Back to School: September 27, 2017

Employment Law Update Webinar

Peter Donati
Laura Friedel
Kenneth Kneubuhler
 Todays Webinar Panel

Peter F. Donati
Partner
Tel: 312.476.7590
pdonati@lplegal.com

Laura B. Friedel
Practice Group Leader
Tel: 312.476.7510
lfriedel@lplegal.com

Kenneth Kneubuhler
Of Counsel
Tel: 312.476.7567
kkneubuhler@lplegal.com

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 Agenda
Overtime update
Minimum Wage developments
Sexual Orientation and Title VII
Other EEOC updates
Independent Contractor & Joint Employer standards
NLRB update
Affordable Care Act update
Immigration update
Arbitration Agreements and Waiver of Class Claims
Church Plan Exemption under ERISA
Pregnancy Accommodation developments
Paid Leave update
Restrictive Covenant Agreement update
Pay History laws
Medical Marijuana
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 Overtime Update
What a difference a year makes..

Obama administration regulations

stayed just before effective date,
and are now dead.
Trump DOL has asked for public
comment, so regulatory process
is in motion.
For now, 2004 Regulations
remain in place.

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 Minimum Wage Developments
States and localities continue to raise minimum wage.
Chicago $11/hr
Cook County (if municipality hasnt opted out) $10/hr
New York State $9.70/hr
NYC $11/hr (large employers) or $10.50/hr (small employers)
Washington, DC $12.50/hr

But some stepping back.

St. Louis minimum wage of $10/hr (which was on track to increase to
$11/hr) was invalidated by Missouri state law, resulting in decrease of
minimum wage in St. Louis from $10/hr to $7.70/hr.

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 Sexual Orientation and Title VII
2015 EEOC began to assert that
Title VII covers sexual orientation
All 11 U.S. Circuit Courts
previously had held not covered
Hively v. Ivy Tech Comm. College (April 4, 2017)
full panel of 7th Cir. breaks ranks
- Form of sex stereotyping
- Associational discrimination
May 25, 2017 2d Cir. grants en banc review in
Zarda v. Altitude Express
July 26, 2017 DOJ files amicus brief opposing
protection under Title VII conflict with EEOC

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 Gender Identity and Title VII

EEOC also takes

position that Title VII
protects against
discrimination based on
gender identity
Roberts v. Clark County Sch. Dist. (October 4, 2016)
district court in Nevada agrees with EEOC
Blatt v. Cabelas Retail (May 18, 2017) district
court in Pennsylvania holds gender dysphoria
possible disability protected by ADA

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 Examples of Discrimination - EEOC
Failing to hire an applicant because she is a
transgender woman.
Firing an employee because he is planning or has
made a gender transition.
Denying an employee equal access to a
common restroom corresponding to the employee's
gender identity.
Harassing an employee because of a gender
transition, such as by intentionally and
persistently failing to use the name and gender
pronoun that correspond to the gender identity with
which the employee identifies, and which the
employee has communicated to management and
employees.
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 Other EEOC Developments

Pay Reporting
2016 EEOC announces plan to begin requiring pay
data reporting as part of EEO-1 in March 2018
April 29, 2017 EEOC Chair Victoria Lipnic
announced review of requirements by OMB
The poster child for the kind of regulation that the
President campaigned against
Prior EE0-1 form (without pay data) remains in effect.
Deadline still March 2018.

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 DOL Withdraws Key Guidances

Independent Contractor Guidance

Guidance issued in July 2015 changed analysis and
made it much harder to establish independent
contractor status.
Withdrawn on June 7th
Where are we now?
- Prior DOL standards stand
- IRS, Common Law, ABC Tests still in place
- Higher state standards apply

Key Takeaway:
Withdrawal of guidance doesnt materially alter overall risk of
independent contractor being deemed to be misclassified!
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 DOL Withdraws Key Guidances

Joint Employer Guidance

Guidance issued in January 2016 expanded
situations where both related companies and
unrelated companies that work together would be
considered joint employers.
Withdrawn on June 7th
Where are we now?
- Existing law on joint employer status remains
- Staffing agency employees still considered joint employees
- Depending on management structure, sister company
employees may be considered joint employees

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 NLRB Gets Ready to Change Course
Two new members recently appointed to NLRB
(William J. Emmanuel and Marvin E. Kaplan). With
Chair Philip Miscimarra, this gives NLRB a
Republican majority for first time in 8 years.
Because of the way the NLRB functions and the fact
that General Counsel Richard Griffin (former union
attorney) will remain until November, change will
come gradually
Regional personnel will adhere to existing
standards, even if writing is on the wall

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 Likely Changes from NLRB
Joint employment standard (also being addressed at
D.C. Circuit)
Mini bargaining units
Ambush elections
Class action waiver (also being addressed at
Supreme Court)
Use of employer email
Scrutiny of employer handbook policies

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 Affordable Care Act Update
It is still with us . . . .
Minimal Impact of January 2017 Executive Order
Failed Legislative Repeal Efforts
Graham-Cassidy, the latest failed attempt

Disclosure amid the turmoil

Revised Summary of Benefits and Coverage standardized form applies
for this seasons open enrollments (after March 31, 2017)
ERISA Summary Plan Descriptions remain important
We continue to see insurance certificate booklets and other benefit
summaries that do not satisfy requirements
Issues in transactions and DOL audits
King v. Blue Cross Blue Shield of Illinois (9th Cir. September 8, 2017)
piecemeal, uncoordinated disclosure of changes can be misleading

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 Immigration
Visa issues
H-1Bs
Crackdown targeting employers who favor H-1B
over US workers
Suspension of premium processing resulting in
delay
Looking closer at entry-level positions
Entrepreneur / Start-Up Visa Program delayed

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 Immigration
DACA (Deferred Action for Childhood Arrivals)
Announcement September 5th that DACA is being
phased out.
Current DACA holders:
If employment authorization expires before March 5, 2018 must
renew by October 5th.
If employment authorization expires after March 5, 2018 will lose
authorization on that date unless they obtain other authorization
If you have DACA employees:
Dont terminate based on DACA withdrawal only when employment
authorization documents expire
Consider carefully international travel by DACA employees

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 New Form I-9
New Form I-9 has been issued
Changes are minimal
Adds some acceptable forms of identification
Separate paper and electronic versions
Make sure using form that has 07/17/17 in the footer and
Expires 08/31/2019 in header
Must use new form as of September 18th
New document is available at https://www.uscis.gov/i-9.

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 Arbitration Agreements and
Class Action Waivers
January 2012 NLRB decides D.R. Horton case
Most federal circuit courts disagreed (5th, 2nd, 8th)
May 2016 7th Circuit becomes first circuit court to agree
with NLRB Epic Systems v. Lewis
Two more courts agree with NLRB - 9th Circuit in August
2016 (Ernst & Young v. Morris) and 6th Circuit in June
2017 (NLRB v. Alternative Entertainment)
January 2017 Supreme Court grants cert in three of the
appellate court cases
Decision expected later this year or early 2018

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 ERISA Exemption for Church Plans
Protections of ERISA do not apply to Church Plans
Original base definition: plan established and maintained for its
employees by a church that is tax-exempt.
Later clarifying addition: includes a plan maintained by an organization
the principal purpose of which is the administration or funding of [such a]
plan if such organization is controlled by or associated with a church.
Many rulings hold that plans of church affiliated tax exempt health
organizations are Church Plans.
Challenges by participants in these types of plans led to
decisions that the plans were not exempt as Church Plans
Not established by a church as required by base definition.
3rd Circuit in 2015, followed by 7th and 9th Circuits in 2016.
Overruled by Supreme Ct in Advocate Healthcare Network v.
Stapleton (June 5, 2017).
Plan need not be established by a church.

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 Pregnancy Accommodation Developments
EEOC enforcement
guidance in 2015
addressing requirements
under ADA and Pregnancy
Discrimination Act.
July 27, 2017, Mass.
passes Pregnant Workers
Fairness Act
Last four months, Connecticut, Nevada, Vermont, and
Washington State have passed similar laws
Total count now 22 states and District of Columbia
Illinois Pregnancy Accommodation Act went into effect
on January 1, 2015

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 Pregnancy Accommodation Developments

Locations with provisions for pregnancy accommodation as of August 2017

Source: Department of Labor
https://www.dol.gov/wb/maps/

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 Leave as Accommodation under ADA
Severson v. Heartland Woodcraft, Inc.,
(7th Cir. 9/20/17)
Question posed: does the Americans with
Disabilities Act (ADA) require that employee be
given additional time off as an accommodation?
EEOC has said yes. Courts previously have
skirted the issue, not providing much guidance.
In Severson, the Seventh Circuit rejected the
EEOCs position
- denied the employees claim that he should have been
allowed an additional 2-3 months of leave
- flies in the face of EEOCs position on maximum leave
policies

[the ADA] is an anti-discrimination statute, not a medical

leave entitlement.

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 Paid Leave
Chicago Paid Sick Leave Ordinance
Went into effect July 1st
Not too complicated on face, but complicated when you dig in
Issues our clients are seeing
Existing generous policies not meeting technical requirements
Carry-over requirement even if frontloading full amount employee is permitted
to take
How to handle new hires when frontloading
Part-time / temporary employees and interns
For FMLA-covered employers, whether to create separate category of time
Multiple locations and employees who work from home

Cook County Earned Sick Leave Ordinance

Went into effect July 1st
Home-Rule Municipalities had right to opt-out vast majority did
For those staying in, same issues as Chicago Ordinance

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 Paid Leave
New York State Paid Family Leave
Effective January 1, 2018
Must include in handbook/policies
Similar to unemployment compensation system, but added to
employers existing disability insurance policy
Most employees eligible after 26 weeks
Starts at 8 weeks @ 50% pay going to 12 weeks @ 67% pay
Can be used for maternity/paternity or other family member care
Employers are required to carry a disability insurance policy
Premium is fully funded by employees
Could start deducting from pay July 1st
Must include in handbook/policies

Federal Standard to bring consistency?

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 Restrictive Covenant Developments
Illinois - Does the 2-year, bright-line standard under Fifield
apply in federal court? Probably not.
California Choice of law/venue statute
- Governs contracts that are entered into from Jan. 1, 2017
forward
- Cant require employee to adjudicate claim outside of CA
- Cant deprive employee of substantive protections of CA law
- All employees who primarily reside and work in CA
- Voidable at option of employee
- Can get attorneys fees
- Does not apply to employee represented by counsel in
negotiating employment agreement

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 Restrictive Covenant Developments
Bankers Life v. American Senior Benefits (Illinois 1st
Dist. June 2017)
- Former employee sent three former coworkers requests to
become LinkedIn connections
- Requests did not discuss Bankers Life or new employer,
did not suggest review of job description, did not encourage
recipient to leave
Mobile Mini, Inc. v. Vevea (U.S. District Court in
Minnesota July 2017)
- Two posts on LinkedIn that included invitations to
customers
- Went beyond status updates

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 Pay History Laws
Laws that prohibit asking applicants about current or past
compensation before an offer is made, or otherwise
seeking that information.
Currently some sort of restriction on the books
Massachusetts (effective 2018)
Delaware (effective 12/17)
Oregon (no suits until 2019)
Puerto Rico (penalty provisions effective 3/18)
New York City (effective 10/31/17)
Philadelphia (enforcement delayed pending court challenge)
San Francisco (penalty provisions effective 2019)
Illinois version was vetoed

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 Pay History Laws

Practical Implications
What law applies when offers are made over state/city lines?
Difficulty making initial offer
Increased negotiation?
Interplay with anti-trust laws
Increased need for comp consultants?

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 Medical Marijuana
Medical marijuana legal in 29 states
plus DC and pending in 12 others
Still Schedule 1 controlled substance
under federal law
Early case law suggested right to use
didnt limit employment action
- 2015 Colorado S. Ct. in Coats v Dish
Network
- Similar rulings in CA, MT, and WA
But the tide is shifting

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 Medical Marijuana
Callaghan v. Darlington Fabrics Rhode Island
Superior Court May 2017 refusal to hire medical
marijuana user violates RI Civil Rights Act and med.
marijuana statute
Barbuto v. Advantage Sales MA Supreme Court
July 2017 finds claim for disability discrimination
under state FEPA
Noffsinger v. SSC Niantic Operating Co. U.S.
District Court in CT August 2017 - federal law does
not preempt claims under state statutes

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 Questions?

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