EEOC & Title VII and Recent NLRB Developments

Labor Talk: An Employment Law Update

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Retroactive Application of Obergefell v. Hodges

Angelica Fortney

BackgroundBaker v. Nelson (SCOTUS 1972) – dismissed plaintiffs’ appeal challenging a Minnesota law that limited marriage to persons of the opposite sex for failure to present a “substantial federal question.” DOMA – 1996 federal law that provided:► Sec. 2: States/territories not required to recognize same-

sex marriages under the law of other states/territories.► Sec. 3: Marriage is defined for federal purposes as

between one man and one woman. Lawrence v. Texas (SCOTUS 2003) – struck down laws prohibiting same-sex intimacy. U.S. v. Windsor (SCOTUS 2013) – struck down Sec. 3 of DOMA.

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BackgroundPost-Windsor agency guidance:► IRS released Revenue Ruling 2013-17, FAQs, Notice

2013-61, and Notice 2014-19.► DOL released Technical Release 2013-4.

Outcome of Guidance:► Established “place of celebration” rule for federal tax and

ERISA purposes, respectively.► Required amendments to qualified retirement plans.► If same-sex spouses were provided certain welfare

benefits, they were entitled to refunds for open tax years.► Generally prospective effect.

- Guidance allowed but did not require retroactive application of Windsor for federal tax purposes.

► Retrospective with regard to refunds.

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Obergefell v. HodgesFacts: Following Windsor, James Obergefell and John Arthur, a gay couple, married in Maryland in July 2013. Ohio, their state of residence, refused to recognize their marriage. Arthur was terminally ill and wanted Obergefell to be recognized as the surviving spouse on the death certificate. ► They filed suit in the federal Southern District Court of

Ohio, where they were granted a TRO against the local Ohio Registrar.

► Arthur died in October. The district court rejected the defendants’ motion to dismiss.

► In December, the district court ruled that Ohio’s refusal to recognize same-sex marriages from other states was unconstitutional.

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Obergefell v. HodgesThe defendants appealed to the Sixth Circuit Court of Appeals.► Obergefell was heard with 5 other district court

cases (including one from TN).Sixth Circuit ruling: The Sixth Circuit ruled that the same-sex marriage ban and non-recognition policy were not unconstitutional, citing precedent of Baker v. Nelson.► This created a Circuit split between the Sixth

Circuit and the Fourth, Seventh, Ninth and Tenth Circuits.

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Obergefell v. HodgesPlaintiffs appealed to the Supreme Court of the United States, which granted cert.► The cases were further consolidated.

Court’s ruling: the Fourteenth Amendment’s Due Process and Equal Protection Clauses prohibit states/territories’ same-sex marriage bans and require states to recognize same-sex marriages performed in other states/territories.► Effect: Superseded Section 2 of DOMA.

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Post-ObergefellObergefell did not break much new ground for purposes of administering employee benefit plansPost-Obergefell IRS Notice 2015-86 amplifies previous guidance:► Obergefell does not require qualified retirement

plans to be amended because that should have been done under Windsor.- Such plans may implement discretionary amendments

to allow optional changes.► Health and welfare plans may need to be

amended depending on the terms of the plan.

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Post-Obergefell

Other consequences► Insured plans – state insurance law impact► Self-funded plans may be vulnerable to

litigation► Income will no longer be imputed for state tax

purposes► Many employers are considering eliminating

domestic partner coverage

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Retroactivity of ObergefellPost-Windsor IRS guidance provided that retroactive application of Windsor is allowed but not required.► Post-Obergefell guidance confirms this is still an

option, but also does not require it.Recent cases have challenged employers’ denial of retroactive application► Post-Windsor Schuett v. FedEx and Cozen

O’Connor P.C. v. TobitsSocial Security Administration may soon be applying Obergefell retroactively.

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HypotheticalYolanda is an employee of ABC Clothing (“ABC”), a large retail chain.After Windsor (and her state’s subsequent recognition of same-sex marriage), she married her partner, Shay, and applied for benefits in 2014. ABC denied coverage for Shay because it did not cover same-sex spouses of employees.Shay suffered extensive injuries in a car accident later that year. Her medical bills amounted to $75,000.After Obergefell, ABC amended its plan effective July 1, 2015 to cover same-sex spouses.Yolanda (represented by a prominent LGBT rights organization) filed an EEOC charge against ABC regarding the previous denial of health coverage.What are ABC’s options?

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EEOC and Title VIIDustin Carlton, Tim Garrett and Mary Leigh Pirtle

Discrimination on the Basis of Sex

Two modes of analysis under Title VII:► Discrimination because of sex (treating men

and women differently because of their sex)► Discrimination based on sexual stereotyping

- Price Waterhouse case- Not promoted because did not act and appear

“feminine” enough

Sexual OrientationCourts have largely agreed: sexual orientation is NOT a protected category under Title VIIBut Price Waterhouse opened the door for expansion of protection to:► Transgender persons► persons discriminated against because they were

not conforming to sex-based stereotypes- Employer could legally discriminate against gay

employees for being gay but not because they were acting insufficiently masculine or feminine

EEOC DecisionJuly 15, 2015 EEOC decision ► “We conclude that sexual orientation is

inherently a ‘sex-based consideration,’ and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII.”

► “Sexual orientation is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.”

Does the Decision Have Legs?

Arose in the context of a federal employeeBut, position taken by EEOC► Likely to apply in public and private sectors► Likely to process charges raising this theory

Ultimately, courts will determineIsaacs v. Felder, M.D. Ala. (Oct. 29, 2015) – summary judgment for employer, but reversed Magistrate Judge on Title VII protection

Recent DecisionsNorthern District of Illinois refuses to extend Title VII protection to discrimination based on sexual orientation. ► Igasaki v. Illinois Dept. of Financial and Professional Regulation► Court focused on language of statute – sexual orientation is not

a listed protected category.

EEOC announces $115,000 settlement in case where employer refused to allow male employee who “presented as a woman” to use female restroom. ► Employer was also required to issue a letter of apology and is

under a 3 year consent decree requiring employer to revise EEO policies to cover transgender status and to give employees additional training.

Recent DecisionsCentral District of California holds that sexual orientation discrimination is a form of sex or gender discrimination.► Videckis v. Pepperdine University

- Plaintiffs alleged they were unlawfully discriminated against on the basis of their sexual orientation, in violation of Title IX.

- Defendant moved to dismiss on the grounds that Title IX does not cover sexual orientation discrimination or gender stereotype discrimination.

- The court rejected Defendant’s argument and found that sexual orientation discrimination is not a category distinct from sex discrimination or gender stereotyping.

- In essence, it is either or both.

Discrimination Because of Sex -Scenario

Paul comes to you (the HR Manager) and explains that he would like to be referred to as the female “Paulette” in the future. Paulette explains that she is transitioning into a female and would like to use the women’s restroom.Paulette provides a doctor’s note that states using the women’s restroom is part of Paulette’s transition therapy.

Considerations? What is a proper response to Paulette regarding request to use the women’s restroom?Should you announce Paulette’s transition to other employees? How do you respond to employee concerns about Paulette’s use of the women’s restroom? Can you require Paulette to use segregated restroom facilities? If Paulette did not have a doctor’s note regarding her transition, can you require she provide one before she is allowed to use the women’s restroom?

OSHA Guidance

Employees entitled to have access to restrooms based on their gender identityEEOC agreesEmployees may not be limited to using facilities that are an unreasonable distance or travel time from the employee’s worksite.

State Laws Specific to Restroom Use

Colorado, Delaware, District of Columbia, Iowa, Vermont, and Washington► Each have laws stating that employers must

permit employees to have access to restrooms in accordance with their gender identity, rather than their assigned sex at birth.

Discrimination Based on Sexual Stereotyping - Scenario

Dave reports to you (the HR Manager) that his co-worker, Steve, has been making comments about Dave’s pink shirt and has made the comment that “real men don’t wear pink.” Dave also complains that Steve mocks the way Dave walks by saying that Dave “prances around.”

Considerations?

Has Dave complained of sexual harassment?Does Dave being homosexual or heterosexual have any impact? Does it matter if the comments about Dave’s masculinity were made by a female?

Questions?

A California Perspective

California has always been at the forefront of prohibiting discrimination based on Sexual Orientation or Gender Identity.► 1992 – Prohibited discrimination based on

“Actual or Perceived Sexual Orientation”► 2000 – FEHA amended to prohibit all forms of

Sexual Orientation Discrimination► 2004 – FEHA amended to also prohibit all

forms of Gender Discrimination

A California PerspectiveProtection of Gender Identity► The California FEHA protects “Gender” in

three ways:- (1) a worker’s actual sex;- (2) an employer’s perception of a worker’s sex- (3) an employer’s perception of the worker’s

personal expression of gender, even when not consistent with the worker’s sex at birth

► Employees must be permitted to dress and groom in ways that reflect their gender identity.

A California Perspective

Case Law and Other Developments► AB 1266: The School Success and

Opportunity Act- Requires that schools allow transgender students

to fully participate in all school activities, sports teams, programs, and facilities in accordance with their gender identity.

► DFEH v. American Pacific Corporation- Held that employees cannot be required to use a

bathroom or locker room of their birth-assigned sex

A California PerspectiveSan Francisco Guidance► “While any given individual’s gender identity or

expression may make other people uncomfortable, refusing to treat transgender or gender variant people in the same manner as other people is a violation of San Francisco laws.”

► Must allow individuals to use the restroom that is consistent with his/her gender identity

► Must make reasonable accommodations for showers► Must not require proof of gender, unless all required► Must make reasonable accommodations for health

needs, including time off to recover from transition-related surgery

Many Other Local RulesLaws in 17 States, D.C., and Puerto Rico140+ local jurisdictions explicitly protect transgender persons in some way► Examples:

- Tucson, AZ- Los Angeles, CA- San Diego, CA- Boulder, CO- Denver, CO- Atlanta, GA . . .

Recent NLRB Decisions and Their Practical Effects on the Workplace

Bob Horton & Michael Moschel

2015 Quick Recap

New NLRB Guidance► Issued March 18, 2015

Quickie Election Rules► Went into effect in April 2015

- Danbury Hospital► Additional Changes in September 2015

- Electronic Signatures

2015 Quick Recap

Annual Performance and Accountability Report► Over 2000 offers of reinstatement and $95

million in back pay awardsGrowth in Number of Charges► Over 23,000 charges filed in 2015► Rise of roughly 11% from 2014► Estimated to rise above 25,000 in 2016

Protected Concerted Activity

Arbitration AgreementsWorkplace Conduct PoliciesInvestigation ProceduresSeverance Agreements

Arbitration Agreements

Class Action Waivers: To Be or Not to Be?


DR Horton 1-NLRB► Employees would reasonably believe they

were prohibited from filing ULP ► Collective grievance is concerted protected

activity and a substantive right that cannot be waived.

► Unequal bargaining strength► Disregarded GC Memo 10-06 and FAA


DR Horton 2-Fifth Circuit► FAA trumps► But must clarify right to pursue ULP ► Class action procedures not substantive right ► Support in other circuits


The Empire Strikes Back - Murphy Oil 1► Class Action waiver is ULP


The Empire Strikes Back - Murphy Oil 1► The agreement had provided:

- By signing this Agreement, Individual and the Company waive the right to commence, be a party to, or [act as a] class member [in, any class] or collective action in any court action against the other party relating to employment issues. Further, the parties waive their right to commence or be a party to any group, class or collective action claim in arbitration or any other forum.

Arbitration AgreementsThe Empire Strikes Back - Murphy Oil 1► In March 2012, following the lawsuit, the

company amended its agreement to state:- Notwithstanding the group, class or collective action

waiver set forth in the preceding paragraph, Individual and Company agree that Individual is not waiving his or her right under Section 7 of the National Labor Relations Act (“NLRA”) to file a group, class or collective action in court and that Individual will not be disciplined or threatened with discipline for doing so. The Company, however, may lawfully seek enforcement of the group, class or collective action waiver in this Agreement under the Federal Arbitration Act and seek dismissal of any such class or collective claims.


► Fifth Circuit again reversed, reaffirming its decision in DR Horton 2.

► However, the agreements before revision were upheld as violating 8(a)(1) because that waiver had applied to “all claims or charges,” not just a waiver of litigation.

Return of the Jedi –Murphy Oil 2


So . . . Where are we now?

Arbitration AgreementsPlotting of the Board► Interestingly, the Board did not seek an appeal of

either DR Horton 2 or Murphy Oil 2 to the Supreme Court.

► However, the Board has continued to hold that class action waivers in arbitration agreements violate the NLRA.

► In December 2015, the NLRB issued decisions striking arbitration agreements in the Tenth and Eleventh Circuits.

► And that trend has continued in 2016.


What to Do Now► Consider the jurisdiction ► If you maintain the waivers

- Include a carve out for filing ULP charges- Consider opt-out provisions and advise to seek

counsel- But see On Assignment Staffing Services, Inc.

- severability clause - Require class claims deemed unwaivable to be

litigated in a judicial (as opposed to arbitral) forum


And of course . . .

Workplace Conduct Policies

The NLRB and the Erosion of Workplace Civility Policies


Most employee handbook policies include some version of “play nice.”It is reasonable to expect that your employees will treat each other, their supervisors, and members of the public with respect.However, these policies can very easily run afoul of the NLRA.


Case in Point – Hills and Dales General Hospital► Daniel Corlis was disciplined based on

company policies after posting the following comment on Facebook:- “Holy shit rock on [S!]. Way to talk about the

douchebags you used to work with. I LOVE IT!!!”

Workplace Conduct PoliciesCase in Point – Hills and Dales General Hospital► The policies provided:

- (1) We will not make negative comments about our fellow team members, and we will take every opportunity to speak well of each other.

- fellow “team members” could include managers- (2) We will represent Hills & Dales in the community in a

positive and professional manner in every opportunity.- would prohibit any public statements that were not positive.

- (3) We will not engage in or listen to negativity or gossip. We will recognize that listening without acting to stop it is the same as participating.

- Beyond just “gossip” to engaging in or listening to “negativity” (which could include protected concerted activity)


Case in Point – Hills and Dales General Hospital► This case highlights how one simple phrase,

such as “or negativity”, or one overbroad term, such as “team members,” can turn an otherwise lawful policy into an unlawful policy.


So How Do I Avoid These Pitfalls?► Remember that employees have the Section

7 right to criticize or protest their employer’s labor policies or treatment of employees.

► This includes even false statements!► Thus, you must avoid rules that can be read

to prohibit protected concerted criticism of the employer or management, even if false.- Exception: maliciously false statements are not

protected.

Workplace Conduct PoliciesAvoid► Policies that prohibit “disrespectful,”

“negative,” “inappropriate,” or “rude” conduct towards the employer or management.

Draft► Policies that require employees to be

respectful and professional towards coworkers, clients, or competitors, but not the employer or management.

► “Insubordination” but not “Disrespectful”

Workplace Conduct PoliciesConsider these Examples of Unlawful Policies► “Be respectful to the company, other employees,

customers, partners, and competitors.”► Do “not make fun of, denigrate, or defame your

co-workers, customers, franchisees, suppliers, the Company, or our competitors.”

► No “defamatory, libelous, slanderous, or discriminatory comments about the Company, its customers and/or competitors, its employees or management.”


The Use of Cameras and Camera Phones in the Workplace► Caesar’s Entertainment d/b/a Rio All-Suites

Hotel and Casino

Workplace Conduct PoliciesCaesar’s Entertainment ► The policy provided:

- Personal pagers, beepers, and cell phones worn by employees must not be visible or audible to guests and should not impact job performance. The use of personal cellular/digital phones is prohibited while on duty but is allowed during break time in designated break areas. Camera phones may not be used to take photos on property without permission from a Director or above.

- Cameras, any type of audio visual recording equipment and/or recording devices may not be used unless specifically authorized for business purposes (e.g., events).


Caesar’s Entertainment ► Board held that these provisions were

unlawfully overbroad.► Photographing and videotaping are protected

by Section 7 when employees are acting in concert for their mutual aid and protection, and no “overriding employer interest” is present.


Caesar’s Entertainment ► What constitutes an “overriding employer

interest?”- Confidential and Proprietary Information- Client Privacy- Patient Privacy

► The policy in Caesar’s Entertainment failed to link the policy with any legitimate business interests.


Recording Devices► Whole Foods Market Group, Inc.

- The company emphasizes an “open door” culture where employees are free to “speak up and speak out” on any issues, work related or not.

- To facilitate this policy, the company enacted a policy prohibiting the recording of conversations by employees.

Workplace Conduct PoliciesWhole Foods Market Group, Inc.► The policy provided:

- It is a violation of Whole Foods Market policy to record conversations with a tape recorder or other recording device (including a cell phone or any electronic device) unless prior approval is received from your store or facility leadership. The purpose of this policy is to eliminate a chilling effect to the expression of views that may exist when one person is being secretly recorded. This concern can inhibit spontaneous and honest dialogue especially when sensitive or confidential matters are being discussed. Violation of this policy will result in corrective action up to and including discharge.

► The rule applied to employees who were on worktime, whether in the store, the parking lot, or the areas in front of the store. The rule did not apply to employees on non-worktime.


Whole Foods Market Group, Inc.► The policy was challenged, and the ALJ found

that making recordings of conversations in the workplace was not a protected right and that the employer had a right to implement rules of conduct.

► But . . .


Whole Foods Market Group, Inc.► Board - policies would reasonably be

construed as prohibiting Section 7 activity.► NLRB case law is “replete with examples

where photography or recording, often covert, was an essential element in vindicating the underlying Section 7 right.”


Takeaways from Caesar’s Entertainment and Whole Foods Market► Narrowly tailor policies ► Focus on proprietary information, financial

data, and other confidential information.► Give examples of what is not prohibited, like

taking pictures of safety issues.


Social Media► Pier Sixty, LLC

- Two days before union election supervisor criticizes leading union organizer

- While on the break and outside of the facility, employee post the following on Facebook :

Bob is such a NASTY MOTHER F***** don’t know how to talk to people!!!!! F*** his mother and his entire f******* family!!!! What a loser!!!! Vote YES for the UNION!!!!!!!Employee discharged

Workplace Conduct PoliciesPier Sixty, LLC► Board determined Perez’s discharge was

unlawful.► Workplace was fraught with such vulgarity and

profanity► Protest of the mistreatment and extortion to “Vote

YES for the Union.”’► Off-duty, offsite use of social media still protected

and did not involve conversation with a supervisor or manager.

► No interruption of work environment or customer relationship

► Employer policy did not cite vulgar or offensive language as prohibited.

Workplace Conduct PoliciesTakeaways from Pier Sixty, LLC► Imperative to have written social media policy!► Must be consistent in application of company policies► Consider the time and place of social media posts, as

well as any effects on customers and vendors► Consider the context—are the employees

complaining about terms and conditions of employment? Are they banning together?

► Avoid overbroad anti-harassment rules► Be specific about prohibited conduct► Remember that criticism of management and the

company is protected

Workplace Investigations

In 2015, the NLRB Weakened Employers’ Ability to Conduct Effective Workplace Investigations in a Series of Cases.


Background► Anheuser-Busch, Inc. –witness statements► Special risk of potential witness intimidation

Piedmont Gardens► The Board rejected its long-standing precedent and

held that an employer must establish “a legitimate and substantial confidentiality interest” with respect to the witness statements.


Employer must show:► The witness needs protection,► The evidence is in danger of being destroyed,► The testimony is being fabricated, or► There is a need to prevent a cover up.

Board then weighs union’s need for the information.

Workplace InvestigationsPiedmont Gardens► Notably, an employer may not meet its burden

by:- Merely asserting a general interest in the

confidentiality of company investigations;- Claiming a general interest in avoidance of

harassment or intimidation; or- Demonstrating that a union could easily obtain the

information from another source.► There must be an actual factual basis to

support a confidentiality interest.


Banner Health System d/b/a Banner Estrella Medical Center► Board prohibits requesting employees not to

discuss workplace investigations with co-workers while the investigation is ongoing absent a legitimate and substantial business justification that outweighs the employees’ Section 7 rights.


Banner Health System d/b/a Banner Estrella Medical Center► What constitutes “a legitimate and substantial

business justification?”► Piedmont Gardens:

- The witness needs protection,- The evidence is in danger of being destroyed,- The testimony is being fabricated, or- There is a need to prevent a cover up.


What about only recommending secrecy?► The Boeing Co.

- Board held that regardless of whether the policy contained a mandatory obligation or a recommendation, it still violated Section 7 of the NLRA.


Takeaways from Piedmont Gardens, Banner Health, and The Boeing Co.► Presumption that confidentiality policies in

investigations are unlawful► Employers bear the burden of showing actual

(rather than theoretical) facts justifying need

Workplace InvestigationsTakeaways from Piedmont Gardens, Banner Health, and The Boeing Co.► Be prepared to show:

- why a witness needs protection;- why evidence is in danger;- how or why testimony may be fabricated; or- why there is a need to prevent a cover up.

► Possible accommodations

Severance AgreementsSection 7 Rights► Confidentiality► Non-disparagement

SEC Whistleblower program states:► “No person may take any action to impede an

individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . with respect to such communications.”

Severance AgreementsPratt (Corrugated Logistics), LLC► Confidentiality of Agreement. Employee will keep the

fact and terms of this Agreement completely confidential and not disclose its contents to anyone except, on a confidential basis, to his/her spouse, tax accountant, financial advisor, or attorney. A violation of this confidentiality provision by any such person is considered a violation by Employee. This section does not prohibit disclosures to the extent legally required pursuant to a court order or subpoena. Employee, however, promises to notify Pratt in advance of such a disclosure obligation or request within two days after Employee learns of it and permit Pratt to take all steps it deems appropriate to prevent or limit the required disclosure.

Severance AgreementsPratt (Corrugated Logistics), LLC► Nondisparagement. Employee agrees that

he/she will not make any oral or written statement or engage in conduct that either directly or indirectly disparages, criticizes, defames, or otherwise casts a negative characterization upon Pratt and/or any Pratt Entity, nor will he/she encourage or assist anyone else to do so. Nothing in this section is intended to prevent Employee from testifying truthfully in any legal proceeding or complying with any lawful subpoena or court order.

Severance Agreements

Pratt (Corrugated Logistics), LLC► Confidentiality and Nondisparagement

provisions were held to be unlawfully overbroad and restricted the employees’ rights to concerted protected activity.

Severance Agreements

Takeaways► Evaluate the Board ruling► Draft as narrowly as possible and clearly

define what is protected► Consider specific carve-outs ► Cannot “buy silence”

Dustin Carlton – [email protected] Fortney – [email protected]

Tim Garrett – [email protected] Horton – [email protected]

Michael Moschel - [email protected] Leigh Pirtle – [email protected]

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Date post:	11-Apr-2017
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