In a unanimous decision, the U.S. Supreme Court held that an employee’s failure to exhaust administrative remedies is not a jurisdictional prerequisite to filing a lawsuit, rather it is a procedural requirement that could be waived by the employer’s failure to timely raise the issue.

In Fort Bend County, Texas v. Davis, — S.Ct. —- (U.S. June 3, 2019) the plaintiff, Davis, filed a charge of discrimination alleging sex discrimination and retaliation. While that charge was pending, Davis was told to report to work on a Sunday. When Davis refused due to a prior church commitment, her employment was terminated. Intending to amend her earlier charge, Davis submitted an EEOC Intake Questionnaire on which she handwrote “religion” under “Harms or Actions” and checked the boxes for “discharge” and “reasonable accommodation.” However, Davis made no change to her formal charge of discrimination document to allege discrimination on the basis of her religion.

In January 2012, Davis filed suit claiming retaliation for reporting sexual harassment and religious discrimination. A year and a half later, the district court granted Fort Bend’s motion for summary judgment; however, in 2014, the appellate court reversed the decision regarding Davis’ religious discrimination claim. After the Supreme Court denied Fort Bend’s petition for certiorari, the case returned to the district court for adjudication of Davis’ religious discrimination claim.

Upon its return to district court, Fort Bend filed a motion to dismiss Davis’ religious discrimination claim arguing that the district court lacked jurisdiction to hear the claim because Davis failed to exhaust her administrative remedies by failing to include her religious discrimination claim in her charge of discrimination. The district court agreed and dismissed Davis’ claim. Davis v. Fort Bend County, Texas, 2016 WL 4479527 (S.D. Tex., Aug. 24, 2016)

On appeal, the Fifth Circuit Court of Appeals reversed the district court’s decision, concluding that the charge-filing requirement was a “prudential prerequisite to suit” but was not jurisdictional. Because Fort Bend had waited almost five years, and after a full round of appeals to raise the issue, it had waived its right to do so at this stage of litigation. Davis v. Fort Bend County, Texas, 893 F.3d 300 (5^th Cir. 2018). Fort Bend appealed the decision to the Supreme Court, which accepted the appeal.

The Supreme Court agreed with the Fifth Circuit. Explaining the distinction between jurisdictional prescriptions and non-jurisdictional claim-processing rules, the court explained that a claim-processing rule may be “mandatory” in that a court must enforce the rule if properly raised, but that even a mandatory rule may be forfeited if a party waits too long to assert it. In contrast, a jurisdictional requirement may be raised at any time during litigation. Ultimately, the Supreme Court concluded that the EEOC charge requirement fit into the category of a claim-processing rule. The Supreme Court affirmed the Fifth Circuit and sent the case back to the district court for further proceedings.

What does the Supreme Court’s decision mean for employers?

From an employer’s perspective, the Supreme Court’s decision has little practical effect. An employee still must file a charge of discrimination with the EEOC (or similar state/local agency) before filing a lawsuit or face the prospect of having the lawsuit dismissed. Attorneys representing employers, however, should be very careful to compare the allegations contained in the plaintiff’s charge of discrimination and those contained in a lawsuit. Should the employee fail to file a charge, or fail to raise specific allegations within a charge, the burden is on the employer to raise the issue as soon as practicable (i.e., in as an affirmative defense in an answer to the complaint or in a motion to dismiss) or risk waiving the defense.

As we explained last week, a federal judge recently ruled that all employers who are required to submit EEO-1 surveys must report 2018 employee pay data by Sept. 30, 2019. In that ruling, the court also ordered the EEOC to collect a second year of pay data and gave the agency a choice between collecting employers’ 2017 data with the 2018 pay data or waiting to collect 2019 pay data next year. 

The EEOC announced May 1 that employers will be required to submit 2017 and 2018 pay data this year. The agency said it will make the collection portal available by mid-July and will provide information and training prior to that date.

Employers should not wait to start compiling the requisite data as it is expected to be quite time-consuming, especially given employers must now report the data for 2017 and 2018. As we previously explained, under the new reporting requirements, the employer must report earnings and hours data aggregated according to the EEO-1 job categories to which the employees are assigned for all full- and part-time employees employed during a payroll period between Oct. 1 and Dec. 31 (the employer can pick the period). For each EEO-1 job category, the employer must indicate the number of employees falling within each of the 12 pay bands by sex and race/ethnicity. Employers are required to use W-2 “Box 1” earnings to determine the pay band into which each employee falls. Additionally, for each EEO-1 job category, the employer must aggregate hours data for all employees in the pay band by sex and race/ethnicity. Hours worked for non-exempt employees will be calculated by using their FLSA recorded hours. For full-time exempt employees, hours will be calculated by multiplying 40 hours by the number of weeks they worked in the applicable year. For part-time exempt employees, hours will be calculated by multiplying 20 hours by the number of weeks they worked in the applicable year.

If you have questions about your company’s reporting requirements, please contact any of the attorneys in our Employment & Labor Group.

A federal judge reportedly ruled April 25 that all employers who are required to submit EEO-1 surveys on employee demographic data must report employee pay data by Sept. 30, 2019.  This includes employers with at least 100 employees and federal contractors with at least 50 employees and a contract of $50,000 or more with the federal government. 

The pay data reporting provisions were initiated by the Obama administration but were suspended in 2017 by the Trump administration and have been the subject of protracted litigation (National Women’s Law Center, et al. v. Office of Management and Budget, et al., Case No. 17-cv-2458).

The judge also ordered the EEOC to collect a second year of pay data.  It gave the agency a choice between collecting employers’ 2017 data with the 2018 pay data or waiting to collect 2019 pay data next year. The EEOC has until May 3 to decide which second-year dataset to collect. 

Advocates for the collection of pay data argue that it will help identify and potentially narrow systemic pay gaps based on race, sex and ethnicity.  However, opponents have argued that W-2 wages will not adequately take into account the nondiscriminatory aspects of pay, including shift differentials, education, etc.  Time will tell which side is correct. 

Under the new reporting requirements, the employer must report earnings and hours data aggregated according to the EEO-1 job categories to which the employees are assigned for all full- and part-time employees employed during a payroll period between Oct. 1 and Dec. 31 (the employer can pick the period).  For each EEO-1 job category, the employer must indicate the number of employees falling within each of the 12 pay bands by sex and race/ethnicity. Employers are required to use W-2 “Box 1” earnings to determine the pay band into which each employee falls.  Additionally, for each EEO-1 job category, the employer must aggregate hours data for all employees in the pay band by sex and race/ethnicity.  Hours worked for non-exempt employees will be calculated by using their FLSA recorded hours. For full-time exempt employees, hours will be calculated by multiplying 40 hours by the number of weeks they worked in the applicable year. For part-time exempt employees, hours will be calculated by multiplying 20 hours by the number of weeks they worked in the applicable year.

It is imperative for employers to start (or continue) gathering the relevant 2018 wage and hour data and preparing it for submission, as this process will take a fair amount of time.  It is also important to note that traditional EEO-1 surveys still have to be filed by May 31, 2019.

If you have questions about your company’s reporting requirements, please contact any of the attorneys in our Employment & Labor Group.

On April 1, 2019, the U.S. Department of Labor (DOL) offered a simplified test in a Notice of Proposed Rulemaking to determine whether two entities should be considered joint employers under the Fair Labor Standards Act (FLSA). The FLSA provides that two entities can be jointly and severally responsible for an employee’s wages, and thus the potential FLSA violations of either entity, if they function as joint employers. The notice sets out that the employment relationship should be determined based on a balance of four factors, specifically, whether a potential joint employer actually exercises the power to:

• hire or fire the employee;
• supervise and control the employee’s work schedules or conditions of employment;
• determine the employee’s rate and method of payment; and
• maintain the employee’s employment records.

The DOL explained that these “factors are consistent with section 3(d) of the FLSA, which defines an ‘employer’ to ‘include[] any person acting directly or indirectly in the interest of an employer in relation to an employee,’ 29 U.S.C. 203(d), and with Supreme Court precedent. They are clear and easy to understand. They can be used across a wide variety of contexts. And they are highly probative of the ultimate inquiry in determining joint employer status: whether a potential joint employer, as a matter of economic reality, actually exercises sufficient control over an employee to qualify as a joint employer under the [FLSA].”

The Notice of Proposed Rulemaking comes almost two years after the DOL withdrew the Obama-era guidance letter 2016-1, which resulted in an expansion of the joint employer doctrine such that even a business entity with very little control, if any, over an employee could still be considered a joint employer.

The Proposed Rulemaking is a welcome relief to businesses, including franchisors that have little to no control over franchisee employees. The DOL’s proposal states that the business model, including a franchise relationship, does not have any bearing on whether there is a joint employment relationship. Furthermore, the DOL included several hypothetical examples and explained that a franchisor providing its franchisees with sample employment materials, applications or policies or requiring the franchisees to conduct certain training would not result in a joint employment relationship if there was no other day-to-day control exercised by the franchisor.

If after the notice and comment period, the DOL adopts the proposed rule, it will not have the weight of law. However, it will provide guidance to the agency and courts when interpreting the FLSA and joint employment situations. If you have questions about how your business may be affected by this proposed rule, please contact any of the attorneys in our Employment & Labor Practice Group.

The Department of Labor (DOL) issued its long-awaited proposed overtime rule and new exemption threshold under the Fair Labor Standards Act (FLSA) on March 7, 2019. The regulation, which replaces the controversial rule issued under the Obama administration in 2016, raises the salary threshold from the $23,660 minimum established in 2004 to $35,308, or $679 per week. As such, employees earning under $35,308 a year must be paid overtime for hours worked in excess of 40 each week. Above this salary level, eligibility for overtime varies based on job duties.

The new proposed threshold is more than $12,000 below the $47,476 threshold set forth in the 2016 regulations the Obama DOL issued. Early projections estimate the current change will create overtime eligibility for an additional 1.1 million workers, which falls significantly below the 4.2 million overtime eligible workers projected under the 2016 rule. Importantly, where the 2016 rule created a formula by which the salary threshold would increase automatically with inflation, here, the 2019 rule allows the DOL to update the minimum salary at its discretion every four years. Additionally, each subsequent proposed threshold update will continue to be subject to the notice-and-comment rulemaking requirement. In determining the proposed overtime rule, the DOL says it received more than 200,000 comments as part of its 2017 Request for Information (RFI).

For highly compensated employees, the DOL raised the salary threshold from the $100,000 mark set in the 2004 regulations to $147,414. This amount is actually about $13,000 higher than the Obama administration’s 2016 rule. And while the minimum salary thresholds saw an overhaul, the DOL declined to make any changes to the duties tests, which make up part of the FLSA exemption analysis.

The proposed rule, which is expected to take effect in January 2020, will now be subject to a 60-day public comment period. The DOL encourages anyone interested to submit comments about the proposed rule electronically at www.regulations.gov, in the rulemaking docket RIN 1235-AA20.

In anticipation of the 2020 implementation date, employers should begin reviewing and evaluating the status of their current employees and creating a schedule to update positions as needed. If you have questions about the proposed overtime rule, the classification of your employees, or other FLSA compliance issues, the attorneys in our Employment & Labor Practice Group can help you navigate these changes.

The Missouri Supreme Court held on Feb. 26, 2019, that under the Missouri Human Rights Act (MHRA), sex-based stereotypical attitudes can form the basis of a sex discrimination claim when the complaining party is homosexual. While finding sexual orientation is not protected under the MHRA, and standing alone, the characteristic of being lesbian, gay, or bisexual cannot sustain a sex stereotyping claim, the court’s holding does offer greater protections for LGBTQ employees in Missouri.

In 2014, Harold Lampley and Rene Frost filed charges of discrimination with the Missouri Commission on Human Rights (MCHR) against their employer, the Missouri Department of Social Services Child Support Enforcement Division. Lampley, a gay man, alleged that his employer discriminated against him based on sex because he does not exhibit the stereotypical attributes of male appearance and behavior. Because he exhibited non-stereotypical behaviors, Lampley said, he was subjected to harassment at work and grossly underscored in a performance evaluation in retaliation for complaining about the harassment.

Frost alleged discrimination and retaliation for her association and close friendship with Lampley. Specifically, she alleged she suffered verbal abuse, threats about her performance review, and other harassing behaviors, in addition to being moved from Lampley’s work area and told they could no longer eat lunch together. Frost believed her employer’s conduct stemmed from her friendship with Lampley, and noted his non-stereotypical attributes. The MCHR dismissed both charges after determining Lampley and Frost made claims of discrimination based on sexual orientation and finding that sexual orientation is not protected by the MHRA.

The Missouri Supreme Court found both Lampley and Frost had adequately stated a claim for sex discrimination based on sex stereotyping, and not based on sexual orientation. In both charges, Lampley and Frost stated Lampley was gay, but the court found this fact was incidental to the basis for the discrimination. The court likened the facts to those in the U.S. Supreme Court case Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), where a female senior manager was denied partnership after partners referred to her as “macho” and needing “a course at charm school.” She was advised that to become a partner she needed to “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.” The U.S. Supreme Court recognized when an employer relies upon sex stereotypes in its employment decisions, that evidence may support an inference of sex discrimination.

The Missouri Supreme Court held the MCHR unreasonably and erroneously assumed that because Lampley was gay, there was no possible sex discrimination claim other than one for sexual orientation. As a result, it found an employee who suffers an adverse employment decision based on sex-based stereotypical attitudes can support an inference of unlawful sex discrimination.

If you have questions about the court’s holding or want to discuss the effects of its decision, please contact one of the attorneys in Greensfelder’s Employment & Labor Practice Group.

Companies encouraged to revisit privacy policies in light of projected increase in litigation

The Illinois Supreme Court in January 2019 held that plaintiffs bringing claims under the Illinois Biometric Information Privacy Act (BIPA) are not required to allege that they suffered any actual harm as the result of a violation of the act. Instead, it’s enough to allege that an employer or other entity simply violated BIPA’s notice, consent or disclosure requirements. The court’s opinion in Rosenbach v. Six Flags is expected to result in an increase in class action litigation under BIPA, which regulates how private entities use information based on “biometric identifiers” such as fingerprints and retina scans.  

The court emphasized in Rosenbach that individuals suffer “real and significant” injuries when the right to control biometric data is compromised. For that reason, the act was intended to prevent harm by “imposing safeguards to insure that individuals’ and customers’ privacy rights in their biometric identifiers and biometric information are properly honored and protected to begin with, before they are or can be compromised.” As a secondary measure, BIPA subjects “entities who fail to follow the statute’s requirements to substantial potential liability.” In designing the act to impose liability even for “technical” violations of the statute, companies have the “strongest possible incentive to conform to the law and prevent problems before they occur and cannot be undone.”

The decision serves as an important reminder to businesses — even those operating outside Illinois — to consider the need for information privacy policies and notice and consent procedures related to the collection of biometric or other personal information. In light of the Rosenbach decision’s projected impact on litigation in this arena and increasing concerns surrounding individual privacy rights in connection with technology, companies should review the following checklist of preliminary considerations related to biometric and information privacy programs:

• Take an inventory of current practices and policies.
  • What types of biometric or personal information is the company collecting, storing or transmitting?
  • Does the company have a policy in place, complete with notice and consent procedures designed to educate individuals about the company’s privacy practices?
• Become familiar with applicable law.
  • Biometric privacy: Illinois, Washington and Texas have biometric information privacy laws.
  • Fingerprinting: New York prohibits employers from requiring employees to be fingerprinted as a condition of employment.
  • Data breach: Most states have adopted laws related to data breach notification requirements that may influence your company’s privacy program. In fact, some states, like Illinois, specifically include “biometric data” in the definition of protected “personal information.”
  • Other state laws also may potentially impact an information privacy program.
• Consider the impact of adopting a biometric information privacy policy.
  • Has the company considered potential accommodations that may be offered to employees or other individuals who decline to provide biometric information for religious, medical or other reasons?
  • Has the company considered whether a proposed policy or changed procedure may trigger bargaining obligations with a representative union?

The checklist represents initial considerations companies should think through. Additional topics that may be implicated by applicable law or the adoption of a biometric information privacy policy include:

• Do the company’s insurance policies provide coverage for BIPA violations or common law privacy tort claims?
• Do vendors or third parties that have access to biometric data, such as personnel services providers or payroll companies, comply with applicable law and information privacy best practices?
• For companies with operations in multiple states, how should the company design a biometric information privacy policy to harmonize requirements across jurisdictions?

For questions about the impact of Rosenbach v. Six Flags or to discuss designing a biometric information privacy program for your company, contact the attorneys in our Employment & Labor group.

For employers, flu season is a great time for a checkup – not with your doctor, but with your policies and procedures related to employee sick leave. Below are some common questions employers may have about how to handle employee sick leave during this flu season.

What are the benefits and risks of letting employees work from home while sick?

Situations vary, so employers should be mindful of whether the employee even has the ability to do meaningful work while under the weather. If an employee is in a position that allows for telecommuting, feels up to it, and the employer’s policies provide for the option, there may be benefits to allowing remote work, including:

• Keeping the office healthy and germ-free.
• Improving morale if employees feel like they can recuperate and work from home while not losing paid time off or increasing their own workload or the workloads of their colleagues.
• Keeping projects on track and meeting deadlines.

On the other hand, potential downsides may include:

• A limited ability to monitor hours worked.
• The quality of work product may be affected by medication, symptoms, etc.
• The potential to open up potential arguments for unfair treatment if telecommuting assignments are not permitted for everyone. 

An important thing to remember is that under the Fair Labor Standards Act, any employee who performs productive work must be compensated. If an exempt employee only performs one hour of work remotely, he or she must be paid for the entire day. Employers may deduct the non-working hours from a paid sick leave program, if applicable; however, pay may not be reduced, even if the employee does not have enough vested paid sick leave hours. Non-exempt employees need only be paid for actual hours worked and then the employer can count the unworked hours as paid sick time, if applicable, and adjust pay as necessary.

How should multi-state employers handle the varying state and local laws related to sick leave policies?

The law on paid sick leave is a patchwork of state and local provisions, so if your company is covered by one or more paid sick leave laws, it’s important to adopt a paid sick leave policy consistent with the laws that apply to your company. The most efficient way to navigate the various requirements is to consult an attorney and ask that your sick leave policy be reviewed and revised to comply with any state and local laws that apply. If certain requirements cannot be incorporated into a universal policy, employers should consider specific addendums that address the more stringent state or local requirements. 

When is the flu covered by the FMLA or ADA?

In some circumstances, employees may be covered by the FMLA or the ADA when suffering from the flu. An employee who is otherwise eligible for FMLA coverage may be qualified for FMLA leave for absences related to the flu if it becomes a protected “serious health condition.” Under the FMLA, the flu could be considered a “serious health condition” if it requires an overnight stay for treatment or incapacitates an employee for more than three consecutive days and either requires two or more treatments from a health care provider or one treatment from a health care provider with a course of continuing treatment (such as medication). Additionally, eligible employees may qualify for FMLA leave to care for a family member suffering from the flu if the family member’s case of the flu presents a serious health condition.

It’s less likely the flu would be considered a covered disability under the ADA because the flu typically doesn’t last long enough to substantially limit major life activities. But it is possible that employees suffering from the flu could still be covered by the ADA if they are “regarded as” having a disability. In rare cases when the flu could be considered an actual disability, ADA leave could be necessary for employees who have already exhausted FMLA leave or who are not eligible for FMLA leave at all.

While ordinary cases of the flu are unlikely to trigger the FMLA or ADA, it’s important not to forget that the ADA or FMLA may come into play in these scenarios. It’s a good idea to keep the FMLA and ADA on your radar when dealing with any employee absence for illness.

Who may be covered by paid sick leave laws but aren’t covered by the FMLA or ADA?

Paid sick leave laws can fill the gaps for conditions that aren’t considered serious health conditions under the FMLA or that don’t substantially limit major life activities under the ADA. They may also cover employers and employees who aren’t covered by the FMLA and ADA either because the employer isn’t large enough (ADA/FMLA) or because the employee hasn’t been at the employer long enough or worked enough hours to qualify (FMLA).

For any employer covered by paid sick leave laws, any existing leave policy should be tailored to comply with applicable law and to outline the specific rights and responsibilities found in the law. For example, many paid sick leave laws specify the rate at which employees must accrue paid sick leave and how much of this leave can be carried over from year to year. Employers should ensure that existing paid leave policies are at least as generous as applicable paid leave laws. 

 What about employees who abuse sick leave policies?

Just like any other type of leave, sick leave presents the potential for abuse. Ordinarily, employers can manage this by keeping good records and monitoring absences for patterns such as those clustered around weekends or holidays. Employers should also enforce the policies they already have related to absences, such as specific procedures for calling in sick or providing doctor’s notes in certain circumstances. If an employer sees a problematic pattern, it may be time for a discussion with the employee. This is a good opportunity to set expectations or to learn if the employee needs accommodations or other assistance.

In terms of a larger-scale solution, many employers find it beneficial to transition to a policy that does not differentiate between types of absence (vacation, sick leave, etc.). When companies have a specific amount of paid time off allocated to sick time, employees often feel like they need to use this time, whether or not they are sick.

What’s the takeaway?

Flu season invokes a cross-section of federal, state, and local laws that may affect employee leave. A quick checkup with your company’s policies related to leave can help ease your HR department’s suffering next time the flu hits your office.