IPMA – HR Eastern Region Conference Bethesda, Maryland April 2013 Presented by: David B. Ritter

1. IPMA – HR Eastern Region Conference Bethesda, MarylandApril 2013 Presented by: David B. Ritter

2. Topics for Today • U.S. Supreme Court Decisions • 2013 • Employment law update • What’s new in social media • How the NLRB is trying to remain relevant in a non-union world • How the EEOC’s strategic enforcement plan will affect you

3. The U.S. Supreme Court

4. U.S. Supreme Court: Who is a “supervisor” for employer liability purposes? • Case: Vance v. Ball State University • In 1997, the U.S. Supreme Court held in Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, that, under Title VII, an employer is vicariously liable for severe or pervasive workplace harassment by a supervisor of the victim • Cert. was granted to determine whether the “supervisor” liability rule (i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim’s daily work, or (ii) is limited to those harassers who have the power to “hire, fire, demote, promote, transfer, or discipline” their victim

5. U.S. Supreme Court: Who is a “supervisor” for employer liability purposes? • The Second, Fourth, and Ninth Circuits have ruled that (i) is the correct interpretation • The First, Seventh, and Eighth Circuits have ruled that (ii) is the correct interpretation • Why is this important? • Vance will have significant impact on employer exposure to Title VII lawsuits

6. U. S. Supreme Court: Is “but-for” causation or mixed motive the correct standard in discrimination cases? • Case: University of Texas Southwestern Medical Center v. Nassar • Cert granted to resolve Circuit split over whether claims under Title VII’s retaliation provision or claims under similarly worded employment statutes are subject to the “but-for” analysis or the mixed motive analysis • In 1998, the Supreme Court held that Title VII requires proof that discrimination was a “motivating factor” for an adverse employment action. Price Waterhouse v. Hopkins, 490 U.S. 228 (1998) • After the decision, Congress adopted the mixed motive language for Title VII’s discrimination provision

7. U.S. Supreme Court: Is “but-for” Causation or Mixed Motive the Correct Standard in Discrimination Cases? • Congress did not change Title VII’s retaliation provision. A mixed motive analysis does not apply. Other employment statutes are similar • In 2009, the Supreme Court held that the ADEA requires the plaintiff to prove that age was “the but-for cause” of the adverse employment action. Gross v. FBL Financial Services, 557 U.S. 167 (2009) • The Seventh Circuit interpreted Gross to hold that, unless a statute provides otherwise, the plaintiff must prove “but-for” causation in all suits under federal law

8. U. S. Supreme Court: Is “but-for” Causation or Mixed Motive the Correct Standard in Discrimination Cases? • The Fifth Circuit disagreed and applied the mixed motive to a Title VII retaliation claim, holding that Gross only applies to ADEA claims, and that Price Waterhouse set the standard • Why is this important? • Nassar will provide needed clarity as to which standard is applicable in cases where the statute is silent

9. U.S. Supreme Court: What constitutes “changing clothes” under the Fair Labor Standards Act? • Case: Sandifer v. United States Steel Corporation • Section 203(o) of the FLSA states that an employer need not compensate a worker for time spent “changing clothes” if that time is expressly excluded from compensable time under a collective bargaining agreement • Workers in this case wear: flame-retardant pants and jacket, work gloves, work boots, hard hat, safety glasses, ear plugs, and a hood

10. U.S. Supreme Court: What constitutes “changing clothes” under the Fair Labor Standards Act? • Seventh Circuit: these are clothes and therefore time spent taking them on and off is not compensable • Ninth Circuit: special protective gear is different in kind from typical clothing and is not “clothes” under 203(o) • Fourth, Sixth, Tenth, Eleventh Circuits: “clothes” includes anything one “wears,” including “accessories” such as ear plugs and safety glasses • Sandifer may have significant impact on compensation of workers nationwide

11. U.S. Supreme Court: Does a collective action become moot after the named plaintiff receives an offer of judgment providing full relief? • Case: Genesis HealthCare v. Symczyk • Sole plaintiff filed collective action on behalf of herself and all similarly situated individuals, alleging violation of FLSA • Before other parties joined the action, defendant made an offer of judgment for full relief • Plaintiff did not respond to the offer; defendant moved to dismiss • District Court dismissed the case; the Third Circuit reversed: A full offer of relief does not cause an FLSA collective action to be dismissed

12. U.S. Supreme Court: Does a collective action become moot after the named plaintiff receives an offer of judgment providing full relief? • Seventh Circuit: a pre-certification settlement offer can moot a class action. See Damasco v. Clearwire Corp., 662 F.3d 891, 896 (2011); see also Cameron-Grant v. Maxim Healthcare Servs., Inc., 347 F.3d 1240, 1249 (11th Cir. 2003) (holding that an FLSA collective action was moot after the named plaintiffs voluntarily settled their claims) • Fifth Circuit: a pre-certification offer of judgment will not moot an FLSA collective action. See Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 920-21 (2008) • Resolution will impact employers’ approach to handling wage and hour claims

13. Fifth Circuit: Do class action waivers in employee arbitration agreements violation federal labor law? • Case: D.R. Horton Inc. v. NLRB • Fifth Circuit case on appeal from an NLRB ruling that a mandatory arbitration agreement that waives employees’ rights to participate in class or collective actions is unlawful under the NLRA • District courts in Arkansas, California, Florida, Kansas, Pennsylvania, and New York have disagreed with the NLRB and refused to follow its ruling • District courts in Missouri and Wisconsin have applied D.R. Horton to strike down class action waivers in arbitration agreements • Many expect this case to reach the U.S. Supreme Court • Why is this important?

14. Enforcement: NLRB Recess Appointments • Noel Canning v. NLRB, D.C. Circuit: Invalidated the recess appointments of three members of the NLRB • Holding: the Senate was not in official recess at the time President Obama made the appointments on Jan. 4, 2012, thus invalidating their appointments • Constitution: President may make appointments “during Recess of the Senate” • Prior interpretation: any break in Senate business of significant duration • Noel Canning: “Recess” is the time between official sessions of the Senate • Further, President may only make appointments for positions that become vacant during the recess

15. Enforcement: NLRB Recess Appointments • If upheld: • Would render all actions taken by NLRB from time of appointments onward invalid • NLRB unable to take action until two valid appointments

16. EMPLOYMENT LAW UPDATE

17. Americans with Disabilities Act • Case: McMillian v. City of New York, 2013 U.S. App. LEXIS 4454 (2d Cir. Mar. 4, 2013) • Plaintiff had schizophrenia, morning medications made him drowsy, sluggish, and therefore late to work • Tardies overlooked for 10 years, then led to discipline • Plaintiff requested accommodation of later start; Employer determined it could not be accommodated because no supervisor present past 6pm (though office open until 10pm) • Plaintiff placed on 30-day suspension; filed suit • Second Circuit: Physical presence at or by a specific time is not an essential function of all employment; factual inquiry required • Further, reasonable accommodation may have possible • Take away: If timely arrival/presence is an essential function, ensure policies and practices reflect this; engage in interactive process

18. Americans with Disabilities Act • Case: Foley v. Morgan Stanley Smith Barney, LLC, Case No. 0:11-cv-62476-WILLIAMS (S.D. Fla. Mar. 4, 2013) • Plaintiff terminated after he removed the central processing unit from his office computer without authorization, took it off the premises, and lied about it • Plaintiff had bipolar disorder, claimed to have been suffering from a manic episode when he engaged in misconduct, but admitted to never having told employer about disability • Summary judgment granted: An employee may lawfully be terminated for misconduct, even if the misconduct was caused by a disability

19. Americans with Disabilities Act • Case: EEOC v. Toys “R” Us, Inc., No. 1:13-cv-00756-CCB (D. Md.), case filed Mar. 19, 2013 • EEOC suing Toys “R” Us for failing to provide interpreter for deaf job applicant and failing to hire because of disability • ADA requires employers to provide reasonable accommodations to employees, applicants unless it would cause undue hardship; prohibits refusal to hire qualified individuals because of disability • A “qualified individual” is one who can perform essential functions of position with or without a reasonable accommodation • EEOC: Due to size and resources of company, would not be an undue hardship to provide interpreter when requested; applicant was qualified individual

20. Family and Medical Leave Act • Case: Lineberry v. Richards, Case No. 11-13752 (E.D. Mich. Feb. 5, 2013) • Plaintiff took FMLA leave after an on-the-job injury caused lower back and leg pain • Restrictions: No standing more than 15 minutes; no pushing/pulling more than 20 lbs; No lifting more than 5-10 lbs • During leave, took pre-planned, doctor-approved trip to Mexico; posted to Facebook photos of herself drinking and riding in a motorboat in Mexico, holding grandchildren at home; co-workers saw photos and reported them to upper management on basis that she was abusing leave • Emails between Plaintiff and manager: Plaintiff claims she used wheelchair throughout travel; Later admitted she lied about using wheelchair • Fired for violating hospital’s dishonesty policy • Court: Summary judgment granted - FMLA does not afford an employee greater rights than she would have if she was not on leave (i.e. Plaintiff still required to adhere to policies)

21. Family and Medical Leave Act • Case: James v. Hyatt Regancy Chicago, Case No. 121511 (7th Cir. Feb. 13, 2013) • Plaintiff took FMLA leave due to eye injury that worsened his already poor vision • During leave, submitted conflicting medical certifications regarding his ability to return to work – the first stated he could return to “light duty” within 3 weeks, latter notes stated he was unable to return in any capacity • Employer attempted to discern ability to return to work, ultimately met with plaintiff and returned him to work in same position, shift, and seniority level 10 months later • Plaintiff claimed FMLA violation based on failure to return him to light duty in accordance with first certification, FMLA retaliation, and failure to accommodate under ADA • Court: Summary judgment affirmed - No duty to return employee to former position when employee unable to perform essential functions of the job; employer acted appropriately

22. Family and Medical Leave Act • Case: Brookins v. Staples Contract & Commercial, Inc., No. 11-11067-RWZ (D. Mass. Feb. 12, 2013) • Plaintiff took leave for cancer treatment • Missed four days of work without approval and without telling employer why • After informing HR, was given 15 days to submit medical certification • Missed deadline, given extension, missed extended deadline, given another extension – never explained why • After a month, company terminated based on unexcused leave • Court: Summary judgment granted - Employee must follow the law or show diligent, good faith effort – Plaintiff did neither

23. Title VII • Case: Henao v. Wyndham Vacations Resorts, Inc., 1:10-cv-00772 (D. Haw., Feb. 26, 2013) • Colombian Plaintiff, but supervisor used Mexican slurs against him • Plaintiff alleged discrimination under Title VII • Court: Summary judgment denied. Though Title VII does not expressly authorize “perceived as” claims (like the ADA), employer should not escape liability because of a mistake about “the precise nature of a person’s characteristics”

24. Cat’s Paw Theory: ADEA • Case: Sims v. MVM, Inc., 2013 U.S. App. LEXIS 1130 (11th Cir. 2013) • Plaintiff terminated at age 71, claimed violation of ADEA • Argued that project manager who terminated him acted as cat’s paw for the assistant project manager’s discriminatory bias • Court declined to apply cat’s paw theory – ADEA requires “but for” showing and cat’s paw evidence did not meet the standard

25. Cat’s Paw Theory: § 1981 Retaliation • Case: Smith v. Bray,681 F.3d 888 (7th Cir. 2012) • Plaintiff claimed a mid-level manager caused a senior level manager to fire him because plaintiff previously reported the mid-level manager’s racist conduct • Normal circumstance, employer would be liable under cat’s paw doctrine • Cat’s paw provided no relief because employer was bankrupt • Mid-level manager held individually liable • Cat’s Paw Theory Applies To 1981 Retaliation Claims

26. WHAT’S NEW IN SOCIAL MEDIA

27. Facebook and Non-Solicitation Clauses • Classic case of new spin on an old problem • Employee was a hair stylist who agreed to a 2 year non-solicitation clause • 4 days after she left her former employer, she began working for a competitor • New employer announced new employee on the company’s Facebook page

28. Facebook and Non-Solicitation Clauses Employee had contact with a client on Facebook regarding her “excitement” for her appointment Employee also became "friends" with at least 8 customers of her previous employer Former employer sues former employee alleging breach of non-solicitation agreement Outcome?

29. Social Media, Passwords, and the Law Laws that prohibit employers from asking, forcing, coercing employees to provide their Facebook (or other social media) passwords Maryland Illinois California recently passed a similar law Exceptions for misconduct investigations Even if not illegal, its a bad idea because . . .

30. Social Media, Passwords, and the Law However, if an employee sues you then all bets are off Recently a federal court judge held that Facebook activity by a Plaintiff who posted about her financial expectations of the lawsuit, her emotional state, and other matters related to the case is relevantand had to be produced Another court recently sanctioned a plaintiff from deleting Facebook account

31. Social Media and Ownership Issues Content on company social media pages: Who owns it? Who has access to it? What is protocol when an employee responsible for the page is terminated/quits/etc.? Recent issues: LinkedIn Account of Executive Twitter page dispute results in injunction Another aspect to consider when drafting your social media policies

32. NLRB – Social Media Has been an issue since 2009 when a GC memo blessed a Sears policy of non-disparagement of the company 2010 – NRLB reversed positions and we have been on that course ever since The issues have focused on both situations dealing with employee discipline and general challenges to social media policies

33. NLRB – Social Media • Section 7 of the NLRA: • “Employees shall have the right to: • self-organization, • form, join, or assist labor organizations, • bargain collectively through representatives of their own choosing, and • engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .”

34. NLRB – Social Media Inquiry covered by the NLRA is whether a social media “posting” is Protected Concerted Activity Protected Concerted Activity: Must be Concerted--with or on the authority of other employees and not solely by and on behalf of the employee himself Must be Protected--must implicate terms and conditions of work Even if Protected and Concerted, must not otherwise be inappropriate conduct -- for example, a public outburst against a supervisor

35. NLRB – Social Media • Issues: • What Social Media policies infringe on employees’ rights to engage in “protected concerted activity” under Section 7 of the NLRA? • What policies reasonably could be construed to potentially chill employees’ ability to exercise this right?

36. NLRB – Social Media Does the challenged rule explicitly restrict activities protected by Section 7? If so, it is unlawful If not, a violation is dependent upon a showing of one of the following: Employees would reasonably construe the language to prohibit Section 7 activity; The rule was promulgated in response to union activity; The rule has been applied to restrict the exercise of Section 7 rights

37. NLRB Decisions—Social Media Costco Wholesale Corp. (Sept. 7, 2012) First NLRB Social Media Decision Any communication transmitted, stored or displayed electronically must comply with the policies outlined in the Costco Employee Agreement. Employees should be aware that statements posted electronically (such as [to] online message boards or discussion groups) that damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.

38. NLRB Decisions—Social Media Costco Wholesale Corp. (Sept. 7, 2012) ALJ: Found that rule did not violate Section 8 (a)(1) because employees would not construe it as regulating inhibiting Section 7 conduct Instead, employees would reasonably infer that Costco’s purpose for rule was to ensure “civil and decent workplace.” Interprets prior NLRB cases as requiring burden of proof that employees would reasonably construe rule as regulating Section 7 conduct; whereas General Counsel preferred burden of proof that employees could construe rule as regulating Section 7 conduct

39. NLRB Decisions—Social Media • Costco Wholesale Corp. (Sept. 7, 2012) • NLRB: • Reversed ALJ’s decision. • Held that rule violated Section 8 (a)(1) because employees would reasonably construe the language in the rule to prohibit their Section 7 rights • The rule “clearly encompasses concerted communications protesting [Costco’s] treatment of its employees.” • employees “would reasonably conclude that the rule requires them to refrain from engaging in certain protected communications (i.e., those that are critical of the [Costco] or its agents).” • No disclaimer in policy to show it did not apply to protected concerted activity

40. NLRB Decisions—Social Media Karl Knauz Motors, Inc. (BMW “hot dog” case) First decision in a discharge case NLRB affirms ALJ’s finding upholding termination of sales employee of auto dealership for posting photographs and critical comments on his Facebook page regarding accident that occurred at sister dealership NLRB also affirms ALJ’s finding that Facebook postings by employee (posted on the same day) criticizing food and beverages served at a dealership event, while concerted protected activity, were not considered by employer when it made decision to terminate employee

41. Knauz BMW While the NLRB upheld the termination, it held that the company’s “Courtesy Policy” was unlawful: Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

42. Knauz BMW “Courtesy” rule unlawful because employees would reasonably construe its broad prohibition against “disrespectful” conduct and “language which injures the image or reputation of the Dealership” as encompassing Section 7 activity (i.e. statements objecting to working conditions) The NLRB ordered the company to remove this language and re-publish the policy

43. NLRB Decisions—Social Media/Unlawful Prohibition of employees posting pictures of themselves in any media depicting the Company including wearing Company uniform violated NLRA Prohibition of employees making disparaging comments when discussing the Company or the employee’s superiors, co-workers or competitors violated the NLRA Prohibiting “unprofessional communication” that could negatively impact Company’s reputation Confidentiality Agreements prohibiting employees from discussing terms and conditions of employment through social media (i.e. wages or working terms)

44. NLRB Decisions—Social Media/Lawful Any rule that makes clear an exception exists for employees engaging in protected concerted activity (some disclaimers have been rejected) Prohibiting employees from posting anything on the internet that could be construed as an act of unlawful harassment, a threat, or other evidence of discrimination Requiring employees to make personal internet postings during nonworking hours, meal periods and/or rest breaks

45. NLRB Decisions—Social Media/Facebook “like”? Does Facebook “like” constitute protected concerted activity NLRB will be reviewing issue in case called Triple Play Sports Bar and Grille Employee hit “like” on a Facebook comment filled with expletives, but also criticizing employer’s payroll practices Employee was terminated ALJ found that the employee was terminated for his “like”, and that the “like” was protected concerted activity

46. NLRB Decisions—Social Media A sound social media policy still serves as valuable tool in protecting against the disclosure of confidential business information, promptly addressing allegations of harassment or discrimination and ensuring proper business conduct That said, employers should review their existing social media policies and any related disciplinary policies to ensure conformity with Section 7 of the NLRA Include a “savings” clause or disclaimer--a disclaimer which states that the rule does not apply to “discussions and activities involving your wages, hours and working conditions.” It should also specifically reference Section 7 of the NLRA as well

47. How the NLRB is trying to Remain Relevant in a Non-Union World

48. NLRB’s Focus on Non-Union Workplaces • NLRA covers both union and non-union employers • The most recent decisions by the NLRB have an impact on non-union employers

49. NLRB: Trying to Stay Relevant • Union membership in the private sector is 6.9% • Union membership in the public sector is 36.2% • How can the NLRB stay relevant? • Expand its reach to non-union employers • Make it easier for employees to form and join unions

50. Union Density in the U.S. 20.0% or more 15.0% - 19.9% 10.0% - 14.9% 5.0% - 9.9% 4.9% or less