With 2015 almost wrapped up, it is a good time to highlight the cases and administrative guidance that packed the biggest punch in the workplace over the last year. Some of this year’s biggest decisions carried a common theme: revisionism. Indeed, several of the nation’s courts, administrative tribunals and agencies fashioned decisions and guidance that greatly departed from longstanding legal precedent, particularly when it came to the relationship between businesses and the individuals who provide services for those businesses.
Below are some of the biggest decisions of 2015 and what you should know about them:
In August, the National Labor Relations Board (“NLRB”) overturned three decades’ worth of its own precedent by dramatically redefining the test for joint employment under the National Labor Relations Act (“NLRA”) in Browning-Ferris Industries of California, Inc. Now, two or more entities will be considered joint employers of a single workforce if, at any time, it can be shown that one of the entities has direct control, indirect control, or merely the potential to control the terms and conditions of employment of another business’s employees. Keep an eye out in 2016 for use of this new broadened test not only by the NLRB, but also by the Department of Labor (“DOL”), U.S. Equal Employment Opportunity Commission (“EEOC”), federal courts (who have often found that Title VII and the NLRA should be read and construed together), and organized labor.
The DOL threw its hat in the ring in July when it decided to weigh in on the debate over classification of workers as independent contractors instead of as employees. DOL Wage Administrator David Weil issued a 15-page Administrator’s Interpretation warning employers that “most workers are employees”, and that the “economic realities” six-factor test would be determinative, not titles and 1099’s.
Wage & Hour
Companies who utilize interns should pay close attention to a decision by the U.S. Court of Appeals for the Second Circuit’s in Glatt et al. v. Fox et al. In that case, the court rejected the DOL’s traditional six-factor test (a test based upon guidance that had been around since the late-1960’s) and announced a new “primary beneficiary test” for determining intern versus employee status. The primary beneficiary test essentially asks who really benefitted from the relationship, the intern or the employer. Although it is clear from the decision that intern status is a fact-intensive and highly individualized inquiry, employers may now consider the flexibility of this new test when developing and implementing internship programs.
Discrimination and Reasonable Accommodation
Young made it significantly more likely that pregnant women denied workplace accommodations offered to other employees will succeed in their legal claims against the employers who denied them. The takeaway? If your business accommodates some temporary disabilities (such as provision of light duty), then you should also find a way to accommodate pregnancy—and cost is no excuse.
Abercrombie addressed whether an employer could be liable for a failure to accommodate under Title VII where no accommodation was explicitly requested. (Applicant Samantha Elauf, who wore a headscarf, or hijab, in accordance with her religious beliefs, was not hired by the fashion retail giant because her hijab did not comport with the company’s “Look Policy”; however, Elauf never addressed her hijab or her need to wear it during the interview.) The Supreme Court’s answer was ultimately “yes.” Success in such a claim hinges only upon whether the need for religious accommodation was a motivating factor in the challenged employment decision—not whether the employer had actual knowledge of the need. As the Supreme Court pointed out, the more certain an employer is that an applicant will need an accommodation, the easier it will be to infer motive, which plainly discourages open dialogue in interviews.
Just a few short days ago, the U.S. Supreme Court dealt a brutal blow to class litigation and bolstered its position in AT&T v. Concepcion upholding class action waivers and the preemptive effect of the Federal Arbitration Act. The high court shot down a consumer class action against DirectTV and forced litigants into individual arbitration, signaling loudly to states hostile to arbitration that there is no getting around the federal preference for it.
The Securities and Exchange Commission (“SEC”) announced in April that it was instituting enforcement proceedings against a Houston-based firm relating to the whistleblower provisions of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) for requiring employees to sign confidentiality agreements in connection with their participation in an internal investigation. According to the SEC, such confidentiality agreements could discourage potential whistleblowers from reporting violations of securities laws.
The SEC based its determination solely on the mere possibility that the provision could stymie the reporting of securities violations to the SEC. The import of the SEC’s action extends well beyond the context of internal investigations. Employers subject to Dodd-Frank and their in-house counsel should be sure to undertake a thorough review all agreements, policies, codes of conduct and employee communications to ensure that nothing therein could be construed to impede communications with the SEC, or any government agency, to report violations of federal law.
Same Sex Marriage
Although admittedly not an employment law case, the U.S. Supreme Court’s decision in Obergefell v. Hodges this past June extends into the workplace and demands that all employers re-evaluate their internal policies and procedures to comport with the law. Obergefell held that the right to marry is a “fundamental right” and that all 50 states must license marriages between two people of the same sex and must recognize a same-sex marriage lawfully licensed and performed out-of-state. Employers must therefore take steps to ensure that any benefits or leave is administered accordingly, which implicates, among other things, FMLA leave and health insurance.
This foregoing illustrations are by no means exhaustive, but provide a roadmap for issues to look out for in 2016.