

One of the most difficult things to do is prove a negative. Yet, this is exactly the problem that employers face when defending wage and hour cases in which the employee alleges work performed off-the-clock. The employer says that the time clock defines the paid limits of the workday, while the employee says that s/he should be compensated for work performed outside the parameters of those clock-ins and clock-outs.

In Moran v. Al Basit LLC (6/1/15) [pdf], the 6th Circuit was faced with a simple question—does an employee need something other than his or her own testimony to establish an entitlement to unpaid compensation under the FLSA?

Sadly, the 6th Circuit ruled in the employee’s favor.

Plaintiff’s testimony coherently describes his weekly work schedule, including typical daily start and end times which he used to estimate a standard work week of sixty-five to sixty-eight hours.… However, while Plaintiff’s testimony may lack precision, we do not require employees to recall their schedules with perfect accuracy.… It is unsurprising, and in fact expected, that an employee would have difficulty recalling the exact hour he left work on a specific day months or years ago. It is, after all, “the employer who has the duty under § 11(c) of the [FLSA] to keep proper records of wages [and] hours,” and “[e]mployees seldom keep such records themselves.”

This ruling is scary, and has the potential to work extortionate results on employers. If all an employee has to do to establish a jury claim in an off-the-clock case is say, “The employer’s records are wrong; I worked these approximate hours on a weekly basis,” then it will be impossible for an employer to win summary judgment in any off-the-clock case.

Employers, the cost of defending wage-and-hour cases just went up, as did the risk for businesses. Even meticulous wage-and-hour records might not save you from a foggy memory of a disgruntled ex-employee.

#SCOTUS requires employers to stereotype in ruling for EEOC in hijab-accommodation case

Yesterday, the United States Supreme Court ruled that an employer violates Title VII’s religious accommodation requirements if the need for an accommodation was a “motivating factor” in its decision, regardless of whether the employer had actual knowledge of the religious practice or its need to be accommodated.

The case, EEOC v. Abercrombie & Fitch Stores [pdf], is an unambiguous win for religious freedoms, while, at the same time, places an added burden on employers to make educated guesses about applicants’ and employees’ potential needs for workplace religious accommodations.

Abercrombie involved a conflict between a hijab-wearing Muslim job applicant and the employer’s “look policy.” The unusually terse seven-page opinion (of which only a little more than three was dedicated to actual legal analysis) focused on the difference between motive and knowledge in explaining its holding:

Motive and knowledge are separate concepts. An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive. Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed.…

For example, suppose that an employer thinks (though he does not know for certain) that a job applicant may be an orthodox Jew who will observe the Sabbath, and thus be unable to work on Saturdays. If the applicant actually requires an accommodation of that religious practice, and the employer’s desire to avoid the prospective accommodation is a motivating factor in his decision, the employer violates Title VII. 

So, if knowledge is irrelevant, what is an employer to when faced with one’s potential need for a religious accommodation? More the point, isn’t an employer faced with having to make educated guesses (based on stereotypes such as how one looks or what one wears) of the need for an accommodation? Title VII is supposed to eliminate stereotypes from the workplace, not premise the need for an accommodation on their use. And that’s my biggest critique of this opinion—it forces an employer into the unenviable position of applying stereotypes to make educated guesses.

Nevertheless, employers are stuck with the Abercrombie “motivating factor” rule as the rule for religious accommodations moving forward. Thus, let me offer a simple suggestion on how to address this issue in your workplace—talk it out. Consider using the following three-pronged approached to ACE religious-accommodation issues in your workplace.

• Ask: Even if an employee comes to a job interview wearing a hijab, it’s still not advisable to flat-out ask about his or her religion. Nevertheless, if you believe an applicant’s or employee’s religion might interfere with an essential function of the job, explain the essential functions and ask if the employee needs an accommodation. 

• Communicate: If the individual needs an accommodation, engage in the interactive process. Have a conversation with the applicant or employee. Explain your neutral policy for which an exception will have to be made. Talk through possible accommodations, and decide which accommodation, if any, is appropriate for your business and for the individual.

• Educate: Do you have written policy on religious accommodation? Of course, merely having a policy is never enough. You must communicate it to your employees, explain its meaning and operation, and enforce it when necessary.

This decision is a potential game-changer for employers. Make sure you understand the implications of Abercrombie, so that you are as accommodating as the law requires.

Image courtesy of Jeffrey Weston’s Ape, Not Monkey
http://www.apenotmonkey.com/2012/04/09/religious-accommodation/

6th Circuit: reasonable belief about unlawful conduct enough for SOX retaliation

It’s hard to imagine that in the eight-plus years I’ve written this blog, there is any area of employment law that on which I have not yet touched—except, I think, the Sarbanes-Oxley Act. Today, that changes.

For the uninitiated, Sarbanes-Oxley (or SOX) is a federal statute, enacted in reaction to a several corporate and accounting scandals (think Enron), which establishes conduct standards for public company boards, management and public accounting firms.

In Rhinehimer v. U.S. Bancorp Investments, Inc. (6th Cir. 5/28/15) [pdf], the 6th Circuit addressed the standard for protected conduct under SOX’s anti-retaliation provisions. Does the plaintiff have to prove an underlying fraud, or it is sufficient for the plaintiff to have a reasonable belief that a fraud was committed?

The facts in Rhinehimer are not complicated. Prior to taking a disability leave, Rhinehimer, a certified financial planner, transferred some of the assets of a long-term, elderly client into low risk, conservative investments. While on leave, Rhinehimer’s assistant alerted him to the fact that a co-worker moved some of those assets into riskier investments. Believing those moves to be contrary to the client’s estate plan, Rhinehimer sent an email to his supervisor complaining about the transactions. Upon his return from leave, Rhinehimer was disciplined for his “unprofessional” email. That email spawned an investigation by FINRA. When Rhinehimer informed his employer that he had retained an attorney in response to the FINRA investigation, he was fired.

At issue on appeal was whether a plaintiff claiming retaliation under SOX must allege the specific elements of fraud relating to the underlying transaction, or if a reasonable, but mistaken, belief about the illegality of the underlying (mis)conduct will support the retaliation claim.

The 6th Circuit held for the more liberal proof standard.

Although it is true that Plaintiff had no specific knowledge of whether Harrigan had omitted or misrepresented material information in his communications with Purcell, much less any knowledge of whether Harrigan did so intentionally or with reckless disregard, these gaps in Plaintiff’s knowledge are immaterial. Even if, in fact, everything about the trades were above board, courts universally recognize that [SOX] protects employees who reasonably but mistakenly believe that the conduct at issue constitutes a violation of relevant law.… 

The information that was available to Plaintiff was more than adequate to allow him reasonably to believe that the trades were the result of conduct constituting unsuitability fraud. When USBII retaliated against him for reporting that information, it therefore violated Sarbanes–Oxley’s whistleblower protections.  

If you are a publicly-trade company, employees who lodge complaint about financial improprieties or other financial issues require special treatment. If faced with one of these complaints, do not get hung up on the rightness or wrongness of the complaining employee’s belief about the illegal conduct, because, if you later fire that employee, it appears the reviewing court will not care.