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WHAT COULD BROWN HAVE DONE FOR RELIGION? EEOC BRINGS CLASS-ACTION RELIGIOUS DISCRIMINATION LAWSUIT AGAINST UPS, Contributed by Michael B. Engle

In a continuation of its evident agenda to expand protections for religious discrimination, the EEOC has set its sights on the UPS. United Parcel Services (UPS) prides itself in being masters of logistics. UPS drivers are encouraged to take three right turns instead of one left turn in order to not have to idle in traffic, are taught how to buckle their seat belts while starting their trucks in order to save time, and are held accountable for almost every action they take while on the job. In its pursuit of uniformity, UPS also has a dress code and grooming policy for its employees, but according to the U.S. Equal Employment Opportunity Commission (EEOC), UPS is unlawfully stalling on accommodating some of its drivers’ sincerely held religious beliefs. Discrimination based on religion has become a developing area of workplace law.

Last June, the EEOC won a Supreme Court case against Abercrombie & Fitch, on behalf of a young Ms. Samantha Elauf, of Tulsa, OK. In Elauf’s case, she interviewed for a position while wearing a hijab (a head covering, as worn by some Muslim females), and was not hired. Abercrombie claimed that it could not accommodate the hijab without compromising their “look book” to which its employees must adhere, but the EEOC prevailed, on the theory that this practice unduly discriminated against Muslims, in violation of Title VII of the Civil Rights Act of 1964.

 The EEOC’s new Title VII claim against UPS is a class action claim, on behalf of Muslim, Rastafarian, and other employees who have been injured by UPS’s strict grooming policy. As UPS’s policy currently stands, male supervisors, as well as male truck drivers who interact face-to-face with customers, are prohibited from wearing beards and from growing their hair below collar length.

 The EEOC cites anecdotes from two victims. In 2005, a UPS hiring official in Rochester, NY alleged told Bilal Abdullah, a Muslim, that “God would understand” if he shaved his beard to get a driver helper job, and could instead seek a package handler job that required no customer contact. UPS hired him for neither position. Meanwhile, in Fort Lauderdale, FL, a Rastafarian part-time load supervisor claims that his manager “didn’t want any employees looking like women,” in objection to his dreadlocks.

 While UPS currently claims that it “is confident in the legality of its employment practices,” it is imperative that employers act carefully in order to avoid litigation. If you feel that your employer’s rules discriminate against your religion, or if you are the employer and want guidance in your policies, contact the Gilbert Law Group today, (631)630-0100.

Department of Labor Proposes to Double Income Level for Salaried Employees to be Exempt From Overtime and Minimum Wage

On July 6, 2015, the U.S. Department of Labor announced its proposal to double the income level required for an employee to be exempt from overtime and minimum wage requirements. It is important to note that this is merely a proposal, and not an official rule. But it demonstrates how serious the DOL is as it relates to updating the exemptions. Also it should put employer’s on notice to pay attention as these changes could significantly impact business of all shapes and sizes.

Under the new proposal, the minimum weekly salary for exempt employees, presently $455 per week or $23,660 per year (http://www.dol.gov/whd/overtime/fs17a_overview.pdf), would increase to the 40th percentile of weekly earnings for full-time salaried workers in the United States, estimated to be $970 per week or $50,440 per year in 2016. Further, the minimum annual salary required for the Highly Compensated Employee exemption, presently $100,000 per year (http://www.dol.gov/whd/overtime/fs17h_highly_comp.pdf), would increase to the 90th percentile of weekly earnings for full-time salaried workers in the United States, which is currently $122,148; and these compensation requirements would automatically increase annually in the future based on a yet to be determined formula. The DOL also announced that it is considering, revising the job duties required for exempt employees, and whether non-discretionary bonus or incentive pay should be considered toward the minimum salary requirement for Highly Compensated Employees.

If you have any questions or concerns regarding how these changes can impact your business, call Gilbert Law Group today, (631)630-0100.

NLRB Expands Concept of Protected Concerted Activity

On April 30, 2015, the National Labor Relations Board handed down a decision which expanded upon a prior theory of protected concerted activity. It had already expanded the concept of protected concerted activity in the past by classifying communications which are “inherently concerted” despite not being designed to engender “group action.” This case was brought before the Board as a result of an employee being terminated after discussing her job security with another employee.

The concept of protected concerted activity gives employees the right to act together to try to improve their pay and working conditions, with or without a union. If employees are fired, suspended, or otherwise penalized for taking part in protected group activity, the National Labor Relations Board will fight to restore what was unlawfully taken away. Historically this concept as only applied to group action.

In Sabo, Inc., however, the Board determined that the discussion between the two employees was “inherently concerted” because job security “[is] a vital term and condition of employment and the ‘grist on which concerted activity feeds’” and concerns about job security have a powerful impact on the rest of a work force and are protected whether or not engaged in for the purpose of inducing group action. In the past, only such communications regarding wages were extended this protection. Now it is extended to job security. Employers should anticipate that the current Board will find other subjects of concern to employees to be likewise protected.

Should you be experiencing an issue involving protected concerted activity, call Gilbert Law Group today.

Arbitrator Holds Employer MLB Did Not Have Right To Suspend Josh Hamilton For Violating Employer’s Substance Abuse Policy

             In a stunning decision laid down on April 3, 2015, an independent arbitrator ruled that baseball athlete Josh Hamilton, an outfielder for the Los Angeles Angels, would not be suspended for self-reporting a drug relapse on February 25. Major Leave Baseball as a substantive substance abuse policy in its Collective Bargaining Agreement and the slugger’s contract had specific language not permitting him to drink alcohol or ingest drugs. The decision shocked Hamilton’s employer, perhaps because he had already been in a sports treatment program due to a history of drug and alcohol issues. Instead of being suspended, Hamilton will be eligible to play and will be able to collect $23 million as part of his salary with the Angels. The matter was submitted to an independent arbitrator after a treatment board created by Major League Baseball’s joint drug program could not determine whether Hamilton’s actions were a violation of his treatment program. The arbitrator did not give any reasons for finding in favor of Hamilton.

            Major League Baseball, the party advocating for his suspension, expressed disappointment with the arbitrator’s decision and in a statement said it would “seek to address deficiencies in the manner in which drugs of abuse are addressed under the program in the collective-bargaining process.” The current collective bargaining agreement is in place until after the 2016 baseball season.

            Employers who find themselves in a similar situation to that of the Los Angeles Angels should consult an attorney for counsel as to their collective-bargaining agreements contain controlling language when matters are left to independent arbitrators.

Pregnancy Discrimination Act: Employment Retaliation Claims Are At an All-Time High

The Supreme Court will decide whether UPS violated the Pregnancy Discrimination Act (PDA) when it refused to provide a temporary light duty assignment to Peggy Young when she was pregnant 7 years ago before giving birth to her daughter, Triniti. The assignment would have allowed Young to work but avoid lifting heavy packages, as her physician had ordered. The issue is whether UPS violated the law by its policy of providing temporary light duty only to employees who had on-the-job injuries, were disabled under the Americans with Disabilities Act, or lost their federal driver certification. It is well-settled that drawing a distinction between pregnant and nonpregnant employees  is generally unlawful pregnancy discrimination, unless there is a legitimate business reason to justify the distinction.

In 1978, Congress passed the PDA in response to the Supreme Court ruling that workplace rules that excluded pregnant workers from disability benefits and insurance coverage was not sec discrimination under Title VII of the Civil Rights Act of 1964. In this case UPS argues that unless Young can show that it intentionally discriminated against her, she has no case. Young contends that UPS “told me basically to go home and come back when I was no longer pregnant.” Young is now 42 and it has taken 7 years to get before the Court.

The Obama administration and 120 Democrats in Congress have submitted a brief supporting Young’s position. Moreover, the EEOC has updated guidance to employers to clarify that they should accommodate workers like Young. Likewise, UPS has since changed its policy so that pregnant employees are eligible for the light duty assignment.

Nonetheless, the Court’s decision is expected to have far-reaching impact in workforces across the nation as 75% of women entering the workforce today will become pregnant at least once while employed, and many will be forced to work throughout their pregnancies, or face possible termination during their pregnancies or upon their return. Stay tuned for the decision.

 

Employers Be On Alert: Employment Retaliation Claims Are At an All-Time High

Employers be on alert: employment retaliation claims are at an all-time high.

The number of discrimination charges filed with the U.S. Equal Employment Opportunity Commission (EEOC) in the past year reached the lowest level since 2007, based on published statistics from the EEOC. Retaliation charges, on the other hand, are at their highest percentage ever of claims filed ever.

The EEOC’s Strategic Enforcement Plan for fiscal years 2013-2016 lists retaliation issues as one of six areas of priority for the agency. The EEOC describes this priority as “targeting policies and practices which discourage or prohibit individuals from exercising their rights under the employment discrimination statutes or that impede EEOC’s enforcement efforts.”

The 2014 statistics, and the priority placed on EEOC retaliation enforcement, are a significant reminder that employers should take the necessary steps to minimize the chance of a retaliation claim even when the underlying discrimination claim is not meritorious. Employers should make sure to consult a knowledgeable employment attorney to ensure their employment policies are up to date. Where there is an active discrimination claim against an employer, there are many acts which if taken, could constitute retaliation. In such circumstances, is important that the that an employer seek counsel before taking action.

Under ERISA, Retiree Healthcare Coverage No Longer Guaranteed Unless Contract Is Clear

Contributed by Jonathan Sobel

On January 26, 2015, the Supreme Court released a decision altering the distribution of union retiree healthcare benefits. In M & G Polymers USA, LLC v. Tackett, the Court, citing ERISA as the controlling law, ruled that ordinary contract principles will be used by courts in determining whether retiree healthcare coverage under a plan for retired workers was meant to be vested for life. This rule invalidated an earlier judicial presumption, known as the Yard-Man presumption, stating that union health benefits would be presumed to be perpetual unless there was specific language stating the contrary in either a plan document or a collective bargaining agreement.

In this case, the employer M & G Polymers had entered into a pension and insurance agreement with the union representing its employees at a plant in West Virginia. In the agreement was a provision stating that the employer would contribute to the healthcare benefits of employees who retired after a certain date and had pension eligibility, with no cost to the employees, for a three-year term. After the agreement had expired, the employer announced that retirees would be required to contribute to the cost of their healthcare. The retirees then filed a lawsuit, alleging that the employer had breached the agreement and violated the Labor Management Relations Act (“LMRA”).

The Court noted that the Employee Retirement Income Security Act (“ERISA”) governs the rules for interpreting pension plans and welfare benefits plans, as applicable in this case. Under ERISA, a welfare benefits plan must be “established and maintained pursuant to a written instrument,” but “[e]mployers or other plan sponsors are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans.” In doing so, the Court essentially has given employers carte blanche discretion to change healthcare coverage for its retired employees as it sees fit.

Changes to FLSA Executive Overtime Exemption Could Mean Significant Raises

Many executive and professional employees who have been exempt from federal minimum wage and overtime regulations may soon qualify to be compensated for overtime. Indeed, the low salary requirement for the executive overtime exemption may soon be a thing of the past. In late November, the Department of Labor released its Fall 2014 Agency Rule List. President Obama has made clear his intention to modernize and streamline FLSA regulations for executive, administrative, and professional employees. The FLSA provides for overtime exemptions (and minimum wage exemptions, in some cases) for employees who are employed in a bona fide executive, administrative or professional capacity, or in the capacity of an outside salesperson. Soon, if employers wish to avoid paying overtime to their executive, administrative, or professional employees, they may have to increase their salaries significantly.minimum wage and overtime

The updated regulations will increase the $455 minimum weekly salary threshold for exempt executive workers. At $455/week, workers earning just $24,000 annually currently meet the minimum salary requirement. The White House has said that just 12% of salaried workers now fall below this threshold, compared to 65% in 1975 when the regulations set a $250/week minimum.  New York already requires employers to pay higher minimums to meet the exemption ($600 in New York, increasing to $675/week by 2016). It has been reported that the Obama administration is planning on setting the minimum salary for the overtime exemption at $42,000 per year (just over $800/week).

A substantial increase even to the anticipated $42,000 would have the most impact on production, service and retail industries that have substantial numbers of low paid supervisors.

To learn more about what this means for your business or compensation package call Gilbert Law Group today: (631)630-0100.

Gilbert Law Group – 425 Broadhollow Road, Suite 405, Melville, New York 11747

New Law Regarding Franchise Joint Employer Liability

The Office of the General Counsel of the National Labor Relations Board (NLRB) recently issued 13 complaints against McDonald’s franchisees as well as their franchisor, McDonald’s USA, LLC alleging various labor law violations.  The complaints follow the NLRB General Counsel’s announcement in July 2014 that McDonald’s USA may be held to be liable as a “joint employer” for unfair labor practices committed by its individual franchisees. This represents a departure from a long-standing precedent regarding franchise joint employer liability.

The 13 complaints allege that the individual franchises violated their employees’ right to engage in protect concerted activity. In other words, they took actions against them for engaging in activities aimed at improving their wages and other terms and conditions of their employment. This includes participating in nationwide fast food worker protests during the past two years. If successful, this would mean that under certain circumstances, a franchisor can be held liable for any unfair labor practices perpetrated by any of its franchisees. Such a precedent would have have a significant impact on franchise joint employer liability.

The NLRB posted on its website a “McDonald’s Fact Sheet” in which it  claims McDonald’s USA “through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand, to make it a putative joint employer with its franchisees” sufficient to share liability for its franchisees’ violations of the National Labor Relations Act.

The results of these complaints will not be determined for some time. Franchisors should take note, however, there are steps a franchisor can take to mitigate its risk of being declared a joint employer of its franchisees’ employees under the current law, as well as potentially under any new law.  These steps will also lessen the risk of a finding of common law vicarious liability for a franchisee’s employment practices in most states.

For more information regarding franchising and/or ways to avoid being declared a joint employer and therefore avoid liability for a franchisees’ employment issues call Gilbert Law Group today. 631-630-0100.

An Epic Heist: Nike Trade Secrets and Breach of Non-Compete

Nike has sued three former employees who left to work for Adidas. The company is suing for breach of contract, theft of trade secrets, fraud, conspiracy and more. In the Complaint, Nike details fairly shocking allegations against the defendants who launched a plot to leave the Company, steal numerous Nike plans and products and then parlay that into lucrative new careers at Adidas.

The three employees all have a relatively long tenure at Nike. Two of the defendants have worked at Nike for 9 years. The remaining defendant has worked there for 6. Their collective experience covers soccer, football, basketball, cross-training, women’s apparel, running. All three of them climbed the corporate ladder. It is unsurprising that the defendants signed agreements that contained non-compete and non-disclosure provisions. Those provisions themselves were quite reasonable: a one-year non-compete, a one-year non-solicitation and a two-year non-disclosure.

During their years at Nike, all three of these individuals exemplified a great deal of talent and intellect—which explains them reaching such high-level positions within such a major corporation. But greed and arrogance can quickly cancel out other positive qualities like talent and intellect. In April 2014, the defendants began executing the plan for their departure from Nike.

Noteworthy is the fact that defendants launched this plan while still working for Nike. In May 2014, after one of the defendants had a visa issue, Nike paid more than $50,000 to relocate him and his family to Italy, on the understanding that one of the defendants would remain employed with the Company long-term. Upon securing Nike’s commitment to fund his relocation to Italy, the defendants allegedly discussed how the move to Italy would serve their scheme well because Italy was one of those “countries where [Nike’s] non-compete is difficult to enforce.”

While still at Nike, the defendants signed lucrative deals with Adidas. Shortly after resigning from Nike, the defendants began a sloppy attempt to steal as much Nike information as possible and then destroy any evidence.  One defendant copied all of his laptop’s contents onto an external hard drive, then damaged the laptop to a point he thought would render it inoperable and shipped it back to Nike. The defendant sent an email to his personal email address containing a zip file with design drawings for an unreleased shoe tied to a prominent, Nike-sponsored athlete. Unlike in most such instances, where the plaintiff offers vague assertions about confidential information and trade secrets, the materials at issue in this case are certainly confidential and  trade secrets. Between their collective efforts, the Defendants walked away from Nike with a treasure trove of information, including:

  • High-level strategic development plans for the next 3 to 4 years. These plans included proposed and prospective product offerings and the timing of releases.
  • Unreleased product design materials for the next 2 to 3 years. This included models, sketches and designs for soccer footwear and other soccer related products (e.g. team uniforms). These design plans included very detailed information on fabrics, cuts, colors, manufacturing and more.
  • Financial data including both a historical breakdown of all Nike footwear sales by product for the past year and a forward looking projection of growth my product for the next twelve to eighteen months.
  • Documents regarding Nike’s product marketing strategies including documents on product promotions, in-store presentations, pr campaigns, product launches, plans for specific sponsored athletes and plans for specific Nike-sponsored sports teams.

Nike is suing the defendants for every claim imaginable, and rightfully so. Turns out, Nike was, rather obviously, able to retain enough electronically stored data to present a very compelling Complaint. In many cases, especially many non-compete and trade secret cases, there is another side to the story. In many cases, the Complaint talks vaguely about wrongful conduct, confidential information and trade secrets, but never really gives specifics. Here, Nike’s complaint is filled with specific, credible and highly damaging allegations. There is unlikely to be anything the Defendants can say that would mitigate their liabilities.