“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.

Seventh Circuit Rules Title VII Bars Sexual Orientation

On April 4, 2017, the Seventh Circuit became the first federal appellate court in the country to extend the protections afford by the Civil Rights Act of 1964 to discrimination on the basis of sexual orientation.  The 8-3 decision came after they held a rare en banc hearing on Kimberly Hively’s case (Hively v. Ivy Tech Community College).

The majority opinion written by Chief Circuit Judge Diane P. Wood cited several U.S. Supreme Court cases, including Price Waterhouse v. Hopkins and Loving v. Virginia, and agreed with Hively’s argument that, but for her gender, her employer would have kept her on staff.

“The Supreme Court’s decisions, as well as the common-sense reality that it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex, persuade us that the time has come to overrule our previous cases that have endeavored to find and observe that line,” Judge Wood wrote.

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Supreme Court Message – Be Wary of EEOC Subpoenas

On Monday, the Supreme Court held that appellate courts must utilize the deferential “abuse-of-discretion” standard when evaluating a ruling on a subpoena issued by the Equal Employment Opportunity Commission (“EEOC”) pursuant to Title VII of the Civil Rights Act.  This ruling came in response to a Ninth Circuit decision wherein the circuit court reviewed a trial court decision under the less deferential de novo standard.  By virtue of this ruling, the Supreme Court has confirmed that greater discretion should be given to the trial court in deciding the enforceability of EEOC subpoenas and has set a higher bar for litigants attempting to overturn a trial court’s ruling.  See McLane Co. Inc. v. EEOC, 581 U.S. ___ (2017).

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Leave as a Reasonable Accommodation under the ADA

In May 2016, the Equal Employment Opportunity Commission (“EEOC”) published “Employer-Provided Leave and the Americans with Disabilities Act” The EEOC published the guidance as it observed a “troubling trend:” employment policies that deny or restrict leave as a reasonable accommodation for employees with disabilities.  It has been a year since this guidance was published and it is worth revisiting this issue.

The issue arises as follows.  An Employer determines whether an employee is eligible for or has exhausted her Family Medical Leave Act (“FMLA”) leave.  If the employee is ineligible or has exhausted her FMLA leave, the employer may deny the employee’s request for leave without consideration of the requirements of the ADA.

The ADA requires, among other things, that employers provide “reasonable accommodations” to employees with disabilities if doing so will allow the employees to perform their essential job functions.  An exception exists if the accommodation would cause the employer “undue hardship.”

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Does Your Social Media Policy Apply Globally?

The surprising EU perspective

Drafting a global social media policy is a balancing act. Employers need to protect their legitimate business interests, but must do so with respect for the employees’ rights to freedom of expression. Striking the right balance depends on the legislation in force in the different countries where your company is active. Compared to the strong focus on protecting employees’ rights in the scrutiny of social media policies in the US, social media policies can go much further in protecting legitimate business interests in Europe. If you have a US company that is active in Europe, you may want to rethink your social media policy for your European entities.

In the US, the standard for what is allowed to be included in social media policies is largely shaped by the National Labor Relations Board (“NLRB”), which is responsible for enforcing the National Labor Relations Act (“NLRA”). The NLRB has given a broad interpretation to the employees’ right to engage in concerted activities under Section 7 of the NLRA. The NLRB finds provisions of social media policies unlawful if they would have a chilling effect on the employees engaging in the activities protected under Section 7. This leads to provisions being struck down by the NLRB because of their wording or for being overly broad.

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Third Circuit Holds that Medical Resident May Bring a Title IX Claim Against a Private Hospital

Earlier this month, the Third Circuit Court of Appeals reversed the lower court’s dismissal of a medical resident’s Title IX suit against Mercy Catholic Medical Center in Philadelphia, which alleged that the plaintiff was kicked out of the hospital’s residency program in retaliation for denying a superior’s sexual advances.  See, Doe v. Mercy Medical Center.

The decision is significant for two reasons: it holds that Title IX is applicable to a private hospital, and also held that the resident was not required to satisfy Title VII’s administrative prerequisites (i.e. file a charge with the EEOC or state agency) before suing the hospital.   Each of these findings opens the door to increased claims against hospitals who sponsor educational programs.

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Law360 Mentions Partner Mark Konkel as Counsel to Saks in Proposed Wage and Hour Class Action

Partner Mark Konkel was mentioned as Saks Fifth Avenue’s defense counsel in a newly-filed wage-and-hour class action in the Law360 article “Saks Hit With NY Wage Class Action Over Sales Commissions.” The high-end retailer has been accused of violating New York state labor law at its flagship department store in Manhattan. Mr. Konkel and a Kelley Drye litigation team defeated these same claims in federal court in 2016.

To read the full article, please click here. Access may require subscription.

Your Employee is Leaving…. How Do You Safeguard Your Company’s IP?

It is a fact: employees leave.  According to the Bureau of Labor Statistics, the average worker currently holds ten different jobs before age forty.[1]  Because employee transitions are inevitable, businesses must prepare to secure their data when an employee exits the company.  Otherwise employers risk having their information (e.g., customer lists and related information, research and development, and strategic business development) stolen.  Stolen information can lead to the loss of competitive advantage, embarrassment and devaluation of image and goodwill, reduced profitability, and loss of core business technology.  These types of damages are difficult to ascertain in monetary terms.

Data is protected by (1) common law, (2) statutory law (e.g., Uniform Trade Secrets Act, Economic Espionage Act, Computer Fraud and Abuse Act, and state criminal codes), and (3) contractual agreements (e.g., non-compete, non-solicitation of clients).  While the law protects your data, a lawsuit to enforce such protection can be costly and time consuming with uncertain outcomes.  Thus, preemptive planning is the best defense.

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Andrew Puzder Withdraws Candidacy for Labor Secretary; Trump Taps Former U.S. Attorney Alexander Acosta

On February 15, 2017, just one day before his confirmation hearing, Andrew Puzder announced that he was withdrawing his nomination to serve as President Donald Trump’s Labor Secretary. Puzder is the CEO of CKE Restaurants, which operates fast-food restaurants Carl’s Jr. and Hardee’s.

Like many of President Trump’s Cabinet picks, Puzder faced fierce opposition from Democrats, as well as unions and worker advocacy groups. The opposition came as no surprise, as Puzder publicly opposed government regulation, a $15 minimum wage increase and the Affordable Care Act, and recently revealed that he hired an undocumented housekeeper. Puzder was also criticized for alleged labor law violations, including unpaid overtime, which occurred at CKE Restaurants under his leadership.

Shortly before announcing his withdrawal, it was reported that Senate Republicans encouraged the Trump administration to pull the nomination since a growing number of Republican senators were uncertain they would vote in favor of Puzder, which jeopardized his confirmation.

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New EEOC Chair Says There Will be No “Major Changes” But – the DOJ Seems to be Calling a Truce in the Transgender Battle – What Direction Are We Heading?

Are we getting a mixed message from the new administration on priorities in the civil rights area?

In her first public comments since her appointment as the new acting chair of the EEOC, Victoria Lipnic just last week (February 8) said that the agency will not be making major changes and “is committed to its core values and mission, to enforce civil rights laws in the workplace.”

Yet – just a few days later on Sunday, February 11, The New York Times reported that the new administration has decided not to appeal a nationwide injunction issued by a judge in Texas to block Department of Education guidelines which stated that schools had to give transgender students access to facilities according to their chosen gender, as a matter of law.  It is not clear now whether this signals that the Trump administration’s position on transgender rights, a significant initiative of the EEOC in the Obama administration, will change and what position the new DOJ will take in the Grimm v. Gloucester County case, now pending before the US Supreme Court.

One is a statement from one agency and the other is a decision by another, but clearly there is going to be a shift of focus and priorities.

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