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DOL To Refrain From Seeking Liquidated Damages in Most Pre-Litigation Settlements

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Effective July 1, 2020, the U.S. Department of Labor (DOL) will pull back on seeking liquidated damages in pre-litigation settlements of wage claims and investigations.  The change in policy, announced in Field Assistance Bulletin 2020-2, is significant, as liquidated damages can equal 100% of the back pay deemed to be owing, potentially resulting in “double damages” for wage violations.

The policy change comes on the heels of an executive order President Trump signed in May 2020, directing federal agencies to use deregulatory actions to spur economic activity in light of COVID-19 shutdowns.  In line with that order, the DOL’s Wage and Hour Division (WHD) will stop seeking liquidated damages in most pre-litigation disputes, finding that resolutions involving liquidated damages take 28% longer to conclude than those that seek only back wages.  WHD may still assess and seek liquidated damages in cases involving bad faith and willfulness on the part of the employer, but seeking such a remedy will now be the exception, not the rule.

Per the new guidance, WHD will not assess pre-litigation liquidated damages if any of the following circumstances exist:

  • there is no evidence of bad faith or willfulness;
  • the employer’s explanation for the violation shows that it was the result of a bona fide dispute of unsettled law under the Fair Labor Standards Act (FLSA);
  • the employer has no previous history of violations;
  • the matter involves individual coverage only;
  • the matter involves state and local government agencies or other non-profits;
  • the matter involves “complex” FLSA § 13(a)(1) or § 13(b)(1) exemptions.

FLSA § 13(a)(1) exempts from both minimum and overtime pay protections bona fide executive, professional, and administrative employees, as well as outside sales employees.  The § 13(a)(1) exemptions, often referred to as the “white collar” exemptions, have been the subject of considerable litigation since 2004, when the federal regulations interpreting those exemptions were revised significantly.  FLSA § 13(b)(1) provides an overtime exemption for certain employees who are subject to Department of Transportation regulations.

The guidance requires that requests for pre-litigation liquidated damages be submitted to both the WHD Administrator and the Solicitor of Labor for approval.

Liquidated damages are costly, and as the DOL acknowledges, can often be a barrier to a pre-litigation solution to a wage dispute.  The DOL’s change in enforcement position should be a welcome development for employers facing federal wage investigations.

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U.S. Supreme Court Holds That Title VII Prohibits Discrimination Based on Sexual Orientation and Gender Identity

In a 6-3 decision ed by Justice Gorsuch on June 15, 2020, the United States Supreme Court held that Title VII’s prohibition on discrimination “because of…sex” includes discrimination on the basis of sexual orientation and gender identity. Bostock v. Clayton County, No. 17-1618 (590 U.S. ___ (2020). In doing so, the Court made clear that employers across the country are now prohibited from terminating an employee solely because they are gay or transgender – a decision that will have the most far reaching implications in the approximately 25 states where discrimination on the basis of sexual orientation and gender identity is not already prohibited by state law.

Relevant Background

The Court’s decision resolves three previously consolidated cases in which an employer terminated an employee because of their sexual orientation or gender identity: Bostock; Altitude Express v. Zarda; and R.G. & G.R. Harris Funeral 凯发国际版homes, Inc v. EEOC. In Bostock, Gerald Bostock, a long-time Clayton County employee, was terminated for conduct “unbecoming” of a county employee after influential members of the community discovered that he was participating in a gay softball league. Bostock brought suit against the county under Title VII alleging unlawful discrimination on the basis of sex. However, in May 2018, the Eleventh Circuit held that Title VII does not prohibit discrimination on the basis of sexual orientation and dismissed the case as a matter of law.

In Zarda, Donald Zarda, a skydiving instructor, was terminated after he told a female client that he was gay in an effort to make her more comfortable with close contact during a skydiving lesson. After the jump, the client’s boyfriend told the employer about Zarda’s sexual orientation, resulting in his termination. Zarda brought suit under Title VII but unlike the Eleventh Circuit, the Second Circuit held that discrimination on the basis of sexual orientation does violate Title VII and allowed the case to proceed.

In R.G. & G.R. Harris Funeral 凯发国际版homes, the plaintiff, Aimee Stevens, presented as male when initially hired as a funeral director. After six years with the employer, she wrote a letter to the owner explaining that she planned to “live and work full-time as a woman.” Like Bostock and Zarda, Stevens was terminated shortly thereafter and brought suit under Title VII. The Sixth Circuit agreed with the Second Circuit and held that Title VII prohibits employers from firing employees because of their status as transgender.

As we previously reported, in April of 2019, the Supreme Court granted certiorari to resolve the circuit split and to decide whether Title VII’s prohibition of discrimination on the basis of sex also encompasses discrimination on the basis of sexual orientation and gender identity.

The Court’s Decision

The Supreme Court agreed with the Second and Sixth Circuits and held that “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex.” In other words, “[s]ex plays a necessary and undistinguishable role in the decision.” The Court’s rationale is significant here in that it looked to the express terms of the statute in reaching this decision despite the fact that sexual orientation and gender identity are not explicitly mentioned in the statute. As the dissent points out, “few in 1964″ would have expected Title VII to apply to discrimination against homosexual and transgender persons.  Nevertheless, the majority explained that “it is ultimately the provisions of those legislative commands rather than the principal concerns of our legislators by which we are governed.”

To illustrate, the Court poses a hypothetical in which a model employee brings their wife to a holiday party but the employer has a policy of firing any employee known to be homosexual. According to the Court, “[i]f the policy works as the employer intends, the answer depends entirely on whether the employee is a man or a woman.” While the employer’s “ultimate goal” may be to discriminate on the basis of sexual orientation alone, the employer also necessarily discriminates on the basis of sex, which is “exactly what Title VII forbids.”

The same is true, the Court explains, with respect to gender identity. “An employer who fires a transgender person who identified as a male at birth but now identifies as a female…penalizes a person identified as male at birth for traits or actions that it tolerates in an employee identified as female at birth.” In either case, because “changing the employee’s sex would have yielded a different choice by the employer – a statutory violation has occurred.”

In the decision, the Court rejected several arguments raised by the employers, including the position that discrimination on the basis of sexual orientation and gender identity applies equally to male and female employees, and therefore does not constitute discrimination “because of…sex.” The Court flatly rejected this argument, making clear that “Title VII protects individuals of both sexes from discrimination, and does so equally.”

Chief Justice Roberts joined the majority opinion, along with Justices Ginsberg, Breyer, Sotomayor and Kagan. Justice Alito filed a dissenting opinion with Justice Thomas while Justice Kavanaugh filed a separate dissent. Notably, Justice Kavanaugh concluded his opinion by acknowledging the “important victory achieved today” by the LGBTQ community; however, he believes it was Congress’s role, not the Court’s, to amend Title VII.

Takeaways

Title VII now prohibits discrimination on the basis of gender identity and sexual orientation in all 50 states – but what exactly does this mean for employers? Before June 15, 2020, approximately 25 states already prohibited discrimination on the basis of sexual orientation and/or gender identity under state and/or local law. So while the decision will likely have little practical effect for employers in those jurisdictions, employers in other locations will need to review and revise their existing policies and training materials, and ensure relevant personnel are trained on these new requirements.

The decision also casts doubt on a new rule published by the Department of Health and Human Services (HHS) that rolled back protections for transgender Americans under the Affordable Care Act. Over the past several years, HHS regulations have incorporated language to prohibit discrimination on the basis of sexual orientation and gender identity. The new rule seeks to reverse this trend and return to “the plain meaning of ‘sex’ as a biological binary.” The Court’s reasoning that discrimination on the basis of sexual orientation and gender identity is inherently discrimination on the basis of sex could make it more difficult for HHS to defend the rule in any forthcoming litigation.

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EEOC and OSHA Issue New COVID-19 Guidance

As the nation continues to move toward reopening, the EEOC and the Occupational Safety and Health Administration (“OSHA”) issued additional guidance for employers to consider as they plan employees’ return to the workplace. These updates supplement earlier guidance issued by both agencies, which we discuss in our previous posts.

EEOC Guidance

On June 11, 2020, the EEOC issued additional, revised technical assistance to employers, addressing necessary considerations for employers that have employees returning to the workplace who are at higher risk for more severe illness due to COVID-19. Specifically, the guidance explains that the Age Discrimination in Employment Act (ADEA) would prohibit a covered employer from “involuntarily excluding an individual from the workplace based on [their] being 65 or older, even if the employer acted for benevolent reasons such as protecting the employee due to higher risk of severe illness from COVID-19.” The EEOC goes on to explain that unlike the Americans with Disabilities Act (ADA), the ADEA does not include a right to reasonable accommodation for older employees due to age. Nevertheless, employers are free to provide flexibility to older workers as the ADEA does not prohibit this, even if it results in employees younger than 65 being treated less favorably based on age.

In advance of having some or all employees return to the workplace, the EEOC explains that employers can make information available in advance to all employees about who to contact (if they wish) to request accommodation for a disability that they may need upon return to the workplace, even if no date has been announced for their return. According to the guidance, an employer may choose to include in such a notice all the CDC-listed medical conditions that may place people at higher risk of serious illness if they contract COVID-19, provide instructions about who to contact, and explain that the employer is willing to consider on a case-by-case basis any requests from employees who have these or other medical conditions.  Alternatively, an employer may send a general notice to all employees who are designated for returning to the workplace, noting that the employer is willing to consider requests for accommodation or flexibilities on an individualized basis. The employer should specify if the contacts differ depending on the reason for the request – for example, if the office or person to contact is different for employees with disabilities or pregnant workers than for employees whose request is based on age or child-care responsibilities.

The EEOC’s updated guidance also addresses the following subjects:

  • Accommodation to Avoid Exposing Family Members. The guidance confirms that employees are not entitled to an accommodation under the ADA in order to avoid exposing a family member who is at a higher risk of severe illness from COVID-19 due to an underlying medical condition. While the ADA prohibits discrimination based on association with an individual with a disability, this protection is limited to disparate treatment or harassment and does not require the employer to accommodate an employee without a disability based on the disability-related needs of a family member or other person with whom they are associated. While employers are free to provide accommodation if they choose to do so, the guidance cautions against engaging in disparate treatment as a result of offering additional flexibilities.
  • Accommodation Based on Pregnancy. The EEOC makes clear that employers cannot exclude an employee from the workplace involuntarily due to pregnancy, even if motivated by benevolent concern, or otherwise single out employees on the basis pregnancy for adverse employment actions, including involuntary leave, layoff or furlough. Of course, pregnant employees may be entitled to certain job modifications, including telework, changes to work schedules or assignments, and leave to the extent provided for other employees who are similar in their ability or inability to work. The guidance reminds employers to consider such requests under the usual ADA rules.
  • Requests for Alternative Method of Screening. If an employee entering the worksite requests an alternative method of screening due to a medical condition or religion, an employer should treat this as a request for reasonable accommodation and proceed as it would for any other request for accommodation under the ADA or Title VII, as applicable. If the requested change is easy to provide and inexpensive, the EEOC suggests the employer voluntarily choose to make it available to anyone who asks, without going through an interactive process. Alternatively, if the disability is not obvious or already known, an employer may ask the employee for information to establish that the condition is a disability and what specific limitations require an accommodation. If necessary, an employer also may request medical documentation to support the employee’s request, and then determine if that accommodation or an alternative effective accommodation can be provided, absent undue hardship.
  • Pandemic-Related Harassment. The EEOC has stated that managers should be alert to “demeaning, derogatory, or hostile remarks directed to employees who are or are perceived to be of Chinese or other Asian national origin, including about the coronavirus or its origins.” Further, all employers covered by Title VII should ensure that management understands in advance how to recognize such harassment. Employers may choose to send a reminder to the entire workforce noting Title VII’s prohibitions on harassment, inviting anyone who experiences or observes harassment to report it to management, and reminding employees that harassment can result in disciplinary action, up to and including termination

The guidance also makes clear that harassment may occur using electronic communication tools (e.g., emails, calls, or platforms or video or chat communication and collaboration) – regardless of whether employees are in the workplace, teleworking or on leave – and also in person between employees at the worksite. If an employer learns that an employee who is teleworking is engaging in harassment, the employer should take the same actions it would take if the employee was in the workplace.

If an employer provides telework, modified schedules or other benefits to employees with children due to school closures or distance learning, the employer must ensure they are not treating employees differently based on sex or other protected characteristics (e.g., assuming female employees, and not male employees, have caregiving responsibilities).

OSHA Guidance

On June 10, 2020, OSHA released new guidance in the form of an FAQ regarding the use of face masks in the workplace. Importantly, the guidance makes clear that OSHA does not consider cloth or makeshift coverings to be regulated personal protective equipment (PPE), and also outlines the differences between cloth face coverings, surgical masks, and respirators, noting that cloth face coverings “may be commercially produced or improvised (i.e., 凯发国际版homemade) garments, scarves, bandanas, or items made from t-shirts or other fabrics.”

The FAQs remind employers not to use surgical masks or cloth face coverings when respirators are necessary and if respirators are required, a proper respiratory protection program should be in place. In addition, the FAQs note the need for social distancing measures, even when workers are wearing cloth face coverings, and recommends following the CDC’s guidance on washing face coverings.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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Hearing Scheduled On Proposed Amendments to Massachusetts Paid Family and Medical Leave Law

On June 11, 2020, the Department of Family and Medical Leave (“DFML”) will hold a virtual public hearing on its recent proposed amendments to the final regulations pertaining to the Massachusetts Paid Family and Medical Leave Law (“PFML”) issued in June 2019.  (Instructions for registering for the virtual hearing are available at this link).  A number of the amendments are particularly noteworthy for businesses in the Commonwealth: Continue Reading

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Top Three Takeaways from OSHA Chief’s Testimony Regarding OSHA Enforcement During the COVID-19 Pandemic

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Amid growing criticism of the agency’s response to the COVID-19 pandemic, OSHA’s Principal Deputy Assistant Secretary, Loren E. Sweatt (“Sweatt”), testified before the House Education and Labor Committee’s Workforce Protections Subcommittee last Wednesday during which she defended the agency’s actions to protect worker safety during the pandemic. Below, we discuss the top three takeaways from Sweatt’s testimony that employers should know.

1.     OSHA Stands By Its Refusal to Issue COVID-19 Specific Regulations

Instead of issuing specific regulations related to the COVID-19 pandemic, OSHA has opted to apply existing workplace safety standards and issue industry-specific guidance. The agency has been under increasing pressure to issue regulations, and is currently defending a lawsuit by the AFL-CIO seeking an order requiring OSHA to issue an emergency temporary standard within 30 days.

During her testimony, Sweatt did not address the AFL-CIO’s lawsuit, but did respond to claims that employers have no compliance obligations because of the lack of a temporary standard. According to Sweatt, “[t]his is not accurate, and repeating this erroneous claim does a disservice … to the hardworking men and women OSHA aims to protect. It also misleads employers about the legal obligations they have.”

As an alternative to emergency regulations, the agency has instead applied existing workplace safety standards to the COVID-19 pandemic. According to Sweatt, these existing standards – including those regarding personal protective equipment, sanitation, training and education, hazard communication, and the general duty clause – “serve as the basis for its COVID-19 enforcement” and are effective to ensure workplace safety during the pandemic.

The agency has also issued various industry-specific guidance, which according to Sweatt, has the advantage of additional flexibility and specificity. According to Sweatt, “[a]s our medical professionals and scientists learn more about the virus, guidance can be easily updated, while regulations are very cumbersome to revise. Guidance also allows us to speak more specifically to particular types of workplaces and controls than would be practicable in a generally applicable rule.” As an example of this flexibility, Sweatt cited the agency’s decision to revoke previous guidance that temporarily relaxed employer recording obligations during the pandemic. Our post on the new recording guidance is available here.

2.     The Agency Has Issued Various Industry-Specific Guidance

During her testimony, Sweatt provided an overview of the various industry-specific guidance that OSHA has published on the COVID-19 pandemic. As of June 1, OSHA has issued general interim guidance as well as fifteen different guidance documents for industries where workers are more likely to be exposed to COVID-19. Industry-specific guidance is available for employers in the healthcare, construction, manufacturing, retail, and cleaning services industries, among others.

Each guidance document generally provides employers with information regarding which engineering controls, administrative controls, safe work practices, and PPE are appropriate for the industry. The guidance also provides examples of work tasks associated with various risk levels in OSHA’s occupational exposure risk pyramid. For example, in the healthcare industry, where many tasks fall into the “high” or “very high” risk categories, the guidance recommends isolating patients with suspected or confirmed COVID-19; implementing systems for cleaning and disinfecting; and providing extensive PPE such as gloves, gowns, eye/face protection, or NIOSH-certified N95 filter face piece respirators or better. On the other hand, in the retail industry, where many tasks are categorized as “lower” or “medium” risk, the guidance recommends implementing measures to maintain social distance and to reduce store density, but does not generally recommend “PPE beyond what [is used] during routine job tasks” unless a risk assessment warrants the use of additional items.

In addition to the industry-specific guidance, OSHA has also published:

  • A series of practical industry alerts that provide guidance on practices and procedures to protect worker safety;
  • Five guidance documents on respirators, which aim to ensure that these items are available to care for patients with COVID-19 and other activities that could result in respiratory exposure to the virus; and
  • A reminder that “it is illegal to retaliate against workers because they report unsafe and unhealthful working conditions during the coronavirus pandemic.” OSHA enforces the whistleblower provisions in more than twenty federal statutes related to workplace safety, including the Occupational Safety and Health Act, which protects employees from retaliation for filing a workplace safety complaint with OSHA or participating in an investigation.

These industry-specific alerts, the respirator guidance, and OSHA’s statement on whistleblower protection can all be accessed here.

3.     OSHA Plans To Ramp-Up COVID-19 Enforcement

According to Sweatt’s testimony, employers should expect OSHA enforcement related to COVID-19 to increase as businesses begin to re-open. According to a revised interim enforcement response plan issued by the agency on May 19, eliminating workplace hazards from COVID-19 remains a top priority for the agency. To that end, Sweatt indicated that in-person inspections will be increasing now that businesses are beginning to re-open and the PPE needed for inspections is becoming more widely available.

Since the beginning of the pandemic, OSHA has received 4,268 COVID-19 safety and health complaints and 1,328 COVID-19 whistleblower complaints. The agency has been reviewing these complaints and has already closed nearly 3,000 cases; and on May 18, 2020, the agency issued its first COVID-19 citation. The citation was issued to a nursing 凯发国际版home in Georgia for failing to report a work-related incident resulting in hospitalization, amputation, or loss of an eye within 24 hours. According to the citation, “the employer reported six hospitalizations that occurred as early as April 19, 2020 but did not inform USDOL-OSHA of the hospitalizations until May 5, 2020.” The citation came with a proposed penalty of $6,506. Employers should expect to see an increase in similar COVID-19 related citations now that OSHA had indicated that it will ramp up enforcement.

Takeaways

Employers should review the general interim guidance and any industry-specific OSHA guidance applicable to their business. In doing so, employers should consider what PPE, employee training, or other measures are necessary to protect employees and ensure OSHA compliance. Employers who primarily operate in office settings may also wish to review OSHA’s Guidance on Preparing Workplaces for COVID-19, which in low-risk settings does not recommend PPE beyond which employees would ordinarily use in their jobs.

Employers should also consult guidance issued by the CDC and state and local governments – such as New York State’s re-opening guidance – which may impose workplace safety measures beyond those mandated by OSHA – including mask and other requirements to provide employees PPE.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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UPDATE: Chicago City Council Introduces COVID-19 Anti-Retaliation Ordinance, Reflecting Growing Trend

The proposed Chicago COVID-19 Anti-Retaliation Ordinance (the “Ordinance”) that was the subject of our post on April 27, 2020, has now become law. The Ordinance prohibits Chicago employers from retaliating against employees for obeying a public health order requiring an employee to remain at 凯发国际版home as a consequence of COVID-19.  This reflects a growing trend among states and local governments in enacting protections against retaliation amid the COVID-19 pandemic.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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