That nasty remaining five percent or so* that can't be explained by personal choice.

*Completely unscientific percentage.

If your pay audit uncovers one of these issues, you ought to be thinking about fixing it:

The Lilly Ledbetter Effect. Lilly Ledbetter says she received relatively poor performance reviews in the 1980's because she was a woman. Whether she is correct or not, I am sure that her employer, Goodyear, would have had a tough time disproving this* because she didn't sue until after she had retired, and any records were probably long gone by that time.**

*Yes, I know the burden of proof in a discrimination case in court is on the employee, but as a practical matter it's on you, the employer. And if you're a federal contractor, you know that the Office of Federal Contract Compliance Programs will not give you the benefit of the doubt. If they find a disparity, you will have to prove to their satisfaction that it's not a result of discrimination.

**This is a reason why employers should not destroy records, but that's a topic for another blog post.

But, anyway, let's take Ms. Ledbetter's word for it. So, she got lousy reviews only because she was a woman in a man's world, and pay increases were based on performance ratings. Just for the sake of argument, let's say Goodyear gave a 5 percent increase to everybody who got "Exceeds Expectations," and 3 percent to everybody who got "Meets Expectations." And just for the sake of argument, let's say Ms. Ledbetter deserved an "Exceeds" rating in 1982 but got only a "Meets" because her male chauvinist pig of a boss thought women were good for only one thing. And I don't mean making tires. Meanwhile, Ms. Ledbetter's male counterpart, Joe, got "Exceeds" in 1982 even though he had exactly the same performance as Lilly, just because he was a man.

"Women can't do no work. Dey ain't as smart as us guys is!"

Let's say the male chauvinist pig boss retires in 1983, and from that point on, Lilly begins reporting to Alan Alda, who gives her the performance ratings she really deserves every year after that. Which means that she and Joe BOTH get "Exceeds" in every year until Lilly retires, many years later.

"I love all women. And I don't mean that in an inappropriate way."

Not only will Lilly never catch up with Joe, but also the gap in their pay will widen over time, even though they received exactly the same percentage pay increase every year from 1983 forward.

If you review your compensation and find an unexplained pay disparity involving long-term employees, you should investigate whether it's a result of the "Lilly Ledbetter Effect" -- the lingering effects of a long-past discriminatory decision. If so, then go ahead and make an adjustment to catch her up. Don't wait for her to sue you, or (more likely) for an audit by the OFCCP.

Be sure to visit Stephanie Thomas's The Proactive Employer Blog for this month's Employment Law Blog Carnival, Spring Is In Bloom Edition! Stephanie, thank you for hosting!

The "Retro Career Choice" Effect. This is similar to the Lilly Ledbetter Effect, except that it's technically not a "discrimination" issue. However, it is a fairness issue that creates the appearance of discrimination.

In this scenario, you have a long-term female employee (let's call her Flo) in a supervisory or management position who is paid less than her male counterparts with similar time in the position. Flo has been a great employee, and you don't have any male chauvinist pigs working for you, so you know that she's been rated fairly her entire career.

Flo is on the right.

When you look back at the beginning of her employment, you see that Flo started out as a machine operator and worked her way up to supervisor 20 years ago. Her male counterparts started out as skilled mechanics before working their way up to supervisor 20 years ago. Flo and the boys all got a 10 percent pay increase when they were promoted to supervisor 20 years ago.

OK, Robin - we see where you're going with this. So why not give everybody a "flat" pay increase when they get promoted?

Glad you asked! The reason you use a percentage rather than a "flat" increase is that you want to make sure employees don't lose money when they're promoted from an hourly position with overtime into a management position without overtime. The only way to guarantee this (apart from giving everybody, like, a $100,000 pay increase when they're promoted to supervisor) is to base the employee's supervisor pay on his or her prior hourly pay.

Oh, OK. Thanks. Now, back to our story. Flo freely chose the machine operator job (contrast with "The Channel Effect" below), but the machine operator job didn't pay as much as the mechanic job, so when Flo was promoted and got her 10 percent increase, she got less real money than the guys did. And her future raises would have been a percentage of each year's salary. Which means that, even if Flo and the guys got exactly the same percentage increases every year after their promotions, as with Lilly Ledbetter, the pay gap would continue to widen, and after 20 years Flo would be earning significantly less than her male counterparts. Even though she is every bit as good a supervisor as they are, and even though your company has treated her in a completely non-discriminatory manner.

Doesn't seem right, does it? So, even though this is technically not discrimination, we do normally suggest that employers give their "Flo's" an adjustment to bring them into line with their counterparts.

The Channel Effect. Thanks to commenter Randy Martinez for bringing this up last week in connection with sales positions. Anyone with eyes to see and ears to hear knows that women (statistically speaking, of course) tend to choose certain jobs and that men (statistically speaking, of course) tend to choose other jobs. If these choices are truly voluntary, then there is nothing wrong with it -- whatever the government or the National Organization for Women may tell you.

"Oh, yeah?"

But occasionally the employer will take it upon itself to "guide" women into certain jobs and "guide" men into different jobs that pay more money.

In recent history, supermarkets have been accused of channeling women into cashier positions and men into meat department positions, which pay a lot more because they involve things like cleaning fish guts and cutting cows up into steaks. (I'm not saying supermarkets actually channel -- only that they've been accused of it.)

The OFCCP is onto channeling, and has announced that it will be on the lookout for it during compensation audits.

If you're "channeling" based on assumptions, stereotypes, or even past experience, about what men and women prefer to do or are better at, then stop it! Right now! This is sex discrimination, and it is illegal.

Then, once you've stopped, figure out a way to offer the "male" jobs to your female employees. Many will prefer to stay where they are, but those who prefer the "male" jobs ought to have the opportunity. Once you find out who those women are, consider whether you also need to make some pay adjustments.

The "I Have No Flipping Idea" Effect. Finally, you might come across this one. You or your lawyer finds that a female is paid less than similarly situated males. You try to figure out why. You investigate all of the non-discriminatory reasons we discussed in last week's post, and none of those fit. You investigate all of the discriminatory or quasi-discriminatory reasons discussed above, and none of those fit, either. You talk to everybody who has been involved in hiring these people, as well as those involved in giving raises. Nobody has a clue why this woman is making less money.

"Hmm. I have no flippin' idea why Evangeline is making less money."

If you have a pay disparity that you cannot explain, then go ahead and make an adjustment. Your utter lack of an explanation will be held against you.

Next week, I'll conclude this series with a post on preventive steps that employers can take to avoid creating pay disparities in the first place.

Image credits: Wikimedia Commons.

Yes. That Lilly Ledbetter. Lilly Ledbetter of the Lilly Ledbetter Fair Pay Act. The Lilly Ledbetter who wore a red suit and stood beside President Obama when he signed the Fair Pay Act into law. Ms. Ledbetter had recently published her book, Grace and Grit: My Fight for Fairness and Equal Pay at Goodyear and Beyond.

Yes, I am serious! The Lilly Ledbetter who is standing right behind the President!

Stephanie is always great, and Ms. Ledbetter herself was a gracious and charming lady, and our half hour flew right by. If she hadn't lived two states away from me, I would have invited her over for dinner.

Ms. Ledbetter strongly believes that pay discrimination against women is rampant. And a women's advocacy group has recently come out with a study showing that, between 2011 and 2012, women's relative pay has dropped from about 82 cents for each dollar that men earn to only about 81 cents on the male dollar.

At the same time, we have extremely well-compensated female super-executives like Sheryl Sandberg of Facebook saying that women aren't as successful, not because men are holding them back, but because women don't want success enough, or something like that, and Marissa Mayer, CEO of Yahoo, saying she's not a feminist and abolishing telecommuting for her employees while building herself a baby nursery next door to her office. (Sisterhood is powerful, baby! This is what we fought for!)

THE PRICE WAS WRONG: I had reported earlier on model Brandi Cochran's $7.7 million verdict in a pregnancy discrimination lawsuit against the long-running TV game show The Price Is Right. The trial judge has now granted the show's motion for a new trial, saying that he gave an erroneous jury instruction according to a California Supreme Court decision that was issued after the trial. I'll continue to keep you posted on this and all daytime-TV-related employment law.

So, with all apologies to Lilly Ledbetter, as we approach the sixth anniversary of the Supreme Court's decision saying that Ms. Ledbetter's case against Goodyear was untimely (a decision that Congress overruled by passing the Ledbetter Fair Pay Act), and the 50th anniversary of the Equal Pay Act, and as the Office of Federal Contract Compliance Programs says in so many words that it's going to keep on scrutinizing contractors' pay in every way possible until it finds a violation, I'm going to be contrary: here are five reasons why I think the "gender pay gap" is mostly baloney.

Res ipsa loquitur.

1. The "X cents on the dollar" argument is fallacious. This statistic measures all women in the workplace against all men in the workplace. It takes nothing into account except sex and pay. That's it. It doesn't control for anything else that might affect a person's pay, such as educational level, years in the workforce, skill or experience level, willingness to travel or do "dirty" work, or anything. Just sex and pay. So it doesn't tell you much of anything about discrimination. At most, it's the first piece in a 2,000-piece jigsaw puzzle. Here are a few of the other 1,999 pieces:

Problem solved! My work here is done!

2. Statistically speaking, men are disproportionately willing to work heavy, dirty, dangerous jobs in bad conditions with long or inconvenient hours. Because these jobs totally stink aren't very pleasant, companies are sometimes willing to pay quite a lot to anyone who is willing to do them. Companies don't have to do that with nice, clean, 9-to-5, Monday-through-Friday office jobs, or even "pink-collar" jobs, which might have inconvenient hours and be stressful in some ways but don't usually involve danger or heavy lifting.

3. Statistically speaking, women are more likely to start their work lives later and interrupt their work lives. (Remember, we are talking "statistically.") The work force is still full of women my age and older, who unlike today's young women, may not have jumped right into their chosen careers, often because we were working at dead-end jobs for a few years while our husbands went to professional school or threw themselves headlong into their own careers. And/or we were having babies. (In my own case, I didn't even start law school until I was 30 and already had one child. And I'm not that unusual.) Even if we were working, we quit* when we had babies. Our husbands never did -- male "moms" are a relatively new phenomenon.

*Quit working outside the home. Moms and dads who stay home, of course, do a ton of work.

So, if you're young, remember that the "pay equity" stats include us as well as you, and we have a big pay gap that usually was not a result of discrimination by employers but a result of family choices we made at various stages of our lives. In other words, our choices are bringing down the average for the whole group of working women. Don't you feel better now?  :-)

4. In the most recent recession, the pay gap narrowed somewhat, and do you know why? It's because women were employed while men were unemployed. (Statistically speaking, of course.) That's right -- men were disproportionately affected by the last recession. You may recall that they even called it a "mancession." Most of the jobs that went away were "men's" jobs -- construction, heavy manufacturing, etc. This narrowed the gender pay gap because women were making a little bit of money while many men were not making any money. If the pay gap really is widening again, I hope it's because some of those poor unemployed men have started to find jobs.

5. Even when they're in the workforce, women disproportionately treat their jobs as "secondary" to their spouses' so that they'll have time to devote to their families. (Statistically speaking again, of course.) Just look around you. Count up the women you know who take off work when their kids are sick, assume primary responsibility for taking care of elderly or sick relatives (including their in-laws), move when their spouses get transferred, and say they want a job that they can "forget about" when they go home at night. Now count up the men you know who do these things.

Some might say taking good care of them is as rewarding a career as any.

My guess is that everyone's circle of acquaintances will include a relatively large number of women, and a relatively small number of men, who do. Now -- tell me who do you think is probably going to make more money at work? Would it be the people who consider their jobs "secondary" to the jobs of their spouses, or would it be the people who consider their jobs to be the "primary" jobs in the family? Do I really have to ask? Of course not. And, if that's the way those women want it, then what's the problem?

I can tell you what the problem isn't: it isn't employment discrimination. 

Image credits: Wikimedia Commons: (1) President Obama signing Lilly Ledbetter Fair Pay Act into law (January 2009) with Lilly Ledbetter standing behind him (in black turtleneck); (2) random person starting a jigsaw puzzle; (3) Benno Adam, "Stier"; (4) William-Adolphe Bouguereau, "The Elder Sister."

"Ha-ha! We were just kidding!"

UPDATE: Thanks to reader John Perkins, SPHR, for the 2013 Mayan Calendar. Most educational!

"Near occasion of sin" is a legitimate ground for termination, Iowa court says. You've probably already heard about this one because it has received quite a bit of coverage elsewhere. The Iowa Supreme Court has ruled that it is not sex discrimination for a male business owner to fire a female employee because he (or his wife) is afraid he may succumb to her charms. The owner, a dentist, had an all-female staff but was suspiciously chummy with one of his assistants. His wife also worked for him, and her "spider sense" began tingling. Wife became upset. Clergy became involved. Dentist eventually fired assistant while minister stood by. (Probably to make sure he went through with it.)

The terminated assistant sued, contending that she was a victim of sex discrimination under Iowa law. The court has a thoughtful and nuanced discussion but found in this case that the termination was simply the reverse of "sexual favoritism," which most courts find legal . . . albeit perhaps unfair. My quick summary: The consequences of a sexual relationship -- whether good or bad -- generally do not create liability for the employer if sexual harassment is not involved. In other words, as long as the relationship is consensual, you are usually out of luck whether the boss is favoring the one he loves instead of you, or whether he fires you because you're the one he loves. (The masculine shall be deemed to include the feminine, and vice versa.)

"Dahling, my wife says I must fire you. You understand, don't you, my little linzertorte?"

Emails sent through employer's system lose marital privilege. The U.S. Court of Appeals for the Fourth Circuit* upheld the bribery conviction of a politician who was convicted in large part based on incriminating emails he'd sent to his wife through his employer's email system. The court said that use of an employer's email system (and computer) was equivalent to dictating to a stenographer a communication for one's spouse, which the Supreme Court held in 1934 also waived the privilege. The Fourth Circuit decision should also apply in employment litigation.

*The U.S. Court of Appeals for the Fourth Circuit hears appeals from federal courts in Maryland, North Carolina, South Carolina, Virginia, and West Virginia.

No lactation accommodation retaliation where employee didn't make "complaint." An employee was fired not long after she had asked about where she could express breast milk at an office that she was going to be visiting. (The employer had accommodated her need to express without any problems for quite some time before.) She sued for retaliation under the Fair Labor Standards Act's "lactation accommodation" requirements, but a federal court in Florida issued judgment for the employer, and the U.S. Court of Appeals for the Eleventh Circuit* affirmed. To have a valid claim for retaliation under the FLSA, the appeals court said, the employee had to make a complaint that could reasonably be viewed by the employer as a grievance asserting rights under the FLSA. Because asking where she could express milk was not a "complaint," her retaliation claim failed. She also didn't have a valid "interference" claim because such a claim does not exist under the FLSA, the court said.

*The U.S. Court of Appeals for the Eleventh Circuit hears appeals from federal courts in the states of Alabama, Florida, and Georgia.

To assert a claim of retaliation under the FLSA, you have to complain.

Party on! U.S. Department of Labor updates its 2012 regulatory agenda. Affirmative action requirements for veterans, FLSA as applied to home health care workers, Affordable Care Act rules, and more!

Belated blog carnival! Forgive me for being so late with this (is it ok since we're still in the 12 Days of Christmas?), but Mark Toth of The Employment Blawg hosted the December Employment Law Blog Carnival, featuring a post by me as well as numerous outstanding posts by other bloggers. Please pay Mark a visit if you have not already done so!

Image credits: Wikimedia Commons.

"I h8 school!"

The Supreme Court of the United States (aka "SCOTUS") began its new term this past Monday, and it will be reviewing at least four employment cases, as well as two non-employment cases that will have an impact on employment litigation. (Hat tip to Bloomberg BNA. Paid subscription required.)

Here's a rundown on the cases that the Court has agreed to hear.

Do you have to have authority to hire fire, demote, or discipline to be a "supervisor" under Title VII?

In Vance v. Ball State University, the U.S. Court of Appeals for the Seventh Circuit* said you do, but other courts have disagreed. The plaintiff in Vance alleged that she was racially harassed by two people who really were supervisors, as well as another employee who may or may not have been. This last person was really important because there wasn't much evidence that the "true" supervisors had harassed her but a lot of evidence that this third person did.

*The Seventh Circuit hears appeals from federal courts in Illinois, Indiana, and Wisconsin.

The definition of "supervisor" is important because if the harasser is not a "supervisor," then the employer is not liable unless it knew or had reason to know about the harassment and failed to act reasonably to stop it. On the other hand, if the harasser is a "supervisor," the employer is strictly liable unless it qualifies for the  "Faragher/Ellerth" defense.*

*At the end of this post, I have a quick and dirty example of how this defense works, just in case you're not familiar with it.

The Seventh Circuit affirmed summary judgment for the university, in part on the ground that this one bad lady was not a "supervisor" because she did not have authority to hire, fire, demote, or discipline the plaintiff.

Oral argument is scheduled for October 10 (Tuesday).

Can you defeat an FLSA collective action by making an offer of judgment to the only named plaintiff before the class has been certified?

(Note to class/collective action nerds: I realize I'm being sloppy by combining "class" and "collective action" terminology here, but I don't know any other way to make myself intelligible.)

Here's the story. A plaintiff sued her employer, alleging that the employer violated the Fair Labor Standards Act by deducting for meal time in which she and her co-workers were allegedly required to work. If true, this would be a no-no. The FLSA allows plaintiffs to bring lawsuits "on behalf of themselves and others similarly situated," which is what this plaintiff sought to do. This is known as a "collective action." (Class actions are a little different and are governed by different rules. That's probably all you need to know about that for now.)

After the plaintiff filed suit but before she got court approval of a collective action, the employer made what is called an "offer of judgment." This essentially means that the employer offered her everything that she could have recovered for the employer's alleged FLSA violations against her (which was $7,500).

Then the employer argued that her lawsuit should be dismissed on the ground that it was now moot, thereby also defeating many claims of all the co-workers who would otherwise have joined her collective action.

Pretty clever, huh? This is why defense lawyers get the big bucks.

A district court in Pennsylvania agreed with the defendant and dismissed the lawsuit, but the U.S. Court of Appeals for the Third Circuit* reversed, saying that this type of tactic means that a defendant could continually "pick off" named plaintiffs one by one and prevent a collective action from ever going anywhere.

*The Third Circuit hears appeals from federal courts in Delaware, New Jersey, and Pennsylvania.

"Well, duh, Your Honors, why do you think we did it?"

Anyway, the Supremes have agreed to hear the case, and oral argument is scheduled for December 3.

"Bay-bee, bay-bee . . . where did our FLSA collective action go?"

When can a benefits plan be reimbursed from a litigation settlement?

I was really hoping my friends at Employee Benefits Unplugged would post on this, and maybe they will later, but in the meantime, I'll do my best here.

An employee was in a devastating non-work-related automobile accident and received disability benefits in the amount of $66,866. He hired a lawyer and went after the driver who was at fault, and from her and various uninsured motorist policies recovered a gross amount of $110,000.

That's why plaintiffs' lawyers get the big bucks. In this case, 40 percent of the $110,000. Without ever going to court.

"Let 'em know YOU MEAN BUSINESS."

So, really, this guy got $66,000 from his litigation settlement. But the benefits plan went after him for reimbursement of the full $66,866 that it had paid out, effectively leaving him in the hole for $866. A federal district court in Pennsylvania decided that the plan was entitled to the full amount (considering the "gross" settlement) and ordered the guy to pay up.

He appealed, and the Third Circuit reversed. According to the court, the Employee Retirement Income Security Act allows a plan to recover "appropriate equitable relief." That means there may be limits on what a plan may recover, the court said. In this case, recovering more than the employee netted would not be "appropriate." Moreover, the employee got his settlement through his own efforts -- the plan did not do anything to help him. So the Third Circuit remanded for the district court to consider what equitable relief for the plan would be "appropriate."

A joint amicus brief in support of the plan has been submitted by the U.S. Chamber of Commerce, the Society for Human Resources Management, the American Benefits Council, and the ERISA Industry Committee.

The U.S. Department of Justice has also submitted an amicus brief. It does not support either side, but according to Bloomberg BNA, argued "that courts retain power under the common-fund doctrine to equitably apportion attorneys' fees, so the Third Circuit's decision should be partially affirmed."

Oral argument is scheduled for November 27.

Well, anyway, here's a link if you care.

The fourth employment case involves which court should hear the claim of discrimination and retaliation claims brought by a federal government employee. I don't think many of my readers are federal employees, so I'll just link to the Eighth Circuit* decision that the SCOTUS will hear for anyone who may be interested. Argument on this one was held this past Tuesday (October 2).

*The Eighth Circuit hears appeals from federal district courts in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota.

Two non-employment cases with big implications for employers

Fisher v. University of Texas. The Supreme Court will hear arguments in Fisher v. University of Texas, in which an undergraduate applicant is challenging the university's admissions standards. The student, who is white and who has since graduated from Louisiana State University, contends that the school's admissions standards violate her rights under the Equal Protection Clause of the U.S. Constitution. A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit* upheld the university's use of race as a factor in selecting applicants for acceptance. The student petitioned for rehearing by the full Fifth Circuit, and nine judges voted against rehearing the case while seven voted in favor of it. Five of those seven joined in a strongly-worded written dissent from the decision not to rehear the case.

*The Fifth Circuit hears appeals from federal courts in Louisiana, Mississippi, and Texas.

The American Bar Association supports the University, as do the NAACP, the Lawyers Committee for Civil Rights Under Law, and the National Women's Law Center, and others.

The plaintiff/student has the support of three members of the U.S. Commission on Civil Rights, the Center for Individual Rights, the Mountain States Legal Foundation, the Pacific Legal Foundation, the Asian American Legal Foundation, and others.

The Equal Employment Advisory Council, an employers' group, has not supported either side but in its amicus brief, according to Bloomberg BNA, has "urged the court not to issue a decision that makes it more difficult for federal contractors to comply with government-mandated affirmative action requirements" or "maintain successful voluntary diversity initiatives."

Oral argument is scheduled for this Tuesday (October 10). The University of Texas School of Law has a great website with links to all of the briefs and decisions in this case, as well as any other related material you might care to read.

Comcast Corp. v. Behrend. This is an antitrust case in which the SCOTUS will decide what type of evidence must be considered in certifying a class action under Rule 23 of the Federal Rules of Civil Procedure. Comcast has challenged a Third Circuit decision affirming certification of a class of current and former cable subscribers.

What does this have to do with employment, you ask? Well, Wal-Mart v. Dukes was a sex discrimination class action brought under Title VII. (The linked article links to the actual decision.) In the summer of 2011, the Supreme Court found that the case could not proceed as a nationwide class action because there wasn't enough "commonality" among the members of the putative class. (The women were claiming discrimination in virtually all aspects of employment, and the class consisted of more than a million members. Meanwhile, Wal-Mart had a corporate policy prohibiting discrimination and delegated employment decisions to the store-management level, which meant that there were hundreds of thousands of decisionmakers.)

Since Dukes, the federal courts have been struggling the parties' burdens of proof in determining whether a putative class has sufficient "commonality" to proceed, what evidence should be considered, and what weight the evidence should be given. The Supreme Court's Comcast decision, scheduled for oral argument on November 5, is expected to provide some welcome clarification.

Photo credits: Clipart.com (girl texting at school), Wikimedia Commons.

DON'T FORGET! If you want my quick explanation of Faragher/Ellerth (not that you need it), read on!

Let's say Susie's boss likes to tell her dirty jokes every day when she comes to work, and his behavior is unwelcome to Susie. Susie has been sexually harassed, right? Probably so.

Let's say that Susie's company has a tough no-harassment policy written in plain English, and a well-deserved reputation for being serious about addressing allegations of harassment without retaliating against the complaining employees. Moreover, Susie's company conducts annual harassment training for management and employees, and all new hires are required to go through the training before they start work.

Susie suffers in silence, despite having been through harassment training and having copies of the no-harassment policy posted all over the workplace. One day, she decides she's had enough, and she quits. Then she files an EEOC charge against the company.

Under Faragher/Ellerth, the company would be strictly liable for the supervisor's harassment unless (1) Susie didn't suffer a "tangible job detriment," like a termination, demotion, pay cut, etc.; and (1) the company could prove that it had measures in place to prevent harassment and address it when it occurred, and (2) Susie unreasonably failed to avail herself of those measures.

In this example, Susie's employer would probably not be liable for the boss's bad behavior because (1) Susie did not suffer a "tangible job detriment"; and (1) the company had a good policy and  training, and took complaints seriously and addressed them, and (2) Susie never complained about her boss's behavior to Human Resources or anyone else. In other words, she unreasonably failed to avail herself of the company's remedial measures. So the company should win this case.

Now, fix me a drink, will ya? We have a lot to talk about.

JANUARY

Ah-choo! Some teenage burglars stole an urn that contained the cremated remains of a man and two great Danes. The teens, obviously not criminal masterminds, snorted the ashes, believing them to be cocaine. 

and . . .

"He*l, they're all disgruntled. I ain't runnin' no da*n daisy farm!" The EEOC reported that for fiscal year 2010 it received a record number of charges, and that retaliation charges surpassed race discrimination charges for the first time in history.

Express yourself. The U.S. Department of Labor issued guidance on its "lactation accommodation" provisions in the Patient Protection and Affordable Care Act (aka "Obamacare") and requested feedback from the public.

GINA: It's more than just a pretty name. The Genetic Information Nondiscrimination Act, which prohibits the acquisition, use or disclosure of "genetic information," which includes family medical history information, took effect.

Nice family. I'd hate to see somet'ing happen to 'em, ya know? The Supreme Court held in Thompson v. North American Stainless that the Title VII anti-retaliation provisions extend to fiances and other significant others of the person who engages in legally protected activity.

FEBRUARY

"Of course, you realize this means war." Uber-disgruntled ex-employee Charlie Sheen declared war on his former employers CBS and Warner Brothers.

and . . .

Another county heard from. (Or is it "country"?) Constangy, Brooks launched the most-excellent Employee Benefits Unplugged, which covers income tax, executive compensation, 401(k) and 403(b) plans, fiduciary compliance, and Department of Labor and Internal Revenue Service audits. All of the attorneys in the firm's Employee Benefits Practice group contribute, but the Chief Blogmistress is Jewell Lim Esposito from the firm's Fairfax, Virginia office.

MARCH

I hate to say "You can't make this stuff up," but you really can't make this stuff up. A New York man who had a court appearance on a DWI charge showed up with an open can of beer and (allegedy) was carrying a bag with four more cans of beer. The man, who had prior DWIs, was jailed with no bail.

and . . . 

At the stroke of a pen, entire nation becomes disabled. The EEOC issued its Final Rule interpreting the Americans with Disabilities Act Amendments Act.

Make sure your "paws" know the laws. The U.S. Supreme Court found in Staub v. Proctor Hospital that an employer could be liable under a "cat's paw theory" for employment decisions that were influenced by a supervisor or other member of management who had an unlawful motive.

APRIL

Study: Members of Congress give each other much less grief than they deserve. A Harvard professor conducted a study that concluded that members of Congress spent 27 percent of their time taunting each other.

and . . .

Life begins at Concepcion. The U.S. Supreme Court found in AT&T v. Concepcion that arbitration of class claims was ok and consistent with the policy underlying the Federal Arbitration Act. The Concepcion decision overruled the interpretation of the California courts that class claims could not be arbitrated.

OFCCP starts pilin' on. The Office of Federal Contract Compliance Programs issued a proposed rule regarding the obligations of federal contractors to recruit and hire veterans. Although the desire to help veterans is laudable, the rule would impose significant compliance burdens on federal contractors.

Nothing could be finah . . . The NLRB filed a complaint against Boeing Corporation for opening a production line in North Charleston, South Carolina, instead of the outskirts of Seattle, Washington, where most of its production was located. The Board alleged that the move to right-to-work South Carolina was the company's unlawful attempt to avoid dealing with the International Association of Machinists, which had carried on a number of strikes at the Washington State facility over the years.

MAY

Cannibal Lecter. A man ran an internet ad seeking someone "who would agree to be killed, cooked, and eaten." A Swiss man answered the ad, thinking it was just a fantasy game, but after talking with the "cannibal" on the phone, determined that he was deadly serious. (Tehe. Get it?) The would-be "meal" called the police, who answered the ad undercover and foiled the banquet.  

and . . .

"I'm a victim of soicumstance!" (Probably true.) Bruce Raynor, President of the Workers United affiliate of the Service Employees International Union and International Executive Vice President of the SEIU, was forced out of both positions after being charged with filing misleading expense reports. Raynor, a labor leader for 38 years and who had been president of UNITE and UNITE HERE for eight years before joining Workers United, contended that he was a victim of SEIU politics.

Kiss our apps! The U.S. Department of Labor launched its wage and hour recordkeeping app (at link, scroll down to "Email your timesheets directly to Big Brother!") for iPhones and iPods, with a promise to develop counterparts for Androids and Blackberrys.

Labor pains. The NLRB sued the state of Arizona over a constitutional amendment that protected the right of employees to have secret ballots in union representation elections. The Board contends that state constitutional amendments like Arizona's are preempted by the NLRB. It has also sued the state of South Dakota for the same reason.

Your money, or your life. The OFCCP proposed changing the scheduling letter that it sends to federal contractors who are being audited. The changes would require contractors to provide detailed, individualized information about employees' compensation, among other proposed changes.

One word. Weinergate.

and . . .

Labor pains, about an hour apart.  The NLRB issued a proposed rule providing for "quickie elections," shortening the time between the filing of a union election petition and the election date, and giving unions immediate access to contact information of employees.

Love those Supremes. On a more positive note, the Supreme Court held in Walmart v. Dukes that a sex discrimination case could not proceed as a class action unless the members of the putative class had so much in common that they could be treated as "one." The Court also held that individual claims for damages had to proceed under rules that allowed the putative class members to "opt out" and that provide more procedural safeguards for defendants.

Don't go away mad, just go away. The Supreme Court upheld an Arizona statute that, among other things, sanctioned employers for knowingly or intentionally employing illegal aliens. The Court, in Chamber of Commerce of the United States v. Whiting, found that the Arizona law was not preempted by the federal Immigration Reform and Control Act.

JULY

They couldn't do it here because it would have violated the ADA. The Crowne Plaza announced the introduction of "snore patrols" in its European and Middle Eastern hotels. The patrollers walk through the hallways and notify guests who snore too loudly, disturbing other guests. The heavy snorers are not kicked out of the hotels but may be moved to rooms in the hotel where they won't bother anybody. (In case you didn't get the ADA reference, loud snoring is often a result of sleep apnea.)

and . . .

Labor pains, coming every 45 minutes now. The U.S. Department of Labor issued a proposed rule on "persuader" reporting rules for attorneys and consultants who advise companies in union elections.

Let's you and him fight. The EEOC got the biggest settlement in its history -- $20MM -- against Verizon. In a case that began under the Bush Administration, the EEOC alleged that Verizon violated the ADA by charging no-fault attendance points without making accommodations to employees whose absences were caused by disabilities. Verizon's attendance policy was part of a collective bargaining agreement. We can't help wishing Verizon had called the EEOC's bluff and gone to court, but its reluctance to do so is certainly understandable.

AUGUST

His sexual harassment training apparently didn't "take." An employee at a fast food restaurant in Georgia was arrested after he handcuffed himself to a teenage co-worker who continually rejected his requests for dates. The girl's co-workers ultimately persuaded him to release her, and she was not hurt.

and . . .

Liebman leaves, poster provision promulgated. NLRB chair Wilma Liebman left the Board as her term expired, but not without a few parting "gifts" for employers, one of which was a requirement that all employers governed by the NLRB post notices informing employees of their right to join unions.

Labor pains, 30 minutes apart now. The NLRB approved a job-based bargaining unit in Specialty Healthcare and Rehabilitation of Mobile, in a decision that is expected to make it dramatically easier for employees in the health care industry as well as other industries to organize. Small bargaining units tend to be more advantageous for unions.

SEPTEMBER

Steak tartare. A man was arrested at a Carlisle, Pennsylvania Walmart for eating some of the store's raw meat merchandise and putting the rest back on the shelves. Walmart had to throw out the meat, of course. Even though the value of the meat was just over $24, he was charged with a felony because he had four prior convictions of retail theft.

and . . .

Thanks, but no thanks. The Internal Revenue Service announced an "independent contractor amnesty" program. Employers who voluntarily reclassify their "independent contractors" as employees get a number of nice tax breaks. Sounds great until you realize that, at the same time, the IRS, the U.S. Department of Labor, and a number of state governments have entered into agreements to share information. And the amnesty applies only to the IRS, not to these other agencies. What do you bet the DOL, et al., will come after some poor unsuspecting employer who enters into one of these agreements, hitting it up for back overtime wages, back benefits, back workers' compensation, and more.

Xtreme EEO. Between the first of August and mid-September, the EEOC filed 21 ADA lawsuits against employers, including a case against Walgreen's over a cashier who was fired for eating a bag of potato chips without paying for it, and a case against Goodyear over a production worker with menstrual problems.

Petulant post protected? Pshaw! In Karl Knauz Motors, Inc., an administrative law judge found that a BMW dealership did not violate the National Labor Relations Act by terminating a salesman who posted on his personal Facebook page photographs and snarky comments about a kid who "test drove" a vehicle into a pond. Although the ALJ found that other Facebook posts by the salesman were protected concerted activity (where he'd criticized the cheap food at a customer event, saying he thought it would adversely affect sales commissions), the ALJ also found that the unprotected "test drive" post was the reason for the termination.

Ain't we something! (Really, you.) Employment & Labor Insider and our brother blog, WorkMatters, were selected for the LexisNexis top 25 employment law blogs. Thanks so much to you, our readers, for your support!

OCTOBER

That's a lotta apps! Research in Motion, the company that manufactures the Blackberry smartphone, apologized for a three-day email outage by offering users $100 in apps. (Psssst -- if you are a Blackberry user and haven't claimed yours yet, you still have until December 31.)

and . . .

Hell hath no fury? The ABA Journal caught some grief after it ran an article about a study showing that legal assistants overwhelmingly preferred working for male attorneys. According to the study, no assistants preferred working for female partners, and less than a handful preferred female associates. The author of the ABA Journal article and the professor who conducted the study were female.

Poster posting postponed. The NLRB delayed the effective date of its notice posting requirement (see August) until January 31, 2012.

NOVEMBER

I totally understand how this woman feels. A Wisconsin woman had her heart set on a 3 a.m. cheeseburger at McDonald's. Unfortunately for her boyfriend, when they got to the drive-thru window, they were informed that the restaurant had stopped serving "dinner" and was now serving breakfast only. They drove away, and, out of her mind with grief, the woman began hitting her boyfriend, biting his arm, and tearing his shirt. When he pulled over to the side of the road, she allegedly got on top of the hood of his car to keep him from leaving. The woman admitted to the police that she was "freaking out" over her inability to get a cheeseburger. She was charged with disorderly conduct. (This story reminds me of the Whammyburger scene in Falling Down, although in that movie, Michael Douglas wanted breakfast. At first.)

and . . .

The incredible shrinking NLRB. With Wilma Liebman's departure (see August), the Board was down to three members, one of whom was Craig Becker, whose recess appointment is due to expire on New Year's Eve, leaving the Board with only two members. Thanks to the Supreme Court's decision in New Process Steel, this means that the two-member Board would be unable to take any action because it must have three members for a quorum. In response, the Board delegated authority to litigate and seek injunctions, as well as authority to certify the results of certain secret ballot elections, to the General Counsel of the NLRB.

What shall it profit a man, if he shall gain 666 days without a lost-time accident, and lose his own soul? A Georgia employer was proud of making it 666 days without a lost-time accident and required its employees to wear badges advertising that fact. Only problem was, one employee believed that wearing the "666" badge would cause him to suffer eternal damnation because it was "the mark of the beast" described in the Book of Revelations. Instead of letting this one guy skip the badge and save his soul, the employer fired him. He filed suit for failure to make a religious accommodation.

Labor pains, 15 minutes apart. The NLRB approved a resolution to go forward with its "quickie election" proposal (see June).

DECEMBER

Tubas are the new Escalades. California, which, as we all know, is way ahead of the rest of us, is experiencing a crime wave of tuba thefts. Piccolos, trumpets, maracas, and pipe organs, among others, remain unmolested. Law enforcement authorities believe that tubas are in demand now because of the banda music popular in Southern California. A new tuba sells for about $5,000, and a used one for about $2,000.

and . . .

Speaking of California . . . A boatload of new employment laws will take effect in the Golden State on New Year's Day 2012, including a ban on most credit checks, a requirement that some employers certify their efforts to prevent human trafficking and slavery, and much, much more! Probably some other states have laws that will take effect on New Year's Day, too.

Since everyone is now disabled, maybe this won't be too big a deal. The OFCCP issued a proposed rule interpreting Section 503 of the Rehabilitation Act of 1973, which would require federal contractors to establish "goals" of a 7 percent disabled workforce. (Hat tip to Constangy's John Doyle, who pointed out how easy this goal will be to attain, now that the ADAAA has rendered virtually 100 percent of the workforce "disabled." LOL, John!)

Boeing case ends. The NLRB withdrew its complaint against Boeing (see April) after the company agreed to open a new production line in Washington State.

Buh-bye. Craig Becker's recess appointment to the NLRB expires this Saturday night.

Labor pains - GET ME TO THAT DELIVERY ROOM STAT! One day before the NLRB issued a final rule on "quickie" elections (see June), the U.S. Chamber of Commerce sued to block the rule. President Obama announced that he would make recess appointments to the NLRB of Sharon Block, the DOL's Deputy Assistant Secretary for Congressional Affairs, and Richard Griffith, General Counsel of the International Union of Operating Engineers, to the Board to restore the quorum (see November), but all 47 Republican senators have gone on record as opposing the appointments. And the NLRB has postponed its posting provision (see August and October) yet again . . . the new deadline is April 30, 2012.

Thank you again! Employment & Labor Insider and our brother blog, WorkMatters, were selected for the ABA Blawg 100. We very much appreciate your support and hope you will stay with us in 2012!

Speaking of which, just wait'll next year . . . Did you know that the world really isn't going to end on 12/21/12? What's with that?

You know the old saying, "If it seems too good to be true, it probably is"? Well, it appears that this may be the case with the new "sweet deal" the Internal Revenue Service is offering to employers who agree to reclassify their "independent contractors" [sic] as "employees" in exchange for some admittedly generous breaks.

The IRS announced this week that it is offering a REALLY, REALLY NICE THING to employers. :-)  If an employer promises that it will treat its independent contractors as employees going forward and enters into an agreement with the IRS, the IRS will assess employment taxes for only the tax year before the agreement was entered and at a reduced rate, with no penalties or interest, and no audits. The program is aimed at small employers, but all employers are welcome. Jewell Lim Esposito at our sister blog, Employee Benefits Unplugged, has more details about the IRS deal and thinks it's great from a pure tax standpoint.

I agree. But, as Jewell also notes, the news release says nothing about amnesty on all liability resulting from a misclassification.

I must admit that I wondered why this Administration, which is usually aggressive toward employers, is all of a sudden being so sweet and lovable?

(I am such a cynic.)

It then occurred to me: But, of course! This is to allow that other agency, the U.S. Department of Labor, which presumably will not be a party to the IRS/employer agreement, to come in and sue the pants off the employer for back benefits and wage-hour violations. Because, you see, misclassified "independent contractors" don't get benefits or overtime, and they may not even be getting the minimum wage once their "fee" is divided by hours worked.

My paranoia was really raging now, and I remembered another news item that came out at the beginning of this week: Secretary of Labor Hilda L. Solis announced a "cooperative" initiative in which the IRS, the DOL, and 11 state governments* are going to start working together to fight misclassification of employees as independent contractors. In addition, the Office of Federal Contract Compliance Programs (the affirmative action guys) and the Occupational Safety and Health Administration are among the agencies who will be receiving and sharing information.

*The 11 states who entered into the memorandum of understanding or have agreed to do so are Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.

(Hat tip to Bureau of National Affairs for both of these news items.)

So! Aha! Putting it all together, here's what the deal really appears to be: A naive (probably small but could be large) employer who has some misclassified folks will read about the IRS deal and think, "What have I got to lose? I'd be a fool to turn this down!" So he signs the agreement with the IRS.

Bam! Six months later, the DOL -- who has received from the IRS the list of unsuspecting employers who entered into this agreement admitting that they were doing it wrong -- comes out for an investigation and hits the employer for overtime and possibly minimum wage violations. Then, the employer's state government -- armed with the same information -- comes out and clobbers the employer for workers' compensation premiums and benefits, and possibly other benefits that the state requires employers to offer to employees. Bam! Bam!

But, wait! There's more! The newly classified employees might have claims for other employment benefits as well, as Microsoft learned the hard way. Bam! Bam! Bam! Then, OSHA and the OFCCP and who knows who else can come in and kick the employer a few more times while he's down. Bam! Bam! Bam! Bam! Bam! (etc.)

THE MORAL: If you have "independent contractors" who are misclassified, by all means get that fixed as quickly as you can. As long as the workers are misclassified, you are potentially liable for back taxes, including FICA, and penalties, back benefits, and back wages. In fact, you can even be liable for severance pay in the event that the faux independent contractor was let go under circumstances that would have entitled her to severance if she'd been an employee. (I actually had this happen to a client once.)

To repeat, if you're doing it wrong, stop it now. But don't be too eager to enter into this deal with the IRS, and definitely do not enter it without consulting with your attorney. Situations vary, and the IRS deal may be good for some, but you also may be much better off taking your chances with an IRS audit (which may or may not ever happen). Meanwhile, you will not be erecting a large neon sign with flashing lights saying, "Here I am, Hilda Solis and everybody else -- I'm guilty -- come and get me!"

Just call me Jim Garrison.

For the most part, these requirements – called “Plan/Prevent/Protect” – will not be limited to federal contractors but, rather, will apply to all employers covered by the relevant laws.

The proposed changes are dramatic, and shift from what the DOL calls “catch me if you can” (in other words, employer is presumed compliant unless the government is given reason to believe otherwise) to “Plan/Prevent/Protect” (in other words, employer is presumed guilty unless it can prove otherwise). “[E]mployers and other regulated entities will be asked to assemble plans, create processes, and designate people charged with achieving compliance,” says the DOL, and “compliance will be non-negotiable . . ..” (Emphasis added.)

The “Plan” component will require employers to enlist employees in “identifying and remediating risks of legal violations and other risks to workers.” The plans must be made available to the workers “so they can fully understand them and help to monitor their implementation.”

The “Prevent” component will require employers to “thoroughly and completely implement the plan in a manner that prevents legal violations. . . . The employer . . . cannot draft a plan and then put it on a shelf. The plan must be fully implemented . . ..”

The “Protect” component will require employers to ensure “that the plan’s objectives are met on a regular basis. Just any plan will not do. The plan must actually protect workers from violations of their workplace rights.”

In the context of compliance with the Fair Labor Standards Act, Plan/Prevent/Protect will require that employers provide information to employees about how their pay is calculated, and prepare a “classification analysis” with respect to any job that it treats as FLSA-exempt. Of course, the analysis will have to be made available to the employees and the government. The DOL will issue proposed regulations on Plan/Prevent/Protect at some unspecified point in the future.