New York City Commission on Human Rights issues new guidance on race discrimination on the basis of hairstyle

On February 19, 2019, the New York City Commission on Human Rights (NYCCHR) issued new enforcement guidance regarding (1) policies that place restrictions, or ban, naturally curly hair, dreadlocks, braids and cornrows, among other hairstyles; or (2) neutral grooming policies that are discriminatorily applied to employees based on aspects of their appearance associated with race.

In its guidance, the NYCCHR emphasized that the New York City Human Rights Law (NYCHRL) “protects the rights of New Yorkers to maintain natural hair or hairstyles that are closely associated with their racial, ethnic, or cultural identities.” For “Black people,” which the NYCCHR defines as individuals “who identify as African, African American, Afro-Caribbean, Afro-Latin-x/a/o or otherwise having African or Black ancestry,” this includes the right to maintain natural hair, treated, or untreated hairstyles. Grooming or appearance policies that restrict natural hair or hairstyles associated with “Black people” therefore violate the NYCHRL’s anti-discrimination provisions.

Governor Pritzker signs law to increase Illinois’ minimum wage to $15 per hour by 2025

By Courtney Ofosu on 25 February 2019 Posted in Employment & Labor (U.S.), Wage and Hour, Workplace Laws and Regulations

On February 19, 2019, Illinois Governor J.B. Pritzker signed into law a proposed bill to increase the state’s minimum wage to $15 per hour by 2025. The bill, known as “Lifting Up Illinois Working Families Act,” sets incremental increases to the state’s hourly minimum wage for employees 18 years or older as follows: (i) $9.25 on January 1, 2020; (ii) $10 on July 1, 2020; and (iii) $11 on January 1, 2021. Starting on January 1, 2022, and on each January 1st thereafter, the hourly minimum wage will continue to increase by $1 until it reaches $15 in 2025.

Fifth Circuit judge asserts Title VII does not prohibit sexual orientation and transgender discrimination

By Cheryl Blount and John T. McDonald on 25 February 2019 Posted in Discrimination, Employment & Labor (U.S.)

On February 6, 2019, the Fifth Circuit affirmed summary judgment in favor of an employer on claims that it discriminated against the plaintiff based on her transgender status. In Wittmer v. Phillips 66 Company, the plaintiff sued Phillips 66 Company for sex discrimination under Title VII in the Southern District of Texas, claiming that the company rescinded her offer of employment after learning she was transgender. The District Court granted the company’s motion for summary judgment because the plaintiff failed to establish a prima facie case of discrimination and failed to show that the employer’s reason for its decision was pretextual. In so ruling, the District Court assumed that Title VII prohibited discrimination based on transgender status and expressly stated that the Fifth Circuit had not addressed the issue.

On appeal, the Fifth Circuit Court of Appeals took notice of the fact that the Second, Sixth and Seventh Circuits have all held that Title VII protection extends to sexual orientation or transgender status over the last two years. However, the three-judge panel disagreed with the District Court’s statement that the Fifth Circuit had not previously ruled on the issue, noting that in Blum v. Gulf Oil Corp., 597 F.2d 936 (5th Cir. 1979), the Fifth Circuit specifically held that Title VII does not prohibit sexual orientation discrimination. Ultimately, the panel did not reach the issue of Title VII’s coverage of sexual orientation or transgender discrimination because it affirmed the District Court’s determination that, even if protected, the plaintiff failed to establish a prima facie case of discrimination and also failed to offer evidence that the employer’s legitimate, nondiscriminatory reasons for its decision were pretextual.

California on call shifts may qualify for paid reporting time pay

By Anne Cherry Barnett and Brittany Hernandez on 18 February 2019 Posted in California, California Employment Beat, Employment & Labor (U.S.), Wage and Hour, Workplace Laws and Regulations

In a recent decision involving retail store employees, the Second Appellate District Court held that employees subject to on-call scheduling must be paid reporting time pay, even when the employee only has to make a short call to determine if they are needed, but does not physically report to work.

The case, Skylar Ward v. Tilly’s Inc., Case Number B280151, involved a putative class action complaint filed by Plaintiff Skylar Ward (Plaintiff), a former sales clerk in a Tilly’s store. In the complaint, Plaintiff alleged that Wage Order 7 mandated that nonexempt retail employees be paid “reporting time pay” if either “an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work” or “an employee is required to report to work a second time in any one workday and is furnished less than two (2) hours of work on the second reporting.” (Cal. Code Regs., tit. 8, § 11070, subd. (5).) Specifically, Plaintiff contended that Tilly’s scheduling policy required employees to call in while on-call, disciplined employees for late or missed call-ins, and made call-in and reporting mandatory. Thus, Plaintiff alleged that when on-call employees contact Tilly’s two hours before on-call shifts they are reporting for work within the meaning of the wage order, and thus are owed reporting time pay.

The trial court sustained the demurrer by defendant Tilly’s on the grounds that Plaintiff is not entitled to reporting time pay under the Wage Order because: (1) the phrase “report to work” means that an employee physically appears at the workplace, and; (2) that merely calling in to learn whether an employee will work a call-in shift does not trigger reporting time pay under Wage Order 7.

Time to reconsider California employee non-solicitation provisions

By Michele Haydel Gehrke and Michael Kleinmann on 13 February 2019 Posted in California, California Employment Beat, Employment & Labor (U.S.), Workplace Laws and Regulations

California has long been known as a state that bans post-employment non-compete and customer non-solicitation agreements for its employees, absent very limited exceptions related to the sale of a business and trade secret protection. Employee non-solicitation provisions were believed to be the last post-employment restrictive covenant that California law still generally allowed, assuming they were properly drafted. Now, because of two recent California court decisions, even inclusion of limited employee non-solicitation provisions needs to be reconsidered.

The legal landscape until November 2018

Within its Business and Professions Code, California has a specific legislative ban on provisions that restrain anyone from engaging in their lawful profession. In 2008, the California Supreme Court in Edwards v. Arthur Andersen LLP specifically held that post-employment non-compete and customer non-solicitation provisions were disallowed under California law regardless of their scope or reasonableness. Because of the California Supreme Court’s silence as to employee non-solicitation provisions, the legal consensus has largely been that California decisions pre-Edwards, which allowed limited employee non-solicitation provisions, were likely still good law. In particular, the 1985 California Court of Appeals decision Loral Corp. v. Moyes allowed a one year post-employment employee non-solicitation provision. Therefore, these provisions have remained staples of California employment agreements.

National Mediation Board proposes simplifying decertification under the Railway Labor Act

By Michele Haydel Gehrke and Garrett Parks on 13 February 2019 Posted in Employment & Labor (U.S.), Labor (U.S.), Labor Relations

On January 31, 2019, the three-member National Mediation Board (NMB), which oversees labor relations for the airline and railroad industries, published a proposed rule-making to simplify the process for workers covered by the Railway Labor Act (RLA) to decertify the unions representing them.

Currently, RLA-represented employees seeking to decertify a union must identify an individual willing to be personally named and represent the bargaining unit. After more than 50 percent of the unit’s members sign an authorization card that clearly states their desire to no longer be represented by the union, the named person is authorized to apply to the NMB to hold a representation election. Then, the NMB will hold an election with options to vote for (1) the current union representation, (2) the named individual, (3) a write-in candidate, or (4) “no union.” To decertify the incumbent union, the majority vote must be for either “no union” or the named individual – who would then disclaim interest in representing the bargaining unit.

New York Federal Court lays down the law: Employees cannot invoke NYCHRL’s broad protections when impact of discrimination is felt outside NYC

By Cindy Schmitt Minniti, Mark S. Goldstein and Leora Grushka on 12 February 2019 Posted in Discrimination, Employment & Labor (U.S.), New York Employment Beat, Workplace Laws and Regulations

In Amaya v. Ballyshear LLC, et al., a case before a New York Federal District Court, Nelly Amaya, a Long Island resident, alleged that her former employers engaged in unlawful discrimination and retaliation, in violation of the New York City Human Rights Law (NYCHRL). Amaya’s employers argued that Amaya failed to show that their alleged conduct had an “impact” on her within the confines of New York City. At the time of the alleged conduct, Amaya was employed as a housekeeper at Ballyshear, Michael Bloomberg’s Southampton, Long Island residence.

Despite the long-standing precedent that the protections of the NYCHRL are only afforded to those who inhabit or are “persons in” New York City, Amaya attempted to invoke the law’s broader protections by claiming that the following connections to city satisfied this requirement: (1) the decision to hire and fire her was made in New York City; (2) she attended several meetings in the corporate defendants’ New York City office; (3) supervisors in the New York City office interacted with her during the course of her employment; and (4) there was a possibility that she might work at other locations within New York City.

NLRB returns to more employer-friendly independent contractor test

By Michele Haydel Gehrke and Brian Morris on 4 February 2019 Posted in Employment, Employment & Labor (U.S.), Labor (U.S.), Labor Relations, Wage and Hour, Workplace Laws and Regulations

In a recent decision involving SuperShuttle drivers, the National Labor Relations Board (NLRB or Board) overruled a 2014 decision making it less likely a worker would be deemed an independent contractor, returning to the more employer-friendly common law test to determine independent contractor status.

In 2014, the Board purported to clarify the standard for evaluating whether a worker is an independent contractor (see FedEx Home Delivery, 361 NLRB 610 (2014)). In FedEx, the Board articulated a new factor in the contractor analysis – whether “putative independent contractor is … rendering services as part of an independent business” (Id.) In doing so, the Board diminished the significance of the putative contractor’s entrepreneurial opportunity in the independent contractor analysis by making it one aspect of the newly created “independent business” prong (Id. at 619).

Last week, the Board overruled FedEx and returned to the traditional common law test. SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019). Under that test, “entrepreneurial control, like employer control, is a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain” (Id. at *9). The Board held that the test articulated in FedEx “fundamentally shifted the independent contractor analysis … to one of economic realities, i.e., a test that greatly diminishes the significance of entrepreneurial opportunity and selectively overemphasizes the significance of ‘right to control’ factors relevant to perceived economic dependency” (Id. at *7-8).

Seventh Circuit limits ADEA’s scope, but beware state law

By Hannah L. Sorcic and Adam Weiner on 30 January 2019 Posted in Discrimination, Employment, Employment & Labor (U.S.), Labor (U.S.), Labor Relations, Workplace Laws and Regulations

The U.S. Court of Appeals for the Seventh Circuit recently reversed its prior decision and upheld an Illinois district court ruling that the federal Age Discrimination in Employment Act (ADEA) does not protect job applicants from disparate impact claims. But beware, as this seemingly apparent win for employers in Illinois, Indiana, and Wisconsin may drive employees to bring their claims under more forgiving state anti-discrimination laws, which often provide for greater damages.

Case background and decision

The plaintiff in Kleber v. CareFusion Corporation, No. 17-1206, 2019 WL 290241 (7th Cir. Jan. 25, 2019) was a 58-year-old attorney who applied for and was denied a general counsel position. The job posting sought an attorney with three to seven years of experience. CareFusion hired a 29-year-old attorney for the role. In his lawsuit, Kleber argued that CareFusion’s “cap” on experience effectively weeded out older applicants.

Initially, a three-judge Seventh Circuit panel found that the ADEA did apply to disparate impact claims by job seekers. But when the full Seventh Circuit reheard the case, it ruled 8–4 that Section 4(a)(2) of the ADEA covers only discrimination against current employees, meaning that non-employee job seekers cannot sue companies for so-called disparate impact claims alleging neutral practices that adversely affect older applicants, thus affirming the district court’s original finding. Comparing the text of various ADEA provisions, the full Seventh Circuit’s majority opinion concluded that Congress did not intend for the Act to cover applicants asserting disparate impact claims.

Importantly, the ruling does not limit an applicant’s ability to sue for intentional age discrimination, such as a potentially ageist comment by a recruiter or a job posting stating “applicants over 40 need not apply.”

The Seventh Circuit joins the Eleventh Circuit (covering Alabama, Florida, and Georgia), which issued a similar ruling in 2016.

San Francisco increases costs and requirements for employers in 2019

By Anne Cherry Barnett and Garrett Parks on 29 January 2019 Posted in California, California Employment Beat, Employment, Employment & Labor (U.S.), Labor (U.S.), Labor Relations, Wage and Hour, Workplace Laws and Regulations

San Francisco’s Office of Labor Standards Enforcement (OLSE) continues to raise the cost of doing business at the foot of the Golden Gate by requiring employers to provide some of the most generous benefits to employees in the United States. The OLSE has amended certain of its rules regarding employer obligations, and will begin enforcing these changes (adopted by San Francisco voters and the City’s Board of Supervisors) as of January 1, 2019. Below are some of the highlights employers should consider as they make their way in the new year:

Health Care Security Ordinance (HCSO) increases the minimum dollar amount employers must spend on health care on behalf of all covered employees (those who have been employed for more than 90 days and who regularly work at least eight hours per week in the City of San Francisco). As of 2019, San Francisco employers with 20–99 employees worldwide must spend $1.95 per hour, and those with 100 or more employees worldwide must spend $2.93 per hour. Businesses with less than 20 employees remain exempt from the HCSO.

The 2019 “Exemption Threshold” (minimum amount for managerial, supervisory, and confidential employees to be exempt from the HCSO) has increased to $48.46 per hour or $100,796 per year.