The ‘Faltering Company’ and ‘Unforeseen Business Circumstances’ Exceptions Under The WARN Act

Under the federal WARN Act, companies that maintain a facility with 100 or more full-time employees are required to provide no less than 60 days’ written notice to employees affected by a mass layoff or facility closure. Many employers are faced with the difficult task of determining whether or when these notices should be distributed.

The WARN Act contains several affirmative defenses that are designed to address this conundrum, and provide employers with a complete defense to liability under the statute when a company’s exigent condition forces an immediate cessation of operations. These exceptions to the WARN notice obligations are identified as the ‘Faltering Company’ and ‘Unforeseen Business Circumstances’ exceptions. Employers faced with possible pending layoffs or facility closures should consider both of them independently.

Read more in the Employment Law Strategist article, The ‘Faltering Company’ and ‘Unforeseen Business Circumstances’ Exceptions Under The WARN Act, written by David Van Pelt (access may require subscription).

Banning Visible Political, Philosophical or Religious Signs in the European Workplace – Does Your Policy Need Updating?

The highest court of the European Union recently issued two judgments allowing employers to ban the visible wearing of political, philosophical or religious signs at the workplace (Judgment of the Court of Justice of the European Union in case C-157/15 and in case C-188/15). If you have a policy in place for your EU-based employees that touches upon the wearing of political, philosophical or religious signs, you should verify whether that policy is in line with this latest interpretation of the principle of equal treatment.

On 14 March 2017, the European Court of Justice ruled that “an internal rule of an undertaking which prohibits the visible wearing of any political, philosophical or religious sign does not constitute direct discrimination”. The two cases concerned the dismissal of two women for wearing the Islamic headscarf, which was prohibited by the employer. The Court decided that wearing the Islamic headscarf could be banned without constituting discrimination, but only as part of a general policy barring all religious and political symbols. Furthermore, that policy must have a legitimate aim such as, for example, pursuing neutrality in the relation with customers. Lastly, such a policy must be achieved through appropriate and necessary means.

Continue Reading

Are We Being Taped? – The Second Circuit Weighs in on Workplace Taping

In the era of the ever-present cell phone, where many people seem to video and record (and then post to social media) virtually everything that goes on in their lives, employers have tried to limit such activity in the workplace with blanket “no recording” policies. These were just dealt a blow last week, when the Second Circuit affirmed a decision by the NLRB, which held that very broad  no-recording policies do violate Section 8(a)(1) of the National Labor Relations Act (“the Act”). See Whole Foods Market Group Inc. v. NLRB, 16-0002 (2d Cir. June 1, 2017).

  • Are all such policies now unlawful?  NO.
  • What should employers do?  Read on. Employers now need to go back and review their policies and, if it can be justified, create a tailored policy designed to protect information that deserves protection, but is not so broad that it can be seen as curbing employee’s rights to organize and bargain collectively.

Continue Reading

Gay Bias Is Still In The News

The Second Circuit has announced that it is scheduling en banc review and has asked the EEOC to weigh in on the controversial question of whether Title VII covers discrimination on sexual orientation.  The court has invited the EEOC to brief and participate in oral argument in the case of Zarda v. Altitude Express, Inc. (15-3775), where a gay skydiving instructor has accused his employer of unlawful discrimination.

The Seventh Circuit has already held that Title VII does prohibit sexual orientation discrimination.  There is also a pending en banc appeal of this issue in the Eleventh Circuit.

We will be monitoring this and other Second Circuit cases closely and will let you know as things develop.

Should a Statement Made at Mediation Ever be Used in Court?

We have been watching with some concern recent developments in a much-publicized gender discrimination action filed in DC federal court by a female partner and practice group head in the Washington, D.C. office of Proskauer Rose LLP. The plaintiff filed her $500 million gender bias suit under a Jane Doe pseudonym on May 12, 2017, alleging that the firm engaged in salary discrimination and retaliation.  Proskauer vehemently denied Jane Doe’s allegations, and maintains that she was compensated fairly in accordance with her contribution to the firm, and its pay structure.

Last week, the legal press reported that the plaintiff was making the explosive allegation that she had been “threatened” with termination by the firm, after making an internal complaint of discrimination. It turns out that the alleged “threats” were made during a failed mediation held at JAMS, just before the suit was filed. Plaintiff “Jane Doe” claimed that a Proskauer attorney stated during mediation that she was “ going to be terminated,” because her “complaint upset a lot of people.”

This alleged “threat” was then made a matter of public record when Jane Doe’s counsel filed an emergency motion in the federal action, asking the court to order the mediator’s notes preserved, to settle a “potential he-said-she-said impasse,” on whether these alleged threats had been made. The same day Jane Doe filed her emergency motion, the court issued a minute order granting it, explaining “pursuant to the court’s inherent authority to oversee discovery and the need to preserve the status quo pending a fuller evaluation of the issues, JAMS must preserve the mediator’s notes from the parties’ March 23, 2017 mediation session and all other documents related to the mediation pending further order of the court.  Continue Reading

The “Knife’s Edge”: Second Circuit Dulls the Standard of Proof Needed for a Hostile Work Environment

The Second Circuit recently reversed a district court’s dismissal of a hostile work environment claim brought by a Muslim plaintiff.  See Ahmed v. Astoria Bank, et al., 16-1389 (2d Cir. May 9, 2017).  In-house counsel and human resources executives should take heed of this decision, which may signal a loosening standard for what may constitute a hostile work environment.  As we all know, once a plaintiff gets past summary judgment, the settlement value of a case will increase drastically.  As we will talk about below, it becomes even more important to be proactive and prevent these claims.

The Facts

The plaintiff, Sherin Ahmed, was an Egyptian and Muslim, and wore a hijab head covering.  She only worked for Astoria Bank for three months, but claimed that managers subjected her to a “hostile work environment” by:  (1) on the day of Ms. Ahmed’s interview (coincidently September 11, 2013), a vice president made comments insinuating that people of Arab or Middle Eastern ethnicity were “terrorists”; (2) on several occasions, the same employee made jokes regarding Ms. Ahmed’s hijab head covering; (3) Ms. Ahmed’s supervisor “singled her out” on the days she arrived late for work; (4) the supervisor would also speak slowly and use hand gestures to communicate with Ms. Ahmed, which she inferred as the supervisor not believing Ms. Ahmed spoke English; (5) the direct supervisor denied Ms. Ahmed’s request to be relieved without pay for a few hours on a major Muslim holiday, despite two other Muslim employees supervised by other managers being given the day off; (6) the direct supervisor made an allegedly “condescending” and “judgmental” comment about Arabic women wearing a head covering; (7) the supervisor also made a comment regarding terrorists; (8) the supervisor refused to allow Ms. Ahmed to take chocolate from the supervisor’s office, despite allowing other employees to do so; and (9) the supervisor reprimanded Ms. Ahmed for leaving early during inclement weather, despite Ms. Ahmed having permission to do so.

The District Court’s Decision

The district judge explained that Ms. Ahmed had a “weak case.”  Despite this view, the judge stated he was “right on the knife’s edge” of either dismissing the case or allowing it to go to a jury.  Ultimately, the judge dismissed the hostile work environment claim since Ms. Ahmed could only point to a few incidents over the course of her three-month employment period in support of her claim.  The district judge held this did not show there was a “steady barrage of opprobrious racial comments” to support a hostile work environment claim.

The Second Circuit’s Reversal

The Second Circuit took a different view from the district court and found that the knife’s edge favored Ms. Ahmed.  The Second Circuit was persuaded by the claims that the vice president “constantly” told Ms. Ahmed to remove her hijab, that he referred to the hijab as a “rag” and had demeaned Ms. Ahmed’s race, ethnicity, and religion.  They also credited her claim that the vice president made a derogatory comment towards Ms. Ahmed during her interview (that occurred on September 11, 2013) referencing “terrorism.”  The Court held that this evidence, together with the comments and conduct of Ms. Ahmed’s supervisor, was enough to allow the case to proceed to a jury since it may show a hostile work environment.

Employer Takeaways

This decision should serve to remind employers of the important lesson that there is no bright line rule as to what constitutes a hostile work environment, and even a few comments over a short period can be enough to support a claim.  Judges are forced to finely parse evidence and compare it to an ever-changing body of case law.  When a judge has to engage in these fact-specific inquiries, they are more likely to allow the case to go to trial for a jury to sort out the evidence.  Once the case is in the hands of a jury, all bets are off.

The first and best solution is prevention so that these incidents don’t happen.  You need:

  • Clear and simple policies, which are displayed and posted in multiple venues in the workplace;
  • The next thing you need is training. You cannot do enough training of all managers and any employee who does interviews.  They must understand that any “joke” or “innocent” comment can be misunderstood.  Second, train them to warn colleagues when a conversation is going astray;
  • Finally, you need a clear and simple complaint procedure, giving employees multiple avenues to complain, and you need to respond to complaints, promptly investigate and take real action to remediate the allegations.

Employers who are not proactive to ensure these incidents don’t happen in the first place may find themselves facing a lawsuit where, as this case shows, the outcome is entirely unpredictable.

One Employee in Europe Could Trigger New EU Data Protection Obligations

An Update on the New EU General Data Protection Regulation

Flag_of_Europe_svg

On 16 April 2016, the EU adopted the General Data Protection Regulation (“GDPR”), which largely rewrites and harmonizes the European legal framework of data protection. The new regulation will become applicable in May 2018, but given the scope and complexity of the GDPR it is important to prepare for this legal change well in advance.

Global scope?

With the GDPR, there will be a substantial expansion of the territorial scope of the EU data protection obligations, which may impact US companies and employers who were previously not affected by EU data protection rules. In determining its geographical reach, the GDPR considers not only the location of the processing, but also the location of the individual whose data is being processed. In this context, if your group of companies has one EU-based employee, the GDPR could be applicable to your organization. Note that the GDPR would also be triggered by processing personal data of EU-based customers.

Processing information?

If your group of companies has one EU-based employee, and it processes (i.e., collect, use, transfer or electronically store) personal data of this employee the GDPR may apply. “Personal data” includes information that is typically considered personal, such as an employee’s name, address, income details and medical condition, but also includes not always considered personal, such as an employee’s computer or device IP address device identifiers, or other “unique identifiers.” Even if you as an employer offer certain services that give you access to such personal data, such as an IT helpdesk, server access, etc., the GDPR could apply to you.

What do I need to do?

First, you should determine whether your group of companies has EU-based employees or is otherwise processing information related to EU-based employees.

If you have EU-based employees and are processing such information, you should conduct an internal GDPR review to determine which department or which companies (e.g. IT help desk, HR, accounting, etc.) are in scope for GDPR compliance obligations, evaluate current compliance and gaps to be resolved by May 2018, and set up the necessary structure for compliance with the GDPR. The level of data protection in the EU is considered (by the EU) to be higher than in the US, and US companies should be prepared for the disclosures, specific guarantees, and obligations under the GDPR. Depending on the circumstances, the GDPR will even require US-based companies with access to personal information to designate a representative based in an EU country to act as the point of contact for the relevant data protection authorities. Given the technical and detailed requirements companies may benefit from the use of targeted guidance.

Sanctions?

The global reach of the GDPR calls into question the enforceability on US-based employers. Violating the GDPR can result in penalties of up to € 20 million or 4% of the annual worldwide turnover of the company (i.e., annual worldwide gross income), whichever is higher.

Bottom line?

The GDPR will not apply until 25 May 2018, but the time for action is now. All HR departments and/or employers should carry out a data review and assess whether the GDPR is applicable and what impact it has on its activities, this in order to implement the necessary changes in time.

If you need additional guidance, an employment attorney will be able to provide guidance both on US and EU aspects of data protection law.

New York City Bans Employers From Making Inquiries Into Salary Histories

Private employers in New York City will soon be prohibited from asking about, relying on, or verifying a job applicant’s salary history. On May 4, Mayor Bill de Blasio signed the measure, which will go into effect on October 31, 2017.

Proponents of the legislation argue that this will help to close the wage gap for women. Read more in our prior post, “’Hiring Hazard’ – NY City Employers May Soon Be Prohibited From Asking Applicants About Salary Histories.”

Now You, Too, Can Call Your Boss a Nasty Motherf****r

Maybe we’ve all thought it at some point in our careers. But according to the Second Circuit Court of Appeals, you might actually be able to get away with saying it—that is, calling your boss a nasty mother****r—if you’re saying it because you care about your coworkers, and if you all swear a lot at work anyway.

So has demonstrated Hernan Perez, a former server at New York catering company Pier Sixty, and now a foul-mouthed trailblazer for questionable employee rights.  His plight, and verbatim reprints of his lurid, social media-based profanities, can be found in a decision just published by the Second Circuit Court of Appeals in National Labor Relations Board v. Pier Sixty, LLC, Nos. 15‐1841‐ag (L), 15‐1962‐ag (XAP) (April 21, 2017).

[Warning: explicit vulgarities will appear below. Not that your kids read this blog, anyway.]

In 2011, workers at Pier Sixty petitioned the National Labor Relations Board (NLRB) for an election to vote for union representation. One day at work, in the run-up to the election, a manager (we’ll identify him here only as “Bob”) told Perez and others “in a harsh tone” to spread out on the catering floor better to serve customers. Perez didn’t like this. We know for sure that Perez didn’t like this, because one day later he posted on his Facebook page:

Bob is such a NASTY MOTHER FUCKER don’t know how to talk to people!!!!!! Fuck his mother and his entire fucking family!!!! What a LOSER!!!! Vote YES for the UNION!!!!!!!

It is difficult to know where to start, and whether to feel sorry for Bob, Bob’s mother, or Bob’s entire, um, family.

Pier Sixty didn’t feel sorry for Perez at all, however. Anyone reading the Facebook post would recognize Perez’s public estimation of his boss as a career-limiting move. And Perez was fired. He then filed unfair labor practice charge with the NLRB, claiming that his termination was motivated by his having engaged in activity that was protected under the National Labor Relations Act—and the NLRB agreed.

Pier Sixty’s trouble actually started in 1935, way before Perez was born, when Congress passed the National Labor Relations Act (NLRA).  Under Section 7 of the NLRA, employees have a right to choose a union to represent them, and “to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The reason for this statutory protection is obvious: many employers don’t like it when their employees unionize or complain about working conditions, and employees’ Section 7 rights wouldn’t mean much if employers could fire them for engaging in protected concerted activity.

The Second Circuit found that Perez’s Facebook abomination, however offensive, was protected under Section 7.  To see why, read what the Court itself had to say:

First, even though Perez’s message was dominated by vulgar attacks on [Bob] and his family, the “subject matter” of the message included workplace concerns—management’s allegedly disrespectful treatment of employees, and the upcoming union election. Pier Sixty had demonstrated its hostility toward employees’ union activities in the period immediately prior to the representation election and proximate to Perez’s post. Pier Sixty had threatened to rescind benefits and/or fire employees who voted for unionization. It also had enforced a “no talk” rule on groups of employees, including Perez and [another server], who were prevented by [Bob] from discussing the Union. Perez’s Facebook post explicitly protested mistreatment by management and exhorted employees to “Vote YES for the UNION.” Thus, the [NLRB] could reasonably determine that Perez’s outburst was not an idiosyncratic reaction to a manager’s request but part of a tense debate over managerial mistreatment in the period before the representation election.

For further context, the Second Circuit also pointed out that similar vulgarity was routinely tolerated at Pier Sixty. (Note: do not ask Perez for one too many hors d’oeuvres unless you’re ready for an earful.)

It would be easy to criticize a crazy NLRB and a liberal Second Circuit for enshrining Perez’s references to what Bob may or may not have done to his mother in the pantheon of protected labor rights. But as with so many things in labor and employment law, context is everything. The employer tolerated crude language at work, apparently made no secret that it didn’t like that Perez liked the union, and fired Perez for speech that was more or less about the union (with Bob and his mother, and their family, as collateral victims in the driveby). This made it far easier for the Second Circuit to conclude that, profanity notwithstanding, Perez’s speech was related to working conditions and the union election.

What might Pier Sixty have done to keep Bob’s purported relations with his mom off Facebook? For starters, it might have trained Bob a little better on how to react during a union organizing campaign. Telling employees not to talk to each other, threatening to rescind benefits if employees organize, and preventing employees from discussing the union signals fear, which everybody can smell—including every employee who was about to vote in the Pier Sixty union election. (Employee reaction:  “If my employer is so scared of the union, maybe the union is onto something”; or “You told me not to do something, and I’m human, so I’m going to do it.”) Managers are much better off welcoming questions and asking employees to keep an open mind to information about unionization than attempting to gag them.

The bottom line for employers is this: when employees are talking about terms and conditions of employment, particularly where a question of union representation is out there, they can say more—and say more offensive things—than employers would often prefer to hear at work. Employers should tread carefully when taking punitive action against employees for things the employer doesn’t like hearing (or reading).

An employer still has the right to insist on efficient, appropriate provision of services to customers, and insist that employees do their jobs well. If Perez had screamed his vulgarities to a room full of paying customers, this case might have ended differently; creating offense or chaos in a physical workplace with real customers in it isn’t the same thing as a Facebook post that is much less direct.

But the facts in the Second Circuit case were what they were. Employers now live with the infamous Perez Rule, under which employees may have the option of telling the boss to go f**k him- or herself. But only if they’re saying it on behalf of their coworkers. And only if they all swear at lot at work.

“Hiring Hazard” – NY City Employers May Soon Be Prohibited From Asking Applicants About Salary Histories

On April 5, 2017, the New York City Council approved a bill which – once signed by the Mayor (a virtual certainty) – will prohibit private employers in the City from asking about, relying on, or verifying a job applicant’s salary history. Proponents of the bill argue that this will help to close the wage gap for women.

This bill follows an executive order signed by Mayor DeBlasio in November 2016, which prohibits New York City agencies from inquiring about the pay histories of job applicants for city positions.

Closing the wage gap is a laudable goal, but this bill will clearly make hiring more difficult.  Indeed, when combined with other City laws that prohibit background checks (the Fair Chance Act) and asking about “employment status” – one begins to wonder – what can a prospective employer ask a job applicant?

It is also notable that this bill amends the New York City Human Rights Law, and thus creates a new claim for any disgruntled applicant to now file, which can be pursued at the City Commission on Human Rights, or directly in court. As with other New York City Human Rights Law violations, an employer found to have violated this law could be liable for compensatory damages, punitive damages, and attorneys’ fees and costs. Additionally, if an employer is found to be acting “willfully” or “maliciously,” it may be slapped with a civil penalty of up to $250,000.

Thus, this is an area where employers will need to tread very carefully.

The Bill

The bill prohibits employers from “inquiring about” an applicant’s salary throughout the entire employment process, including when making an offer of employment or during contract negotiations.

The bill even prohibits employers from searching publicly available records to obtain an applicant’s salary history.

So, how do you legally hire and how do you understand an applicant’s salary expectations?  You need to look carefully at the exceptions which the law creates:

(1) An employer may consider an employee’s salary history if the applicant makes a voluntary and willing disclosure.

(2) An employer may discuss salary, benefits and other compensation expectations with the employee as long as the employer does not inquire about salary history.

(3) Further, the definition of “salary history” does not include any “objective measure” of the applicant’s productivity, such as revenue, sales, or other production reports.

The bill also excludes: (1) employers acting pursuant to a law authorizing the disclosure or verification of salary history for employment purposes, (2) current employees applying for internal promotions or transfers, or (3) public employee positions for which compensation is determined pursuant to procedures established by collective bargaining.

So, what do you do?

This is not a law – yet – and will not be a law until 6 months after it is signed by the mayor.  So, you have some time to get ready for it.

Here are some ideas:

  • Review – Start by reviewing your applications, background check documents, and hiring procedures to remove any questions explicitly seeking information about an applicant’s salary history.  This includes a review of any information you may request via online portals.
  • Train – It is essential to inform not just Recruiting and those in HR, but everyone who gets involved in the interview process, to refrain from directly questioning applicants about their salary histories.
  • Inform contractors and vendors – You need to communicate this information to third parties or outside vendors who participate in the hiring process, such as placement firms, temp agencies and recruiters.
  • Look at your online presence – if you are posting on job sites like Monster, etc, make sure there are no requests for salary information on those sites.

The overall takeaway is that while the new law does make it unlawful to request salary information, there are lawful ways that you can talk about salaries during the interview process, just as long as you do not demand or “prompt” the disclosure of the applicant’s salary.  You can explain the salary you are offering and ask if that is acceptable.  If an applicant discloses that it is lower than a current salary that is a voluntary disclosure.

The trick will, of course, be “proving” that disclosure was “voluntary,” especially if you decide not to hire that applicant.  It may be a good idea to ask any applicant who does volunteer salary information to sign a form acknowledging the disclosure was voluntary.  There is nothing in the bill that precludes such a ‘waiver’ form, and it would protect the company from claims or provide a clear defense to a claim.  This would have to be handled carefully to make sure that an applicant does not feel they are under duress.

The Mayor is expected to sign the bill soon. Once signed, the bill will become effective 180 days later.

LexBlog