By now, most employers are familiar with the list of categories protected from employment discrimination under Title VII of the Civil Rights Act:  race, color, religion, national origin and sex.  Additional categories are protected by other federal anti-discrimination laws:  disability (Americans with Disabilities Act), age (Age Discrimination in Employment Act), pregnancy (Pregnancy Discrimination Act), and genetic information (Genetic Information Nondiscrimination Act).  Absent is any mention of sexual orientation or gender identity. The protections are, of course, broader in New York State.  Under the New York Human Rights Law, discrimination on the basis of sexual orientation (among other things) is also prohibited.  And in New York City, the New York City Human Rights Law prohibits discrimination on the basis of gender identity. Advocacy groups have been clamoring for legislation to protect transgender and lesbian/gay employees on the federal level for years.  The Employment Non-Discrimination Act (ENDA) would explicitly prohibit employment discrimination on the basis of sexual orientation and gender identity, but ENDA (despite versions being introduced in almost every Congress since the 1990s) has never made it to the President’s desk. Enter the EEOC.  Apparently tired of waiting for legislative protection for transgender employees, the EEOC has taken matters into its own hands. Back in April 2012, the EEOC officially took the position that transgender discrimination is a form of gender discrimination in violation of Title VII.  In Macy v. Holder, a case involving an applicant to the Bureau of Tobacco, Firearms and Explosives, the EEOC concluded that the Bureau violated Title VII when it withdrew an employment offer after the candidate revealed she was in the process of transitioning from male to female.  The EEOC reasoned that the term “sex” in Title VII encompasses not only a person’s biological sex, but also the cultural and social aspects associated with masculinity and femininity, and therefore, the law’s prohibition against sex discrimination is broader than discrimination based on biological sex.  The EEOC relied on Price Waterhouse v. Hopkins, a 1989 U.S. Supreme Court decision that established a theory known as “sex stereotyping.”  Under this theory, employers unlawfully discriminate on the basis of gender when they take some action against an employee because he or she does not conform to expected gender stereotypes.  The Macy decision was significant, as it was the first time the EEOC officially took this position regarding transgender discrimination.  However, since Macy was an administrative ruling involving a federal agency, it did not create binding precedent for courts. Later in 2012, the EEOC issued its Strategic Enforcement Plan.  As we wrote here, that plan made “coverage of lesbian, gay, bisexual and transgender individuals under Title VII's sex discrimination provisions” a top enforcement priority. Fast forward to September 2014.  Seemingly eager to create binding court precedent recognizing transgender discrimination as a form of sex discrimination under Title VII, the EEOC filed two lawsuits against employers alleging transgender discrimination.  In EEOC v. Lakeland Eye Clinic (filed in Florida) and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. (filed in Michigan), the EEOC claims that employees were terminated after informing their employer that they were transgender.  These cases are both in the early stages, but we will monitor and report on any significant developments in those cases. In the meantime, employers should be ready to deal with the issues that arise with transgender employees in their workplace.  It is wrong to assume these employees are not protected just because the terms “transgender” or “gender identity” do not appear in the federal or state employment discrimination laws.  Aside from not making employment decisions based on an employee’s gender identity, there are also accommodation issues to consider.  Should a transitioning employee be allowed to use the restroom corresponding to their gender presentation -- even if it makes other employees uncomfortable?  (Yes.)  Should you change the first name of the employee in your employment records based on a request?  (It depends on the record.)  The questions abound.  Stay tuned for more guidance on these complex issues.

With that first real chill in the air, the holiday season is suddenly upon us.  For parents, it is a time to relive our childhood, watching with our children all of those holiday specials ranging from It's the Great Pumpkin, Charlie Brown to Santa Claus is Comin' to Town.  Unfortunately, for members of our misfit profession, “tis the season” is not so much about being jolly, but more about defending lawsuits. And speaking of lawsuits, a daily perusal of employment law blogs and periodicals reveals that there is no shortage of new and innovative ways to sue an employer.  The seemingly endless tide of profligate litigation makes me shiver like Linus in the Pumpkin Patch about what would happen if the Department of Labor, the EEOC, or the plaintiff’s bar set its sights on Santa and his manufacturing plant in the North Pole.  For this reason, I offer the following guidance to Mr. Kringle d/b/a Santa on how to clean up some glaring employment law violations.  (Disclaimer:  Our guidance to Mr. Kringle is not intended to be legal advice nor should it be a substitute for him retaining local counsel familiar with the laws in his local jurisdiction.  I would also include the obligatory tax advice disclaimer, but I believe Mr. Kringle is tax-exempt.) I will discuss individual lawsuits below.  However, my main concern in terms of liability is in the arena of the class action.  I say this with all due love and affection, “Mr. Kringle, your workshop is a treasure-trove of wage and hour violations.”  The elves work, quite obviously, more than 40 hours a week.  They work through meal periods and weekends and holidays.  Where is their overtime pay?  While efficiently furnished, I don’t see any punch clock for your employees.  Can we say liquidated damages and attorneys’ fees? Your workplace is also quite literally an accident waiting to happen.  The elves have no protective equipment.  There is an Abominable Snowman on the shop floor.  Can we all say, “OSHA”? Mr. Kringle, despite your big heart, your workplace is rife with harassment and discrimination.  For example, there is Rudolph’s red nose and the universally known harassment and bullying to which he has been subjected (“used to laugh and call him names”).  The un-remedied mocking of Rudolph makes for a great holiday gift for the plaintiff’s lawyer who signs up Rudolph and his “slam dunk” suit.  (We make no representations as to whether any plaintiffs-side lawyers are on the "Nice List" and worthy of such a gift).  I think it is imperative that all of your reindeer immediately receive anti-harassment training.  So too with poor Hermey.  The Seinfeldesque “Anti-Dentite” environment that you have condoned is ripe for litigation and is otherwise an insult to dentists world-wide.  That leads us to our Faragher defenses.  Are your EEO policies translated into “Elfish” and properly distributed with a clear record of same? Of additional concern, have you taken care to make sure that the post-toy delivery workplace celebration does not cross the proverbial “line” of appropriateness and result in more than just hangovers at the workshop the next day? Finally, we need a word about the Island of Misfit Toys.  Notwithstanding that the public may want all lawyers permanently deposited in this desolate place, it is nonetheless illegal to segregate your workforce on the basis of such protected characteristics as being a cowboy who rides an ostrich.  And, who among us wouldn’t want to ride an ostrich? Of course, Mr. Kringle is not the only one staring down the barrel at punitive damages.  Yes, I’m talking to you, Mr. Burgermeister Meisterburger.  Making toys is plainly a recreational activity under state labor laws and interfering with concerted activity in this regard will get you an unfriendly knock on the door from the NLRB. So, to our clients and blog subscribers, I wish you all a joyous holiday season in front of a warm fire surrounded by friends and family, without any visions of EEOC complaints or Department of Labor audits dancing in your heads.

Over the past few months, the media has reported extensively about several incidents of domestic violence involving professional athletes.  While these high-profile cases generate huge attention, it is important to remember that domestic violence is a problem of epidemic proportion.  The Center for Disease Control and Prevention reports that 1 in 4 women and 1 in 10 men have experienced physical or sexual violence or stalking by an intimate partner.  Only a small fraction of these cases involve millionaire athletes. Whether it is obvious or not, domestic violence impacts workplaces across the United States on a daily basis.  When this happens, an employer is often left struggling with the question of how – if at all – it should acknowledge and react to an employee’s sensitive and highly personal situation.  While the nature of the problem makes it impossible to predict every issue that might arise, the following questions are frequently asked by employers when domestic violence affects their workplace. Question:  Do any job protections exist for domestic violence victims? Answer:  Yes.  In several states, including New York, domestic violence victim status is a protected category, meaning that an employer cannot take adverse job actions against an individual on that basis.  While federal law does not expressly provide this same protection, Title VII of the Civil Rights Act (Title VII) makes it unlawful for an employer to treat an employee differently due to sex-based stereotypes, such as the assumption that there will inevitably be “distractions” in the workplace if a female employee is involved in an incident of domestic violence.  This is not to say that domestic violence victims are insulated from employment actions taken for legitimate work deficiencies or other non-discriminatory reasons.  It does mean, however, that an employer will be expected to prove that a challenged action occurred for a non-discriminatory reason. It is also important to remember that the Americans with Disabilities Act (ADA) and analogous state laws prohibit discrimination on the basis of covered physical or mental impairments.  Those same laws also require employers to provide disability-related accommodations, which could include modifying certain job responsibilities or employment policies, unless doing so would cause an undue hardship to the business.  Although an incident of domestic violence would not itself implicate these laws, the accompanying physical and emotional harm could constitute a disability resulting in employee coverage. Question:  Is an employer required to provide victims of domestic violence time off from work? Answer:  The New York Penal Law makes it a misdemeanor offense for an employer to penalize the victim of a crime who, after giving advance notice, takes time off from work to appear in court as a witness, consult with a district attorney, or obtain an order of protection.  In addition, the federal Family and Medical Leave Act (FMLA) grants eligible employees up to 12 weeks of unpaid leave to recover or receive treatment for serious health conditions, which could include counseling for any physical or psychological conditions resulting from domestic violence.  The ADA and equivalent state laws may also require that some amount of unpaid leave be offered as a form of reasonable accommodation. An employer would also be expected to grant domestic violence victims time off from work pursuant to internal leave policies if leave is normally available to employees experiencing other types of personal matters. Question:  Is an employer obligated to ensure a safe workplace for domestic violence victims? Answer:  The Occupational Safety and Health Administration considers workplace violence to be an occupational hazard which can be prevented or minimized with appropriate precautions.  Included within the agency’s definition of workplace violence is violence by someone who does not work at a given location, but who has a personal relationship with an employee.  Under the Occupational Safety and Health Act’s “General Duty Clause,” employers are required to provide a place of employment that is free from recognizable hazards that cause or are likely to cause harm to employees.  An employer that has experienced acts of workplace violence – or is on notice of threats, intimidation, or other indicia to show a potential for workplace violence – is required under the general duty clause to implement feasible abatement measures. Question:  What if my employee is not the victim, but is the person accused or found guilty of engaging in criminal acts often associated with domestic violence? Answer:  New York and many other states make it unlawful for an employer to discipline, discharge, or take other adverse action against an employee who was accused of a crime if the charges have been dropped, dismissed, or otherwise resolved in the employee's favor.  At least in New York, that same protection is not afforded to pending charges, but an employer motivated by mere allegations that an employee has perpetrated a crime could nevertheless find itself defending against claims of discrimination on other grounds.  This includes a claim that the challenged action was the result of an employer policy or practice which adversely impacts one or more groups protected by Title VII, as addressed in recent enforcement guidance issued by the Equal Employment Opportunity Commission.  If the accused employee belongs to a union, additional protections may be afforded under a collective bargaining agreement provision requiring “just cause” prior to disciplinary action. In regards to criminal convictions, several states restrict an employer’s ability to fire an individual because he or she has been convicted of a crime.  In New York, an employer considering such action must evaluate eight factors, such as the nature of the offense, the time elapsed, the age of the individual when the offense occurred, and any evidence of rehabilitation.  Only after evaluating these factors will an employer be in a sufficient position to determine whether a direct relationship exists between the offense and the job, or whether the person’s employment involves an unreasonable risk to property or safety, either of which would provide a defense to a discrimination claim based on a prior conviction. For either arrests or convictions, an employer should investigate the underlying facts to determine if an individual’s conduct justifies termination or some other employment action.  Failure to do so may hurt the employer’s chances of successfully defending against allegations of discrimination, prevailing at arbitration, or avoiding negligent hiring or retention claims. In sum, employers must become familiar with the various legal obligations that arise when an employee is involved in domestic violence, either as the victim or the accused.  If the employee is known to be suffering the effects of an abusive relationship, the employer should be prepared to grant leave or make other work-related adjustments to facilitate the employee's physical and emotional recovery or participation in the legal process (including obtaining an order of protection).  If the employee is accused or convicted of a violent or threatening act, the employer should determine if the underlying conduct impairs his or her continued employment, recognizing that the law generally disfavors employment actions taken because of an individual’s arrest or conviction record.  In either situation, merely ignoring the problem is never a good strategy.

A recent Second Circuit case highlights the potential perils of basing employment decisions upon subjective judgments which are susceptible to multiple interpretations.  In Abrams v. Department of Public Safety, the court reversed a summary judgment decision granted to an employer based upon the hiring supervisor’s assessment that a non-minority applicant for a detective position in a special major crimes group would “fit in better” than a minority applicant for that position. The minority detective, Frederick Abrams, brought a variety of discrimination and retaliation claims against a state law enforcement agency based upon his non-selection for a major crimes unit position and his subsequent reassignment to a casino unit following his internal complaints about not receiving the major crimes job and various other things.  The district court granted the law enforcement agency’s motion for summary judgment on Abrams’ discrimination claims, but found that there were sufficient questions of fact surrounding the retaliation claim to warrant those claims proceeding to trial.  In granting the summary judgment motion, the district court refused to consider the “fit in better” comment, finding that it was an inadmissible hearsay statement.  Abrams appealed to the Second Circuit after a jury ruled in favor of the law enforcement agency following a three-day trial. On appeal, the Second Circuit ruled that the lower court had improperly excluded the “fit in better” statement, finding that it was not hearsay and was admissible evidence.  The court explained that this statement was not being offered to establish its truth – that Abrams would not be a good fit – but rather only to show that the statement was made and that it referred to Abrams. The central question, the court observed, was whether this racially neutral statement was sufficient to create an inference of discrimination sufficient to avoid summary judgment.  Relying on an earlier Fifth Circuit decision, the Second Circuit noted:

[T]he phrasing "better fit" or "fitting in" just might have been about race; and when construing the facts in a light most favorable to the non-moving party, those phrases, even when isolated, could be enough to create a reasonable question of fact for a jury.  It is enough of an ambiguity to create a reasonable question of fact.

The case was therefore remanded to the district court for further proceedings and perhaps a second trial. This case plainly illustrates the vulnerability of employment decisions based upon ambiguous, subjective judgments and shows the ease with which these decisions can be attacked and challenged, even on appeal.  Because of the conflicting inferences that can be drawn from these judgments, employers are obviously well-served to base their employment decisions upon consistent, measurable, job-related criteria whenever possible.

Sun Tzu's seminal work “The Art of War” has long been required reading in leading business schools.  As a definitive work on strategy, the impact of “The Art of War” crosses a great many sectors.  In its most basic sense, Sun Tzu has a great deal of wisdom to offer anyone charged with motivating a workforce, changing a culture, achieving collective goals, and negotiating with and/or defeating hostiles. This leads us to the Art of War’s relevance to litigation, and in particular, employment litigation.  Of course, we do not equate the trials and tribulations of employment litigation with the sacrifice and horrors of actual war, but we use Sun Tzu merely as a guide to the importance of strategy in litigation.  As we are all keenly aware, profligate employment claims bring with them attendant legal fees, in terrorem settlements, potential runaway juries, and loss of time and energy.  For every in-house counsel and human resources executive overseeing such claims, reference to this ancient text can serve as a valuable guidepost to effectively manage the case from the proverbial “General’s” chair. Sun Tzu:  Now the general who wins a battle makes many calculations in his temple ere the battle is fought.  The general who loses a battle makes but few calculations beforehand. Strategy is an often overlooked complement to litigation defense.  Each case is different, making rote defenses unacceptable.  At the very outset of the case, the “General” needs to know:  what is our strategic plan for confronting this particular case, before this particular judge, on these unique facts. Sun Tzu:  What the ancients called a clever fighter is one who not only wins, but excels in winning with ease. Winning with “ease” in employment cases means winning pre-trial and preferably pre-discovery.  Consequently, a threshold question is:  do we have a motion to dismiss? Courts have become far more accepting of dismissing complaints that are based solely on conclusory allegations.  See, e.g., Zucker v. Five Towns College, 2010 WL 3310698 (E.D.N.Y. 2010) (granting motion to dismiss, finding that allegations concerning plaintiff’s satisfactory work performance, termination, and much younger replacement do not -- by themselves -- suffice to plead an age discrimination claim).  If a motion to dismiss is available, it could save discovery costs or possibly paying an in terrorem settlement to avoid those discovery costs.  An ill-conceived motion to dismiss, however, only runs up unnecessary costs and, in the view of the deciding judge, may undermine the credibility of any subsequent motion for summary judgment.  Dig down deep into the case law to find cases within the jurisdiction in which complaints with similar factual allegations have been dismissed. Sun Tzu:  There is no instance of a country having benefited from prolonged warfare. Winning after expensive discovery and an expensive trial is not, in Sun Tzu’s philosophy, truly “winning.”  This brings us to the concept of a “reasonable” settlement.  Often times, there is a fear that if we settle, every terminated employee will believe they can exact a payout upon the mere presentation of a complaint, even if that complaint is utterly specious.  On the flip side, standing on principle and “fighting to the death” is expensive and time-consuming. Perhaps the most important thing to consider with such a conundrum is:  who is our judge?  Some judges have no problem granting pre-trial motions to dismiss or for summary judgment.  Other judges virtually never grant a pre-trial motion.  Knowing this at the outset is critical.  Even if standing on principle is important, if you know that winning the case will in all likelihood require the cost of a full blown trial, settling at the inception of the case for less than the defense costs to win at trial (and taking away the risk of losing at trial and paying prevailing party fees) may be the better part of valor. Sun Tzu:  Hence to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting. At first blush, this sounds vastly easier said than done.  But, one way to subdue an enemy in employment cases is to make the enemy defend against a counterclaim.  In our experience, viable counterclaims are often overlooked.  Enter the “faithless servant” doctrine.  If a former employee plaintiff has been terminated for misconduct, that employee may be subject to a claw-back of all of the compensation he/she was paid during the period of such misconduct.  The possibility of not only losing the employment claim but also having to forfeit back already received compensation dramatically changes the leverage in terms of settlement or making the plaintiff simply go away.  See, e.g., William Floyd Union Free Sch. Dist. v. Wright, 61 A.D.3d 856, 877 N.Y.S.2d 395 (2d Dep't 2009) (affirming grant of summary judgment which required employees to forfeit all compensation during the period of their disloyalty and to forfeit all forms of deferred compensation). Sun Tzu:  If we do not wish to fight, we can prevent the enemy from engaging us even though the lines of our encampment be merely traced out on the ground.  All we need do is to throw something odd and unaccountable in his way. Something “odd and unaccountable” in the eyes of a plaintiff, and most particularly in the eyes of a plaintiff’s lawyer, is the possibility of fee-shifting not just against the plaintiff, but also against the plaintiff’s lawyer.  The availability of prevailing party fees to the plaintiff creates a Damoclean incentive to settle.  Little known, however, is that in some cases the threat of fees against the plaintiff, and more specifically the plaintiff’s lawyer, can quickly level that playing field. A hidden gem in federal law allows for full fee-shifting against a plaintiff’s lawyer who has been put on notice that the plaintiff’s complaint is frivolous.  28 U.S.C. § 1927.  While a plaintiff’s lawyer may initially laugh off such a threat, do not hesitate to send the lawyer a case where a substantial fee shift was imposed.  See, e.g., Capone v. Patchogue-Medford Union Free Sch. Dist., 2006 U.S. Dist. LEXIS 96016 (E.D.N.Y. 2006) (imposing full fee-shifting against plaintiff’s counsel in employment case).  When done right (notice, etc.), a fee-shifting claim can be a potent weapon in an employer’s self-defense arsenal. Conclusion Litigation is about strategy -- playing offense when available, breaking the enemy when possible, and avoiding a prolonged fight.  There is no one rote method of responding to an employment discrimination claim.  In-house counsel and human resources executives should be provided by their counsel with a full range of options and facts to support those options, particularly as to whether the current case -- as assigned to a specific judge -- ought to be quietly and quickly settled or vigorously litigated.

On July 14, 2014, the U.S. Equal Employment Opportunity Commission ("EEOC") issued its Enforcement Guidance on Pregnancy Discrimination and Related Issues.  The purpose of the Enforcement Guidance is to explain the EEOC’s current interpretations of the Pregnancy Discrimination Act of 1978 ("PDA") and the interplay between the PDA and the Americans with Disabilities Act ("ADA").  This interplay is important because although pregnancy by itself is not a disability under the ADA, it is often accompanied by one or more medical impairments which would entitle an employee to the ADA’s protections. Perhaps the most significant take-away from the new Enforcement Guidance concerns those situations when the PDA and ADA do not overlap, i.e., when pregnant employees do not have ADA-covered disabilities.  The EEOC’s interpretations make clear that it views pregnancy as a preferred status for enforcement and litigation purposes, such that pregnancy alone can give rise to certain job protections that would not be afforded to comparable non-pregnant co-workers. As an amendment to Title VII of the Civil Rights Act of 1964, the PDA prohibits discrimination on the basis of an applicant's or employee’s pregnancy, childbirth, or related medical conditions.  It requires that women affected by pregnancy be treated the same as non-pregnant employees who are “similar in their ability or inability to work.”  Courts generally interpret this to mean that employers need not adjust their normal policies and practices to accommodate work restrictions caused solely by pregnancy.  This is unlike under the ADA, which affirmatively requires that employers reasonably accommodate otherwise qualified individuals who are unable to perform the essential functions of their jobs due to disabilities. Despite earlier court decisions, the EEOC Enforcement Guidance instructs that employers must generally honor work restrictions for pregnant employees, even if no ADA-covered condition exists to require a workplace accommodation.  Similarly, if an employer provides light duty assignments to employees who experience on-the-job injuries (as many employers do to lower workers’ compensation costs), it is the EEOC’s position that pregnant employees must be given the light duty option.  This is the EEOC's view even if light duty work is not available to similarly situated employees whose job restrictions result from an injury suffered outside of the workplace. The EEOC issued its Enforcement Guidance less than two weeks after the U.S. Supreme Court decided to hear the case of Young v. UPS, Inc.  The Fourth Circuit held in Young that the PDA does not require pregnancy-related accommodations or light duty assignments since this would effectively grant non-disabled pregnant employees preferential treatment relative to co-workers who are not otherwise covered by the ADA or an employer’s light duty policy (such as an individual who suffered a temporary, off-the-job injury) – a result which was never intended by Congress.  Critics view the Enforcement Guidance as an attempt by the EEOC to politicize a question of judicial interpretation in advance of the Supreme Court ruling. The Enforcement Guidance also describes the EEOC’s position on other pregnancy-related issues affecting the workplace, which will be discussed in a future blog article.  In the meantime, as we noted in our January 2, 2013, blog post, the issue of accommodating pregnancy-related limitations will continue to be one of the EEOC’s top enforcement priorities.  Accordingly, prudent employers should evaluate their internal policies and practices for compliance with current legal standards, and ensure that those policies and practices are being applied in a consistent and non-discriminatory manner. The EEOC has also issued a Questions & Answers to summarize its new Enforcement Guidance, as well as a Fact Sheet for Small Businesses.

On July 22, 2014, Governor Cuomo signed a bill that amends the New York Human Rights Law by adding a new Section 296-c entitled, “Unlawful discriminatory practices relating to interns.”  The amendment prohibits employers from discriminating against unpaid interns and prospective interns on the basis of age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, or domestic violence victim status, with respect to hiring, discharge, and other terms and conditions of employment.  The amendment further prohibits employers from retaliating against unpaid interns who oppose practices forbidden under the Human Rights Law or who file a complaint, testify, or assist in a proceeding brought under the Human Rights Law.  The amendment also makes it unlawful for employers to compel an intern who is pregnant to take a leave of absence, unless the pregnancy prevents the intern from performing the functions of the internship in a reasonable manner.  The amendment also prohibits employers from subjecting interns to sexual harassment or any other type of harassment based on a protected category. This legislation was introduced following a 2013 case in which the United States District Court for the Southern District of New York dismissed a sexual harassment claim asserted by an unpaid intern who alleged that her boss had groped her and tried to kiss her.  In that decision, the Court was bound by the language of the statute that existed at that time and the court decisions interpreting that language, which provided that the Human Rights Law only applied to paid employees and did not apply to unpaid interns.  The purpose of the legislation is to give unpaid interns the same right to be free from workplace discrimination and harassment as paid employees. Employers who have unpaid interns or expect to have unpaid interns in the future should consider revising their anti-discrimination and anti-harassment policies to explicitly provide that discrimination and harassment against interns will not be tolerated, and that complaints made by interns regarding alleged unlawful harassment will be investigated in the same manner as complaints made by employees.  In addition, as we noted in a 2010 blog post, employers should also make sure that unpaid interns truly qualify as unpaid interns, and would not be considered "employees" who are entitled to the minimum wage and overtime protections of the Fair Labor Standards Act and New York wage and hour laws.

As expected, President Obama signed an Executive Order today which amends Executive Order 11246 to prohibit federal contractors from discriminating against employees or applicants based on their sexual orientation or gender identity.  The prohibition against discrimination based on sexual orientation is not new to federal contractors who operate in New York State, because the New York Human Rights Law already prohibits employment discrimination based on sexual orientation.  Nevertheless, all federal contractors in New York should take this opportunity to review their policies and practices to ensure compliance with the new Executive Order.  Specifically, all anti-discrimination and anti-harassment policies should specifically list sexual orientation and gender identity among the protected categories, and all solicitations for employees should include a statement that qualified applicants will receive consideration for employment without regard to sexual orientation or gender identity (in addition to the other protected categories). The Secretary of Labor has been directed to issue regulations implementing the amendments to Executive Order 11246 within 90 days.  The amendments to Executive Order 11246 will apply to federal contracts entered into on or after the effective date of the regulations issued by the Secretary of Labor.

Discrimination claims are expensive to defend and if they reach a jury, the results are often unpredictable.  The summary judgment motion, when utilized properly, is an effective risk and cost containment tool available to employers attempting to fend off such claims before they reach a jury.  Therefore, employers need to make sure that they do everything within their power to keep this tool available to them if a discrimination lawsuit is filed.  A recent New York Court of Appeals decision, Jacobsen v. New York City Health and Hospitals Corp., underscores this point.  In Jacobsen, the Court of Appeals held that an employer who does not participate in an interactive process regarding a disabled employee’s accommodation request is thereafter precluded from obtaining summary judgment with respect to any state or city disability discrimination claims related to that request. Both the trial court and the Appellate Division, First Department, held that summary judgment was appropriate because in their view, on the facts of the case, there was no reasonable accommodation available that would have enabled the terminated employee to perform the essential functions of his position.  However, there was one dissenting opinion in the Appellate Division’s decision.  The dissenter noted, among other things, that the record lacked any evidence that the employer had engaged in a good faith interactive process to determine the existence and feasibility of a reasonable accommodation.  Given such failure, the dissenter felt that summary judgment in favor of the employer was inappropriate. The Court of Appeals concurred with that aspect of the dissenter’s opinion, and reversed the decision granting summary judgment to the employer.  After examining the legislative history and intent of the statutes, particularly the provisions of the New York Human Rights Law, the Court of Appeals held that employers are required to “give individualized consideration” to a disabled employee’s accommodation request and that:

In light of the importance of the employer’s consideration of the employee’s proposed accommodation, the employer normally cannot obtain summary judgment on a State HRL claim unless the record demonstrates that there is no triable issue of fact as to whether the employer duly considered the requested accommodation.  And the employer cannot present such a record if the employer has not engaged in interactions with the employee revealing at least some deliberation upon the viability of the employee’s request.

Because of its broader coverage, the Court also held that the “City HRL unquestionably forecloses summary judgment where the employer has not engaged in a good faith interactive process regarding a specifically requested accommodation.” The Court of Appeals made clear that, despite its holding, a plaintiff’s burden at trial remains the same and that he/she still has to prove the existence of a reasonable accommodation that was requested and denied.  Moreover, the Court of Appeals rejected the even harsher notion that the failure to engage in a good faith interactive process compels a grant of summary judgment or a verdict in the employee’s favor. The lesson here is simple.  Prudent employers should always at least consider a disabled employee’s accommodation request, engage in a dialogue with the employee regarding the feasibility of the accommodation request, and suggest potential alternatives if the initial request is not feasible.  Employers should also document their interactions with a disabled employee and the resolution of the employee's accommodation request.  That way, employers can ensure that they have a fully equipped tool belt to employ in fending off any potential disability discrimination claims.

On January 13, 2014, the Equal Employment Opportunity Commission (“EEOC”) announced it had reached a settlement with Founders Pavilion, Inc. (“Founders”), a former nursing and rehabilitation center located in Corning, New York.  In the lawsuit, the EEOC alleged that Founders violated the Genetic Information Nondiscrimination Act (“GINA”).  The lawsuit represented only the third time since GINA was enacted that the EEOC had brought a lawsuit against an employer in which it alleged that an employer violated GINA, and the first lawsuit in which the EEOC alleged that the discrimination was systemic. In EEOC v. Founders Pavilion, Inc., the EEOC alleged that Founders violated GINA because it conducted post-offer, pre-employment medical exams of applicants, in which it requested a family medical history from the applicants.  The EEOC also alleged Founders violated the Americans with Disabilities Act by firing an employee after it refused to accommodate her during the probationary period of her employment, and by firing two women because of perceived disabilities.  Further, the EEOC alleged that Founders violated Title VII by firing and/or refusing to hire three women because they were pregnant. After the lawsuit was filed, Founders ceased operating its business in New York and on or about January 9, 2014, entered into a five-year consent decree in which it agreed to settle the lawsuit.  Pursuant to the settlement, Founders agreed to establish a fund of $110,400 for distribution to 138 individuals who were asked to provide their genetic information.  Founders also agreed to pay $259,600 to five individuals who the EEOC alleged were fired or whom Founders refused to hire in violation of the ADA and Title VII.  In addition, Founders agreed that if it were to resume its business, it must post notices to notify its employees of the lawsuit and consent decree, as well as adopt a new anti-discrimination policy and provide anti-discrimination training to its employees. While the New York Human Rights Law has prohibited employers from discriminating against an employee on the basis of a predisposing genetic characteristic since 1996, GINA goes a step further and makes it unlawful for an employer to request or require employees to provide their own genetic information or the genetic information of family members.  Importantly, GINA and the corresponding regulations broadly define genetic information to include, among other things, genetic tests of the individual or family members and family medical history.  For a more detailed discussion of what is prohibited under GINA, see our blog posts on January 14, 2011, December 7, 2010, and November 19, 2009. In announcing the Founders settlement, the EEOC expressed its intent to continue pursing alleged violations of GINA against employers.  This settlement demonstrates the potential liability that an employer could face in the event that the employer violates a provision of GINA.  Since GINA and its regulations are relatively new, it is important for employers to consult with their legal counsel to ensure compliance.

Next year, most employers with employees working in New York City will be required to provide reasonable accommodations for pregnant employees.  The new requirement is an amendment to the New York City Human Rights Law and takes effect on January 30, 2014. Under the new law, employers in New York City with four or more employees will be required to provide reasonable accommodations needed due to pregnancy, childbirth, or related medical conditions, provided that the pregnancy or condition “is known or should have been known” to the employer.  The law states that accommodations may include, “bathroom breaks, leave for a period of disability arising from childbirth, breaks to facilitate increased water intake, periodic rest for those who stand for long periods of time, and assistance with manual labor, among other things.” Accommodations need not be provided if they would pose an “undue hardship."  Factors in determining undue hardship include the nature and cost of the accommodation, the nature of the facility, and the finances of the business. The law also contains a notice requirement.  Covered employers must notify employees of the right to be free from pregnancy discrimination.  The notice must be given to all new employees and existing employees.  The New York City Commission on Human Rights is expected to issue more specific guidance on the notice requirements.  The new law allows employees to file complaints with the Commission or proceed directly to court. It is fair to say that the New York City law broadens protections for pregnant workers beyond the scope of the Pregnancy Discrimination Act, the Americans with Disabilities Act, and the New York Human Rights Law.  Typically, those other laws have not been interpreted to require that employers accommodate a normal, healthy pregnancy.  Instead, the right to an accommodation is usually triggered only upon the showing of a particularized need or complicating medical condition, or at the point when the pregnancy becomes disabling (e.g., immediately before and after the birth).  The effect of the New York City law is to put a normal, healthy pregnancy on par with a disability for the purpose of workplace accommodations. Employers with employees in New York City are advised to review their policies and procedures concerning pregnancy and to educate supervisors and managers regarding the scope of these new protections.

As previously reported, the elimination of barriers in recruitment and hiring was identified as one of the Equal Employment Opportunity Commission’s six priorities in its 2013-2016 Strategic Enforcement Plan (“SEP”).  Accordingly, the EEOC is focusing its enforcement efforts and resources on eradicating both class-based intentional discrimination, as well as facially-neutral recruitment and hiring practices that have a discriminatory effect on particular groups.  To this end, the EEOC has been aggressively challenging employers’ use of criminal and credit background checks in recruitment and hiring, alleging that such practices have a disparate impact on certain applicants in protected classes.  However, in a significant victory for employers, the EEOC’s efforts were recently thwarted in a decision issued by the United States District Court for the District of Maryland. In EEOC v. Freeman, the EEOC challenged the defendant’s use of criminal background and credit checks, alleging that, although facially-neutral, the practice had a discriminatory effect on African-American and male applicants.  In granting the defendant’s summary judgment motion dismissing the complaint, the court held that the EEOC and their experts failed to identify a specific policy causing an alleged disparate impact and “something more, far more, than what is relied upon by the EEOC in this case must be utilized to justify a disparate impact claim based upon criminal history and credit checks.”  The court further admonished the EEOC’s lack of factual support, stating that:

[b]y bringing actions of this nature, the EEOC has placed many employers in the "Hobson’s choice" of ignoring criminal history and credit background, thus exposing themselves to potential liability for criminal and fraudulent acts committed by employees, on the one hand, or incurring the wrath of the EEOC for having utilized information deemed fundamental by most employers.

To further underscore the importance of background checks to employers, the court pointed out that ironically, even the EEOC conducts criminal background investigations as a condition of employment for all employees, and conducts credit background checks on approximately 90% of its positions. The Freeman court explained that it is not the “mere use” of background checks that presents Title VII concerns, but rather “what specific information is used and how it is used.”  Here, Freeman’s use of criminal and credit checks were not used as automatic exclusions and were conducted only for specific types of jobs.  The Freeman court held that the use of these screening tools is a “rational and legitimate component of a reasonable hiring process.” Although this decision is an important victory for employers defending their right to refuse to hire applicants whose backgrounds call into question their character and qualifications for employment, it is unlikely to stop the EEOC’s enforcement efforts completely.  The SEP, together with the EEOC’s April 2012 Enforcement Guidance on criminal background checks, make clear that the EEOC is determined to seriously limit the use of background checks, if not prohibit their use altogether.  Therefore, employers should consult with legal counsel to ensure that any use of background checks is both job-related and consistent with business necessity, and that such use does not result in automatic exclusions.  Background checks should also be limited only to those positions where there is a direct correlation between the background check and the job involved.