Labor Law

The OFCCP Did Something They Should Have Done a Long Time Ago

Most of you reading this article probably do not remember when the Office of Federal Contract Compliance Programs (OFCCP) previously drafted sex discrimination guidelines.  This is because the OFCCP has not revised its sex discrimination guidelines since 1970.  Yes, you read that correctly: 1970.  For those of you who are employed by a company that often works as a Federal contractor, these new guidelines will apply.  For everyone else, these guidelines will reflect a national trend regarding sex discrimination in the workplace, particularly pregnancy discrimination and transgender rights.  As the U.S. Department of Labor put it in their factsheet, we are moving from the “Mad Men” era to the Modern era.  Finally.

The key changes are focused on three issues:  (1) disparities between men and women in the workforce (e.g. pay, career development, opportunities, etc); (2) lack of accommodations offered to pregnant employees; and (3) LGBT discrimination and “sex stereotypes.” 

 Men = Women // Women = Men

Under the new OFCCP guidelines, contractors are expressly forbidden from paying workers differently based on sex.  Since part of the gender pay-gap is due to women receiving less opportunity to “rise in the ranks,” the OFCCP added language that also prohibits a contractor from denying an opportunity for more pay or career advancement based on sex (think: overtime, training, or seeking a higher position).  This would also include placing unnecessary job restrictions to limit the eligibility of a female (or male).    In other words, any height, weight, or strength requirements must be a bona fide occupational characteristic and be job-related and consistent with a business necessity. 

In addition to pay and advancement issues, the OFCCP also makes it clear that contractors cannot discriminate on the basis of sex when it comes to offering fringe benefits.  “Fringe benefits” include things like health benefits, life insurance, and retirement benefits.  There is also a clause that reiterates that sexual harassment will not be tolerated.

Pregnant Employees and Job Accommodations

While most pregnant employees are not “disabled” by the ADA definition of the word, many of them may qualify for an accommodation that permits them to continue doing their job.  Such a workplace accommodation could be as simple as extra bathroom breaks or light-duty assignments and must be evaluated based on each employee’s need.  This provision of the revised OFCCP guidelines also expands pregnancy discrimination to include “related medical conditions.”  If the same or similar accommodation would be (or legally should be) offered to a non-pregnant employee, then it must also be offered with the same consideration to a pregnant employee (or an employee suffering a medical condition related to pregnancy and/or childbirth). 

 LGBT and Transgender Employees = Employees

As we continue to witness laws like HB2, the Feds continue to counterattack by setting the example that LGBT discrimination should not be tolerated.  While the new OFCCP guidelines does not specifically address HB2, it certainly attempts to counteract the North Carolina law by requiring federal contractors to allow workers to use bathrooms, changing rooms, and showers that are consistent with the gender in which the worker identifies.   The OFCCP also goes a step further and states that excluding coverage for cases related to gender dysphoria or gender transition is facially discriminatory.  In other words, Federal contractors cannot discriminate based on gender identity or transgender status.

Since more and more LGBT employees are bringing Title VII discrimination claims through a “sex stereotype” theory, the revised OFCCP guidelines also state contractors cannot treat employees or applicants adversely because they fail to comply with social expectations of men and/or women.  Moving forward, referring to certain positions as a “man’s job” may not be the best idea. 

All that said, most of this should be a good review of Title VII, which applies to private employers, but these new OFCCP guidelines are certainly a product of trends seen in the world of employment law.  My guess is that more and more will be said about transgender employees in the next few years, as will more be said about pregnant employees and the gender wage-gap in the near future.            

The NLRB Strikes Again: When "Recommendations" = "Directed"

Earlier this fall, the National Labor Relations Board ("NLRB") decided that a company policy recommending that employees not discuss HR-related investigations with fellow employees was in violation of Section 8 of the National Labor Relations Act ("NLRA").  The NLRB strikes again

The background of the Boeing Co. case (No. 19-CA-089374) goes like this:  Boeing Co. had a policy that directed employees to not talk to colleagues about on-going HR investigations.  The NLRB said this was not appropriate based on the employees' right to engage in "protected concerted activity" under the NLRA's Section 7.  As part of the NLRB's enforcement powers, they required Boeing Co. to revise its policy to be in tune with the NLRA.  In response to this requirement, Boeing Co. revised the language to say it was "recommended" that employees not discuss on-going HR investigations with other employees.  The NLRB said this wasn't good enough because when it comes down to it, "recommend" and "direct" are the same thing.  

SIDE BAR: The NLRA applies to all employers (except State and Federal Governments) and all employees, even those that are not unionized. 

If this seems to be absurd, you are in good company.  Internal HR investigations are very, very, (VERY) important.  Whenever an employee files a formal complaint, no matter how benign, it is important that the employer launch an investigation- even if its a small one.  Part of these investigations is collecting testimony from witnesses, the accuser, and the accused.  As you can imagine, this information-gathering expedition can lead to the discovery of some highly sensitive information (think: sexual harassment investigations). Sometimes this sensitive information is private and sometimes it is very personal.  All the time, it should be treated as confidential which is why a policy directing employees to stay quiet about an on-going investigation not only makes sense but is sometimes important.  Now the NLRB says this is a disruption to the employee's right to engage in protected concerted activity and therefore a violation of an employee's rights under the NLRA.  I'm going to have to disagree*. 

So what do you do now? I have no clue.  My first suggestion would be to politely suggest that employees refrain from talking about an on-going HR investigation; however, the NLRB shot this down.  Now HR leaders everywhere are in an NLRB pickle:  Do you run the risk of a squabble with the NLRB? Do you continue to suggest-direct employees to refrain from talking about HR matters?  Or is there some magical word the NLRB finds appropriate?  IDK. 

I've thrown up my hands on this one.  If you have a policy that says something similar - which my guess is most of my readers do -  it may be worth a second glance to see if your wording is NLRB-friendly (or at least friendly-ish).  Otherwise, I simply give you the knowledge to make an informed decision based on calculated risk.  If you want to know more, just ask.  


[*]  Now for the editorial: I do not think asking for employee confidentiality during an HR investigation is in violation of the NLRA.  Protected concerted activity under Section 7 of the NLRA protects the employees' rights to engage in activities intended to benefit the "mutual aid or protection" of the workforce.  During an HR investigation, the information gathered is often personal, private, and specific to a complaint - not about mutual aid and protection of all employees.   Assuring confidentiality is one of the reasons a lot of employees come forward with complaints and that, to me, has far more value to the mutual aid and protection of the workforce.  

The Rule of 7: President Obama Signs New Executive Order Requiring Paid Sick Leave for Federal Contractors

Image courtesy of Newsweek.

Image courtesy of Newsweek.

On Labor Day 2015, President Obama continued his ambition to leave a legacy by signing a new controversial Executive Order.  This Executive Order requires federal contractors to offer covered employees 7 days of paid sick leave.  Key word: PAID.  The President then encouraged Congress to pass similar legislation requiring paid sick leave for all private-sector employees (cue Republican heartburn). Such legislation would finally put the U.S. on the map of industrialized nations requiring paid sick leave.  To put it in perspective, of the 22 wealthiest countries in the WORLD, the U.S. is the only one without paid sick leave.

Here is a breakdown of what you need to know:

  • The new Executive Order requires federal contractors to offer at least 7 days of earned sick leave.  This leave must be paid based on the worker's salary, hourly rate, or prevailing wage.
  • This paid leave will be available for: physical or mental illnesses, injuries, or medical conditions; obtaining a diagnosis or preventative care; the care of a parent, child, spouse, partner, or blood family member; and absences due to dometic abuse, sexual assault or stalking.
  • If the workers uses 3 consecutive days of paid sick leave, the federal contractor can require a medical certification from a physician.
  • Use of this required paid sick leave cannot be made contingent on finding a replacement worker. 
  • Federal contractors can require a 7 day notice period, if the notice is practicable under the circumstances (e.g. advance notice for a known doctor's appointment = ok; advance notice for having the flu = not ok).
  • If the worker does not use all 7 days of paid sick leave, it will carry over from year to year BUT federal contractors are not required to pay out any accrued sick days upon a worker's separation of employment (unless you have a policy stating otherwise).
  • This new requirement is in addition to similar requirements under the Davis-Bacon Act and the Service Contract Act and these required sick days cannot be used as a credit towards fringe benefit obligations under these or similar acts. 
  • Federal contractors with existing paid leave policies that apply to all employees will satisfy this Executive Order so long as the same requirements are met (e.g. the amount of paid leave is at least 7 days, etc).
  • Federal contractors are expressly forbidden from retaliating or discriminating against a worker who requests use of his or her paid sick leave. 

Although this Executive Order will only apply to federal contracts initiated on or after January 1, 2017, federal contractors should consider preparing for this change now as opposed to December 31, 2016.  Perhaps in the near future, private-sector employers can begin making similar changes to their leave policies for the 40% of private sector employees without access to paid sick leave.  #LEADONLEAVE



NLRB Creates Revised Joint-Employer Test; Franchisor-Panic Begins

I want to start this post by saying how much I adore the National Labor Relations Board ("NLRB").  This fantastic (read: fanatic) government agency is the panel that said AT&T service techs can make house-calls wearing inmate jumpsuits as a uniform (later overturned by the D.C. Circuit who aptly cited "commonsense" as one of their reasons for overturning).  The NLRB also introduced us to the NCAA athlete-employee who can unionize while playing college sports (also recently overturned, crushing college athlete dreams of fast cars, lots of money, and a Teamsters card).  The NLRB is entertaining, revolutionary, and they literally don't GAF. 

So what have they done now?  The NLRB has decided to redefine "joint employer" by changing a test that had been on the books (and in the courts) for over 30 years.  The three Democrats on the panel cheered while the minority Republicans shook their heads.  

Prior to this decision, "joint employer liability" was judged on the actual level of control the joint employer exerts over its employees. The control had to be both direct and immediate.  In other words, no actual/direct control = not a joint employer. 

The new test suggests that anytime an employer shares or co-determines matters governing the "essential terms and conditions" of the employment, the employer will be a joint employer.  "Essential terms and conditions" is inclusive of anything from hiring and firing to discipline, supervision, setting wages and hours, controlling work schedules, assigning work, and determining overtime.  In other words, mere possession of control (even if you don't use it) = joint employer. 

In the case at hand, the "joint employer" (Browning-Ferris Industries of California - a.k.a. "BFI")  used a staffing agency to employ over 200 workers in its California location.  The staffing agency directly controlled most aspects of the workers' employment including benefits, wages, scheduling, on-boarding, and job performance evaluations. BFI had some control and assigned limited tasks to workers, conducted required training sessions, and adopted a "wage ceiling" for employees hired through the staffing agency. Even though BFI's control over the staffing agency employees was minimal at best, it was enough to push them over the threshold into the joint employer zone under the newly revised joint employer test.  

What does this mean for you?  If you are a Franchisor, your liability may have increased exponentially.  If courts adopt this new joint employer test where "mere control" is enough, franchisors may be liable for their franchisee's employees - even if they never meet them, never know them, or never directly manage them.  If you are a contractor, the same may be true of your subcontractor relationships.  And finally, if you staff your company via a staffing agency, consider this NLRB opinion a new warning regarding employment liability.  No one is safe from this decision. 

Luckily, the NLRB is a government agency (read: not a court) and their opinions are not binding, nor are they legal precedent a court must follow.  However, their opinions are suggestions that do often turn into case law as the agency decisions bleed into the courts.  Once again, this is a cautionary tale and something I will be tracking carefully for all my clients.