October 19, 2014

New York City Council Considers Legislation Limiting Inquiries into Applicants' Criminal and Credit Histories

Currently pending before the New York City Council (the "Council") are two bills that could significantly affect hiring processes utilized by New York City employers.  The proposed Fair Chance Act and the Stop Credit Discrimination in Employment Act would restrict what employers may inquire about regarding job applicants' criminal and consumer credit histories.  If passed, the bills would require employers to review and potentially revise their hiring practices, including the use of criminal background searches and credit checks. 

           

Introduced in April 2014, the Fair Chance Act (the "FCA"), which has been described as "ban-the-box" legislation, would amend the New York City Human Rights Law (the "NYCHRL") to prevent pre-employment inquiries into an applicant's conviction or arrest history.  The New York Correction Law ยง 23-A currently requires employers to conduct a multi-factor analysis before refusing to hire an applicant based on his or her criminal history.  This analysis considers, among other things, any bearing the criminal offense would have on the applicant's fitness or ability to perform the duties related to the position, the time that has elapsed since the offense, the applicant's age at the time of the offense, the seriousness of the offense, any information produced on behalf of the applicant relating to his or her rehabilitation and good conduct, and the employer's legitimate interest in protecting property and the safety and welfare of specific individuals or the general public.  The employer may only refuse to hire an applicant based on his or her criminal conviction if there is a direct relationship between the prior criminal offense and the specific job sought, or if hiring the individual would pose an unreasonable risk to property or others' safety.

           

The FCA extends these protections by requiring that employers first deem an applicant qualified for a job and make a conditional job offer before inquiring into an applicant's criminal history or conducting any criminal history search.  The bill defines "inquiries" to include questions in a job application or in a standalone document, searches of publicly available records or consumer reports, or even mentioning that a background check will be required.  However, employers who are legally required to conduct a criminal history search may inform applicants that the job is subject to a background check and that the employer is prohibited from employing individuals with certain criminal convictions.

           

The FCA also provides that if an employer intends to take an adverse employment action based on a criminal inquiry, it must provide the applicant with a written copy of the criminal inquiry and the multi-factor analysis the employer is required to conduct.  The applicant must then be provided a minimum of seven business days to respond, during which time the position must remain open.  Once the response time has lapsed, the employer no longer needs to wait for an answer.  An employer who violates these new requirements could be liable for a minimum of $1,000 in damages and is presumed to have engaged in unlawful discrimination, which can only be overcome with "clear and convincing evidence" demonstrating otherwise.  Further, an applicant may not be disqualified from prospective employment based on a response to an unlawful inquiry or statement under the FCA.  Employees who claim that their rights have been violated under the FCA would be entitled to a private cause of action.

 

Also pending before the Council is the Stop Credit Discrimination in Employment Act (the "Act"), which would amend the NYCHRL to prohibit employers from requesting or using for employment purposes information contained in an applicant's consumer credit history or to retaliate or otherwise discriminate against an applicant based on the applicant's credit history.  The Act defines "consumer credit history" as "any information bearing on an individual's credit worthiness, credit standing, or credit capacity, including but not limited to an individual's credit score, credit account and other consumer account balances and payment history."  However, the Act would not apply to employers that are required under state or federal law to use an individual's consumer credit history for employment purposes.

 

Employers should monitor the Council's legislative activity on both bills and, if they are passed, review and revise hiring policies and practices.

 

This post was authored by Matt Lampe, Emilie Hendee, and Sharon Cohen of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

September 6, 2014

NLRB: Employees' Paid Sick Leave Campaign Protected

The National Labor Relations Board in MikLin Enterprises, Inc., 361 N.L.R.B. No. 27 (8/21/14), ruled that the employer, a franchisee of the Jimmy John's sandwich shops, violated the National Labor Relations Act by disciplining employees for participating with the Industrial Workers of the World in a publicity campaign to obtain paid sick leave. The campaign involved placing posters in and near the employer's stores that displayed side-by-side pictures of two sandwiches with one described as being made by healthy worker and the other by a sick worker. The posters stated further: "Can't Tell the Difference? That's too bad because Jimmy John's workers don't get paid sick days. Shoot, we can't even call in sick. We hope your immune system is ready because you are about to take the sandwich test . . . . Help Jimmy John's workers win sick days." In concluding that the employees were engaged in protected activity under the Act, the Board cited that the posters were "directly linked to an ongoing labor dispute" and "did not constitute disloyalty or reckless disparagement as previously defined by Board and court precedent."


http://www.nlrb.gov/cases-decisions/weekly-summaries-decisions/summary-nlrb-decisions-week-august-18-22-2014

September 5, 2014

OFCCP Issues Directive Clarifying Sex-Based Discrimination Under E.O. 11,246

On August 19, 2014, the U.S. Department of Labor's Office of Federal Contract Compliance issued Directive 2014-02 clarifying the scope of Executive Order 11,246's prohibition of sex-based discrimination as including discrimination based on gender identity or transgender status. The directive confirms in this regard that the OFCCP will follow the Equal Employment Opportunity Commission's ruling in Macy v. Holder, 2012 WL 1435995. According to the OFCCP, however, the directive does not address gender identity as a "stand-alone protected category," which, along with sexual orientation is the subject of Executive Order 13,672.

http://www.dol.gov/ofccp/regs/compliance/directives/dir2014_02.html

NLRB: Back Pay For Unlawful Reduction in Hours Not Subject to Offset for Interim Earnings

On August 25, 2014, the National Labor Relations Board, in Community Health Services, Inc., 361 N.L.R.B No. 25, reaffirmed that the back pay ordered to remedy the employer's unlawful reduction in hours is not subject to offset based upon the employees' interim earnings from other employment. In 2004, the Board found that the employer had violated the Act by reducing working hours for its respiratory department employees without bargaining with the union that represented them. It ordered the employer to remedy that violation by making the employees whole for the lost earnings and benefits resulting from this unilateral change, which were to be computed in accordance with its holding in Ogle Protection Service, 188 N.L.R.B. 682 (1970), enfd., 444 F.2d 502 (6th Cir. 1971). On December 20, 2011, the District of Columbia Circuit remanded the case to the Board for a more thorough analysis of the interim earnings issue.

On remand, the Board concluded that the standard established in Ogle Protection Service, should continue to govern the calculation of back pay in cases that do not involve a cessation of employment. The Board reasoned that in such cases, "permitting the employer to deduct those interim earnings from back pay owed, rather than permitting the employee to enjoy the full benefit of them, would represent an unwarranted windfall to the employer and discourage compliance with the law." Applying the Ogle Protection Service back pay formula in this manner, the Board explains, "falls well within the permissible bounds of the Board's broad remedial discretion and effectuates important statutory policies recognized by the Supreme Court."

http://op.bna.com/dlrcases.nsf/id/ldue-9ndp4c/$File/Community825.pdf


August 29, 2014

NLRB: Used Car Salesman's Profanity-Laced Outburst Did Not Cost Him Protection of the Act

On remand from the Ninth Circuit, the National Labor Relations Board, in Plaza Auto Center, Inc., 360 N.L.R.B. No. 117 (May 28, 2014), reaffirmed that the employee, a used car salesman, did not lose the protection of the National Labor Relations Act due to his profane and derogatory remarks to the owner while making concerted complaints regarding compensation practices. The employee's remarks included, among others, calling the owner a "fucking mother fucking," a "fucking crook," and an asshole." The Ninth Circuit directed the Board to rebalance its four-factor Atlantic Steel analysis based upon its finding that the nature-of-the-outburst factor weighed against protection. On review, the Board concluded that even accepting the court's determination, the nature-of-the-outburst factor was substantially outweighed in favor of protection by the other three factors, which are: (1) the location of the discussion; (2) the subject matter of the discussion; and (3) employer provocation by unfair labor practices.

In dissenting, Board Member Harry Johnson stated that the majority erred in implying that vulgarity in the workplace is common. He remarked, "The Board is out of touch here. The reality of the modern workplace is that employees do not typically curse each other and their superiors like characters in a Scorsese film."

http://www.nlrb.gov/case/28-CA-022256


EEOC Issues New Enforcement Guidance On Pregnancy Bias


On July 14, 2014, the Equal Employment Opportunity Commission, by a 3-2 vote, approved the issuance of new enforcement guidance under the Pregnancy Discrimination Act ("PDA"). In doing so, it updated a 1983 EEOC Compliance Manual Chapter concerning the PDA.

The guidance addresses, among other matters, the accommodations that employers must provide pregnant workers under the PDA, as well as the ADA. In particular, it states that the PDA requires employers to offer light duty to pregnant employees if they do so for non-pregnant employees who are similar in their ability or inability to work.

The Supreme Court will be addressing that issue in Young v. United Parcel Service, Inc., when it reviews the Fourth Circuit's ruling that the PDA does not require employers to offer light duty to pregnant employees with work restrictions even if light duty is available for certain categories of non-pregnant employees. The employer in that case, UPS, granted light duty accommodations to employees with work restrictions that stemmed from on-the-job injuries, but did not extend light duty assignments to employees, with non-work related medical conditions.

http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm


http://www.eeoc.gov/laws/guidance/pregnancy_qa.cfm

http://www.eeoc.gov/eeoc/publications/pregnancy_factsheet.cfm

August 1, 2014

State Lawmakers Pass Bill to Eliminate Annual Wage Notice Requirement

As of June 19, 2014, both the New York State Assembly and the New York State Senate voted to pass a bill (A08106C / S05885-B) to amend the New York Wage Theft Prevention Act to eliminate the annual wage notice requirement (the "Bill").  The Bill will become law if signed by Governor Andrew Cuomo. 

Under the current law, New York employers are required to provide all employees with an annual wage notice before February first of each year, which includes information about the employee's rate of pay and the employer.  The Bill would eliminate this annual notice requirement for employers as long as the same information is provided at the time of hire. The Bill does not change the existing requirements to provide wage notices at the time of hire and/or where changes to employee pay are made.  

In addition to eliminating the annual wage notice requirement, the Bill would increase penalties for certain violations of the New York wage law.  Specifically, employers who fail to provide a wage notice within ten business days of a new employee's first day of work, or fail to provide a wage statement as required by the law, would incur damages of $50 per day (previously $50 per week), up to a total amount of $5,000 (previously $2,500).  An employer who is found to have retaliated against an employee in violation of the wage law could incur a civil penalty of up to $20,000 (previously $10,000). 

Additionally, the bill requires employers who have previously committed wage theft, or whose violation is willful or egregious, to report certain employee and wage data to the Commissioner of Labor to be published online.  The bill makes clear, however, that employers should not report or otherwise disclose individual identifying information of employees.  The bill makes it harder to avoid liability via restructuring by making "an employer similar in operation or ownership to a prior employer who had previously committed wage theft" liable for acts of the prior employer.  It also places increased burdens on contractors found liable for wage violations and sets up a Wage Theft Prevention Enforcement Account to help fund the administration and enforcement of the Wage Prevention Theft Act.

Employers should monitor the Bill and, if and when it is signed by Gov. Cuomo, take steps to adjust their payroll practices accordingly.  

This post was authored by Matt Lampe, Emilie Hendee, and Laura Jean Eichten of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association. 

April 9, 2014

EEOC Issues Guidance on Religious Accommodations for Dress and Grooming in the Workplace


On March 6, 2014, the Equal Employment Opportunity Commission ("EEOC") issued additional Guidance on how the federal employment discrimination law (Title VII) applies to religious dress codes and grooming practices. More specifically, it addresses what, when and how religious accommodations need to be made. The Guidance is titled: "Religious Garb and Grooming in the Workplace: Rights and Responsibilities."

Title VII requires that an employer, once it is aware that a religious accommodation is needed, must accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship. The employer must make an exception to allow the employee or applicant's religious practice unless doing so would place an undue hardship on the operation of the employer's business. Undue hardship for religious accommodations has been defined as "more than de minimis" cost or burden, which is a relatively low standard.

Even if a religious accommodation is made for one or several employees, the employer may still retain its dress or grooming policy and expectations for the rest of its employees. Employers are not required to give an exception for secular reasons or for jealousy or unhappiness of the other employees. Similarly, an employee's jealousy or unhappiness about an allowed religious accommodation for a co-worker is not considered undue hardship, and neither is customer preference.

The new Guidance from the EEOC provides over twenty examples of scenarios with explanations of the applicable law and guidance for what the employer should do when faced with these situations. Some scenarios include: a current employee's new religious practice or observance; assigning an employee to a "back room" because of religious dress or grooming practices; head coverings that pose security concerns; co-worker harassment based on religion; and more. It also provides answers to the most commonly asked questions that employers and employees have regarding the issue of religious accommodations for dress and grooming policies.

The full text of the Guidance can be found here: http://www.eeoc.gov/eeoc/publications/qa_religious_garb_grooming.cfm.

March 17, 2014

EEOC v. Founders Pavilion, Inc. Reaches Settlement


The Equal Employment Opportunity Commission ("EEOC") announced on January 13, 2014, that a settlement had been reached in the case of EEOC v. Founders Pavilion, Inc. The EEOC brought suit against the defendant, Founders Pavilion, a former nursing and rehabilitation center in Corning, New York, under the Genetic Information Nondiscrimination Act ("GINA"). Congress passed GINA to prevent employers from requesting genetic information or considering the genetic information in making employment decisions. The Founders Pavilion case is the third lawsuit that the EEOC has brought since the enactment of GINA in 2008.

The EEOC asserted that Founders Pavilion violated GINA in its practice of requesting family medical history as part of its pre-employment medical exam of its applicants who had already received conditional offers of employment. Additionally, the EEOC charged that Founders Pavilion violated the Americans with Disabilities Act in firing two employees based on the employer perceiving them to be disabled. There were also three instances alleged where Founders Pavilion made employment decisions based on the pregnancy of three women, which violated Title VII of the Civil Rights Act of 1964 ("Title VII").

The EEOC filed suit against Founders Pavilion, Inc. in the U.S. District Court for the Western District of New York and the suit was resolved by a five-year consent decree. As part of the decree, Founders Pavilion will provide a fund of $110,400 for distribution to the 138 individuals who were asked for their genetic information in violation of GINA. Also as part of the agreement, Founders Pavilion will have to pay a fine of $259,600 to the five individuals who the EEOC alleged were fired or denied hire in violation of the Americans with Disabilities Act or Title VII.

At the time of settlement, Founders Pavilion had already been sold to Pavilion Operations, LLC and the nursing and rehabilitation center had ceased operating. As part of the consent decree, if Founders Pavilion resumes conducting business, they must post notices and send a memo our to all employees regarding this lawsuit and the resulting five-year consent decree. Also, if they resume business they will be required to adopt a new anti-discrimination policy that will provide anti-discrimination training to all employees and will provide periodic reports to the EEOC regarding any internal discrimination complaints.

In response to this settlement, the EEOC General Counsel David Lopez, stated: "Employers need to be aware that GINA prohibits requesting family medical history. When illegal questions are required as part of the hiring process, the EEOC will be vigilant in ensuring that no one is denied employment opportunities on a prohibited basis." This case should serve as a warning to employers that under GINA, there are real consequences to asking applicants or employees about their family medical history.

February 21, 2014

Employment arbitration practice tip

As it becomes increasingly common for New York employers to be, or be affiliated with, foreign corporations, the likelihood also increases that arbitrations with their employees will be administered by the International Centre for Dispute Resolution (ICDR), which is the International Division of the American Arbitration Association. If the ICDR's rules are applied to the arbitration, then the potential for attorney's fee-shifting may - - unbeknownst to many attorneys - - arise. Article 3I of the ICDR Procedures authorizes the arbitrator to apportion "costs" among the parties, including "the reasonable costs for legal representation of a successful party." (emphasis added.)
By contrast, under the AAA Employment Rules, the arbitrator's ability to award attorney's fees is far more circumscribed: Rule 39(d) permits the arbitrator to award attorney's fees only "in accordance with applicable law," which essentially allows attorney's fees to prevailing employees only in statutory discrimination cases, or to the employer only if the discrimination case were found to be entirely frivolous.
The ICDR procedures will not necessarily govern in an ICDR-administered employment arbitration; which set of rules to apply is often, surprisingly, left up to the parties, if they are able to agree. If counsel have the opportunity to choose between the ICDR Rules and the AAA Employment Rules, they should consider whether the potential for broader attorney's fee-shifting under the ICDR rules would be advantageous, or possibly dangerous, for their clients.