Proposed New NJLAD Category

On September 30, 2013, Bill No. S-2995, which would add a new protected category - pregnancy - to the New Jersey Law Against Discrimination, was introduced to the New Jersey Senate by Senator Loretta Weinberg (Bergen).  Under the proposed amendments, it would be unlawful for an employer to treat female employees affected by pregnancy in a less favorable manner than similarly situated persons who are not affected by pregnancy.  Employers would be required to provide reasonable accommodations, upon request of the affected employee with advice of the employee’s physician. In addition, the employer would be prohibited from penalizing an employee who utilized such an accommodation.  Moreover, in the event that an accommodation was deemed not feasible, the employer would be prohibited from penalizing an employee who, as a result, was required to take time off from work, as certified to by her physician. Although the proposed category is identified as “pregnancy,” these amendments would be applicable to pregnancy and childbirth, as well as medical conditions related to both.  Bill S-2995 has been referred to the Senate Labor Committee.

Vance v. Ball State Univ. et al., 570 U.S. ____ (2013).

On June 24, 2013, the Supreme Court of the United States issued its decision in Vance v. Ball State University.  The Court had decided to hear the case in order to clarify the “supervisor” liability rule that it had established in 1998 in Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth.  According to those cases, an employer is vicariously, and strictly, liable for a supervisor's workplace harassment of, and discriminatory conduct directed toward, employees. An employer, on the other hand, is vicariously liable for harassment or discrimination inflicted by employees' co-workers only if the employer was negligent in either discovering or remedying the offending conduct. The later negligence standard is much more favorable to employers; therefore, whether an alleged harasser was a supervisor or not is often crucial to the defense of an employment discrimination case. 

In Vance, the Court was asked to resolve the question of who is a “supervisor” and specifically decide whether (i) it encompasses all individuals who have the authority to direct and oversee an employee’s daily work, or (ii) is limited only to those individuals who have the power to “hire, fire, demote, promote, transfer, or discipline” an employee.  The Court found that the latter definition described a supervisor, holding that a supervisor is a person empowered by an employer “to take tangible employment actions against the victim, i.e., to effect a ‘significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.’” Id. at 9 (slip opinion) (quoting Burlington Industries, Inc., 524 U.S. 742, 761 (1998)).

This Court found that this definition is one that can “readily be applied” and will therefore provide great assistance to litigators.  Now, in most cases “it will be known even before litigation is commenced whether an alleged harasser was a supervisor, and in others, the alleged harasser’s status will become clear to both sides after discovery.”  This resolution of a person’s status as a supervisor allows the parties to “assess the strength of a case and to explore the possibility of resolving the dispute” at an earlier date in the litigation.  Under the other approach, by contrast, the “supervisor status would very often be murky. . . .”  Id. at 20. 

The Supreme Court’s adoption of a clear and uniform standard provides a good opportunity for employers to evaluate which of their employees are supervisors and should be targeted for additional training on their responsibilities for prevention and appropriate action when harassment occurs.  It also underscores the need for strong, regular training for all employees on a company’s anti-discrimination and harassment policies and the available mechanisms for an employee to make a complaint. 

University of Texas Southwestern Medical Center v. Nassar, 570 U.S. ____ (2013).

Title VII of the Civil Rights Act of 1964 generally prohibits employment discrimination based on employee’s race, color, religion, sex and national origin. Employees who bring lawsuits claiming employment discrimination because of their status as a member of one of these protected groups [status claims] must show that illegal discrimination was a motivating factor or a reason that they suffered an adverse employment action. This is sometimes referred to as the motivating factor test.

Employees may also bring separate claims under Title VII asserting that they were retaliated against because they filed a charge of discrimination, because they complained  about discrimination on the job, or because they participated in an employment discrimination proceeding (such as an investigation or lawsuit). Traditionally, courts have applied a “but for” test, or required the employee claiming retaliation to prove that “but for” their complaints or other protected actions, they would not have suffered an adverse employment action such as a firing, demotion, failure to be promoted or harassment.  Generally, this but for test is harder to satisfy than the motivating factor test. Therefore, employees who bring lawsuits typically prefer the motivating factor test. 

Under Title VII, Congress codified a motivating factor causation standard for status based claims. However, Congress did not codify a causation standard for retaliation claims.  The Supreme Court, in University of Texas Southwestern Medical Center v. Nassar, had to decide whether both types of claims, retaliation claims and status based claims, should have the same causation standard. A divided Supreme Court concluded that, despite being part of the same statute, retaliation claims must still be proven “according to traditional principles of but-for causation, not the lessened [motivating factor test].”  This decision is welcome news for employers, as retaliation claims are among the most frequently asserted in the employment context both nationally and in New Jersey today.

National Labor Relations Board v. Noel Canning, No. 12-1281

On June 24, 2013, the Supreme Court also granted cert to NLRB v. Noel Canning (No. 12-1281), a case which is a major test of the Constitution’s grant of power to the President to name appointees temporarily to government posts when the Senate is in recess. 

The case is coming up from the D.C. Circuit, where the D.C. Circuit ruled that President Obama’s temporary appointments to three empty seats on the five-member NRLB (made while the Senate was on recess except for intermittent, routine sittings), were unconstitutional, thereby nullifying these appointments. 

When the Supreme Court hears the case next term, it will decide the two questions presented, plus one it has requested the parties to brief:  (1) if the President may make temporary appointments to vacant posts only at the end of the Senate’s annual sessions or also during other breaks in sessions; (2) whether the President could fill a post that became open at any time during an annual session or only those that became vacant in the end-of-session periods, and (3) whether the President's recess-appointment power may be exercised when the Senate is convening every three days in pro forma sessions.  

"Unpaid Internships - Companies Need To Exercise Caution In Light Of Recent District Court Ruling"

On June 11, 2013, the viability of unpaid internship programs at for-profit corporations was dealt a resounding blow when the Honorable William H. Pauley III, U.S.D.J. of the Southern District of New York granted plaintiffs-former unpaid interns summary judgment on the issue of whether they were “employees” for Fair Labor Standards Act (“FLSA”) and New York Labor Law purposes.

In Glatt v. Fox Searchlight Pictures, Inc., No. 11-civ-6784, Plaintiffs Eric Glatt and Alexander Footman argued that their position as unpaid interns on the production and/or post-production of the Black Swan film should have been classified as employees covered by the FLSA and NYLL.  Further, Plaintiffs Glatt and Footman claimed that these positions did not qualify for the trainee exception to the FLSA established in Walling v. Portland Terminal Co., 330 U.S. 148 (1947). 

In resolving the issue, the Court was guided by the six criteria set forth in the Department of Labor’s 2010 Fact Sheet #71.  In so doing, the Court rejected the application of the “primary benefits test” used by some Circuit Courts as urged by Defendants, finding that that test was unsupported by Walling, subjective and unpredictable.  On the other hand, the Court found that Walling supported the DOL factors and held that “[b]ecause they were promulgated by the agency charged with administering the FLSA and are a reasonable application of it, they are entitled to deference.” 

            

The following are the six criteria established by the DOL for determining whether a for-profit corporation’s unpaid internship is exempt from the FLSA:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

In analyzing these factors, the Court first held that the unpaid internship program at issue lacked the educational component because the unpaid interns merely learned the function of a production office, which was accomplished simply by being present, and therefore was no different than the experience of his paid co-workers.  Second, the Court held that the benefits of a resume listing, job reference and knowledge of the function of a production office were incidental and again these same benefits were received by paid co-workers.  Third, the Court held that the tasks performed by the unpaid interns were routine in nature and would have been performed by paid employees had the unpaid interns not been present.  Fourth, the Court held that the defendants obtained immediate advantages from the unpaid interns work because the unpaid interns performed work that would have otherwise been performed by paid employees as the work, while menial, was essential.  Fifth, the Court held that there was no evidence that the unpaid interns either thought they were entitled or were actually entitled to a job at the conclusion of the internship.  Sixth, although the unpaid interns understood they would not receive compensation for the internships, the Court held that “the FLSA does not allow employees to waive their entitlement to wages” and therefore held that this factor was not significant. 

           

Based on the totality of the circumstances, the Court held that Plaintiffs Glatt and Footman were employees for FLSA purposes and had therefore been improperly classified as unpaid interns.

This holding has the potential for huge ramifications for companies who have unpaid internship programs.  If the Wage and Hour Division of the U.S. Department of Labor seeks to enforce minimum wage or overtime pay requirements, a company may face civil money penalties, criminal prosecution/penalties, fines, injunctions, and damages (including back wages and liquidated damages in an amount equal to back wages).  If instead the unpaid intern files a private cause of action, a company may face damages (including back wages, liquidated damages in an amount equal to back wages, attorney’s fees and court costs).  Even more concerning is the potential for an FLSA class action.  In fact, the law firm that represents the plaintiffs in the Glatt case is actively soliciting unpaid interns.  Given the recent success, it is likely that there will be more unpaid interns interested in a potential pay day.

Therefore, now is the time to re-evaluate unpaid internship programs to make sure that they are in compliance with the 6 factor test.  Otherwise, an unpaid internship program may prove very costly for the company.

Michael Shadiack's Workplace Harassment Prevention Training

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EMPLOYER ALERT: NEW FORM I-9

EMPLOYER ALERT: NEW FORM I-9

On March 8, 2013, the Department of Homeland Security issued a new version of the Form I-9, Employment Eligibility Verification (“Form”). The current version of the Form expired last August.

While the new Form may be used immediately, the USCIS has granted employers until May 7, 2013, to begin using the new version for all new hires and reverifications.

Before beginning to use the new Form (dated 03/08/2013 N at the bottom of each page), we recommend carefully reviewing the new Form and its new instructions as well as reviewing the new Handbook for Employers issued on March 13, 2013 to ensure that your staff understands how to properly complete the new Form.