Legislation Update
In this edition of Human Capital we give you a brief update of some recently announced or proposed developments in employment law.
Continue Reading...U.S. Supreme Court Holds That Discrimination Law Also Prohibits Retaliation
The U.S. Supreme Court today held that 42 U.S.C. § 1981 (Section 1981), a law enacted just after the Civil War, which prohibits race discrimination in the making and enforcement of contracts, also protects persons who are subject to retaliation because they have complained about such discrimination – even though Section 1981 never mentions retaliation. The Court relied in large part on two of its earlier cases that had interpreted a similar law against discrimination to encompass retaliation claims. It also noted that its decision did not change the law, because every federal appellate court to have addressed the issue had held that Section 1981 prohibits retaliation. CBOCS West, Inc. v. Humphries, No. 06-1431 (May 27, 2008).
Section 1981, which the Court earlier held prohibits discrimination based on ethnicity as well as race, offers plaintiffs three key advantages over the more well-known federal fair employment practice law, Title VII of the Civil Rights Act of 1964. First, although Title VII precludes plaintiffs from suing until they have first filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) and waited for that agency to issue a right-to-sue notice, Section 1981 plaintiffs may sue without exhausting any administrative process. Second, while Title VII has a fairly short statute of limitations, requiring plaintiffs to file an EEOC charge within 180 or 300 days after an act of alleged discrimination or retaliation has occurred, Section 1981 gives plaintiffs four years after such an act has occurred in which to sue. Third, although Title VII allows employees to recover all lost wages and benefits, it limits how much a successful employee can collect for emotional distress and punitive damages, with the cap for such other damages ranging from $50,000 to $300,000, depending on the employer’s size. Section 1981, on the other hand, allows a plaintiff to recover unlimited compensatory and punitive damages.
In light of these differences, employers may expect current or former employees who believe themselves to have been subject to retaliation based on complaints about alleged race discrimination to sue under Section 1981 instead of or in addition to Title VII.
U.S. Congress Passes Ban on Genetic Discrimination
This post was written by James A. Burns, Jr. and Rachel C. Shim.
By overwhelming margins, the House and Senate have passed legislation that will prohibit discrimination in employment and medical insurance based on genetic information and tests. The White House has made clear that President Bush will sign the bill.
The Genetic Information Nondiscrimination Act (“GINA” or the “Act”) will prohibit employers, employment agencies and labor unions from discriminating against applicants or employees based on information about genetic tests of, or the receipt of genetic counseling or other services by, an individual or his or her family members. GINA will also preclude group health plans and issuers of health insurance from discriminating against individuals based on genetic information, and will bar insurers from requiring genetic tests.
Employers, Employment Agencies and Labor Unions
GINA makes it unlawful for an employer, employment agency or labor union to discriminate against any applicant or employee based on “genetic information,” which the Act defines as information about the genetic tests of such an individual or any of his or her family members; information about the manifestation of a disease or disorder in any such family members; or information about a request for or receipt of a genetic test, genetic counseling, or genetic education by the individual or any of his or her family members. The Act also prohibits requesting, requiring or purchasing genetic information with respect to an employee or family member. Employers are nonetheless permitted to request or require that an employee provide a family medical history in compliance with the certification provisions of the Family and Medical Leave Act (“FMLA”) or comparable state laws, or where the employer’s request or requirement is “inadvertent.” Another exception permits requesting or requiring information used for legally mandated genetic monitoring of the biological effects of toxic substances in the workplace, but only if the monitoring complies with federal and state regulations, and the employee expressly consents and is given the results.
Like medical information under the Americans with Disabilities Act, genetic information must be treated as confidential, maintained on separate forms, and stored in separate medical files. If a covered entity receives a court order directing it to provide genetic information, it cannot do so unless the disclosure is specifically authorized by the order and the employee either knew about the order before it was secured, or is told about the order and any genetic information to be produced before production takes place. Employers may also disclose such information in connection with the employee’s compliance with the certification provisions of the FMLA or comparable state laws.
Other provisions of the Act, including its prohibition against retaliation and the range of available remedies, mirror those found in Title VII of the Civil Rights Act of 1964. Prevailing plaintiffs may thus recover lost wages and benefits; compensatory and punitive damages of up to $300,000, costs and attorneys’ fees; and equitable relief such as reinstatement. To allay business concerns, however, GINA does not permit employees to bring “disparate impact” claims asserting that a facially neutral policy or practice has a discriminatory adverse effect based on a protected characteristic.
Group Health Plans and Insurers
Under the Act, group health plans and insurers cannot discriminate against an individual with regard to premiums based on genetic information, nor can they require an individual to undergo a genetic test (except in certain limited circumstances for research purposes). The Act also bars group health plans and insurers from requesting, requiring or purchasing genetic information about an individual, or using for underwriting purposes any genetic information that they acquire.
GINA’s full impact on employers that provide group health plans is not yet clear, as the agencies charged with administering the new law have been given one year from the date the Act takes effect to issue regulations. Nevertheless, employers that provide fully insured group health plans will most likely be able to rely on their insurers to satisfy at least some requirements of the Act. In addition, GINA requires the Department of Health and Human Services (“HHS”) to amend regulations issued under the Health Insurance Portability and Accountability Act (“HIPAA”) to include genetic information within the definition of protected health information. This should allow insurers and group health plans to use genetic information for payment, treatment and health care operations, and thereby ensure that the Act does not bring the day-to-day administration of a group health plan to a halt.
Once GINA takes effect, however, employers will need to pay close attention to ensuring that their group health plans comply with its requirements, because penalties for a violation are steep. Under the Act, the Secretary of Labor may impose a penalty of up to $100 per day per participant or beneficiary to whom a failure relates. The Act also allows an excise tax to be imposed under Section 4980D of the Internal Revenue Code. While employers will be able to correct errors and be excused from unintentional, unknowing mistakes, employers that fail to take action to ensure compliance could be hit hard.
Effective Dates
To provide enough time for those covered by the Act to prepare for its restrictions and for the agencies charged with issuing regulations to do so, GINA will not take effect until next year. Those parts of the Act that cover group heath plans and health insurers will take effect 12 months after the bill is signed, while the employment discrimination provisions will take effect six months after that.
ACAS publishes draft Code of Practice for consultation
On 2 May 2008, ACAS published a new draft Code of practice on discipline and grievances for public consultation. The Code has been revised to take into account the changes proposed to be made to workplace dispute resolution by the Employment Bill, currently before Parliament, and in particular the forthcoming abolition of the statutory dispute resolution procedures.
Consultation Paper and draft Code of Practice
Continue Reading...Unfair dismissal time limit extended owing to ongoing dismissal procedure
In Towergate London Market Ltd v Harris the Court of Appeal held that a claimant was entitled to a three-month time extension to bring her unfair dismissal claim, since she had reasonable grounds to believe that a dismissal procedure was ongoing upon the expiry of the original time limit. The Court reached this conclusion despite the fact that the claimant had not appealed internally against her dismissal under any formal process, but rather had raised a post-employment 'grievance' with her employer.
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