Federal Court Permits Employer to Fire Transgender Employee

Posted by on Sep 6, 2016 in Gender Discrimination, Supreme Court, Title VII

In 2014, the Supreme Court of the United States ruled in Burwell v. Hobby Lobby, 134 S.Ct. 2751 (2014), that closely-held corporations are exempt from laws to which its owners object on religious grounds, if there is a less restrictive means of furthering the law’s interest. In Burwell, David and Barbara Green owned a family business, Hobby Lobby, and objected to provisions within the Patient Protection and Affordable Care Act (“PPACA”), more commonly known as the “Affordable Care Act” or “Obamacare,” that would have required them to pay for employee insurance coverage that provided access to contraceptives. This controversial decision was hailed by some as a victory for religious freedom, and simultaneously condemned by others as expanding previous Supreme Court decisions that treat corporations like people, notably, Citizens United v. Federal Election Commission, 558 U.S. 310 (2010).

More recently, the Honorable Sean F. Cox, U.S.D.J. of the United States District Court for the Eastern District of Michigan, ruled on the defendant’s motion for summary judgment in Equal Employment Opportunity Comm’n v. R.G. & G.R. Harris Funeral Homes, Inc., 2016 WL 4396083 (E.D. Mich. Aug. 18, 2016), holding that the Supreme Court’s decision in Burwell meant a closely-held corporation could fire a transgender employee who, while transitioning from male to female, wished to begin dressing as a female. Notably, Judge Cox interpreted the Religious Freedom Restoration Act of 1993 (“RFRA”), in accordance with the Burwell decision, to mean that the sincerely held religious beliefs of a corporation provide an exemption to state and federal law unless the government can show a need to advance a compelling interest and that the requested means is the least-restrictive method of protecting such an interest. Accordingly, Judge Cox held that employers could terminate employees for the reasons described below.

In Harris, the EEOC argued that an employee’s right to not be discriminated against on the basis of transgender status or gender identity was protected by Title VII of the Civil Rights Act of 1964, which prohibits employers from discharging or otherwise discriminating against any individual with respect to compensation, terms, conditions, or privileges of employment “because of such individual’s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e–2(a)(1). Judge Cox stated that enforcement of Title VII would impose a substantial burden on the corporation’s ability to conduct business in accordance with its sincerely held religious beliefs, in violation of RFRA, and the EEOC’s demand of allowing the employee to wear women’s attire was not the least-restrictive method of protecting the employee’s interest in not being discriminated against.

Notably, Judge Cox pointed out the employer’s mission statement, which points to “its highest priority” as “honor[ing] God in all that we do as a company and as individuals,” as evidence of their sincerely held religious beliefs. In contrast, Judge Cox noted the employee’s desire to dress “in a stereotypical feminine manner (wearing a skirt-suit),” which would allow for gender expression, and that the EEOC refused to consider whether the employer would be willing to accept gender-neutral attire that still allowed for gender expression. As a suggestion, Judge Cox proposed a “dark-colored suit, consisting of matching business jacket and pants, but without a neck tie.”

Given Citizens United, Burwell, and now Harris, there appears to be a trend of federal case law indicating that corporations may be treated like individuals, and that the religious beliefs of a closely-held corporation’s owners can override federal protections against discrimination. As it appears likely that the EEOC will appeal this decision to the United States Court of Appeals for the Sixth Circuit, both employers and employees should continue to track its progress through the legal system.

Hill Wallack employment law attorneys are available to help navigate issues such as these and how they may affect clients in New Jersey, New York, and Pennsylvania.

Read More

NLRB Changes Course, Rules that Student Assistants at Private Universities Have Right to Unionize

Posted by on Sep 2, 2016 in NLRB

The National Labor Relations Board (“NLRB” or the “Board”) recently ruled in a 3-1 decision that student assistants at private colleges and universities “who have a common-law employment relationship with their university” are “employees” under the National Labor Relations Act (the “Act”), 29 U.S.C. § 151 et seq. As a result, the decision, Trustees of Columbia University in the City of New York and Graduate Workers of Columbia-GWC, UAW, provides those qualifying student assistants at private colleges and universities, which are generally subject to NLRB jurisdiction, with the right to organize and collectively bargain with their university employers.

The Board specifically found in the Trustees of Columbia University decision, issued on August 23, 2016, that Columbia University’s “Instructional Officers” (including Teaching Fellows at the graduate level, Teaching Assistants at the graduate and/or master’s level, Preceptors at the graduate level, Readers/Graders at the master’s level, and Course Assistants) and “Research Officers” (i.e., research assistants) fell into the category of “employees” under the Act. Furthermore, the Board determined that a student assistant bargaining unit consisting of “graduate students, terminal Master’s degree students, and undergraduate students,” which was requested by the petitioner, was appropriate. Moreover, none of the student assistant categories at issue in the case were temporary employees that were excluded from coverage under the Act.

The Trustees of Columbia University decision, issued on August 23, 2016, reverses the Board’s decision in Brown University and International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW AFL-CIO, 342 N.L.R.B. 483 (2004), which held that student assistants were not employees under the Act and therefore did not have the right to unionize.  In determining that the student assistants were not employees, the Brown University decision had found that student assistants were not primarily employees but instead had an “educational relationship” with the employer.

In examining its Brown University decision, the Board determined that it erred in that decision by focusing “on whether some other relationship between the employee and the employer is the primary one . . . .”  Focusing on the existence of another relationship in addition to the employment relationship, the Board found, was not supported by the Act.[1] In looking at the broad language of the Act, the Board stated:

“It seems clear to us, then, that the Act’s text supports the conclusion that student assistants who are common-law employees are covered by the Act, unless compelling statutory and policy considerations require an exception.”

In addressing the arguments raised against a finding that the student assistants are employees, the Board observed that federal labor policy is generally encouraging of collective bargaining, and that allowing student assistants to choose whether to unionize would further the purpose of the Act.  The Board also noted that just because there may be issues particular to employment in an academic setting, such issues do not prevent the application of the Act to student assistants, contrary to the Board’s findings in the Brown University decision. Moreover, permitting student assistants to unionize would not infringe upon academic freedom because the parties could resolve these issues through collective bargaining, and there are limits, defined by the Board, on what constitutes the mandatory subject of bargaining. Additionally, noted the Board, evidence that student assistant unionization is harmful to the educational process and student-faculty relationship is dubious at best, and bargaining between student assistant unions and universities has been occurring at public universities without resulting in significant harm.

The Board also rejected the contention that student assistants should not be permitted to unionize because “student assistants have finite terms and because the academic world may experience a fast pace of development in fields of study,” and the Board may take a relatively long period to time to make a determination on a dispute. On these issues, the Board stated: “The alternative—to deny coverage because of effect of procedural delays— would seem to countenance the denial of the Act’s overage to large groups of employees whose tenures are short or industries where there is a rapid pace of change.”

 “Finding “no compelling reason—in theory or in practice—to conclude that collective bargaining by student assistants cannot be viable or that it would seriously interfere with higher education,” and that there are no conflicting federal statutes, the Board determined that “[a]ccordingly, we overrule Brown University and hold that student assistants who have a common-law employment relationship with their university are statutory employees entitled to the protections of the Act.”

The case was remanded to the regional director to take appropriate action per the Board’s decision that the petitioning student assistants group qualified as employees and could move to organize under the Act. It should be noted that the parties may appeal this decision to the U.S. Court of Appeals.

In light of this decision, private colleges and universities employing student assistants covered by the Act should be aware that student assistants may be soon engaging in formal organizing efforts. As a result, these colleges and universities may need to be prepared to quickly respond to such efforts. We suggest that those entities consult with a labor attorney to determine their rights and obligations with respect to student assistant union activities.

Read the Trustees of Columbia University decision here at: https://assets.documentcloud.org/documents/3033549/Columbia-NLRB.pdf.

[1] Section 2(3) of the Act, 29 U.S.C. § 152(3), states: The term “employee” shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment . . . or by any other person who is not an employer as herein defined.
Read More

Minimum Wage and Major League Baseball’s Fair Labor Standards Act Exemption

Posted by on Aug 2, 2016 in FLSA

On June 27, 2016, U.S. Congresswoman Cheri Bustos (D-Ill.) and U.S. Congressman Brett Guthrie (R-Ky.) introduced H.R. 5580, where it was referred to the House Committee on Education and the Workforce, stylized as the “Save America’s Pastime Act.” The bill was intended to amend the Fair Labor Standards Act (“FLSA”) to exempt minor league baseball players from the minimum wage. While Congresswoman Bustos H.R. 5580 quickly withdrew her support after public outcry, the bill is still in committee and serves as an important reminder of how little minor league baseball players are paid and the expansive legal protections afforded to the baseball industry.

As an initial matter, the federal minimum wage is currently $7.25 per hour. While Major League Baseball (“MLB”) profits are booming, currently over $9.5 billion annually, minor league players typically only earn between $1,150 and $2,700 per month, and only during the season. With players often clocking fifty-to-seventy hour weeks, and no overtime pay, a rookie minor league player can earn as little as $4.10 per hour, and a multi-year veteran approximately $13.50 per hour. In contrast, the minimum salary for a major league player is $500,000 per year.

Some minor league players are attempting to strike back at the industry. In Senne, et al. v. Office of the Commissioner of Baseball, et al., 3:14-cv-00608, filed in early 2014, several former baseball players are seeking certification for a nation-wide class-action lawsuit alleging that the minor league baseball system violates the FLSA by denying players a minimum wage and overtime. The case is currently pending before the United States District Court for the Northern District of California. MLB claims minor league players are not bound by the FLSA due to an exemption for seasonal and recreational employers. The previously-proposed H.R. 5580 would specifically clarify and exempt the minor league system from any minimum wage concerns.

Those involved in the baseball industry, as well as those who just love the game of baseball, should be mindful of the status of this bill. Should H.R. 5580, or a similar bill, be signed into law, there will be far-reaching legal consequences. These types of bills tell us what is on the minds of legislators and signals yet another effort to expand the FLSA and to weaken its exceptions. Hill Wallack employment law attorneys are available to help navigate issues such as these and how they may affect clients in New Jersey, New York, and Pennsylvania.

Read More

Governor Christie Vetoes Amendment to New Jersey Law Against Discrimination

Posted by on Jun 23, 2016 in Gender Discrimination, Racial Discrimination, Uncategorized

On May 2, 2016, New Jersey Governor Chris Christie conditionally vetoed Senate Bill 992 (“S. 992”), which was intended to amend the New Jersey Law Against Discrimination (“NJ LAD”) to make wage disparities among similarly situated employees expressly unlawful. While S. 992 is aimed at reducing gendered or race-based pay disparity, Governor Christie stated that the bill would make New Jersey “very business unfriendly,” and criticized several aspects, including:

  1. Restarting the statute of limitations each time an employee receives unequal pay, and allowing for back pay for the entire period of continuous violation, which is currently capped at two years and is identical to the federal Lily Ledbetter Fair Pay Act of 2009;
  2. Prohibiting employers from requiring employees to waive or voluntarily limit their equal pay protections;
  3. Allowing treble damages upon any employer found to be in violation;
  4. Protecting employees from retaliation if they disclose their salary to a co-worker; and
  5. Shifting responsibility and burden of proof to the employer to justify pay differences, which would be permitted only based on seniority, merit, or objective factors such as training, experience, education, and productivity.

Additionally, S. 992 is substantially similar to the California Fair Pay Act, which was adopted last year. Governor Christie has made several recommendations, with which he would revoke his veto and sign a revised version of S. 992. Some of these recommendations include eliminating fact-based evaluation in alleged discrimination cases as well as treble damages. Governor Christie also would like the revised version to limit back pay to two years, as opposed to the proposed unlimited amount. While S. 992 passed the State Senate by a vote of 28 to 4, and the General Assembly by a vote of 54 to 14 to 6, it is unclear whether the legislature will attempt to override Governor Christie’s veto, which requires a two-thirds margin.

Employers should be mindful of the status of this bill, along with others like it, as there will be far-reaching consequences should one be successful in being signed into law. Hill Wallack employment law attorneys are available to help navigate issues such as these and how they may affect clients in New Jersey, New York, and Pennsylvania.

Read More

EEOC Issues Fact Sheet Reminding Employers Not to Discriminate Restroom Use Based on Gender

Posted by on May 31, 2016 in Gender Discrimination, Sexual Orientation Discrimination

-Scott D. Salmon, Esq. and Susan L. Swatski, Esq.

North Carolina (as well as other states) has become infamous for HB-2, a law that restricts restroom use in government buildings based on the gender listed on an individual’s birth certificate, and which is directed towards transgender individuals. The law additionally prohibits municipalities from enacting anti-discrimination laws of their own.

The reaction to HB-2 has been swift and furious. PayPal and Deutsche Bank, among other businesses, are halting planned expansions into the state, and multiple cities and states across the country have implemented travel bans for government employees going to North Carolina. The National Basketball Association (“NBA”) said it will change the location of the 2017 All-Star Game if the law does not change, and a significant number of filming projects and entertainers are refusing to perform in North Carolina, which has led some experts to conclude that North Carolina will lose $77 million in revenue as a result of HB-2. Additionally, the American Civil Liberties Union filed a federal lawsuit challenging the law; the case is captioned, Carcaño v. McCrory and is pending in the U.S. District Court for the Middle District of North Carolina. Also, the United States Department of Justice and the State of North Carolina are currently in litigation over whether HB-2 violates Title VII of the Civil Rights Act and Title IX of the Education Amendments of 1972.

In response to HB-2 and similar laws in other states, the Equal Employment Opportunity Commission (“EEOC”) issued a fact sheet to remind employers that discrimination based on transgender status is sexual discrimination under Title VII of the Civil Rights Act. The EEOC’s fact sheet also reminded employers that HB-2, and other similar state laws, is not a defense to any action brought under federal laws. The EEOC’s fact sheet goes on to state, based on multiple rulings:

  1. denying an employee equal access to a common restroom corresponding to the employee’s gender identity is sexual discrimination;
  2. an employer cannot condition this right on the employee undergoing or providing proof of surgery or any other medical procedure; and,
  3. an employer cannot avoid the requirement to provide equal access to a common restroom by restricting a transgender employee to a single-user restroom.

In addition, the EEOC fact sheet warns that “gender-based stereotypes, perceptions, or comfort level must not interfere with the ability of any employee to work free from discrimination, including harassment.”

While employers everywhere should be mindful of the EEOC’s position on this matter, it is especially important for those in states subject to laws such as HB-2, as contrary state law is not a defense against potential litigation given the federal statutes. Hill Wallack employment law attorneys are available to help navigate issues such as these and how they may affect clients in New Jersey, New York, and Pennsylvania.

Read More

The District Court of New Jersey Rejects Class Action Certification Under the FLSA

Posted by on May 31, 2016 in FLSA

In a recent case in the United States District Court for the District of New Jersey, a plaintiffs’ motion for final certification of a collective action under the Fair Labor Standards Act was denied. At its core, Plaintiff Fred Adami and two remaining Opt-In Plaintiffs alleged that their employer, Cardo Windows, Inc. mischaracterized them as independent contractors, rather than employees, and asserted claims for unpaid overtime.

Judge Simandle found that while the Plaintiffs properly alleged common employer practices, they failed to sufficiently demonstrate the similarity between the circumstances of their employment. For example, while Adami was a long-time employee that was at the core of Cardo’s operations, the Opt-In Plaintiffs “worked sporadically and had differing work environments from Adami.” Adami v. Cardo Windows, Inc., No. 12-2804 (JBS/JS), 2016 WL 1241798, at *2 (D.N.J. Mar. 30, 2016).

Specifically, Adami and the Opt-In Plaintiffs worked a considerably different number of hours, which changed on an individual basis. Schedules varied based on customer needs, and the Opt-In Plaintiffs could take breaks when they wished. In addition, Defendants noted that the Opt-In Plaintiffs were entitled to hire “helpers” for each project, and were able to choose both the number and how much each were paid, which changed the profit or loss for each Opt-In Plaintiff. Lastly, while Adami worked for Cardo for approximately ten years, the Opt-In Plaintiffs had worked at the company for just a few months. Subsequently, the Court found that while Adami’s employment relationship had been described in significant detail, there was a considerable amount of evidence that showed Adami’s employment was “the exception rather than the rule.” Adami, 2016 WL 1241798, at *6.

In so finding, the Court applied the “circumstances of the whole activity” test to determine whether an employment relationship existed and noted that it is the plaintiff’s burden to show by a preponderance of the evidence that “all members of the class are all employees covered by the FLSA.” Id. (emphasis in original).

Ultimately, Judge Simandle held that the Opt-In Plaintiffs were closer to independent contractors than employees. As such, the circumstances of each Opt-In Plaintiffs’ employment were too dissimilar for a collective action.

Employers should consider the similarity between their employees’ work, and the degree to which the company controls the day-to-day actions of its employees to determine if they are truly employees or independent contractors. Hill Wallack employment law attorneys are available to help navigate these options and how they may affect clients in New Jersey, New York, and Pennsylvania.

Read More

Supreme Court Holds That Where Violation of First Amendment Rights at Issue, Employer Perception Rules

Posted by on May 12, 2016 in Retaliation, Supreme Court, Wrongful Termination

In a decision that may be particularly timely in this heated election season, the United States Supreme Court recently considered the issue of whether an employee who was demoted because the employer mistakenly believed he participated in political activity can file a lawsuit against the employer under 42 U.S.C. § 1983 for deprivation of his First Amendment rights under the U.S. Constitution. The facts of this case took place right here in our region in Paterson, New Jersey.

In Heffernan v. City of Paterson, 136 S.Ct. 1412 (2016), a police officer went to a political campaign site to pick up a lawn sign for a mayoral candidate, who was a friend of his, on behalf of his bedridden mother. The police officer had no involvement in the candidate’s campaign. The officer’s supervisor and the chief of police had been appointed by the candidate’s opponent, the incumbent mayor. His fellow officers spotted the officer at the campaign site, and word got back to his supervisors about it. The officer was demoted the very next day for his “over involvement” in the campaign of the mayoral candidate.

The officer filed a lawsuit under 42 U.S.C. § 1983 (which provides a cause of action for violations of constitutional rights) alleging that he was unlawfully demoted “because he had engaged in conduct that (on [the employer’s] mistaken view of the facts) constituted protected speech.” The Court observed, citing to Elrod v. Burns, 427 U.S. 347 (1976) and Branti v. Finkel, 445 U.S. 507 (1980), that “[w]ith a few exceptions, the Constitution prohibits a government employer from discharging or demoting an employee because the employee supports a particular political candidate.” However, the officer in this instance had just picked up a sign for his mother and was not actually engaging in political activity or supporting the candidate.

The question before Court in Heffernan was whether it is the employee’s actions, or instead the employer’s motivation in an employment decision, that determines whether an employee was deprived of a constitutional right. Put another way, does the analysis of whether the employee’s constitutional rights were violated by an employment decision focus on the employee’s conduct in engaging in protected activity, or is it instead focused on whether the employer believed (even mistakenly) that the employee was doing so?

The Court held in a 6-2 decision that whether the employee’s right was violated is determined by the employer’s motivation in the employment decision. In its decision, the Court looked to Waters v. Churchill, 511 U.S. 661 (1994), in which an employer terminated an employee when the employer believed the employee had engaged in speech that was not protected by the First Amendment, even though the employee’s speech was in fact protected. In Waters, the Court held that the employer did not violate the employee’s constitutional rights if it “(1) had reasonably believed that the employee’s conversation had involved personal matters, not matters of public concern, and (2) had dismissed the employee because of that mistaken belief.” The Court in Heffernan noted that the Waters decision focused on the perception of the employer, not the actions of the employee. The Court then stated:

“In Waters, the employer reasonably but mistakenly thought that the employee had not engaged in protected speech. Here the employer mistakenly thought that the employee had engaged in protected speech. If the employer’s motive (and in particular the facts as the employer reasonably understood them) is what mattered in Waters, why is the same not true here? After all, in the law, what is sauce for the goose is normally sauce for the gander.”

Notably, the Court also addressed whether its decision would increase the burden placed on employers to defend against claims, and held that a ruling that creates liability for an employer for a factual mistake does not place an increased burden on an employer. After all, the Court held, the employee still shoulders a heavy burden of showing the employer’s motive.

The case was then sent back to the lower court, who will hear, among other issues, if the employment decision was based on a policy prohibiting all officers from engagement in “overt involvement in any political campaign,” and if that policy was constitutional.

In light of the Heffernan decision, employers should be aware that they may not be able to defend adverse employment decisions where the employee’s engagement in protected speech is at issue merely by asserting that the employee was not actually engaged in protected speech. Their mistaken view will not relieve them of potential liability. Employers may wish to tread carefully when making an adverse employment decision and ensure that their investigatory procedure clearly documents that a decision was made as a result of unprotected speech by an employee or other just cause. As always, we advise that employers consult with an employment attorney prior to making adverse employment decisions.

The full text of the Heffernan decision can be found at: http://www.supremecourt.gov/opinions/15pdf/14-1280_k5fl.pdf.

Read More