Ninth Circuit Widens Circuit Split on Whether Dodd-Frank Protects Internal Whistleblowing

Posted in Sarbanes-Oxley, SEC, Whistleblower

Introduction

On March 8, 2017, in Somers v. Digital Realty Trust Inc., No.15-cv-17352 (9th Cir., March 8, 2017), the Ninth Circuit Court of Appeals affirmed the district court’s denial of the defendant’s motion to dismiss a whistleblower claim brought under the Dodd-Frank Act’s (“DFA”)’s anti-retaliation provision.

In a 2-1 decision, the majority endorsed the approach of the Second Circuit, and not that of the Fifth Circuit, in holding that Congress did not intend to limit DFA whistleblower protections to only those who disclose information to the Securities and Exchange Commission (“SEC”). Rather, the court held that the DFA anti-retaliation provision also protects those who are fired after making internal disclosures of allegedly unlawful activity under the Sarbanes-Oxley Act (“SOX”) and other securities laws, rules, and regulations.

The majority also agreed with the Second Circuit that, to the extent there was any ambiguity in the statute, an SEC regulation, 17 C.F.R. § 240.21F-2 (Rule 21F-2) interpreting the DFA to protect those who made only internal disclosures resolved any such ambiguity and was entitled to Chevron deference.

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The Senate Narrows Employers’ Obligation to Accurately Record Work-Related Injury and Illness Records

Posted in OSHA

On March 22, 2017, the Senate passed H.J. Resolution 83, a Congressional Review Act (CRA) resolution (Resolution) that cuts the Occupational Safety and Health Administration’s (OSHA) ability to cite an employer for failing to accurately record work-related injuries and illnesses from five years to six months.1 The resolution blocks and eliminates OSHA’s “Volks” final rule, also known as “Clarification of an Employer’s Continuing Obligation to Make and Maintain an Accurate Record of Each Recordable Injury and Illness” (Final Rule). The Final Rule, which went into effect Jan. 19, 2017, gave OSHA the authority to fine and cite employers that failed to accurately track and record work-related injuries and illnesses for up to five years after they occur.

If President Trump signs the resolution (which he is expected to do), OSHA will only be permitted to cite employers for failing to keep accurate records of workplace incidents up to six months after the recordkeeping violation occurred. OSHA will also be barred from passing a substantially similar measure; Congress must pass a law instead, which is usually a more difficult process.

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Sixth Circuit Joins Six Other Circuits in Ruling Exhaustion of Plan’s Administrative Procedures Not Required When Asserting Statutory Violations

Posted in ERISA

On Tuesday, March 14, 2017, in Hitchcock v. Cumberland University, No. 3:15-cv-01215, 2017 WL 971790 (6th Cir. Mar. 14, 2017), the Sixth Circuit Court of Appeals joined six other federal circuits in ruling that Employee Retirement Income Security Act (“ERISA”) plan beneficiaries are not required to exhaust administrative remedies prior to filing suit when asserting statutory violations as opposed to claims for benefits.

Plaintiffs, former employees of Cumberland University (the “University”), were participants in a defined contribution pension plan (the “Plan”) sponsored by the University for its employees. In 2009, the University adopted a five percent matching contribution, whereby the University would match an employee’s contributions to the Plan up to five percent of the employee’s salary.  On October 9, 2014, the University amended the Plan retroactively to 2013 to replace the match with a discretionary match, whereby the University would determine the amount of the employer’s matching contribution on a yearly basis.  The University also announced that the employer matching contribution for the 2013-14 year, and for the 2014-15 year, would be zero percent.

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11th Circuit Upholds Longstanding Precedent: Sexual Orientation Claims Are Not Cognizable Under Title VII

Posted in Discrimination

On March 10, 2017, in Evans v. Ga. Reg’l Hosp., No. 15-15234, 2017 U.S. App. LEXIS 4301 (11th Cir. Mar. 10, 2017), the 11th Circuit Court of Appeals in a majority split affirmed a district court’s dismissal of a former employee’s suit against her employer, which alleged discrimination in violation of Title VII on the basis of her sexual orientation as a lesbian and for failing to carry herself in a “traditionally” womanly manner. In rendering its decision, the 11th Circuit relied on binding precedent in Blum v. Gulf Oil Corp., 597 F.2d 936, 938 (5th Cir. 1979), which expressly holds that “[d]ischarge for homosexuality is not prohibited by the Title VII.” Id.

The Court in Evans explicitly stated that despite the fact that claims for gender non-conformity and same sex discrimination may be brought under Title VII, it does not allow the Court to abandon the longstanding holding in BlumId. at *15.

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Employer Guidance – National Immigrant Protests

Posted in Immigration, NLRB

In connection with “National Day without Immigrants” held on Thursday, Feb. 16 and Friday, Feb. 17, immigrant employees as well as supporters and sympathizers may have requested time off or, in some instances, called in sick from work to attend protest-related events and activities. Supporters called on the public to refrain from working, opening businesses, and spending money in an effort to show the impact immigrants have on our country each day.

Although having employees absent from work may pose challenges for business operations, it is important to recognize that the decision to participate may be protected in some instances. Congress enacted the National Labor Relations Act (NLRA) “to protect the rights of employees and employers, to encourage collective bargaining, and to curtail private sector labor and management practices, which can harm the general welfare of workers, businesses, and the U.S. economy.” More specifically, the NLRA provides that employees are protected under the “mutual aid or protection clause” of Section 7 when they seek to “improve their lot as employees through channels outside the immediate employee-employer relationship.”

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Employer’s Honest Belief Sufficient to Defeat FMLA Retaliation Claim

Posted in FMLA, Litigation

In a welcome decision to employers, the Third Circuit decided last week, for the first time, that an employer’s mere “honest belief” that an employee misused FMLA leave is sufficient to defeat a retaliation claim. As an employee claiming retaliation for using protected FMLA leave must prove that the very exercise of that right was a determinative factor in the employer’s decision to take adverse action against her, in other words that there was retaliatory intent, it is good news for employers that they can now successfully defend against claims simply by showing they believed in good faith that the employee misused what was otherwise protected leave. While the Seventh, Eighth, and Tenth Circuits have reached similar decisions, this was previously an open issue in the Third Circuit.

Also of note, the Third Circuit rejected plaintiff’s claim that his employer failed to accommodate his disability under the ADA. While the FMLA (unlike the ADA and most state law analogues) does not require employers to provide reasonable accommodation, a request for leave under the FMLA may under certain circumstances now qualify as a request for a reasonable accommodation under the ADA.

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Philadelphia Becomes the First City to Prohibit Employers from Asking Applicants About Salary History

Posted in State Law, Wage & Hour

Employers who just last year revised their application forms to eliminate initial questions about past arrests and convictions, now have to revise them again to remove questions regarding current and past salary. On Jan. 23, 2017, Philadelphia’s mayor signed a wage equity ordinance (the Ordinance) which prohibits, among other things, employers from asking job applicants about prior wages or wage history. The goal of the law is to address the gender pay gap, as the Ordinance asserts that women workers in Pennsylvania earn 79 cents for every dollar a man earns.  Although Massachusetts has passed similar legislation that prohibits inquiries into a job applicant’s wage history, Philadelphia is the first city to do so. The law is slated to go into effect on May 23, 2017.

The Wage Equity Law

Prohibitions and Definitions

The Ordinance, which amends Philadelphia’s Fair Practice Ordinance, principally prohibits employers from relying on an applicant’s wage history to determine “the wages for such individual of any stage in the employment process.” It defines “employer” as “any person who does business in the City of Philadelphia through employees or who employs one or more employees exclusive of parents, spouse, life partner or children, including public agency or authority; any agency, authority or other instrumentality of the Commonwealth; and the City, its departments, boards and commissions.” To “inquire” means “to ask a job applicant in writing or otherwise.” The term “wages” is broadly defined to include wages, commissions, and fringe benefits.

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NY Governor Directs Contractors Doing Business with or Bidding on State Contracts to Disclose Employee Salary Information to Identify Wage Disparities

Posted in Federal Law, Wage & Hour

On Jan. 9, 2017, New York Governor Andrew M. Cuomo signed Executive Order 162, which requires state contracts and procurements entered into or issued as of June 1, 2017, to include new reporting obligations for contractors, subcontractors, and bidders. Employers seeking to contract with the State will be required to disclose, on at least a quarterly basis, job title and salary information for each employee performing work on a state contract. Employers unable to identify the specific individuals working on a state contract are required to disclose job title and salary information for their entire workforce.

The State already required the reporting of general workforce utilization data pertaining to state contracts through the Minority and Women-Owned Business Enterprise Program. The Executive Order states, however, that such data, which is disaggregated by race and gender, is inadequate to address the Governor’s concerns related to discriminatory wage practices. While the Order does not explicitly require the new data to be disaggregated by race and gender, it is clear that the State would need such information to achieve the Executive Order’s intended purpose of allowing the State to analyze whether wage disparities exist.

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The Equality Act (Gender Pay Gap Information) Regulations 2017

Posted in Discrimination, UK Employment

Background

The final draft of the Equality Act (Gender Pay Gap Information) Regulations 2017 (the Regulations) and accompanying Explanatory Memorandum was published 6 December 2016. Subject to parliamentary approval, the Regulations will come into force 6 April 2017. The Regulations introduce a mandatory gender pay gap reporting requirement for non-public sector employers with at least 250 employees.

To whom do the Regulations apply?

The Regulations apply to any “relevant employer”, namely private/voluntary sector employers with 250 or more employees on the “relevant snapshot date”, which is 5 April in the relevant year. The reporting requirement applies to individual employers within a group, rather than a groupwide basis.

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The Apprenticeship Levy

Posted in Tax, UK Employment

The way apprenticeships are funded in the UK is changing as of Spring 2017. With this change, some employers will be required to contribute to a new apprenticeship levy and there will also be changes to the funding for apprenticeship training for all employers. The Apprenticeship Levy (the Levy) will come into effect 6 April 2017 and a new apprentice funding system is set to be in place as of May 2017.

The purpose of the Levy is to provide funding for apprenticeships and a new “digital service account”. Essentially, companies in England will have an opportunity to reclaim the Levy through the digital service account (an online tool allowing an employer to create apprenticeship schemes) if they are prepared to run their own apprenticeship training, either for new recruits or to allow existing staff to develop new skills.  Scotland, Wales and Northern Ireland will have their own arrangements for supporting employers to access apprenticeships. Companies should therefore decide whether to accept the Levy as a standalone tax or view it as an opportunity to operate Government-funded apprenticeships allowing them to develop their own workforce.

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