As reported by our sister blog, ADR: Advice from the Trenches, the Northern District of Illinois recently issued an unusual decision. After finding that both plaintiffs were bound by arbitration agreements with the defendant and after finding that the plaintiffs’ claims were within the scope of the arbitration clauses, it denied defendant’s motion to compel arbitration. See Zoller v. UBS Secs. LLC, 2018 U.S. Dist. LEXIS 44170 (N.D. Ill. Mar. 9, 2018).
Lots to talk about in the Labor & Employment world! The Massachusetts Pregnant Workers Fairness Act went into effect on April 1, 2018, imposing stricter non-discrimination rules on employers of pregnant workers. The U.S. Department of Labor launched the Payroll Audit Independent Determination program, which encourages employers to self-report wage and hour violations. The Sixth Circuit issued a decision in EEOC v. R.G. & R.G. Harris Funeral Homes, holding that transgendered employees are protected under Title VII, even mounted against an employer’s religious objections under the Religious Freedom Restoration Act. The Commonwealth of Massachusetts lost a step in the legal challenge to the contraceptive mandate exemptions in the Affordable Care Act, on the grounds that it did not have standing to assert the relief it sought. Still on the federal landscape, Congress added an amendment to the FLSA in the recent omnibus budget bill, providing that an employer may not keep tips received by its employees for any purpose. The Supreme Court issued an important ruling holding that service advisors are exempt from the FLSA’s overtime requirements and rejecting the principle that FLSA exemptions should be narrowly construed. The State of Washington followed suit with many other states, including California, New York, and Massachusetts, becoming the most recent state to add an updated Equal Pay Act, and a “Ban the Box” law. In the wake of the #MeToo movement, Washington also barred nondisclosure agreements in sexual harassment suits. As always, stay tuned for further updates and more details on these developments which we will be covering more extensively here in the coming weeks, including a post on the Massachusetts Pay Equity Act coming up later this week.
Finally, there’s still time! Don’t forget to register to attend our Fourth Annual Employment Law Summit on April 19.
What’s a financial advisor to do? On March 15, 2018, the Fifth Circuit Court of Appeals in Chamber of Commerce of the U.S. v. U.S. Dep’t. of Labor, No. 17-10238, 2018 U.S. App. LEXIS 6472 (5th Cir. Mar. 15, 2018) vacated – thereby invalidating – a series of seven rules (which we collectively refer to in this post as the “fiduciary rule”) issued in April 2016 by the Department of Labor (DOL). The fiduciary rule vastly expanded the reach of the ERISA fiduciary standards that apply to individuals and entities providing investment advice. This post first explains the state of the law prior to the fiduciary rule; it then discusses the impact of the rule on the arguments that the Court grappled with; and it concludes by handicapping the options available to regulated financial advisors and institutions as they endeavor to respond.
Last week, the U.S. Supreme Court declined to review a decision by the Seventh Circuit Court of Appeals holding that a multi-month leave of absence is beyond the scope of a reasonable accommodation under the Americans with Disabilities Act (ADA). The plaintiff in Severson v. Heartland Woodcraft, Inc. had asked the Supreme Court to decide whether there is a per se rule that a finite leave of absence of more than one month cannot be a reasonable accommodation under the ADA. Without the Supreme Court stepping in to resolve the split among the federal circuit courts, employers are left without clear guidance as to how to navigate the interplay between the ADA and extended leaves of absence.
On Monday of this week, the U.S. Supreme Court reversed the Ninth Circuit when it ruled in Encino Motorcars, LLC v. Navarro that auto dealership service advisors are exempt from the FLSA’s overtime requirements. The justices’ analysis led the five-justice majority to conclude that service advisors fall squarely within the applicable exemption for “any salesman, partsman or mechanic primarily engaged in selling or servicing automobiles.” 29 U.S.C. § 213(b)(10)(A). This case, however, promises broad national impact because the majority rejected the longstanding principle established through decades of FLSA jurisprudence that exemptions should be construed narrowly.
The contraceptive mandate, one of the more controversial provisions of the Affordable Care Act, continues to make news as various stakeholders duke it out in and out of court. This blog post describes the history of the contraceptive mandate as well as a recent court loss delivered to the Commonwealth of Massachusetts on March 12, 2018 in the United States District Court for the District of Massachusetts.
The U.S. Court of Appeals for the Sixth Circuit ruled on March 7 that employer R.G. & G.R. Harris Funeral Homes unlawfully discriminated on the basis of sex when it fired a transgender employee after she informed the company that she would begin presenting consistent with her gender identity. In so doing, the court emphatically rejected the employer’s defense invoking religious liberty to discriminate on the basis of sex and other protected minorities. On the heels of the Second Circuit’s decision in Zarda v. Altitude Express, this case represents a further affirmation that existing civil rights laws protect LGBTQ employees from both gender identity and sexual orientation discrimination.
Phew – it has been a whirlwind of a month in the employment law world! Just in time for spring, new laws are popping up like crocuses just about everywhere we turn.
Here is your monthly rundown of the most recent developments in labor and employment law: The Supreme Court significantly narrowed whistleblower protections under Dodd Frank with its decision in Digital Realty Trust, Inc. v. Somers. The Second Circuit became the second circuit court to prohibit sexual orientation discrimination when it issued a decision holding that sexual orientation discrimination is sex discrimination under Title VII. In New York, just as employers finished preparing for and implementing the New York Paid Family Leave law, New York City passed new legislation requiring employers to grant temporary schedule changes for qualifying personal events, and amending the requirements for employers and employees engaging in a cooperative dialogue concerning a reasonable accommodation. The Massachusetts Attorney General’s Office issued guidance on the pay equity law scheduled to take effect in July; Austin, Texas became the first Texas municipality to enact a paid sick and safe leave law; and new legislation intending to crack down on sexual harassment has been proposed in several jurisdictions, including Connecticut and New York City. Stay tuned for further updates and more details on these developments which we will be covering more extensively here in the coming weeks.
In the meantime, don’t forget to register to attend our Fourth Annual Employment Law Summit on April 19!
On Monday, for the second time in less than a year, a federal appeals court ruled that Title VII forbids sexual orientation discrimination because it is a form of sex discrimination. This time, in Zarda v. Altitude Express, Inc. the Second Circuit overturned decades of precedent and ruled that Title VII’s ban on discrimination “because of . . . sex” encompasses discrimination based on sexual orientation. The decision is also an apparent rebuke of the position taken by the United States Department of Justice (contrary to the Equal Employment Opportunity Commission’s position) that sexual orientation discrimination was never intended to by Congress to be covered by Title VII. The issue is almost certainly headed to the Supreme Court in its next term.
On Wednesday this week, all nine justices agreed that the Dodd-Frank Act’s anti-retaliation provision does not extend to an individual who has not reported a violation of the securities laws to the Securities and Exchange Commission (“SEC”). In other words, making only internal complaints does not shroud an employee in whistleblower protection under the Dodd-Frank Act.