Over the past several years, we have received multiple inquiries from employers confronted with claims that they have misclassified service technicians as exempt from the overtime requirements of the Fair Labor Standards Act (FLSA), including from health care organizations. In a typical situation, the technicians in question are highly skilled and experienced workers who travel to customer locations for purposes of installing and servicing sophisticated machinery and equipment. The service technicians may be paid salaries close to six figures, and the equivalent time and one-half hourly overtime rate would be extremely high, especially given the amount of working time spent traveling.Read More
Florida Governor Rick Scott recently signed into law a medical marijuana use bill that was prompted by a voter referendum that amended the Florida Constitution to provide certain patients the right to use marijuana for medical purposes. The law limits such rights to patients with debilitating medical conditions but does not specifically define this term. For employers in Florida and beyond, these medical marijuana legalization laws raise questions regarding their ability to enforce policies that prohibit the use of marijuana by employees on or off duty.Read More
Last week, President Trump named his final appointee to the National Labor Relations Board (NLRB), giving Republicans a majority of the board’s members. Over time, this majority is likely to reverse a number of controversial pro-labor positions adopted by the NLRB during the Obama administration, including some policies that would affect health care providers.
Several years ago, the Equal Employment Opportunity Commission (EEOC) raised employers’ eyebrows when it filed several lawsuits challenging the validity of employer-sponsored wellness programs. The EEOC contended that such programs violate the ADA and GINA due to terms that rewarded or punished employees and dependents based on their degree of participation in the wellness initiatives. Federal courts were largely unsympathetic to these challenges, noting provisions in other federal laws specifically endorsing the use of wellness programs as a way to improve employee health and help control plan expenses.
On January 1, the federal Occupational Safety and Health Administration’s (OSHA) new recordkeeping and reporting rule took effect. The main impact of this rule requires employers to electronically file annual injury and illness reports, which will be placed in a publicly accessible database. However, buried in the final rule’s explanation last year, OSHA questioned the ability of employers to conduct automatic post-accident drug or alcohol testing.
The policy seemed straightforward. A hospital required all employees to receive seasonal flu vaccinations based on its assessment of the dangers of influenza to patients with compromised immune systems. The hospital went further, providing an exemption from the policy for employees with medical or religious reasons for avoiding the vaccinations. Nevertheless, the Equal Employment Opportunity Commission (EEOC) recently announced that it had reached a $300,000 settlement with the hospital based on its claims that the vaccination policy violated the religious rights of six terminated employees under Title VII.
The EEOC claimed that in practice, the Pennsylvania hospital rejected religious claims for exemption from the flu vaccine, while routinely granting medical exemptions. The settlement specifically prohibits the hospital from requiring that employees seeking a religious exemption from the vaccinations provide notes from clergy certifying the religious basis for the objection. In general, Title VII prohibits employers from inquiring into the basis for or sincerity of the employee’s religious practices or beliefs.
The settlement does allow the hospital to continue denying vaccination exemption requests if it can prove undue hardship. This is a difficult standard, requiring the employer to demonstrate something close to certainty of harm in the event that the exemption is granted. In the hospital’s case, undue hardship could arise for example, with employees whose jobs requires regular and close contact with patients known to have compromised immune systems.
The EEOC’s position obviously provides employees who simply prefer not to get vaccinated an avenue to claim a questionable religious exemption to the requirement. Absent clear evidence that the employee does not hold a sincere religious belief supporting the accommodation request, the employer has little recourse other than to determine whether the accommodation presents the undue hardship allowed by the EEOC.
I vaguely recall the word “monopsony” from an introductory economics course, but to be honest, I could not remember what it means. The term monopsony is defined as, “a market condition where one or a small group of firms exercise such control over a particular product or service that they are able to pay lower prices for its inputs.” While a monopoly can result in higher consumer prices, a monopsony allows the controlling company to lower its costs of production by paying less than would be the case in a competitive marketplace.
Earlier this month, the President’s Council of Economic Advisors released an issues brief discussing the consequences of a labor market monopsony on wages and economic equality. The Council identified monopsony as a significant contributing factor behind slow wage growth in the U.S. in recent years. Absent a competitive labor market in some industries, employees lack the ability to increase their incomes by selling their services to a competitor.
In addition to market concentration, the issues bulletin notes recent cases of wage collusion among competitors in Silicon Valley and in the healthcare industry who allegedly agreed not to hire each other’s employees. The bulletin also cites non-competition agreements as a significant contributing factor toward market monopsony, noting that 18 percent, or 30 million U.S. employees are currently restricted from moving to competitors. Finally, the Council points out that the decline of organized labor, regulatory (i.e., licensing) restrictions and lack of healthcare portability also contribute to a lack of labor mobility.
The issues bulletin concludes by setting forth a list of proposed remedial steps such as increased antitrust enforcement efforts. More importantly for employers, in addition to the bulletin, the White House also released a set of “best practices and call-to-action” for states to implement specific policy reforms to “curb the use of unnecessary non-compete agreements.” Among other recommendations, the White House urges states to ban non-compete agreements for (1) workers under a certain salary threshold; (2) those who do not have access to trade secrets; (3) workers in public interest vocations; and (4) employees who have been terminated or laid off without cause.
Neither the issues bulletin or White House best practices guidelines have any force of law. However, they represent one of the first expressions of federal interest in controlling state law governed non-competes. In recent years, state courts and legislatures have become increasingly hostile to non-compete agreements they view as overbroad or unfair. If Democrats continue to hold the White House or regain control of Congress, these new policy documents could represent an indication of future federal legislative and regulatory intentions.
On September 2, 2016, the United States District Court for the District of Maryland (which sits in the Fourth Circuit, along with North Carolina and South Carolina) held that the EEOC can move forward in its case against a large Maryland healthcare provider for allegedly failing to promote a female employee allegedly because she had availed herself of maternity leave.
In the case, EEOC v. Dimesions Healthcare Sys., No. PX 15-2342 (D. Md. Sept. 2, 2016), upon being passed up for a promotion, the plaintiff met with her supervisor to discuss why she had not been awarded the position when she had more years of experience in the industry and working with the company than the male candidate who had been selected. In response to the plaintiff’s inquiries, the supervisor told the plaintiff that the selected candidate “had a management background. Plus you were on maternity leave for a while.” Highlighting the fact that the supervisor was the ultimate decision-maker and that this reference to the plaintiff’s maternity leave was made on the heels of the promotion decision, the court concluded that the comment could reasonably be viewed as direct evidence of discrimination. The court focused on the fact that the plaintiff had superior experience and qualifications compared to the selected male candidate in rejecting defendant’s argument that the comment was a single, isolated remark that should not be given much weight. Moreover, the court also considered remarks and personnel decisions the supervisor had made with regard to other pregnant employees to further support its conclusion that the statement could reasonably be viewed as direct evidence of a discriminatory bias.
This case is a reminder that comments—especially those made by decision-makers—can constitute direct evidence of discrimination under federal discrimination laws. When there is direct evidence of discrimination, it is easier for a court or jury to find an employer liable for unlawful discrimination. The court’s decision also demonstrates that circumstantial evidence cannot only be used under the burden-shifting framework set forth in McDonnell Douglas, but can also bolster alleged discriminatory comments under the direct evidence analysis. Furthermore, the court’s consideration of comments made about other employees highlights that remarks do not have to be about the employee or employment decision at issue to constitute direct evidence of a discriminatory bias.
Most importantly, the case underscores the importance of training employees in decision-making positions to refrain from voicing or considering unlawful factors when making employment decisions or otherwise.
On May 16, 2016, President Obama signed into law the Defend Trade Secrets Act of 2016 (DTSA). The new law takes immediate effect and will provide important new federal protections against unauthorized disclosure of proprietary and confidential business information. However, one provision of DTSA immediately affects employers and other parties using confidential information and non-disclosure agreements with employees and independent contractors.Read More
The Equal Employment Opportunity Commission issued final regulations on Wednesday that place limits on financial incentives used in certain employer-sponsored wellness programs. The two rules issued under the ADA and GINA, essentially limit such incentives or penalties to 30 percent of the cost of employee-only group medical coverage. Wellness programs that require employee or spouse medical examinations, or disclosure of family medical history, cannot include financial terms that reward or punish employees beyond this level based on their participation decision.Read More