Looking Ahead at 2020's Labor and Employment Hot Topics - Matthew V. DelDuca Tracey E. Diamond Lee E. Tankle Jessica X.Y. Rothenberg
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Looking Ahead at 2020’s Labor and Employment Hot Topics Matthew V. DelDuca Tracey E. Diamond Lee E. Tankle Jessica X.Y. Rothenberg December 10 | Webinar
Matthew V. DelDuca
Partner and Chair, Labor and Employment
609.951.4187 / 215.981.4814
delducam@pepperlaw.com
Has litigated hundreds of cases in state and
federal courts and has tried dozens of
cases to verdict
Trial experience includes individual and
class employment cases, noncompetition
and trade secret litigation, complex
business litigation, shareholder litigation,
product liability and mass tort litigation
Regularly represents employers in litigation
involving claims of discrimination, wrongful
discharge and defamation, as well as other
related disputes
2
Tracey E. Diamond
Of Counsel, Labor and Employment
215.981.4869
diamondt@pepperlaw.com
Practices in the areas of employment law,
human resources counseling and
employment litigation
Regularly counsels clients on workplace
issues, provides harassment training,
conducts internal investigations, drafts
policies and procedures, negotiates
employment and severance agreements,
advises on independent contractor, FMLA
and ADA compliance issues, and partners
with clients to structure their workforce in
the most efficient and effective way possible
3
Lee E. Tankle
Associate, Labor and Employment
215.981.4096
tanklel@pepperlaw.com
Litigates complex employment claims under
federal and state laws, including the Fair
Labor Standards Act, Title VII of the Civil
Rights Act of 1964, Family and Medical
Leave Act, Americans with Disabilities Act,
Age Discrimination in Employment Act and
Pennsylvania Human Relations Act
Provides clients with day-to-day
employment counseling related to
workplace issues, including hiring,
discipline, harassment and discrimination,
medical leaves, and disability
accommodations
4
Jessica X.Y. Rothenberg
Associate, Labor and Employment
212.808.2731
rothenbergj@pepperlaw.com
Regularly counsels businesses on
employment policies and practices,
including employee handbooks,
employment agreements, restrictive
covenants, privacy matters, performance
management, family and medical leaves,
disability accommodations, sexual
harassment, wage and hour compliance,
independent contractor misclassification
and employment separations
5
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Agenda
Hairstyle discrimination
Department of Labor’s new overtime rule
Medical marijuana in the workplace
Questions and answers
12Hairstyle Discrimination
13What is hairstyle discrimination?
Discrimination against applicants or employees on the basis
of hairstyle or other traits historically associated with race.
Common forms of discrimination:
- Declining to hire an applicant because he or she does not fit the
company’s “image” because the applicant has dreadlocks
- Enforcing a dress code or grooming policy that targets hairstyles
/ other traits historically associated with race.
Common examples:
- Hair texture (“natural hair”)
- Protective hairstyles (braids, locks, twists).
14News Coverage
Gabrielle Union (former “America’s Got Talent” judge) was
criticized by the network for having hairstyles that were “too
black” for viewers.
Penn State football player received a letter from an alumnus:
- “Though the athletes of today are certainly superior to those in
my days; we miss the clean cut young men and women from
those days.”
- “Don’t you have parents or girlfriend who’ve told you those
shoulder length dreadlocks look disgusting and are certainly not
attractive.”
High school wrestling athlete in New Jersey was forced by a
referee to either cut his dreadlocks on the spot or forfeit a
wrestling match.
15Legal Landscape
Until recently, hairstyle/grooming discrimination was implicitly
prohibited under race/ethnicity discrimination.
The burden was on the employee to prove the link between
the hairstyle/grooming standard and race/ethnicity.
California and New York now explicitly prohibit such
discrimination, making it easier to assert such claims.
16New York City
Feb. 2019 legal enforcement guidance:
- Prohibits workplace grooming policies that may discriminate against
Black people.
• Black people include those who identify as African, African American, Afro-
Caribbean, Afro-Latin-x/a/o or otherwise having African or Black ancestry.
• “Bans or restrictions on natural hair or hairstyles associated with Black
people are often rooted in white standards of appearance and perpetuate
racist stereotypes that Black hairstyles are unprofessional.”
- Prohibits workplace grooming policies that target communities of color,
religious minorities or other communities protected under the NYC
Human Rights Law.
• A Sikh applicant being denied employment because of his religiously
maintained uncut hair and turban.
• A salesperson being required to shave his beard despite a medical condition
that makes it painful to do so.
17New York State
July 2019 legislation amended the definition of “race” under
the NYS Human Rights Law to include “traits historically
associated with race, including, but not limited to, hair texture
and protective hairstyles.”
18California
Creating a Respectful and Open Workplace for Natural Hair
Act (CROWN Act) – effective January 1, 2020:
- Amends the definition of “race” under the Fair Housing and
Employment Act to include “traits historically associated with
race, such as hair texture and protective hairstyles,” including
“braids, locks, and twists”
- Also amends California’s Education Code to prohibit such
discrimination in public schools.
19Future Legislation
In 13 other states, lawmakers are discussing or have
proposed similar bills to CA and NY:
- New Jersey, Michigan, Tennessee, Wisconsin, Kentucky, Illinois,
Pennsylvania, Massachusetts, Maryland, Georgia, Florida, South
Carolina and Virginia.
Legislation was introduced in the Senate and the House last
week to prohibit hairstyle discrimination under federal law
(focusing on employment and education).
20Compliance Steps
Train hiring managers about the importance of not assessing
applicants based on “company image.”
Review dress and grooming policies to ensure they are
facially neutral and applied in a uniform manner:
- Where hair must be tied back for hygienic/safety reasons, a
policy should state that hair longer than a certain length must be
tied back, rather than prohibiting specific hair styles.
- A policy that requires “professional” hairstyles should be written
in a neutral manner that does not disproportionately affect
people of any particular race.
21Department of Labor’s New Overtime Rule
22DOL’s New Overtime Rule
Expands overtime eligibility for certain employees making less
than $35,568 per year.
- Dollar amounts for the exemptions are lower than those in the
rule published by the Obama administration in May 2016.
Salary threshold for the “highly compensated employee”
exemption will be increased from $100,000/year to
$107,432/year.
Employers will be able to count certain nondiscretionary
bonuses and incentive payments toward as much as 10
percent of the minimum salary threshold.
23Wage and Hour Basics
Fair Labor Standards Act (FLSA):
- Minimum wage of $7.25/hour (higher under many state laws).
- Overtime pay at 1.5x the employee’s regular rate for all hours
worked in excess of 40 in a workweek.
Rule for all employees unless “exempt”:
- If an employee is exempt, they do not need to be paid overtime.
- If an employee is nonexempt, they must be paid overtime.
24Exemption Basics
Employees are exempt and not required to be paid overtime
if:
- Employee is paid a minimum weekly salary (currently
$455/week); and
- Employee regularly receives predetermined weekly
compensation regardless of hours worked in week; and
- Primarily performs “exempt” duties.
Main “EAP” white collar exemptions are:
- Executive
- Administrative
- Professional.
25Common Misperceptions
Myth: As long as an employee is paid a salary, the employee
does not need to be paid overtime.
- This is false. Many salaried employees are entitled to overtime
pay under state and federal law because they do not perform
primarily “exempt” duties.
To be exempt, employees must meet the strict definition of the
applicable exemptions explained in case law, regulations and
Department of Labor opinion letters.
Always be cognizant of more employee-friendly state/local
laws.
26DOL’s New Overtime Rule
How did we get here?
- Early 2016: Obama administration introduces new overtime rules
scheduled to go into effect on December 1, 2016.
• Would have increased minimum salary for exemption to
$47,476/year.
- Employers spent most of 2016 getting ready for these changes.
- Just a few days before the rules were scheduled to go into effect,
a federal judge struck down the Obama rules and the changes
were never implemented.
- Trump administration proposed regulations earlier this year.
- Final rule released on September 24.
- Goes into effect on January 1.
27Increased Minimum Weekly Salary
To qualify for one of the three white collar exemptions, an
employee must earn a minimum weekly salary of $684 (or
$35,568 per year).
- Most employees earning less than $684 per week must be paid
overtime for all hours worked in excess of 40 in a workweek.
- DOL estimates that 1.3 million Americans will be eligible for
overtime as a result of the new rule.
No changes to the duties test.
No automatic increases.
28Increased Salary Threshold for Highly
Compensated Employees
The salary threshold for the “highly compensated employee”
exemption will be increased from $100,000 per year to
$107,432 per year.
For employees with large salaries who do not fall neatly into
one of the EAP exemptions, the employee must:
- Meet the minimum salary threshold; and
- Perform office or nonmanual work; and
- Customarily and regularly perform at least one of the exempt
duties of an EAP employee.
29Use of Bonuses/Incentive Payments
Employers will be able to count certain nondiscretionary
bonuses and incentive payments (including commissions) that
are paid at least annually toward as much as 10 percent of
the minimum salary threshold.
If an employee does not earn enough in nondiscretionary
bonuses or incentive payments in a given year (52-week
period) to retain his or her exempt status, the DOL will permit
employers to make a “catch-up” payment within one pay
period at the end of the 52-week period.
30Complying With the New Overtime Rule
Examine all exempt employees making less than $684/week
($35,568/year).
There are three main options for compliance:
- Raise annual salary to $35,568 or more.
- Pay overtime above the salary.
• Requires tracking hours.
- Convert to hourly status.
• Requires tracking hours.
31Challenges of the New Overtime Rule
If converted to nonexempt, must ensure employee is paid
1.5x the regular rate for all hours worked in excess of 40 in a
workweek.
Potential adverse consequences of converting salaried
exempt to nonexempt hourly:
- Increased compensation costs if you simply divide an
employee’s annual salary by 2,080 hours (40 hours/week x 52
weeks/year).
• Consider reducing base hourly wages.
• Restructure position?
- Prestige/morale issues.
32Wage and Hour Litigation
Wage and hour violations = easy money for plaintiffs’
attorneys.
Even minor errors in applying state/federal wage laws can
result in expensive class action lawsuits and the possibility of:
- Large monetary damages
- Liquidated double or triple damages
- Attorneys’ fees (the employer’s and the employees’).
33Wage and Hour Litigation Example
IT employee Emily makes $800/week.
Emily is classified as exempt.
- Even though Emily is only supposed to work 40/hours a week,
Emily actually works 45 hours per week.
Emily sues you, claiming she is not exempt and that she
should have been paid $30/hour for her 5 hours of
overtime/week.
- Emily’s regular rate is $20/hour ($800/40 hours). Her overtime
rate is $30/hour.
- $150/week.
- $7,800/year.
- $23,400/3 years (2-year statute of limitations under FLSA; 3
years if violation is deemed willful).
34Wage and Hour Litigation Example
It turns out Emily is just one of 20 IT employees in the exact
same position, so she brings a collective and class action.
The Court concludes all the IT employees should have been
treated as nonexempt.
- $23,400 x 20 = $468,000
Double liquidated damages under the FLSA.
- $468,000 x 2 = $936,000
Plus Emily’s attorneys have $150,000 in attorneys’ fees and
costs.
- $936,000 + $150,000 = $1,086,000
Plus you need to pay your own attorneys.
35Wage and Hour Audits
Conduct an attorney-client privileged wage and hour audit of
positions currently classified as exempt to determine if the
people working in those positions are actually performing
“exempt” duties.
- Job title does not control.
Pepper attorneys regularly conduct privileged wage-and-hour
audits:
- Review job descriptions
- Interview supervisors and employees about actual job duties
- Advise on exempt/nonexempt status and options
- Reduce risk of being a litigation target.
362020 and Beyond
Compensation continues to be a major political topic.
- Cities and states regularly making changes to minimum wage
laws.
Employers under constant threat of:
- Wage and hour litigation
- Federal/state DOL wage and hour audits.
37Medical Marijuana and Employment
38Federal Law
Controlled Substances Act, 21 U.S.C. § 801(16)
Schedule I drug:
- Highly addictive
- No medical value.
Same category as cocaine and heroin.
39State Medical Marijuana Statutes
33 states and D.C. have comprehensive medical marijuana
programs.
Most laws protect medical marijuana users from
discrimination.
Most laws do not require you to accommodate medical
marijuana use at work.
Zero-tolerance drug testing policies?
40Quest Diagnostics Study
Between 2015 and 2018, 8 of 17 sectors saw double-digit
increases in the rate of positive marijuana drug tests.
Sharpest increases among transportation and warehouse
workers.
41Pennsylvania Medical Marijuana Act (PMMA)
Effective May 16, 2016.
To use medical marijuana, an individual must:
- Be a resident of the Commonwealth
- Obtain a valid prescription for a serious medical condition
- Obtain a permit from the PA Department of Health.
42PMMA
17 ailments qualify as a serious medical condition:
- Cancer
- IBS
- PTSD
- “severe, chronic or intractible” pain where traditional therapies
are ineffective.
43PMMA
Employers may not take an adverse action against an
employee based on his or her status as medical marijuana
cardholder.
Employers are permitted to discipline employees for being
under the influence in the workplace or while working where
the employee’s conduct falls below the standard of care
normally accepted for that position.
No performance of duties that involve health or safety risk.
44PA Case Law
Palmiter v. Commonwealth Health Systems Inc. (Ct. Common
Pleas Nov. 22, 2019)
- Court found that the PMMA permits an aggrieved employee to
bring a private right of action for discrimination based on medical
marijuana use.
- Pamela Palmiter, a medical assistant, was prescribed marijuana
by her physician because of chronic pain, chronic migraines and
persistent fatigue.
45Palmiter v. Commonwealth Health Systems
Inc.
After her original employer was taken over by another entity, Palmiter was informed
that she would no longer be allowed to work based on her drug test. She filed suit
against the hospital system on charges including violation of the PMMA.
The Commonwealth argued the state Department of Health had exclusive authority to
enforce the PMMA’s provisions and that Palmiter could not pursue a private right of
action under the Act.
The court disagreed. The court stated that the PMMA’s antidiscrimination provisions
“would be rendered meaningless if an aggrieved employee could not pursue a private
cause of action and seek to recover compensatory damages from an employer that
violates these provisions. . . . Recognition of an implied right of action . . . is
consistent with the [PMMA’s] stated purpose of providing safe and effective access to
medical marijuana for eligible patients, while simultaneously protecting them from
adverse employment treatment in furtherance” of the Act’s legislative intent.
The court noted that courts in Connecticut, Rhode Island, Delaware and Arizona
similarly had ruled that the medical marijuana statutes in those states provided an
implied private right of action.
46Gsell v. Universal Elec. Corp. (Allegheny Cty.
Comm. Pleas Oct. 10, 2019)
Company issued job offer contingent on successful
completion of drug screen.
Plaintiff tested positive for THC (active ingredient in
marijuana) in pre-employment drug test.
Presented medical marijuana card, but offer rescinded.
47Suber v. Pittsburgh Water & Sewer Authority
(Allegheny Ct. Comm. Pleas)
Case filed last week.
Customer service rep used medical marijuana to treat PTSD;
tested positive for marijuana in drug test.
Attempted to show medical marijuana card to HR rep, but she
refused to look at it.
Plaintiff fired and sued.
Also appealing denial of unemployment benefits.
48NJ Compassionate Use Medical Marijuana
Act (CUMMA)
Protects individuals from arrest, prosecution, property
forfeiture, criminal and other penalties under NJ law for
patients who use medical marijuana for certain medical
conditions.
Originally did not have a provision requiring employers to
accommodate medical marijuana use, stating that “nothing in
the [NJ law] shall be construed to require . . . an employer to
accommodate the medical use of marijuana in any
workplace.”
49Cotto v. Ardagh Glass Pkg. (D.N.J. Aug. 10,
2018)
Forklift driver used medical marijuana; employer refused to
waive drug test requirement.
Court ruled that passing the drug test was an essential
function of the job.
Dismissed disability discrimination case against employer.
50Wild v. Carriage Funeral Holdings, Inc.
Case pending before NJ Supreme Court.
- Funeral director fired after blood test was positive for marijuana.
- Employee was driving a vehicle for work and was struck by
another vehicle that ran a stop sign.
- At the hospital, employee told doctor he used medical marijuana
to treat cancer. Doctor stated he did not appear to be intoxicated.
Employer insisted on blood test.
- Employee sued, alleging violations of NJLAD; employer moved
to dismiss.
51Wild v. Carriage Funeral Holdings. Inc.
Trial court dismissed case, holding that CUMMA does not
contain employment protections for medical marijuana users
and NJLAD does not require employers to accommodate
medical marijuana use.
Appellate Division reversed trial court, holding that, while
CUMMA does not specifically protect employees who use
medical marijuana, the plaintiff may still have a claim under
the NJLAD for discrimination and failure to accommodate.
52New Jersey Compassionate Use Medical
Cannabis Act
An amendment to CUMMA, adopted in July 2019.
Bars employers from taking adverse action “based solely on
the employee’s status” as a medical cannabis patient.
If an employer has a drug testing policy, any employee or
applicant who tests positive must be provided with an
opportunity to present a legitimate medical explanation for the
positive result or request a retest.
Law does not permit employees to be impaired at work.
53NJCUMCA v. NJLAD
Employees likely to bring suit under both statutes.
- NJLAD allows for punitive damages and fee-shifting.
54Key Takeaways
Modify drug policies.
Train managers.
Document evidence of conduct falling below standard of care
normally accepted for position.
Consider ADA/PHRA duty to accommodate.
Follow new NJ law by providing opportunity to supply medical
explanation for positive drug test result.
Keep medical information confidential.
55Q&A
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questions to usEmail dolanb@pepperlaw.com if interested in receiving a CLE form.
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