Federal
Paycheck Fairness Act Fails
Key Vote (S. 3772)
During the recent post-election
"lame duck" session, the Senate reconsidered the Paycheck Fairness
Act (S. 3772) but was unable to obtain the 60 votes necessary to invoke
cloture and vote on the bill. This bill would have amended the
Equal Pay Act (EPA) and the Fair Labor Standards Act (FLSA) to provide
further tools regarding gender-based wage discrimination. For
instance, it would have eliminated the current "any factor other than
sex" defense to explain wage differentials, and instead required employers
to affirmatively demonstrate any differential resulted from a bona fide
factor other than sex, and that the bona fide factor was a business
necessity. It would also have removed the caps on compensatory
and punitive damages for EPA violations, and made it easier for plaintiffs
to maintain class action suits. In light of the recent election
results, it appears this bill is stalled and will not be enacted this
year or in 2011.
AGENCY
Federal
EEOC Issues Final Rule Concerning
Title II of GINA
Generally speaking, Title II
of the Genetic Information Nondiscrimination Act (GINA) prohibits employers
from discriminating based on genetic information, restricts employer
acquisition of genetic information, and limits the disclosure of genetic
information. Although Title II took effect in November 2009, the
Equal Employment Opportunity Commission has just recently issued its
much anticipated Final Rule implementing Title II. This Final
Rule and accompanying regulations officially take effect on January
11, 2011 and, amongst other things, provides considerable clarification
of GINA's definitions (e.g., "genetic test," "employee") and
the circumstances under which employers may lawfully acquire "genetic
information."
As mentioned, under Title II
"covered entities" (including employers) may not "request, require
or purchase" genetic information of an individual or family member
except in very narrow statutorily-enumerated circumstances.
Notably, the Final Rule deleted the requirement that employers "deliberately"
obtain genetic information for a violation to occur; rather, the Final
Rule specifies that "request" includes "conducting an Internet
search on an individual in a way that is likely to result in a covered
entity obtaining genetic information; actively listening to third-party
conversations or searching an individual's personal effects for the
purpose of obtaining genetic information; and making requests for information
about an individual's current health status in a way that is likely
to result in a covered entity obtaining genetic information."
The Final Rule also contains
considerable discussion about several exceptions to the general prohibition
on an employer's acquisition of genetic information, including: (1)
"inadvertently acquired" information; (2) information obtained through
commercially and publicly available sources; (3) information obtained
pursuant to a leave request; (4) voluntary wellness program-related
disclosures; and (5) information obtained through workplace monitoring
of toxic substance exposure.
For instance, Title II's
general prohibition on acquiring genetic information does not apply
where a covered entity "inadvertently" acquires this information
(e.g., someone accidentally sends to the employer or the employer unintentionally
uncovers this information.) The Final Rule provides considerable
guidance on how this narrow exception applies in the medical examination
context, and essentially creates a duty on employers to ensure there
is no inadvertent disclosure during such examinations, but also provided
a specific "safe harbor" disclaimer for employers to use in such
situations.
Specifically, the Final Rule
states an employer who acquires genetic information in response to a
lawful request for medical information cannot claim inadvertence unless
the covered entity specifically directs the individual or medical provider
(in writing or verbally) not to provide genetic information. In
this regard, an employer who receives genetic information despite the
verbal or written warning may invoke the inadvertent disclosure exception
but an employer who fails to provide this instruction cannot invoke
this exception even if the disclosure to the employer was inadvertent
unless the employer can demonstrate its initial request was not likely
to result in the employer obtaining genetic information.
The Final Rule also sets forth
(in section 1635.8(b)(1)(i)(b)) a specific "safe harbor" provision
that covered entities may include in their medical information request
that will ensure any subsequent disclosure of genetic information despite
this provision will be "deemed inadvertent." The EEOC-provided
sample "safe harbor" provision is as follows:
The
Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers
and other entities covered by GINA Title II from requesting or requiring
genetic information of an individual or family member of the individual,
except as specifically provided by the law. To comply with this
law, we are asking that you not provide any genetic information when
responding to this request for medical information. "Genetic
information" as defined by GINA, includes an individual's family
medical history, the results of an individual's or family member's
genetic tests, the fact that an individual or an individual's family
members sought or received genetic services, and genetic information
of a fetus carried by an individual or an individual's family member
or an embryo lawfully held by an individual or family member receiving
assistive reproductive services.
The Final Rule also provides
clarification, and numerous examples, about another form of "inadvertent
disclosure" -- the so-called "water cooler problem" -- in which
a manager accidentally elicits or overhears disclosures about "genetic
information" of an employee or family member. These examples
specify that obtaining "genetic information" in response to questions
such as "How are you?" or "How is your son feeling today?" will
not violate Title II's prohibition on acquiring genetic information.
However, this variant on the "inadvertent" acquisition exception
will not apply if the employer "follows up a question concerning a
family member's general health with questions that are probing in
nature" such as whether other family members have the condition or
if the individual has been tested for the condition.
The Final Rule also clarified
the so-called "commercially and publicly available information"
exception to the prohibition on acquiring genetic information.
The Rule notes that the prohibition on acquisition does not apply to
information publicly available on the internet, including through social
networking sites (e.g., Facebook, MySpace, etc.) unless the media source
requires permission to access and this permission has not voluntarily
been provided. In other words, an employer cannot surreptitiously
access an employee's password-protected Facebook profile and then
invoke the "publicly available" exception. Similarly, since
the "publicly available" exception is another variant of the "inadvertent"
acquisition exception, employers cannot rely on it if they accessed
internet sites specifically looking for genetic information about an
individual.
The Final Rule also sets forth
circumstances under which genetic information may be obtained as part
of a "voluntary wellness program," including as part of a "health
risk assessment." Amongst other things, the Rule sheds light
on what is required to ensure the disclosure is actually "voluntary."
For instance, the Rule notes that a covered entity may offer an inducement
for completing a health risk assessment that includes questions about
family medical history or other genetic information provided the covered
entity specifically identifies these questions and makes clear that
the individual need not answer these particular questions to receive
the inducement. In effect, the Rule approves the use of a so-called
"bifurcated" health risk assessment.
The Final Rule also provides
some guidelines concerning an employer's confidentiality obligations
concerning the storing of genetic information. The Rule notes
that, as under the ADA, employers must keep records reflecting genetic
information in separate files and treat them confidentially. However,
while employers must maintain confidentiality of any such information
regardless of when obtained, it need not physically remove such genetic
information from a pre-existing file obtained before November 2009 (Title
II's effective date).
These are just some of the
numerous items discussed in the Final Rule and employers should consider
reviewing the entire Final Rule for additional questions regarding these
and other items. The complete text of the Final Rule is available
at www.federalregister.gov/articles/2010/11/09/2010-28011/regulatoins-under-the-genetic-information-nondiscrimination-act-of-2008.
The EEOC has also posted a document entitled "Questions and Answers
for Small Businesses: EEOC Final Rule on Title II of the Genetic Information
Nondiscrimination Act of 2008" at www.eeoc.gov/laws/regulations/gina_qanda_smallbus.cfm.
Other practical steps employers
should consider moving forward include (1) reviewing and revising their
policies (especially EEO policies) to ensure genetic harassment and
discrimination are prohibited; (2) obtaining and posting the new EEOC-provided
poster discussing GINA and its protections; (3) reviewing file storage
and document retention policies and procedures to ensure genetic information
is not obtained unless authorized, that it is properly stored
to maintain confidentiality, and to ensure it is not improperly disclosed
(including during potential subsequent litigation); (4) updating forms
to avoid improperly requesting genetic information and to include the
'safe harbor' provision for medical-related examinations; and (5)
training supervisors and human resources employees about GINA-related
compliance.
JUDICIAL
California
California Supreme Court
Clarifies Three-Year Statute of Limitations Applies for All
"Waiting Time" Penalty Claims
Labor Code sections 201 and
202 provide that when an employee is terminated or resigns his or her
final wages are generally due and immediately payable. Labor Code
section 203 provides that if an employer willfully fails to timely pay
final wages, "the wages of the employee shall continue as a penalty
from the due date" up to a maximum of 30 days. While it appeared
clear the three-year statute of limitations to pursue wage-related claims
applied to actions seeking both "final wages" and these so-called
"waiting time" penalties, an open question remained regarding the
statute of limitations when employees sought only to recover the "waiting
time" penalty portion (i.e., in instances where the final wages had
been paid, even belatedly). Specifically, it was unclear whether
"waiting time" penalty-only cases would be governed by the three-year
statute for wage claims generally, or the one-year period in Code of
Civil Procedure section 340 for penalty provisions.
In a unanimous decision, the
California Supreme Court held that the three-year limitations period
for wage-related claims applied to all waiting time penalty claims,
regardless of whether the employee was also seeking unpaid final wages.
The Court relied heavily upon the statutory language in section 203(b)
which provides "[s]uit may be filed for these penalties at any time
before the expiration of the statute of limitations on an action for
the wages from which the penalties arise." The Court concluded
this language reflected a legislative intent for only a single limitations
period to apply for suits for unpaid wages and penalties. The
Court also reasoned that a contrary result would create confusion with
multiple different limitations periods, and potentially permit employers
to "game the system" and control what limitations period governs
their employees' section 203 claims.
However, the Court also held
that section 203 "waiting time" penalties are not available as "restitution"
under Business and Professions Code section 17200 (Unfair Competition
law). The Court reasoned that these "waiting time" penalties
are not intended to compensate employees for work performed, but are
a penalty intended to encourage employers to pay final wages on time
and punish those who do not. Accordingly, the Court held that
while unpaid overtime wages are potentially recoverable under the Unfair
Competition law because they represent the employee's property (i.e.,
wages they have earned), waiting time penalties are not recoverable
under the Unfair Competition Law because the employees have no ownership
interest in these penalties.
In effect, the Court held a
three-year limitations period applied in all actions seeking to recover
waiting time penalties, but it declined to apply the four-year statute
of limitations that would have applied if the employee could also seek
recovery under the Unfair Competition Law. (Pineda v. Bank
of America N.A. (S170758 Nov. 18, 2010) ___ Cal.4th ___, 2010 Cal.LEXIS
11678.)
Cashiers Permitted to Sue
under PAGA for Retailer's Failure to Provide
"Suitable Seating"
Section 14 in several of California's
Industrial Wage Orders provides that "all working employees shall
be provided with suitable seats when the nature of the work reasonably
permits the use of seats." In this case, a retail cashier sued
under California's Private Attorneys General Act (PAGA), Labor Code
Section 2699(f), which permits private plaintiffs to sue for violations
of certain listed statutes. Among those statutes is Labor Code
Section 1198, which provides, in part that "[t]he employment of any
employee…under conditions of labor prohibited by the order is unlawful."
In effect, the cashier argued a violation of the Wage Order's "suitable
seating" requirement violated Labor Code section 1198 entitling the
employee to sue under PAGA to recover the statutorily-enumerated penalties
(up to $200 per employee per pay period for each violation).
The employer argued a violation
of this Wage Order section would not violate Labor Code Section 1198
because the seat requirement was not a condition of labor "prohibited"
by the Wage Order. The employer also argued PAGA's penalties
were not available because the Wage Order had its own internal penalty
provision, applying only to employees who were "underpaid," which
this employee was not. The trial court dismissed the cashier's
complaint, but the court of appeals reversed, holding that Labor Code
Section 1198 applies to any violation by an employer of the "standard
conditions of labor" enumerated in the Wage Orders (in this case,
the affirmative duty to provide "suitable seats.") The appellate
court also held the Wage Order's penalty provision for "underpaid"
employees did not preclude an employee from pursuing PAGA's statutory
penalties for other violations of the Wage Order, including the failure
to provide suitable seats.
In short, the court concluded
the employees could proceed with their claim that a Wage Order violation
violated Labor Code section 1198, thus entitling them to PAGA's penalty
provisions. (Bright v. 99 Cent Only Stores (2010) ___ Cal.App.4th
___, 2010 Cal.App.LEXIS 1935.)
(NOTE: A different division
of the same appellate district is scheduled to hear oral argument on
the same issue in a different matter in early December and other courts
are also considering this issue. Accordingly, it is foreseeable
that these courts will issue conflicting results and that the California
Supreme Court may eventually weigh in on this issue.)
Plaintiff's Attorney
Not Permitted to Attend Mental Examination
California's Discovery Act
permits a mental examination of a plaintiff in employment cases where
the plaintiff alleges severe or ongoing emotional distress as a result
of the employer's conduct. In this FEHA sexual harassment case,
the court ordered that the plaintiff's attorney would not be permitted
to attend the psychiatric examination of his client. The court
noted that while California law permits the audio taping of this examination,
the attorney's presence would potentially unduly interfere with the
examination and there was no evidence the psychiatrist would act inappropriately.
(Toyota Motor Sales v. Sup. Ct. (ex rel Braun) ___ Cal.App.4th___,
2010 Cal.App.LEXIS 1926.)
Federal
Employee Who Failed to Follow
Re-Hire Procedures Outlined in CBA Precluded from Suing Employer for
Not Re-Hiring Him
An employee sued under the
Americans with Disabilities Act (ADA) alleging his employer failed to
accommodate his disability, laid him off because of his disability,
and refused to rehire him because of his disability. The federal
district court dismissed the accommodation and termination claims on
the grounds the employee had failed to file a charge with the Equal
Employment Opportunity Commission (EEOC) within 30 days after receiving
a right-to-sue letter from the California Department of Fair Employment
and Housing (DFEH). The Ninth Circuit Court of Appeals reversed,
holding that once an employee has received a DFEH right-to-sue letter
that would entitle him to an EEOC right-to-sue notice, the employee
is not required to also file a claim with the EEOC to pursue his ADA
claims. The court concluded the "work share" agreement
between the two agencies makes it unnecessary to file a claim with both
agencies.
However, the court concluded
the employee could not maintain his "failure to re-hire" claim because
he failed to comply with the collective bargaining agreement's (CBA)
procedures for re-hire. In this case, the CBA specified that employees
must regularly attend "roll call" meetings to move to the top of
the union's out-of-work list, but Plaintiff admitted he had not attended
due primarily to logistical issues. The court reaffirmed that
the employer did not have an affirmative obligation to seek plaintiff
out for rehire, and could hold him to the same requirements as other
employees seeking re-hire. (Stiefel v. Bechtel Corp. (9th
Cir. 2010) ___ F.3d ___, 2010 U.S.App.LEXIS 22670.)
Employer Did Not Violate
FLSA in Seeking Repayment of Training Costs Following Employee's Early
Separation
An employee who resigned her
employment after only two years challenged the employer's policy of
requiring employees who departed before five years of employment to
repay a pro rata share of previously-provided training costs.
In this case, the employer immediately provided the employee her total
final paycheck (approximately $2,400 representing 60 hours work), but
withheld the employee's accrued unused vacation and compensatory time
off and also sent a demand for the remaining pro-rata portion of the
previously-provided training expenses. The federal court rejected
the employee's claim the employer violated the Fair Labor Standards
Act (FLSA) by deducting the vacation and compensatory time-off and in
insisting on repayment of the other training expenses.
The federal court concluded
the employer had not violated the FLSA's requirement that employees
receive the federal minimum wage each workweek because the employer
had provided the employee with a final paycheck in an amount exceeding
the federal minimum wage for each hour worked. In this regard,
the court noted the employer would have violated the FLSA had the employer
withheld the entire final paycheck in satisfaction of a debt, but this
employer had still paid the employee approximately $40 per hour in the
final paycheck totaling approximately $2,400 for 60 hours worked.
The court also rejected the employee's contention the repayment provision
constituted an impermissible "kickback," reasoning the repayment
agreement was akin to an employer-provided loan the employee agreed
to repay. The court concluded that so long as the employer paid
the employee at least the statutory minimum wage, it could collect the
remaining training costs just like any other creditor. (Gordon v.
City of Oakland (9th Cir. 2010) ___ F.3d ___, 2010 U.S.App.LEXIS
23803.)
