The day before Equal Pay Day, the U.S. Court of Appeals for the Ninth Circuit, sitting en banc, ruled that employers defending claims under the Equal Pay Act cannot rely on workers’ past salaries in any respect in trying to justify pay disparities between women and men. Aileen Rizo v. Jim Yovino, 16-15372, 2018 WL 1702982 (9th Cir. Apr. 9, 2018) (en banc). This ruling expressly overturns the Ninth Circuit’s prior holding in Kouba v. Allstate Insurance Co., 691 F.2d 873 (9th Cir. 1982), conflicts with rulings from other circuits, and tees up a very important issue for potential Supreme Court review.
On April 2, 2018, in a 5-4 decision, the United States Supreme Court held that automobile service advisors are not entitled to overtime pay. Although the precise holding is of limited application because few companies outside car dealerships employ individuals as automobile service advisors, the Supreme Court’s analysis will have wide-reaching application. Departing from years of contrary thinking, the decision definitively states there is no basis for construing exemptions to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA) narrowly. This is a major victory for employers, who have long faced the frequently-intoned argument that courts must construe the FLSA’s exemptions narrowly against them.
Last week, the New Jersey Legislature passed a high profile bill proposing sweeping amendments to New Jersey’s Law Against Discrimination (LAD). The most noteworthy amendments are designed to broaden LAD’s protections against alleged discriminatory pay practices. If Governor Murphy signs the bill into law, as is almost certain, New Jersey’s equal pay law will be among the nation’s most expansive laws of its kind and will carry severe penalties for employers who run afoul of its mandates.
On March 23, 2018, President Trump signed into law the 2,232-page Omnibus Appropriations bill – HR 1625, Consolidated Appropriations Act for FY 2018, which funds the government for the rest of the fiscal year. Included in that bill were a few paragraphs that prohibit restaurant owners from sharing server tips with supervisors, managers, or themselves.
In Wema Hoover v. Brijon Management & Employee Leasing Services, et al., Case No. 3:14-cv-05786-MAS-DEA (D. N.J.), a former employee of Brijon Management & Employee Leasing Services, Inc. (Brijon) and a participant in the Employee Stock Ownership Plan (ESOP) sponsored by Brijon filed a class action complaint alleging that Brijon, its former Chief Executive Officer (CEO), and others violated ERISA when they approved the ESOP’s sale of 100 percent of Brijon’s stock to Defendant CarolBri, LLC (CarolBri), an entity partially owned by Brijon’s former CEO, for an amount that plaintiff alleged was less than the fair market value of the stock.
Greenberg Traurig recently published a multi-country survey InfoPAKSM on covenants not to compete through the Association of Corporate Counsel (ACC). Covenants not to compete are important for employers to consider in order to protect proprietary information such as trade secrets, intellectual property, and highly confidential information. However, these post- employment restrictions vary country by country. These differences should be considered when an employer enters into an agreement with an employee.
On Feb. 26, 2018, the U.S. Court of Appeals for the Second Circuit handed down an en banc ruling in the case of Zarda v. Altitude Express, holding in a 10-3 decision that Title VII prohibits discrimination on the basis of sexual orientation. Addressing a case in which a sky diving instructor was allegedly terminated for being gay, the Court employed three separate theories to reach the conclusion that sexual orientation discrimination constitutes a form of sex discrimination (which, of course, is explicitly banned by Title VII):
- The “Because of Sex” Theory: This theory takes a literal, textualist approach to interpreting Title VII, concluding that the statute’s plain language—which prohibits discrimination “because of . . . sex”—is inclusive of sexual orientation discrimination. In particular, the Second Circuit examined Title VII’s language from a “comparative” posture, reasoning that if an employer would not discriminate against a female employee who dated males (e., a heterosexual employee), but would discriminate against a male employee who dated males (i.e., a homosexual employee), then such discrimination is “because of . . . sex” and is duly outlawed by Title VII.
Massachusetts employers are reminded that the provisions of the Massachusetts Pregnant Workers Fairness Act (the PWFA) take effect April 1, 2018.
The PWFA was signed into law in July 2017, and a previous GT Alert summarizes the law’s major provisions. The PWFA amends the Massachusetts statute prohibiting employment discrimination (MA General Laws Chapter 151B) to expressly prohibit discrimination on the basis of pregnancy or pregnancy-related conditions.
On Feb. 21, 2018, the U.S. Supreme Court held that the anti-retaliation provision of the Dodd-Frank Act (DFA) protects only employees who complain to the Securities and Exchange Commission (SEC) and not those who make only internal complaints.
In a unanimous decision, the justices ruled in favor of Digital Realty Trust (Digital Realty), finding that employees who bring securities law complaints against their employers must first take their allegations to the SEC to be protected by the DFA anti-retaliation provisions.
The decision resolves a long-standing circuit split, discussed in a prior GT Alert, between the Fifth Circuit Court of Appeals which held internal reporting was not protected by the DFA, and the Second and Ninth Circuits which held that internal reporting was protected.
On Feb. 26, 2018, the National Labor Relations Board (NLRB or Board) issued an order reinstating the Browning-Ferris standard for evaluating joint employer status, once again leaving franchisors open to an increased risk of being found to be a joint employer of franchisee’s employees and potentially liable for labor law violations.
The Board’s 3-0 Order (Member Emmanuel did not participate) vacated its recent decision in Hy-Brand Industrial Contractors, Ltd. And Brandt Construction Co., 365 NLRB No. 156 (2017), which had overruled Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015). The Board’s Order is a direct result of a Feb. 9, 2018, report issued by NLRB Inspector General David Berry finding that Member Emmanuel should have been recused from Hy-Brand pursuant to Executive Order 13770, “the President’s ethics pledge,” which “prohibits an appointee from participating in a ‘particular matter involving specific parties’ when the appointee’s former employer or client is a party or represents a party.” According to the Inspector General, Hy-Brand was the same “particular matter” as Browning-Ferris because “the Board’s deliberation in Hy-Brand, for all intents and purposes, was a continuation of the Board’s deliberative process in Browning-Ferris” and “involved and affected the legal rights of the parties of Browning-Ferris.”