2013 Employment Law Update HRACC September 18, 2013

1. 2013 Employment Law UpdateHRACCSeptember 18, 2013 Holly L. Cini cinih@jacksonlewis.com Beverly W. Garofalo garofalb@jacksonlewis.com Jackson Lewis LLP 90 State House Square, 8th Floor Hartford, CT 06103 860-522-0404

2. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

3. Fiscal Year 2012 EEOC Charges Nationwide

4. UNITED STATES SUPREME COURT

5. Assessing Supervisor Liability Under Title VII Vance v. Ball State, No. 11-556: decided Jun. 24, 2013 • Vance, an African-American catering employee at Ball State University, claimed a white co-worker slapped her, threatened her and used racial epithets. Employee argued the co-worker had the authority to direct her work and qualified as a supervisor. • Ellerth/Farragher framework: Employers strictly liable for harassment by supervisor that results in tangible employment action but where harassment is committed by a co-worker, employer will be liable only if negligent in preventing or stopping harassment. • The Court narrowed the term “supervisory” authority to include having the power to make “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.”

6. Standard Applicable to Title VII Retaliation Claims UT Southwestern v. Nassar, No. 12-484: decided June 24, 2013 • Doctor Nassar alleged that he was denied permanent employment at a University-affiliated medical center after complaining about discrimination by his supervisor at the University. The employer argued that regardless of any retaliatory intent, it would not have hired him anyway because its agreement with the medical center required all physicians to be members of the University faculty, which Doctor Nassar was not. • Question for the Court: What standard should apply: Must the plaintiff prove only that retaliation was a “motivating factor” in decision or must he prove that he would have gotten the job except for the retaliatory intent? • The Court held that, in retaliation claims under Title VII, employees need to show that the employer would not have taken the adverse employment action “but for” the retaliatory motive.

7. DOMA Struck Down United States v. Windsor, No. 12-307: decided June 26, 2013 • Background: Windsor and Spyer were legally married in New York. Pursuant to Section 3 of DOMA, which defined spouse only as a person of the opposite sex, the federal government did not recognize the couple as legally married; thus, $363,000 more required of Windsor in estate tax. Windsor sued claiming that DOMA discriminated on the basis of her sexual orientation. • The Court ruled unconstitutional a law denying federal recognition of legally-married same-sex couples. • Struck down Section 3 of the Defense of Marriage Act of 1996 (“DOMA”), holding that it violated the equal protection component of the Fifth Amendment’s Due Process Clause because married couples within a state were not treated similarly. • Employers with operations in multiple states will have to deal with a patchwork of state laws governing who constitutes a “spouse”.

8. DOMA Struck Down: Impacts • Employee Benefits: Same-sex spouses likely will be treated equally when it comes to employee benefits, including a 401(k) plan • Ruling changes administration of Family and Medical Leave Act (“FMLA”) • Under FMLA, employers must provide employees time off to care for their spouse • “a husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized.” 29 CFR 825.102

9. FEDERAL LEGISLATION

10. Federal Legislative Activity • Fair Credit Reporting Act (FCRA) • Consumer Financial Protection Bureau updated Summary of Rights and Notice. If still using previous FCRA summary and notice, replace with new forms and notice to comply with new law. • Department of Labor - FMLA • Expansion of law’s military family leave provision to extend military caregiver leave to eligible family members of recent veterans with injury or illness suffered in line of duty. • New FMLA Poster: all covered employers are required to display and keep displayed a poster summarizing the major provisions of the FMLA and informing employees how to file a complaint. • Must be displayed in a conspicuous place where employees and applicants for employment can see it. • Must be displayed at all locations even if there are no eligible employees.

11. Affordable Care Act Update • Employees granted one year extension of ACA penalties. • Penalties for not providing health insurance to employees were scheduled to take effect on January 1, 2014. • The Treasury Department extended to January 1, 2015 the ACA requirement that employers provide coverage or pay penalties. • Marketplace Notice to employees of coverage options. • Marketplace coverage scheduled to be available as of January 1, 2014. • ACA requires employers to provide employees with written notice of availability of the Exchanges and related information (Amendment to Federal Labor Standards Act). • Notice must be in writing, by first class mail, or electronically, if the DOL electronic distribution rules are satisfied. • DOL has issued Technical Release 2013-2 to assist employers in satisfying the Marketplace Notice requirement.

12. Legislation To Watch Employment Non-Discrimination Act (“ENDA”) • ENDA would amend Title VII of the Civil Rights Act to prohibit “covered entities” and employers with at least 15 employees from discriminating against employees on the basis of sexual orientation or gender identity. • ENDA passed out of the Senate Committee with a 15-7 vote. The full Senate is expected to take it up later this year. DOL Right to Know Law • Possible revival would require employers to provide justification for classifying workers as either employees or independent contractors. • DOL has asked for public comment period, first step in attempting to revive.

13. CONNECTICUT

14. Fiscal Year 2012 EEOC Charges CT

15. CONNECTICUT FEDERAL DISTRICT COURT DECISIONS

16. Severance Agreements Allen v. Chanel, Inc., No. 12-cv-6758(S.D.N.Y., June 4, 2013) Samples coordinator for Chanel’s fashion division was terminated and given a “separation and release agreement” providing the employee a severance for her release of claims of discrimination. Employee re-typed entire page of agreement with same font and same margins except changing the word “including” to “excluding” from the list of covered claims so she could still sue for discrimination. Chanel did not notice the change and paid the employee the $15,000 severance payment upon receipt of the agreement. Employee brought suit for discrimination and Chanel moved to dismiss. Court found that employee was not barred from bringing a discrimination lawsuit because she had not validly released her claims. Chanel’s motion to dismiss was denied.

17. Interns – To Pay or Not to Pay Glatt v. Fox Searchlight Pictures, Inc. (S.D.N.Y., June 11, 2013) • Judge found that Fox misclassified their interns when they failed to call them employees. • “They worked as paid employees work, providing an immediate advantage to their employer and performing low-level tasks not requiring specialized training. . . . They received nothing approximating the education they would receive in an academic setting or vocational school.” • Employees are not allowed to waive their wages under the federal Fair Labor Standards Act. • Criteria to apply when determining whether to pay interns: • Internship is similar to training which would be given in an educational environment • For the benefit of the intern • No displacement of regular employees • No immediate advantage to employers • No promise of employment

18. CONNECTICUT LEGISLATIVE ACTIVITY

19. 2013 CT Legislative Session • CT Personnel Files Act – C.G.S. Sec. 31-128 et seq.; amended as P.A. No. 13-176 (eff. 10/1/13) • Current Employees: Seven business days to inspect or send copy (upon request) of personnel file • Former Employees: 10 business days to inspect or send copy if requested within one year of termination • Disciplinary Action: Must provide a copy of any documented disciplinary action imposed upon employee within one business day • Termination: Must provide a copy of a documented notice of termination immediately

20. 2013 CT Legislative Session • CT Personnel Files Act – C.G.S. Sec. 31-128 et seq.; amended as P.A. No. 13-176 (eff. 10/1/13) • “IF YOU DISAGREE WITH ANY OF THE INFORMATION CONTAINED HEREIN YOU MAY SUBMIT A WRITTEN STATEMENT EXPLAINING YOUR POSITION” – Clear and conspicuous requirement • Time limitations • UC 61 “Pink Slip” • Penalty: up to $500 first violation up to $1,000 each subsequent violation

21. 2013 CT Legislative Session • Minimum Wage • $9.00: moves from 6th to 2nd highest in U.S. • Laws Expanding Protections for Veterans – P.A. 13-49 • Replicate Final USERRA Regulations that go into effect on January 18, 2014. • Paid FMLA Feasibility Study • House and Senate passed bill (No. 6553) to commission study and task force.

22. 2013 CT Legislative Session – Raised But Not Passed • Paid Sick Leave Law Amendments • Running on an anniversary date of hire basis (vs. calendar year) • Annual determination of threshold employee count • Ban on disruptive intermittent leave • No Social Media Passwords • Would have prohibited the mandatory disclosure of social media passwords

23. 2013 CT Legislative Session – Raised But Not Passed/Vetoed • Non-Compete Agreements • Would have voided non-compete agreement required after a merger or acquisition. Passed legislature but vetoed by Governor Malloy. • Free Speech Claims under C.G.S. 31-51q • Would have eliminated the defense that the employee was acting within the scope of his or her employment.

24. SECOND CIRCUIT FEDERAL COURT OF APPEALS

25. Arbitration Clauses in Employment Agreements Parisi v. Goldman Sachs, 710 F. 3d 483 (2ndCir. 2013) Facts: • Lisa Parisi became a managing director at Goldman Sachs in 2003. At that time, she signed a Managing Director Agreement, which contained an arbitration clause. The scope of the clause included any claim arising out of “employment related matters”. • In 2008, Parisi was terminated. Parisi sued alleging Title VII gender discrimination. Two other former Goldman Sachs employees also sued as individuals and as part of a putative class, alleging a continued pattern of gender discrimination. • Goldman Sachs moved to enforce the arbitration clause. The FAA magistrate judge agreed that the arbitration clause was valid, that it covered Parisi’s claims, and that it did not provide for arbitration on a class-wide basis. However, the magistrate found that the preclusion of class arbitration would make it impossible for Parisi to arbitrate a Title VII pattern or practice claim, therefore that it effectively waived a substantive right, and invalidated the clause as a result. The District Court affirmed the magistrate’s opinion.

26. Arbitration Clauses in Employment Agreements Holding: Reversed. • The Second Circuit held that a pattern or practice claim is not an independent cause of action, but is merely a method of proving the disparate treatment element of a Title VII claim, and therefore “such a right does not exist”. • The Court noted that the Financial Industry Regulatory Authority rules of arbitration, which regulated the arbitration clause, would likely allow Parisi to offer evidence of patterns or practices regardless.

27. Punctuality is Not an Essential Function of the Job McMillan v. City of New York, 711 F. 3d 120 (2d Cir., March 4, 2013) Facts: • McMillan worked as a case manager for an NYC social services agency. He took medication for schizophrenia that made him drowsy in the morning and for 10 years, his resulting tardiness to work was either explicitly or tacitly approved. A new supervisor then told him she would not approve any more tardiness and began disciplining McMillan for late arrivals. • Two years later, McMillan formally requested an accommodation that included a later flex start time schedule whereby he would work later in the evening. This was denied because there was no supervisor in the office after 6 PM, even though the office was open until 10 PM. • The District Court granted summary judgment to the city, holding that McMillan failed to demonstrate a prima facie case of disability discrimination because he could not perform the essential function of his job that is getting to work on time.

28. Punctuality is Not an Essential Function of the Job Holding: Reversed. • The Second Circuit held that while punctuality and being physically present at work are normally essential functions of any job, here the city approved the tardiness for a decade and the city’s flex time policy, which permitted employees to arrive and leave work within an hour of their start and end time of their shift, implied that punctuality and presence at precise times may not be essential. • The Court emphasized that a “penetrating factual analysis” must be done.

29. CEO Liability Under FLSA Irizzary v. Catsimatidis, No. 11-4035-cv (2d Cir., July 9, 2013) • Gristedes Foods, a NYC-based chain of small supermarkets, reached a settlement agreement as part of an FLSA lawsuit for failure to pay overtime to workers. As Gristedes Foods started to fall behind in payments, the plaintiffs sought to hold the grocer’s CEO (and recent NYC mayoral candidate) John Catsimatidis personally liable for the settlement payments. • Catsimatidis argued that he was not an “employer” under the FLSA and could not be held liable as he was not involved in day-to-day decisions of the company. • The Second Circuit found that Catsimatidis could be held personally liable because evidence showed he had operational control and authority over management and oversight of Gristedes in general, including the hiring and supervision of managers.

30. NATIONAL LABOR RELATIONS BOARD (“NLRB”)

31. From the NLRB The posting rule was struck down by the 4th Circuit Court of Appeals. Employers do not need to post. Employers may not have an outright ban on employees taking and posting videos and photographs of the workplace. No blanket confidentiality during company investigations. Employers should consider the need for confidentiality on a case-by-case basis. General Counsel Advice Memorandum. The NLRB now has a full 5-member board.

32. CONNECTICUT STATE COURTS

33. The Interactive Processis Not Just for Employers Festa v. East Haven Bd. of Educ., 145 Conn. App. 103 (Aug. 20, 2013) • A kindergarten teacher had a traumatic brain injury. The school district underwent a re-organization and a number of teachers were reassigned, including plaintiff, who was assigned to teach third grade. • Plaintiff presented a note from her primary care doctor asking that her reassignment be rescinded because her injury made it impossible for her to meet the academic demands of teaching third grade. • The superintendent told plaintiff he did not believe her doctor had any evidence on which he could conclude that teaching third grade would be more challenging than teaching kindergarten. He invited her to submit information showing what accommodations, if any, she might need to teach third grade. • She did not do so and her employment was terminated.

34. The Interactive Processis Not Just for Employers (cont’d) • Plaintiff sued, claiming the termination of her employment violated the disability discrimination provisions in both the CFEPA and the ADA. • Holding: Plaintiff was not entitled to the accommodation of her choice. By failing to submit information about an accommodation for the third grade position, she failed to fulfill her duty to participate in the interactive process.

35. Get a DUI, Collect Unemployment Tuxis Ohr’s Fuel, Inc. v. Administrator, Unemp. Comp. Act, et al., 309 Conn. 412 (Jul. 30, 2013) Employee fuel oil delivery driver. While off duty, he was arrested for DUI and lost his CDL. Because he could no longer drive the delivery truck, he was terminated. The employer challenged his application for unemployment benefits, arguing that plaintiff should be disqualified because he failed a federal or state mandated drug or alcohol test. Holding: Willful misconduct must be “in the scope of employment”. A police sobriety test is not a mandatory test administered by the employer.

36. Whistleblowers Comm’r of Mental Health and Addiction Svcs. v. Saeedi, 143 Conn. App. 839 (Jul. 9, 2013) Plaintiff, a physician, alleged that he was retaliated against for reporting another physician’s substandard care. He filed a whistleblower complaint with the as well as several grievances with via his Union. Plaintiff prevailed after a CHRO public hearing and the Referee ordered, among other things, that plaintiff be given an “excellent” rating on his performance review and that his supervisors undergo professional ethics training– equitable remedies, in addition to financial. On appeal, the state court upheld the ruling except as to the training order, which it found exceed remedies permitted under this provision of the enabling legislation. Language in decision potentially will impact emotional distress damages debate . . . .

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