Sexual Harassment Policies and Best Practices: A Comprehensive Guide

1. Let It Go: Employment Law in 2018 Presented to the Association of Corporate Counsel of Washington January 17, 2019 By: Robert M. Howie & Gena M. Bomotti of Fox Rothschild & Courtney Fuller of Guidant Financial Group

2. SEXUAL HARASSMENT

3. Model Sexual Harassment Policies And Best Practices Are Here • WSHRC convened a stakeholder work group to create these, as required under the 2018 SB 6471 • Introduction and Best Practices • “not mandatory,” and don’t create an affirmative defense or safe harbor • Sexual Harassment Model Policy • To assist in creating a workplace that is free from sexual harassment • Sexual Harassment Model Procedures • To be used by anyone who is responsible for receiving sexual harassment complaint

4. Best Practices & Model Policies • Understanding sexual harassment (power) • Leadership • Policy • Procedure & Investigations • Communication • Training • Contacting law enforcement

5. Decline of Faragher/Ellerth Defense? • Minarsky v. Susquehanna County (3rd Cir. 2018) • SJ Reversed by Third Circuit – focus on Faragher/Ellerth • Affirmative defense for non-tangible impact harassment by supervisor • Employer exercised reasonable care to prevent and correct promptly • Plaintiff failed to take advantage of preventive or corrective opportunity • Here, court found justification for Plaintiff’s failure to report ongoing conduct by her boss over several years

6. The Creepy Customer • EEOC v. Costco Wholesale (7th Cir. 2018) • Jury awarded 250K because Plaintiff was subjected to sexually hostile work environment by customer – Costco appealed and 7th Circuit affirmed (Amy Comey Barrett – SCOTUS finalist) • Harassment need not be overtly sexual – it can be “demeaning, ostracizing or terrorizing” – Costco called the conduct “tepid” • Was customer “unstable and obsessive” or “friendly but overeager” • Also back pay possible during period of medical (but unpaid) leave given hostile work environment

7. Courts Continue to Show Reduced Tolerance for Sexual Comments • Ray v. International Paper Company (4th Cir. 2018) • Denial of overtime work was tangible employment action – even if total amount of overtime was higher in subsequent years • Nexus between employment action and offensive conduct • Retaliation claim survives SJ too

8. DISABILITY

9. 195 Absences in a Year – too many? • Lipp v. Cargill (8th Cir. December 2018) • Lipp took leave in 2014 for multiple reasons – caring for relative and her own medical condition – exhausted FMLA • Cargill fired her on the 195th absence – she sued • Court said 195 absences renders Lipp not a qualified individual under the ADA • Employer not punished for generously allowing more absences • Focus is on whether person is able to perform the job at the time • Reliable consistent attendance is essential function

10. ADA/Accommodation – Full Time • Hostettler v. The College of Wooster(6th Cir. 2018) • Key takeaways • If you take the position that full time work is an essential function, be prepared to prove it • “on its own, however, full-time presence at work is not an essential function. An employer must tie time-and-presence requirements to some other job requirement.” • An employee might be able to show that they can achieve the job’s essential functions with a modified schedule

11. ADA/Accommodation – Telework • Mosby-Meacham v. Memphis Light (6th Cir 2018) • Work from home CAN be reasonable accommodation in some cases • Limited in time (10 weeks) • Items in job description that employer relied on for “in person” were never actually performed • She had worked from home previously without incident • Testimony of boss and co-workers • Snead v. Florida A&M (11th Cir. 2018) • Campus police officer limited to working 8 hour day shifts – court affirmed jury verdict for employee (job description didn’t require more)

12. ADA – Employer Gets Wide Latitude to Set Essential Functions • Can a needle-phobic pharmacist be qualified to perform his job? • 1st Circuit says no

13. Disability Accommodation - Concentration • Moses v. Dassault Falcon Jet (8th Cir. 2018) – employee who worked as aircraft safety inspector suffered from depression that affected his ability to concentrate at work • Court held that employee could not perform essential job function of concentrating • IME conducted by employer

14. Disability Accommodation – Attendance • Neufelt v. WinCo Holdings – “regular and predictable attendance was an essential function” of cashier job • Credeur v. Louisiana Office of Attorney General – Attendance essential for litigator

15. Pot Use as Reasonable Accommodation? • Massachusetts Supreme Judicial Court says yes, at least under some circumstances (Barbuto v. ASM– 2017) • Employee suffered from Crohn’s disease – medical marijuana prescribed – used at home – she failed drug test at work – fired • Employer argued, conduct that violates federal law cannot be a reasonable accommodation. Court disagreed • Conduct illegal under federal law could be reasonable accommodation • Employer also had to engage in interactive process • Undue hardship might be defense (federal contractor, transportation)

16. ADA Accommodation – A Helpful Washington Case • Gamble v. City of Seattle (Wn. App. Dec. 2018) • SJ affirmed for employer (very unusual in WA) • Key points • New supervisor was held to be on notice of prior accommodations • Employer has an obligation to accommodate employee’s disability unless it would impose an undue hardship on the business • Slight delay in providing accommodation not fatal • Employee cannot just demand accommodation of part-time work the next day – employer acted reasonably in taking time • Gamble failed to advise City Light that she needed additional items – ongoing obligation on the part of employee to interact

17. ADA Burdens of Proof – A Helpful 9th Circuit Case?! • Snapp v. BNSF (9th Cir. 2018) • If an employer fails to engage in the interactive process, who bears the burden of proof at trial to show that an accommodation was available? Ninth Circuit: Employee • Key Takeaways • Trial is different than SJ – burden back to employee • Employer should always engage in interactive process to avoid problems • Key fact – was there an actual accommodation that could work

18. ADA Leaves of Absence – A Light At the End of the Endless Tunnel? • When an employee asks for 6 months of leave as a reasonable accommodation, does an employer have to grant it? • Severson v. Heartland Woodcraft, Inc. (7th Cir. 2017) – No. • Key takeaways • In 7th Circuit, courts take seriously that a qualified person with a disability is a person who “with or without reasonable accommodation, can perform the essential functions of the” job. • “a couple of days or even a couple of weeks” may be reasonable, but no “long term leave” is required • 9th Circuit takes a broader view

19. ADA/Accommodation – Ticky Tack • EEOC v. Dolgencorp (6th Cir. 2018) • Key takeaways • Accommodation requires modifying neutral policy, relying on the neutral policy often will not cut it (not essential function) • Dollar General argued that she could have taken glucose pills or candy, but court noted that Dollar General policy also prohibited chewing items so it might have violated that one too • Manager’s refusal ended the process, so why should she come up with solutions? • Case written by Judge Jeffrey Sutton – prolific conservative judge

20. BACKGROUND CHECKS

21. Ban the Box Goes Statewide: Washington’s Fair Chance Act • Employers may not: • Include a question on an application • Inquire orally or in writing • Receive information through a criminal history check • Otherwise obtain . . . . • “Information about an applicant’s criminal record until after the employer initially determines that the applicant is otherwise qualified for the position”

22. NEW ACCOMMODATION OBLIGATIONS

23. Accommodating Victims of Domestic Violence (HB 2661) • Washington already provides for protected leave for victims of domestic violence, sexual assault or stalking • Employers are now prohibiting from not hiring someone because of their status or “perceived status” as a victim of domestic violence, sexual assault or stalking OR firing OR discriminating against them in any term or condition of employment – new “protected class” • Employers are also required to provide “reasonable safety accommodations in the workplace” to a victim of domestic violence, sexual assault or stalking absent undue hardship

24. Accommodating Victims of Domestic Violence • Undue hardship is defined as “an action requiring significant difficulty or expense” • Examples provided: • transfer; • reassignment; • modified schedule; • changed work telephone number, email address or workstation; • installed lock; • implemented safety procedure; • any other adjustment to job structure, workplace facility, or work requirement.

25. Accommodations for Pregnant Workers • Healthy Starts Act requires the following: • Some accommodation requests require no medical verification and do NOT allow for undue hardship (and do not require disability): • More frequent, longer or flexible restroom breaks • A change in policies precluding eating or drinking at work • Access to seating or more frequent seating breaks • Restricting lifting to 17 pounds or less

26. Accommodations for Pregnant Workers • Healthy Starts Act requires the following: • Some accommodation requests allow for medical verification and for undue hardship (but still do not require disability): • Job restructuring (modified schedule, reassignment) • Temporary transfer to a less hazardous or strenuous job • Providing assistance with manual labor and limits on lifting • Flexible scheduling for pre-natal visits • Any further pregnancy accommodation an employee may request • No retaliation • Private right of action

27. WAGE AND HOUR/PAY EQUITY

28. Waiting for a Salary Raise • Obama DOL Proposed Raise In Salary Levels for Exemption • Salary threshold for overtime exemption was to increase from $23,660to $47,476annually (exclusive of board, lodging) – and then increase automatically thereafter • Applied to Executive, Administrative, Professional, Computer Employee • Enjoined by a court in 2016; back to old rules • Now DOL working on revised rules – timing uncertain

29. Washington State L&I – Updating Regs • Second Pre-Draft Rules out in November 2018 • L&I intends to propose rule that will raise the salary basis threshold to between 2 and 2.5 times the state minimum wage for a 40 hour work week • Almost certainly coming in 2019 – effective in 2020 • Included questions for stakeholders on implementation/phase-in plan, definition of “primary duty,” and how the criteria for the duties test should differ (if at all) between the state and federal rules.

30. The Pay Equity Act (2SHB 1506) • You might have thought it was already unlawful to pay women less than men for performing the same work – and it was • But here comes the Washington Legislature! • Employers cannot discriminate in compensation between “similarly employed” employees, which means: • Work for same employer • Performance of the job requires similar skill, efforts and responsibility • Jobs are performed under similar working conditions • “Job titles alone are not determinative” of similar employment

31. Pay Equity, Continued • Good faith bona fide job related factors can explain differences as long as they are: • Consistent with business necessity • Are not based on or derived from a gender-based differential; and • Account for the entire differential • Bona fide job related factors include: • Education, training, experience • Seniority • Merit • Bona fide regional difference in compensation levels • Local ordinances that require higher wages • Prior wage or salary history is NOT a bona fide factor

32. Pay Equity, Continued • Compensation = “discretionary and nondiscretionary wages and benefits provided by an employer to an employee as a result of the employment relationship” • Employer bears the burden of proof on a bona fide difference in pay • Also unlawful for employers to “limit or deprive an employee of career advancement opportunities” because of gender

33. Pay Equity, Continued • Employers barred from requiring non-disclosure by employee of his or her wages as a condition of employment • Employers forbidden to retaliate if an employee inquires about, discloses, compares or otherwise discusses the employee’s wages or the wages of any other employee • Exception if employee has access to compensation information of other employees as part of his or her essential job functions • Private right of action (3 year statute of limitations + bonus year) • Actual damages; statutory damages ($5,000 minimum); fees

34. Service Advisors at Auto Dealers Are Exempt – So Why Should I Care? • Encino Motorcars, LLC v. Navarro(U.S. 4/2/18) • Exemption applies to "any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements“ • Court said a service advisor counts • Court rejected “narrow construction” of exemptions - FLSA gives no textual indication that its exemptions should be construed narrowly, so they should be given a fair reading

35. Prior Salary = Radioactive • Can an employer rely on an applicant’s salary history in setting pay or does that violate the federal Equal Pay Act? • Rizo v. Yovino (9th Cir. 2018) says employer cannot so rely • Key Takeaways • “Any factor other than sex” must be job related • Prior salary is not job related as it “perpetuates the very stereotypes about the value of work that the Equal Pay Act was designed to end.” • Prior salary should not be used in the salary setting mix • Can an applicant use prior salary as a negotiating tool?

36. Prior Salary = Radioactive (2) • Various jurisdictions are prohibiting employers from inquiring about or using salary history • Oregon, Massachusetts, Delaware, Connecticut, Vermont • New York City, San Francisco, Philadelphia • It would seem only a matter of time until Washington State follows • Some states have gone the opposite direction and prohibited local bans (Michigan, Wisconsin)

37. WRONGFUL DISCHARGE

38. Washington Supreme Court Still Trying to Figure Our Wrongful Discharge Tort • Employment in Washington is supposedly at will – absent a law that prevents termination for specified reasons • Years ago, Washington courts created “wrongful discharge in violation of public policy” tort – and what a mess that was • Martin v. Gonzaga University (Wn. 2018) – Martin claimed he was fired because he complained about inadequate padding on the basketball court – GU claimed he was insubordinate • Court clarified test – was discharge motivated by reasons that contravene clear mandate of public policy (“significant factor”)? • Court also rejected claim for failure to provide personnel file copy

39. LEAVES

40. Initiative Measure 1433 • State Minimum wage increased to $12 on 1/1/19 • $13.50 in 2020 • Then adjusted for inflation thereafter • State paid sick leave started in 2018 • Accrue one hour for each 40 hours worked (front loading OK; no caps) • Broad use (employee sickness, family member care, including preventive, domestic violence) • Verification note only after 3 days • Notice of available sick leave required • Carry over up to 40 hours • PTO can substitute if equal • No required payout on termination

41. Washington State Puts the Protection in Protected Leave • If a pregnant employee takes unforeseeable leave for an episode of incapacitation, can an employee use the leave as a negative factor in a subsequent employment decision? • Espindola v. Apple King. (Wn. App. 2018) – No. • Key takeaways • Be cautious about applying a points-based attendance policy. • Employers forbidden to use FMLA/WFLA leave as negative factor under no fault attendance policy • Adequate notice of leave (content, timing, compliance with policy) • When medical leave is unforeseeable, no advance notice is required

42. Washington State Paid Family Leave • Provides for paid leave (up to 18 weeks in some cases) • More than just maternity leave • Up to $1,000 a week – state administered program (employer pays 37 percent) • Premiums collected 1/1/19; program starts 2020 • Key – employers can ask to opt out if equivalent program

43. Can I Contact An Employee on FMLA Leave? Maybe, if brief! • So an employee is out on FMLA leave. Someone reaches out to ask a question or make contact. Is that interference? • Antekeier v. Laboratory Corporation of America (E.D. Va. 2018) • Employer can: • Contact employee on leave if unrelated to work (happy birthday call) • Contact employee on leave for work related item if “de minimis” (requesting contact person information; telephone number; status of matter) • Employer cannot: ask employee to work while on FMLA leave

44. ARBITRATION

45. To Arbitrate or Not to Arbitrate, That is the Question! • Epic battle over mandatory arbitration resolved by United States Supreme Court • Lewis v. Epic Systems Corp.(U.S. 2018) • Key takeways • Federal Arbitration Act requires courts to enforce arbitration agreements by their own terms – that can include waiver of right to participate in class claims • National Labor Relations Act does not provide a right for employees to participate in class claims (concerted protected activity) • Still in play: unconscionability; mandatory v. opt-out; practical concerns

46. Gov. Inslee Fights Back Against Epic • Executive Order signed June 12: • “To the extent permissible under state and federal law, when making purchasing and other procurement decisions, all state executive and small cabinet agencies shall seek to contract with qualified entities and business owners that can demonstrate or will certify that their employees are not required to sign, as a condition of employment, mandatory individual arbitration clauses and class or collective action waivers.”

47. Restriction on Confidential Arbitration • SB 6313 – Provision in an “employment contract or agreement” is against public policy, void and unenforceable if: • It requires an employee to waive his or her right to “publicly pursue a cause of action arising under” state or federal anti-discrimination law or to “publicly file” a complaint with state or federal agency; OR • It requires an employee to resolve claims of discrimination in a “confidential” dispute resolution process • This law would appear to severely limit arbitration that is confidential, but does it run afoul of federal law? (FAA – Epic)

48. Winning the Battle; Losing the War? Several large companies have announced that they will no longer require arbitration of sexual harassment claims: What about racial or other harassment claims? What about sex discrimination claims? Wage claims or other claims?

49. And Do Sweat the Small Stuff • Huckaba v. Ref-Chem LP (5th Cir. 2018) • One must sign on the line that is dotted . . . . • Otherwise, in some cases, your arbitration agreement will not be enforced (“by signing this agreement, the parties agree . . . “) • Weckesser v. Knight Enterprises SE LLC (4th Cir. 2018) • You must correctly identify the party that wants to arbitrate • Here, Jeffery Knight, Inc. v. Knight Enterprises – court held that the employer wasn’t a party to the arbitration agreement – the parent company was - oops

50. NLRB