By Michele L. Jakubs*
On November 22, 2016, the Court in State of Nevada, et al. v. U.S. Dept. of Labor, granted a nationwide preliminary injunction halting implementation of the Department of Labor’s rule increasing the minimum salary threshold required to qualify for the Fair Labor Standards Act’s “white collar” overtime exemptions. The rule was set to take effect on December 1, 2016 and would have increased the minimum salary threshold from $23,660 per year to $47,476 per year. For the time being, the salary threshold for the “white collar” exemptions remains $23,660 per year ($455 per week).
As the Court’s ruling is only a preliminary injunction, subject to future modification, we will continue to monitor this case as it proceeds forward and will advise of any additional rulings.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Wednesday, November 23, 2016
Thursday, November 17, 2016
TRUMPED: Texas Federal Court Permanently Enjoins the DOL’s “Persuader Rule” – Will the DOL Changes to the FLSA Exemptions Thresholds Face the Same Fate?
By Patrick J. Hoban*
Yesterday, the Federal District Court for the Northern District of Texas made permanent the preliminary injunction it issued earlier this year to prevent the U.S. Department of Labor (“DOL”) from enforcing its controversial “persuader” rule (“Persuader Rule”). Judge Sam R. Cummings announced the decision on Wednesday in a concise two-page opinion, in which he concluded that the Persuader Rule violated the federal Administrative Procedure Act, 5 U.S.C. § 706 (“APA”) and is unenforceable. The case, National Federation of Independent Businesses v. Perez, No. 5:16-cv-00066-C (N.D. Texas, November 16, 2016), effectively converts the preliminary injunction granted by the same court on June 27, 2016 into a permanent injunction with nationwide effect.
The Persuader Rule, which took effect on April 25, 2016, dramatically expanded the reporting requirements imposed on employers and their labor relations consultants under the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”). Under the LMRDA, employers and their labor relations consultants are required to disclose agreements to engage in activities to persuade employees regarding their rights to unionize and collectively bargain. These onerous disclosure reports required that employers, attorneys and consultants provide details about the nature and cost of the services consultants provide. Although the reporting requirements were subject to certain exemptions, including an exemption related to the provision of “advice,” the DOL’s guidance on the Persuader Rule made clear that it would decide what services qualified as advice on a case-by-case basis.
Historically, the DOL has interpreted the “advice” exemption to exclude from the reporting requirements an employer’s engagement of consultants, including attorneys, to assist in responding to a unionizing campaign, where: (1) the consultant or attorney had no direct contact with the employees; and (2) the employer retained discretion to reject the recommendations of the consultant or attorney. The DOL’s new Persuader Rule upended this long-standing interpretation by requiring employers and labor relations consultants to report their agreements even in the absence of direct contact between the consultants and the employees.
U.S. Secretary of Labor Thomas E. Perez defended the Persuader Rule from withering criticism, describing the changes as a “matter of basic fairness” to ensure that workers have “the information they need to make informed choices about how they pursue their rights to organize and bargain collectively.” Employers, labor relations consultants, and attorneys opposed the changes. Of particular concern was the extent to which the Persuader Rule would have compelled employers and law firms to disclose information protected by the attorney-client privilege. Absent the Court’s June injunction, enforcement of the Persuader Rule and its new reporting requirements would have begun on July 1, 2016.
Yesterday, Judge Cummings granted summary judgment to those challenging the Persuader Rule and reiterated his previous conclusions that it was “defective to its core,” “arbitrary and capricious,” “violated free speech and association rights,” and was “unconstitutionally vague.” Additionally, Judge Cummings affirmed that the Persuader Rule violated the Administrative Procedures Act and that the DOL did not have authority to issue it. On these grounds, the Court issued a nationwide permanent injunction prohibiting enforcement of the Persuader Rule.
The DOL previously appealed Judge Cumming’s decision granting the preliminary injunction of its Persuader Rule to the U.S. Fifth Circuit Court of Appeals, but that appeal was rendered moot by Wednesday’s summary judgment ruling. However, in June 2016, a federal district court in Minnesota refused to enjoin the Persuader rule.
The Persuader Rule is one among several hotly-contested Obama administration changes to employment and labor relations law. Those changes have caused significant disruption and include the National Labor Relations Board (“NLRB”)’s “ambush” election rules, the NLRB’s Specialty Healthcare decision that opened the floodgates for “micro” union organizing, and the DOL’s changes to the salary threshold for exempt status under the Fair Labor Standards Act (“FLSA”) (which likely takes effect on December 1, 2016).
Like the Persuader Rule, the DOL changes to FLSA exemptions were also challenged in federal court in Texas by twenty-one states and multiple business entities – including challenges under the Administrative Procedures Act. Although the new FLSA exemptions rule takes effect on December 1, the judge in that case announced yesterday that on November 22 he will issue a decision on whether DOL will be prohibited from enforcing the new rule. As a result, we will soon see if the Eastern District of Texas reaches the same conclusion with regard to the changes to the FLSA exemptions as Judge Cummings did for the Persuader Rule.
Yesterday’s decision is subject to appeal. However, as President-Elect Donald Trump will take office in January, there is reason to believe the Trump DOL will not seek review. The Court’s ruling on the Persuader Rule provides employers with relief from reporting requirements and potential liability. As we look to the future, it is anticipated that Trump administration appointments at DOL and the NLRB may offer employers a more level playing field.
*Patrick Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the DOL’s persuader rule or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Yesterday, the Federal District Court for the Northern District of Texas made permanent the preliminary injunction it issued earlier this year to prevent the U.S. Department of Labor (“DOL”) from enforcing its controversial “persuader” rule (“Persuader Rule”). Judge Sam R. Cummings announced the decision on Wednesday in a concise two-page opinion, in which he concluded that the Persuader Rule violated the federal Administrative Procedure Act, 5 U.S.C. § 706 (“APA”) and is unenforceable. The case, National Federation of Independent Businesses v. Perez, No. 5:16-cv-00066-C (N.D. Texas, November 16, 2016), effectively converts the preliminary injunction granted by the same court on June 27, 2016 into a permanent injunction with nationwide effect.
The Persuader Rule, which took effect on April 25, 2016, dramatically expanded the reporting requirements imposed on employers and their labor relations consultants under the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”). Under the LMRDA, employers and their labor relations consultants are required to disclose agreements to engage in activities to persuade employees regarding their rights to unionize and collectively bargain. These onerous disclosure reports required that employers, attorneys and consultants provide details about the nature and cost of the services consultants provide. Although the reporting requirements were subject to certain exemptions, including an exemption related to the provision of “advice,” the DOL’s guidance on the Persuader Rule made clear that it would decide what services qualified as advice on a case-by-case basis.
Historically, the DOL has interpreted the “advice” exemption to exclude from the reporting requirements an employer’s engagement of consultants, including attorneys, to assist in responding to a unionizing campaign, where: (1) the consultant or attorney had no direct contact with the employees; and (2) the employer retained discretion to reject the recommendations of the consultant or attorney. The DOL’s new Persuader Rule upended this long-standing interpretation by requiring employers and labor relations consultants to report their agreements even in the absence of direct contact between the consultants and the employees.
U.S. Secretary of Labor Thomas E. Perez defended the Persuader Rule from withering criticism, describing the changes as a “matter of basic fairness” to ensure that workers have “the information they need to make informed choices about how they pursue their rights to organize and bargain collectively.” Employers, labor relations consultants, and attorneys opposed the changes. Of particular concern was the extent to which the Persuader Rule would have compelled employers and law firms to disclose information protected by the attorney-client privilege. Absent the Court’s June injunction, enforcement of the Persuader Rule and its new reporting requirements would have begun on July 1, 2016.
Yesterday, Judge Cummings granted summary judgment to those challenging the Persuader Rule and reiterated his previous conclusions that it was “defective to its core,” “arbitrary and capricious,” “violated free speech and association rights,” and was “unconstitutionally vague.” Additionally, Judge Cummings affirmed that the Persuader Rule violated the Administrative Procedures Act and that the DOL did not have authority to issue it. On these grounds, the Court issued a nationwide permanent injunction prohibiting enforcement of the Persuader Rule.
The DOL previously appealed Judge Cumming’s decision granting the preliminary injunction of its Persuader Rule to the U.S. Fifth Circuit Court of Appeals, but that appeal was rendered moot by Wednesday’s summary judgment ruling. However, in June 2016, a federal district court in Minnesota refused to enjoin the Persuader rule.
The Persuader Rule is one among several hotly-contested Obama administration changes to employment and labor relations law. Those changes have caused significant disruption and include the National Labor Relations Board (“NLRB”)’s “ambush” election rules, the NLRB’s Specialty Healthcare decision that opened the floodgates for “micro” union organizing, and the DOL’s changes to the salary threshold for exempt status under the Fair Labor Standards Act (“FLSA”) (which likely takes effect on December 1, 2016).
Like the Persuader Rule, the DOL changes to FLSA exemptions were also challenged in federal court in Texas by twenty-one states and multiple business entities – including challenges under the Administrative Procedures Act. Although the new FLSA exemptions rule takes effect on December 1, the judge in that case announced yesterday that on November 22 he will issue a decision on whether DOL will be prohibited from enforcing the new rule. As a result, we will soon see if the Eastern District of Texas reaches the same conclusion with regard to the changes to the FLSA exemptions as Judge Cummings did for the Persuader Rule.
Yesterday’s decision is subject to appeal. However, as President-Elect Donald Trump will take office in January, there is reason to believe the Trump DOL will not seek review. The Court’s ruling on the Persuader Rule provides employers with relief from reporting requirements and potential liability. As we look to the future, it is anticipated that Trump administration appointments at DOL and the NLRB may offer employers a more level playing field.
*Patrick Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the DOL’s persuader rule or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Friday, November 11, 2016
Specialty Healthcare Five Years Later – Despite Assurances to the Contrary, Micro-Union Organizing Proliferates
By Andrew J. Cleves*
Five years ago, the National Labor Relations Board (“NLRB”) altered the union organizing landscape by changing its analysis of union-proposed bargaining units. In Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”), the NLRB established a new standard for determining whether unions may propose a unit comprised of only a small group of employees (a “micro-unit”) over an employer’s objection.
Under the Specialty Healthcare standard, a union-proposed bargaining unit is presumptively appropriate and employers must prove that the excluded employees share an “overwhelming community of interest” with the employees included in the union-proposed unit.
Justifiably, the NLRB’s Specialty Healthcare decision concerned employers. It allows unions to cherry pick “micro” bargaining units comprised almost exclusively of union-supportive employees. This offers unions a strategic foothold even in businesses where a majority of workers do not support unionization. Furthermore, the NLRB’s new requirement for an “overwhelming community of interest” makes it more difficult for employers to effectively challenge a union-proposed unit.
Anticipating criticism, the NLRB went to great lengths to assure employers of Specialty Healthcare’s limited change and impact when it announced the decision. The NLRB claimed that it merely “clarified” the criteria used in instances “where a party argues that a proposed bargaining unit is inappropriate.” The NLRB also insisted the Specialty Healthcare decision “did not create new criteria for determining appropriate bargaining units outside of healthcare facilities.”
However, those assurances have rung hollow as employers across numerous industries have experienced an uptick in union organizing activities targeted at small fragments of their workforces. As the U.S. Chamber of Commerce highlighted in its Trouble With The Truth: Specialty Healthcare and the Spread of Micro-Union Report, released on October 31, 2016, the following industries have felt the sting of the NLRB’s approval of “micro” bargaining units:
Employers are likely to face the reverberating effects of Specialty Healthcare for years to come. To date, federal courts of appeals have upheld Specialty Healthcare’s “overwhelming community of interest” test and legislative proposals to overturn the decision have proven unsuccessful.
Furthermore, recent NLRB changes have compounded the effects of Specialty Healthcare and more changes may be on the horizon. As Zashin & Rich reported in March 2015, the NLRB’s “ambush” election rules have made it significantly more difficult for employers to run an effective campaign against unionization. In addition, the NLRB may address the following topics before the end of the current presidential administration: regulatory actions related to joint-employment; “captive audience” meetings; and the definition of independent contractors, further hampering employer’s efforts to remain union-free.
Employers who oppose unionization should consider regular communication about the perils of union representation with employees prior to any sign of a union organizing effort. Additionally, upon receiving notice that a union has filed a representation petition, no matter how small or fragmented the proposed unit may be, employers should immediately contact counsel to manage the risk of a union gaining a foothold among their workforce.
*Andrew J. Cleves practices in all areas of labor and employment law. For more information about “micro” bargaining unit organizing, the NLRB, or its regulatory decisions, please contact Andrew (ajc@zrlaw.com) at 216.696.4441.
Five years ago, the National Labor Relations Board (“NLRB”) altered the union organizing landscape by changing its analysis of union-proposed bargaining units. In Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”), the NLRB established a new standard for determining whether unions may propose a unit comprised of only a small group of employees (a “micro-unit”) over an employer’s objection.
Under the Specialty Healthcare standard, a union-proposed bargaining unit is presumptively appropriate and employers must prove that the excluded employees share an “overwhelming community of interest” with the employees included in the union-proposed unit.
Justifiably, the NLRB’s Specialty Healthcare decision concerned employers. It allows unions to cherry pick “micro” bargaining units comprised almost exclusively of union-supportive employees. This offers unions a strategic foothold even in businesses where a majority of workers do not support unionization. Furthermore, the NLRB’s new requirement for an “overwhelming community of interest” makes it more difficult for employers to effectively challenge a union-proposed unit.
Anticipating criticism, the NLRB went to great lengths to assure employers of Specialty Healthcare’s limited change and impact when it announced the decision. The NLRB claimed that it merely “clarified” the criteria used in instances “where a party argues that a proposed bargaining unit is inappropriate.” The NLRB also insisted the Specialty Healthcare decision “did not create new criteria for determining appropriate bargaining units outside of healthcare facilities.”
However, those assurances have rung hollow as employers across numerous industries have experienced an uptick in union organizing activities targeted at small fragments of their workforces. As the U.S. Chamber of Commerce highlighted in its Trouble With The Truth: Specialty Healthcare and the Spread of Micro-Union Report, released on October 31, 2016, the following industries have felt the sting of the NLRB’s approval of “micro” bargaining units:
- General Aviation Service: The proposed unit included only 34 “line service” employees in a general aviation service business with 110 employees overall.
- Telecommunications: The petitioned-for bargaining unit included 16 T-Mobile field and switch technicians who worked in Long Island, NY but excluded employees who worked in New York City’s boroughs and both Long Island counties.
- Rental Car Facility: All 109 employees did not share an overwhelming community of interest with 31 rental service agents and lead rental service agents.
- Retail Department Store: In a Macy’s department store of 150 employees, including 120 sales associates, the approved bargaining unit included only 41 cosmetics and fragrance sales representatives.
- Fast-Casual Dining: The NLRB approved a bargaining unit which included 17 out of 43 bakers working at six out of 17 Panera Bread cafés.
- Automobile Manufacturing: The NLRB approved a micro-unit of 152 maintenance workers at a Volkswagen plant despite the fact that the union disregarded the company’s shop structure and essentially “invented” a new maintenance department.
Employers are likely to face the reverberating effects of Specialty Healthcare for years to come. To date, federal courts of appeals have upheld Specialty Healthcare’s “overwhelming community of interest” test and legislative proposals to overturn the decision have proven unsuccessful.
Furthermore, recent NLRB changes have compounded the effects of Specialty Healthcare and more changes may be on the horizon. As Zashin & Rich reported in March 2015, the NLRB’s “ambush” election rules have made it significantly more difficult for employers to run an effective campaign against unionization. In addition, the NLRB may address the following topics before the end of the current presidential administration: regulatory actions related to joint-employment; “captive audience” meetings; and the definition of independent contractors, further hampering employer’s efforts to remain union-free.
Employers who oppose unionization should consider regular communication about the perils of union representation with employees prior to any sign of a union organizing effort. Additionally, upon receiving notice that a union has filed a representation petition, no matter how small or fragmented the proposed unit may be, employers should immediately contact counsel to manage the risk of a union gaining a foothold among their workforce.
*Andrew J. Cleves practices in all areas of labor and employment law. For more information about “micro” bargaining unit organizing, the NLRB, or its regulatory decisions, please contact Andrew (ajc@zrlaw.com) at 216.696.4441.
Thursday, November 10, 2016
Will Trump Dump The New DOL Rule Regarding Exempt Status?
By Michele L. Jakubs*
Will President-Elect Donald Trump provide employers with a reprieve from the Department of Labor’s (“DOL”) new rule regarding overtime? We will all have to wait and see.
On May 18, 2016, the DOL announced its final rule increasing the salary thresholds for exemptions under the Fair Labor Standards Act (“FLSA”). To meet an exemption from overtime under the new rule, employees must meet both the duties test and the increased salary requirement. The final rule sets the new salary threshold for “white collar” exemptions at $47,476 annually. For the highly-compensated employee exemption, the new salary threshold is set at $134,004 annually. The final rule (including the new salary thresholds) goes into effect on December 1, 2016.
The FLSA generally requires employers to pay employees for any time worked in excess of forty hours per work week at a rate of one-and-a-half times the employee’s regular rate. The FLSA exempts “white collar” employees from the overtime requirement, provided the employees meet specific criteria: (1) the employees receive a fixed salary; (2) the salary meets the minimum threshold requirement (currently $455 per week, or $23,660 per year) which increases to $913 per week, or $47,476 per year on December 1; and, (3) the employees’ responsibilities primarily involve executive, administrative, or professional duties (the “duties test”). Highly-compensated employees who regularly perform one or more exempt duties also are exempt.
In September, 21 states, including Ohio, filed a lawsuit, State of Nevada, et al. v. U.S. Dept. of Labor, et al., in federal court, challenging the final rule. The Court consolidated this case with a similar case filed by various business associations and Chambers of Commerce. The States seek a declaratory judgment from the Court holding that, among other things: (1) the final rule is unlawful under the Constitution; (2) the final rule’s automatic indexing of the salary-basis test every three years is without Constitutional authority and violates the Administrative Procedure Act; and, (3) the final rule is unconstitutional as applied to the States. The States also have asked the Court to issue an injunction enjoining the final rule from having any legal effect. The Court has not yet ruled and briefing is not yet complete.
Employers should continue to prepare for the December 1, 2016 implementation of the final rule. At this point, it remains unclear whether President-Elect Trump will take action to repeal or modify the new rule once he takes office in January 2017. It also remains possible that the Court hearing the case from the States and business Plaintiffs may issue an order staying the effective date of the final rule pending resolution of the legal challenges. Absent an action by the government or the Court, the new rule will take effect on December 1, 2016. Z&R will continue to monitor the status of the new rule and will issue further client alerts as information becomes available.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Will President-Elect Donald Trump provide employers with a reprieve from the Department of Labor’s (“DOL”) new rule regarding overtime? We will all have to wait and see.
On May 18, 2016, the DOL announced its final rule increasing the salary thresholds for exemptions under the Fair Labor Standards Act (“FLSA”). To meet an exemption from overtime under the new rule, employees must meet both the duties test and the increased salary requirement. The final rule sets the new salary threshold for “white collar” exemptions at $47,476 annually. For the highly-compensated employee exemption, the new salary threshold is set at $134,004 annually. The final rule (including the new salary thresholds) goes into effect on December 1, 2016.
The FLSA generally requires employers to pay employees for any time worked in excess of forty hours per work week at a rate of one-and-a-half times the employee’s regular rate. The FLSA exempts “white collar” employees from the overtime requirement, provided the employees meet specific criteria: (1) the employees receive a fixed salary; (2) the salary meets the minimum threshold requirement (currently $455 per week, or $23,660 per year) which increases to $913 per week, or $47,476 per year on December 1; and, (3) the employees’ responsibilities primarily involve executive, administrative, or professional duties (the “duties test”). Highly-compensated employees who regularly perform one or more exempt duties also are exempt.
In September, 21 states, including Ohio, filed a lawsuit, State of Nevada, et al. v. U.S. Dept. of Labor, et al., in federal court, challenging the final rule. The Court consolidated this case with a similar case filed by various business associations and Chambers of Commerce. The States seek a declaratory judgment from the Court holding that, among other things: (1) the final rule is unlawful under the Constitution; (2) the final rule’s automatic indexing of the salary-basis test every three years is without Constitutional authority and violates the Administrative Procedure Act; and, (3) the final rule is unconstitutional as applied to the States. The States also have asked the Court to issue an injunction enjoining the final rule from having any legal effect. The Court has not yet ruled and briefing is not yet complete.
Employers should continue to prepare for the December 1, 2016 implementation of the final rule. At this point, it remains unclear whether President-Elect Trump will take action to repeal or modify the new rule once he takes office in January 2017. It also remains possible that the Court hearing the case from the States and business Plaintiffs may issue an order staying the effective date of the final rule pending resolution of the legal challenges. Absent an action by the government or the Court, the new rule will take effect on December 1, 2016. Z&R will continue to monitor the status of the new rule and will issue further client alerts as information becomes available.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers in FLSA actions and is well versed in the nuances of the law. If you have questions about the DOL’s final rule or the FLSA more generally, please contact Michele (mlj@zrlaw.com) at 216.696.4441.
Wednesday, November 2, 2016
EMPLOYMENT LAW QUARTERLY | Volume XVIII, Issue iii
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More specifically, Ohio has a statute limiting an employer’s influence over how employees vote on Election Day. Ohio Revised Code 3599.05 makes it illegal for an employer or his agent or a corporation to:
A violation of this statute is punishable by a fine of $500 - $1,000.
In 2011, the owner of a fast food restaurant violated R.C. 3599.05 when, in the month preceding the election, the employer enclosed a letter containing the company’s logo on it with each employee’s pay check that stated:
The letter then listed the candidates the owner believed would help the business move forward.
At least one employee filed a complaint against the owner with local prosecutors. The Ohio Secretary of State investigated the claim and recommended charges against the owner. Ultimately, the owner pled no contest to a violation of R.C. 3599.05 and agreed to pay a $1,000 fine.
Accordingly, Ohio employers must understand that there are limits to the amount of influence they can exert over their employees’ choices at the ballot box. If an employer wishes to publish political opinions to their employees, they should consult counsel to help avoid violating the law.
*Brad S. Meyer practices in all areas of public and private labor and employment law. For more information on political speech in the workplace or other labor and employment questions, please contact Brad at bsm@zrlaw.com or 216.696.4441.
The following table summarizes the key aspects of state voting laws:
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In addition to the state laws summarized above, employers also should know about any local ordinances relating to employee time off for voting. With Election Day fast approaching, employers should understand the validity of an employee request for time off to vote and prepare for the impact of any voting-related absences upon business operations.
*Brad E. Bennett practices in all areas of public and private labor and employment law. For more information on employee leave or other labor and employment questions, please contact Brad at beb@zrlaw.com or 614.224.4411.
Generally, the ADA prohibits employers with 15 or more employees from discriminating against individuals on the basis of a disability. To prevent such discrimination, the ADA restricts employers with respect to obtaining medical information from employees and applicants. Notwithstanding the general restriction, however, the ADA permits employers to make certain inquiries of employees regarding their health and to conduct medical exams of employees when such requests are part of voluntary EHPs.
Voluntary EHPs encompass health promotion and disease prevention programs and activities offered to employees as part of an employer sponsored health plan or as a benefit of employment. The EEOC promulgated the new rules to guide employers who may offer incentives to employees to participate in wellness programs that require them to answer disability-related inquiries or undergo a medical examination.
Under the ADA, participation in an EHP must be voluntary. An EHP is voluntary if: (1) it does not require employees to participate; (2) it does not deny coverage under any of its group health plans or limit the extent of benefits (with some limited exceptions) due to non-participation; (3) it does not result in any adverse employment action or retaliation against any employees; and (4) it provides notice to employees regarding the use of their health information.
The new rules issued by the EEOC provide employers further guidance on the fourth prong of the voluntary test - the notice requirement. While the EEOC provides a Sample Notice for Employee-Sponsored Wellness Programs, employers are not required to use the EEOC sample. Under the new rules, an employer is required to provide employees with notice that: “(A) is written so that the employee from whom medical information is being obtained is reasonably likely to understand it; (B) describes the type of medical information that will be obtained and the specific purposes for which the medial information will be used; and (C) describes the restrictions on the disclosure of the employee’s medical information, the employer representatives or other parties with whom the information will be shared, and the methods that the covered entity will use to ensure that medical information is not improperly disclosed (including whether it complies with the measures set forth in the HIPAA regulations).”
After much debate, the EEOC declined to include a requirement that employees participating in EHPs provide prior written and knowing confirmation that their participation is voluntary. In making its determination, the EEOC sought to ensure that no employee unwittingly authorized the dissemination of confidential and protected information, while refusing to place unwieldy burdens on an employer. In order to balance those competing interests, the EEOC ruled that “a covered entity may not require an employee to agree to the sale, exchange, sharing, transfer, or other disclosure of medical information, or to waive confidentially protections available under the ADA as a condition for participating in a wellness program or receiving a wellness program incentive.”
The EEOC rules go into effect on the first day of the first plan year for benefits beginning on or after January 1, 2017. With open enrollments quickly approaching, it is important for employers to make sure they are familiar with the new EEOC rules. Employers can expect the EEOC and employee groups to enforce compliance with the new notice rules through litigation.
Employers also must understand that this is just one of the rules that govern EHPs. Implementation of these programs requires compliance with a host of laws and regulations, including but not limited to: HIPAA, Title II of GINA (also enforced by the EEOC), the Affordable Care Act and others.
*Patrick J. Hoban practices in all areas of employment and labor law. If you have questions about employee health programs or other employment and labor law issues, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Title VII of the Civil Rights Act of 1964 (“Title VII”) forbids religious discrimination. Specifically, the statute’s “disparate treatment” provision prohibits employers from failing/refusing to hire, discharging, or otherwise discriminating against an applicant/employee “because of” the applicant’s/employee’s religion. Title VII defines religion to include all aspects of religious observance, practice, and belief.
Religious disparate treatment claims often arise in the form of “failure to accommodate” allegations. Generally, to succeed on a failure to accommodate claim, the applicant/employee initially must prove that: (1) he/she holds a sincere religious belief that conflicts with a job requirement; (2) he/she informed the employer about the conflict; and (3) the employer discharged or disciplined the applicant/employee for failing to comply with the conflicting job requirement.
Title VII defines religious belief broadly. For example, one court acknowledged that Title VII provides atheists with the same protections as members of other religions and found a plaintiff’s atheistic beliefs sincere. See Mathis v. Christian Heating and Air Conditioning, Inc., 158 F. Supp. 3d 317 (E.D. Pa. 2016). There, the plaintiff’s atheistic beliefs conflicted with a job requirement to wear an I.D. badge that included a religious mission statement.
The United States Supreme Court recently relieved applicants/employees from demonstrating, in some cases, that the applicant/employee informed the employer of a conflict between the job requirement and religious belief. In EEOC v. Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028 (2015), the Court held the employer does not need specific knowledge of the applicant’s/employee’s religion or need for accommodation in intentional religious discrimination cases. Rather, an employer who acts with the motive to avoid an applicant’s/employee’s religious practice or need for religious accommodation – even if based on nothing more than an unsubstantiated suspicion – may violate Title VII. An applicant’s/employee’s religion cannot be a “motivating factor” in the employer’s decision.
If an applicant/employee establishes a prima facie failure to accommodate claim, the employer must show that accommodating the employee would impose an undue hardship on the employer. Undue hardship means more than a de minimis cost. Historically, courts have considered accommodations that result in the following undue hardships: requiring an employer to pay overtime; requiring an employer to hire replacement employees; requiring an employer to make additional contributions to insurance and pension funds; requiring an employer to take action that compromises schedule or seniority systems; and requiring an employer to risk regulatory or criminal sanctions.
In addition, Title VII mandates that an employee cooperate with the employer’s attempts to provide a religious accommodation. Courts may be more likely to find undue hardship where the employee refuses to compromise. For example, a FedEx employee insisted that she keep her operations manager position and get all Saturdays off. The company showed such arrangement would have created a safety risk because the company needed all managers available every day during peak season to assist in loading and launching aircraft. The court found that allowing the employee not to work during peak season imposed an undue hardship. See Burdette v. Federal Express Corp., 367 Fed. App’x 628 (6th Cir. 2010).
Employers should address claims of religious discrimination and requests for accommodation carefully and on an individualized basis. In its Abercrombie & Fitch decision, the United States Supreme Court concluded Title VII does not demand mere neutrality with regard to religious practices. Rather, “it gives [employees seeking religious accommodations] favored treatment.” When evaluating accommodation requests, employers should evaluate carefully the costs of an accommodation, work with the employee to find a solution, and contact employment counsel with questions.
*Drew C. Piersall practices in all areas of employment and labor law. If you have questions about religious discrimination, accommodations, or the EEOC’s enforcement efforts, please contact Drew (dcp@zrlaw.com) at 614.224.4411.
Scott DeHart’s practice will focus on all areas of private and public sector labor and employment law and litigation. Scott graduated summa cum laude from New York Law School, where he focused his studies on labor and employment law. As a law student, Scott was selected as Champion of the NKU Grosse Moot Court Competition. Prior to joining Zashin & Rich, Scott pursued a career as a Human Resources practitioner, most recently as a Director of Human Resources at Columbia University. In that capacity, Scott ensured the effective design and administration of a broad range of HR programs and served on the university’s collective bargaining team.
Monday, November 7, 2016
George S. Crisci presents “The National Labor Relations Board – Obligations and Compliance” and “Other Employment Laws You Need to Know” at the National Business Institute’s Seminar on Human Resource Law from Start to Finish at the CMBA Conference Center, One Cleveland Center, 1375 E 9th St, Cleveland, Ohio 44114.
Friday, November 18, 2016
Jonathan J. Downes presents “FLSA – New Rules and Practical Solutions” at the CAAO Winter Conference during the 9:00 am – 10:30 am session. The conference takes place at the Embassy Suites Dublin, 5100 Upper Metro Place, Dublin, 43017.
Thursday, December 8, 2016
George S. Crisci will participate, as the Management Panelist, in the presentation “A View from the Chair of the National Labor Relations Board.” The featured panelist will be NLRB Chairman Mark G. Pearce. Patrick J. Hoban will participate, as the Management Panelist, in the presentation “Applying the NLRA to Employer Handbooks and Other Employer Policies.” The presentations will occur at 12:30 p.m. and 1:45 p.m., as part of the Ohio State Bar Association’s “National Labor Relations Board Update: Times and Laws are Changing” seminar, which will be held at the Ohio State Bar Association headquarters, 1700 Lake Shore Drive, Columbus, Ohio 43204.
For more information regarding this seminar, please contact Linda Morris – CLE Program Coordinator for the Ohio State Bar Association at 614-487-4408 or email at lmorris@ohiobar.org.
- Not So Fast (Food): Ohio Employer Goes Too Far With Supersized Influence Over His Employees’ Voting Decisions
- Elections and the Workplace: Employee Time Off for Voting
- EEOC Changes the Notice Employers are Required to Provide Employees Participating in an Employee Health Program
- Religious Discrimination on the Horizon: EEOC Targets Enforcement
- Z&R SHORTS
Not So Fast (Food): Ohio Employer Goes Too Far With Supersized Influence Over His Employees’ Voting Decisions
With a hotly debated election season upon us, everyone seems to have an opinion on the candidates and significant ballot issues. While political discussions are common in the workplace, Ohio employers cannot influence their employees’ votes.More specifically, Ohio has a statute limiting an employer’s influence over how employees vote on Election Day. Ohio Revised Code 3599.05 makes it illegal for an employer or his agent or a corporation to:
print or authorize to be printed upon any pay envelopes any statements intended or calculated to influence the political action of his or its employees; or post or exhibit in the establishment or anywhere in or about the establishment any posters, placards, or hand bills containing any threat, notice, or information that if any particular candidate is elected or defeated work in the establishment will cease in whole or in part, or other threats expressed or implied, intended to influence the political opinions or votes of his or its employees.
A violation of this statute is punishable by a fine of $500 - $1,000.
In 2011, the owner of a fast food restaurant violated R.C. 3599.05 when, in the month preceding the election, the employer enclosed a letter containing the company’s logo on it with each employee’s pay check that stated:
As the election season is here we wanted you to know which candidates will help our business grow in the future. As you know, the better our business does it enables us to invest in our people and our restaurants. If the right people are elected we will be able to continue with raises and benefits at or above our present levels. If others are elected we will not. As always who you vote for is completely your personal decision and many factors go into your decision.
The letter then listed the candidates the owner believed would help the business move forward.
At least one employee filed a complaint against the owner with local prosecutors. The Ohio Secretary of State investigated the claim and recommended charges against the owner. Ultimately, the owner pled no contest to a violation of R.C. 3599.05 and agreed to pay a $1,000 fine.
Accordingly, Ohio employers must understand that there are limits to the amount of influence they can exert over their employees’ choices at the ballot box. If an employer wishes to publish political opinions to their employees, they should consult counsel to help avoid violating the law.
*Brad S. Meyer practices in all areas of public and private labor and employment law. For more information on political speech in the workplace or other labor and employment questions, please contact Brad at bsm@zrlaw.com or 216.696.4441.
Elections and the Workplace: Employee Time Off for Voting
As Election Day approaches, employers will receive requests from employees for time off from work to go vote. As there is no federal law governing time off for voting, numerous states have enacted laws governing employee leave for voting. In the 29 states that currently have laws providing for voting leave, the requirements vary. For example, 21 of those states require employers to provide paid time off to employees to vote.The following table summarizes the key aspects of state voting laws:
DOWNLOAD PDF OF TABLE
In addition to the state laws summarized above, employers also should know about any local ordinances relating to employee time off for voting. With Election Day fast approaching, employers should understand the validity of an employee request for time off to vote and prepare for the impact of any voting-related absences upon business operations.
*Brad E. Bennett practices in all areas of public and private labor and employment law. For more information on employee leave or other labor and employment questions, please contact Brad at beb@zrlaw.com or 614.224.4411.
EEOC Changes the Notice Employers are Required to Provide Employees Participating in an Employee Health Program
The Equal Employment Opportunity Commission (“EEOC”) recently published final rules under the Americans with Disabilities Act (“ADA”) for employers who offer certain wellness programs that collect employee health information. Specifically, the EEOC detailed what type of notice employers must provide regarding the use of employee health information. According to the EEOC, the new rules ensure that Employee Health Programs (“EHPs”) “are reasonably designed to promote health and prevent disease, that they are voluntary, and that employee medical information is kept confidential.”Generally, the ADA prohibits employers with 15 or more employees from discriminating against individuals on the basis of a disability. To prevent such discrimination, the ADA restricts employers with respect to obtaining medical information from employees and applicants. Notwithstanding the general restriction, however, the ADA permits employers to make certain inquiries of employees regarding their health and to conduct medical exams of employees when such requests are part of voluntary EHPs.
Voluntary EHPs encompass health promotion and disease prevention programs and activities offered to employees as part of an employer sponsored health plan or as a benefit of employment. The EEOC promulgated the new rules to guide employers who may offer incentives to employees to participate in wellness programs that require them to answer disability-related inquiries or undergo a medical examination.
Under the ADA, participation in an EHP must be voluntary. An EHP is voluntary if: (1) it does not require employees to participate; (2) it does not deny coverage under any of its group health plans or limit the extent of benefits (with some limited exceptions) due to non-participation; (3) it does not result in any adverse employment action or retaliation against any employees; and (4) it provides notice to employees regarding the use of their health information.
The new rules issued by the EEOC provide employers further guidance on the fourth prong of the voluntary test - the notice requirement. While the EEOC provides a Sample Notice for Employee-Sponsored Wellness Programs, employers are not required to use the EEOC sample. Under the new rules, an employer is required to provide employees with notice that: “(A) is written so that the employee from whom medical information is being obtained is reasonably likely to understand it; (B) describes the type of medical information that will be obtained and the specific purposes for which the medial information will be used; and (C) describes the restrictions on the disclosure of the employee’s medical information, the employer representatives or other parties with whom the information will be shared, and the methods that the covered entity will use to ensure that medical information is not improperly disclosed (including whether it complies with the measures set forth in the HIPAA regulations).”
After much debate, the EEOC declined to include a requirement that employees participating in EHPs provide prior written and knowing confirmation that their participation is voluntary. In making its determination, the EEOC sought to ensure that no employee unwittingly authorized the dissemination of confidential and protected information, while refusing to place unwieldy burdens on an employer. In order to balance those competing interests, the EEOC ruled that “a covered entity may not require an employee to agree to the sale, exchange, sharing, transfer, or other disclosure of medical information, or to waive confidentially protections available under the ADA as a condition for participating in a wellness program or receiving a wellness program incentive.”
The EEOC rules go into effect on the first day of the first plan year for benefits beginning on or after January 1, 2017. With open enrollments quickly approaching, it is important for employers to make sure they are familiar with the new EEOC rules. Employers can expect the EEOC and employee groups to enforce compliance with the new notice rules through litigation.
Employers also must understand that this is just one of the rules that govern EHPs. Implementation of these programs requires compliance with a host of laws and regulations, including but not limited to: HIPAA, Title II of GINA (also enforced by the EEOC), the Affordable Care Act and others.
*Patrick J. Hoban practices in all areas of employment and labor law. If you have questions about employee health programs or other employment and labor law issues, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Religious Discrimination on the Horizon: EEOC Targets Enforcement
In a series of moves, the Equal Employment Opportunity Commission (“EEOC”) recently demonstrated its intent to pursue religious discrimination claims more actively. In July, the EEOC released a fact sheet “designed to help younger workers understand their rights and responsibilities” under anti-discrimination laws. The EEOC also announced its improved coordination with the Department of Labor (“DOL”) to prevent religious discrimination among federal contractors and subcontractors.Title VII of the Civil Rights Act of 1964 (“Title VII”) forbids religious discrimination. Specifically, the statute’s “disparate treatment” provision prohibits employers from failing/refusing to hire, discharging, or otherwise discriminating against an applicant/employee “because of” the applicant’s/employee’s religion. Title VII defines religion to include all aspects of religious observance, practice, and belief.
Religious disparate treatment claims often arise in the form of “failure to accommodate” allegations. Generally, to succeed on a failure to accommodate claim, the applicant/employee initially must prove that: (1) he/she holds a sincere religious belief that conflicts with a job requirement; (2) he/she informed the employer about the conflict; and (3) the employer discharged or disciplined the applicant/employee for failing to comply with the conflicting job requirement.
Title VII defines religious belief broadly. For example, one court acknowledged that Title VII provides atheists with the same protections as members of other religions and found a plaintiff’s atheistic beliefs sincere. See Mathis v. Christian Heating and Air Conditioning, Inc., 158 F. Supp. 3d 317 (E.D. Pa. 2016). There, the plaintiff’s atheistic beliefs conflicted with a job requirement to wear an I.D. badge that included a religious mission statement.
The United States Supreme Court recently relieved applicants/employees from demonstrating, in some cases, that the applicant/employee informed the employer of a conflict between the job requirement and religious belief. In EEOC v. Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028 (2015), the Court held the employer does not need specific knowledge of the applicant’s/employee’s religion or need for accommodation in intentional religious discrimination cases. Rather, an employer who acts with the motive to avoid an applicant’s/employee’s religious practice or need for religious accommodation – even if based on nothing more than an unsubstantiated suspicion – may violate Title VII. An applicant’s/employee’s religion cannot be a “motivating factor” in the employer’s decision.
If an applicant/employee establishes a prima facie failure to accommodate claim, the employer must show that accommodating the employee would impose an undue hardship on the employer. Undue hardship means more than a de minimis cost. Historically, courts have considered accommodations that result in the following undue hardships: requiring an employer to pay overtime; requiring an employer to hire replacement employees; requiring an employer to make additional contributions to insurance and pension funds; requiring an employer to take action that compromises schedule or seniority systems; and requiring an employer to risk regulatory or criminal sanctions.
In addition, Title VII mandates that an employee cooperate with the employer’s attempts to provide a religious accommodation. Courts may be more likely to find undue hardship where the employee refuses to compromise. For example, a FedEx employee insisted that she keep her operations manager position and get all Saturdays off. The company showed such arrangement would have created a safety risk because the company needed all managers available every day during peak season to assist in loading and launching aircraft. The court found that allowing the employee not to work during peak season imposed an undue hardship. See Burdette v. Federal Express Corp., 367 Fed. App’x 628 (6th Cir. 2010).
Employers should address claims of religious discrimination and requests for accommodation carefully and on an individualized basis. In its Abercrombie & Fitch decision, the United States Supreme Court concluded Title VII does not demand mere neutrality with regard to religious practices. Rather, “it gives [employees seeking religious accommodations] favored treatment.” When evaluating accommodation requests, employers should evaluate carefully the costs of an accommodation, work with the employee to find a solution, and contact employment counsel with questions.
*Drew C. Piersall practices in all areas of employment and labor law. If you have questions about religious discrimination, accommodations, or the EEOC’s enforcement efforts, please contact Drew (dcp@zrlaw.com) at 614.224.4411.
Z&R SHORTS
Please join Z&R in welcoming Scott DeHart to its Employment and Labor Groups
Scott DeHart’s practice will focus on all areas of private and public sector labor and employment law and litigation. Scott graduated summa cum laude from New York Law School, where he focused his studies on labor and employment law. As a law student, Scott was selected as Champion of the NKU Grosse Moot Court Competition. Prior to joining Zashin & Rich, Scott pursued a career as a Human Resources practitioner, most recently as a Director of Human Resources at Columbia University. In that capacity, Scott ensured the effective design and administration of a broad range of HR programs and served on the university’s collective bargaining team.
Upcoming Speaking Engagements
Monday, November 7, 2016
George S. Crisci presents “The National Labor Relations Board – Obligations and Compliance” and “Other Employment Laws You Need to Know” at the National Business Institute’s Seminar on Human Resource Law from Start to Finish at the CMBA Conference Center, One Cleveland Center, 1375 E 9th St, Cleveland, Ohio 44114.
Friday, November 18, 2016
Jonathan J. Downes presents “FLSA – New Rules and Practical Solutions” at the CAAO Winter Conference during the 9:00 am – 10:30 am session. The conference takes place at the Embassy Suites Dublin, 5100 Upper Metro Place, Dublin, 43017.
Thursday, December 8, 2016
George S. Crisci will participate, as the Management Panelist, in the presentation “A View from the Chair of the National Labor Relations Board.” The featured panelist will be NLRB Chairman Mark G. Pearce. Patrick J. Hoban will participate, as the Management Panelist, in the presentation “Applying the NLRA to Employer Handbooks and Other Employer Policies.” The presentations will occur at 12:30 p.m. and 1:45 p.m., as part of the Ohio State Bar Association’s “National Labor Relations Board Update: Times and Laws are Changing” seminar, which will be held at the Ohio State Bar Association headquarters, 1700 Lake Shore Drive, Columbus, Ohio 43204.
For more information regarding this seminar, please contact Linda Morris – CLE Program Coordinator for the Ohio State Bar Association at 614-487-4408 or email at lmorris@ohiobar.org.
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