NLRB Lacks Quorum To Act

Take a look at our recent e-Alert on the decision of the U.S. Court of Appeals for the D.C. Circuit, which found that President Obama’s recess appointments to the National Labor Relations Board were imrpoper and, as a result, the Board did not have a quorum to issue any of the decisions it issued since the appointments were made over a year ago.  This stunning decision potentially invalidates all of the controversial decisions reached by the Board in the past year, many of which we have already blogged about (here, here, here, herehere, here, and here).

- Dan Handman  (Los Angeles)

DOL Issues Guidance On FMLA Leave Needed To Care For An Adult Child

The U.S. Department of Labor (DOL) recently clarified an issue concerning an employer’s obligation to provide leave to an employee to care for his adult son or daughter.  The FMLA regulations require an employer to provide leave to an employee to care for (1) a son or daughter who is under the age of 18; or (2) a son or daughter over the age of 18 who is “incapable of self-care because of a mental or physical disability.” 

This seemingly straightforward regulation has caused a surprising amount of confusion.  A few years ago, the DOL issued a guidance explaining that no legal relationship was required between the parent and the “son or daughter” but rather that any person acting in loco parentis (in the role of a parent) would suffice, such that caretakers, foster parents and the like were protected. 

The DOL issued this new guidance to clarify that it was irrelevant for purposes of the FMLA whether the “mental or physical disability” of a son or daughter over the age of 18 arose before or after the child reached that age.  The DOL has stressed this precise point twice before in a 1994 Opinion Letter and in the Final Rule which amended the FMLA regulations issued in 2009. 

This recent guidance also clarified that the definition of a “mental and physical disability” includes the broader definition of a “disability” recognized in the Americans With Disabilities Act Amendments Act of 2008 (ADAAA).  Under the ADAAA, Congress significantly broadened that term to, among other things, clarify that mitigating measures to ameliorate the effects of an impairment are not taken into account when determining whether someone has a disability. 

These issues always seemed self-evident to me, especially since passage of the ADAAA, so it seems puzzling that the DOL would issue a guidance on them, but presumably the Department had received a number of questions on those issues and felt compelled to do so.   Nonetheless, employers would be well-advised to review their handbooks to ensure that their FMLA and leave policies are consistent with this guidance.

- Dan Handman (Los Angeles)

U.S. Supreme Court To Decide Title VII Retaliation Case

Last week, the United States Supreme Court agreed to review a decision of the U.S. Court of Appeals for the Fifth Circuit that should help to resolve a circuit split on an imporant issue:  whether the “mixed motive” analysis under Title VII discrimination claims should be applied to retaliation claims under Title VII, or whether the “but for” causation model enunciated by the Supreme Court as to ADEA cases should control.  (In California, the “mixed motive” analysis applies to all state law employment discrimination claims under the Fair Employment and Housing Act [“FEHA”], which covers all protected classifications.)  The case is Nassar v. University of Texas Southwestern Medical Center.

The First, Sixth and Seventh Circuits have used the “but for” model, requiring that the plaintiff prove that the employer would not have taken the adverse employment action but for a retaliatory motive.  Under the “but for” model of proof, it is not enough for a plaintiff to prove that retaliation was one of several of the employer’s motivations for taking an adverse action.   

The Fifth and Eleventh Circuits have followed the “mixed motive” analysis first enunciated by the Supreme Court in Price Waterhouse v. Hopkins in 1989 and then codified under the discrimination sections of Title VII in the Civil Rights Act of 1991.  Under the mixed motive test, an improper, discriminatory animus need only be one of several motivating reasons for the adverse employment action—in other words, even if it is proven that, in addition to any improper motive, there were legitimate, non-discriminatory reasons for the action, such legitimate reasons have limited effect: although a plaintiff-employee could not be awarded damages, he or she could obtain equitable relief, including job reinstatement, and attorneys’ fees.  Surprisingly, the Ninth Circuit has not yet weighed in on the “mixed motive” versus “but for” debate. 

On this issue, it is difficult to predict how the Supreme Court will rule.  While it has been sharply divided on “hot button” issues in recent years, the Supreme Court often surprises pundits with consensus when it comes to issues of statutory construction under federal anti-discrimination laws.

Stay tuned.  The Roberts’ Court’s decision here could significant effect employment litigation under federal law and have ripple effects on similar state anti-discrimination laws.   

- Monte Grix

New California Legislation Affecting Colleges And Universities In 2013 Focuses On Student Issues

The California Legislature took aim this past session to address topics near and dear to many college and university students:  social media, textbook, loans, and athletic scholarships.

Hands Off Student Social Media!  

When tech-savvy California Governor Jerry Brown signed two social media laws this past September, what did he do?  He announced it on Twitter, Facebook, Google+, LinkedIn and MySpace.  SB 1349, which passed through the Legislature without opposition (a feat in itself), prohibits public and private postsecondary educational institutions in California – as well as their employees and representatives – from requiring or requesting a student, prospective student or student group to disclose, access, or divulge personal social media user names or passwords, or any personal social media information.  According to the Governor’s Office, the legislation – similar but narrower in scope to companion bill AB 1844 applicable to California employers – was “designed to stop the growing trend of colleges and universities snooping into student social media accounts, particularly those of student athletes.”  “Social media” is defined expansively to mean “an electronic service or account, electronic content, including, but not limited to, videos, or still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.”  Colleges and universities cannot discipline or threaten to discipline or penalize a student or student group for refusing to comply with a request that violates the prohibition.  However, the legislation states that it is not intended to prohibit investigation into alleged student misconduct or violations of applicable laws or regulations, or taking adverse action against a student, prospective student or student group for any lawful reason.  Only time will tell, however, exactly where this “not so bright” line is drawn.

The More Information The Better, At Least When It Comes To Student Loans And Textbooks

The Legislature continued in its attempt to address components of rising education costs for students:  student loans and textbooks.  Attempting to address the rising amount of debt assumed by students in order to attend college, SB 1289 requires public and private colleges and universities (with the exception of community colleges, which are requested to comply) to make certain disclosures to students regarding private student loans in financial aid materials and in private loan applications.  All printed and online financial aid materials issued/distributed by the institution, and also private loan applications provided or made available by the institution, must include specific statements regarding (1) the fact that federal student loans are required to provide a range of flexible payment options and repayment plans that other loans are not required to provide, and (2) that federal direct student loans are available to students regardless of income.  The legislation also requires institutions that offer private loans as part of a financial aid package to clearly distinguish between federal loans and private loans, and provide specific information regarding interest rates that can be charged by private lenders.  Institutions that provide a private lender list to students must also disclose the basis for each lenders inclusion on the list.  Opponents of the legislation asserted that it was unnecessary because the federal Truth in Lending Act and the U.S. Department of Education’s student financial aid regulations already require disclosures in this arena. 

Likewise, the rising cost of course materials and textbooks continues to be a legislative focus with the passage of SB 1539, which requires textbook publishers, and also their agents and employees, to provide price and content comparison information to faculty at both public and private higher education institutions who are prospective purchasers of the products.  The data required to be provided includes a list of the products offered for sale by the publisher germane to the prospective purchaser’s subject area of interest, the wholesale or retail price of the product, and the estimated length of time the publisher intends to keep the product on the market.  The required information also includes – for each new edition of the product – a list of the substantial content differences between the new edition and the previous edition of the textbook. The definition of textbook products was also expanded to include materials in digital or electronic format.  Additional legislation in the arena aimed at lowering the cost of instructional materials for students attending California’s public colleges and universities, was the passage of both SB 1052 and SB 1053, creating the California Open Education Resources Council and the California Open Source Digital Library.  The Council is charged with the identification of strategically selected lower division courses and making sure that open digital material of high quality is created for students in such courses.  Likewise, the Library, to be administered by CSU, will house open source materials and provide a web-based means for students, faculty and staff to find, adopt, use and modify course materials for little or no cost.   

A Student Athlete Bill of Rights, But Currently Only For Athletes At Four Of California’s Universities

California once again enacted “first-in-the nation” legislation – albeit limited – to protect student athletes who suffer career-ending injuries (SB 1525).  The Student Athlete Bill of Rights requires universities that receive more than $10 million annually from sports media revenue to give academic scholarships to students who experience a career-ending injury while playing their sport.  It also requires universities to cover insurance deductibles and pay health insurance premiums for low-income student athletes.  Currently, that is a lonely club of four PAC-12 California schools:  U.C.L.A., U.C. Berkeley, Stanford and USC (soon to potentially be joined by the non-PAC-12 U.C. San Diego).  Opponents of the bill voiced concern that the legislation failed to protect the rights of the vast majority of California’s student athletes, who do not participate in the few sports programs with a sufficiently high-profile to meet the media revenue threshold.  Will similar rights eventually be extended to college athletes with sports scholarships at colleges and universities with less high-grossing athletic profiles?  Stay tuned.

- Jayne Benz Chipman (San Francisco)

California Court of Appeal Supports Employer’s Use of Arbitration and Waiver of Class Actions

In an employer-friendly decision, a California Court of Appeal affirmed the dismissal of a class action and ordered arbitration of the individual employee’s claim in Outland, et al. v. Macy’s (January 17, 2013).  This is the second California appellate decision following the U.S. Supreme Court’s holding in AT&T v. Concepcion, 131 S.Ct. 443 (2007) and applying the principle that a waiver of class actions can be enforceable in an arbitration agreement.

Plaintiff Jennifer Outland sued her employer and claimed that she usually worked more than 50 hours per week without being properly compensated for the overtime and for missed meal and rest breaks.  She claimed that she was misclassified as an exempt employee.  She filed the lawsuit as a class action.

The employer responded with a motion to compel arbitration of her individual claims.  Macy’s also moved to dismiss her class action claims because the arbitration agreement barred any class actions.

Outland argued that a recent decision of the National Labor Relations Board, D.R. Horton, supported her ability to bring a class claim.  D.R. Horton held that a class action waiver in an arbitration agreement was unenforceable because it violated employees’ rights to engage in concerted, protected activity under the National Labor Relations Act.

The Court of Appeal in the Macy’s case disagreed about the persuasiveness of the NLRB decision.  Instead, the Macy’s court relied on the U.S. Supreme Court’s decision in Concepcion that allowed for a waiver of a class action in a consumer arbitration agreement.  They found that the Concepcion decision allows them to validate the employment arbitration agreement and hold differently than a 2007 California Supreme Court decision (Gentry v. Superior Court, 42 Cal.4th 443 (2007)) and the recent NLRB decision.

This Macy’s decision is consistent with a prior California appellate decision in Iskanian v. CLS Transportation Los Angeles LLC (June 4, 2012).  In that case, the appellate court upheld an arbitration agreement that included a class action waiver.  This creates a split in the California appellate courts on this very contentious issue.  In 2011, a California Court of Appeal in Brown v. Ralph’s Grocery Co., 197 Cal.App.4th 489 (2011), held that Concepcion did not apply to representative actions under the California Private Attorney General Act (PAGA).  The Brown court held that a waiver of such representative actions is unenforceable.

The California Supreme Court has agreed to decide the issue of whether a waiver of class actions in an arbitration agreement is enforceable by accepting review of the Iskanian case.  Currently, there are two appellate decisions that support the enforceability of the class action waivers and it would be prudent for employers to have their arbitration agreements reviewed and revised in keeping with the two favorable appellate decisions.

- John Baum (San Francisco)

Common Sense Prevails In the Ninth Circuit In Disability Discrimination Opinion: Lawler v. Montblanc North America, LLC

Another win for employers from the Ninth Circuit!  On January 11, 2013, the Ninth Circuit affirmed the district court’s summary judgment in favor of an employer based on the former employee’s failure to present any genuine issues of material fact as to each of her claims under California law, specifically her claims for: (1) disability discrimination under FEHA; (2) retaliation under FEHA; (3) harassment under FEHA; and (4) intentional infliction of emotional distress. 

In the diversity action, Plaintiff-Appellant Cynthia Lawler  appealed the district court’s grant of summary judgment in favor of Defendants-Appellees Montblanc North America, LLC and its President and CEO, Jan-Patrick Schmitz. 

Lawler worked as a manager in one of its California boutique retail stores.  Lawler’s duties as a manager included hiring, training, and supervising sales staff; overseeing and developing customer relations; administrating stocking and inventory; cleaning; creating store displays; and preparing sales reports.  Lawler admitted that she could only perform her duties in the store.  Lawler further acknowledged that during the holiday season, which lasts from the Friday after Thanksgiving to January 2 each year, the hours increased to approximately 70 hours per week.  Further, the store made one-third of its annual sales during this time period.  Montblanc maintained a policy prohibiting employee vacations during the holiday season. 

In June 2009, Lawler was diagnosed with psoriatic arthritis and her physician recommended a reduced workweek of 20 hours.  Lawler therefore made a request to Montblanc, which requested additional documentation to determine whether the accommodation could be provided.  A few weeks after the initial diagnosis, on August 4, 2009, Lawler fractured her toes after a fall at her home.  Her podiatrist authorized her to return to work on September 2, 2009.  In need of a fax machine to fax Human Resources the documentation relating to her injury, Lawler traveled to the Montblanc store.  While at the store, Schmitz and Montblanc’s Vice President of Retail, Mike Giannattasio, arrived for an inspection.  Schmitz asked Lawler about her attire in an “abrupt, brisk” manner.  After Lawler informed him that she was off work on disability, Schmitz told her, in an “intimidating,” “abrupt,” and “gruff” tone, “We will talk when I get back.”  Schmitz and Gianattasio then left to walk around the surrounding stores and view their “competition.”  According to Lawler, Schmitz also made other demands, but when Lawler told Schmitz she was on disability leave and couldn’t do the work, Schmitz told her to “do it or else.”   

After that incident, Lawler complained about Schmitz’s conduct to her regional manager and she obtained a letter from her doctor advising that she take an extended leave of absence through Jan. 5, 2010.  Montblanc sent the doctor a letter asking if there were any accommodations it could make that would allow Lawler to be regularly present at the store and performing her job duties. The doctor responded that Lawler needed to remain off work until January.  A week later, Lawler’s regional manager called her and told her that she was being terminated, effective Oct. 31, 2009.

The Ninth Circuit affirmed summary judgment on all of Lawler’s claims.  While this case is relatively fact specific (as most disability discrimination cases are), it provides good case law with respect to employees who need particular accommodations, such as leaves of absence, despite the fact that their job duties require them to be on-site somewhere.

What are the practical points to take away from this case?  First, if a plaintiff is unable to work at all, she can’t win a disability discrimination case.  Here, Lawler was completely unable to work and therefore perform the essential duties of her position as a store manager.  She was unable to work during the holiday season, the store’s busiest time of the year.  These facts prevented Lawler from establishing a genuine dispute of material fact on his discrimination claim.  Second, when a supervisor acts and makes statements that are within the scope of his responsibilities, that conduct cannot be harassment.  Schmitz’s comments and abruptness with Lawler, while rude and disrespectful, were all related to work and within the scope of his responsibility as the President/CEO.  The Court correctly determined that his conduct did not constitute harassment or intentional infliction of emotional distress.

- Olivia Perry (Los Angeles)


Is Another California Supreme Court Employment Decision Bound For Reversal At The U.S. Supreme Court?

While we were all watching football and eating leftovers over the Christmas holiday, the California Supreme Court issued one of the most controversial decisions in years, finding that a union had the right to picket on private property outside of a Ralph’s grocery store.  Most labor lawyers, including me, expect this fight to make its way to the U.S. Supreme Court where it stands a good chance of being reversed. 

A bit of background.  Two California statutes – the Moscone Act and California Labor Code §1138.1 – make it legal for a union to engage in peaceful picketing or patrolling during a labor dispute and prohibit courts from issuing injunctions against them in most cases.  In Ralphs Grocery Company v. UFCW, Local 8, a local chapter of the United Food and Commercial Workers (UFCW) engaged in picketing on the private walkway in front of a Ralph’s grocery store in an attempt to organize the workers there.  Ralph’s had a union-neutral company policy which prohibited speech activities on its property, but the union picketed nonetheless and, after the police refused to intervene, Ralph’s sought an injunction prohibiting the picketing.  Ralph’s maintained that the union was trespassing on its private property and the union contended that its conduct was lawful under the Moscone Act and Section 1138.1. 

The ultimate issue is whether the Moscone Act and Section 1138.1 are constitutional under the First Amendment to the U.S. Constitution.  Generally speaking, state laws which restrict speech based on the content of the speech (i.e., speech about unionizing) are prohibited.  To that end, the U.S. Supreme Court has twice struck down state laws restricting picketing “on a public way” near a school or picketing “before or about the residence or dwelling of any person” as impermissible content-based restrictions. 

The twist in this case is that the Moscone Act and Section 1138.1 do not restrict speech.  On the contrary, the laws: (1) make it lawful to engage in peaceful picketing during a union campaign; and (2) prohibit an employer from getting an injunction to prohibit such picketing.

The Court of Appeal found that to be a distinction without a difference.  It reasoned, “the effect on speech is the same: the laws favors speech related to union disputes over speech related to other matters – it forces Ralph’s to provide a forum for speech based on its content.”  Because of that “preferential treatment,” both the Moscone Act and Section 1138.1 were unconstitutional in its view.   In other words, labor picketers and no one else have the right to picket on private property.

This was not the first time an appellate court had found these two statutes to violate the First Amendment.  In 2001, the U.S. Court of Appeals for the D.C. Circuit (which regularly reviews decisions from the NLRB) found the Moscone Act and Section 1138.1 to be unconstitutional content-based regulations of speech which violate the First Amendment.

The California Supreme Court chose not to follow all of these precedents and found in a 6-1 decision that the Moscone Act and Section 11138.1 were constitutional.  It focused almost exclusively on the fact that “neither the Moscone Act nor Section 1138.1 . . . restricts speech.”  It was truly perplexing that the California Supreme Court chose not to address the “preferential treatment” alluded to by the Court of Appeal and the D.C. Circuit.

So, what happens now?  Ralph’s can seek a writ of certiorari with the U.S. Supreme Court to have the First Amendment issue addressed by that court.  Ralph’s has publicly indicated that it intends to seek such review and there is good reason to think that the U.S. Supreme Court will grant review and find these statutes unconstitutional.  Although the U.S. Supreme Court is famously split on all sorts of high-profile issues, in recent years the Court’s members have seemed to find more common ground when it comes to issues involving First Amendment issues.  And, the California Supreme Court’s dodge of the precise issue here – whether there is any difference between content-based restriction of speech and the preferential treatment of speech based on its content – practically begs for review and reversal by the U.S. Supreme Court. 

- Dan Handman (Los Angeles)

California Laws On Religious Accommodation Are Not Much Different Than Those In The EU

The more employee-friendly the California courts get, the more inevitable the comparisons are between California and European workplace laws. But, are we in the U.S. really that different to begin with? A recent decision from the European Court of Human Rights suggests not.

On January 15, 2013, the European Court of Human Rights issued a decision on religious accommodation which was remarkably similar to claims decided under the Title VII and California’s Fair Employment and Housing Act (“FEHA”), as well as recent California legislation on religious dress and grooming.  (Our recent blog post on the Workplace Religious Freedom Act of 2012 can be found here.)

The decision first analyzed the claims of two employees—a British Airways flight attendant and a geriatric nurse—who were precluded from wearing crosses around their necks at work. In the case of the flight attendant, the airline’s uniform policy initially provided that items worn for religious reasons must be covered by the employee’s uniform. In September 2006, the flight attendant was sent home without pay for openly wearing a cross until she agreed to comply with the uniform code. In October 2006, British Airways offered her administrative work without the obligation to wear a uniform or have customer contact, which she refused. The employee returned to work in February 2007 when British Airways changed its policy to permit the display of religious and charity symbols. The Court found that the flight attendant’s right to manifest her religious belief outweighed British Airways’ wish to project a certain corporate image, because other British Airways employees had previously been authorized to wear religious clothing such as turbans and hijabs without any negative impact on the company’s brand. That is precisely the same ruling that courts in the U.S. have consistently reached.

On the other hand, the Court ruled that the hospital had a more compelling reason to preclude the nurse from wearing a cross, as “the protection of health and safety on a hospital ward was inherently of much greater importance.” Again, courts in the U.S. have consistently found that where issues of health and safety are involved, an employer has much more leeway in imposing dress and grooming rules.

Finally, the Court found that employers were justified in terminating a marriage registrar and a sex therapist, who had refused to deal with gay individuals based on religious beliefs. Like courts in the U.S., the European court found that an employer’s enforcement of its non-discrimination policies outweighed an employee’s claim to religious freedom.

In sum, when it comes to issues surrounding religious accommodation and dress and grooming policies, European judicial bodies are facing the same thorny issues as California courts, often with very similar outcomes.

- Amy Durgan

EEOC Renews Focus On Immigrants’ Rights, Equal Pay

Employers take caution!  The Equal Employment Opportunity Commission (EEOC), the federal agency which enforces discrimination laws, has set its enforcement priorities for the second term of the Obama Administration and they are consistent with themes raised in the presidential campaign.  In its Strategic Enforcement Plan, the EEOC laid out six priorities on which the EEOC will focus specific attention in the next four years: 

  1. Protecting Immigrant, Migrant and Other Vulnerable Workers. The EEOC will direct attention to disparate pay, job segregation, harassment, trafficking and other discriminatory practices and policies affecting immigrant, migrant and other vulnerable workers, who are often unaware of their rights under the equal employment laws, or reluctant or unable to exercise them.
  2. Enforcing Equal Pay Laws.  The EEOC will target compensation systems and practices that discriminate based on gender.  The Commission particularly encourages the use of directed investigations and Commissioner Charges to facilitate enforcement.
  3. Addressing Emerging and Developing Issues. The EEOC will focus on emerging issues in equal employment law, including those associated with significant events, demographic changes, developing theories and new laws.  The Commission noted the following areas as examples of developing issues: (1) employer coverage and employee qualification under the Americans with Disability Act, reasonable accommodations, and undue hardship; (2) accommodating pregnancy-related limitations; and (3) coverage of lesbian, gay, bisexual and transgender individuals under sex discrimination provisions.
  4. Eliminating Barriers in Recruitment and Hiring. The EEOC will pursue class-based recruitment and hiring practices that adversely impact protected groups based on race, ethnicity, religion, age, sex, and disabilities.  The targeted practices include exclusionary policies, steering individuals into specific jobs due to their protected status, restrictive application processes, and using screening tools (e.g., pre-employment tests, background checks, date-of-birth inquiries).
  5. Preserving Access to the Legal System. The EEOC will also target policies and practices that discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or impede the EEOC’s investigative or enforcement efforts.  This includes retaliatory actions, overly broad waivers, settlement provisions that prohibit filing charges with the EEOC or providing information to assist in the investigation or prosecution of claims of unlawful discrimination, and failure to retain records required by EEOC regulations.
  6. Preventing Harassment Through Systemic Enforcement and Targeted Outreach. The EEOC will seek to deter harassment based on protected classes by systematic enforcement and educating employers and employees. 

The EEOC will use the SEP to determine where to apply its resources as far as administrative charges, private enforcement actions, and systematic lawsuits.  Employers should evaluate their policies and practices in the identified target areas and consider whether revisions or training are needed. 

- Alison Hamer (Los Angeles)