April 15, 2014

Unpaid Interns Now Protected by New York City Human Rights Law

In October 2013, the United States District Court for the Southern District of New York dismissed the Plaintiff's claim of sexual harassment in Wang v. Phoenix Satellite Television, Inc. The court found that since as an unpaid intern Ms. Wang was not paid by the defendant, she was therefore not an employee for purposes of the New York City Human Rights Law (NYCHRL) and thus not able to assert an actionable hostile work environment claim under the NYCHRL.

The District Judge's legal reasoning about the case might have been sound. However, the idea that unpaid interns, generally the least powerful people in their organizations, have no recourse in cases of discrimination or exploitation in virtue of being unpaid seems like exactly the kind of situation laws like the NYCHRL aim to prevent. Seeing that the existing law offered no recourse for people like Ms. Wang, the case became a catalyst for the New York City Council (NYCC) to change the law so it would encompass cases like hers by protecting unpaid interns from workplace discrimination and harassment. So on March 26, 2014, after defining "intern" broadly as "an individual who performs work for an employer on a temporary basis whose work: (a) provides training or supplements training given in an educational environment such that the employability of the individual performing the work may be enhanced; (b) provides experience for the benefit of the individual performing the work; and (c) is performed under the close supervision of existing staff. The term shall include such individuals without regard to whether the employer pays them a salary or wage," the NYCC unanimously voted to add the following wonderfully succinct passage to the NYCHRL: "The provisions of this chapter (of the administrative code of the City of New York) relating to employees shall apply to interns."

The NYCHRL now explicitly affords the same protections to interns and paid employees, protections from discrimination based on their age, race, national origin, gender, disability, or other protected characteristics. Companies will now also be required to make reasonable accommodations in certain circumstances, and to refrain from retaliatory responses to complaints by interns about discrimination.

Lawyers and law firms have now begun to warn companies that they should revisit their policies on discrimination and harassment, distribute such information about company policies to interns as well as employees, take steps to develop a business culture that reassures all employees that discrimination and harassment are not tolerated, and to verify that current interns are not subject to harassment. The Council members who voted for this change the NYCHRL will surely be gratified to learn that the need to comply with the new law is motivating companies to make such changes in an effort to comply and avoid future liability.

Before New York, Washington D.C., Oregon, and other state and local governments had enacted similar new laws. Another possible fortuitous consequence of the new law in New York is that it could add momentum to the movement of other state and local governments in the same direction.

If you are an unpaid intern and you believe your rights have been violated in the workplace, please contact The Harman Firm, P.C.

April 15, 2014

Whole Foods Market California, Inc. Accused of Violating Fair Credit Reporting Act On Background Checks

On February 7, 2014, a class action complaint was filed in the Northern District of California in the case Esayas Gezahegne v. Whole Foods Market California, Inc. In the complaint Plaintiffs allege that the company violated the Fair Credit Reporting Act (FCRA) in its conduct background searches on hundreds of job candidates who filled out online job applications on the company's website. As part of this first stage in each candidate's application process, s/he was required to "electronically sign" an online form that reads, in most relevant part:
"I hereby authorize Whole Foods Market to thoroughly investigate my references, work record, education and other matters related to my suitability for employment and, further, authorize the references I have listed to disclose to the company any and all letters, reports, and other information related to my work records, without giving me prior notice of such disclosure. In addition, I hereby release the company, my former employers and all other persons, corporations, partnerships and associations from any and all claims, demands or liabilities arising out of or in any way related to such investigation or disclosure."

It is generally legal for employers to obtain credit reports and criminal records for the purpose of conducting background checks on potential employees, so long as they obtain consent and properly notify candidates of any adverse action taken by the employer on the basis of these data. The key legal claim in the complaint, the cornerstone of the plaintiffs' argument in the case, is that the inclusion of a liability waiver with the initial consent form made that form facially invalid. The consent form therefore did not actually entitle Whole Foods to undertake its investigation of Gezahegne or other Class members, defined as "all individuals who executed online authorization forms permitting Defendant to obtain a consumer report as part of an employment applicationat any time from February 7, 2009 until the present..." Thus, Plaintiffs argue, these investigations violated their rights under the FCRA. Plaintiffs further claim that the company committed a willful violation of the FCRA by treating these invalid forms as authorizing them to collect credit and other records, since the law clearly states that an employer must disclose its intention to procure a consumer report for purposes of researching a job candidate "in a document that consists solely of the disclosure." This is perhaps a fine legal point, but Plaintiffs cite several cases to support their argument that "an employer violates the FCRA by including a liability release in a disclosure document."

Plaintiffs argue that Plaintiffs and each member of the Class--that is, each person whose consumer reports were collected by Whole Foods Market California on the basis of the invalid liability release--is entitled to $1000 for the Defendant's willful violation of the FCRA, plus "an award of punitive damages to Plaintiff and the members of the Class in an amount to be determined by the Court," plus payment of attorneys' fees.

If you believe your fights under the Fair Credit Reporting Act have been violated by a prospective employer, please contact The Harman Firm, P.C.

April 13, 2014

From the Bully Pulpit on Equal Pay Day

Each year, National Equal Pay Day marks the day by which an average working woman would have earned the amount of money earned by an average working man in the previous year. This year the day fell on Tuesday, April 8 and came with more fanfare than usual. President Barack Obama issued a Presidential Proclamation acknowledging "the injustice of wage inequality" and calling on Congress to pass the Paycheck Fairness Act.

The PFA fell six votes short of passage in the U.S. Senate, but congressional Democrats and the President made clear that they think the time is right, at least politically, to push measures designed to reduce the pay gap between men and women. On National Equal Pay Day the President signed an Executive Order making it illegal for federal contractors to retaliate against employees for discussing their unequal pay. The White House described this policy as "a critical tool to encourage pay transparency," Considering that the large majority of employers have policies that workers are not permitted to discuss their compensation, and that employment is generally "at will," legal protection for those who raise the issue of pay equity is a crucial step.

Along these same lines, the President also signed a memorandum instructing Labor Secretary Tom Perez to create new regulations requiring federal contractors to report salary data to the government, including breakdowns of pay rates by sex and race. In addition to the direct effect of further increasing transparency among federal contractors regarding disparate pay, the White House also expressed its hope that this new policy would have the indirect effect of encouraging private sector employers to submit such data voluntarily.

One of the President's well-known accomplishments on this issue in past years was his successful promotion of the Lilly Ledbetter Fair Pay Act, which was passed by Congress in 2009. The legislation was in response to a decision by the U.S. Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), in which Justice Alito, writing for the five-justice majority, held that the Plaintiff was not legally entitled to sue under Title VII of the Civil Rights Act of 1964 over race or gender pay discrimination, because her claims were based on decisions made by the employer 180 days ago or more. The justices reasoned that each paycheck received did not constitute a discrete discriminatory act, implying that the only action which could have been found unlawful was the employer's original decision to pay her less than her male peers; however, that original decision was outside the 180-day statute of limitations for a claim of gender discrimination under Title VII of the Civil Rights Act of 1964. The central provision of the Lilly Ledbetter Fair Pay Act was to effectively redefine define each act of paying a woman less than her male counterparts as a discrete discriminatory act, so that the 180-day statute of limitations resets with each new paycheck, effectively extending the length of time during which an employee can pursue a claim of pay discrimination under Title VII.

In our economic system, money is supposed to be a reward for ingenuity and hard work. We hear over and over that we cannot enact policies which decrease the profitability of companies, because it is the maximization of profit that provides the incentive for business owners to have the initiative, invention, sacrifice and investment on which the health of our economic system depends. Since these are truisms for most of us, why, the President asked, would we allow ourselves to waste the labor and talents of women by offering them less financial reward for their initiative, sacrifice, innovation and investment? Thus, he suggested, while there are reasons to promote pay equity having to do with justice and politics, there are also economic reasons.

If you believe your employer has discriminated against you based upon your gender, please contact The Harman Firm P.C.

April 9, 2014

NLRB Finds That Employee Was Wrongfully Terminated After Management Interrogated Him About Union Affiliation

On January 16, 2014, a National Labor Relations Board panel issued an Order affirming and strengthening the Decision of Administrative Law Judge Joel P. Biblowitz in the case of K-Air Corporation and Sheet Metal Workers Local #67. Judge Biblowitz had found that Kyle Villarreal, owner and President of K-Air Corporation, unlawfully interrogated employee John Vega about his past union membership and then terminated him because of it. Expanding on the Judge's ruling, the NLRB panel added that Respondent Villarreal also unlawfully threatened employees who were union members or whom he had overheard discussing unions when he told them that he "had no interest in having" and "did not want" union employees.

"Credibility," the NLRB panel writes, "obviously plays an important part in this case." The panel noted Villarreal's general animus toward union activity, Vega's relative forthrightness in his testimony, the suspicious timing of his termination 1 day after Villarreal learned of his former union affiliation, and "Villarreal's shifting rationales for firing Vega--initially, that he could not afford to retain Vega (even as he hired two new employees the day after Vega's discharge), and later that Vega was incompetent." (Villarreal's charge of incompetence was based on a repair The Court and panel concluded that but for Villarreal's discoveries about Vega's past union affiliation, "there was no other credible testimony to establish that Vega would have been discharged absent his protected conduct," and that K-Air therefore "violated Section 8(a)(1)(3) of the (National Labor Relations) Act by discharging him..."

As often happens in cases like this one, Villarreal argued that Vega was not protected by the NLRA because he was not his employee but an independent contractor. The panel pointed to several reasons for its rejection of this claim: there had been no discussion at the time of Vega's hiring about his being hired as an independent contractor, there was no contract or agreement stating this, discussion of his training for the job and his starting wage implied that he was starting as an employee, Vega did not operate his own business or carry his own insurance, and he filled out tax documents and time sheets like a regular employee. The panel concluded that the Respondent Villarreal had "presented no evidence that Vega was an independent contractor."

In the end, the NLRB panel ordered Respondent Villarreal to offer Mr. Vega reinstatement to his position without prejudice , to make him whole for any loss of earnings and other benefits as a result of the discrimination against him, to cease and desist from activities such as "interfering with, restraining, or coercing its employees in the exercise of their rights as guaranteed them by Section 7 of the Act," and to post a notice to his employees informing them of the outcome of this case as well as their rights under the NLRA to form, join, or assist a union without being discharged or otherwise discriminated against.

If you are an employee and you believe your rights have been violated or if you believe you have a claim under the NLRA, please contact The Harman Firm P.C.

April 7, 2014

Large Distributor of Baked Goods Settles Worker Misclassification Suit for Over $900,000.00

On March 5, 2014, the parties in a Pennsylvania class action lawsuit against Bimbo Bakeries USA filed a Stipulated Settlement granting $12,500.00 to each of 5 named Plaintiffs, $900.00 to each of 272 current distributors, and $450.00 to each of 414 former distributors, along with $375,000.00 for attorneys' fees and $22,000.00 to the settlement administrator. The Plaintiffs argued that the company knowingly misclassified employees as "independent contractors" or "independent operators," since Defendant was "fully aware that the extent of direction and control over the manner and means by which Plaintiffs performed their work for Defendant was inconsistent with the legal definition of "independent contractors."

According to the Plaintiffs, the company's reasons for misclassifying its drivers are obvious and typical. First, a condition of class members' employment at Bimbo was that they purchase "distribution rights" and sign the company's "Distribution Agreement," granting control of most business decisions to the company. Plaintiffs were also required to purchase and agree to maintain their own delivery trucks, agree to have various business expenses deducted from their compensation by the company, and absorb the cost of the company's unilateral decisions about product pricing and distribution rules. In effect, Plaintiffs alleged, the misclassification scheme allowed Bimbo Bakeries to avoid its biggest operating expenses by passing them off to employees. By misclassifying employees the company enabled itself to avoid various legal obligations of employers under the Fair Labor Standards Act (FLSA) and the Pennsylvania Wage Collection and Payment Law (PMWA). For example, independent contractors need not be provided lunch breaks or holiday pay, they need not be paid the federal minumum wage, and they need not receive time and a half for hours worked in excess of forty. (Plaintiffs argue that the company did in fact, "either regularly or from time to time," pay less than the minumum wage, or require employees to work uncompensated overtime.) Employers are prohibited from making unauthorized deductions from employees' wages, but Bimbo Bakeries often made such deductions "including, but not limited to, deductions for servicing Plaintiffs' routes without Plaintiffs' permission, deductions for Defendant's operating expenses, deductions for products purchased but not sold or accepted for return, and penalties charged by retail outlets..." By classifying workers as "independent contractors," Bilbo also avoided the burdens of making Federal Insurance Compensation Act (FICA) contributions on employees' behalf, maintaining for unemployment insurance, and paying any state and federal employment taxes.

One thing that is noticeably missing from the proposed settlement agreement is any change to the company's ability to classify its delivery drivers as independent contractors or to require that they enter into the distributions agreements that the Plaintiffs criticize in their complaint. Bimbo Bakeries USA seems poised to go on doing business the same way as before. It remains to be seen whether other, similar legal action will be taken against them in the future.

If you are an employee and you believe your rights have been breached under the FLSA or you have been misclassified, please contact The Harman Firm P.C.

April 7, 2014

Hawaii Federal District Court Finds that Staffing Agency Global Horizons Singled Out Thai Workers for Disparate Treatment

On March 19, 2014, the federal district Court in Hawaii granted the Plaintiffs' motion for partial summary judgment in EEOC v. Global Horizons, Inc. Global Horizons is a staffing agency based in Los Angeles, CA, which supplied workers to several defendants named in the motion, all Hawaiian agricultural firms: Maui Pineapple, Del Monte Fresh Produce, Mac Farms, and Captain Cook Coffee Company. All of these companies are singled out in Judge Kobayashi's decisive and damning Order as participants in a pattern or practice of recruiting Thai workers specifically, charging them excessive recruitment fees to make them indebted and compliant; physically assaulting them; verbally harassing them; forcing them to work harder than members of other groups; and threatening them with demotion or deportation in retaliation for their complaints about poor working conditions. The Court acknowledged the many illegal employment practices of managers at these companies, and ultimately concluded that "as a matter of law, Global Horizons is vicariously liable for the harassment" to which they subjected their Thai recruits.

The Court concluded that Global Horizons specifically sought out Thai workers to fulfill farm labor contracts based on their stereotype of Thai nationals as "easier to exploit," and less likely to leave the job, than workers from other national origins and/or races. Several managers from Global Horizons's client companies explicitly acknowledged these practices and the stereotypes on which they were based, leading the Court to conclude that there "is no genuine issue of material fact as to the motivation behind Global Horizons's harassment of the Claimants." Thai workers, more than those of any other nationality, were systematically subjected to conditions such as denial of food, excessive discipline, and denial of medical care. "The evidence clearly establishes that Global Horizons's standard operating procedure was to treat the Thai workers less favorably than the non-Thai workers."

As the Court notes in several places, "Global Horizons has not identified any genuine issue of material fact as to any substantive defense to the EEOC's pattern and practice claim of hostile work environment." The EEOC had served three sets of requests for admissions (RFA) on Global Horizons, but the Court noted "that Global Horizons failed to respond either to the EEOC's Merits Motions or the EEOC's concise statements of fact in support of the Merits Motions...Thus, this Court HEREBY DEEMS ADMITTED all of the statements of fact set forth in the EEOC's Merits CSOFs." In short, the Court concluded that the EEOC's accusations regarding the abusive employment practices of Global Horizons and its clients were either proven or uncontested, leading the Court to decide in favor of the EEOC on its hostile work environment claims with no need for further legal motions or trial.

While Global Horizons failed to respond to these parts of the Complaint, the EEOC had included several references to managers from the Defendants' companies who were on record acknowledging that they "selectively recruited impoverished, uneducated Thai workers," that their reason for doing this was their belief that those workers would be less likely to complain or try to escape, and that their selective mistreatment of Thai workers was "sufficiently severe or pervasive to alter the conditions of the Claimants' employment."

If you are an employee and you believe you have been discriminated against based upon your nationality, please contact The Harman Firm P.C.

March 31, 2014

College Football Players are Employees under the NLRA and May Form a Union

On March 26, 2014, an administrative judge at the National Labor Relations Board ("NLRB") rendered its decision in the Northwestern University v College Athletes Players Association (CAPA) case. The NLRB ruled in favor of the Petitioners finding that players receiving scholarships from the University (the employer) are employees under section 2(3) of the National Labor Relations Act ("NLRA") and thus they are eligible to form a union.

In the facts of this case, the Petitioners were football players who received grant-in-aid scholarships from Northwestern University. The Petitioners contended that they were employees under the NLRA. Northwestern University is a private, non-profit, non-sectarian, coeducational teaching university settled in Illinois. The University is part of an intercollegiate athletic program and a member of the National Collegiate Athletic Association ("NCAA"), which is responsible for formulating and enforcing rules governing intercollegiate sports for participating colleges. The Employer's football team is comprised of about 112 players of which there are 85 players who received a scholarships totaling $61,000 each academic year, that pays for their tuition, fees, room, board, and books. During the first two years of college, the players were required to live in dorms and were given meal cards. After the first two years, the players could elect to live off campus and would receive a monthly stipend between $1,200 and $1,600 to cover their living expenses. The NCAA rules prohibit employers from proving the players with additional funds. However, the employer may give its players additional funds through the "student assistance fund", which was set up to cover expenses such as "health insurance, dress clothes required to be worn by the team while traveling to games, the cost of traveling home for a family member's funeral, and fees for graduate school admittance tests and tutoring." The players did not have federal taxes (such as the federal insurance contribution tax) withheld from the stipend they received and did not receive a W-2 tax form from their employer. The University offered four-year scholarships to its players. Both parties were required to sign a contract called the "tender" laying out the conditions of the offer and the circumstances that could lead to the cancellation of the scholarship (such as: violation of the University's code of conduct or a player voluntarily leaving the team).

In deciding whether players could be considered employees under the NLRA, the administrative judge looked at the common law definition which defines an employee as "a person who performs services for another under a contract of hire, subject to the other's control or right of control, and in return for payment." The board concluded that the "scholarship is clearly tied to the player's performance of athletic services as evidenced by the fact that scholarships can be immediately canceled if the player voluntarily withdraws from the team or abuses team rules" and that the tender "serves as an employment contract." The board found evidence that the coaches controlled almost every aspect of the players' lives. Coaches impose on players a very strict schedule regarding trainings an their football duties. They also control the players' private lives "by virtue of the fact that there are many rules that they must follow under threat of discipline and/or the loss of a scholarship. Therefore the NLRB concluded that grant-in-aid scholarship football players: i) perform services for the benefit of the employer for which they receive compensation; and ii) are subject to the employer's control in the performance of their duties as football players. This NLRB decision may be appealed.

If you are an employee and you believe your rights under the NLRA have been violated, please contact the Harman Firm P.C.


March 28, 2014

Obama Wants to Expand Overtime Protections under the FLSA

On March 13, 2014, President Obama issued a presidential memorandum addressing overtime pay protections to help ensure that all workers are paid a fair wage for a hard day's work. This memorandum is also aimed to making the current rules simpler for employers and workers.

The incentive behind the President's initiative is to improve the rules that established the 40-hour workweek. Those rules eroded over the years - leaving millions of salaried workers without protections of overtime or sometimes event the minimum wage. The existing rules and laws regarding overtime and minimum wage are set forth in the Fair Labor Standards Act ("FLSA"), which protects over 135 million workers in more than 7.3 million workplaces nationwide. The FLSA established minimum wage, overtime pay, recordkeeping and youth employment standards affecting employees working in private companies, federal state agencies or local governments with fifteen or more employees. However, the FLSA contains a number of exceptions for exempt employees - who, as a consequence, are not allowed to overtime pay. Nonexempt employees covered under the FLSA are entitled to a minimum wage of $7.25 per hour. However, many states also have minimum wage laws and employees are entitled to the higher minimum wage if state and federal minimum wage are different. Under the FLSA, nonexempt employees who worked in excess of 40 hours per workweek must receive overtime pay at a rate of one and one-half times the regular rate of pay and there is no limit on the number of hours employees 16 years or older may work in any workweek. It should be noted that the FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days. Employees who are paid hourly or who earn below a certain salary are generally protected under the FLSA for overtime pay. Exempt employees are usually employees who perform executive, managerial or administrative duties. For instance, store managers and supervisors are exempt from overtime even though they usually work more than 40 hours in a given week.

President Obama wants to make the FLSA fairer and reach more employees, because currently "only 12 percent of salaried workers fall below the threshold that would guarantee them overtime and minimum wage protections (compared with 18 percent in 2004 and 65 percent in 1975)" and "[m]any of the remaining 88 percent of salaried workers are ineligible for these protections because they fall within the white collar exemptions."

The presidential memorandum instructs the Secretary of Labor to update regulations regarding who qualifies for overtime protection and suggests that the regulations could be revised to: i) update existing protections in keeping with the intention of the FLSA; ii) address the changing nature of the American workplace; and iii) simplify the overtime rules to make them easier for both workers and businesses to understand and apply.

If you are an employee and you believe your employer breached the FLSA and your entitled to overtime pay, please contact the Harman Firm P.C.

March 24, 2014

New Affirmative Action Requirements and Non-discrimination Obligations for Federal Contractors and Subcontractors Regarding Veterans and Persons with Disabilities

On September 24, 2013, the Office of Federal Contract Compliance Programs (OFCCP) of the U.S. Department of Labor (DOL) established final rules defining Section 503 of the Rehabilitation Act of 1973 ("RA") and the Jobs for Veterans Act of 2002, which amended the Vietnam Veterans' Readjustment Assistance Act of 1974 ("VEVRAA"). The RA and VEVRAA prohibit employers from discriminating against veterans and disabled persons and require federal contractors to pursue affirmative steps to hire individuals belonging to these categories. The final rules, codified at 41 C.F.R. §§60-300 and 60-741, went into effect on March 24, 2014 and establish affirmative action and non-discrimination requirements for government contractors and subcontractors. Employers are expected to take necessary steps within the next six months to comply with their new obligations.

The new obligations established by the DOL include non-binding hiring benchmarks for veterans and disabled persons. Federal contractors are now required to take necessary steps to meet a benchmark of 7% in hiring individuals with disabilities, and to set an annual goal for hiring veterans that matches the national percentage of veterans in the labor force, which is currently at 8%, or calculate its veteran benchmark according to state-specific data published by he OFCCP and the employer's own experience with application, hiring and recruiting. Federal contractors with 100 or fewer employees may be in compliance with these new rules if they meet the benchmark across their entire workforce instead of each job group. However, an employer may not be penalized solely based on their failure to meet these benchmarks or if they have a legitimate reason for not being able to meet these requirements. For instance, employers located in areas with a very low veteran population and contractors who need specialized type of training that is not available in the veteran community may be able to justify lower affirmative action goals. Employers that cannot meet the benchmarks established by these new rules are required to maintain a three-year record of the reasons for setting lower goals.

Aside from these hiring benchmarks, the new rules require federal contractors and subcontractors to invite individuals to self-identify as veterans or disabled during the application process, the offer period and post-hiring period, during the first year of employment and at least once every five years. Contractors must use specific language while inviting individuals to identify themselves as disabled, and they may follow the DOL's recommended language for identification of veterans. Additionally, contractors must regularly inform employees that they may update their disability status at any time. Furthermore, these employers must keep record of this information, maintain these disclosures confidential and provide records to the OFCCP upon request.

Additionally, contractors are required to review the prior year's efforts to hire veterans and disabled individuals and to make necessary changes to their affirmative action programs to meet the required benchmarks. The new rules offer a list of actions that contractors can adopt to improve their recruitment of veterans and persons with disabilities. In fact, the requirement to maintain records is intended to encourage businesses to evaluate whether veterans or individuals with disabilities require accommodations, and to allow employers to take necessary actions to provide necessary accommodations.

To ensure that these rules also apply to subcontractors, federal contractors are required to include equal opportunity provisions in their subcontracts. Employers are encouraged to update their affirmative action program policy statements to reflect these new requirements, add references to the Code of Federal Regulations to subcontract templates, and establish an annual review process of the effectiveness of their affirmative action programs. Contractors that already have an established affirmative action plan may maintain their plan until the end of the year. Contractors failing to take steps to comply with these requirements may face penalties or have their federal contracts revoked.

If you are a veteran or a person with a disability and believe that you have been a victim of employment discrimination, please contact The Harman Firm, P.C.

March 24, 2014

Agreement in Principle to Settle United States v. City of New York for $98 million

On March 18, 2014, the Department of Justice announced that it has reached an Agreement in Principle for a $98 million settlement in the 2007 case United States v. City of New York, in which the Plaintiff argued that the New York City Fire Department's (FDNY) has discriminated against African-American and Hispanic candidates. The Plaintiff and Plaintiff-Intervenors alleged that two of the examinations that had been used by the FDNY to screen entry-level firefighter candidates disproportionately excluded African-American and Hispanic candidates. The lawsuit arose from a long history of research, discussion, litigation, activism, and policy action aimed at addressing the extreme underrepresentation of minorities in the ranks of the FDNY, which is undisputed.

In July 2009 Judge Nicholas G. Garaufis of the Eastern District of New York acknowledged the pride that New York City takes in its firefighters, and in particular of their inspiring response to the events of September 11, 2001, but then went on to agree with the Plaintiffs that the FDNY's hiring policies were discriminatory and illegal. Then in May 2013 the Second Circuit Court of Appeals effectively upheld the ruling, ordering only a few revisions including, most notably, the replacement of references to "intentional discrimination" with alternative language such as "unlawful disparate treatment." With the Appeals Court's ruling the District Court moved into its second, "remedial" phase, starting the negotiations that led to this landmark agreement to settle the case for $98 million.

The fundamental question on which the Appeals Court agreed with Judge Garaufis is whether a hiring practice that "facially neutral," subjecting all individuals to the same test, can be discriminatory insofar as it consistently produces disparate results for majority versus protected minority candidates. The Court ruled that, whether intentional or not, the net effect of the FDNY's hiring policy was to put African-American and Hispanic candidates at a disadvantage relative to others. The Court further rejected the City's "business-necessity" defense, concluding that the Defendant had not shown that the exams in question were appropriate tests of a candidate's ability to do what the job requires and that alternative means of screening entry-level candidates were available which would not have the same discriminatory effect. In fact, the Court ruled that that the City of New York had "failed to raise a triable issue that this disparate impact was the result of business necessity." The Court therefore concluded that the FDNY's use of the exams as part of its hiring process was therefore discriminatory and unlawful.

The District Court has also ordered several remedial changes to the FDNY's hiring policies. The FDNY was ordered i) to replace its discriminatory exams with alternative testing procedures developed under the Court's supervision, ii) to identify 293 individuals who are currently eligible and currently qualified to be entry-level firefighters, iii) to offer priority hiring at a rate of two black priority hires and one Hispanic priority hire out of every five hires, and iv) retroactive seniority for candidates whose hiring was delayed as a result of discriminatory hiring policies.

If you believe you have been discriminated against by an employer, please contact the Harman Firm P.C.

March 21, 2014

Mayor De Blasio Signs Paid Sick Leave Bill into Law to Benefit Half a Million More New Yorkers

On March 20, 2014, New york City Mayor, Bill De Blasio, signed his first bill into law - extending the right to paid sick leave to half a million more New Yorkers. Under New York City's Earned Sick Time Act (Paid Sick Leave Law), certain employers must give their employees sick leave, which they can use for the care and treatment of themselves or a family member. The new law will require all businesses in New York with 5 or more employees to provide paid time off for its employees who are hired to work more than 80 hours a calendar year in New York City. Employers with less than 5 employees must provide unpaid sick leave. Employers who have one or more domestic workers who have been employed at least one year and who work more than 80 hours a calendar year must provide paid sick leave. The law will enter into force on April 1, but businesses with fewer than 19 employees will be allowed a six-month grace period before they are subject to fines "[b]ecause we recognize that there's a period of time for employers to get to know the law, and work with the department to understand it" as stated by Consumer Affairs Deputy Commissioner Marla Tepper. The previous legislation only applied to companies with 15 or more workers.

As stated in the New York City press release, the paid sick leave law builds upon and expands on previous legislation by:

• "Eliminating the phase-in, which would have delayed coverage to workers at businesses between 15 and 20 workers. This means 140,000 people who would have waited until mid-2015 under the existing bill will have coverage this April. Eighty-five thousand of those workers do not currently have a single paid sick day.
• Removing exemptions for the manufacturing sector, extending paid sick leave coverage to 76,000 workers, half of whom don't currently have any paid sick days.
• Adding grandparents, grandchildren and siblings to the definition of family members workers can legally care for using paid sick time.
• Eliminating the economic trigger that could have delayed implementation of paid sick leave based on certain economic benchmarks."

Mayor De Blasio, who signed the bill at the Williamsburg, Brooklyn-based Steve's Ice Cream shop, stated: "[f]rom Day One of this administration, we've made it our mission to lift up working families and raise the wage and benefit floor for all New Yorkers. This law is the first of many steps we are taking to fundamentally address inequality in this city, and make this a city where everyone rises together. Today is truly a historic day that takes us one step closer toward that goal."

If you are an employee and you believe your employer wrongfully denied you paid sick leave, please contact the Harman Firm P.C.

March 19, 2014

The EEOC and the FTC Issue Joint Guidance Regarding Employer's Background Checks on Employees

On March 10, 2014, the Federal Trade Commission (« FTC ») and U.S. Equal Employment Opportunity Commission (« EEOC ») issued joint guidance on how the anti-discrimination laws and the Fair Credit Reporting Act ("FCRA") apply to employers performing background checks on employees or applicants when making the decision to hire, retain, promote or reassign them. The joint guidance comprises two documents, one directed at employers and the other directed at employees and applicants, and aims to provide high-level practical assistance and answers to commonly asked questions that arise during the application process.

Background checks can be used to find out about different information regarding the employee's or applicant's works history, education, criminal record, financial history, medical history or use of social media. When making those background checks, the employer should keep in my mind that it should be done within the limits of the law and that he should comply with federal laws protecting employees and applicants against discrimination, including discrimination based on race, color, national origin, sex, religion, disability, genetic information (such as medical history) and age (protecting employees or applicants over 40).

The EEOC recommends to treat everyone equally by applying the same standard to every employee or applicant because it is illegal to check and employee or an applicant background if it is based on their race, color, national origin, sex, religion, disability, genetic information (such as medical history) and age (protecting employees or applicants over 40).

According to the FTC, when obtaining information regarding an employee's or applicant's background information from another company in the business of compiling such information, there are additional procedures required by the FCRA: telling the employee or applicant that such information might be used for decisions about his employment; telling the employee/applicant the scope of the investigation and getting the employee's or applicants written permission.

The joint guidance also contains information regarding how background check information should be disposed of. The EEOC requires any background information on applicants or employees to be preserved for one year after the records were made. The EEOC extends this time period to two years for educational institutions and for state and local governments. The Department of Labor extends it to two years for federal contractors that have at least 150 employees and a government contract of at least $150,000.) However, in case of litigation started by the applicant or employee and relating to a discrimination claim, employers must maintain the records until the case is concluded.

According to the FTC, after an employer satisfied all the legal requirements regarding preservation of background checks records, an employer is allowed to dispose of any background report, as long as it's done in a secured manner. Physical documents may be pulverized, shredded or burnt. Electronic documents canshould be disposed of so that they can't be read or reconstructed.

If you are an employee and you believe your rights regarding background check have been violated by your employer, please contact the Harman Firm P.C.

March 17, 2014

Iowa Supreme Court Says Federal Arbitration Act Does Not Require Plaintiff to Submit to Arbitration to Sue

On February 28, 2014, the Supreme Court of Iowa reversed a decision by the Iowa District Court of Polk County in Rent-A-Center, Inc. ("RAC") v. Iowa Civil Rights Commission ("ICRC"). The District Court's 2011 decision would have forced Plaintiff Nicole Henry to arbitrate her discrimination claim against RAC, her former employer, before the ICRC, working in cooperation with the Equal Employment Opportunity Commission ("EEOC"), could initiate any legal action involving her and her employer.

Henry's original case against RAC concerned the company's unwillingness to accommodate her pregnancy by imposing a 20-pound lifting restriction as recommended by her doctor. She argued that RAC had made such accommodations for other pregnant employees in the recent past, and that she performed many duties each day that did not require her to lift more than 20 pounds.

The central question in this case was whether the Federal Arbitration Act ("FAA") required Ms. Henry, who had signed an arbitration agreement with RAC, to arbitrate her dispute before seeking relief against her employer through any legal or enforcement action. District Court Judge Robert B. Hanson had ruled that the FAA did in fact preempt the ICRC's jurisdiction, under state law, to pursue Henry's case. Now, disagreeing with Judge Hanson's ruling, the Iowa Supreme Court finds that the FAA does not bar the ICRC from undertaking administrative proceedings, independently of any contractual obligation by the parties to arbitrate disputes, since the ICRC itself was not a party to the contract between Henry and RAC.

In its decision the Iowa Supreme Court referred to the widely-cited 2002 case E.E.O.C. v. Waffle House, Inc., in which the U.S. Supreme Court found that "an arbitration agreement between an employer and an employee did not bar the EEOC from bringing an enforcement action against the employer to obtain relief for he employee." The Iowa Court reasoned that the Court's analysis in Waffle House, which applied to the EEOC at the federal level, also applied more or less straightforwardly at the state level to the ICRC in the present case: in each case, the enforcement agency's jurisdiction is not preempted by existing arbitration agreements. These agencies have the authority to bring legal actions and seek relief on behalf of particular persons, as part of their general enforcement powers, without regard to arbitration agreements that have been previously entered into by any of the parties.

A key legal question that underlies the Iowa Supreme Court's decision in these case is whether an agency that pursues a case on behalf of a complainant becomes an agent of that complainant, and thus subject to the same contractual obligation to arbitrate as the complainant him- or herself. On this question the Court's answer is clear: when an agency chooses to single out a representative case to pursue as part of its enforcement activities, it is not joining the existing action of the person in that existing case. It is starting a new action of its own, exercising independent authority. "We have noted," writes the Iowa Supreme Court, "that the 'legislative intent was to permit the (ICRC) to be selective in the cases singled out to process through the agency, so as to better impact unfair or discriminatory practices with highly visible and meritorious cases.'" The agencies' function is not primarily to represent the complainants in those cases, but to pursue their cases as part of the agency's own mission. Any obligation a person has to arbitrate a dispute with her employer does not limit the actions that the , or a state-level agency like the ICRC, can take on their behalf.

If you are an employee and you believe your rights have been violated, please contact the Harman Firm P.C.

March 14, 2014

CEO Held Personally Liable for the Company's FLSA Violations

On March 10, 2014, the United States Supreme Court denied Catsimatidis' petition of certeriori in the Irizarry v. Catsimatidis case. The grocery chain petioned the U.S Supreme Court after the United States Court of Appeals for the Second Circuit decided on July 9, 2013, that Catsimatidis should be held personally, jointly, and severally liable for wages owed to employees based on his general control over the company.

This case started when a class of current and former employees of Gristede's supermarkets filed a class action in the United States District Court for the Southern District of New York against several corporate and individual defendants for alleged violations of the Fair Labor Standards Act ("FLSA") and the New York Labor Law. Gristede is one of the 30-35 grocery stores operated and owned by John Catsimatidis. The parties had settled the FLSA claims, but the employees moved for partial summary judgment on the CEO's personal liability after the corporate defendants defaulted on their settlement obligations. The district court granted partial summary judgment for the plaintiffs, concluding that John Catsimatidis, the owner, president, and CEO of Gristede's, was the plaintiffs' "employer" under both laws. Therefore, he was held jointly and severally liable for damages as an FLSA employer. Thereafter, Catsimatidis appealed the district court decision.

The Court of Appeals studied Catsimatidis' arguments and used the "economic reality" test to determine whether an employer-employee relationship existed for purposes of the FLSA between Catsimatidis and Gristede's employees. The determination of the employer-employee relationship does not depend on isolated factors such as where work is done or how compensation is divided. The Court of Appeals reiterated that "four factors have been established to determine the "economic reality" (Carter test) of an employment relationship: whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records." The district court made the determination that the Catsimatidis hired managerial employees, signed class members' paychecks, had the power to close or sell the stores, routinely reviewed financial reports, and generally presided over the day-to-operations of the company.
Besides, the Court of Appeals noted that: "there is no question that Gristede's was the plaintiffs' employer, and no question that Catsimatidis had functional control over the enterprise as a whole. (...) Although there is no evidence that he was responsible for the FLSA violations -- or that he ever directly managed or otherwise interacted with the plaintiffs in this case -- Catsimatidis satisfied two of the Carter factors in ways that we particularly emphasized in RSR: the hiring of managerial employees, and overall financial control of the company. (...) This involvement meant that Catsimatidis possessed, and exercised, "operational control" over the plaintiffs' employment in much more than a "but-for" sense. His decisions affected not only Gristede's bottom line but individual stores, and the personnel and products therein. We recognize that the facts here make for a close case, but we are guided by the principles behind the liquidated damages provision of the FLSA in resolving the impact of the totality of the circumstances described herein."

The Court of Appeals concluded that Catsimatidis was an employer under the FLSA, but that further consideration of the state law issues was required. The Supreme Court declined to review the Court of Appeals' decision making Catsimatidis personally liable as an employer under the FLSA.

If you are an employee and you believe your employer violated your rights under the FLSA, please contact the Harman Firm P.C.

March 12, 2014

The EEOC Issued New Guidelines on Religious Garb and Grooming in the Workplace

On March 6, 2014, the Employment Equal Opportunity Commission (« EEOC ») issued a fact sheet and a full-length question-and-answer guide providing information on how federal employment discrimination law applies to religious dress and grooming practices.

The fact sheet and question-and-answer guide is addressed to employers covered by Title VII of the Civil Rights Act of 1964 ("Title VII"). Under Title VII, employers are required to take certain measures in order to permit applicants and employees to follow religious dress and grooming practices, even if it is contrary to their general rules. Title VII applies to employers with at least 15 employees (including private sector, state, and local government employers), as well as employment agencies, unions, and federal government agencies.

Different religions have different dressing and grooming practices, which may include: wearing religious clothing or articles (e.g., a Christian cross, a Muslim hijab (headscarf), a Sikh turban, a Sikh kirpan (symbolic miniature sword)); observing a religious prohibition against wearing certain garments (e.g., a Muslim, Pentecostal Christian, or Orthodox Jewish woman's practice of wearing modest clothing, and of not wearing pants or short skirts); or adhering to shaving or hair length observances (e.g., Sikh uncut hair and beard, Rastafarian dreadlocks, or Jewish peyes (sidelocks)).

Title VII provides several protections and contains certain prohibition to prevent employees from being discriminated against based on their religious belief or practice, or lack thereof. Title VII prohibits disparate treatment, workplace or job segregation (employer cannot assign employees or applicants to a non-customer contact position because of actual or feared customer preference) or retaliation and harassment based on religious belief or practices, or lack thereof. Furthermore, Title VII requires an employer to accommodate any employee once he is put on notice that a religious accommodation is needed for sincerely held religious belief or practices and make an exception to dress and grooming requirements or preferences, unless it would pose undue hardship. The guidelines issued by the EEOC highlight the fact that "neither co-worker disgruntlement nor customer preference constitutes undue hardship." Those determinations should be made by the employer on case-by-case basis.

However, Title VII contains an exception providing that certain employers who are religious organizations are permitted to prefer co-religionists with respect to hiring and certain other employment decisions. It only applies to institutions whose "purpose and character are primarily religious."

The EEOC guidelines make it clear that "Title VII applies to any practice that is motivated by a religious belief, even if other people may engage in the same practice for secular reasons." These guidelines will help employers get a better understanding of how they should act when faced with a situation regarding religious discrimination in the workplace. Besides, it also helps employees understand what are their rights and what steps they can take when those rights are not respected.

If you are an employee and you believe you have been discriminated against based upon your religious beliefs or practices, or lack thereof, please contact the Harman Firm P.C.