Monthly Archives: July 2013

Wage and Hour Violations at Restaurants

A couple of days ago, the New York Times published an article about wage and hour violations at Urasawa, a very trendy — and expensive — sushi restaurant in Beverly Hills. According to the article, workers were not paid overtime and not allowed to take legally required breaks. An employee interviewed for the article also noted that he was required to buy his own $700 set of knives, at a time when he was earning between $9 and $11 an hour. (Although the article didn’t mention it, this is a separate violation of California law, which requires employers to bear the cost of uniforms, tools, and other items necessary for employees to do their jobs.)

Restaurants are too frequently in violation of wage and hour laws, from overtime and break rules to minimum wage, uniform, and tip requirements. If the violator is extremely upscale, like the restaurant cited in the Times article, employees are often willing to put up with substandard conditions in exchange for the opportunity to gain the experience and cachet that stem from working at a trendy spot. (Apparently, diners are also willing to put up with a lot to eat there, from a $1,000 price tag for dinner for two to rules about how the food must be treated that would make Sienfeld’s Soup Nazi blush.) At the other end of the spectrum, employees working at fast-food franchises and low-budget eateries often don’t know their rights and work for an owner who is operating on a financial shoestring.

In recent years, the Department of Labor has taken steps to remedy this situation, from revising the regulations on tip credits to partnering with the Subway restaurant chain to make sure that employees know their rights. Let’s hope it works! Because I don’t know about you, but for my own selfish reasons, I’d prefer to have my food prepared by workers who are allowed to go to the bathroom when they need to.

Religious Discrimination and Accommodation

cadleLast week, the Equal Employment Opportunity Commission (EEOC) announced that it had filed a lawsuit against United Cellular, Inc., of Alabama. The lawsuit claims that United Cellular discriminated against Charles Embry, a Seventh-Day Adventist, by scheduling him to work on his Sabbath day and then firing him when he didn’t show up for work. During his initial job interview, Embry told United Cellular that his religious beliefs prohibited him from working from sundown on Friday through sundown on Saturday.

Religion is unique among the characteristics protected by Title VII, in that it is not only a trait but also a system of beliefs that may require believers to engage in certain practices at work. Employers are required to provide reasonable accommodations to allow employees to practice their faiths, unless doing so would create an undue hardship. Common accommodations include schedule changes, exceptions to grooming or dress codes, and breaks or time off for prayer and religious observances.

Religious discrimination can be a tricky issue for employers, who are required both to disregard religion as a trait in making employment decisions and to take religion into account as a practice in providing accommodations. Especially difficult is figuring out whether and how to accommodate an employee whose religion requires public profession of faith or proselytizing, especially if other employees or customers would prefer not to be the audience.

Recognizing this, the EEOC in 2008 issued policy guidance and a question and answer series on “how to balance the needs of individuals in a diverse religious climate.” Apparently, however some questions remain: The number of charges filed with the EEOC alleging religious discrimination has more than doubled in the past 15 years, while total charges filed have increased by only 25% in the same timeframe.

In response to frequent questions and search interest in this topic, we’ve put together a Religious Discrimination page, with basic information and answers to common questions about discrimination and workplace accommodations.

 

Employers Win Retaliation Case in Supreme Court

supctThere were plenty of blockbuster decisions issued in the final week of the Supreme Court term that ended in June: Cases on affirmative action, voting rights, and of course same-sex marriage garnered most of the attention. But the Court also issued a couple of major employment decisions, which will have a significant effect on cases headed to trial.

In the first case, Vance v. Ball University, the Court limited the definition of “supervisor” in harassment cases to include only those who are authorized to take tangible employment actions (such as firing, demotion, promotion, or job reassignment) against employees. This case ¬†immediately changed the burdens of proof in harassment cases going to trial across the nation, making it more difficult for employees to hold their employers liable for hostile environment harassment. (You can find out why in my post about the decision, Big Win for Employers in Supreme Court Harassment Case.)

In the second case, University of Texas Southwestern Medical Center v. Nassar, the Court ruled that employees who claim that they were retaliated against for complaining about discrimination have a higher burden of proof than employees who only raise discrimination claims. Although the current Supreme Court is generally considered very favorable to business interests, this pro-business decision is something of a surprise. Employees haven’t had much luck in other types of cases, but they had an unbroken win streak in retaliation cases, until a few weeks ago. (Don’t believe me? See Another Supreme Court Win for Employees in Retaliation Case, Oral Complaints Trigger Retaliation Protection, and Supreme Court Issues Another Retaliation Decision, for starters.)

In the Nassar case, the Court had to decide who has to prove what in a “mixed motive” retaliation case. A little background: To win a Title VII discrimination case, an employee has to prove that the employer took action (typically, firing the employee) because of the employee’s race, religion, or other protected characteristic. In 1989, the Court had to decide how to handle cases in which the employer had discriminatory intent, but also had other, nondiscriminatory reasons for its decision. The Court came up with this rule for these mixed motive cases: If the employee can show that his or her protected characteristic was a motivating factor in the decision, the employer could escape liability if it could prove that it would have taken the same action absent any discriminatory motive.

Congress tweaked the mixed motive rule in the Civil Rights Act of 1991, in favor of employees. Congress reasoned that discrimination is always wrong, and should subject the employer to penalties even if the employer had other reasons for its actions. On the other hand, if the employer really would have taken the same action for legitimate reasons, the employee can’t prove any out-of-pocket losses. For example, if an employee claims that he was fired because of his race, but the employer says “we would have fired him on the same day because of his billing errors,” the employee can’t show that his lost wages were caused by discrimination. So, Congress refined the rule to hold that an employee who proves that discrimination was a motivating factor can be awarded attorney fees, costs, and declaratory relief (a finding by the court that the employer discriminated). However, if the employer can prove that it would have taken the same action for legitimate reasons, the court will not order money damages or reinstatement.

The Nassar case turned on a retaliation claim. Nassar, a doctor who worked at the hospital and was on the faculty at the University, claimed that a supervisor (Dr. Levine) harassed him based on his national origin and religion. Nassar complained to his immediate supervisor (Dr. Fitz) about the harassment, and also tried to arrange to leave the faculty while still working at the hospital (an arrangement not usually allowed). After the hospital indicated that it would hire him, Nassar quit his teaching position and wrote a letter to Fitz, stating that he had resigned because of the harassment. Fitz was angry about Nassar’s allegations, stating that he had “publicly humiliated” Levine, who should be “publicly exonerated.” He contacted the hospital and asked them to retract their job offer; he pointed out that the rules required all physicians at the hospital to also be faculty members. The hospital obliged, which led to Nassar’s retaliation claim and a very clear mixed motives case. The facts demonstrate both that Fitz had a retaliatory motive and that the same action would have been taken anyway, for other reasons. So, the Court of Appeals applied the mixed motive framework explained above.

The Supreme Court said that was incorrect. The Court decided that Congress’s mixed motive framework applies only to claims of discrimination, not claims of retaliation. In a retaliation case, the employee always has the burden of proof, and must show that the employer took action “because of” a retaliatory motive. If the employer would have taken the same action for other reasons, the employee loses.

Why did the employee winning streak end in retaliation cases? The majority decision states that it’s simply a matter of reading the statute. Congress laid out the mixed motive framework only for discrimination cases, not retaliation cases. As the dissent points out, however, the Court has recently allowed retaliation claims under statutes that don’t mention retaliation at all. And, because vindicating the right to work free of discrimination necessarily requires that employees not be penalized for coming forward with these claims, it’s odd to adopt different standards for these two allegations that are so closely linked. Perhaps the real reason is revealed when the majority opinion points out the huge rise in retaliation charges in recent years: Allowing employees to proceed under the easier burden of proof for mixed motive cases would “contribute to the filing of frivolous claims, which would siphon resources from efforts by employer, administrative agencies, and courts to combat workplace harassment.”

 

 

 

Obamacare Employer Mandate Postponed to 2015

In an announcement that seemed to take everyone by surprise, the Obama administration yesterday issued a statement that it would not enforce the employer mandate of Obamacare until 2015. More specifically, the statement indicates that the Obama administration won’t enforce the law’s reporting requirements for employers or assess the “shared responsibility” payments (fines for failing to provide adequate, affordable healthcare) until 2015. These provisions were supposed to take effect at the beginning of 2014.

This change was billed as the administration’s effort to “listen to the business community.” However, the effects of the change could be much more widespread. The deadline for the individual mandate has not changed; we all still have to have insurance coverage by January 1, 2014, or pay a penalty. I will refrain from detailing my thoughts about the administration giving a break to the “business community” while the actual humans are still on the hook. But postponing the employer mandate will make the individual mandate more challenging. For example, whether subsidies are available to employed people who buy their own insurance depends on the quality and cost of insurance available to them at work. If employers aren’t required to report on that, how is the IRS going to know who is eligible for a subsidy?

Postponing the employer mandate and reporting requirements also, frankly, gives employers more time to come up with ways to get around the law by restructuring their workforces (look for more job openings for employees to work no more than 29 hours per week), coming up with ways to offer the least coverage possible and pay the lowest penalties (like this scheme, which came to light only a few weeks ago), and so on.

Here’s an additional complication: The administration doesn’t seem to have the authority to require this delay. As noted in this article in Forbes, the effective date of the mandate is statutory. Congress said, right there in the law, that it applies to “months beginning after December 31, 2013.” Although the administration could choose not to enforce this part (as they did with DOMA before the Supreme Court overturned it), they might face a lawsuit over their decision. And, unlike the DOMA situation, there will be real people who are harmed by this delay.