STRATEGIES FOR TACKLING TODAY’S PREVAILING EMPLOYMENT ISSUES

Employment

The National Association of Women Lawyers hosted a webinar on Oct. 26 highlighting hot topics in employment law and best practices for employers and management attorneys. The panel discussion covered retaliation, joint employment, pay equity, new overtime regulations and current trends.

The panelists were Ellen Casey, senior employment counsel at MetLife Inc.; Darcy Gibson, corporate counsel in Caterpillar Inc.’s litigation and employment group; Janet Hendrick, partner at Fisher & Phillips LLP; Carolyn Rashby partner at the Miller Law Group; and Rita Srivastava, senior counsel in McDonald’s Corp.’s global labor and employment law group. Jamie Rudman, partner at Sanchez & Amador, moderated the discussion.

EEOC’s New Guidance on Retaliation 

In August 2016, the Equal Employment Opportunity Commission issued new enforcement guidance on retaliation, replacing a part of its 1998 compliance manual. The commission in the new guidance interprets the elements of a retaliation claim. In defining “participation” in protected activity, the EEOC clarifies that participation in the EEO process constitutes protected activity, regardless of whether or not an allegation is based on good-faith belief.

Casey said the agency released this guidance in response to the increasing amount of court decisions on the subject since 1998, as well as the increase in retaliation charges filed with the EEOC. The EEOC received more than 37,000 retaliation charges in 2015, which comprised 44.5 percent of all charges filed with the commission.

Casey explained that employers and their attorneys should consider employer policies, training for managers and removing from written policies a good-faith requirement.

Specifically, employers taking a closer look at written policies should consider removing “any punitive policies that would impose materially adverse actions for disclosing or discussing wages.”

Managers should receive guidance and periodic refresher training on the components of retaliation claims.

According to Casey, as a best practice, employers should remove language from manuals and written policies that imposes a good-faith requirement, even though the “EEOC is taking a different approach than the courts.” Including such requirement language increases the risk that an employee will be deterred from bringing a complaint.

Joint Employer Standard

Recently, the Labor Department, National Labor Relations Board and Occupational Safety and Health Administration have adopted a “broad view” of joint employment.

Srivastava said the DOL’s January 2016 Administrator’s Interpretation on joint employment should be viewed more broadly than the common law definition of control.

She also delved into the NLRB’s decision in Browning-Ferris Industries of California Inc., 362 NLRB No. 186 (2015), where the board refined the standard for joint employer status determinations to include “indirect control.” The decision is currently on appeal in the U.S. Court of Appeals for the District of Columbia Circuit.

In this appeal, the EEOC submitted an amicus brief in support of the broad definition of joint employment. OSHA also has adopted this broad view for work safety purposes.

Srivastava suggested some ways employers can prevent joint employer liability. 

Employers and their managers shouldn’t “exercise direct and immediate control over terms and conditions of employment of workers by franchisees, subcontractors or other business partners,” she said.

Further, employers and their attorneys should have procedures in place that provide franchisees, partners or subcontractors the “maximum amount of operational control.”

Srivastava also said that commercial agreements, leases, licenses and franchise agreements shouldn’t include language that may imply the employer “retains ability to exercise control over another’s business operations or employees.”

Employers’ attorneys can insert language in contracts specifying that franchisees “are solely responsible for all employment-related decisions” and can “include indemnification provisions.”

Employers might consider weighing joint employer risks with outsourcing some tasks, if cost-effective, she said.

Pay Equity: New EEO-1 Reporting Requirements

Equal pay laws across the nation are focusing on fair pay and pay transparency. Employers, who are subject to vast changes on the state and federal levels, have new requirements for the EEO-1 report due in March 2018.

The EEOC will collect W-2 wage and work-hour data broken down by race, sex, ethnicity and job category in the EEO-1 report. The commission will utilize this information in assessing whether employers have pay disparity patterns.

The new EEO-1 reporting requirements “will open up employers to a lot of scrutiny by the federal agencies,” Rashby said. As a result, she recommended the following:

  • Make compensation practices simpler. Employers and their attorneys should “proactively look at compensation setting strategies and practices, and make practices more objective and simple.”

  • Centralize pay decisions. Employers should “centralize compensation decisions.” Various managers shouldn’t be making compensation decisions differently. If employers don’t centralize decisions, it’s much harder to defend future equal pay allegations.

  • Train managers. Managers should understand pay equity and transparency requirements.

  • Make necessary changes to employee handbooks. Employers and their counsel should review employee handbooks and search for provisions that can restrict pay transparency.

  • Start preparing now for EEO-1 changes. Employers and counsel should start prepping now in anticipation of meeting the new W-2 and hours reporting requirements.

New Federal Overtime Regulations

The DOL announced publication of a final rule updating overtime regulations earlier this year. The final rule primarily pertains to exemption status, as well as salary and compensation level updates for executive, administrative and professional workers.

Gibson recommended that employers and counsel review the status of employees affected by the new rule. Based on this review, they should determine who doesn’t meet salary requirements and either switch those employees to nonexempt status or increase their salaries.

Some workers may view a switch to nonexempt status as a demotion. Plans should be in place to effectively communicate changes to workers. Timing of communication to employees is important. With a little less than a month remaining until Dec. 1, Gibson said employers and counsel should “ensure that communication doesn’t come too late because then workers may be surprised."

Gibson also emphasized the importance of providing training and information to workers, where many don’t have previous experience with overtime, clocking in and out, keeping track of breaks or recordkeeping.

Although case law and legislation seeking to halt the implementation of the rule are pending, Gibson remarked that this isn’t a reason for employers and their attorneys “not to act.”

Notable Trends in Employment Law

Participants were asked about current trends in employment law. Rashby said that she is seeing a rise in pay equity claims in California.

Others added that they have observed an increasing number of disability discrimination and Family and Medical Leave Act claims, as well as more utilization of internal processes for pay equity claims.

 

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