New York State Broadens Its Pay Equity Law

On July 10, 2019, the Governor of New York State signed into law a bill extending New York’s pay equity protections to pay differentials based not only on gender, but also those caused by discrimination on the basis of age, race, sexual orientation, disability, and domestic violence victim status.  The bill lowers the burden of proof by eliminating the necessity of proving that claimant and the comparator performed truly “equal” work.  In short, the bill makes it easier for potential plaintiffs to establish liability by allowing them to compare themselves to workers who do not necessarily perform the same job as they do – it broadens their potential pool of comparators.

Pay differentials still are permitted when they are based on a bona-fide seniority system, a methodology measuring earnings by quantity or quality, or a bona fide reason other than the individual’s membership in a protected class. The pay differential must be job-related and due to business necessity, such as geography, education, or experience. The law allows a successful plaintiff to recover treble damages.  Additionally, the law bans employers from inquiring into a job applicant’s prior salary history.

The law takes effect on October 8, 2019. Insureds should review job applications to confirm compliance with the new law and should consider undertaking a review/audit of pay practices.  A pay equity analysis now should be run across all employees and protected categories, not just comparisons of male and female employees.  Since employers’ pay policies tend to impact multiple employees, claims likely will take the form of class actions and could expose insureds to significant liability.

Federal Court: Federal Arbitration Act Preempts New York Law Banning Arbitration of Sexual Harassment Claims

According to the Southern District of New York, the Federal Arbitration Act preempts the recently enacted New York State law that bars arbitration agreements of sexual harassment cases.   To read a complete analysis of one of the first decisions to rule on this issue, click here.

New York State Further Expands Anti-Discrimination Laws

In addition to the laws expanding sexual harassment liability, the New York State Legislature also passed last week three laws that will bar employers from inquiring about applicants’ salary history, prohibit wage differentials based on protected class status, and ban race discrimination based on hairstyle.  For a complete review, see our article by clicking here.

Washington Supreme Court Confirms Higher Standard for Harassment at a “Place of Public Accommodation”

Under the Washington State Law Against Discrimination (“WLAD”), the statute prohibits “places of public accommodation” discriminating against individuals on the basis of sex, race, national origin, and sexual orientation. RCW 49.60.215. “Places of public accommodation” is broadly defined and includes all facilities or businesses used by or open to the public. Sexual harassment is a form of sex discrimination prohibited under the WLAD.

On January 31, 2019, the Washington Supreme Court confirmed there is a higher standard for acts of sexual harassment committed in places of public accommodation. In Floeting v. Group Health, Inc., 192 Wn.2d 848, 434 P.3d 39 (Wash. Sup. Ct. 2019), the Court held that employers are strictly liable for the actions of even non-management employees who harass customers or members of the public in places of public accommodation.

The test for showing sexual harassment in a place of public accommodation requires that the:

  1. The member of the public is a member of a protected class;
  2. Employer’s establishment is a place of public accommodation;
  3. Employer discriminated against the customer or member of the public when it did not treat him/her in a manner comparable to the treatment it provides to persons outside of that class; and
  4. Person’s protected status was a substantial factor that caused the discrimination.

To be actionable, the Court held that the discriminatory conduct “must be of a type, or to a degree, that a reasonable person who is a member of the plaintiff’s protected class, under the same circumstances, would feel discriminated against. This is an objective standard.” Id. at 858 (emphasis in original). Under this “reasonable person” standard, it seems that a single incident could result in liability.

In contrast, employers have several opportunities to show they were not at fault in cases of employee workplace harassment under the WLAD. For example, employer can show that:

  1. The conduct did not affect the terms or conditions of employment;
  2. The harassment was not severe or pervasive;
  3. That the employer did not authorize, know of, or have the ability to know of the harassment or, if it did,
  4. The employer took reasonable prompt and corrective action.

The majority opinion stated the strict liability standard should motivate employers in public accommodations to implement quality training and supervision as well as effective procedures for reporting harassment and/or discrimination.

In this zero-tolerance context, employers should obtain counsel to re-evaluate anti-harassment and anti-discrimination policies to highlight public accommodation issues.

New Jersey Hotels Must Provide “Panic Buttons”

New Jersey Governor Murphy signed Bill S-2986 into law on June 11, 2019 mandating that “larger” hotels protect workers from sexual violence, assault, and other acts of harassment and violence that can occur on hotel premises by co-workers and/or guests. A copy of the law can be seen by clicking here. The law notes that “[d]ue to the unique nature of hotel work, hotel employees are particularly vulnerable to unsafe working conditions because they often work alone in hotel guest rooms, which sometimes may be occupied. This solitary work places them at risk of assault, including sexual assault, and sexual harassment.” Qualifying hotels include “any hotel, inn, boarding house, motel or other establishment” with at least twenty-five (25) guest rooms. A covered hotel must provide a “panic button” (and training in its use) to summon help if an employee reasonably believes “there is an ongoing crime, harassment, or other emergency….” An employee is legally authorized to leave any area where there is a perceived danger; retaliation is prohibited.

Although New Jersey is the first state to mandate these protections, the idea is not unique. In October 2017, the Chicago City Council passed a “panic-button” ordinance. In August 2018, California introduced its own “panic button” bill, but it stalled at the Senate’s Appropriations Committee. In California, though, Sacramento and Long Beach enacted similar ordinances.

Second Circuit: ADA Allows Hostile Work Environment Claims

The Second Circuit recently held that the Americans with Disabilities Act (“ADA”) encompasses claims for hostile work environment harassment (“HWE”). Fox v. Costco Wholesale Corporation. While this plaintiff-friendly ruling may be disappointing to employers, the decision also contains some helpful analysis for defense of those claims.

In Fox, Plaintiff brought ADA claims alleging discrimination, failure to accommodate, and hostile work environment. Dismissing the discrimination claim, the Court held, among other things, that the four verbal reprimands received by Plaintiff did not rise to the level of adverse employment actions because none “resulted in disciplinary action or a reduction in salary, benefits or other responsibilities.” As to the failure to accommodate claim, the Court refused to impute knowledge of the need for an accommodation to the employer because Plaintiff never asked for an accommodation. Moreover, there was no proof that the employer should have offered an accommodation due to its unquestionable need. (It should be noted that state or local laws may be more employee-protective and could support a failure to accommodate claim merely because the employer was on notice of the medical condition).

With respect to HWE, the Court joined four other Circuit Courts in ruling that HWE claims can be asserted under the ADA, but noted that “[l]egitimate reprimands by an employer are not abuse.” Moreover, the Court noted that “teasing in the workplace is not uncommon, and in most instances probably not actionable.” Thus, the mere fact that Plaintiff was teased about his condition was not necessarily actionable harassment. But, since it might be, a trial was ordered as to the HWE claim.

Employers in the Second Circuit must be aware of the possibility of HWE claims under the ADA. As such, employers should update supervisor training to account for ADA hostile work environment claims.

U.S. Supreme Court: Employee May Proceed with Title VII Claim Despite Not Fulfilling EEOC Filing Obligation

The general rule is that a federal discrimination claim should be dismissed unless a timely charge was filed with the Equal Employment Opportunity Commission (EEOC). Whether that statutory requirement was jurisdictional (and could not be waived) or procedural (and must be presented to the Court in a timely manner or the defense is waived) was subject to judicial disagreement. Until today’s Supreme Court’s ruling in Fort Bend Cty. v. Davis, eight federal appellate courts ruled that the failure to exhaust administrative remedies was a procedural matter that would not necessarily bar a discrimination claim under Title VII. Three other appellate courts, however, had ruled that pre-suit claim exhaustion was a jurisdictional prerequisite to a court filing.

In Davis, plaintiff handwrote “religion” on the EEOC Charge intake questionnaire, but did not include that claim on the formal charge document. In 2012, Davis commenced a civil action in federal court alleging discrimination based on religion and retaliation for reporting sexual harassment. The District Court partially granted Fort Bend’s motion for summary judgment based on Davis’s failure to amend her charge to contain a claim for discrimination based on religion. The Court of Appeals for the Fifth Circuit reversed.

It was not until years into the litigation that Fort Bend sought dismissal due to the lack of federal jurisdiction because claimant had not stated a timely claim for religious discrimination in the EEOC charge. Rejecting this contention, the Supreme Court ruled that Title VII’s charge-filing requirement is not jurisdictional; it is procedural. Therefore, even though Title VII requires that a plaintiff file an administrative charge before filing a lawsuit, a case will not be dismissed unless the employer raises that objection in its Answer or by motion early in the case. In effect, assert the defense or forfeit it.

Second Circuit: Application of Neutral Policy Does Not Interfere with FMLA Rights

As recently reaffirmed by the U.S. Court of Appeals for the Second Circuit, neutral application of a policy to prorate incentive compensation contributions during leaves of absence does not unlawfully interfere with an employee’s rights under the Family and Medical Leave Act (FMLA).  In Clemens v. Moody’s Analytics, Inc., Plaintiff contended that he was denied benefits because his bonus was already “self-prorating” due to a reduced work period that naturally yielded a lesser bonus amount. In effect, he claimed, additional prorating was a doubled-reduction. Since the undisputed evidence showed that the employer’s prorating policy was neutrally applied based on the length of the employee’s leave (regardless of the reason for leave), there was no discriminatory interference with FMLA rights.

This decision serves as an important reminder that employers must review seemingly neutral policies (such as, for example, attendance or bonus policies) to consider the impact of those policies on employees on FMLA leave.

2019 EPLI Trends Report Published

Workplace law changes constantly. Employers and EPL carriers need to keep up with expanding risks, changing legal obligations, reason-defying jury verdicts, the #MeToo movement, and a record number of threatened and asserted claims associated with these changes. Our 2019 EPLI Trends Report gives an overview of the related risks and exposures employers and, by extension, carriers face in 2019.  Topics covered include:  Pay Equity Lawsuits, Medical Marijuana, Website Accessibility Lawsuits, Whistleblower Claims, Class Action Developments, Privacy and Data Breach Issues, and more.  See the full report by clicking here.

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