Perspectives

What’s going on with the EEOC? On October 19th 2022, the U.S. Equal Employment Opportunity Commission (EEOC) released their new ‘Know Your Rights’ poster, which replaces and clarifies the historically required “EEO is the Law” poster. As with the original poster, covered employers are still required by federal law to prominently display the poster at their work locations. If unsure what spot could classify as “prominently displayed”, the EEOC states that posters should be placed in a conspicuous location in the workplace where notices to applicants and employees are normally posted. In addition to physically posting, employers are encouraged to post a digital notice on their employee websites in an obvious location. These two steps can help employers avoid any applicable fines for non-compliance.

Most employers are familiar with the EEOC poster and the laws it summarizes. Contained within we find summaries of federal laws prohibiting job discrimination, and the steps for filing a charge if an employee believes they have experienced discrimination. The poster shares information about discrimination based on:

• Race, color, sex, national origin, religion,
• age (40 and older),
• Equal pay,
• Disability,
• Genetic information (including family medical history or genetic tests or services), and includes
• Retaliation for filing a charge, reasonably opposing discrimination, or participating in a discrimination lawsuit, investigation, or proceeding.

So at this point you’re probably saying, “I knew all of that, what’s changed?” Most prominently added to the new ‘Know Your Rights’ poster is a familiar square that’s becoming more common in our fast-moving lives today. The square is a QR code, and it allows for applicants or employees to scan the QR code and be directed to instructions for how to file a charge of workplace discrimination with the EEOC. There is speculation that the increasing ease of filing a charge will correspondingly increase the number of employee EEOC charges.

Additional changes to the poster are intentional clarifications which could also lead to an increase in EEOC charges against employers. The clarifications include:

• Use of straightforward language and formatting, such as bullet points;
• Explanation that harassment is a prohibited form of discrimination;
• Clarification that sex discrimination includes discrimination based on pregnancy and related conditions;
• Addition of language regarding sexual orientation and gender identity discriminations;
• Inclusion of information about equal pay discrimination for federal contractors.

Why do we think this is important enough to share with you? Our thoughts echo those of EEOC Chair Charlotte Burrows who said in a statement that “The new ‘Know Your Rights’ poster is a win-win for employers and workers alike. By using plain language and bullet points, the new poster makes it easier for employers to understand their legal responsibilities and for workers to understand their legal rights and how to contact EEOC for assistance.”

This is a good time for employers to ensure all required posters are being properly displayed and that employee handbooks and workplace policies are up to date an in compliance with recent changes to federal EEOC law. Also, employers should remember that in addition to using the QR code to file a charge with the EEOC, all of the original methods for filing a charge remain, including online via the EEOC Public Portal, in person at an EEOC Office, by telephone, at a State or local Fair Employment Practice Agency or by mail.

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If you have been struggling to find workers lately, you aren’t alone. High inflation and low unemployment have given prospective employees more bargaining power and desire for higher wages. Some of the industries hit hardest are hospitality (including restaurants and hotels), care facilities, and construction and trade jobs.

With background checks and drug tests disqualifying some otherwise qualified candidates, old patterns of thinking may have to change (although if DOT or other federal law governs your industry, this not the advice for you!)

Here are four strategies that may increase your applicants and fill roles sooner:

All in all, companies that take the time to create a good work environment for current and prospective employees will likely have an easier time finding (and retaining) good workers.

Classifying workers as independent contractors is not as easy as issuing a 1099 instead of a W-2 at tax time.  Rather, there are a variety of factors employers must analyze regarding each of their independent contractors to ensure they are properly classified.  And the risk of improper classifications can be steep.  However, the Fifth Circuit Court of Appeals, covering Texas, Louisiana, and Mississippi, recently proved it is not impossible.

In the case, which can be found here, an attorney working as a consultant for an oil and gas company filed suit under the Fair Labor Standards Act (FLSA), alleging that he was improperly classified as an independent contractor and seeking to recover unpaid overtime.  The court, in analyzing whether the attorney was an “employee” for purposes of the FLSA, examined the attorney’s working relationship with the company under the framework of the following five non-exhaustive factors:

• The degree of control exercised by the alleged employer;
• The extent of the relative investments of the worker and the alleged employer;
• The degree to which the worker’s opportunity for profit or loss is determined by the alleged employer;
• The skill and initiative required in performing the job; and
• The permanency of the relationship.

Ultimately, the court ruled that the attorney was properly classified as an independent contractor because he signed an “Independent Contractor Master Consulting Services Agreement,” worked independently and managed his own workload and schedule, was not expected to be at the office during set hours each day, did not receive performance evaluations or an access key card, supplied his own computer and telephone, paid for his own continuing legal education courses, purchased his own home office equipment, and could select which projects he wanted to work on.  Because the attorney was an independent contractor and not an employee under the FLSA, he was not entitled to overtime wages.

Companies that utilize the services of independent contractors would be wise to review their working relationships with contractors to ensure they are properly classified under not just the FLSA test, but also the IRS test and any applicable state law tests.

To learn more about protecting your business and your employees, contact the Employment Law group with WFJ today!

In a move that stunned even some Minnesota lawmakers who voted yes, Minnesota Governor Tim Walz signed H.F. 4065 into law, legalizing the sale and consumption of “edible cannabinoid.” The law mandates that the edibles do not contain more than a legally proscribed amount of THC, the THC be derived from hemp, and that the product be edible, either through food or beverage.  It is important to remember that Minnesota law still prohibits the use of recreational marijuana, and only individuals who are on the Minnesota Medical Cannabis Registry may use marijuana medicinally.

Unfortunately, the statute does not provide much guidance for employers.  The most critical questions revolve around employer drug testing and whether companies must accommodate employee use of edibles.  For example, Minnesota law prohibits employers from discriminating against employees based on their status on the Medical Cannabis Registry.  Whether further laws will be passed to provide this same level of protection for edibles remains unclear.

Further, individuals might use hemp-derived edible products to alleviate symptoms associated with anxiety, PTSD, or other medical conditions.  For this reason, if an applicant or employee fails a drug test, an employer may need to consider accommodating an employee’s use of edibles to avoid disability discrimination claims.

It also remains difficult to gauge current marijuana intoxication. THC and its metabolites are often stored in a body’s fat cells, which means THC can remain detectable for up to 30 days after use.  Until tests like those used to test for alcohol can be developed, determining whether an applicant or employee is currently intoxicated for purposes of a pre-employment drug screen, or while working on an employer’s premises, is difficult, if not impossible.  Minnesota law allows employees to use lawful products during non-working hours, so employers may consider removing TCH from its drug test panel and focus, instead, on prohibiting use during working hours and on company property.

The bottom line is that without much guidance from the statute itself, employers must consult knowledgeable counsel to determine what drug-free workplace policies should look like in wake of H.F. 4065.

It is no secret that the construction industry has been facing significant issues completing its project backlog that have caused stress on business.  Since construction is one of the largest sectors of the U.S. economy, most can appreciate these concerns, as they in turn impact many other sectors of business.  The two main problems most of the industry is navigating are: supply chain issues and shortage of workers.  First, current supply chain issues are pushing delivery dates to double or triple their typical timelines, which make planning projects difficult and deadlines tough to uphold.  Further, even when materials or equipment are available, US Inflation at a current rate of 8.52% is driving costs to unprecedented highs.  Second, the effects of the pandemic have left a significant shortage of skilled workers in the US labor market.  It is difficult to retain quality employees and challenging to hire new or replacement workers.  This labor shortage puts pressure on any project to complete the work on time and within budget.  In some instances, construction firms have taken a laxer approach to compliance, often with dire consequences.

However, these pressures on construction firms should not cause HR departments to “throw out the baby with the bathwater.”  In May, during hearings, the EEOC cited the construction industry’s culture of racism and sexism and commented that, with much of the $1.2 trillion Infrastructure Investment and Jobs Act being earmarked for construction firms, the Act should not fund an environment of hate.  It is safe to say that construction firms are squarely in the EEOC’s enforcement crosshairs, which is never a good place to be.

Consider a case that a Washington HVAC contractor recently settled with the EEOC.  The case involved allegations against the HVAC contractor’s owner who was accused of sexually harassing female employees, including telling women they did not belong in the building trades, engaging in nonconsensual touching, leaving condoms and lubricant out in public areas of the building, and asking women to wear more revealing clothing.  Ultimately, the contractor reached a settlement with the EEOC agreeing to be subject to federal oversight for five years and pay out a total of $361,000 to seven women who were subjected to the owner’s harassing conduct

Against this backdrop, it has never been more important for construction firms to recommit to compliance: starting with its anti-discrimination and anti-harassment policies.

Review: HR representatives should review existing policies and ensure they are up to date.  If any changes are needed, or an audit reveals some employees have not received the policy, HR should undertake to ensure all employees receive and acknowledge receipt of the policies.

Train: All employees and managers should receive anti-discrimination and anti-harassment training, ideally on an annual basis.  Companies should ensure that they comply with any specific state or local laws requiring employee and manager training.

Enforce: Compliant policies are no good if they are not properly enforced.  HR must take all allegations of discrimination and harassment seriously, regardless of the position of power the alleged perpetrator may occupy.  Companies should conduct thorough investigations.  Employees should be subject to appropriate remedial action, including termination of employment if the circumstances warrant.

Simplify your compliance needs by partnering with Wagner, Falconer & Judd. Let our experienced employment law attorneys assist you with everything from employee handbooks, onboarding and training to termination. Contact us today to learn more about our services. 

Magic Burgers, a Florida burger restaurant, employed Plaintiff, Ashley Merard, as a cashier in the restaurant’s front counter and drive-through.  Merard had previously been involved in a car accident leaving her with a tracheostomy tube, which was visible on Merard’s neck.  About one month after beginning employment, Merard was fired by her supervisor, Sonia Rivera.  When Merard asked Rivera why her employment was being terminated, Rivera pointed at Merard’s tracheostomy tube and said, “because of that.”  Merard filed a charge of discrimination with the EEOC alleging discrimination in violation of the Americans with Disabilities Act (“ADA”) and the Florida Civil Rights Act.  The EEOC issued a right-to-sue letter, and subsequently Merard filed suit.

During the jury trial, Rivera testified that after Merard’s termination, the Regional District Manager, Jim Burris, came to the restaurant to ensure that the “nasty girl with . . . the tube in her throat” had been terminated.   The jury awarded Merard $15,000 in compensatory damages, $30,000 in emotional pain and suffering damages, and tried to award $2 million in punitive damages.  Luckily for Magic Burgers, the ADA places a statutory $300,000 cap on punitive damages.  In total, the district court entered judgment awarding Plaintiff $345,519.60.

Plaintiffs asserting federal employment discrimination claims can recover punitive damages when “the employer has engaged in intentional discrimination and has done so ‘with malice or with reckless indifference to the federally protected rights of an aggrieved individual.’” Kolstad v. Am. Dental Ass’n, 527 U.S. 526, 529-30 (1999) (citing 42 U.S.C. § 1981a(b)(1)).  Employers can attempt to avoid an award of punitive damages by asserting a good-faith defense, as Magic Burgers attempted to do here.  Employers using this defense argue that a management-level employee’s decision is “contrary to the employer’s good faith efforts to comply” with employment laws.  Id. at 545-46.

Magic Burgers argued that its establishment of an anti-discrimination policy was sufficient to mount a good-faith defense to Burris’ actions.  However, the simple existence of an anti-discrimination policy is not sufficient to establish the good-faith defense.  Testimony at trial revealed that the company had failed to communicate and train their managers on the policy and that Rivera failed to report Burris’ discriminatory actions for fear she would be deemed insubordinate.  These facts rendered Magic Burgers’ anti-discrimination policy ineffective, thus the restaurant was not entitled to the good-faith defense.

Employers must remember that it is not enough for a company to just implement an anti-discrimination policy.  Companies must also ensure that all employees receive a copy of the policy and are given training, ideally on an annual basis.  Any state laws governing employee training must also be considered.  Employee training should, at a minimum, define the different forms of discrimination, discuss how employees can prevent workplace discrimination, and provide a variety of methods for reporting discrimination.  Managers at all levels should receive additional anti-discrimination training that more fully explains their duties to promote a discrimination-free workplace, understand the relevant anti-discrimination laws, how to recognize requests for reasonable accommodations, how to respond to discrimination complaints, and how to avoid retaliation.   Had the leaders from Magic Burgers followed their own, presumedly well-intentioned policies, that $345K would still be tucked away in their magic hat.

Does your anti-discrimination policy need an update? Or maybe you need help creating a training process for your employees to avoid making the same mistakes as Magic Burger. No matter your need, the Employment Law team at Wagner, Falconer & Judd is here to help!

Minnesota employers, be prepared.  A broad new wage theft and employee recordkeeping law goes into effect on August 1, 2019.  This leaves employers with less than two months to prepare to comply. …