EEOC Releases Preliminary Fiscal Year 2018 Statistics on Sexual Harassment Claims

By Barbara E. Hoey and Jennie Woltz on Posted in EEOC

Last week, the EEOC released preliminary data on sexual harassment claims for its 2018 fiscal year. The report (not surprisingly) shows an eye-popping rise in sexual harassment claims and enforcement activity – a trend acting EEOC chair Victoria Lipnic anticipates will continue for a while.

Even for employers not affected by New York and New York City’s sweeping sexual harassment prevention laws, or other new state or local laws, the EEOC report underscores the need for HR departments to shore up their discrimination and harassment prevention programs now.

SEXUAL HARASSMENT ENFORCEMENT BY THE NUMBERS

Here is what the EEOC reports:

  • Sexual harassment charges with the EEOC increased by more than 12% from last year. This is the first time in a decade that the EEOC had an increase in annual sexual harassment complaints from the year prior.
  • Sexual harassment lawsuits filed by the EEOC’s attorneys – 41 in 2018 – increased by 50% from the previous year.
  • Reasonable cause findings in sexual harassment cases increased from 970 to nearly 1,200, an increase of over 23%.
  • Successful conciliation proceedings (a formalized mediation process run by the EEOC) jumped from 348 to nearly 500, a 43% increase.
  • Monetary awards recovered for the victims of sexual harassment rose to $70 million, an increase of over 22% from last year’s recovery.
  • The public’s interest in the EEOC’s sexual harassment enforcement efforts also appears to have increased: the EEOC reported that visits to its sexual harassment website page more than doubled compared to last year.

Continue Reading

Happy October! – A New Round of State Sexual Harassment Guidance And City Laws to Kick Off the Scariest Month of the Year

By Barbara E. Hoey, Diana R. Hamar and Steven R. Nevolis on Posted in DOL

New York State and City have each passed new legislation addressing workplace sexual harassment and employer accommodations, which both have deadlines looming for New York employers.

Just in time – on October 1, the State DOL (finally) clarified – in a good way – a number of employer obligations under the State law. The State DOL also launched a website “Combating Sexual Harassment In the Workplace,” and an “Employer Toolkit,” with sample policies, complaint forms, and training materials. Easing sleepless nights for many employers, the DOL stated that training under the state law does not have to be completed until October 2019.

Because there can never be one without the other, effective October 15, 2018, the New York City Human Rights Law (“CHRL”) will now require covered employers to engage in or seek to engage in a “cooperative dialogue” with individuals who may be entitled to accommodations. This new law provides a separate cause of action against an employer for not engaging in a “cooperative dialogue” – but more on that later. Continue Reading

Healthcare Headache: New Jersey Healthcare Network a Target for EEOC Religion Claim

By Barbara E. Hoey and Alyssa Smilowitz on Posted in EEOC

Recent filings show healthcare employers remain susceptible to religious discrimination claims.

In August, the EEOC filed suit against Hackensack Meridian Health (“Hackensack”), a New Jersey healthcare network, alleging an employee was harassed due to religion. According to the complaint, Hackensack hired Jojy Cheriyan in August 2015 to perform clinical informatics work. The EEOC alleges that his supervisor discovered that Mr. Cheriyan was Catholic, which sparked a strong negative reaction. According to the complaint, the supervisor “exhibited disapproval” when he observed a crucifix in Mr. Cheriyan’s office, and began treating Mr. Cheriyan in a hostile and verbally abusive manner, which included screaming at Mr. Cheriyan during meetings, belittling him and his work, tearing his work up and throwing objects at him.

The EEOC claims that Hackensack was aware of the harassment – due to Mr. Cheriyan’s complaints to management – yet failed to take reasonable corrective actions to put an end to the treatment.

At this time, the litigation is in its infancy with only the August complaint on the docket and an answer due in a few weeks. In its press release about the case, the EEOC’s New York District Director stated, “[p]eople of all religions are entitled to go to work and do their jobs without fear of harassment.” Continue Reading

Offering Student Loan Benefits Under 401(k) Plans

By Kelley Drye on Posted in Employee Benefits

As employers look for creative ways to help employees manage their student loan debt, the IRS recently ruled that employer nonelective contributions to a 401(k) plan for employees who make student loan repayments would not violate the Internal Revenue Code’s contingent benefit rule. That rule prohibits an employer from making any benefit (other than matching contributions) contingent, directly or indirectly, on an employee’s making, or not making, elective deferrals under the 401(k) plan.

The guidance came in the form of a Private Letter Ruling (“PLR”), which may only be relied on by the employer who requested the ruling. Nonetheless, the PLR is instructive for other employers wishing to provide similar tax-favored benefits for employees who may not otherwise be in a position to contribute to their retirement savings.

In the PLR, the employer’s 401(k) plan provided a 5% match on eligible compensation for each pay period in which the employee made an elective deferral of at least 2% of eligible compensation. The employer proposed amending the plan to allow employees to opt out of the 5% match and, in lieu thereof, receive nonelective contributions to the plan equal to 5% of their eligible compensation for each pay period in which they make student loan repayments of at least 2% of their eligible compensation. Employees participating in the student loan repayment program would be eligible for a true-up matching contribution for any pay period in which they made elective deferrals to the plan but failed to make the 2% student loan repayment necessary to receive the nonelective contribution for such pay period. These nonelective and true-up matching contributions would be subject to the same vesting schedule as regular matching contributions and would be deposited in an employee’s account as soon as practicable after the end of the plan year if he/she were employed on the last day of the play year (except in the case of death or disability). The nonelective contributions would be subject to all plan qualification requirements and would not be treated as a match for 401(m) discrimination testing purposes (but any true-up matching contribution would be). All employees eligible to participate in the 401(k) plan would be eligible to participate in the program and could opt out prospectively at any time and resume eligibility for regular matching contributions. The employer represented that it had no intention of extending student loans to any employee eligible for the program.

To read the full advisory on the Kelley Drye website, click here.

IRS Releases Initial 162(m) Guidance

By Kelley Drye on Posted in Legislation

IRC §162(m) limits a publicly held corporation’s ability to take a tax deduction for compensation paid to covered employees in excess of $1 million. As mentioned in our January 2018 Client Advisory, the Tax Cuts and Jobs Act (“Act”) repealed the exception to §162(m) for qualified performance-based compensation and expanded the applicability of §162(m) by broadening the definitions of covered employee and publicly held corporation. These changes generally apply to tax years beginning on or after January 1, 2018, but certain payments are exempt under a transition rule. The IRS recently issued Notice 2018-68 (“Notice”) to provide guidance on the identification of covered employees and the operation of the transition rule. This Client Advisory highlights some of the guidance provided.

Covered Executives
For purposes of determining covered employees for any tax year, the Act provides that any executive (i) who is the principal executive officer (“PEO”) or principal financial officer (“PFO”) of the publicly held corporation at any time during the taxable year, or an individual acting as such, or (ii) whose total compensation for the taxable year is required to be reported to shareholders under SEC rules by reason of such executive being among the three highest compensated officers for the taxable year (other than the PEO or PFO, or an individual acting in such capacity), is a covered executive. Moreover, any individual who was a covered employee for tax years beginning on or after January 1, 2017, remains a covered employee for subsequent tax years.

The Notice provides that an executive does not have to serve as an executive officer at the end of the taxable year to be a covered employee, and that an executive whose compensation is not required to be disclosed under SEC rules may nevertheless be a covered employee – e.g., where an employer delists its securities and does not have to file a proxy statement for the year in question or where an employer is subject to the scaled disclosure rules for smaller reporting companies or emerging growth companies. The Notice also provides that, for tax years beginning before January 1, 2018, covered employees are determined under pre-Act provisions.

To read the full advisory on the Kelley Drye website, click here.

Every Minute Counts: Should Californian Employers Record Every Minute Worked?

By Kate Visosky and Christina Nordsten on Posted in Wage and Hour

In July, the California Supreme Court issued its opinion in Troester v. Starbucks Corp., holding that the federal wage laws that excuse companies from paying workers for de minimis work, i.e. small amounts of time that are difficult to record, do not apply under the California wage and hour standards.

The de minimis rule has been applied by the federal courts for more than 70 years. The doctrine excuses the payment of wages for small amounts of otherwise compensable time upon a showing that the time is administratively difficult to record. For example, courts have held that time spent by employees booting up their computers and shutting down and clocking out are de minimis and not compensable. See e.g. Chambers v. Sears Roebuck and Co., 428 Fed. Appx. 400 (5th Cir. 2011).

In Troester, the California Supreme Court stepped away from the de minimis approach holding that an “employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.” Troester, (2018) 5 Cal. 5th 829, 847. The plaintiff in Troester “had various duties related to closing the store after he clocked out” and that “on a daily basis, these closing tasks generally took [plaintiff] about 4-10 minutes.” Id. at *21. The Court said this time must be compensated.

Notably, while the Court declined to apply the de minimis standard under the facts of the case, it did not reject the doctrine completely. Indeed, it noted there could be instances involving tasks “so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.”  Troester, 5 Cal. 5th at 848. Thus, the key notion to take away from this case is that off-the-clock work considered significant and regular must be compensated, while insignificant and irregular time could still be considered de minimis. As to the application of the rule, Justice Leondra Kruger wrote a separate concurring opinion offering some concrete examples for when the de minimis rule could apply:

  • Time spent turning on a computer and logging in to an application in order to start a shift and the process takes longer because of a rare and unpredictable software glitch.
  • Time spent reviewing schedule changes notified by e-mail or text message during off hours.
  • Time spent waiting at work for transportation at the end of the day during which time a customer may ask the employee a question not realizing the employee is off duty.

Justice Kruger noted that requiring an employer to accurately record this type of time would be impractical and unreasonable.

What does this ruling mean for California employers?

Although the Troester decision limits the de minimis standard in California, it does not fully reject it. Realistically there will be situations where some work will be impossible to record. The Court made note of this. Therefore, while entities doing business in California can be confident that highly unusual and irregular time spent off-the-clock may not be found compensable, the Troester decision may still have an impact on their business. This is especially true for companies in the service industry such as retailers and restaurants who employ a large number of the hourly workers in our state. These companies may want to conduct a review of their policies, practices, and procedures that impact their employees’ timekeeping. Below are a few examples of what employers in California can do in light of Troester.

  • Review pre-shift and post-shift practices to ensure that there is no regularly occurring off-the-clock work. For example, “post-shift” practices that include locking up the business should be done on the clock.
  • Keep in mind that technological advances can streamline timekeeping practices. For example, many companies employ smartphone applications that can measure time worked to the split of a second.
  • Update handbooks and written policies to ensure compliance. For example, policies should strictly prohibit off-the-clock work and provide employees with a process for submitting claims of off-the-clock work.
  • Train employees, including supervisors, and managers, in their updated policies and procedures.

Although the Troester decision has limited the application of the de minimis doctrine in California, it remains to be seen how it will be applied to other cases moving forward. In the meantime, employers can limit their exposure by proactively reviewing and revising their policies and procedures in light of the decision.

This article was originally published in Lawyer Monthly on August 31, 2018.

Altered State: Navigating the Haze Around Medical Marijuana in the Workplace

By Matthew C. Luzadder and Janine N. Fletcher on Posted in Discrimination, Health Care, Legislation

Medical marijuana occupies a gray space within the United States. Marijuana is an illegal drug under federal law and is included on the Drug Enforcement Administrations’ Schedule I, along with heroin and LSD. The drugs on this schedule are considered to have “no currently accepted medical use and a high potential for abuse.” In spite of the federal prohibition, thirty states have passed some form of legislation allowing for the medical use of marijuana.

This conflict between state and federal law may cause employers confusion—especially in states with expansive disability protections. For example, the New Jersey Law Against Discrimination (“NJLAD”) which provides extensive protections for individuals with disabilities. The New Jersey Compassionate Use Medical Marijuana Act (“NJCUMMA”) supplements the NJLAD by stipulating that employees using marijuana for a medicinal purpose are considered to have a disability and such use is protected. These protections, of course, do not force employers to allow employees to use marijuana at work but do pose a dilemma when it comes to workplace drug testing. Many companies require employees to pass drug tests for federally prohibited narcotics. However, the NJLAD requires employers to provide reasonable accommodations to disabled individuals. Since the NJCUMMA classifies medical marijuana users as disabled, is a drug test a violation of their accommodations? Continue Reading

NYC Employers Take Notice: Notice Requirements Pursuant to the “Stop Sexual Harassment Act” Take Effect September 6, 2018

By Diana R. Hamar on Posted in Legislation

While a slew of laws relating to sexual harassment are set to take effect in New York City and New York State this fall, the most imminent provision-applicable to all New York City employers-is set to take effect on September 6, 2018.

The provision requires all employers with employees working in New York City (regardless of size) to conspicuously display an anti-sexual harassment rights and responsibilities poster in both English and Spanish and distribute a factsheet on sexual harassment to new hires. Instead of distributing the fact sheet, employers have the option of including such information in an employee handbook. This provision is just one of the many new requirements employers must follow under the Stop Sexual Harassment Act, which was enacted by Mayor Bill de Blasio on May 9, 2018.

While only employment attorneys would enjoy making the required notice and factsheet from scratch, employers need not fear-the New York City Commission on Human Rights recently published both the required notice and factsheet, which can be found here and here.

This provision applies to New York City employers only, but all employers in New York State should take note that Governor Cuomo’s newest anti-sexual harassment requirements take effect on October 9, 2018. For the first time, the state is mandating both a written policy and annual training for all employers. For more information regarding the New York State provisions, see our blog post.

The First “Me Too” Verdict in New York Should Send A Strong Message to Managers and Employers

By Barbara E. Hoey on Posted in Discrimination, Legislation, Termination

On Friday, July 27, after a 3 week trial in Manhattan, a jury awarded $1.25 million in damages to Enrichetta Ravina, a former professor at Columbia University Business School, who claimed that she was denied tenure and forced to resign in retaliation for complaining that a senior professor, Geert Bekaert, had sexually harassed her.  Professor Bekaert will owe her $500,000 in punitive damages, and Columbia will owe $750,000 in punitive damages.

Ravina first prevailed Thursday on her retaliation claims against Bekaert and against Columbia based on his conduct.  The jury also held Thursday that Bekaert, but not Columbia, could be held liable for punitive damages.  Jurors rejected Ravina’s gender discrimination claims against both.  The money verdicts then came in on Friday.

Interestingly, the jury found that there was no sexual harassment or gender discrimination.  The verdict was on the retaliation claims.  The jury also did not give the plaintiff the back pay and front pay she had sought.  They awarded only punitive damages, against both defendants. Continue Reading

Ninth Circuit Rules that California Employees Can Trade Away Meal Period Rights

By Michael Gallion and David Van Pelt on Posted in Class Actions, Wage and Hour

In a noteworthy decision last week, the Ninth Circuit ruled that fast food workers in California can voluntarily bargain away some of their meal period rights in exchange for discounted meals. The unanswered questions are how much employees can trade away, and in exchange for what.

The case (Rodriguez v. Taco Bell) challenged Taco Bell’s policy of offering discounted food to employees to be eaten during their meal breaks, as long as the employees agreed to remain in the store. Taco Bell’s reason for adopting the policy was apparently to prevent employees from leaving the premises and giving the food to friends or family. California law requires that during employees’ required meal breaks, employees must be relieved of all duty and be free to leave the premises.

The Court rejected the employee’s argument that by being required to remain in the store, the employee was “under the control” of Taco Bell and the meal period was invalid. The Court noted that purchasing the discounted food was “entirely voluntary,” and Taco Bell did not interfere in how the employee spent the meal break.

The obvious question is how far the reasoning in this case can be extended. The California Supreme Court held years ago that an employer is not liable if employees voluntarily choose not to take their meal break. Does this mean that employees can trade away their right to take meal periods or rest breaks in exchange for a company gift card, for example? What about a monthly bonus? Employees in California can waive their meal periods under certain circumstances. Can they also trade them away, and be required to work an eight-hour shift with no meal period, in exchange for a benefit?

In our view, a significant expansion of this case is unlikely. California courts are simply too protective of employee rights (or perhaps paternalistic, depending on your viewpoint) to permit employees themselves to trade away significant rights. The Court in this case suggested that if the employee had been “under the control” of Taco Bell during the meal period, even voluntarily as part of receiving discounted meals, the practice would have been struck down. Indeed, California law provides that even if an employee prefers to work (and be paid) during his/her meal period, an employer can only do so if the nature of the job makes it necessary.

Still, this case does provide an opportunity that California employers may use to their advantage. Companies might consider ways to lessen the inconvenience that comes with certain legally-protected employee rights (such as the right to leave the premises during a meal period) in exchange for a benefit. Employers should just be aware that any limitation on employee rights will be viewed with suspicion by California courts.

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