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[email protected]
Presentation For: Western Pennsylvania
Chapter-Association of Corporate Counsel
1
“U.S. employers continue to experience
difficulty with attracting and retaining
employees, as increasing hiring and turnover
levels show no signs of abating,” and half of
employees “are open to leaving their current
employers for new opportunities,” according to
separate surveys from Willis Towers Watson
and Aon.
2
While U.S. hiring increased in 2016, 7.4 million
individuals are unemployed. A fourth of
unemployed workers (24.8%) have been jobless for
at least 27 weeks. There are about 1.4 workers for
each job opening, and the average duration of
unemployment is 6 months. The labor participation
rate has hovered near a historic low of 62.7%, with
more than 95 million Americans not in the labor
force.
3
The Federal Reserve projects the
unemployment rate will range from
4.5% to 4.7% in 2017.
4
Eight states (including Pennsylvania) had unemployment rates of
5.5% or higher in 2016.
For example, in August of 2016, the national unemployment rate
was 4.9%, but in Pennsylvania it was 5.7%.
In 2016, the ranks of unemployed in Pennsylvania grew by 70,000
– a 20 percent increase.*
* Pittsburgh Post-Gazette, Sunday, February 5, 2017
5
State
Charges
Texas
Florida
California
Georgia
Illinois
Pennsylvania
North Carolina
New York
Virginia
Alabama
Ohio
Tennessee
Michigan
Indiana
Arizona
9,539
7,158
6,199
5,234
4,581
4,420
4,113
3,669
2,844
2,802
2,796
2,726
2,551
2,545
2,396
CHARGES BY STATE: A fourth
of all discrimination charges
filed with the EEOC in FY 2015
were filed in just three states:
Texas (10.7%), Florida (8.1%)
and California (7.0%). See
chart for number of charges
filed in the top 15 states.
6
The EEOC projects that nearly 92,000 employment
discrimination charges will be filed against private sector
employers in FY 2017. In FY 2016, 91,503 discrimination
charges were filed with the EEOC, a 3% increase over
FY 2015. Retaliation and race continue to be the most
frequent basis of discrimination alleged in EEOC
charges, followed by disability, sex, age, national origin,
and religious discrimination. Some charges allege
multiple bases.
7
In August 2016, the EEOC issued new enforcement
guidance on retaliation. The guidance addresses the
scope of employee activity protected by the law, remedies
available for retaliation, and gives detailed examples of
employer actions that may constitute retaliation. The
agency’s guidance takes an expansive position on
protection given to persons who make internal complaints
about discrimination – even if made in bad faith.
8
Two EEOC Commissioners in June 2016 called on
employers to “reboot” workplace harassment prevention
efforts, stating that “merely having effective reporting and
response systems in place” is not enough. In addition,
they asserted that “much of the training done over the last
30 years has not worked as a prevention tool,” and has
“been too focused on simply avoiding legal liability.” They
urge employers to explore new types of training to prevent
harassment, including workplace civility.
9
10
Despite stepped-up efforts by organized labor,
only about 14.8 million U.S. workers belong to a
union, down from 17.7 million in 1983. The union
membership rate in the public sector (35.2%) is
more than five times higher than the rate in the
private sector (6.4%), and about half of all union
members live in just seven states: California,
New York, Illinois, Pennsylvania (about 13.3%),
Michigan, Ohio, and New Jersey.
11
Legal challenges to the NLRB’s revised election
procedures were dismissed by a federal appeals
court in 2016. The revised rules decrease the
time preceding union elections, defer employer
challenges to voter eligibility until after an election
is held, and require employers to provide unions
with additional employee contact information.
12
In the first year of the NLRB’s revised election procedures,
unions filed the same number of representation petitions
(2,144), entered into election agreements at the same rate
(92%), and won about the same number of representation
elections (70%) as the previous year. However, the median
days between a union filing a petition for a representation
election and the date of the NLRB election were reduced by
two full weeks, from 38 days to 23 days. The median size of
the bargaining unit sought in union representation petitions was
22, down from 25 a year earlier.
13
In 2016, multiple U.S. Courts of Appeals upheld the Board’s
new approach to voting units in NLRB elections. In
Specialty Healthcare, the Board held that if a union
petitions to represent a group of employees within a
workplace and the employer challenges that voting unit as
inappropriate, the employer must show that all employees it
seeks to add share “an overwhelming community of
interest” with the petitioned-for employees in order to
prevail. This rule puts the burden on the employer to prove
the appropriateness of the voting unit, setting a significant
evidentiary hurdle for employers opposing small units.
14
A National Labor Relations Board judge dismissed claims by two terminated
employees, saying allegations a company fired them in retaliation for their
actions in a union election were not substantiated in the face of evidence the
company actually dismissed them for falsifying their timesheets.
The two employees, alleged that the company used discrepancies in their
timesheets as an excuse to force them out. The NLRB Judge disagreed, ruling
that the company had data to back up its decision.
“There is no evidence countering the credibly offered claim by the employer
that in discharging these employees, it acted in conformity with its policies
against the submission of falsified time records,” the judge said.
The Judge said arguments by the employees that timesheet discrepancies
were only an excuse for the company to fire them were unconvincing because
management randomly checked the timesheet records of other employees and
found no issues. Law360, New York (February 15, 2017)
15
A former Trader Joe’s employee filed ULP charges, alleging Trader
Joe’s maintains unlawful rules requiring workers, inter alia, to smile
at coworkers. The employee received two performance reviews in
which managers cited a poor attitude, and a lack of “energy or
concern for the store.”
Trader Joe’s terminated the employee after a third performance
review, citing a poor attitude.
According to the ULP filing, Trader Joe’s maintains rules requiring
associates to “have a positive attitude,” “collaborate,” “be a team
player,” and to smile at coworkers. In the filing, the employee
conceded that Trader Joe’s can promulgate rules requiring a
positive attitude around customers.
16
Trader Joe’s cannot, the employee argued,
require employees to express positivity about
terms and conditions of employment.
In a statement to the press after the filing, the
employee’s attorney stated “[t]he National Labor
Relations Act is intended to protect the
unhappy.”
17
A Burger King Corp. franchisee in Missouri unlawfully retaliated
against a group of workers who participated in a 2015 strike, the
National Labor Relations Board ruled January 24, 2017.
NLRB Chairman Mark Pearce and members Philip Miscimarra
and Lauren McFerran ordered franchisee EYM King of Missouri
LLC, a Burger King outlet in Kansas City, to stop disciplining the
employees for engaging in a strike or supporting Workers
Organizing Committee-Kansas City or any other union.
On Feb. 9, 2016, NLRB Administrative Law Judge Christine
Dibble found that the business had violated the National Labor
Relations Act, and she ordered it to rescind its written discipline.
18
In its ruling, the NLRB ordered EYM King to remove from its files
within 14 days any reference to the unlawful discipline the
franchisee issued against six workers and to notify them within
three days after that the unlawful discipline will not be used
against them.
Most of the allegations stemmed from a one-day strike the
organizing committee staged on April 15, 2015, as part of a
nationwide campaign to raise the minimum wage for fast food
workers to $15 per hour. The next day, six employees from one
of EYM’s restaurants, on 47th Street in Kansas City, were written
up for failing to appear for their scheduled shifts.
19
But Judge Dibble said it didn’t meet the definition of a work stoppage
that would be unprotected because she said there was no evidence the
restaurant was seriously hurt by the workers’ absence.
The judge also wasn’t convinced by EYM King’s argument that the
Burger King restaurant didn’t know about the workers’ protected activity
when the written discipline was issued.
“The fact that the six employees, all of whom are active in WOC-KC,
were absent on the day of the strike would not appear as coincidental
to a reasonable person,” Judge Dibble wrote.
*The case is EYM King of Missouri LLC and Workers’ Organizing Committee-Kansas City
20
President Donald Trump has appointed Republican Philip A.
Miscimarra as acting chairman of the National Labor Relations Board,
the agency confirmed January 26, 2017.
Miscimarra, the sole Republican on the labor board, was nominated by
Barack Obama in April 2013 and appointed to a four-year term that
August. He is taking over the chairmanship from Democrat Mark
Gaston Pearce, who joined the NLRB in April 2010 and was named
chairman by Barack Obama in August 2011.
21
However, the term of Richard Griffin, the current General
Counsel, does not expire until November 2017. Griffin
intends to stay on through the end of his term and may
continue to take anti-business enforcement actions for the
remainder of his term.
Appointing Miscimarra is the first move Trump has made
toward shaping his NLRB, which by tradition consists of
three members of the President’s party and two members
of the opposition. The board currently has two vacancies.
*Law360, January 26, 2017
22
This new board with a Republican majority will likely
revisit numerous recent NLRB rules and decisions,
including those covering:
o Micro-units;
o Class action waivers;
o Joint employers;
o Inclusion of temporary workers in bargaining units with an
employer’s regular workers;
o Quickie elections;
o Protected concerted activity in areas such as social media,
confidentiality, and employer policies and handbooks; and
o Status of college/university adjunct faculty, graduate students, and
student athletes.
23
National Right-to-Work Bill:
o Would prohibit traditional “security clauses” in
CBAs.
o Previous attempts at a national right-to-work bill
have not gotten far. However, with Republican
control of Congress and the White House, many
experts consider the chances of passing the bill
this time better than before, if not still unlikely.
24
National Right-to-Work Bill (cont.):
o President Trump on February 17, 2016:
• "I love the right to work . . . . I like it better
because it is lower. It is better for the people. You
are not paying the big fees to the unions. The
unions get big fees. A lot of people don't realize
they have to pay a lot of fees. I am talking about
the workers. They have to pay big fees to the
union. I like it because it gives great flexibility to
the people. It gives great flexibility to the
companies."
25
Paid Maternity Leave:
o President Trump has proposed requiring employers to provide
six weeks of full or partially-paid maternity leave.
o This plan would likely be implemented by amending existing
unemployment statutes and funded by uncovering
unemployment fraud.
o Critics contend the plan would only provide benefits to married
women – not single women or men – and only to those who give
birth rather than adopt.
o Some commentators note that Republican lawmakers have
resisted paid maternity leave proposals, but might consider
allowing earned “comp time” to be used for maternity leave.
26
Under President Trump, the DOL is expected to
be more business-friendly, and to shift its focus
to achieving compliance rather than aggressive
enforcement.
The DOL is expected to permit employers
greater flexibility in using independent
contractors, for example, and provide
businesses with more certainty in expanding
through the use of franchises.
27
President Trump has appointed Victoria Lipnic as
Acting Chair of the EEOC.
28
Lipnic is the EEOC’s only Republican Commissioner on the
five-member Commission. She takes the reins from Jenny
R. Yang, a Democrat, who continues as a Commissioner.
By statute, each Commissioner is appointed by the
President, subject to approval by the U.S. Senate, and no
more than three Commissioners may be member of the
same political party. Currently, there is one seat vacant.
Barring the resignation of a Commissioner, Trump will not
be able to appoint enough Commissioners to the EEOC to
form a majority of Republicans until July 1, 2017.
29
During her time at the EEOC, Lipnic has joined in bipartisan
initiatives of the agency. For example, she co-chaired, along
with Democratic Commissioner Chai R. Feldblum, the EEOC’s
Select Task Force on Harassment in the Workplace in 20152016.
She also voted to approve the EEOC’s 2012 Guidance on the
Use of Arrest and Conviction Records in Making Employment
Decisions.
One some issues, Lipnic has not supported the EEOC’s
Democratic majority. She opposed the EEOC’s proposed
change to EEO-1 reporting to include collecting pay data from
employees.
30
Strategic Enforcement Plan:
o In mid-October, 2016, the EEOC issued its updated
Strategic Enforcement Plan (SEP) for Fiscal Years
2017-2021.
o The new SEP reiterated the agency’s commitment to
the six priorities in its previous SEP (2012-2016), with
some changes.
31
Despite the change at the White House, the U.S. Equal Employment
Opportunity Commission will continue to follow its most recent
strategic enforcement plan, which includes prioritizing cases in
emerging areas of law like protection for LGBT individuals against
sex-based discrimination, Commissioner Chai Feldblum said
Tuesday.
Speaking at the Society for Human Resource Management’s
Employment Law & Legislative Conference in Washington D.C.,
Feldblum said the enforcement priorities outlined in the agency's
strategic enforcement plan, or SEP, for 2017-2021, which was
released in October, will remain the benchmark for the type of cases
and issues the EEOC will pursue.
Law360, Washington (March 14, 2017)
32
Strategic Enforcement Plan (cont.):
o The new SEP set forth new emphases on several
priorities, including, for example:
• Qualification standards and inflexible leave policies
under the ADA;
• Complex employment relationships and structures
in the 21st century workplace; and
• Backlash discrimination against those who are
Muslim or Sikh, or persons of Arab, Middle Eastern
or South Asian descent.
33
34
President Trump will appoint at least one new
Justice to the U.S. Supreme Court (possibly three)
and will fill numerous other federal judicial vacancies
(100 open currently).
President Trump will likely appoint judges who are
inclined to:
o Preserve strict certification standards for class
actions;
o Support arbitration of employment disputes; and
o Reign in novel interpretations of EEO laws, such as
Title VII and the Americans with Disabilities Act.
35
President Trump has nominated Neil Gorsuch to fill
the open spot on the U.S. Supreme Court
36
Neil Gorsuch:
o Federal judge on the U.S. Court of Appeals for the Tenth Circuit
in Denver.
o B.A., Columbia University in 1988.
o J.D., Harvard Law School in 1991.
o Doctorate of Legal Philosophy from Oxford University in 2004.
o Gorsuch clerked for
• D.C. Circuit Judge David B. Sentelle in 1991-1992.
• Supreme Court Justices Byron White and Anthony Kennedy in
1993-1994.
37
Neil Gorsuch (cont.):
o Federal Agency Power (Chevron Deference):
• In Gorsuch’s concurrence in Gutierrez-Brizuela v.
Lynch, 834 F.3d 1142 (10th Cir. 2016), he took aim
at the role of administrative agencies and, in
particular, the doctrine of Chevron deference.
• Criticized the legal doctrine that federal courts
must often defer to the Executive Branch’s
interpretations of federal law, warning that such
deference threatens the separation of powers
designed by the framers.
38
Neil Gorsuch (cont.):
o Federal Agency Power (Chevron Deference) (cont.):
• Explicitly called for reconsideration of the doctrine of
Chevron deference to administrative agencies,
including those that regulate labor and employment
such as the Equal Employment Opportunity
Commission and the National Labor Relations Board,
• “Chevron … permit[s] executive bureaucracies to
swallow huge amounts of core judicial and legislative
power and concentrate federal power in a way that
seems more than a little difficult to square with the
Constitution of the framers’ design.” Id. at 1149.
39
Neil Gorsuch (cont.):
o Treatment of Plaintiffs:
• Applied discrimination charge filing deadlines
strictly against plaintiffs, rejecting arguments that
would expand those time periods.
• Has not hesitated to reject federal whistleblower
claims.
40
Neil Gorsuch (cont.):
o Religious Liberties of Employers:
• Judge Gorsuch’s most notable benefits-related opinion
was a concurrence in Hobby Lobby Stores, Inc. v.
Sebelius, 723 F.3d 1114 (10th Cir. 2013), in which several
employers challenged the contraceptive mandate imposed
by the Affordable Care Act on religious-liberty grounds.
• The interests of religiously affiliated employers will come
into play as early as this term, when the Supreme Court
considers the scope of ERISA’s exemption for “church
plans.”
41
Neil Gorsuch (cont.):
o ADA:
• With respect to leave-management issues, Judge Gorsuch
authored the decision in Hwang v. Kansas State Univ., 753
F.3d 1159 (10th Cir. 2014),
• Tenth Circuit determined that a leave of absence of more
than six months was an unreasonable accommodation.
• Gorsuch wrote, “It’s difficult to conceive how an employee’s
absence for six months … could be consistent with
discharging the essential functions of most any job in the
national economy today.” Id. at 1162.
42
The Obama administration exceeded its
authority when it roughly doubled—to about
$47500—the annual salary threshold below
which workers are eligible for overtime pay, a
group of 21 states challenging the rule told the
U.S. Court of Appeals for the Fifth Circuit in a
brief filed January 17.
(Nevada v. DOL, 5th Cir., No. 16-41606, brief filed 1/17/17).
43
The U.S. Supreme Court Jan. 13 agreed to consider whether arbitration
agreements that prohibit employees from pursuing class or collective
actions are unlawful under the National Labor Relations Act and
unenforceable under the Federal Arbitration Act. (NLRB v. Murphy Oil
USA, Inc. U.S., No. 16-307, cert. granted 1/13/17)
The National Labor Relations Board asked the high court to review and
reverse a ruling by the U.S. Court of Appeals for the Fifth Circuit (808 F.
3d 1013, 2015 BL 351672, 204 LRRM 3489 (5th Cir.2015)), which
rejected the board’s position that such agreements unlawfully interfere
with employees’ NLRA rights to engage in concerted activity for their
mutual aid or protection.
The Second and Eighth circuits have also rejected the board’s position,
but the Seventh and Ninth circuits have weighed in with opinions that
support the NLRB’s view, and the Supreme Court agreed to hear the
Seventh and Ninth circuits cases along with Murphy oil.
44
Law360, (January 11, 2017) – The Third Circuit in a
precedential ruling revived claims in an age bias suit ruling
that disparate impact claims under the Age Discrimination
in Employment Act are not limited to 40 and older
comparisons, and a policy that favors younger members of
a protected class can still be illegal.
The appeals court found, contrary to the lower court’s
determination, that Rudolph Karlo’s claim that policies
disparately impacted workers over the age of 50 was in
violation of the ADEA even though those policies did not
harm other employees in their forties, who are also
protected by the statute, are cognizable.
45
The court acknowledged that its ruling contrasts with those
reached by other circuits in similar cases.
In reaching its conclusion, the panel looked at controlling
U.S. Supreme Court precedent set in the high court’s 1996
ruling in O’Connor v. Consolidated Coin Caterers Corp. and
1982 decision in Connecticut v. Teal.
Quoting from the Supreme Court’s decision in O’Connor,
the panel wrote “the fact that one person in the protected
class has lost out to another person in the protected class
is . . . irrelevant, so long as he has lost out because of this
age.”
46
President Trump announced an intention to
rescind many of President Obama’s
Executive Orders and Actions.
Many of these impose significant restrictions
and reporting requirements on government
contractors.
47
Executive Order Minimizing the Economic Burden of
the ACA (January 20, 2017):
o “It is the policy of my Administration to seek the prompt
repeal of the [ACA].”
o “In the meantime, pending such repeal, it is imperative for
the executive branch to ensure that the law is being
efficiently implemented, take all actions consistent with law
to minimize the unwarranted economic and regulatory
burdens of the Act, and prepare to afford the States more
flexibility and control to create a more free and open
healthcare market.”
48
Core Principles for Regulating the United States
Financial System (February 3, 2017):
o Orders Secretary of the Treasury to review
regulation of financial institutions.
o ALSO, Presidential Memorandum on Fiduciary
Duty Rule (February 3, 2017) published in
tandem.
49
Core Principles for Regulating the United States
Financial System (February 3, 2017) (cont.):
o The Memo directs the DOL to analyze the
economic and legal impact of the Fiduciary Duty
Rule.
o If DOL affirmatively determines the Fiduciary
Duty Rule will not fulfill the administration’s
purposes, the Memo directs the DOL to use the
administrative rule making process to rescind or
revise the Rule.
50
The Trump Administration has announced that the
Department of Education (DOE) and the Department of
Justice (DOJ) rescinded the Obama Administration’s
May 2016 Dear Colleague Letter directing that schools
“treat a student’s gender identity as the student’s sex for
purposes of Title IX and its implementing regulations.”
51
The “Protecting the Nation from Foreign Terrorist Entry into the
United States” Executive Order (E.O.), issued by President Donald
Trump on March 6, 2017, suspends processing of visa issuance for
individuals from six designated countries until June 14, 2017.
The March 6 E.O. applies to citizens and nationals from six
countries:
o Iran
o
o
o
o
o
Libya
Somalia
Sudan
Syria
Yemen
Iraq, which was included in the January 27 Executive Order, has
been removed from the list.
52