This article was written by Barbara E. Hoey & Diana R. Hamar, and originally posted to Kelley Drye’s Labor Days Blog.

With the crowd’s chant of “equal pay” echoing at the Women’s World Cup soccer match and again as the champions float down the Canyon of Heroes, the issue of pay equality continues to be in the spotlight, and the New York legislature has jumped onto this moving train.

In addition to passing a powerhouse bill that strengthens protections for workers who claim workplace harassment, New York recently passed two pay equity bills that expand protections for current employees and job applicants.

Now, more than ever, employers in New York State should pay close attention to this rapidly changing legal landscape.

From “Equal Pay for Equal Work” to “Equal Pay for Substantially Similar Work”

The first pay equity bill implements a new standard for assessing pay discrimination claims under the New York Labor Law and expands protections to employees of all protected categories, not simply gender. The implications of the new legislation are best understood by comparing it to the existing law.

The Old Laws – Under existing federal (29 U.S.C. § 206(d)) and state law (New York Labor Law § 194), employers must pay men and women “equal pay for equal work,” defined as requiring equal skill, effort and responsibility performed under similar working conditions.  This seemingly simple standard was often difficult to define in real life, because, well, it’s just never comparing apples to apples. Courts and employers often struggle with these concepts.

The New Law – First, the comparison is no longer just men and women–the law now applies to any employee who falls into any one of the protected categories under the New York State Human Rights Law (NYSHRL), including age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, disability, predisposing genetic characteristics, familial status, marital status or domestic violence victim status. Thus, this new pay equity legislation reaches far beyond gender equality and creates a new claim for any employee who falls into any of these (many) protected categories.

Second, the new law provides an alternative standard to establish pay discrimination.  Before the new law passed, employees had to prove they did not receive equal pay for “equal work.” Now however, employees can succeed on the merits if they do not receive equal pay for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” The new legislation is significant because it lowers an employee’s burden to establish pay discrimination by allowing employees to compare themselves to employees who share substantially similar, but not “equal,” job responsibilities. In effect, an employee does not need to identify a “comparator” who performs essentially the same work to establish a claim.

While the new law is expansive, it does not amend the affirmative defenses available to employers to justify pay differentials, such as a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor other than sex, such as education, training, or experience.

New equal pay law will be effective on October 8, 2019.

Salary History Ban Applies Statewide

Following in the footsteps of local municipalities including New York City, Suffolk County, and Westchester County, the New York State legislature passed a bill prohibiting employers from inquiring or relying upon the salary history of a job applicant in determining whether to extend a job offer and in setting an applicant’s salary.  An employer is also prohibited from retaliating against an applicant who refuses to disclose salary history information.

Unlike New York City’s salary history ban law, which only applies to prospective employees, this new legislation also applies to current employees who are seeking internal transfers or promotions.  Upon enactment, employers in New York State are now prohibited from requesting or relying upon a current employee’s salary or salary history in determining whether to interview the current employee for a different position, determining whether to extend a current employee an offer for a different position or promotion, or in setting the current employee’s salary if transferred or promoted.

The new legislation does not prohibit an applicant or current employee from voluntarily, “and without prompting,” disclosing or verifying salary history, including for the purposes of negotiating wages or salary.  Further, if an applicant or current employee responds to an offer of employment or promotion by disclosing wage or salary history to negotiate a higher offer, an employer may confirm wage or salary history at such time.

The salary history law becomes effective on January 6, 2020.

Takeaway for Employers

While we fantasize that management and HR employees read this blog for fun, we surmise that our readers are primarily focused on one thing: should you change existing internal policies and practices in light of this new legislation and if so, how?  Our answer is yes, and we suggest employers consider the following:

  • Engage in a privileged pay equity audit and broaden the lens in which employees are typically grouped for comparison. Employers should look beyond job title, and instead focus on grouping employees who perform similar job functions and tasks since minor differences will no longer justify pay differentials.
  • On that same vein, when employers group employees for comparison, employers can no longer compare employees only by gender but must assess and compare employees of all protected characteristics under the NYSHRL.  This is not a simple task and we recommend employers engage outside counsel, particularly to keep the audit privileged.
  • Although job descriptions are not outcome determinative, job descriptions should be revised to ensure they reflect the actual responsibilities, skills, and effort required of the position to comply with the new legal standard.
  • Last, but certainly not least, we recommend that HR and management take a second look at internal hiring and promotion practices due to the new salary history ban legislation. We recommend employers assess internal transfer applications, form interview questions, or anything related to the internal hiring and transfer process. Specifically, employers should take care to ensure that internal applications do not request salary history or wage information and that model interview questions for internal hiring are devoid of any inquiries regarding the same.

Navigating this new legislation is tough-with amorphous standards, employers are often left guessing how new laws will be enforced in the real world.  Regulations have not been issued yet, leaving pay equity a hot legal topic. Join Kelley Drye on September 17, 2019, as we tackle this rapidly changing landscape in a webinar entitled, The “Year of the Woman” – Pay Equity and Gender Equality Legislation and Litigation. This webinar is part of WORKing Lunch, a larger educational series hosted by Kelly Drye’s Labor and Employment group. To view webinars programs and date click here. To register for one or more webinar in this series please email marketing@kelleydrye.com.

This article was written by Constantine (Dino) Koutsoubas, Jennifer Fischer, and Matthew C. Luzadder and originally posted to Kelley Drye’s Labor Days Blog.

On June 25, 2019, Governor Jay B. Pritzker signed the Cannabis Regulation and Tax Act (HR1438) (“Cannabis Act”) into law. When the law goes into effect on January 1, 2020, Illinois will be the second largest state (after California) to allow the use and possession of recreational cannabis for all citizens over age 21. Notably, Illinois is the first state to legalize recreational cannabis use through legislative action, rather than ballot initiative.

Businesses in Illinois should have one simple question in mind: what can we do about drug testing now that employees have the right to use cannabis under state law? Can these employers still prohibit their employees from using cannabis when they are at work? Can these employers still prohibit their employees from partaking in cannabis when they are not at work?

The answer is, of course, it depends. Unfortunately, the Cannabis Act provides conflicting language on precisely what employers can do in terms of drug testing for employees.

What Employers Can Do

● Employers May Restrict Being Under the Influence of Cannabis During Working Hours

First, employers are allowed to restrict employees from being “under the influence of or use cannabis in the employer’s workplace or while performing the employee’s job duties or while on call.” Cannabis Act at § 10-50(b). Illinois employers may need to amend existing policies to expressly state that the use of cannabis will not be tolerated on premises and that employees are not to be under the influence of cannabis during working hours. Specifically, Section 10-50(e) protects employers for actions founded on an employer’s “good faith belief that an employee used or possessed cannabis in the employer’s workplace or while performing the employee’s job duties.”  Workplace possession of paraphernalia, however, is not explicitly discussed.

● Federally Regulated Employers May Continue Their Zero-Tolerance Policies

Second, as with Illinois’ medical cannabis law, an employer may continue any testing program that federal, state, or local restrictions require. For instance, companies that must comply with Department of Transportation regulations to maintain a drug testing program—airlines, trucking companies, rail companies, etc.—may maintain those policies as it pertains to cannabis. Id. at § 10-50(g) Similarly, organizations may keep their existing policies in place if changing those policies would jeopardize federal contracts or federal grants. Id. These federally regulated employers should update their policies to note that they will continue to test for cannabis despite its legal status in Illinois.

● Employers may adopt “Reasonable” Zero Tolerance Policies

On the one hand, Section 10-50(a) of the bill states that employers are allowed to adopt “reasonable zero tolerance or drug free workplace policies, or employment policies concerning drug testing, smoking, consumption, storage or use of cannabis in the workplace or while on-call provided that the policy is applied in a nondiscriminatory manner.” (emphasis added). Furthermore, Section 10-50(c) allows employers to discipline or terminate employees who violate those policies. These sections would tend to indicate that an employer could maintain a policy of random drug screening for cannabis in certain situations similar to those for federally regulated companies. But courts may have to decide what is a “reasonable” zero tolerance or drug free workplace policy in a particular instance.

● Employers May Use “Good Faith” To Determine Drug Use At Work

Section 10-50(d) notes that “[a]n employer may consider an employee to be impaired or under the influence of cannabis if the employer has a good faith belief that an employee manifests specific, articulable symptoms while working that decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position….” Moreover, while Section 10-50(e) of the Act provides immunity to an employer if it takes an action against any employee, including testing that employee under a policy, or takes action against an employee for refusing testing, the action must be “based on the employer’s good faith belief that an employee used or possessed cannabis in the employer’s workplace or while performing the employee’s job duties or while on call in violation of the employer’s employment policies.” These provisions of the Cannabis Act indicate that an employer should meet a “probable cause” or reasonable suspicion-like standard before requesting (or acting on) a drug test for cannabis. A positive test, in itself, is unlikely to be sufficient to shield the employer from liability if the test administration lacked a good faith basis.

Impact on the Illinois Right to Privacy in the Workplace Act

The Cannabis Act’s amendments to the Illinois Right to Privacy in the Workplace Act, 820 ILCS 55/5, and their subsequent impact, are not clear. The existing statute reads, “it shall be unlawful for an employer to refuse to hire or to discharge any individual … because the individual uses lawful products off the premises of the employer during nonworking hours.” 820 ILCS 55/5(a). The Cannabis Act, however, confirms that “lawful products” means “products that are legal under state law,” which must be read to explicitly include cannabis given this context. Cannabis Act at § 900-50. Compare to Coats v. Dish Network, L.L.C., 303 P.3d 147, 150–51 (Colo. App. 2013) (holding that that “lawful activity” under a similar statute did not include medical marijuana because medical marijuana use was prohibited by federal law.)

But, at the very beginning of the amendment to the Right to Privacy in the Workplace Act, the Cannabis Act adds an explicit reference to Section 10-50 of the Cannabis Act in its initial exclusionary clause:

“Except as otherwise specifically provided by law, including Section 10-50 of the Cannabis Regulation and Tax Act … it shall be unlawful for an employer to refuse to hire or to discharge any individual … because the individual uses lawful products off the premises of the employer during nonworking and non-call hours.” (additions boldeded).

Arguably, the inclusion of this amendment effectively removes the Cannabis Act from being included in the Illinois Right to Privacy in the Workplace Act, though it is not clear that this was the intention of the General Assembly.

In the end, it is unclear what, if anything, the changes to the Illinois Right to Privacy in the Workplace Act mean in the context of Section 10-50 of the Cannabis Act. At the very least, Section 10-50 of the Cannabis Act seems to trump the Illinois Right to Privacy in the Workplace Act to the extent there is a conflict.

Reasonable Drug Testing Policies 

Under 10-50(a), an employer is allowed to have “reasonable” drug testing policies, but affected employees will surely test those policies in court if the policies seek to regulate an employee’s legal cannabis usage.

A zero-tolerance testing policy against cannabis might be reasonable for workplace settings where life and limb might be at risk (i.e. construction sites, manufacturing involving heavy equipment, hospitals). In those situations, the risk of death or serious bodily harm due to impaired employees might justify a proactive testing program—particularly if the outward symptoms of impairment may not present themselves until it is too late.

On the other hand, it may not be reasonable to have a zero-tolerance testing program in an office or retail setting. A consulting firm, for instance, might have a hard time convincing a judge that it has an interest in prohibiting cannabis usage outside of its offices.

Changes in Testing Methodologies May Change The Landscape

The answers might become clearer as drug-testing methodologies improve. The active component of cannabis that leads to impaired judgment is delta-9-tetrahydrocannabinol (“delta-9-THC”). Once it is in the blood, delta-9-THC has a half-life of less than 30 minutes in the blood. Indeed, because of this, delta-9-THC is undetectable in urine. That is why most tests look for the metabolites of delta-9-THC—the chemicals that the body converts delta-9-THC to in order to remove it from the body. Detection of these metabolites occur for up to 30 days post cannabis usage.

The current tests are not precise enough to fit into the legal framework of the Cannabis Act. This is because, by their very nature, they necessarily will capture legal cannabis usage in Illinois. If future tests were to focus simply on delta-9-THC as opposed to metabolites, drug testing will be able to accurately capture an employee being under the influence of cannabis while at work or on a call, rather than his or her legal use of cannabis during non-business hours.

Until there is a delta-9-THC test that can be quickly administered, non-federally regulated employers should be cautious about maintaining a cannabis testing protocol for their employees.

Suggested Policy Revisions

Employers who implement drug testing to employees or job applicants should to re-visit their drug testing policies to make sure they are in conformance with the Cannabis Act. Here is what the policy can require:

● employees cannot come to work under the influence of cannabis;
● employees cannot use cannabis products during work hours; and
● the employee to submit to a drug test if the employee exhibits behaviors consistent with being under the influence of cannabis.

To the extent an employer wishes to continue their zero-tolerance approach under current testing methodologies, they should be prepared to provide a reasonable justification for that approach.

Employers should also ensure that if comprehensive drug testing is done, the testing is either not testing to cannabis, since it could result in a false positive for an employee’s legal use of cannabis outside of working hours, or the testing is designed to detect recent cannabis usage, once the testing methodologies have advanced.

If you have questions about your policies regarding drug testing, please contact Kelley Drye’s Labor and Employment Team.

This article was written by Nicholas J. Kromka, Jennie Woltz, and Mark A. Konkel, and originally posted to Kelley Drye’s Labor Days Blog.

Ah, summer: less-demanding schedules, lighter workloads, and a more relaxed work wardrobe. In keeping with the professional reputation of lawyers as killjoys, however, we recommend that HR professionals act more like Aesop’s ants—using the summer to prepare for fall—than the grasshopper, who was so busy partying that he failed to prepare at all. So listen, Grasshopper: savvy HR leaders know to use their summer downtime to set themselves up for success when we all go “back to school.”

Here are seven suggestions of what New York HR professionals can get ahead of over the summer:

1. Coordinate Sexual Harassment Prevention Training – Under New York State law, all employers must provide annual sexual harassment prevention training that satisfies the State’s training requirements by October 9, 2019 (NYC has its own requirements, as we describe here). An employer can satisfy these requirements by either adopting the State’s model training documents or by providing live or interactive online/video training which meets or exceeds the State’s minimum standards. With a mid-fall deadline quickly approaching, summer is the perfect time to think about, and possibly complete, your workforce’s first annual training.

2. Ensure Compliance with Sick and Safe Leave Law Requirements – Both New York City and Westchester County have recently adopted new laws and requirements for paid sick and safe leave, and the Westchester law has approaching deadlines. For instance, the new Westchester County, New York Sick Leave Law requires employers to provide employees a copy of the law and a notice of how the law applies to them, either when an employee starts at the organization, or by July 9, 2019, whichever is later. Westchester employers must also post the law and a poster in a place accessible to all employees (the law and its requirements can be found here).

Employers who have employees in both NYC and Westchester must be careful to note some key differences between the New York City and the Westchester laws. For example, employees under New York City law accrue safe leave based on hours worked, whereas employees under Westchester County’s new Safe Time Leave Law do not accrue leave, but are instead entitled to take a specific amount of protected, paid leave. The safe leave provision in Westchester is also in addition to the sick leave provision, whereas in NYC the two are combined. Given the new requirements and recent changes, this summer is an ideal time to get a handle on the state of the law that applies to your organization, and to make sure your notice and posting procedures are compliant, that your payroll systems are accruing/deducting sick and safe leave banks correctly, and that your HR departments are poised to handle requests for these kinds of leaves in the right way. You may also need to consider training for your supervisors who are often your first line of defense when fielding employee requests for leave.

3. Implement Changes Based on Paid Family Leave Law – You readied your workforce for New York Paid Family Leave when it first started in January 2018, and so you know that each year until at least 2021, each January will bring a slightly new coverage and payment scheme.  Currently, as of January 1, 2019, under the New York State Paid Family Leave Law, eligible employees can take up to 10 weeks of paid leave. Additionally, employees taking paid leave this year receive 55% of their average weekly wage, capped at the current statewide average weekly wage of $1,357.11, with a maximum weekly benefit of $746.41. Employees contribute 0.153% of their gross wages each pay period to Paid Family Leave this year. In January 2020, employees will still be eligible for 10 weeks of paid leave, but will instead receive 60% of their average weekly wage.

Given these changes, summer is a good time to update any Paid Family Leave forms distributed by your organization to reflect the increased number of weeks of paid leave employees can take and what their rights and responsibilities are with respect to taking paid leave. Managers (and staff) should be reminded or notified about the increase in benefits that is coming soon, and how that will affect their paychecks. Likewise, you should consider using this summer to work with payroll personnel to ensure employee contributions are being properly deducted from employees’ wages.

4. Review Employee Handbooks – Reviewing your organization’s policies and procedures annually is always best practice. Take advantage of the summer to make sure your organization’s policies are complete, up to date and well-drafted. Once reviewed, you still need approval from key figures and stakeholders to implement any policy changes. You may find decision-makers more willing to come to the table during the summer months when work demands tend to be lighter and the work environment is more relaxed.

5. Address Compensation Program – Since many salary surveys are published in the spring, summer is a good time for salary benchmarking activities. Use the summer (and any available summer interns you may have!) to collect and analyze the appropriate data to determine the proper market comparisons for your organization’s job listings. You do not want to find out too late that the reason a position is not filled is because the salary posted on the job listing is below market. Also consider reviewing current job descriptions during this time to ensure accuracy with tasks actually performed, and to double-check exemption categories. Taking time to address any pay equity issues you discover when assessing your compensation program is also a good idea.

6. Plan Employee Engagement Events – Summer is an excellent time to start planning and booking engagement events and activities for the upcoming winter, spring and summer. Booking now guarantees your desired venues are reserved well before they become unavailable. The summer’s warm-weather also makes it a great time to get employees outside. Try to coordinate a few outdoor outings this summer to generate employee satisfaction and inspire workplace commitment.

7. Recruit for the Upcoming Fall – Slower summertime business means there is room for other initiatives like recruitment. Many businesses also find themselves with higher-than-normal resignation rates in the summer, as members of their workforce return to school in the fall. With September recruiting around the corner, now is an opportune time to start reviewing applications and conducting interviews to fill open positions, or to plan to fill positions that will open in the fall.

So make your summer work for you. Better to move the HR ball forward methodically now than frantically later. You’ll thank us in September.

  • 04/26/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Alabama Packaging Manufacturer For Safety Violations after Two Employees Suffer Injuries
  • 04/25/2019 – OSHA Statement – Statement by Acting Assistant Secretary of Labor for Occupational Safety and Health Loren Sweatt on Workers’ Memorial Day 2019
  • 04/25/2019 – Region 4 OSHA News Release – U.S. Department of Labor Expands Partnership with Florida SAFETY Alliance to Increase Awareness of Construction Hazards
  • 04/25/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Georgia Preparatory College For Exposing Employees to Trenching Hazards
  • 04/25/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Chemical Manufacturer for Exposing Workers To Fire and Burn Hazards at Georgia Worksite
  • 04/23/2019 – Region 4 OSHA News Release – U.S. Department of Labor Partners with Southeast’s Industry Leaders, Landscaping Employers to Sponsor Safety Stand-Down, April 29-30, 2019
  • 04/23/2019 – Region 6 OSHA News Release – U.S. Department of Labor and Associated General Contractors Renew Alliance to Promote Safety and Health in the Rio Grande Valley
  • 04/23/2019 – Region 8 OSHA News Release – U.S. Department of Labor Cites Montana Highway Contractor After Hot Asphalt Burns Three Workers in Laurel
  • 04/22/2019 – OSHA Trade Release – U.S. Department of Labor, Workplace Safety Organizations Announce 6th Annual National Fall Prevention Safety Stand-Down
  • 04/22/2019 – Region 3 OSHA News Release – U.S. Department of Labor Partners with Alvin H. Butz Inc. to Promote Workplace Safety at Manufacturing Facility Expansion in Pennsylvania
  • 04/22/2019 – Region 8 OSHA News Release – U.S. Department of Labor Investigation Finds Hospital Employees Exposed to Workplace Violence Hazards
  • 04/19/2019 – OSHA Trade Release – U.S. Department of Labor to Hold Meeting to Solicit Public Input On OSH Act Whistleblower Protection Provision
  • 04/19/2019 – Region 1 OSHA News Release – U.S. Department of Labor Cites New Hampshire Furniture Manufacturer One Willful and 36 Serious Violations after Employee Injury
  • 04/17/2019 – Region 3 OSHA News Release – Federal Jury Decides Pennsylvania Company Wrongfully Terminated Two Employees for Participating in U.S. Department of Labor Investigation
  • 04/17/2019 – Region 3 OSHA News Release – Federal Jury Awards Whistleblower $40,000 in Damages Following U.S. Department of Labor Investigation of Pennsylvania Foundry
  • 04/17/2019 – Region 3 OSHA News Release – U.S. Department of Labor Fines Pennsylvania Framing Contractor For Exposing Employees to Fall Hazards
  • 04/17/2019 – Region 4 OSHA News Release – U.S. Department of Labor Partners with University of South Florida and Contractor to Promote Worker Safety During Florida Construction Project
  • 04/17/2019 – Region 4 OSHA News Release – U.S. Department of Labor Joins Partnership to Promote Workplace Safety During North Huntsville, Alabama, Construction Project
  • 04/17/2019 – Region 4 OSHA News Release – U.S. Department of Labor Partners with Contractors to Promote Safety During Construction of Florida Development Project

 

  • 04/12/2019 – Region 5 OSHA News Release – U.S. Department of Labor Enters Partnership to Promote Safety During Bridge Construction Project in Ohio
  • 04/11/2019 – Region 5 OSHA News Release – U.S. Department of Labor and Illinois Funeral Directors Association Sign Alliance to Improve Workplace Safety
  • 04/10/2019 – Region 3 OSHA News Release – U.S. Department of Labor Cites Southern New Jersey Contractor For Disregarding Fall Protection Requirements
  • 04/10/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Plastics Manufacturer For Exposing Employees to Amputations after Worker Injury
  • 04/08/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Ohio Construction Company After Employee Suffers Injuries from Fall at Florida Worksite
  • 04/03/2019 – Region 2 OSHA News Release – U.S. Department of Labor Cites Remington Arms for 27 Safety and Health Violations after Amputation at New York Manufacturing Plant
  • 04/03/2019 – Region 4 OSHA News Release – U.S. Department of Labor Investigation Finds Florida Roofing Contractor Continues to Expose Employees to Fall Hazards
  • 04/02/2019 – Region 5 OSHA News Release – U.S. Department of Labor Partners with Industry at Chicago Area Trench Safety Conferences to Raise Awareness of Hazards
  • 04/02/2019 – Region 5 OSHA News Release – U.S. Department of Labor Partners with Safety Professionals and Industry To Raise Awareness of Hazards during Trench Safety Day Event in Ohio

 

This article was originally written by John Mattiace, and posted to Kelley Drye’s Labor Days Blog.

The fact-pattern is familiar to employers who have been on the receiving end of attorney litigation threats. A plaintiff’s lawyer calls, or writes a letter, outlining a potential claim by a client, makes a demand for damages, then perhaps throws in mention of the harm the company will suffer if the allegations become “public.” Just another run-of-the-mill litigation threat from a plaintiff’s attorney. Nothing to make a “federal case” out of it, right? Nothing criminal, right?

Well, maybe it is criminal. The recent charges filed by the United States Attorneys’ Office in the Southern District of New York against celebrity attorney Michael Avenatti highlight the lines that both management and plaintiff’s attorneys need to be aware of during communications involving threats of litigation.

On March 25, 2019, Mr. Avenatti was charged with various counts of extortion and conspiracy to extort in connection with his communications to Nike attorneys about a claim that a client of his had relating to allegations of misconduct by Nike employees. Specifically, Mr. Avenatti threatened to hold a press conference announcing the claims unless Nike acceded to his exorbitant demands of payment to him and his client, and his insistence that he and another attorney be paid to conduct an “investigation” into the matter for Nike. The indictment described that Mr. Avenatti required payment of $1.5 million for his client and that he be retained to conduct an internal investigation for between $15 and $25 million, or, that Nike pay him a total of $22.5 million to resolve claims of client and buy Avenatti’s silence.

So, what makes this “extortion?” The general rule is that threats of litigation, even if the claims are meritless and/or economically harmful, are not extortion. GI Holdings, Inc. v. Baron & Budd, 179 F.Supp. 2d 233 (S.D.N.Y. 2001); Building Industry Fund v. Local Union No. 3, Intern. Broth. of Elec. Workers, AFL-CIO, 992 F. Supp. 162, 176 (E.D.N.Y. 1996). The extortion line is crossed, however, when one “magnifies the risks to its adversary by corrupting the litigation in order to ‘get the price up.’” Chevron Corp. v. Donziger, 974 F.Supp. 2d 362, 580 (S.D.N.Y. 2014). Essentially, lying about the risk makes the communications extortionate because it creates leverage that “bears no proper nexus to any plausible claims that may have been asserted in the first place, and from which the victim has a right to be free.” Id.

Here, Mr. Avenatti likely crossed the line when he made repeated reference to the harm that going public with his client’s claims was going to cause Nike. The indictment states that Mr. Avenatti told Nike that if his demands were not met that he would “go take ten billion dollars off [Nike’s] market cap.” This out-sized amount was clearly meant to gain the “leverage” that the courts hold has no nexus to any plausible claim.

The Avenatti indictment is likely to check the tactics of even the boldest plaintiff’s counsel. Nevertheless, the lesson for employers is clear: the next time your company is faced with an out-sized threat of harm by an ambitious plaintiff’s counsel ask yourself if the harm claimed is proportionate to the allegations, and consider asking for counsel’s basis for his claim. If there is none, or the basis given is suspect, consider the possibility that you could be the victim of criminal extortion necessitating the involvement of the prosecutor’s office.

This article was originally written by John Mattiace and posted to Kelley Drye’s Labor Days Blog.

The Equal Opportunity Employment Commission (“EEOC”) has always required employers with 50 or more employees to submit annual reports, known as “EEO-1” submissions, to the Commission. These report are required to include data concerning the number of employees the company employs based on gender, race, and ethnicity. At two pages long, they were relatively straightforward and the data fairly easy to submit. The requirement has yo-yoed back and forth from being much more onerous over the past several years, with recent developments casting a shadow of uncertainty over the current EEO-1 obligations.

Increased Reporting Requirements

In September 2016, the EEOC expanded the reporting obligation to include detailed wage and hour information broken down by gender, race, and ethnicity within 12 different pay bands for 10 different job classifications.  This drastically increased the amount of information that employers needed to collect and report. If it wasn’t already, the EEO-1 form became an unequivocal burden. The new requirements were submitted to the federal Office of Management and Budget (“OMB”) and approved for employers to begin complying with in 2017.

New Requirements Called Off and Then Reinstated

Things changed again when the Trump administration took over. In August 2017, the OMB issued a stay of the new wage and hour reporting requirements, citing, among other things, that it was overly burdensome and “[did] not adequately address privacy and confidentiality issues.”

In November 2017, several advocacy groups sued the administration and claimed that the OMB’s decision violated the federal Paperwork Reduction Act (“PRA”), and Administrative Procedures Act (“APA”), and asked that the OMB’s stay be lifted.

On March 4, 2019, the pendulum swung back when the U.S. District Court for the District of Columbia granted the plaintiffs summary judgment and held that the OMB’s stay was not reasonable. This means the requirements would need to be reinstated.

More Uncertainty

Although the deadline to comply with EEO-1 requirements has been extended (because of the recent government shutdown) from March 31, 2019 to May 31, 2019, the EEO-1 submission portal still needs to be updated to allow for the submission of the new reporting data and there is no indication when that will be done. Thus, we expect a further extension of the deadline at some point. It is also very likely that the Trump administration will appeal the District Court’s decision so there is the potential for a swing back to the days when the new data was not required.

We will continue to monitor the developments for any updates concerning employers’ responsibility to comply with these new changes to the EEO-1 reporting law.

  • 03/26/2019 – Region 5 OSHA News Release – U.S. Department of Labor Again Cites Wisconsin Pallet Manufacturer After Three Employees Exposed to Wood Dust
  • 03/25/2019 – Region 4 OSHA News Release – U.S. Department of Labor Fines Georgia Contractor For Trenching Violations; Proposes $106,078 in Penalties
  • 03/25/2019 – Region 4 OSHA News Release – U.S. Department of Labor Seeks to Prevent Georgia Roadway Worksite Injuries through Safety Stand-Down Events
  • 03/22/2019 – Region 5 OSHA News Release – U.S. Department of Labor, Industry Leaders and Safety Professionals Join for Kickoff of 2019 National Safety Stand-Up for Grain Safety Week on March 25
  • 03/21/2019 – Region 5 OSHA News Release – U.S. Department of Labor Proposes $1,326,367 Penalty after Ohio Company Willfully Exposes Employees to Dangerous Hazards
  • 03/19/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Ammunition Manufacturer After Explosion Kills Two Employees at North Florida Worksite
  • 03/15/2019 – Region 8 OSHA News Release – U.S. Department of Labor Signs Alliance with North Dakota Oil and Gas Industry Group to Promote Workplace Safety in Oil Fields

 

  • 03/13/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites South Florida Restaurant Operator For Safety Violations After Employee Suffers Burn Injuries
  • 03/11/2019 – Region 5 OSHA News Release – U.S. Department of Labor Cites Wisconsin Aluminum Castings Manufacturer After Three Employees Develop Occupational Lung Disease
  • 03/08/2019 – OSHA Trade Release – OSHA Requests Information on the Powered Industrial Trucks Standard
  • 03/06/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Georgia Battery Manufacturer For Lead and Other Safety Hazards; Proposes $115,594 in Penalties
  • 03/06/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Contractors for Safety Violations Following Two Fatalities at Florida Hotel Worksite
  • 03/05/2019 – Region 3 OSHA News Release – U.S. Department of Labor Fines Pennsylvania Construction Company $208,560 for Exposing Employees to Trenching Hazards
  • 03/05/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Roofing Contractor After Fatal Fall at South Florida Worksite
  • 03/01/2019 – Region 1 OSHA News Release – U.S. Department of Labor Sues Massachusetts Construction Company For Retaliation for Facilitating Arrest of Injured Employee
  • 03/01/2019 – Region 4 OSHA News Release – U.S. Department of Labor Cites Florida Pet Food Manufacturer For Amputation, Fall and Other Safety Hazards
  • 03/01/2019 – Region 5 OSHA News Release – U.S. Department of Labor Renews Alliance with Toledo Electrical Joint Apprenticeship Training Committee to Improve Workplace Safety

 

This article was written by Barbara E. Hoey and Diana R. Hamar, and originally posted to Kelley Drye’s Labor Days Blog.

In a decision that could have wide-ranging implications for all employers, the Fourth Circuit recently held that an employer’s failure to stop a false rumor that a female employee slept with her male boss to obtain a promotion, could give rise to employer liability under Title VII for gender discrimination. Parker v. Reema Consulting Services Inc., No. 18-1206 (4th Cir. Feb. 8, 2019).

So now employers must police the rumor mill? This decision is confusing to say the least, as employers now have dueling obligations—to quash rumors while not infringing upon an employee’s Section 7 rights to discuss the terms and conditions of employment.

ALLEGED FACTS

According to the Complaint and reported decision¹, plaintiff Evangeline Parker worked for Reema Consulting Services, Inc. (“RCSI”) at its warehouse facility in Sterling, Virginia. Parker began as a low-level clerk and was promoted six times in approximately two years, ultimately holding the position of Assistant Operations Manager. Two weeks after her latest promotion, a male employee started a rumor that Parker received the promotion because she was having a sexual relationship with her boss. The male ‘rumor monger’ had started at RCSI at the same time as Parker, but had not been promoted and was now reporting to Parker.

Subsequently, a warehouse manager (male) began to spread the rumor and Parker’s direct reports and coworkers started treating her with hostility. After six weeks, the warehouse manager held a mandatory all-staff meeting, allegedly to discuss the rumor. Parker and her boss were late to the meeting, however, her boss was allowed into the meeting while the warehouse manager was claimed to have “slammed the door in Parker’s face.”

Parker scheduled a meeting with the warehouse manager to discuss the rumor where he blamed her for “bringing the situation in the workplace” and told her that she could no longer advance in the company because she complained about the rumor.

Parker filed a formal hostile work environment complaint with HR. She claimed that HR instructed her to avoid her boss, but placed no restrictions on him. Later that month, Parker was called to a meeting with HR and the warehouse manager; she was issued two written warnings (one for complaining about the harassment) and was terminated.

PARKER’S CLAIMS AND THE DISTRICT COURT DECISION

Parker filed suit alleging claims under Title VII, including: (1) hostile work environment on the basis of sex; (2) retaliatory termination;  and (3) discriminatory termination on the basis that RCSI terminated her employment contrary to its three warnings rule.

RCSI filed a motion to dismiss and the district court granted the motion, explaining that the rumor was not based upon Parker’s gender but instead her conduct. The district court further held that the alleged harassment was not severe and pervasive because the rumor lasted only a few weeks and involved only a “few slights.” As such, the court also dismissed Parker’s retaliatory termination claim because her belief that she was subjected to gender discrimination was not objectively reasonable since the rumors were not based upon her gender.

FOURTH CIRCUIT REVERSES DECISION 

Surprisingly, the Fourth Circuit reversed the district court decision and held that RCSI may be liable for failing to quash this rumor on the theory that it perpetuated a ‘deeply rooted perception’ that women (not men) use sex to achieve success. The Court relied upon gender stereotyping cases, including the seminal Supreme Court case Price Waterhouse v. Hopkins, 490 U.S. 228, 250–51, 258, 272–73 (1989). The Fourth Circuit emphasized that assuming all of Parker’s allegations to be true, the rumor clearly resulted in Parker being treated differently from male employees (i.e., male employees started the rumors, Parker was excluded from an all-staff meeting regarding the rumor while her male supervisor was not, and only Parker was sanctioned for complaining about the alleged harassment while her male supervisor was not).

The Fourth Circuit also rejected the district court’s conclusion that Parker failed to allege that the harassment was severe and pervasive. It reasoned that the alleged harassment did not last a mere two weeks, but rather, two months and found it to be more than a few “slights.” The Court found that the alleged harassment was continuous, consumed management and employees and was at times physically threatening (the warehouse manager slamming the door in Parker’s face). Thus, the Fourth Circuit concluded that Parker sufficiently alleged that the harassment was severe and pervasive and interfered with her work.

GUIDANCE FOR EMPLOYERS

At first blush, it seems outrageous that an employer could be liable for failing to control rumors in the workplace.  In fact, how would an employer even do that? Even if an employer could, would an employer be infringing upon employees’ Section 7 rights by instructing employees not to speak about a workplace romance?

The answer: it depends on the rumor and how management reacts to the rumor. In that regard, this case may be a demonstration of the adage that – bad facts make bad law.

There were a number of bad facts here which led to this result, most notably the fact that the warehouse manager was alleged to have spread the rumor and then called a meeting to discuss the rumor with staff.  Assuming that were true – and we know there may be two sides to the story – that puts management right in the thick of the rumor spreading.

So, the lesson to be learned here includes:

  • A false rumor grounded in a harmful gender-based stereotype may result in employer liability for unlawful gender discrimination if management takes part in spreading it.
  • Managers that are aware of malicious rumors may need to take steps to quiet them and certainly should not spread them.
  • Managers should also know that if they are found to be spreading malicious gossip or rumors, they may be subject to discipline.
  • Finally, once the employee has made a complaint, it goes without saying that the company should not retaliate against the employee.

To further complicate matters, employers should remember that the NLRB has held that broad “no gossip” policies violate the National Labor Relations Act because they discourage employees from speaking to coworkers about the terms and conditions of employment.

The takeaway? Employers must pay attention to the content of the rumor and act accordingly.

————————————————————————————————————

¹ For purposes of summary judgment, allegations in a complaint must be assumed to be true. We take no position on whether the allegations were in fact accurate.