León Cosgrove

Articles in Category: Labor & Employment

EEOC Issues Report on a Decade of Fighting Systemic Discrimination in the Workplace

By: León Cosgrove LLC

People working in the officeSince instituting a program to combat systemic discrimination in the workplace in 2006, the U.S. Equal Employment Opportunity Commission (EEOC) reported last week that the program has achieved significant success over the past decade. The commission defined its success as a significant increase in the number of such matters investigated annually since 2011, and a dramatic increase in the number of cases resolved through conciliation without proceeding to litigation.

The EEOC defines “systemic discrimination” as an employer’s discriminatory pattern, practice or policy that has a broad impact on an industry, profession, company, or geographic location. Thus, by definition, systemic discrimination has a larger footprint than an alleged discriminatory practice affecting a single employee or a small group of plaintiffs.

In combating such alleged forms of widespread discrimination, the EEOC’s Systemic Task Force provides recommendations to the Commission and works to sharpen its national approach in the investigation, litigation and enforcement in systemic cases.

Investigations Up 250 Percent

In a statement about the systemic program’s success, EEOC Chair Jenny R. Yang explained that “EEOC has transformed its systemic program in the past decade by investing in staff, training, and technology to build systemic expertise in every EEOC district.” The result of the commission’s work is a 250 percent increase in systemic investigations in the past five years. Moreover, the EEOC noted in last week’s report that the conciliation success rate of systemic cases has tripled from 21 percent to 64 percent, yielding the commission a 94 percent success rate in systemic discrimination lawsuits.

“As a direct result of EEOC systemic investigations and lawsuits over the past decade, more than 70,000 workers have received jobs, wages, and benefits, and many more have benefited from positive changes in workplace practices,” Ms. Yang said.

Nevertheless, the report acknowledges that there are still barriers to eradicating systemic discrimination, including procedural challenges to class certification in class action lawsuit and employers’ mandatory arbitration policies. From the EEOC’s perspective, mandatory arbitration policies protect employers from public scrutiny with their private arbiters, weaken incentives to comply with the law, and prevent employees from learning about similar conduct toward co-workers, among other harmful effects. Further, the class certification standard set by Dukes v. Wal-Mart Stores, Inc. makes it more difficult for employees to form a certifiable class to defend themselves under federal statutes.

EEOC as the Alternative to Arbitration Clauses, Dukes Ruling

Nevertheless, the EEOC pointed out that it is not hampered by the same obstacles faced by employees seeking legal redress. That’s because the commission has the authority to “bring litigation regardless of arbitration bans on class actions and can seek relief for all employees affected by an employer’s discriminatory practices under a different standard than the procedural requirements for certification of private class actions.”

In fact, legal hurdles faced by employees have only intensified the EEOC’s focus on systemic workplace discrimination and spurred more aggressive investigation of broad-based employment discrimination cases. And in its report, the commission states that moving forward, the EEOC will focus on three key areas to defend against systemic discrimination: “1). executing national strategies to address persistent and emerging systemic issues; 2). advancing solutions that promote lasting opportunity in the workplace; and 3). strengthening the agency’s technology and infrastructure.”

 

JohnBosco_BW_WebJohn Bosco is a partner in the Dallas, Texas, office of León Cosgrove, LLC who focuses his practice on the defense and trial of complex labor and employment and accessibility matters in federal and state courts across the country.

New Overtime Exemption Rule: Friend or Foe?

By: León Cosgrove LLC

An office worker sits working in an empty office working overtime.On May 18, 2016, President Obama and Department of Labor (DOL) Secretary Perez announced the publication of the DOL’s final rule updating its overtime regulations. The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level defining an exempt employee (from $455 to $913 per week) will be effective on that date.

From its inception, the Fair Labor Standards Act gave most Americans the right to a minimum wage and time-and-a-half pay for more than 40 hours of work in a week. These rules apply to most hourly and salaried workers, but not to some white-collar workers whose salaries and duties exempt them from the overtime pay requirement. Nevertheless, the white-collar exemption salary level set in 2004 ($455 per week or $23,660 a year), meant that workers earning less than the poverty line for a family of four might still earn too much to qualify for overtime. Now, the new rule will entitle most salaried workers earning less than $913 a week ($47,476 a year) to overtime pay.


The Employer’s Conundrum

Increasing the number of overtime-eligible workers gives employers a choice: Employers can either increase their employees’ salaries to at least the new salary threshold, pay workers overtime for extra hours, or limit their employees to 40 hours per week.

If some employees are close to the threshold salary, $47,476 per year, employers will likely choose to increase these salaries to meet the new threshold, allowing these employees to remain exempt and ineligible for overtime premiums.

Employers might also convert employees to an hourly rate assuming a 40-hour work week. This is the easiest but most expensive option, as any hours above 40 will need to be paid at overtime premiums.

Another option is to convert the employees to an hourly rate based on an estimate of their average hours worked. This will likely be a popular option because it will allow employers to comply with the new guidelines while minimizing the cost of overtime.

While the impetus behind the new rule is to put more money in the middle-class worker’s pocket and improve work-life balance, employers in many industries will have to alter their staffing operations to ensure compliance.

 
RETAIL INDUSTRY:

Retail managers’ job roles naturally overlap with those of hourly employees, which is an essential aspect to serving in their capacities as managers. Now, managers and professionals who make more than the minimum can be declared exempt, but only if they meet certain conditions, such as having supervision of other workers as their primary duty.

Even with mandated overtime pay, many retail employees may not actually see a change in net pay. Instead, employers may decide to reduce workers’ hours and spread out responsibilities among part-time workers. Other workers may not see bigger paychecks if their base pay is cut to make up the difference.

 
RESTAURANT INDUSTRY:

Critics in the restaurant industry believe that the new regulations will limit employment and advancement opportunities in the restaurant industry. The “primary duty” test will now be used to figure out whether exemptions apply, and workers who fall under the executive, administrative or professional exemptions will not spend more than half their time on nonexempt tasks.

Since assistant managers in the restaurant and retail industries do much of the same tasks as the employees they oversee, restaurants and retailers may allot fewer hours to assistant managers and other similar positions in order to avoid having to pay higher overtime costs.

 
HOTEL INDUSTRY:

The range of job roles in any hotel makes the hospitality industry another hard-hit sector. While a hotel manager will likely be exempt, and a bellhop likely would not be, many hotel jobs are harder to classify. Executive employees might include assistant managers and supervisors within different hotel departments. But the rules make it hard to exempt employees in supervisory roles who spend much of their time performing similar work as non-exempt workers. Employers can reclassify hotel assistant managers and supervisors as non-exempt and eligible for overtime pay, and manage their hours to ensure they stay under forty.

 
HEALTHCARE INDUSTRY:

Hospitals typically employ a wide range of service workers, including cafeteria staff and gift shop managers. Most of these service workers are already hourly employees earning overtime, so the new regulations might not affect them significantly. Nevertheless, workers in management positions in those departments, such as cafeteria and gift shop managers, will be affected. Before the regulations, they might have been exempt and ineligible for overtime. Going forward, if they earn less than $50,000 annually, they won’t be exempt, regardless of their job responsibilities.

Employers will be subject to penalties if they misclassify employees. In the case of misclassification, the DOL can issue a finding of back wages. This would be done by calculating what the overtime pay should have been, plus an equal amount of the back wages as liquidated damages at 100% of the back wage amount. A claim might arise through private litigation by an impacted employee on an individual or a collective basis, pursuing back wages and overtime for themselves and for similarly situated persons. Plaintiff employees can recover liquidated damages at 100% and back wages that are owed, as well as attorney’s fees.

 
PROTECTING WORKPLACE ADVANCEMENT AND OPPORTUNITY ACT

Employers and small-businesses opposed to the new regulations might breathe a sigh of relief if the Protecting Workplace Advancement and Opportunity Act is passed by Congress. With Congressional action, the bill would nullify the new DOL regulations. The bill’s sponsor, Senator Tim Scott of South Carolina, called the DOL’s overtime proposal “irresponsible.”

The legislation would not ban the DOL from enacting a new overtime rule, but seeks to restrict the Department from changing overtime rules without considering the economic impact. The Protecting Workplace Advancement and Opportunity Act would require that any changes to the duties tests be made available for public review and comment before being made into law, and would also prohibit automatic annual increases that are intended to rise with inflation.

In addition, courts may scrutinize DOL regulations that change the agencies previous positions. A recent U.S. Supreme Court decision found that the DOL failed to properly explain the reasons behind its rule that car dealership service advisers should qualify for overtime. See Encino Motorcars LLC v. Hector Navarro et al., Case No. 15-415, Supreme Court of the United States.

The justices voted 6-2 to vacate the Ninth Circuit’s March 2015 decision (that had been challenged by California car dealership Encino Motorcars LLC) that service advisers—workers at car dealerships who speak with customers about the work on their vehicles—should be eligible to receive overtime compensation.

Led by Justice Anthony Kennedy, the majority ordered the Ninth Circuit to reconsider the issue without giving weight to regulations finalized by the DOL in 2011 that service advisers were not exempt from overtime pay. Indeed, the justices stated that given decades of industry reliance on the DOL’s prior policy that service advisers were exempt, the agency’s explanation for changing its position needed further explanation.

 
TIME TO IMPLEMENT CHANGES:

In the meantime, with less than 200 days until the proposed start-date, employers should:

• consider changes to staffing or salary levels;

• analyze staffing patterns to eliminate unnecessary hours;

• prepare budgets to account for increased overtime expenditures;

• closely monitor and manage hours worked to minimize overtime exposure; and

• hire additional workers to minimize overtime expenses.

 
Being proactive will not only minimize your litigation risk, but will foster employee goodwill and a more productive work environment.

 

JohnBosco_BW_WebJohn Bosco is a partner in the Dallas, Texas, office of León Cosgrove, LLC who focuses his practice on the defense and trial of complex labor and employment and accessibility matters in federal and state courts across the country.

 

Final EEOC Rules Issued on Employer Wellness Programs

By: León Cosgrove LLC

healthform-crop-600x338The U.S. Equal Employment Opportunity Commission (EEOC) recently published final rules regarding the collection and use of health information from employees participating in company wellness programs. Amending the original regulations for implementing Title II of GINA and Title I of the ADA, the rules outline the extent to which employer-sponsored wellness programs that offer incentives for participation are legal under the ADA and GINA. The rules also outline non-participation penalties that are illegal under the law because they make wellness program participation “involuntary.”

These final rules apply to all workplace wellness programs that make medical inquiries and conduct medical exams, including those in which employees or their family members may participate without also enrolling in a particular health
plan. The rules go into effect on or after January 1, 2017– the first day of the new plan year.


Genetic Information Nondiscrimination Act (GINA)

The new rules revise the EEOC’s regulations implementing Title II of GINA, which protects workers from certain employment actions based on their genetic information, including the health status of their family. The revised GINA II regulations allow employers offering certain wellness programs to provide some financial and other incentives in exchange for an employee’s spouse providing health information, as long as that information isn’t used to discriminate against an employee.


American with Disabilities Act (ADA)

Likewise, the EEOC’s regulations for implementing Title I of the ADA were revised to allow employers to offer incentives for wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations. “The commission worked to harmonize [the Health Insurance Portability and Accountability Act’s] goal of allowing incentives to encourage participation in wellness programs with ADA and GINA provisions that require that participation in certain types of wellness programs is voluntary,” EEOC Chair Jenny R. Yang said in a statement.  “These rules make clear that the ADA and GINA provide important safeguards to employees to protect against discrimination.”

 

Voluntary

According to the EEOC rules, a health/wellness program that includes medical inquiries and exams is voluntary if it:

• does not require participation;

• does not deny access to health insurance or benefits to an employee for non-participation;

• does not retaliate against, interfere with, coerce, intimidate, or threaten any employee who does not participate or fails to achieve certain health outcomes;

• provides a notice that explains the medical information that will be obtained, how it will be used, who will receive it, and the restrictions on disclosure; and complies with the rules’ incentive limits.

 

Incentives

The rules on incentive limits are:

• 30% of the total cost of the self-only version of the plan in which the employee is enrolled — when the employer requires the employee to be enrolled in a particular health plan in order to participate in the wellness program;

• 30% of the lowest-cost major medical self-only plan the employer offers — when the employer offers more than one self-only health plan and does not require the employee to be enrolled in a particular health plan to participate in the wellness program; and

• 30% of the total cost to a 40-year-old non-smoker purchasing self-only coverage under the second-lowest-cost silver plan available on the state or federal exchange in the location that the employer identifies as its principal place of business — when the employer does not offer a health plan, but offers a wellness program that is open to employees.


Promote Health or Prevent Disease

For a health/wellness program to be reasonably designed to promote health or prevent disease, it must:

• have a reasonable chance of improving the health of, or preventing disease in, participating individuals;

not be overly burdensome, a subterfuge for violating the ADA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease;

not exist merely to shift costs to employees based on their health;

not be used only to predict an employer’s future health costs;

• use the health information collected from participants to provide follow-up information or advice to those participants or design a program that addresses at least some conditions identified; and

not impose unreasonably intrusive procedures, an overly burdensome commitment of time for participation, or significant costs related to medical exams, on employees.

 

Notice & Confidentiality

A new notice requirement has been added that requires employers to provide notice that clearly explains what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure.

The rules require that the all employee health information that employers receive be collected by a wellness program in an aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals, except as necessary to administer the plan. Employers may not require an employee to agree to the sale, exchange, transfer, or other disclosure of medical information or to waive confidentiality protections under the ADA in exchange for an incentive or as a condition for participating in a wellness program, except to the extent permitted by the ADA to carry out specific activities related to the wellness program. Interpretive guidance includes the following best practices for ensuring confidentiality: adopting and communicating clear policies; training employees who handle confidential information; encrypting health information; and providing prompt notification to employees and their family members if any breaches occur.

 

JohnBosco_BW_WebJohn Bosco is a partner in the Dallas, Texas, office of León Cosgrove, LLC who focuses his practice on the defense and trial of complex labor and employment and accessibility matters in federal and state courts across the country.

Web Accessibility: Why Many Entities Are Only a Click Away From Litigation

By: León Cosgrove LLC

Symbol RollstuhlWhen the Americans with Disabilities Act (ADA) was enacted on July 26, 1990, the Internet was in its nascent stage, and e-commerce, online banking, and mobile applications were unheard of. Unsurprisingly, the ADA and its original implementing regulations lacked specific guidance regarding accessibility for websites and mobile applications. While guidelines have been proposed, technical accessibility standards have not yet been adopted.1

Nevertheless, because the Internet is the primary point of access to goods and services for many people with disabilities—specifically, the blind, deaf, and mobility impaired—online accessibility has already become a major focus for the Department of Justice (DOJ), advocacy groups, and individual litigants. Hundreds of entities have recently been confronted with the expense and disruption of enforcement agency investigations and/or litigation regarding the failure to provide accessible websites and mobile applications. For both private and public entities doing business in the United States, the time to address digital accessibility is now.


Recent Enforcement and Litigation Trends

Despite the lack of published regulations, the DOJ has emphasized the immediate need for accessible electronic and information technology—including websites—for the blind and visually impaired.2 As early as July 2010, the DOJ announced in an Advance Notice of Proposed Rulemaking (ANPRM) that it would issue new regulations under Title III of the ADA to address the accessibility of websites.

On June 25, 2015, the DOJ filed Statements of Interest in two lawsuits brought by deaf advocacy organizations alleging two universities had failed to caption videos posted to their websites. Notably, the DOJ posited that the obligation to make websites accessible exists right now, even in the absence of any new regulations. Indeed, the DOJ explained that when it issued the ANPRM, it was seeking “to explore whether rulemaking would be helpful in providing guidance as to how covered entities could meet preexisting obligations to make their websites accessible.” 3

This pronouncement follows a myriad of settlement agreements and consent decrees whereby the DOJ has required businesses and government entities to make their websites and mobile applications conform to a developed accessibility standard—the Web Content Accessibility Guidelines (WCAG) version 2.0, level AA.4 Many of these agreements additionally require the entity to appoint an ADA coordinator, implement complaint procedures, and train staff members in accessible features.

Federal courts have further endorsed the DOJ’s interpretation of the ADA in the context of web accessibility. See, e.g., Nat’l Fed’n of the Blind v. Scribd Inc., 97 F. Supp. 3d 565 (D. Vt. 2015) (denying defendant’s motion to dismiss and finding the digital library’s website and mobile applications were places of public accommodation); Nat’l Ass’n of the Deaf v. Netflix, Inc., 869 F. Supp. 2d 196, 202 (D. Mass. 2012) (finding a “web site is a place of public accommodation”); Nat’l Fed. of the Blind v. Target Corp., 452 F. Supp. 2d 946, 956 (N.D. Cal 2006) (holding “to the extent that plaintiffs allege that the inaccessibility of Target.com impedes the full and equal enjoyment of goods and services offered in Target stores, the plaintiffs state a claim, and the motion to dismiss is denied”).

This endorsement has led to a spike in lawsuits alleging barriers to access brought on behalf of both private litigants and associational plaintiffs that can expose a business to penalties, damages, and substantial legal fees. Indeed, plaintiffs have filed more than 30 lawsuits within the past two months in federal Courts across the country.5


Best Practices for Enhancing Accessibility and Avoiding Litigation

For companies looking to explore this emerging issue, assess their exposure, and minimize the risk of expensive DOJ investigations and burdensome litigation, there are concrete steps to take.  First, websites should be audited—under the protection of privilege—for compliance with WCAG 2.0 Level AA standards. The retention of outside legal counsel at the outset of this process will help protect the reports and findings generated as privileged. Second, website accessibility policies, and procedures to assist in their implementation, should be drafted and adopted.  Third, necessary staff should be trained in these policies, practices, and procedures, as well as how to respond to customers’ accessibility concerns.

One of the most effective ways to reduce the risk of an ADA lawsuit is to ensure that customer service outlets are available—and able—to assist customers who encounter difficulty utilizing your website and to respond to customers’ accessibility concerns. Finally, accessibility should be integrated into a company’s infrastructure and decision-making processes.  Vendors should be selected with an eye towards their ability to provide support for accessibility issues and legal compliance. Being proactive will not only minimize your litigation risk, but will widen your customer base to include the substantial number of disabled individuals who rely on websites and digital applications to purchase goods and services.

 

JohnBosco_BW_WebJohn Bosco is a partner in the Dallas, Texas office of León Cosgrove, LLC who focuses his practice on the defense and trial of complex labor and employment and accessibility matters in federal and state courts across the country.

The author gratefully acknowledges the assistance of León Cosgrove Miami associate Tiffany L. Anderson in the preparing this article.

 

Footnotes

[1] The standards are expected to be adopted in April 2016. See http://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201504&RIN=1190-AA61.

2 See, e.g., New v. Lucky Brand Dungarees Stores, Inc., Statement of Interest of the United States, Case No. 14-CV-20574 (S.D. Fla.) (“[T]he Department has long considered websites to be covered by title III despite the fact that there are no specific technical requirements for websites currently in the regulation or ADA Standards.”).

3 See Nat’l Ass’n of the Deaf v. M.I.T., Statement of Interest of the United States, Case No. 3:15-cv-300024 (D. Mass.).

4 See, e.g., Settlement Agreement between the U.S. and edX Inc., available at http://www.ada.gov/edx_sa.htm; Settlement Agreement between the U.S. and Ahold U.S.A., Inc. and Peapod, LLC, available at http://www.justice.gov/file/163956/download; Settlement Agreement between the U.S. and the National Museum of Crime and Punishment, available at http://www.justice.gov/file/317596/download; Settlement Agreement between the U.S. and Carnival Corporation, available at http://www.ada.gov/carnival/carnival_sa.html.

5 See, e.g., Guimaraes v. Nat’l Collegiate Athletic Ass’n, Case No. 15-CV-13378 (D. Mass.); Gross et al. v. Ascena Retail Grp., Case No. 15-CV-01214 (W.D. Penn.); Parrish v. Sears Holdings Corp., Case No. 15-CV-05622 (W.D. Wash.); Sipe v. Huntington Nat’l Bank, Case No. 15-CV-01083 (W.D. Penn.); Sipe v. Toys R Us, Inc., Case No. 15-CV-01037 (W.D. Penn.); Jahoda v. Foot Locker, Inc., Case No. 15-CV-1000 (W.D. Penn.); Jahoda v. Brooks Brothers, Inc., Case No. 15-CV-1050 (W.D. Penn.); Jahoda v. The Pep Boys, Case No. 15-CV-1124 (W.D. Penn.); Jahoda v. Hard Rock Café Int’l, Inc., Case No. 15-CV-1123 (W.D. Penn.); Nguyen v. RedBox Automated Retail, LLC, Case No. 15-CV-03100 (E.D. Penn.).

 

Employers Concerned about Proposed Expansion of EEO-1 Reporting

By: León Cosgrove LLC

imagesRecently, the U.S. Equal Employment Opportunity Commission (EEOC) made public a proposed revision to the annual Employer Information Report (EEO-1) that would require employers with 100 or more employees to collect and report to the EEOC workers’ pay ranges and hours worked. In its news release, the EEOC said collecting the additional data “will assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.”

Many employers fear that the new pay and hours reporting requirements will vastly increase the burden of EEO-1 reporting, which already requires data on employees’ race, ethnicity, sex, and job category. Among employers’ most pressing concerns are that the aggregate data collected will, in fact, be useless and even misleading for the EEOC’s stated purpose of gaining “insight into pay disparities across industries and occupations and strengthening federal efforts to combat discrimination.”

Under the Paperwork Reduction Act (PRA), the EEOC is seeking three-year approval of the revised EEO-1 from the Office of Management and Budget (OMB). 44 U.S. Code § 3501 requires the OMB to consider “whether the data request is the least burdensome possible and whether the information shall have practical utility.”

If approved by the OMB, the proposed revisions to the EEO-1, available on the Federal Register’s website, would take effect with the September 2017 reporting period.

The EEOC took public comments from February 1st to April 1st, and also heard testimony on the pending changes at a March 16th public meeting. Among those at the public hearing criticizing aspects of the proposed changes were representatives of the U.S. Chamber of Commerce, the Society for Human Resource Management, the National Association of Manufacturers, and the National Federation of Independent Business.

In general, critics argued at the March 16th hearing that the revised EEO-1 fails OMB’s Paperwork Reduction Act test that the changes proposed be “the least burdensome,” and provide “practical utility.” Detailed criticisms of the expanded EEO-1 reporting proposal falls into several categories, including: problems with collecting and reporting aggregate pay data from employees’ W-2s; the difficulty of collecting and reporting hours worked data for exempt employees whose work hours are not tracked because they are salaried; concerns about the identifiability of private employee pay data; and concerns about the EEOC’s potential misuse of data that will be chilling and costly for employers.

Indeed, the National Federation of Independent Business (NFIB) has claimed that the “expanded form would contain over 3,500 data cells. Every employer covered by the report will need to spend significant time and money figuring what and how to report . . . While NFIB and its members are committed to supporting workplaces that are free from discrimination, we do not believe that the additional reporting burden imposed on employers will identify illegitimate discriminatory pay practices. Instead, we are concerned that the revised EE0-1 will put more employers at risk of investigations and lawsuits over legal disparities in pay in addition to exponentially increasing employers’ reporting burden.”

The U.S. Chamber of Commerce similarly found that “[t]he impact of the new EEO-1 report would be substantial, both in the millions of hours that private employers would be required to spend completing the new report and in the false results that may be generated. . . . In practice, it would impose enormous burdens and risks on employers who base complex compensation decisions on factors other than membership in a particular EEO-1 (protected) category . . .

“The EEOC is requiring the combining of completely dissimilar jobs to determine if there is pay discrimination. For instance, the proposed revised forms will require a reporting hospital to combine lawyers, doctors, nurses and dieticians—all grouped as ‘professionals’—to somehow determine whether there are pay disparities based on gender, race or ethnicity. No law permits comparisons of such diverse workers to prove discrimination.”

According to the Society for Human Resource Management, “each EEO-1 job category includes a wide range of job titles, for which vastly different rates of pay are provided based on a variety of legitimate, nondiscriminatory factors. It goes without saying that the pay for each of these positions, even though they are within the same broad EEO-1 job category, varies significantly because these individuals perform very different work. However, there is no way for the EEOC to understand this legitimate reason for pay differences within this job category under the proposed data collection.”

While salary variances may be completely legitimate, the new reporting requirements are likely to lead to an increase in EEOC investigations. Accordingly, employers should be proactive in addressing pay disparities and regularly auditing pay practices to minimize the risk of an EEOC enforcement action.

 

JohnBosco_BW_WebJohn D. Bosco is a partner in the Dallas, Texas, office of León Cosgrove LLC who focuses his practice on the defense and trial of complex labor & employment and accessibility matters in state and federal courts across the country. Jbosco@leoncosgrove.com

Employer Lessons Gleaned From the EEOC’s 2015 Enforcement Data

By: León Cosgrove LLC

Employer Lessons Gleaned From the EEOC’s 2015 Enforcement DataBy John D. Bosco

The United States Equal Employment Opportunity Commission (EEOC) recently released detailed breakdowns of the 89,385 charges of workplace discrimination that the agency received in federal FY 2015. While the annual number of charges had steadily declined since peak year 2011—when 99,947 were filed—charges are again on the rise.

The EEOC’s litigation and enforcement statistics provide insight into the types of discrimination claims employees are filing and where the Commission is allocating its resources.
Specifically, in 2015:

  • 44.5% of the claims filed alleged employer retaliation.

 

  • Retaliation charges increased by nearly 5% from the previous year and continue to be the leading complaint raised by employees.

 

  • Claims of disability discrimination also reached a record high in 2015. A total of 26,968 such claims were filed, representing 30.2% of total charges.

 

The EEOC also increased the number of merits lawsuits it filed in 2015, most of which alleged violations of Title VII of the Civil Rights Act of 1964, followed by suits alleging violations of the Americans with Disabilities Act. Of the 142 lawsuits, 42 involved multiple claimants. This demonstrates the Commission’s focus on systemic discrimination, which it defines as discrimination involving “a pattern or practice, policy, or class case where the alleged discrimination has a broad impact on an industry, profession, company or geographic area.”

In total, the EEOC secured $356.6 million for charging parties through voluntary resolutions (mediation, conciliation, and settlements), $65.3 million through litigation, and $105.7 million for federal employees and applicants.
Employer Takeaways: How Can You Limit Legal Exposure?

While employers should continue to evaluate their policies and identify vulnerabilities in the areas discussed above, the following best practices can help minimize an employer’s litigation risk:

Revise Your Handbook: Make sure your handbook includes a discrimination and harassment prevention policy with strong anti-retaliation language and an easy to follow complaint procedure. Employers who fail to adopt such internal processes will see higher incidences of EEOC charges.

Train Management: While all employees should be well-trained in proper complaint procedures, this is especially important for management. Train early and often and ensure that management understands your company’s anti-discrimination and anti-harassment policies.

Promptly Address and Investigate Complaints: Employees often complain to their employers prior to filing an EEOC charge. When they do, listen and promptly investigate, and avoid any action that could be considered retaliatory. Nearly half of all charges filed in 2015 included a retaliation allegation. These claims can be viable even if the initial complaint lacks merit, and are generally more believable—and thus harder to defend—if a jury ultimately hears the case.

For additional information or to discuss minimizing your company’s risk of an EEOC enforcement action, contact John Bosco at jbosco@leoncosgrove.com.

 

JohnBosco_BW_WebJohn D. Bosco is a partner in the Dallas, Texas, office of León Cosgrove LLC who focuses his practice on the defense and trial of complex labor & employment and accessibility matters in state and federal courts across the country.

Does dismissal of the EEOC’s Flambeau lawsuit allow employers to tie company health insurance to employee participation in wellness programs?

By: León Cosgrove LLC

employment

In late 2015, U.S. District Court Judge Barbara B. Crabb granted summary judgment to Flambeau Inc., a manufacturing firm in Baraboo, Wis., that required employees who wanted company health insurance coverage to participate in the company’s wellness program.

Flambeau, which manufactures and sells plastic products, first offered its wellness program in 2011 with an additional benefit of a $600 credit to any participating worker.  But by 2012, the company required any employee who wanted to obtain health insurance to fulfill the requirements of its wellness program, which included a health risk assessment and a biometric test, similar to a routine physical.

A worker refused to complete the requirements and was dropped from insurance coverage. The Equal Employment Opportunity Commission filed suit on his behalf. A recent article in Human Resource Executive Online discussed the ramifications for employers and their HR departments of the court’s summary dismissal of the EEOC’s Flambeau lawsuit.

León Cosgrove LLC is advising several clients on the employment implications of adopting various wellness programs as the law evolves in this area.  In spite of the favorable ruling for the employer in EEOC v. Flambeau, Inc., 2015 U.S. Dist. LEXIS 173482 (W.D. Wis. Dec. 30, 2015), employers should be aware that the EEOC is unlikely to reverse its current position on wellness programs reflected in its April 2015 proposed regulations.  While not currently binding, once finalized, these regulations will likely be viewed as more restrictive than the case law interpretation.  Accordingly, a prudent employer may want to comply with the EEOC’s interpretation to avoid a potential challenge.

Alternatively, if an employer elects to rely on the ADA’s “safe harbor” exemption, described in the Seff v. Broward County, 778 F. Supp. 2d 1370 (S.D. Fla. 2011), aff’d, 691 F.3d 1221 (11th Cir. 2012), and Flambeau cases,  it should be prepared for a challenge, particularly if the wellness program imposes a severe penalty for noncompliance, such as a requirement that the employee pay the entire cost of plan coverage.  An employer willing to accept this risk should ensure that its wellness program strictly complies with the requirements of the “safe harbor” exemption.

 

JohnBosco_BW_WebJohn D. Bosco is a partner in the Dallas, Texas, office of León Cosgrove LLC who focuses his practice on the defense and trial of complex labor & employment and accessibility matters in state and federal courts across the country.

Bring Your Own Device to Work: Balancing Data Protection, Employee Privacy, and Litigation Risks

By: León Cosgrove LLC

byod_(1)

According to a recent article in Fast Company magazine, 60 percent of respondents said their companies already have a “Bring Your Own Device (BYOD)” policy, and another 14 percent said their employers are developing one.  Fast Company also published a prediction by Gartner research that half of all employers would require staff to use their own devices for work by 2017.

The BYOD phenomenon started more than a decade ago with young recruits wanting to use their personal tablets, then smartphones, in the workplace, and employers acquiescing in order to compete for young talent.  Today, tech-savvy employees are also pushing their companies to implement online training and benefits enrollment that are accessible on workers’ personal devices.

Proprietary & Privacy Issues in Data Ownership

Once personal technology entered the workplace, it didn’t take long for legal challenges to emerge from the inevitable use of personal devices for a mix of business and personal purposes. “Data spillage” from the company’s secure network—as well as unsecured new pathways for unauthorized access to that network, became major, new risks.  Deliberate theft—proprietary data like customer lists and sales leads walking out the door with departing employees—became another challenge.  Employers have legitimate unfair competition concerns in such a scenario, especially when the departing employee goes to work for a competitor. In still another scenario, companies risk having their data accidentally lost or misplaced when an employee loses a mixed-use tablet or smartphone.

From the employee side of the equation, data privacy is the issue when employers want to monitor or remove data on the worker’s own personal device. Clearly, employees own the data on any device with a wireless/Internet plan they have paid for that is used solely for private, non-work purposes. However, exclusively personal use is rare in an environment where employee tablets and smartphones are brought to the office and/or used to work from home. And once the employee brings a personal device into the workplace, uses an employer’s wireless Internet connection, and starts doing work on that device instead of using the employer’s equipment, data ownership issues become legally complex.

The BYOD Policy: Top Legal Issues

Privacy: Monitoring privately-owned devices presents significant dilemmas for structuring a BYOD policy. If the company monitors too often or too much data, it can be seen as invading employee privacy–and in some jurisdictions, even as breaking the law. Yet if the company does not exercise enough control, it places the company’s data at a huge risk. Balancing these two seemingly opposing interests is the single greatest challenge to successfully implementing a BYOD program, and it is the role of legal counsel and the in-house legal department to make sure implementation is carried out within the law, transparently, and without exposing the company to unnecessary legal risk.

Off-The-Clock Work: Providing a non-exempt employee with a mobile device on which she can check work-related email or exchange text messages with supervisors invites a wage and hour enforcement action because many employees will perform these tasks away from the workplace and after their regular working hours. To avoid liability, employers must instruct non-exempt employees not to check or respond to messages after their regular work hours.

Security/Data Protection: Companies are concerned about security, keeping confidential data from falling into a competitor’s hands, and preventing customers’ account numbers and their personal and financial information from being stolen by hackers. Businesses that fall under compliance mandates such as the Payment Card Industry Data Security Standard (PCI DSS), Health Insurance Portability and Accountability Act (HIPAA), or Gramm-Leach-Bliley Act (GLBA) have certain requirements related to information security and safeguarding specific data. These compliance mandates extend to company-owned data on the personal laptop of an employee.

Litigation/Legal Holds: If a company becomes the subject of a lawsuit, work-related items on employee-owned devices will have to be preserved for discovery purposes. Failure to do so can bring stiff spoilage sanctions. One example of this came in January 2014 when the U.S. District Court for the Southern District of Illinois slapped pharmaceutical manufacturer Boehringer Ingelheim with a $900,000-plus fine, in part, because the company did not tell its employees to save work-related text messages on their personal phones.

Consent: A BYOD policy should explicitly obtain the employee’s consent to review the content on the employee’s personal device.  Failure to obtain an employee’s consent can result in liability under privacy tort law, federal and state computer trespass statutes, and state wiretap statutes. Furthermore, notification and consent—especially regarding any new or different employer monitoring of the employee device that may not otherwise be detectible by the employee–can only empower the company to update, and if necessary, expand necessary controls to counter any new technology-based threats, for example, from hackers.  Employer transparency on the details of monitoring, including any new software to be installed on personal devices, protects the employer-employee relationship, prevents the impression of deception or secrecy on the part of the employer, and reduces the risk of privacy-related litigation.

Specific Elements of the BYOD Policy

The only way an employer can assert a legal right to monitor activity on an employee’s personal device that is used for mixed purposes is to develop, and have employees execute, a BYOD workplace policy.  BYOD policies should include a definition of acceptable use, describing: the purposes for which the device may be used to collect, communicate, and store company data; any restrictions on network access or software applications; security measures that the company will use to secure any business data on the device; when any company monitoring of the device can occur and how the company will access the employee’s device; informed employee consent allowing an employer to access, back up, audit, and monitor the device and the various types of data on it; device-loss and data-loss policies, including any related obligations of the employee; ownership of the device and its service contract; and finally, management of the device, including the data and business software on it upon termination of employment.

To safeguard the company network and protect customer and proprietary data, IT departments may want the power to “enter” and wipe data on employee devices at any time. However, extrapolating from the court’s reasoning in City of Ontario, California v. Quon, employees have a reasonable expectation of privacy for devices they personally own. In the BYOD arena, this means that employees must be informed of, and consent to all employer “passive” or “background” security access to their devices.

Workers must be told exactly what user activity is being tracked and how that information will be used and stored by the company. Any planned location tracking of the device must also be revealed, including who will have access to that data and why. Transparency and consent should be the employer’s rules of thumb. If any new software is to be installed changing the breadth, scope, or frequency of employee device monitoring, the company should provide specific notice and revise its BYOD policy accordingly. The change should be explained in detail, and employees should be asked to acknowledge that they understand the change and that they give their specific consent.


Conclusion: BYOD at Your Own Risk

An employee’s use of a personal device for work purposes, while convenient, comes with many risks and obligations for both employers and employees. As the legal landscape continues to evolve, prudent employers should ensure that they have a sound BYOD policy to address privacy concerns, wage and hour liability, and security risks.


JohnBosco_BW_WebJohn D. Bosco
is a partner in the Dallas, Texas, office of León Cosgrove LLC who focuses his practice on the defense and trial of complex labor & employment and accessibility matters in state and federal courts across the country.

The author gratefully acknowledges the assistance of León Cosgrove Miami associate Tiffany L. Anderson in preparing this article.