Author: Jon Hyman

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Mom Cannot Sue Employer for Discrimination Against Her Son, Court Says

Brittany Tovar claimed that her employer, Essentia Health, discriminated against her when her employer-sponsored medical insurance denied her son gender reassignment services and surgery.

In Tovar v. Essentia Health (D. Minn. 5/11/16), the court had little issue dismissing Tovar’s claims because the alleged target of the discrimination, her son, was not an employee protected by Title VII:

There are no allegations that Tovar herself is transgender or was denied health benefits…, let alone denied benefits because of her sex. Instead, she assumes the discrimination against her transgender son was also discrimination against her. This assumption confuses the true target because it was not Tovar who was discriminated against; it was her son (a non-employee and non-party) who was the sole object of the discrimination. This does not support a claim of discrimination.… 

Tovar has alleged no … discriminatory conduct or adverse action taken by Essentia against her. Instead, she argues “she is entitled to the full enjoyment of the privileges of her employment, including access to and use of her health care benefits equal to that of other employees.” Yet, there are no facts in the Complaint to support that she was ever personally denied the benefits or privileges of her employment or personally experienced anything less than full coverage of the benefits provided.

This holding is very different from Thompson v. North Am. Stainless, in which the Supreme Court recognized a claim for “associational retaliation.” In that case, both the complaining employee and the terminated employee were both employees, and the alleged discriminatory action was against an employee. In Tovar, the alleged victim of the discrimination was not an employee.

So, what does this case mean? Title VII protects employees, not non-employees, even if the non-employee is closely related to an employee. Title VII prohibits adverse employment actions, not adverse actions against those related to employees.

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I Scream, You Scream, We All Scream … for the FLSA’s New Salary Test

Vice President Joe Biden, Sen. Sherrod Brown and Secretary of Labor Tom Perez will appear at Jeni’s Ice Cream in Columbus, Ohio, May 18 to announce the Department of Labor’s new overtime rule.

The rule, as expected, increases the salary level at which one qualifies as an exempt white-collar employee ($913 per week; $47,476 annually), while leaving alone (for now) the duties one also must meet to qualify. It is expected that 4.2 million white-collar workers will now qualify for overtime.

The effective date of the final rule is Dec. 1, giving employers more than six months to digest the new rules, reclassify workers and comply with the new salary test.

In advance of today’s announcement, late yesterday the DOL published the Final Rule, along with some guidance for employers. It also published this handy chart, comparing the current regulations, last year’s proposed regulations, and the final regulations.

 
 
 
What does the DOL want you to know about the new rule? It …

  1. Only applies to the administrative, executive, and professional exemptions.
  2. Sets the salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually).
  3. Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004).
  4. Establishes a mechanism for automatically updating the salary and compensation levels every three years.
  5. Permits employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level (this is new to the FLSA, and a pleasant surprise for employers).
I will say, while a 50 percent increase in the salary test is significant, the Final Rule is not nearly as bad for employers as it could have been or was feared.

  • The salary test is based on the lowest-wage Census area (the South);
  • It will update every three years (not every year, as feared);
  • It left the duties test alone (for now);
  • It providers a much longer than feared six months until effective; and
  • It introduced the inclusions of bonuses and commission into the salary calculation.

Perhaps what is most interesting, however, is the guidance that the DOL chose to publish along with the Final Rules. Much of the criticism lobbed at the DOL over the increased salary test related to the higher salary level’s impact on small businesses, non-profits, higher-education institutions, and governments. Not so coincidentally, take a look at the guides and fact sheets the DOL published alongside the Final Rule:

Employers, you have a little more than six months to get your wage-and-hour houses in order. You need to figure out which of your exempt employees make less than $47,476, and determine what you are going to do with them—switch them to non-exempt or gross-them up to the new salary level.
If you switch them to non-exempt, you will have to deal with the employee-relations issues that arise from tracking (or restricting) overtime and limiting flexibility. If you gross them up to keep them exempt, you will have to deal with the employee-relations issues that arise from salary contraction. Will your manager be happy that she is being paid nearly the same as her assistant manager/supervisor?
There are no easy answers, but you have until Dec. 1 to figure it out.

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EEOC’s Final Rules on Employer Wellness Programs Provides Clear Path for Employers

The EEOC published May 16 its long-awaited rules that describe how the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act apply to wellness programs offered by employers that request health information from employees and their spouses. Both rules take effect July 18, 2017.

The EEOC has made the following documents available:

What do employers need to know about these rules? The two biggest takeaways are: (1) wellness programs are voluntary (and therefore do not violate the ADA or GINA) as long as an employers’ incentives or discounts don’t exceed more than 30 percent of the cost of an employee’s individual “self-only” health coverage; (2) employers still have obligations under both laws to keep confidential employee medical and genetic information provided through a wellness program.

Given the surging cost of health insurance and the massive burden those costs place on employers and employees, it is relief that the EEOC is leaving intact these beneficial programs popularized by the Affordable Care Act. Moreover, the EEOC’s 30 percent hard cap is certainly more palatable than a fuzzy “reasonableness” standard that begs for litigation and uncertainty. While both employers and employees can quibble over whether 30 percent is too low, too high, or just right, I’d rather have this Goldilocks debate over a number we can see than a different debate over a fuzzy standard that we cannot.

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The $15 Minimum Wage is an Employee Relations Nightmare

The Cleveland City Council recently introduced legislation to raise the city’s minimum wage to $15. Mayor Frank Jackson has come out against the bill, stating that he opposes the legislation because it puts the city at a competitive business disadvantage against other cities.

“I continue to support a minimum wage increase if mandated by the state or federal government and not just for the city of Cleveland. For the full economic impact this has to be a united effort throughout Ohio and the United States.”

There is much debate over the positive or negative impact of a $15 minimum wage. Where you fall on the debate depends on whether you are pro-employee or pro-business, and, if you look, you can find empirical evidence to support either argument.

Here’s one argument, however, that I have not come across. If the minimum wage rises to $15 an hour, what happens to all of those employees already earning $15 an hour? What happens to the employee, hired 10 years ago at $7 an hour, who worked his butt off for the past decade, and, through a series of promotion and raises, earned his way up to $15 an hour? Those employees will not receive a proportional raise to keep pace. The $15 minimum wage will convert these millions of workers into minimum-wage employees. And, for better or worse, there is a certain stigma with being classified as minimum wage — especially if you’ve worked hard for years not to be minimum wage.

There is no easy answer or quick solution to providing people with a livable wage. There is lots to discuss before we make the reflexive decision to cure the wage gap in this country by increasing the minimum wage. One issue that cannot be discounted is the employee-relations nightmare that we will create for those already earning this new minimum wage.

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President Signs the Defend Trade Secrets Act of 2016 — What Employers Need to Know

President Obama signed into law the Defend Trade Secrets Act of 2016 on May 11. It creates a uniform, federal standard for the protection of corporate trade secrets.

What do employers need to know about this new law?

1. It creates a uniform federal cause of action for the misappropriate of trade secrets. Thus, companies, particularly, but not limited to, those that operate in more than one state, can seek nationwide relief from the misappropriate of trade secrets, without regard to differences in state law. Also, because it creates a federal cause of action, it grants access to federal court without regard to the state of citizenship of the parties.

2. It does not circumvent state laws regarding the enforceability of non-competition agreements. Employers are still free to limit their employees’ post-employment activities, subject to applicable state laws.

3. It does not preempt state trade secrets laws, to the extent they provide greater protections.

4. It creates a mechanism for the civil seizure of stolen trade secrets. In “extraordinary circumstances” a federal court may order the civil seizure of property “necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.” Moreover, interestingly, one of the pre-conditions on this seizure is that the “applicant has not publicized the requested seizure.”

5. One who claims to have an interest in any seized material move the court “to encrypt any material seized or to be seized … that is stored on a storage medium.”

6. Aside from this newly created civil-seizure remedy, other more traditional remedies are also available—injunctions, compensatory damages, exemplary damages, and attorneys’ fees.
 
7. Injunctions, however, are not intended to serve as back-door non-competition agreements. Instead, injunctions are limited in scope to what is necessary to “prevent any actual of threatened misappropriation” of the trade secret. This is one area where state-law inevitable disclosure remedies might prove more favorable than this federal law.
 
8. Exemplary damages (limited to two times the amount of compensatory damages) and attorneys’ fees are only available upon proof that the misappropriation was “willful and malicious.” 
 
9. Attorneys’ fees are also available against a plaintiff if the defendant can show that the claim was brought in “bad faith,” or that a motion to terminate an injunction was opposed in “bad faith.”

10. Disclosure of trade secrets are protected if made in confidence to a government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or if made in a complaint or other legal document filed under seal in a lawsuit or other proceeding.

While this law may not change the legal status of trade secrets it does add another arrow to the corporate quiver of trade-secret protections, which most (honest) employers should welcome.

 
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NLRB Positively Botches Decision Over ‘Positive Workplace’ Policy

Do you have a “positivity policy” like the following in your employee handbook?

The Company expects all employees to behave in a professional manner that promotes efficiency, productivity, and cooperation. Employees are expected to maintain a positive work environment by communicating in a manner that is conducive to effective working relationships with internal and external customers, clients, co-workers, and management.

What could be wrong with a workplace policy that tells employees to “maintain a positive work environment”? Everyone loves positivity, right?
 


Everyone, that is, except the NLRB.

In T-Mobile USA [pdf], the NLRB struck down that innocuous, neutral handbook policy as a violation of employees’ section 7 rights.

The rule at issue here more broadly restricts employee communications and is not limited to conduct that would objectively be viewed as unprotected. Rather, we find that employees would reasonably understand the rule’s requirement that they communicate “in a manner that is conducive to effective working relationships” with coworkers and management as prohibiting disagreements or conflicts, including protected discussions, that the Respondent subjectively deems to not be conducive to “a positive work environment.”

Translation? Good luck writing a handbook policy that even touches employee communications that will pass muster with the NLRB. On this issue, I, and employers everywhere, are positively glum.

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Happy Blogiversary to Me

Nine years ago today, I launched the Ohio Employer’s Law Blog. 

During that span, millions have read 2,421 posts (OMG!). 

The ABA Journal has honored me six times with inclusion in its Blawg 100, and last year inducted me into its Blawg Hall of Fame.

I’ve established a strong relationship with Workforce magazine, the website of which cross-publishes my posts as The Practical Employer. I also pen a monthly column for the magazine, and serve on its editorial advisory board.

My thoughts have appeared in publications such as the Huffington Post and the Wall Street Journal.
I’ve criss-crossed America speaking on myriad employment-law topics, and have appeared on NPR and John Stossel’s tv show.

I’ve written a book or two.

And I’ve made lots of great friends — client, readers, and other bloggers.

All of this is prologue to a huge “thank you” to all whose paths I’ve cross since I started this little pet project nine years ago. This blog is an absolute labor of love, and if I didn’t love the creative outlet it provides, it would sit on the blogging scrapheap with myriad other legal blogs. My blog is, without a doubt, the most professionally rewarding aspect of my career, period. So, again, thank you to everyone who’s helped make it worthwhile.

In honor of today’s blogiversary, I thought I’d share my favorite post from each of the past nine years of blogging. Enjoy my jaunt through the archives.

I’ll be back tomorrow with post 2,423 as we start our march to close out decade number one.
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Labor Department Publishes New Employer FMLA Guide

Since I recently cut a check to the IRS for the balance due on my taxes, I thought I’d take today’s space to review how the federal government spends our tax dollars. Today’s examination? The Department of Labor’s newest publication, The Employer’s Guide to the Family and Medical Leave Act [pdf]. 

According to the DOL, this 71-page guide:

is designed to provide essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA. The Guide is organized to correspond to the order of events from an employee’s leave request to restoration of the employee to the same or equivalent job at the end of the employee’s FMLA leave.

So, has the DOL wisely spent our tax dollars in publishing this new FMLA guide? After reviewing the Guide, I have to concur with the thoughts of Jeff Nowak, who, at his FMLA Insight’s blog, who summarized his conclusions about this Guide:

“1. It follows the FMLA regulations and the course of a typical leave request in a relative orderly manner. 

“2. It contains easy to follow flowcharts so that employers can better understand the typical FMLA process, including a cute little “Road Map to the FMLA” that provides an overview of the FMLA process. You’ll even find some interactive cartoons along the way to further explain the regulations. 

“3. It includes “Did You Know?” sections to give employers a heads-up on some of the lesser-known provisions and nuances of the FMLA regulations. 

“4. It highlights user-friendly charts and explanation of the medical certification process, including what information is required in certifications. 

“5. It provides a helpful overview of military family leave, which often can be a bit overwhelming to employers attempting to navigate this portion of the FMLA.”

Look at it this way. For companies with 50 or more employees, the FMLA ranks very highly on the list of HR headaches. If this guide answers even one question for an employer, it has justified its publication.

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No Matter What the Producers of ‘Hamilton’ Tell You, Race is Never a BFOQ

True confession time. I am not a fan of Hamilton. I don’t get it. Never have, never will. I will probably go to my grave having never seen what people tell me is the greatest thing to come to Broadway in the last few decades. And I’m perfectly OK with that.

I say this as prologue to today’s thought, which discusses this ad (h/t HuffPost), in which the producers of the Broadway seek “NON-WHITE men and women, ages 20s to 30s, for Broadway and upcoming Tours!”

The age part of the casting call is easy to handle. If age is a BFOQ (bona fide occupational qualification) for a position, the employer has a defense to the age-discrimination claim.

The race aspect of the ad, however, is trickier.

The producers claim the ad “adheres to the accepted practice that certain characteristics in certain roles constitute a ‘bona fide occupational qualification’ that is legal.” But does it?

According to the EEOC's Compliance Manual, “race and color can never be BFOQs.” The EEOC continues, in its fact sheet on race/color discrimination: “Title VII also does not permit racially motivated decisions driven by business concerns – for example, concerns about the effect on employee relations, or the negative reaction of clients or customers. Nor may race or color ever be a bona fide occupational qualification under Title VII.”

So, how can Hamilton’s producers rely on a BFOQ for its discriminatory ad? Consider this language, taken from Ferrill v. Parker Group, Inc. (11th Cir. 1999): “A film director casting a movie about African-American slaves may not exclude Caucasians from the auditions, but the director may limit certain roles to persons having the physical characteristics of African-Americans.”

Thus, although actors may be hired by physical characteristics, the law expressly prohibits consideration of race as a BFOQ. Racial discrimination in hiring is illegal, even if the hiring is to cast an actor in a race-specific role, period.

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When Schoolyard Bullies Become Workplace Bullies

This is Donovan.
 


He’s 7 years old. And he has Noonan syndrome. Noonan syndrome is a genetic disorder caused by one of several genetic mutations. Donovan’s is of the PTPN11 gene. It is a multisystem disorder with an estimated prevalence of 1 in 1,000 to 2,500 births. In Donovan’s case, he has a bleeding (platelet function) disorder, a congenital heart defect (pulmonary valve stenosis), feeding and gastrointestinal issues (Celiac disease), ptosis of his right eye, small stature (for which he takes daily injections of growth hormones), and low-set ears.

By all accounts, he’s a pretty confident kid. He’s smart, funny, comfortable in groups of all ages, and overly sweet and affectionate. 

And, while he’s conscious of his differences, he’s never let them get him down. He embraces his daily growth-hormone injections because he knows they are helping him grow. He loves his glasses because everyone tells him how cool they look. He’s always quick with a Donovan-ism to break up a room. And he doesn’t mind his current toothless state, because missing teeth brings the Tooth Fairy, who brings money and future Lego Dimensions purchases.

That is, he never let them get him down until last week.

At school, a fourth grader made fun of his ears. And it really bothered him. It’s the first time I’ve seen him down in the dumps about who he is, or, more accurately, what it is about his syndrome that sets him apart.

As a parent, I had three reactions. In order:

     1. That %&?*! little punk. I’m gonna kick his ass. Truth is, the kid is a %&?*! punk. Lots of kids have issues with him, and will continue to have issues with him. 
 
     2. “Donovan, you need a hug. Sorry you had to hear that. We love you. Lots of people love lots of things about you. I can’t tell you not to let it bother you, because I can’t tell you how to feel. And I can’t tell you it won’t ever happen again. The fact is, I’m pretty confident it will. What I can tell you is that you will meet lots of people in life, and some will say mean things to you. Those who love you for who you are will far outnumber the meanies, trust me.”
 
     3. I’m not one of those parents who feels that I need to fix everything for my kids. I want my kids to grow up capable of handling their own problems. If I try to fix everything, they will never learn to be self-reliant. Instead they will learn to be dependent on others every time something goes wrong. The rest of today’s kids might grow up coddled, but mine won’t. My job as a parent is to provide my kids the tools to cope with adversity, not to shield them from adversity or to fix their problems for them.
 
Today’s schoolyard bully is tomorrow’s workplace bully. The question, however, is whether Gen Z (and whatever the generation after that will be called — Generation Alpha?) is prepared to handle the workplace bully. My fear is that we are raising a generation that is so prepared in relying on their parents that they will run to HR the first time someone offends their sense of anything at work.
 
Employees, your employer is not your parent. Employees need to take responsibility for their own problems and not burden HR with every petty workplace slight and insult. It’s when the self-help doesn’t work, or when the offense is so bad that self-help is not possible that employee issues need to become employer issues. An employer’s job is not to adjust every petty grievance between employees.
 
I felt (and still feel) horrible that Donovan’s feelings were hurt. It was his first experience in which someone treated him poorly because of his differences. And it won’t be the last. The question for him is how he reacts when it happens again, and what these experiences teach him about how to react if it happens in the decades to come at work.