Kullman Firm Newsletter

HIGH STAKES AT THE HIGH COURT: HERE’S THE LOWDOWN!

The new 2017 term of the United States Supreme Court convened on October 2, 2017. That same day, the Court heard argument in three consolidated cases addressing whether class and collective action waivers are prohibited by the National Labor Relations Act’s right to engage in “concerted activities” for “mutual aid or protection.” In two of those cases, the appellate courts (the Seventh and Ninth Circuits, whose rulings apply to employers in Illinois, Indiana, Wisconsin, California, Arizona, Nevada, Alaska, Idaho, Montana, Oregon, Washington, and Hawaii) sided with the National Labor Relations Board, finding that class action waivers are illegal under the NLRA. In the third case, the Fifth Circuit (whose rulings apply to employers in Mississippi, Louisiana, and Texas) reasserted its rejection of the NLRB’s position, finding that mandatory class waivers do not violate workers’ rights to engage in concerted activity under the NLRA. The Court’s ruling is anticipated late this year.

The High Court also recently agreed to hear argument in two other cases of interest to employers. In the first, the Court is poised to finally decide whether public employees who are not members of a union can legally be required to pay fees related to the union’s contract administration and collective bargaining or whether deducting such fees constitutes a violation of the employee’s First Amendment rights. A ruling in favor of the public employees could deal a potentially devastating financial blow to unions.

The other case questions whether service advisors at automobile dealerships are subject to the overtime provisions in the Fair Labor Standards Act or are exempt as salesmen. Oral arguments on these issues are expected to take place in early 2018, with rulings issued before the Court adjourns in June.

We will update you as decisions are rendered, so be on the lookout!

ICE TO INCREASE I-9 AUDITS BY FOUR TO FIVE TIMES CURRENT LEVELS

On October 17, 2017 the Acting Director of Immigration and Customs Enforcement (“ICE”), Thomas Homan, said that he had given instructions to ramp up immigration enforcement at workplaces by four to five times the current levels. According to Mr. Homan, ICE will “significantly increase” the number of worksite inspections where agents review an employer’s Form I-9s. After Acting Director Homan’s remarks, ICE released a statement confirming that ICE had been directed to begin conducting more I-9 audits.

Employers should heed this warning and make sure that their Form I-9s are in audit-ready condition. If an I-9 audit has not been done in the past year, it should be done now. In addition, corrections should be made to any Form I-9s with errors, and written Form I-9 Policies and Procedures should be in place. If a Form I-9 audit indicates a high error rate, I-9 training should be conducted. Also, if you are using an electronic Form I-9 system to complete and/or store your Form I-9s, be sure that it is compliant with federal regulations.  Fines for improper Form I-9s can be as high as $2,156 per form.

EMPLOYERS’ RELIANCE ON AN APPLICANT’S PAST PAY HISTORY – IS IT SOON TO BE A THING OF THE PAST?

States and cities across the country are enacting laws barring employers from asking job applicants about their salary histories and from relying on such histories in determining whether to make the applicant an employment offer. The thought is that the status quo perpetuates wage gaps between women and men as employees change jobs, which could lead to violations of the Equal Pay Act, a long-standing law that requires the payment of same wages for same work.

Puerto Rico, Oregon, and New York City have implemented such bans, with similar laws set to soon take effect in Massachusetts, Delaware, California, and San Francisco. The laws in these locations vary, with some allowing employers to consider salary history if it is voluntarily provided by the applicant and others allowing employers to confirm wages once they are voluntarily divulged by the applicant. Because of these variances, employers should be conscientious of the applicable state and local laws so as to avoid any potential penalties, which in New York City can reach $250,000 for intentional violations.

If you are impacted by such a ban, we offer a few important tips to assist you in avoiding potential risk. First, review your hiring documents, including employment applications, to ensure that they do not seek past pay information. Also, make sure that your employees responsible for hiring and conducting interviews are aware of the applicable laws. Third, be sure that any background checks you (or a third-party on your behalf) perform do not include pay histories. You are also well-advised to review your job advertisement postings to ensure compliance and to update your employee handbooks to include any necessary modifications to your equal pay and anti-discrimination provisions.

TRANSGENDER PROFESSOR’S SUIT SURVIVES SUMMARY JUDGMENT

After being sued by a transgender professor, Southeastern Oklahoma State University filed a motion for summary judgment, seeking dismissal of the plaintiff’s claims. The school argued that the plaintiff’s hostile work environment claims should be dismissed because the professor did not file an internal complaint regarding the harassment she allegedly faced, which purportedly included school officials referring to her by the wrong pronoun. The court rejected the university’s argument, reasoning that the school’s policies did not address transgender discrimination.

This case serves as an important reminder – employers should regularly review their handbooks, including their discrimination, harassment, and retaliation policies, to ensure that they are updated in accordance with any applicable statutes, regulations, and judicial and administrative opinions.

DISCLOSURE OF EMPLOYEE PERSONAL INFORMATION – A REMINDER

When faced with a public agency’s request for information, employers are encouraged to be mindful the extent to which the government agency will effectively safeguard private information and how the employee will perceive the employer’s disclosure (albeit, involuntary) of their personal information. To that end, employers who receive a request for employees’ private information, whether it be by way of a subpoena or a discovery request in litigation, should consider negotiating a protective order requiring the recipient (and potentially others) to safeguard the provided information. Further, to the extent that a request for information is overly broad, employers should consider a proper objection to the production, which could potentially pare down the scope of the requested information.

By putting up some resistance to requests for private information, an employer may not only gain goodwill with its employees, but it may also prevent or minimize the potential for unauthorized use and identity theft.

“WHITE COLLAR” FLSA EXEMPTION CHANGES ARE STILL DEAD, SO WHAT IS THE DOL APPEALING?

As previously reported, last year a Texas federal court granted a nationwide preliminary injunction enjoining the Department of Labor from implementing and enforcing the new rule that would have significantly increased the minimum salary required for workers classified as exempt from overtime under the white collar exemptions. The Texas federal court then granted summary judgment in favor of the Plano Chamber of Commerce and more than 55 other business groups who challenged the proposed rule. As noted, in its opinion, the Texas federal court reasoned that the “significant increase” from $455 weekly to $913 weekly would essentially render meaningless the duties/functions/tasks test that Congress intended to be used in analyzing whether an employee is exempt. The Texas federal court thus concluded that the proposed rule was invalid.

Thereafter, the Department of Labor informed the Fifth Circuit Court of Appeals that it no longer wanted to pursue the appeal of the injunction, and the appeal was ultimately dismissed.  However, the Department of Labor has now appealed the Texas federal court’s ruling on summary judgment. While it appeared clear that the court’s ruling did not hold the Department of Labor did not have the authority to set a minimum salary requirement at all, just that it could not set it so high that it effectively rendered the other requirements for the exemption to apply meaningless, apparently the Department of Labor is concerned the ruling could be misconstrued to have done away with its prerogative to set a minimum salary requirement of any amount. While the Obama-era regulations still remain a thing of the past, it appears the Department of Labor will pursue the appeal to make sure that is not the case.

In the meantime, the Department of Labor presumably will continue to consider modifying the 2016 proposed rule to adopt a salary requirement higher than the current threshold, but lower than what the Texas federal court struck down. Current speculation remains that the Department of Labor will seek to set a salary requirement between $575 to $675 per week ($30,000 to $35,000 annually).  Continue to stay tuned.