Wednesday, March 26, 2014

Fifth Circuit Agrees Employer's Confidentiality Policy Violates NLRA

In a decision issued this week, the Fifth Circuit upheld and enforced a National Labor Relations Board (NLRB) order finding that a portion of a  non-unionized employer's confidentiality policy violated the National Labor Relations Act because it was overly broad and contained language employees could reasonably interpret as restricting the exercise of their Section 7 rights.  See Flex Frac Logistics, L.L.C. v. National Labor Relations Board, No. 12-60752 (Mar. 24, 2014). 

The employer's confidentiality policy included the following language:

"Confidential information includes...personnel information and documents..."

The NLRB found that even though the clause did not reference wages or the specific terms or conditions of employment, the clause nevertheless violated the NLRA.  In reviewing the NLRB's order, the Court reiterated that a workplace rule that forbids the discussion of confidential wage information between employees violates the NLRA.  Confronted with the employer's argument that the clause in question did not reference wages, the Court nevertheless determined that employees would "reasonably construe" the clause to prohibit wage discussions, and went so far as to note that the clause did not except out wages from its scope.

This decision underscores the importance of regular handbook reviews to ensure compliance with the NLRB's growing list of prohibited policies.

Eleventh Circuit Finds Depressed Employee's Leave Request Did Not Qualify as Protected FMLA Leave

It is common knowledge there are no magic words required for an eligible employee to make a valid request for FMLA leave.  But what happens when an employee makes a vague request?  The Eleventh Circuit answered this question in Hurley v. Kent of Naples, Inc. et al., No. 13-10298 (11th Cir. Mar. 20, 2014).  

Hurley, an executive, sent the CEO an e-mail that included a list of eleven weeks of vacation over a two year period.  The executive denied the request and asked to schedule a meeting to discuss the e-mail.  In response, Hurley sent another e-mail to the executive that said the vacation request "was not a request it was a schedule…I have been advised by my medical health/health professionals that my need to avail myself of vacation time that I have earned is no longer optional."  

The next day, the two met, and the executive terminated Hurley for insubordination and poor performance.   A week after Hurley's discharge, he visited his health care provider to secure FMLA paperwork, which reflected he did suffer from depression, but the duration and frequency of any incapacity was unknown.

Hurley filed suit alleging FMLA interference and retaliation, and the claims proceeded to trial, where he was awarded substantial damages.  The company appealed.

The Court's opinion addressed two important issues.  First, the company argued Hurley's requested leave did not qualify as protected FMLA leave; therefore, he could not maintain a valid interference claim.  The Court agreed, finding that Hurley's notice of the need for leave was sufficient, but that notice is only relevant to FMLA leave if the leave is protected.  Hurley admitted his leave (vacation) was not for a period of incapacity, or for treatment for such incapacity, and he could not predict any period of incapacity from his condition.  For these reasons, his leave request was not protected, and his interference claim failed.

Second, the Court rejected Hurley's argument that he only needed to provide notice of potentially qualifying FMLA leave, noting that "[o]therwise, the FMLA would apply to every leave request."

 This decision demonstrates that employees continue to test the boundaries of the FMLA.  

Saturday, March 15, 2014

High Court Extends SOX Whistleblower Protection to Employees of Private Contractors and Subcontractors

Congress enacted the Sarbanes-Oxley Act of 2002 (SOX) to safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron.

In a recent decision, the United States Supreme Court ruled that the whistleblower protection included in SOX protects not only the employees of public companies, but also the employees of privately-held contractors and subcontractors who render services to public companies.  See Lawson v. FMR LLC, No. 12-3 (March 4, 2014).  

Drawing on, among other things, the legislative record, the plain language of the statute and Congressional intent, the Court noted that to exclude employees of private contractors and subcontractors would leave them vulnerable to retaliation by their employers for blowing the whistle on schemes to defraud public company investors, even if the schemes were engineered entirely by the contractor or subcontractor.

Private contractors and subcontractors that do business with, or otherwise provide services to, public companies should ensure they implement policies prohibiting retaliation and train their managers to understand and enforce the policies.  

Thursday, March 13, 2014

President Expected to Direct DOL to Revamp Overtime Rules

Today President Obama is expected to direct the United States Department of Labor to revise overtime pay regulations under the Fair Labor Standards Act to expand the scope of employees entitled to overtime pay.  Although the President's directive could take considerable time to accomplish, it could have a significant impact on the hospitality industry by increasing the number of employees, such as certain types of managers, who would no longer be classified as exempt.

Sunday, March 9, 2014

EEOC Issues New Publication Regarding Religious Garb and Grooming in the Workplace

Last October, the Tenth Circuit Court of Appeals dealt the Equal Employment Opportunity Commission (EEOC) a blow when it reversed a religious failure to accommodate summary judgment ruling in the EEOC's favor and remanded the case with instructions to grant summary judgment in favor of the defendant, retailer Abercrombie & Fitch Stores.  See EEOC v. Abercrombie & Fitch Stores, Inc., No. 11-5110 (10th Cir. 2013).  

In the Abercrombie case, the Tenth Circuit found that Abercrombie was entitled to summary judgment as a matter of law because there was no genuine dispute of material fact that Ms. Elauf (the individual on whose behalf the EEOC sued) never informed Abercrombie prior to its hiring decision that she wore her headscarf, or “hijab,” for religious reasons, and that she needed an accommodation for that practice due to a conflict between the practice and Abercrombie’s clothing policy.  In the decision the Court repeatedly referenced the EEOC's Compliance Manual and other publications related to its position on accommodations in the workplace.
On March 6, 2014, the EEOC issued a new publication, along with a Fact Sheet, regarding religious garb and grooming in the workplace, which provides guidance on the topic, including the following:
  • Title VII protects all aspects of religious observances, practices and beliefs and defines religion broadly to include not only traditional religions, but also religious beliefs that seem illogical or unreasonable, are new or uncommon, and/or are not part of a formal church or sect, as long as the beliefs are "sincerely held."
  • Employers cannot exclude employees from positions due to customer preferences or desired images.
  • Employers cannot assign employees to non-customer contact positions due to customer preferences.
  • An employer may accommodate religious dress or grooming (such as tattoos) by offering to have the employee cover the item or attire, provided that the accommodation does not conflict with the religious belief.
  • Applicants who request religious accommodations are protected from retaliation.
  • Employers have an obligation to stop religious-based harassment.
  • While safety, security, or health may justify denying a religious accommodation, the employer may only do so if the accommodation would actually pose an undue hardship.
Interestingly, this newest publication appears to recognize the Abercrombie decision (specifically in its Example No. 5 regarding an employer's insufficient knowledge that an employee might need an accommodation) yet criticize the retailer (specifically in its Example No. 10 addressing an employer's "image" requirements) for its image policy.  

Employers should be particularly mindful of the EEOC's positions that the religious accommodation at issue may not relate to any recognized or established religion, and that only accommodations which pose an undue hardship may be denied.