The Fourth Circuit finds the ADA covers gender dysphoria

By Emily Harbison and Oluwaseyi Odunaiya on 18 August 2022 Posted in Employment, Employment & Labor (U.S.), LGTBQ+, US Alert, Workplace Laws and Regulations

On August 16, 2022, the U.S. Court of Appeals for the Fourth Circuit held that gender dysphoria could qualify as a disability under the Americans with Disabilities Act (ADA). (Williams v. Kincaid, No. 21-2030 (4th Cir. Aug. 16, 2022)) According to the World Professional Association for Transgender Health Standards of Care, gender dysphoria is “discomfort or distress that is caused by a discrepancy between a person’s gender identity and that person’s sex assigned at birth.”

A transgender woman, Kesha Williams, sued Fairfax County and several of its officers and jail personnel for violations under the ADA, the Rehabilitation Act, the Equal Protection Clause of the Fourteenth Amendment of the US Constitution and state common law, for housing her in the men’s section of the jail and limiting her access to treatment and medication for her gender dysphoria. Fairfax County argued that Ms. Williams could not seek relief under the ADA because gender dysphoria “is an identity disorder not resulting from physical impairments,” and thus not protected. Ms. Williams argued that gender dysphoria was not a gender identity disorder and qualified as a disability under the ADA. The Fourth Circuit agreed with Ms. Williams.

In its analysis, the Fourth Circuit court noted several reasons why gender dysphoria qualified as a disability under the ADA:

In 2008, Congress broadened the definition of disability in an attempt to cover individuals “to the maximum extent permitted by the [ADA’s] terms.” 42 U.S.C. § 12102(4)(A). By broadening coverage under the ADA, Congress was also narrowing exclusions.
The American Psychiatric Association (APA) established in its fifth edition of the Diagnostic and Statistical Manual (DSM-5), that gender dysphoria was an ailment that caused significant “discomfort or distress related to an incongruence between an individual’s gender identity and the gender assigned at birth,” and thus limited daily functions. The APA went on further to recognize that the disability was not the state of being transgender, but the results of the incongruence such as “intense anxiety, depression, suicidal ideation, and even suicide.”
Other courts have recognized the debilitating effects of gender dysphoria and the necessity for treatment. For example, the Ninth Circuit pointed out in Edmo v. Corizon, Inc., 935 F.3d 757, 771 (9th Cir. 2019), “[f]ailure to follow an appropriate treatment plan [for gender dysphoria] can expose transgender individuals to a serious risk of psychological and physical harm.”

The Fourth Circuit’s decision is the first of its kind in finding that gender dysphoria is not precluded from protection under the ADA. Even though the Fourth Circuit’s decision did not arise in the employment context, the court’s interpretation of the ADA to cover gender dysphoria will also apply to employers. Employers, even those with employees outside the Fourth Circuit’s jurisdiction, should reassess their current policies and practices to ensure they are not excluding transgender individuals from the protections of the ADA. For example, companies should inform HR professionals and others who handle requests for accommodation to engage in the interactive process with transgendered employees suffering from gender dysphoria who request an accommodation (and not automatically deny the request because they take the position it is not a covered disability under the ADA).

UAE employers, are your HR affairs in order?

By Adela Mues and Marize Coetzer on 26 July 2022 Posted in Employment

In February 2022 the new UAE Labour Law[1] came into force marking a landmark change to the employment landscape in the United Arab Emirates – the first significant change in employment legislation in 41 years. Employers in the UAE (with the exception of the DIFC and ADGM free zones[2], which have their own employment laws in place) were given one year (from 2 February 2022) to ensure that they are compliant with the provisions with the new law.

As July is almost finished, this means that UAE employers have a little over six months to ensure that their human resources (HR) affairs are in order. This includes having all employees on fixed term contracts and having the requisite policies and procedures in place as required by the UAE Labour Law.

As the new president of the UAE, His Highness Sheikh Mohammed Bin Zayed Al Nahyan, in his recent address to the nation[3], emphasised the importance and value of human capital in the UAE, this is a good time to ensure that companies’ employment policies and processes are compliant with the law and supports this vision.

Holiday Pay: the latest instalment

By Carl De Cicco and Alison Heaton on 22 July 2022 Posted in Employment (UK)

As we start the summer holidays, the Supreme Court’s judgment on holiday pay is a timely reminder of the complexities of calculating holiday pay for certain workers.

Holiday pay has been a hot topic in UK employment law over recent years, with the latest Supreme Court decision in Harpur Trust v Brazel addressing the calculation of pay for workers who work irregular hours for part of the year on permanent contracts. Dismissing the appeal, the Supreme Court agreed with the earlier decisions that holiday pay should not be pro-rated, but instead calculated by looking at average earnings over the relevant reference period prior to leave being taken, even if it meant that the worker received proportionately more paid holiday than a full time worker.

Pennsylvania on the path to increase threshold for tipped employees (part 2)

By Christopher Bouriat and Veronica Miclot on 18 July 2022 Posted in Employment & Labor (U.S.), Pennsylvania Employment Beat, US Alert, Wage and Hour, Workplace Laws and Regulations

In our original post, we reviewed the Pennsylvania Independent Regulatory Review Commission (IRRC) approval of proposed new regulations by Governor Tom Wolf’s administration concerning tipped employees.

Since then, the Pennsylvania Attorney General completed its review and approved the regulation. The regulation will go into effect on August 5, 2022. Below is a review of the changes the final-form of the regulation will institute for Pennsylvania employers:

Who is a “tipped employee”? Updates the definition of “tipped employee,” adjusting for inflation since 1977, by increasing the amount in tips an employee must receive monthly from $30 to $135 before an employer can reduce an employee’s hourly wage from $7.25 per hour to as low as $2.83 per hour.
80/20 Rule. Aligns with federal regulations by codifying that in order for employers to take a tip credit, among other factors, the employee must spend at least 80 percent of their time on duties that directly generate tips, commonly known as the “80/20 rule.”
Tip Pooling. Aligns with updated federal regulations that allow for tip pooling among employees but in most cases excluding managers, supervisors, and business owners.
Credit Card Fees and the Tip Credit. Puts in place a prohibition on employers deducting credit card and other non-cash payment processing transaction fees from an employee’s tip included with a credit card payment or other non-cash method of payment.
Service Charge Disclosure to Customers. Puts in a place a requirement for employers to clarify that automatic service charges are not gratuities for tipped employees.[1]

Fluctuating workweek

Additionally, this new regulation will codify the Pennsylvania Supreme Court’s holding in Chevalier. v. General Nutrition Centers, 2019 U.S. Dist. LEXIS 6521 (Pa. 2019) and will eliminate the right of Pennsylvania employers to utilize the fluctuating work week for salaried, non-exempt employees. Under the fluctuating workweek approach (permitted under federal law), the overtime premium of a salaried, non-exempt employee is paid on a half-time basis, as compared to the typical requirement that overtime premiums be paid on a time and a half basis for hourly, non-exempt employees.[2] In Chevalier, the Court held that Pennsylvania law does not permit the use of a fluctuating workweek method under the Pennsylvania Minimum Wage Act (PMWA) and the Pennsylvania Regulations. The court clarified that the PMWA does not support the fluctuating work week method because it allows an employer to calculate overtime pay only at one half of the employee’s regular rate. The court explained that the PMWA requires employers to pay “not less than 1 ½ time the employee’s rate of pay for all hours worked in excess for 40 hours in a work week.”

Thus, the regulation formalizes the holding in Chevalier and provides more clarity for Pennsylvania employers and employees for calculating overtime.

Additionally, the Department of Labor and Industry expressed that this calculation will also be the same for hourly employees.

[1] See Wolf Administration: Updated Minimum Wage Act Regulations Protecting Tipped Workers Approved, Pennsylvania Pressroom, May 5, 2022 https://www.media.pa.gov/pages/labor-and-industry-details.aspx?newsid=678.

[2] To use the fluctuating workweek method, among other requirements, employees’ hours actually must change on a week-to-week basis, and employees must receive the agreed-upon fixed salary even when they work less than their regularly scheduled hours. See Fluctuating Workweek Method, https://www.dol.gov/agencies/whd/fact-sheets/82-bonus-rule#:~:text=To%20use%20the%20fluctuating%20workweek,than%20their%20regularly%20scheduled%20hours.

Unfair Dismissal Compensatory Awards – The Cost of Compliance

By David Ashmore and Louise Ketley on 13 July 2022 Posted in Dismissals, Employment (UK), Employment Tribunals

The recent case of Dafiaghor-Olomu v Community Integrated Care [2022] EAT 84 is a good demonstration of the rough justice that is occasionally dispensed by the Employment Tribunal system.

It is well known that the amount of compensation that an employer can be ordered to pay for a straightforward unfair dismissal claim is subject to a statutory maximum amount of 52 weeks’ pay (commonly referred to as the “statutory cap”). In Dafiaghor-Olomu v Community Integrated Care, Mrs Dafiaghor-Olomu won her unfair dismissal claim against her employer. At the remedies hearing, the tribunal awarded her £46,153.55 in compensation and the employer paid this amount in full. The claimant successfully appealed the outcome of the remedies hearing and her award was subsequently increased to £128,961.59 following a second remedies hearing. The claimant appealed again to the EAT in respect of the remedy.

The key question for the EAT to determine was how the statutory cap should be applied in this unusual scenario in light of the earlier payment of £46,153.55. In particular, the EAT had to decide whether:

The employer should be given credit for the earlier payment of £46,153.55 before the statutory cap was applied leaving the employer with an outstanding balance to pay of £74,200 (the statutory cap at the time of dismissal); or
The statutory cap should be applied to the total award first, and then the employer given credit for the earlier payment of £46,153.55, leaving the employer with an outstanding balance to pay of £28,046.45.

Employers in Germany must take action following changes to the Notification Act

By Jan Weißgerber and Elisa Saier on 7 July 2022 Posted in Employment (Germany)

As of 1 August 2022, employers in Germany must provide employees with additional information on the terms and conditions of employment. In case of non-compliance, there is a risk of administrative fines of up to EUR 2,000 per violation.

In June 2022, the German government passed changes to the Notification Act that will enter into force on 1 August 2022 and will require action from employers in Germany. Background of the amendments to the already existing Notification Act is the implementation of the European Directive on Transparent and Predictable Working Conditions (EU 2019/1152) into national law.

Important Consequences for Employers

The changes mean that employees need to be provided with additional information on essential terms and conditions of employment. The German legislator decided to apply a written form requirement for this notification and thus decided against the possibility of digitalization. This means that the information on the essential conditions of employment must be wet signed by the employer.

Although the Notification Act is not new for employers, it has not been of great significance in practice to date, not only because of the lack of consequence so far, but also because of the comparatively low requirements that were typically met by standard employment contracts.

What employers need to consider post-Dobbs

By Emily Harbison and Brenda Rosales-Carrillo on 29 June 2022 Posted in Employment, Employment & Labor (U.S.), Workplace Laws and Regulations

In light of the U.S. Supreme Court decision on June 24, 2022, Dobbs v. Jackson Women’s Health Organization, which holds that access to abortion is not a constitutional right, employers are faced with myriad challenges moving forward. Our Labor and Employment lawyers, working with Reed Smith’s Reproductive Health Working Group, address some of the questions employers must consider now in terms of their workforces, including whether or not take a position publicly; how to manage their employees’ reactions in the workplace; dealing with claims involving religious and political opinion discrimination; and which policies to review in order to stay compliant.

Our client update is below:

Unanswered questions after Dobbs Part VI: Employment

Please reach out to the authors or the Reed Smith labor and employment lawyer with whom you normally work. We will continue to monitor developments and provide updates in response to the Dobbs opinion.

Supreme Court Rules in Favor of Arbitrability of PAGA Action

By Mara Curtis, Corrie Buck and Mona Razani on 24 June 2022 Posted in Employment & Labor (U.S.)

In a highly-anticipated decision, the U.S. Supreme Court issued its opinion in Viking River Cruises, Inc. v. Moriana (Case No. 20-1573) on June 15, 2022. The Court examined whether the Federal Arbitration Act (FAA) preempted California court precedent, which invalidated contractual waivers of representative claims under California’s Private Attorneys General Act of 2004 (PAGA).

Under PAGA, an employee may sue their current or former employer as a representative of the California Labor and Workforce Development Agency (“LWDA”). In such an action the employee can seek penalties for alleged violations of the Labor Code suffered by the employee themselves and other allegedly “aggrieved employees” if the employee was subjected to one or more violations of the California Labor Code.

Sailing close to the wind: ‘without prejudice’ and the thresholds of ‘unambiguous impropriety’

By David Ashmore and Jonathan Lord on 22 June 2022 Posted in Employment (UK), Employment Tribunals

The outcome of Swiss Re Corporate Solutions v Sommer [2022] EAT 78, (which we reported in this month’s newsletter) provides an interesting illustration of the scope of the ‘without prejudice’ privilege rules in the context of settling an employment tribunal claim.

The ‘without prejudice’ rule (the “Rule”) allows parties to have a full and frank exchange of views about a dispute or litigation, and even to make concessions about weaknesses in their own case, when discussing settlement. The parties can do this safe in the knowledge that anything said or done will be “without prejudice” and therefore cannot be relied on and would not be disclosable if settlement is not achieved and the matter goes to court/tribunal. The courts recognise that without prejudice privilege is important for the efficient operation of the legal system, as it facilitates parties to resolving disputes outside of court/tribunal.

There are only a small number of narrow exceptions to this Rule and the Sommer case is a good illustration of that. One exception is that the Rule cannot be abused or weaponised as a disguise or excuse for “perjury, blackmail or other unambiguous impropriety”. Case law has established that this ‘unambiguous impropriety’ exception should be construed narrowly – it should only be applied in the clearest cases of abuse. In 2021 the Court of Appeal ruled it would only be lost in “truly exceptional” circumstances.