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.

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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.

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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.

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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.

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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.

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