Prior salary and the Equal Pay Act

[Video] If starting salary is based on prior salary, that's not a defense to an Equal Pay Act suit. So says the 9th Circuit in an en banc (11 judges) decision: Rizo v. Yovino (9th Cir 02/27/2020) [PDF].

Setting initial wages based on prior wages is always problematic because it tends to perpetuate the discrimination that might have been practiced by previous employers to the disadvantage of women and racial minorities.

Now, we've got a 9th Circuit case saying that an employer cannot ever use prior wages to justify a pay differential between men and women which otherwise would violate the Equal Pay Act.

A woman was paid less than men who were doing the same job and the employer said Look, the Equal Pay Act has a defense. It's called any other factor other than sex, and we put her on the pay schedule based on her prior salary, and that is an other factor other than sex.

And the 9th Circuit says No. The other factor has to be job related, and prior salary is not job related.

My issue with this case, which we’ll see discussed in the Supreme Court, is that the statute says ANY other factor other than sex, and the statute does not say anything at all about that other factor having to be job related.

NLRB's new joint-employer rule - video

[Video] Under the NLRB’s new rule, a finding of joint-employer status will be based on control - actual, direct, and immediate control.

SCOTUS: "Actual knowledge" means actual knowledge

The US Supreme Court can get behind being unanimous when faced with a statutory phrase that is written in "plain and unambiguous statutory language."

Intel Corp Committee v. Sulyma (US Supreme Ct 02/26/2020) [PDF] dealt with a statute of limitations that began to run when the plaintiff had “actual knowledge” of an alleged breach. The Court held that “actual knowledge” means …. well …. actual knowledge.

ERISA §1113(2) requires plaintiffs with "actual knowledge" of an alleged fiduciary breach to file suit within three years of gaining that knowledge, rather than within the 6-year period that would otherwise apply.

Sulyma sued ERISA plan administrators alleging that they had managed the plans imprudently, and the administrators argued that Sulyma filed suit more than three years after they had disclosed their investment decisions to him. Although Sulyma had visited the website that hosted many of these disclosures many times, he testified that he did not remember reviewing the relevant disclosures and that he had been unaware of the allegedly imprudent investments while working at Intel.

The 9th Circuit held that the administrators were not entitled to summary judgment because Sulyma's testimony created a dispute as to when he gained "actual knowledge" for purposes of §1113(2).

The US Supreme Court unanimously affirmed, and held that a plaintiff does not necessarily have "actual knowledge" under §1113(2) of the information contained in disclosures that he receives but does not read or cannot recall reading. To meet §1113(2)’s "actual knowledge" requirement, the plaintiff must in fact have become aware of that information. This is based on ERISA’s "plain and unambiguous statutory language." To have "actual knowledge" of a piece of information, one must in fact be aware of it.

NLRB: Joint Employer final rule

The NLRB has announced that it will issue its final rule on the standard for determining joint-employer status under the National Labor Relations Act on February 26. The final rule will guide the NLRB and those covered by the NLRA in determining whether a business is a joint employer of employees directly employed by another employer. [Text of the Final Rule]

Following is the NLRB's explanation of the Final Rule:

IMPACT OF THE FINAL RULE

A joint employer finding has significant implications for rights and obligations under the NLRA relative to collective bargaining, strike activity, and unfair labor practice liability.

• If the employees are represented by a union, the joint employer must participate in collective bargaining over their terms and conditions of employment.

• Picketing directed at a joint employer that would otherwise be secondary and unlawful is primary and lawful.

• Each business comprising the joint employer may be found jointly and severally liable for the other’s unfair labor practices.

Because of these important consequences, the purposes of the NLRA are not furthered by drawing into a collective-bargaining relationship, or exposing to secondary coercion and joint- and-several liability, a direct employer’s business partner that does not actively participate in decisions setting employees’ wages, benefits, and other essential terms and conditions of employment.

JOINT-EMPLOYER STANDARD OVERVIEW

The Final Rule:

• Specifies that a business is a joint employer of another employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment;

• Clarifies the list of essential terms and conditions: wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction;

• Provides that to be a joint employer, a business must possess and exercise such substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees as would warrant a finding that the business meaningfully affects matters relating to the employment relationship;

• Specifies that evidence of indirect and contractually reserved but never exercised control over essential terms and conditions, and of control over mandatory subjects of bargaining other than essential terms and conditions, is probative of joint-employer status, but only to the extent that it supplements and reinforces evidence of direct and immediate control;

• Defines the key terms used in the final rule, including what does and does not constitute “substantial direct and immediate control” of each essential employment term;

• Makes clear that joint-employer status cannot be based solely on indirect influence or a contractual reservation of a right to control that has never been exercised.

WHY RULEMAKING?

The Board’s 2015 decision in Browning-Ferris unsettled the law in this vitally important area by holding that a company could be deemed a joint employer if its control over the essential terms and conditions of another business’s employees was merely indirect, limited and routine, or contractually reserved but never exercised. Although the Board could have addressed this issue in yet another decision, it decided to do so through rulemaking, for several reasons:

• Rulemaking provides a means to give this complex, nuanced, and vitally important issue the kind of comprehensive and detailed explication it deserves and to which the public is entitled, resulting in greater clarity and certainty of the law under the NLRA.

• More generally, although the NLRB, throughout much of its history, has done most of its work through decision-making, it possesses statutory authority to engage in rulemaking, and the current Board intends to exercise that authority where it believes—as it does here—that doing so will enable it to provide more clarity and certainty in the law it administers.

• Rather than issuing a decision based on, and potentially limited to, the specific facts of a particular case, rulemaking allows the Board to provide broader and more detailed guidance.

• Cases are typically briefed by lawyers hired by the parties. In contrast, notice-and- comment rulemaking enables everyone who wants to weigh in on an issue to do so— including those who cannot afford to hire a lawyer to write and file a brief. The NLRB received nearly 29,000 comments on the joint-employer rule it proposed in 2018. A comparison of the proposed and final rules will demonstrate that the NLRB gave those comments the serious consideration they deserved.

• Rulemaking under the Administrative Procedure Act is strictly prospective. Thus, employers, employees, and unions will know what is coming and can prepare accordingly.

IMPLEMENTATION TIMELINE

The final joint-employer rule will go into effect April 27, 2020.

No refund of pre-Janus fair share payments

The 6th Circuit held today that a union is entitled to rely on its good faith in following existing Ohio and longstanding Supreme Court precedent permitting fair-share fees, so an objecting employee is not entitled to a refund. Lee v. Ohio Education Association (6th Cir 02/24/2020) [PDF].

In Janus v. AFSCME (2018) the US Supreme Court held that it was unconstitutional to compel public sector employees to pay fair share fees to their union. Now the 6th. 7th, and 9th Circuits have held that the employees cannot recover a refund of payments they made prior to the Janus decision. I did a video [here] on the two earlier decisions.

In Lee v. Ohio Education Association, Plaintiff Lee sought a refund of "fair share" fees she was required to pay to her public-sector union. Shortly thereafter, the Supreme Court held such fees violated the First Amendment as a form of compelled speech, Jones v. AFSCME, Council 31. The trial court granted the union's motion to dismiss, ruling that the union, as a private actor sued under 42 USC Section 1983, was entitled to rely on its good faith in following existing Ohio and longstanding Supreme Court precedent, which had expressly permitted fair-share fees.

The 6th Circuit affirmed the dismissal of plaintiff's federal cause of action because the union's good-faith defense barred the claim. The court held that the trial court properly granted the motion to dismiss plaintiff's section 1983 claim because the union's reliance on existing authority satisfied the good-faith defense as a matter of law.

With respect to plaintiff's state-law conversion claim, the court found that plaintiff was contractually obligated to pay fair-share fees pursuant to the collective bargaining agreement – just as the union was obligated to collect them. It was a condition of plaintiff's employment that she pay fair-share fees. The court concluded plaintiff, therefore, had no right to ownership or possession of them at the time they were taken. Accordingly, the court affirmed the trial court's dismissal of plaintiff's state-law conversion claim.

Pacific Coast Labor & Employment Law Conference

Click image to view the brochure.

Consistently excellent labor and employment law program. Pacific Coast Labor & Employment Law Conference in Seattle April 30-May 1.

Here’s the brochure: [PDF]

Website: https://pacificlaborlaw.com/2020-conference/2020-registration

email: registration@pacificlaborlaw.com

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Post-shift personal search is compensable time

[Video] Post-shift personal search is compensable time

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Employees can't use employer's email

[Video] Overruling a 2014 decision, the NLRB is now holding that employees do not have a statutory right to use their employer’s email and other information-technology resources to engage in non-work-related communications.

In other words, employees have no right to use the employer’s email for purposes of union organizing.

Caesars Entertainment, 368 NLRB No. 143 (12/17/2019) [PDF]. Overruling Purple Communications, Inc., 361 NLRB 1050 (2014).

Certiorari granted to review exemptions to Affordable Care Act’s birth control mandate.

The US Supreme Court has granted certiorari to review Little Sisters of the Poor v. Pennsylvania [Briefs] and Trump v. Pennsylvania [Briefs], which deal with the Affordable Care Act’s requirement that employers to provide female employees with health insurance that includes access to certain forms of birth control. In 2013, the government exempted churches and other religious institutions, and provided an “opt-out” process for religious nonprofits. In 2017, the government expanded the exemption to allow private employers with religious or moral objections to opt out.

The rulings now under review (1) affirmed a nationwide injunction of the 2017 rules, (2) held that the government lacked statutory authority under the Patient Protection and Affordable Care Act and the Religious Freedom Restoration Act to expand the exemption, (3) held that adopting the rules violated the Administrative Procedure Act, and (4) held that Little Sisters of the Poor lacked appellate standing.

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SCOTUS orders more briefs in federal sector ADEA case

On January 15 the US Supreme Court heard oral arguments in Babb v. Wilkie [Briefs] [Transcript] [Audio], in which the issue is "Whether the federal-sector provision of the Age Discrimination in Employment Act of 1967, which provides that personnel actions affecting agency employees aged 40 years or older shall be made free from any 'discrimination based on age,' 29 U.S.C. §633a(a), requires a plaintiff to prove that age was a but-for cause of the challenged personnel action."

On January 17 the Court issued the following order:

“The parties are directed to file supplemental letter briefs addressing the following question: What prospective administrative or judicial relief may a federal employee obtain under laws other than the ADEA, including under the civil service laws or the Constitution, against age-related policies, practices, actions, or statements that were not the but-for cause of an adverse employment action against the complaining employee? The briefs, not to exceed 10 pages, are to be filed simultaneously with the Clerk and served upon opposing counsel on or before 2 p.m., Thursday, January 23, 2020.”

Interesting, to say the least.

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No refunds for Janus objectors

[Video]

In Janus v. AFSCME (2018) the US Supreme Court held that it was unconstitutional to compel public sector employees to pay fair share fees to their union. Now the 9th and 7th Circuits have held that the employees cannot recover a refund of payments they made prior to the Janus decision.

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NLRB rolling back Obama-era decisions

Three big NLRB decisions in two days.

Board Restores Employers’ Right to Restrict Use of Email

In a decision issued December 17, 2019, the National Labor Relations Board reestablished the right of an employer to restrict employee use of its email system if it does so on a nondiscriminatory basis. The case is Caesars Entertainment d/b/a/ Rio All-Suites Hotel and Casino, 368 NLRB No. 143.

The Board last considered the issue presented here in Purple Communications, Inc., 361 NLRB 1050 (2014).  There, the Board held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system, on nonworking time, for communications protected by Section 7 of the National Labor Relations Act.  Overruling Purple Communications, the Board today holds that employees do not have a statutory right to use employers’ email and other information-technology (IT) resources to engage in non-work-related communications.  Rather, employers have the right to control the use of their equipment, including their email and other IT systems, and they may lawfully exercise that right to restrict the uses to which those systems are put, provided that in doing so, they do not discriminate against union or other protected concerted communications.  To this extent, the Board effectively reinstated the holding of Register Guard, 351 NLRB 1110 (2007).  Recognizing that employees must have adequate avenues to engage in communications protected by Section 7 of the NLRA, the Board’s decision creates an exception for circumstances where the use of employer-provided email is the only reasonable means for employees to communicate with one another on non-working time during the workday. 

On August 1, 2018, the Board requested briefing from the public in this case seeking input on whether the Board should adhere to, modify, or overrule Purple Communications. The Board received 19 briefs, which it considered in reaching its decision. 

Chairman John F. Ring was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Member Lauren McFerran dissented in part.

Board Approves Greater Confidentiality in Workplace Investigations  

In a decision issued December 17, 2019, the National Labor Relations Board held that work rules requiring confidentiality during the course of workplace investigations are presumptively lawful. The case, Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019), overturns a 2015 decision— Banner Estrella Medical Center, 362 NLRB 1108 (2015), enf. denied on other grounds 851 F.3d 35 (D.C. Cir. 2017)—that had required employers to prove, on a case-by-case basis, that the integrity of an investigation would be compromised without confidentiality.   

The Board concluded that the framework set forth in Banner Estrella improperly placed the burden on the employer to determine whether its interests in preserving the integrity of an investigation outweighed employee Section 7 rights, contrary to both Supreme Court and Board precedent. The Board also noted that the new standard better aligned with other federal guidance, including EEOC enforcement guidance.

In today’s decision, the Board applied the test for facially neutral workplace rules established in The Boeing Company, 365 NLRB No. 154 (2017), and determined that investigative confidentiality rules limited to the duration of the investigation are generally lawful. Because the rules at issue in this case did not limit confidentiality to the duration of the investigation, the majority remanded this case for further consideration.

Chairman John F. Ring was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Member Lauren McFerran dissented.

Board Restores Longstanding Union Dues Checkoff Rule

In Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center, 368 NLRB No. 139 (2019), issued December 16, 2019, the National Labor Relations Board overruled 2015 changes governing dues checkoff obligations when a collective bargaining agreement ends, restoring precedent that had been in place since 1962. The Board held that an employer’s statutory obligation to check off union dues ends upon expiration of the collective-bargaining agreement containing the checkoff provision.

The majority found that dues checkoff provisions belong in the limited category of mandatory-bargaining subjects that are exclusively created by the contract and are enforceable through Section 8(a)(5) of the National Labor Relations Act only for the duration of the contractual obligation created by the parties. In the majority’s view, there is no independent statutory obligation to check off and remit employees’ union dues after the expiration of the collective-bargaining agreement even where the contract does not contain a union-security provision.

This decision overturns Lincoln Lutheran of Racine, 362 NLRB 1655 (2015), and returns Board precedent to the rule established under Bethlehem Steel, 136 NLRB 1500 (1962).

Chairman John F. Ring was joined by Members Marvin Kaplan and William Emanuel in the majority opinion. Member Lauren McFerran dissented.

Double mastectomy, but no ADA disability

[Video]

You would think an employee would win an Americans with Disabilities Act lawsuit If she was fired two weeks after having a double mastectomy.

But here's a case where the employee actually did not have breast cancer.

She had the BRCA1 gene mutation, which makes it way much more likely to get breast cancer in the future.

This case went to a federal district court in Ohio and the court said that she's going to lose this case because she cannot show that she has a current limitation of a major life activity.

A future likelihood — Yes, but there's no present disability. So she loses her ADA case.

[I learned about this case from a blog post by  Daniel Pasternak at Squire Patton Boggs. He writes for the Employment Law Worldview. Read his interesting thought here: Genetic Mutation Is Not A Disability under the ADA, Says Ohio Federal Court (US).]

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Employer must REQUIRE 30 minute meal break

[Video] An administrative rule in Oregon says certain employers "shall provide" a 30 minute meal break for employees working between six and eight hours.

The Oregon Court of Appeals says this means that if employees work a portion of that 30 minutes, then they are entitled to be paid for the entire 30 minutes. Maza v. Waterford Operations (Oregon Ct App 11/14/2019) [PDF]

Here is what the administrative rule says:

“(1) The purpose of this rule is to prescribe minimum meal periods and rest periods for the preservation of the health of employees.

“(2)(a) Except as otherwise provided in this rule, every employer shall provide to each employee, for each work period of not less than six or more than eight hours, a meal period of not less than 30 continuous minutes during which the employee is relieved of all duties.

“(b) Except as otherwise provided in this rule, if an employee is not relieved of all duties for 30 continuous minutes during the meal period, the employer must pay the employee for the entire 30-minute meal period.”

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Paul Grossman's Employment Discrimination Law Update

Paul Grossman just sent out his 152 page Employment Discrimination Law Update. If you practice employment law, this is something you must have. It’s thorough, objective, accurate, and easy to read.

In an act of great generosity, Paul sends this out periodically during the year to those who ask for it. Simply send your full contact information to Paul's secretary Cathy Smith-Joo: cathysmithjoo@paulhastings.com.

Paul Grossman is a partner at Paul Hastings, and is based in Los Angeles. He is a management-side employment lawyer and a frequent speaker on employment law.

Paul's Employment Discrimination Law Update is a supplement to Lindemann, Grossman & Weirich, Employment Discrimination Law (5th ed. 2013), and the 2017 Supplement put out by the ABA Section of Labor and Employment Law (Debra A. Millenson, Laurie E. Leader, and Scott A. Moss, Executive Editors). It is organized by book chapters. The 2017 Supplement includes Court of Appeals decisions through 2016 and some Supreme Court cases issued during the 2016-2017 term. With a few exceptions, the current update begins with cases decided after January 1, 2016. It focuses almost exclusively on Court of Appeals and Supreme Court decisions.

Thank you, Paul.

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