2017 Federal Employment Law Developments

As is expected with any change in administration, 2017 was a busy year for federal employment law developments. Below are ten of the major developments:

1. Fair Pay and Safe Workplaces Executive Order is revoked.

In March President Trump signed a bill into law which overturned the regulations implementing former President Obama’s Fair Pay and Safe Workplaces Executive Order. The Fair Pay and Safe Workplaces Executive Order, which was signed in July, 2014, required companies bidding on contracts with the federal government that were over $500,000 to disclose their history of violations of labor and employment laws relating to workplace safety, discrimination, minimum wage, and overtime pay. The order also required federal contractors to put basic wage information on employees’ paystubs each pay period and prohibited companies from forcing employees to arbitrate sexual harassment and other discrimination claims. With the overturning of former President Obama’s Executive Order, employers will not be required to disclose this information.

2. Employer liability under the FLSA may be changing.

In a three-sentence press release in June, Department of Labor (DOL) Secretary Alexander Acosta withdrew two Wage and Hour Administrator’s Interpretations (AIs) on joint employment and independent contractors. While these were not binding law, they did represent a significant shift in wage and hour law advocated by the Obama administration by setting forth expansive views of joint employer liability and independent contractor misclassification. Given that the AIs were non-binding guidance, the DOL emphasized that, “[r]emoval of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law.” However, this does appear to be a signal to employers that the current administration may be more employer-friendly than the previous.

3. No new overtime rule has been implemented.

The Obama administration’s overtime rule, if implemented would have more than doubled the minimum salary level required to qualify for a white-collar exemption to $913 per week; ($47,476 annually). The rule never went into effect due to a lawsuit filed in the Eastern District of Texas which issued a nationwide preliminary injunction. On August 31, 2017, the District Court invalidated the 2017 overtime regulations. In October, 2017, the DOL appealed the decision invaliding its rule. However, in a turn of events, in November 2017, the DOL asked the circuit to hold its appeal in abeyance “pending the outcome of new rulemaking.”

While it remains to be seen what the new threshold will be, DOL Secretary Alexander Acosta has indicated that the new overtime regulations will set the salary level somewhere between the existing threshold set in 2004 ($455 per week, $23,660 annually) and the threshold set by the 2017 proposed rule. In the meantime, employers must follow the exempt salary level of $455 per week, $23,660 annually.

4. Equal Employment Opportunity Commission’s (EEOC) plan to collect pay and hours worked data on the 2017 EEO-1 report has been halted.

Every year most federal contractors and other private employers (with at least 100 employees) tally and report their employee numbers for one pay period by job category and then by sex, race, and ethnicity. The EEOC proposed to collect additional information related to pay and hours worked starting in March 2018. The EEOC and the DOL planned to use the data for enforcement purposes and hoped to decrease pay disparities without agency intervention.

In August the White House Office of Management and Budget (OMB) initiated a review and stay of the EEOC’s plan to collect pay and hours. Therefore, employers are not required to report pay and hours worked data on their 2017 EEO-1 Reports, which are due to be filed by March 31, 2018. Given the current administration it is not likely that the additional data collection will go into effect for 2018 EEO-1 Reports either.

5. Whether transgendered employees are protected under Title VII became less-clear.

The EEOC interprets and enforces Title VII’s prohibition of sex discrimination as including employment discrimination based upon gender identity or sexual orientation. In October 2017, the Department of Justice (DOJ) declared in a memorandum that Title VII “does not encompass discrimination based on gender identity per se, including transgender status.” This is a 180 degree reversal of the DOJ’s prior position and conflicts with the EEOC’s position and court decisions issued from the First, Sixth, Ninth, and Eleventh Circuits. It remains to be seen whether there will be any additional clarity (or further muddling) on this topic in 2018.

6. Whether sexual orientation is protected under Title VII remains unclear.

Similar to transgender rights, federal agencies showed a split in 2017 with regards to Title VII’s coverage of sexual orientation. The EEOC’s position is that Title VII covers sexual orientation while the DOJ’s position is that sexual orientation is not covered under Title VII.

Federal courts are also not aligned on the subject. This year the U.S. Court of Appeals for the Seventh Circuit held in Hively v. IvyTech Community College, 853 F.3d 339 (7th Cir. 2017), that Title VII prohibits sexual orientation discrimination. However, the Eleventh Circuit, in Evans v. Georgia Regional Hospital, 850 F.3d 1248 (April 4, 2017), reh’d en banc denied (July 6, 2017), reached the opposite conclusion. A petition for certiorari was filed in the Evans case in September 2017 and was recently denied. Meanwhile, the Second Circuit, en banc, is addressing Title VII’s coverage of sexual orientation discrimination in the pending case of Zarda v. Altitude Express, Inc., Case No. 15-3775. Given the circuit split, no matter what the ruling is in Zarda it is likely that the Supreme Court would grant certiorari if the losing party were to seek it.

7. The Affordable Care Act remains the law.

The Trump administration repeatedly and unsuccessfully tried to appeal and replace the Affordable Care Act (ACA) in 2017. Despite these efforts, the Affordable Care Act remains law. The senate version of the tax reform bill, passed in early December, would make significant changes to the Affordable Care Act including repealing the individual mandate. It is possible that we will see more developments on this subject yet in 2017 or early 2018.

8. Harassment becomes a hot issue.

The recent high profile harassment allegations bring to the fore-front an employer’s duty to take reasonable steps to prevent harassment in the workplace. Employers must ensure that they have appropriate policies and training in place to prevent, detect, and handle harassment complaints within the workplace. Employers should have a plan in place to act quickly and diligently to investigate and respond to harassment claims. However, employers must also ensure that they do not jump to conclusions and ensure that anyone accused has a fair investigation before adverse employment decisions are made. When faced with a complaint, employers may want to consider getting outside support to complete an investigation, especially if the accusation is against a high-level supervisor. Finally, even if no complaint has been lodged, employers should be asking themselves if there are employees whose off-colored words or conduct has been tolerated or ignored and, if so, to act appropriately to correct the situation.

9. Whether extended leave is a reasonable accommodation under the ADA is unclear.

As I indicated in my last blog post, the Seventh Circuit issued a bombshell ruling in Severson v. Heartland Woodcraft Inc. indicating that the Americans with Disabilities Act (ADA) is not an extension of medical leave under the FMLA. The Seventh Circuit held that an employee who requests a multi-month period of leave as an accommodation is not a “qualified” individual with a disability under the ADA because they are unable to work. Thus, ADA protections did not apply to the employee. This ruling is directly contradictory to the EEOC’s position and rulings from the First, Fifth, Sixth, Ninth, Tenth, and Eleventh Circuits and is ripe for being heard by the Supreme Court.

10. ADA Website Accessibility Lawsuits Increase

Title III of the ADA makes it unlawful to discriminate against disabled persons in the full and equal enjoyment of public accommodations. To state a claim for relief under Title III, a plaintiff must plausibly allege that because of their disability they were denied full and equal enjoyment of the public accommodation. The ADA’s definition of “place of public accommodation” does not currently include websites and there is a split among the circuits whether Title III applies beyond physical spaces and into cyberspace. Earlier this year, the Department of Justice (DOJ) stated that it planned to address the uncertainty on the website issue, but has yet to do so. If the DOJ moves forward with adopting guidelines, they will most likely adopt the “Web Content Accessibility Guidelines (WCAG) 2.0 AA.” Stay tuned for more on this.

If you have any questions on any of these topics or would like more information, please contact Labor & Employment attorney Lida Bannink at (715) 386-3733, or email at lbannink@eckberglammers.com.

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