The Supreme Court on Monday, in a 5-4 decision in Epic Systems Corp. v. Lewis, No. 16–285 (U.S. May 21, 2018) (consolidated cases), ruled that companies can use arbitration clauses in employment contracts to prohibit workers from banding together to take legal action over workplace issues.  The Court’s decision could affect some 25 million employment contracts.

Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by another federal law, the Federal Arbitration Act which for over 70 years coexisted with the NLRA and during this time permitted individual arbitration agreements.  Gorsuch also noted that the NLRA’s protections on “concerted activity” must only be understood in the context of traditional labor relations matters (such as union organizing and collective bargaining), not civil litigation of claims arising under statutes other than the NLRA: “If workers were allowed to band together to press their claims,” he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”

The Court also rejected the argument that courts owe deference to the NLRB’s view of things, pointing out that courts do not and should not grant deference to an agency’s interpretation of a federal law outside its sphere of responsibility: “The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.”

Requiring employees to submit class or collective claims to arbitration on an individualized basis is increasingly common.  Going forward, companies already employing this practice can be confident that the agreement is enforceable.  For employers who have not yet adopted such agreements, they should consider the benefits of doing so.  Our team of labor and employment attorneys can advise you on this topic.

Joining several other states including New York, New Jersey, and Massachusetts, Connecticut is set to enact legislation banning salary history inquiries by employers or their agents.  The General Assembly passed the measure and Governor Malloy is expected to sign it into law with an effective date of January 1, 2019.

The move is part of a trend among several states and municipalities to remove a barrier to gender-based pay equity.  Asking an employee’s salary history, the reasoning goes, allows employers to further entrench gender-based pay disparities by continuing a prior employer’s gender discrimination.  For example, if an employer makes it a practice to hire new employees at 10% above their prior salary in order to lure new hires, an applicant earning $70,000 at a prior job would be hired at $77,000 and an employee earning $80,000 at the prior job would be hired at $88,000 for the same work.  While prior salaries of applicants can vary for many factors other than gender, the aim of legislation like this is to eliminate the echoes of prior employers’ gender discrimination.

There are a few limitations on the ban:

  • It does not apply to any actions taken by an employer, employment agency, or employee or agent thereof pursuant to any federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes;
  • It does not apply if the prospective employee has voluntarily disclosed salary history; and
  • It does not apply to inquiries about other elements of a prospective employee’s compensation structure, as long as the employer does not inquire about the value of the elements of such compensation structure.

Significantly, nothing in the legislation prohibits employers from asking prospective employees about their salary requirements.  In other words, employers may not be permitted to ask what a prospective employee made at his or her old job, but can still ask what salary the prospective employee requires in order to accept the position in question.

In addition, the legislation does not prohibit employers from using salary history in setting compensation, so in theory, if an applicant voluntarily discloses his or her prior salary, it would be permissible to set pay based on it.  However, a recent case from the Ninth Circuit Court of Appeals, Rizo v. Yovino, held that salary history can never be a legitimate basis to pay women and men differently for the same work under the federal Equal Pay Act, so to avoid the possibility of inadvertent gender-based differentials in pay, it is best to avoid using salary history as well.

Under the Connecticut legislation, employers can be liable for compensatory damages, attorney’s fees and costs, punitive damages, and any legal and equitable relief the court deems just and proper.

Is this legislation constitutional?  Recently, a salary history ban enacted in Philadelphia was partially enjoined by a federal judge on the basis that it violates the First Amendment’s free speech clause.  The judge determined that the portion of the ordinance banning the employer from using the information to set pay was valid, but blocked the portion allowing the employer to ask about the information.  Thus, it will be interesting to see whether Connecticut’s legislation (which only bans inquiries and not use) will be challenged on constitutional grounds.

Unless and until such a challenge is successful, employers in Connecticut should prepare to comply.  Employers should remove any questions about salary history from their employment applications and any screening instruments that may be used by third party agents, such as recruiting firms.  Employers should also instruct anyone conducting interviews on their behalf not to inquire about salary history.  In addition, when setting compensation, employers should ensure that any differences in compensation among employees performing the same work can be justified by factors other than sex or prior salary.  Legitimate job-related factors can include amount of experience, level of education, ability, and job performance.

Our team of labor and employment attorneys can assist employers with all aspects of employment law compliance, including the onboarding process and avoiding discrimination claims.  Contact us for assistance in addressing any compliance concerns.

Federal law requires employers to verify the identity and employment eligibility of their current and prospective employees and document their compliance using the Employment Verification, Form I-9. U.S. Immigration and Customs Enforcement (“ICE”) Homeland Security Investigations (“HSI”) has the authority[1] to inspect and review employer’s Forms I-9 and conduct workplace raids. Employers in Connecticut and other parts of New England face a fair chance of an I-9 audit and enforcement activity in their place of business.  This note covers compliance with Forms I-9.

A violation for the unlawful employment of an undocumented worker can result in the imposition of fines to employers, the arrest of employers who knowingly employ undocumented workers, and the arrest of workers working without lawful authorization for employment in the United States.[2]

Continue Reading Is your business ready for an inspection from U.S. Immigration and Customs Enforcement?

In a given year, about 2,000 complaints of employment discrimination are filed with the Connecticut Commission on Human Rights and Opportunities (CHRO).  For some employers, the receipt of a CHRO charge is their first exposure to the legal system (other than Unemployment).  The employer has only thirty days to respond to the charge, and only ten days to choose whether to participate in a pre-answer conciliation process.  Employers need to be prepared to respond whenever a CHRO charge is filed.  The following is an employer’s roadmap to the CHRO process.

  1. First, breathe.  Many employers (and virtually all large employers) in Connecticut face a CHRO charge at some time.  The filing of a charge does not mean that you or your employees are bad people, are going to jail, or are going to have to pay out a massive verdict.  Factually or legally baseless charges are, unfortunately, quite common.  While using an attorney may seem like a costly proposition, in many cases, an attorney can help resolve the matter quickly and efficiently so that it does not hang over your head.
  2. The next step is to determine whether there is insurance coverage that might cover the charge and to notify the carrier.  Typically, the appropriate carrier is the Employment Practices Liability Insurance (EPLI) carrier.  It is possible for a general business policy or other insurance policy to cover this kind of claim.  Failing to notify the insurance carrier promptly can result in a loss of coverage for that charge or the reassignment of the case to a different attorney once work has already commenced.  If the company does not have EPLI, it is worth considering purchasing such coverage for the future.
  3. If the company has insurance coverage, the carrier will likely assign an attorney.  Otherwise, you will need to select an attorney.  It is a good idea to choose attorneys who have substantial experience in the area of Connecticut employment law and who regularly appear before the CHRO.  General practice attorneys are often unfamiliar with the specifics of practice before the CHRO and the nuances of employment law in Connecticut.  Even though the CHRO process is somewhat informal, the case can make its way to state or federal court, so it is important to set the groundwork at the agency with a firm prepared to litigate in court if necessary.  A company can represent itself at the CHRO, but not in court.
  4. If you think the case can be settled quickly and efficiently and want to attempt settlement prior to responding to the allegations, you must request pre-answer conciliation within ten days (not business days) after receiving the charge.  This is a very short window and no extensions are available.  If the company does not have an attorney already, it may be difficult to get advice on this question before a response is due.  One option is to request pre-answer conciliation to preserve the option and then find an attorney to assist, or even attend the pre-answer conciliation prior to obtaining counsel.  Of course, an attorney can be invaluable in drafting a settlement agreement that best meets the company’s needs.
  5. If the company does not engage in pre-answer conciliation or a settlement is not reached, it will need to respond to the charge.  This involves responding to the employee’s claims from a factual and legal standpoint and offering the employer’s own explanation for what happened.  For example, an employee may claim she was fired for complaining about sexual harassment, but the employer may be able to show that the person who fired her never knew about the complaint at the time the termination decision was made.  This is where it is ideal to have good documentation of the employer’s decision making process.  The employer can make arguments to try to have the case dismissed at the Case Assessment Review stage.  If the case is retained, the next step is a mandatory mediation, which may be skipped if there was a pre-answer conciliation.
  6. The mandatory mediation is an attempt to settle the case.  While the CHRO encourages settlement, it is up to the parties whether to settle and on what terms.  If the employee’s expectations are reasonable, a settlement is often achievable on terms that make financial sense for the employer, especially if there is insurance.  Unfortunately, some employees demand million-dollar settlements and ignore the opinion of the mediator that the case is actually worth substantially less.
  7. After the mandatory mediation, if the case has not settled, it will be assigned to an investigator.  It is also possible to request early legal intervention to try to have the CHRO dismiss the case without an investigation.  A request for early legal intervention may also result in the case being fast-tracked to a public hearing, although this is rare.  When the CHRO dismisses a case, it issues a “release of jurisdiction” allowing the employee to proceed to court on the case.  The employee may also request a release of jurisdiction if he or she would rather not wait around for the CHRO to do its investigation and would rather go straight to court.  Whether to request a release of jurisdiction is a strategic decision, because going to court may be less desirable than proceeding in the CHRO.
  8. If the case is not released, the investigator will set up a fact-finding hearing where evidence and testimony are presented on the case.  It is usually several months after the hearing before the fact-finding report is issued.  First, a draft report is issued and the parties have an opportunity to comment before a final report is issued.  That report determines whether there is reasonable cause to believe discrimination occurred or whether there is no reasonable cause and the case will be dismissed.
  9. If there is a finding of reasonable cause, the matter proceeds to the Office of Public Hearings, which engages in a conciliation process and a hearing.  After that hearing, the CHRO could appeal a decision in favor of the employer to court.  This is rare.  In fiscal year 2016-2017, out of 2376 complaints at the CHRO (most of which were employment-related), only 78 were certified to a public hearing and only 5 proceeded to the end of the public hearing process to result in a referee decision.  (The statistics do not indicate which party won in those cases and, if the employer won, whether the CHRO appealed in court.)

Just how many CHRO cases end up in court is not easily determined.  More than a third of CHRO cases are withdrawn due to a settlement.  Many of the remaining cases are dismissed from the agency with the employee retaining the ability to sue the employer in court, but many employees do not pursue their cases in court.

While an employer can represent itself at the CHRO, an experienced employment attorney can remove a great deal of the stress and anxiety from the process by giving perspective on the likelihood of an unfavorable finding, advising on the value and terms of a good settlement, drafting factual and legal arguments that are persuasive to CHRO officials, and being ready to jump into litigation should the employee proceed to court.  The attorney can even give advice on policies and procedures to prevent future disputes.

The labor and employment department at Berchem Moses PC has more than 100 years of collective experience navigating the CHRO process and litigating discrimination claims.  We would be happy to partner with your business to address any labor and employment concern, including CHRO charges.

As the #metoo and #timesup movements continue gaining momentum, Connecticut employers should not be surprised that the start of the 2018 Connecticut General Assembly session saw the introduction of a bill to increase workplace harassment prevention training in Connecticut. Should HB 5043 pass in its current form, it would be the first substantial revision to Connecticut’s workplace harassment prevention training requirements since their enactment in 1992.

Connecticut, one of only three states with similar mandates, currently requires employers of 50 or more employees to provide two hours of workplace sexual harassment prevention training to supervisors within six months of the supervisor being hired as a supervisor or promoted to a supervisory position. The new bill seeks to significantly expand this training requirement increasing the number of employers covered, the topics that must be addressed and the frequency of the training.  Additionally, the bill would increase the content and frequency of information employers must post regarding workplace harassment. Continue Reading More Connecticut Employers May Have To Provide Workplace Anti-Harassment Training. Will Your Company Be One Of Them?

Workplace Investigations – and the need for them – have been in the news a lot lately.  So it seems like a good time to review some basics, such as what triggers them, who should conduct them, and why are they important.

A workplace investigation can be triggered by myriad reasons, including a complaint or report of a policy violation or other employee misconduct; employee injury; complaint filed with EEOC, CHRO, NLRB or other agency; lawsuit; or compliance audit.  Upon the occurrence of any one of these triggers, the employer, often with the assistance of counsel, should assess the allegations or issues involved and make a determination as to whether an investigation is warranted. Some situations, such as alleged violations of non-discrimination laws, or workplace accidents, require an investigation be conducted. Continue Reading Back to Basics: Workplace Investigations

At the end of 2017, the NLRB issued a decision reversing the enhanced “overwhelming” community of interest standard and its much derided “micro units” in determining the appropriate unit for representational purposes. In its 3-2 decision in PCC Structurals, Inc., 365 NLRB No. 160 (2017), the NLRB re-adopted the traditional test, which considers factors such as functional integration, employee skill, employee interchangeability, working conditions, wages and benefits, common supervision, and bargaining history to determine whether a proposed unit of workers shares a community of interest. The PCC decision overturns the NLRB’s 2011 decision in Specialty Healthcare and Rehabilitation Center of Mobile, which had allowed the unionization of “micro-units.”

In returning to the traditional test, the NLRB may have made it more difficult for unions to organize by compromising the union-organizing strategy of “getting a foot in the door” with a smaller bargaining unit as a prelude to organizing more employees at a later date.

On February 26, 2018, the Supreme Court of the United States will hear arguments in Janus v. AFSCME, Council 31, a case which should be watched by public employers and union officials as the fate of agency fees hangs in the balance. Agency fees are paid by non-union members to compensate the union for its services such as negotiating contracts and grievance representation. In this case, an employee claimed the union’s requirement that he pay an agency fee was unconstitutional as it violated his rights of freedom of speech because he disagreed with the union’s political message.

Agency fees have been found to be constitutional since the Supreme Court’s 1977 decision in Abood v. Detroit Board of Education.  The Supreme Court took up the issue of agency fees again in 2016 in Friedrichs v. California Teachers Association, which, with the passing of Justice Scalia, resulted in a 4-4 tie.  This time, the Court will have a new justice in Neil Gorsuch, who was appointed by President Trump in 2017.

The ramifications of a decision in favor of Janus has unions nervous since a decision prohibiting their ability to collect agency fees from persons who do not join the union would affect their ability to maintain staff and officers, as well as negatively impact their lobbying efforts.

We will be sure to keep you posted on this case and others.

The importance of training supervisors on how to recognize and deal with employee leave issues cannot be overstated. And here’s a painful example of why…

Grace, an employee at a group home where she provided support to residents with mental impairments, was unexpectedly hospitalized due to a mental health condition. Grace had her son call her employer to tell them that she was in the hospital and could not report to work. Grace’s son called the employer at least four times over the next week to advise that his mother was still in the hospital. He spoke with Grace’s direct supervisor, as well as the program manager and the HR department. Such notifications should have sounded alarm bells that Grace might have a “serious health condition” and may be entitled to leave under the FMLA. Which it did – sort of; an HR department staff person prepared an FMLA packet acknowledging that the employer had been informed Grace was on a medical leave. However, when Grace’s son informed her supervisor that Grace was able to speak, the supervisor became angry and said it was inappropriate for him to be calling on his mother’s behalf and told him not to call again. The supervisor did not ask the son any questions regarding Grace’s condition or whether there was something preventing Grace from calling herself. Continue Reading FMLA: A Painful Reminder of the Importance of Supervisor Training

In a victory for employers in Connecticut and across the country, a federal district court in Texas last week invalidated the Obama Administration’s Department of Labor overtime regulation which sought to increase the salary threshold for the overtime exemptions under the Fair Labor Standards Act from $455 per week ($23,660 annually) to $913 per week ($47,476 annually) with the thresholds increasing every three years.  For employers who have exempt employees receiving salaries below the proposed increased threshold, this decision allows them to continue to keep those employees exempt at their current salary.  The court’s decision follows its injunction last November to enjoin the rules from being implemented. Continue Reading Increased Salary Threshold for Overtime Exemptions Struck Down By Federal Judge