The theme for last year’s federal developments was reversal of Obama-era rules. The Department of Labor and National Labor Relations Board were especially active in this respect.
After a relatively quiet Supreme Court term for employment law in 2018-19, the stage is set for the court to rule in 2020 on highly anticipated topics. Below is a summary of major federal employment law headlines from last year and a look at what employers can expect in 2020.
For Missouri and Illinois employers, a review of 2019 state updates and a look forward at 2019 can be found here.
DOL overtime rule goes into effect
Under the Fair Labor Standards Act, the standard weekly salary threshold for exempt employees increases to $684 ($35,568 annually). Employees earning less than $684 per week must be paid overtime for hours worked in excess of 40 each week. Employees above this salary level who meet the job duties qualifications are exempt from overtime. Now that the long-delayed rule has finally gone into effect, employers should consider whether their “exempt” employees are still exempt under the new threshold.
DOL finalizes revisions to joint employer test
In early January 2020, the DOL issued its final rule updating its joint employer framework. The new rules, effective in March 2020, contract the DOL’s Obama-era broad view of joint employer liability. The final rule adopts a balancing test that looks at four factors in determining whether multiple companies have jointly employed workers: 1) whether the company can hire or fire employees, 2) the extent to which the company controls schedules and conditions of employment, 3) whether the company decides worker pay rates, and 4) whether the company maintains worker records.
EEOC retracts policy opposing arbitration mandates
On the heels of the Supreme Court’s decision in Epic Systems, in late 2019 the EEOC retracted its longstanding policy opposing mandatory arbitration of employment discrimination claims as a condition of employment. Explaining that the policy statement “does not reflect current law,” the EEOC rescinded it and advised that it should not be relied upon by EEOC staff in investigations or litigation.
NLRB overrules Purple Communications
Last month in its Caesars Entertainment decision, the NLRB overruled Purple Communications, the 2014 decision that held employees could use employer-provided email systems during nonworking time for communications protected by the NLRA. The decision holds that employees have no right to use employer-provided email for non-work purposes. Instead, employers maintain control over their property, including communications systems, and may establish nondiscriminatory rules restricting employee use. Employers may wish to revisit employee handbooks and workplace policies in light of the holding.
NLRB overrules Banner Estrella Medical Center
Continuing its trend of backtracking on Obama-era board decisions, in Apogee Retail, decided in December 2019, the NLRB found that it was not unlawful for companies to maintain rules requiring confidentiality of employees during workplace investigations. The board analyzed the employer rule under the Boeing test and concluded that a facially neutral rule requiring confidentiality during investigations is presumptively legal. The board further explained that employers may require confidentiality even after a workplace investigation has concluded if a legitimate business interest outweighs the impact on employees’ rights under the NLRA.
NLRB modifies “ambush” election rules
The NLRB also recently released new rules set to take effect in May 2020 that will eliminate Obama-era “quickie” representation elections. The new rules loosen some of the procedural requirements associated with responding to union election petitions, allowing employers more time and more avenues for responding.
Does Title VII prohibit discrimination on the basis of sexual orientation, gender identity and transgender status?
On Oct. 8, 2019, the court heard a trio of cases on whether Title VII prohibits discrimination on the basis of sexual orientation, gender identity and transgender status. When the court issues these rulings, it will likely resolve a major lingering question (and circuit split) about how far Title VII’s prohibition on discrimination “because of sex” extends.
Presently, however, employers are advised to check local and state laws for guidance, keeping in mind that several state and local jurisdictions have already provided protection against sexual orientation discrimination. Find a more detailed discussion on this circuit split here.
What standard of causation applies to race discrimination claims under Section 1981?
On Nov. 13, 2019, the court heard oral arguments in Comcast v. National Association of African American-Owed Media, which considers whether a claim of race discrimination under 42 U.S.C. § 1981 fails in the absence of but-for causation. This case stems from Comcast declining to carry channels that plaintiffs produced, allegedly violating Section 1981 — a federal law barring racial discrimination in contracts. The district court dismissed the plaintiffs’ action, concluding that they had not alleged facts showing Comcast’s decision was motivated by race, rather than by legitimate business reasons. But the Ninth Circuit Court of Appeals reversed, holding that, to survive a motion to dismiss for failure to state a claim, “plaintiffs needed only to plausibly allege that discriminatory intent was a factor in Comcast’s refusal to contract, and not necessarily the but-for cause of that decision.”
Businesses should be on the lookout for the court’s decision because affirming the Ninth Circuit’s ruling could make it much easier for employees to obtain damages under Section 1981 than under Title VII.
What standard of causation applies to federal sector ADEA claims?
On Jan. 15, 2020, the court heard oral arguments in Babb v. Wilkie, in which the court is considering whether federal-sector employees bringing ADEA age-discrimination claims must prove their age was not just the motivator, but the cause for the adverse employment action. In Babb, the plaintiff alleges she was denied a promotion because of her age, a violation of Section 633a(a). This provision states in relevant part that “all personnel actions affecting employees or applicants for employment who are at least 40 years of age shall be made free from any discrimination based on age.” According to the defendant, the phrase “based on age” requires that plaintiffs prove their age was the but-for cause of the challenged action.
The court’s treatment of causation standards in Babb and Comcast could signal a move toward the but-for causation standard in other statutory contexts.
Are federal officials liable for money damages when they simply enforce laws barring discrimination?
At the surface, FNU Tanzin v. Tanvir appears to just decide whether the Religious Freedom Restoration Act (RFRA) allows suits seeking money damages against individual federal employees. In Tanvir, two Muslim men were placed on the “no fly” list after they refused to provide the FBI agents information about other American Muslims. Both men sued the agents, alleging that retaliating against them violated the RFRA, which is intended to prevent other federal laws from substantially burdening a person’s religious exercise.
A decision in Tanvir permitting individuals to seek money damages against individual federal employees could have sweeping effects, potentially opening the door for claims against federal officials for enforcing anti-discrimination laws against individuals who claim their faith requires them to discriminate.
If you have questions about any of the topics addressed in this update, or if you want to discuss how these issues may affect your business, contact any of the attorneys in our Employment & Labor Group.