New Proposed Rule to Expand Overtime Eligibility
For months, there has been talk that the Obama Administration would seek to increase the number of workers eligible for overtime pay by raising the minimum level of salary an employee must earn in order to meet the overtime exemption for “white collar” employees. On June 30, 2015, the Administration finally unveiled the details of its plan.
The Department of Labor’s proposed rule would raise the salary threshold below which workers automatically qualify for time-and-a-half overtime wages from $23,660 to $50,440 a year. The measure is expected to impact nearly 5 million workers. As even the Department of Labor itself has recognized, however, employers will likely respond by cutting hours to manage the use of overtime or by cutting base pay to account for an employee’s expected increase in overtime wages.
The new rule would apply to all private employers that are subject to federal wage and hour laws. However, no changes will occur immediately. The proposed rule will enter a public comment period beginning July 6, 2015, with the final version of the rule likely not going into effect until sometime in 2016.
Are Pregnant Employees Entitled to Light Duty?
Probably, as a result of the Supreme Court’s recent decision in Young v. UPS.
Many employers have had a long-standing policy or practice of providing temporary light duty only to employees who are returning to work from an on-the-job injury. “Light duty” is typically a job or project that is specially created to help an injured worker that would otherwise not exist. Limiting these special assignments to workers who get hurt at work makes sense. Employers feel an obligation to their employees that get hurt at work, and employers have a financial interest in these employees coming back to work as soon as possible. Also, most employers have limited light duty opportunities and, therefore, want to preserve them for employees who are recovering from work-related accidents. Someone with a condition unrelated to the job, such as injuries from a car accident or pregnancy, does not get light duty under the typical policy. If the employee with a non-occupational injury cannot do the essential functions of the job, even with accommodation, he must go on leave of absence.
That is what happened to the pregnant UPS driver in Young v. UPS. Her doctor put her on a lifting restriction that prevented her from lifting some UPS packages. Although it would have allowed someone injured at work with the same lifting restriction to perform light duty, Young had to go on unpaid leave and could not afford to keep her health insurance.
Ultimately, the United States Supreme Court rejected both parties’ positions and created a new standard for judging the legality of such policies. If a company’s policy “significantly burdens” pregnant workers (as most light duty policies do), the company must advance “sufficiently strong” reasons to justify the burden. Cost and inconvenience are not sufficient, the Court said. The Supreme Court sent the case back to the lower court for further litigation under this new standard. Given what the Court has required that it prove, however, UPS is not likely to be able to successfully defend its policy.
Policies like UPS’s, which are common, will now be very difficult, if not impossible, to defend. Even if such a policy can be successfully defended, an employer will spend a lot of money doing it. In our opinion, an employer would have to have substantial operational reasons, apart from cost and inconvenience, to limit light duty opportunities to only those who have been hurt at work and to the exclusion of pregnant workers. All employers should review their policies and consult with counsel about the ability to defend them after this important change in the law.
NLRB Compliant Employer Handbooks: A Constantly Moving Target
The task of reconciling employer handbook and workplace policies with the myriad of National Labor Relations Board rulings is a formidable one. The NLRB has recently been invalidating policy after policy under the theory that they interfere with employee rights to engage in protected, concerted activity under the National Labor Relations Act, even in situations where the employer has no unionized employees. The NLRB’s handbook policy decisions have been unclear at best and downright contradictory at worst, leaving employers in danger of inadvertently promoting a policy that could run afoul of the NLRA. A new 30-page report from the NLRB’s General Counsel attempts to clarify the issue and offer guidance on crafting policies and rules that will not be deemed unlawful by the NLRB. Unfortunately, the NLRB’s “guidance” creates just as many questions as it answers.
The NLRB report is divided into two parts. The first compares rules the NLRB found unlawful with rules found to be lawful and tries to explain the Board’s reasoning for the distinction. The second section of the report explores handbook policies from a recently settled unfair labor practice charge against the fast food chain Wendy’s. The report sets forth Wendy’s original policies, why the Board found those policies unlawful, and Wendy’s modified rules resulting from settlement of the charge which, for now, appear to comply with the NLRA.
This report should be a sharp reminder that it is not just an employer’s social media policy that the NLRB will look to invalidate. The report identifies eight other types of policies the NLRB finds frequently chill employee Section 7 rights: (1) confidentiality; (2) employee conduct toward the company and/or supervisors; (3) employee conduct toward co-workers; (4) interactions with outside parties; (5) protection of company logos and trademarks; (6) photography on company property; (7) leaving work; and (8) conflicts of interest. The line the NLRB draws between legal and illegal policies is razor thin and can often turn on the difference between one or two words or the context and location of the policy. For example:
• The NLRB found unlawful a rule prohibiting “walking off the job” but found lawful a rule prohibiting “leaving Company property without permission.”
• A policy requiring employees to “be respectful of others and the Company” was held to be unlawful whereas a policy that stated “each employee is expected to work in a cooperative manner with management/supervision, coworkers, customers and vendors” was not.
• The NLRB held that a policy which told employees not to make “insulting, embarrassing, hurtful or abusive comments about other company employees online” and to “avoid the use of offensive, derogatory, or prejudicial comments” was vague and overbroad; yet endorsed a policy that prohibited the “use of racial slurs, derogatory comments, or insults.” The NLRB explained that, in isolation, the latter policy might have been unlawful but it survived scrutiny because it was located in a section of the employer’s handbook addressing unlawful harassment and discrimination and thus would be understood by employees as limited to that context.
• With respect to confidentiality, policies prohibiting employees from discussing “customer or employee information” or publishing “the employer’s or another’s confidential or other proprietary information” without specific examples are overbroad because they could be construed by employees as a prohibition on discussing wages and terms of employment. However, if the confidentiality policy specifically identifies the types of confidential information not to be disclosed, it has a better chance of receiving the NLRB’s blessing.
While the report is useful in summarizing the policies and rules currently in the NLRB’s crosshairs, employers should bear in mind that there is no ideal policy language that is wholly sanctioned by the Board. Many of the policies cited as being lawful in the General Counsel’s report were labeled as such only after an assessment of the entire handbook and the policy’s context therein. So, even if an employer copies the approved language word for word, the NLRB could still invalidate the policy depending on its location in the handbook and surrounding policies. As such, employers would be wise to consult their labor and employment counsel for a full handbook audit and to help draft workable policies that are likely to survive NLRB scrutiny.
Combating the Recent Explosion of Retaliation Claims: A Local Court’s Application of the Supreme Court’s Heightened Retaliation Standard
In July 2013, we reported on the United State Supreme Court’s decision in University of Texas Southwestern Medical Center v. Nassar. In Nassar, the Court held that a plaintiff bringing a Title VII retaliation action must demonstrate that he would not have suffered an adverse employment action but for his protected activity. Following the Nassar decision, we recognized that the “but for” standard would be more difficult for plaintiffs to establish than the motivating-factor test that governs Title VII discrimination claims defending and that the heightened “but for” standard would assist employers in Title VII retaliation claims, especially at the summary judgment stage. However, at the time, we were unsure as to the practical effects of the Supreme Court’s decision and how our local courts would apply the new standard. A recent decision by United States District Judge William Acker for the Northern District of Alabama sheds some light on at least one local court’s application of the Nassar standard.
In Montgomery v. Board of Trustees of the University of Alabama, the plaintiff alleged she was retaliated against when she was terminated only fourteen days after she complained that she was denied a requested day off because of her race. The short fourteen-day interval between her complaint and termination was the plaintiff’s only evidence of causation. In analyzing the case at the summary judgment stage, Judge Acker applied the Nassar standard and granted summary judgment in favor of the Board of Trustees. Specifically, the court held, “Under Nassar, . . . Montgomery must establish that her protected activity was the ‘but-for’ cause of her discharge. . . . Merely showing that she was terminated shortly after she complained does not meet the prima facie standard for proof that she was terminated only because she complained.” In other words, the court determined that close timing alone is no longer sufficient to prove a causal connection between protected activity and an adverse employment action. The court noted that although such a short time period would have been sufficient to establish causation for a prima facie case of retaliation under the pre-Nassar “motivating factor” standard, such temporal proximity, without more, does not meet the new “but for” causation standard. In reaching its decision, the court acknowledged that the Eleventh Circuit Court of Appeals has not yet directly decided whether close temporal proximity is enough to meet a plaintiff’s heightened burden under the “but-for” causation standard; however, in support of its decision, the court cited illustrative decisions from the Fifth and Seventh Circuits.
In addition to finding that the plaintiff failed to meet her prima facie case because her only causation evidence was temporal proximity, the court noted two alternative bases to support its decision. First, the court found that even if temporal proximity could, in certain circumstances, constitute sufficient proof of causation, the undisputed evidence showed that the university was concerned about her attendance and performance even before she complained of discrimination. Next, the Court again applied the Nassar standard and found that because plaintiff’s original complaint alleged both race discrimination and retaliation as motives for the adverse employment action, she failed to meet the Nassar standard on the face of her complaint. In other words, the Court believes “in order to pursue a retaliation claim under Nassar a plaintiff must make it perfectly clear in her pleading that there are no proscribed motivations other than an intent to retaliate.”
Although this recent decision from the Northern District provides more support to employers in defending retaliation claims, there is no guarantee that other courts in our Circuit will apply the Nassar standard in the same way. Nevertheless, this decision provides a well-reasoned examination of the application of the Nassar standard to a typical Title VII retaliation case. We will continue to monitor the developing case law to see how other courts respond to this decision. Although this decision may prove to be helpful to employers in defending retaliation claims, as always, it is important that employers remain diligent in taking employee complaints seriously and not treating complaining employees any differently than non-complaining employees.
The Impact of Same-Sex Marriage on Employers
Earlier this year, the U.S. Department of Labor (DOL) changed the definition of “spouse” under the Family and Medical Leave Act (the FMLA) to allow employees to take FMLA leave to provide care for a same-sex spouse, even if they live in a state that does not recognize same-sex marriage. This change was part of a final rule enacted by the DOL in February 2015 following the Supreme Court’s decision in the case of United States v. Windsor. In that case, the Supreme Court considered Section 3 of the Federal Defense of Marriage Act (DOMA), which defined “marriage” to mean a legal union of a man and a woman only, and declared Section 3 unconstitutional under the Fifth Amendment in that it deprived state-sanctioned same-sex spouses of their rights without due process of law. Under Windsor, where a state agreed to recognize same-sex marriages, the federal government could no longer decide otherwise.
The new DOL rule provides that all legally married couples, same-sex and otherwise, are entitled to equal rights under the FMLA, regardless of the state in which they live. Although a same-sex couple may reside in a state that does not recognize same-sex marriage, the new rule focuses on the “state of celebration” – or where the marriage was formalized – rather than the “state of residence.” In addition, for marriages performed outside the U.S., the spouse qualifies if the marriage was legally valid where it was performed and if it could have been validly entered into in at least one U.S. state.
Following the enactment of the new rule, four states (Texas, Arkansas, Louisiana and Nebraska) filed a lawsuit seeking a preliminary injunction to stay the application or enforcement of the new rule. The U. S. District Judge Reed O’Connor granted an injunction for the stay of the enforcement of the Final Rule on March 26, 2015 – the day before the Final Rule was to go into effect.
On June 26, 2015, the Supreme Court declared in Obergefell v. Hodges that same-sex marriage is a fundamental right under the U.S. Constitution and that states can no longer prohibit same-sex marriage. Under Obergefell, states must also recognize lawful same-sex marriages entered into in another state.
Although the full implications of Obergefell are yet to be seen, the Court’s ruling substantiates the DOL’s new definition of “spouse” and has likely eliminated any uncertainty concerning the new definition. In fact, District Judge O’Connor filed an Order dissolving the preliminary injunction and lifting the stay after the issuance of the Obergefell decision.
Employers should be aware that employees in all states are now entitled to FMLA leave in order to care for same-sex spouses as long as the marriage was legally recognized in the “place of celebration.” Employers should also be aware that this change impacts secondary relationships, such as leave taken to care for a same-sex spouse’s child or for a parent’s same-sex spouse. 1
The definition of “spouse” under the FMLA applies only to legally married spouses; it does not extend to unmarried domestic partners in same- or opposite-sex relationships. It is important to note, however, that state laws may differ and provide different leave rights. Employers are encouraged to review the applicable state laws and consult with counsel if any questions arise.
Under the FMLA, employers may request reasonable documentation of the family relationship from employees who take leave to care for a spouse (or other covered family member). The employee has the right to decide what type of documentation to provide, including a simple written statement by the employee. In addition, if an employee has already provided proof of marriage for some other purpose, then additional proof may not be requested. Employers are cautioned against requesting documentation only in the case of same-sex relationships or from requesting additional and/or different documentation from employees where a same-sex spousal relationship is involved, as such practices could be viewed as discriminatory.
Employers should review their current FMLA policies and forms to determine whether they allow for leave to care for a same-sex spouse or other secondary relationships impacted by a same-sex relationship. Employers should also train supervisors and administrators on the new rule.
In addition to its impact on FMLA leave, the Obergefell decision also potentially impacts employer-provided benefits. Practically, the ruling should streamline benefits administration as now all marriages must be treated the same. For example, for employers operating in states that require benefits be extended to spouses, that requirement would now include same-sex spouses, regardless of the state where the marriage was entered into. As with the FMLA, however, the ruling does not affect unmarried, same-sex couples in domestic partnerships, and the law will continue to develop in this area.
We encourage employers to review their policies to make sure they comply with these changes in the law.
1 Additional information can be found in the Federal Register online: https://www.federalregister.gov/articles/2015/02/25/2015-03569/definition-of-spouse-under-the-family-and-medical-leave-act
NLRB’s New “Ambush” Union Election Rules Followed by Spike in Union Activity
We have previously written about the NLRB’s proposed “ambush” or “quickie” election rules. The final version of those rules went into effect on April 14, 2015. As most commentators have predicted, unions have seized on the new rules as an opportunity to aggressively step up their efforts at recruitment. In the first month the rules were in place, 280 representation cases were filed, which represents a 17% increase from the same period in 2014 and 32% increase from the month prior to the rules taking effect.
The rules put employers at a deep disadvantage in any union election, which were already difficult to win. Unions work silently to sell their message to employees without the employer finding out until a petition is filed. The employer then has little time to educate its employees about the disadvantages of joining a union, such as the payment of dues and initiation fees, the need to give up merit bonuses, and forced membership in a pension plan that might be in poor financial shape.
Prior to the implementation of the rules, more than 90% of all elections took place within 60 days of the petition being filed, with the average election taking place in just 37 days. Pursuant to the new rules, however, this time could be shortened to as little as 13 days. In fact, since the rules have been in place, the median time between the filing of a petition and the election has decreased to only 23 days. Thus, employees will be forced to cast a vote while having primarily only heard the union’s side of the story. In addition to dramatically shortening the pre-election period, the new rules also include a controversial provision that requires employers to divulge their employees’ personal contact information to unions, which has obviously raised privacy concerns amongst opponents of the rules.
Locally, the implementation of the rules also comes on the heels of a high-profile union victory here in Alabama. In May, the NLRB certified a vote to unionize the Golden Dragon (“GD”) Copper plant in Wilcox County. Two days before the election, Alabama Governor Robert Bentley became involved and sent a letter to GD’s employees urging them to vote against unionization, noting the effect it could have on other out-of-state employers interested in locating in the area. Nonetheless, the employees voted 75-74 in favor of unionization. The result was no aberration, however. In fact, Alabama is the most unionized state in the South. According to the Bureau of Labor Statistics, almost 11 percent of the state’s workforce belonged to a union in 2014. Under the new rules, unions will undoubtedly continue to ramp up their efforts to add new Alabama employees to their ranks.
Two major lawsuits have been filed seeking to overturn the new rules. In one case, the U.S. Chamber of Commerce filed suit in federal court in Washington, D.C. The judge presiding over that suit recently heard oral argument on the NLRB’s motion to dismiss the case, but has yet to issue a ruling. However, a similar lawsuit filed in Texas challenging the NLRB rules failed at the district court level, and will now be appealed to the Fifth Circuit Court of Appeals. Thus, for now, the rules remain in effect and will not be set aside without action from the courts or Congress. Now, more than ever, it is critical that employers take proactive steps towards limiting the threat of unionization before a petition is ever filed.