Leah Kessler

On Tuesday, December 5, the Department of Labor (DOL) sent out a Notice of Proposed Rule Making (NPRM) regarding tip regulations under the Fair Labor Standards Act (FLSA). The DOL seeks to rescind an Obama-era regulation that prohibited restaurants and other service-industry employers, specifically those who pay their employees minimum wage and do not take a tip credit, from enforcing a tip-sharing system between tipped and non-tipped employees.

While tips are considered the sole property of the tipped employee under the FLSA, tip-pooling (sharing tips equally among staff) is allowed. There are, however, specific requirements for valid tip-pooling arrangements. When an employer takes a tip credit to satisfy a portion of the minimum wage, the tip pool can only include workers who “customarily and regularly receive tips”, prohibiting the sharing of tips with “back of the house” employees (such as cooks and dishwashers), who do not usually earn tips. Section §203(m) of the FLSA outlines the rules and regulations for tip credits, permitting employers to take a tip credit toward the minimum wage obligation for tipped employees equal to the difference between the required cash wage and the minimum wage. For example, the federal minimum wage is currently set at $7.25 per hour. Under section § 203(m) of the FLSA, an employer can pay his or her tipped employee a minimum cash wage of $2.13 per hour and claim a maximum credit of $5.12 per hour. The employer is obligated to pay the employee if the tips do not amount to the mandatory feral minimum wage. (These are the federal rules for tip credits. Fortunately, the tip credit regulations in New York are better for employees: The minimum cash wage is higher and the maximum tip credit allowed is lower.)

Edgar M. Rivera, Esq.

On November 21, 2017, in Martinez v. Davis Polk & Wardwell LLP, the Second Circuit affirmed the district court’s dismissal of a race discrimination case at summary judgment. Plaintiff Eunice Martinez, a web editor at the law firm Davis Polk & Wardwell LLP (“Davis Polk”), claimed that Davis Polk—despite Martinez’s repeated requests to be promoted to a management-level position—awarded her lower salary raises and failed to promote her into a managerial position because she is Hispanic. The district court concluded that Martinez failed to establish a prima facie case for either claim. Second Circuit Judges Rosemary S. Pooler, Debra Ann Livingston, and Denny Chin affirmed the decision.

To prove pay discrimination, Martinez had to satisfy the “demanding” standard of the equal work inquiry, which requires evidence that the jobs compared are “substantially equal.” Showing that two positions are “substantially equal” is easier said than done, as even small differences in duties or responsibilities can suffice to show that two positions are not “substantially equal.” Here, Martinez conceded that she “holds a unique position and there is no point of comparison” for her particular job and testified during her deposition that she was not qualified to do the jobs of six of her proposed seven comparators. As a result, Martinez could not show that her comparators were “substantially equal” and therefore could not show that they did “equal work.”

Leah Kessler

On Tuesday, November 28, 2017, the U.S. Supreme Court heard oral arguments in the case of Digital Realty Trust, Inc. v. Paul Somers. While the Supreme Court’s ruling on this case is not expected until next June, the outcome, as well as the arguments made this week, have serious ramifications for the accepted legal definition of “whistleblowing” and the protections that definition provides.

Paul Somers was the Vice President at Digital Realty Trust, Inc., from 2010 to 2014, during which time he filed reports to senior management about possible securities law violations by the company. When Digital Realty fired Somers, he filed suit in the U.S. district court for California, alleging that Digital Realty fired him for his reports of securities law violations in violation of the anti-retaliation protections created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank was passed in 2010 in the wake of the 2008 financial crisis and expanded the whistleblower incentives and protections under the 2002 Sarbanese-Oxley Act. (Here is a side-by-side comparison of these two whistleblowing acts, including both the definitions they use and the protections they provide.) Although the district court held Somers to be a “whistleblower” under the statute, and the Ninth Circuit affirmed the district court’s decision on behalf of Somers, Digital Realty appealed to the Supreme Court on the grounds that Somers was not a “whistleblower” as defined by Dodd-Frank because Somers did not report his concerns to the Securities and Exchange Commission (SEC) before he was terminated.

Lev Craig

Last week, on November 20, 2017, in Chauca v. Abraham, the New York State Court of Appeals set the standard for punitive damages awards in claims brought under the New York City Human Rights Law (NYCHRL). The New York  Court of Appeals, in keeping with the New York State common law standard, held that the NYCHRL entitles a plaintiff to punitive damages “where the wrongdoer’s actions amount to willful or wanton negligence” or “recklessness” or involve “a conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.”

In 2009, Plaintiff Veronika Chauca became pregnant, took a period of maternity leave from her job as a physical therapy aide, and was terminated after her return from leave. She then filed suit in the U.S. District Court for the Eastern District of New York, bringing sex and pregnancy discrimination claims under Title VII of the Civil Rights Act of 1964 (“Title VII”), the New York State Human Rights Law (NYSHRL), and the NYCHRL.

Owen Laird, Esq.

On Thursday, all across the country, Americans will gather together to celebrate Thanksgiving. For millions, their Thanksgiving celebration will include sitting down and watching some football. The National Football League (NFL) is one of the most prominent societal institutions left in the United States today, and its popularity—though not universal—is so widespread that millions of Americans often view vital issues such as race, politics, religion, and economics through the lens of the NFL.

For the past year, it has been impossible to escape the countless stories about NFL players protesting police brutality by kneeling during the national anthem. Those stories, often critical of the protests, were followed by stories about the backlash by owners and fans against the protests, which, in turn, were followed by stories about the backlash against the backlash, ad infinitum.

Edgar M. Rivera, Esq.

On November 15, 2017, in Berghorn v. Texas Workforce Commission, the District Court for the Northern District of Texas dismissed with prejudice plaintiff Kyle Berghorn’s sexual orientation discrimination claim, but allowed him to re-plead his gender stereotyping claim. Berghorn alleged that Xerox terminated his employment because he is gay and because he failed to conform to Xerox’s gender stereotypes. Both of Berghorn’s claims arose under Title VII of the Civil Rights Act of 1964 (“Title VII”).

Berghorn was employed by Xerox from 2002 until February 29, 2016. At the time of his termination, he held the position of senior manager. Xerox terminated Berghorn after finishing an investigation, which purportedly concerned Berghorn’s use of expenses, but in which Xerox instead asked Berghorn several questions about whom Berghorn was sleeping with and whether the person was male. Allegedly, Xerox employees had previously made other disparaging comments about Berghorn’s sexuality, like, “He has no children. He’s gay.” Ultimately, the investigation revealed that Berghorn had not stolen any money from the company and that he had himself paid for personal charges on his card; his expenses were in order. Nonetheless, Xerox fired him.

Lev Craig

This Monday, November 13, 2017, the U.S. District Court for the Northern District of Illinois granted the defendant’s motion for summary judgment in Richardson v. Chicago Transit Authority, in which plaintiff Mark Richardson alleged that his former employer, the Chicago Transit Authority (CTA), had violated the Americans with Disabilities Act (ADA) by terminating his employment because he was obese. The court held that, if not caused by an underlying physiological disorder or health condition, obesity in and of itself does not qualify as a disability under the ADA. As a result, Richardson was unable to show that he was disabled within the meaning of the ADA, and his ADA claim was dismissed.

Richardson began working for the CTA as a bus driver in 1999. In 2010, after Richardson took an extended medical leave, the CTA required him to undergo a medical exam and safety assessment before returning to work. At the time of the medical evaluation, Richardson weighed 594 pounds and, according to standardized height and weight medical guidelines, had a BMI of 82.8, meaning that he was medically considered to be “suffering from ‘extreme obesity.’” During the safety assessment, the CTA found that Richardson’s weight prevented him from complying with various CTA safety regulations; for example, Richardson could not perform hand-over-hand turning or stop “cross-pedaling”—having part of his foot on the gas and brake pedals at the same time—because of his size. The CTA later terminated Richardson’s employment, stating in a memo, “Based on the Bus Instructors [sic] observations and findings, the limited space in the driver’s area and the manufacturer [maximum allowable weight] requirements, it would unsafe for Bus Operator Richardson to operate any CTA bus at this time.”

Lev Craig

This summer, New York State finalized the regulations for New York’s new Paid Family Leave Benefits Law (PFL), which goes into effect on January 1, 2018. The PFL will expand New York’s existing Disability Benefits Law to provide paid leave for nearly all private employees in New York State to cover time spent caring for a new child, caring for a family member with a serious health condition, or assisting loved ones while a family member is deployed abroad on active military duty, with the guarantee that an employee who takes leave will be able to return to their job and continue their health insurance.

While polls indicate that Americans largely support paid family leave policies, no federal statute entitles employees to paid family leave, and only five states other than New York—California, New Jersey, Rhode Island, Washington, and Washington, D.C.—have state-level paid family leave laws. According to last year’s National Compensation Survey, an annual survey conducted by the U.S. Bureau of Labor Statistics, only 14% of civilian workers in the U.S. had access to any paid family leave whatsoever. And of those, higher-wage white-collar workers are much more likely to have access to paid family leave; 37% of those employed in the finance and insurance sectors have paid family leave benefits, in comparison to 5% and 6% of workers in the construction and hospitality industries, respectively.

Leah Kessler

On October 19, 2017, in John L. McKinney Jr. v. G4S Government Solutions, Inc., the Fourth Circuit affirmed the ruling of the district court, dismissing John McKinney’s hostile work environment, retaliation, and intentional infliction of emotional distress (IIED) claims against his former employer, G4S Government Solutions, Inc. (“G4S”). The Fourth Circuit concluded that Mr. McKinney failed to follow G4S’s procedure for reporting discrimination and his emotional distress lacked the necessary severity to sustain a claim.

In September 2005, G4S hired McKinney, who is Black, as a security officer at the Radford Army Ammunition Plant (RFAAP).  On May 23, 2013, McKinney observed four of G4S’s white superior officers laughing in a common area near his office. One of them, Shawn Lewis—a project manager and G4S’s highest ranking supervisor at RFAAP—asked McKinney “if he knew that there was a noose hanging on a nail inside a small closed cabinet outside the security captain’s office.” After showing McKinney the noose, Lewis directed McKinney to get rid of it, over McKinney’s objection.  As McKinney was walking away with the noose, another employee—who lived in a predominantly Black neighborhood—told McKinney, “I know what to do with [the noose]. I can use that around my house.” That same day, McKinney saw Lewis standing on a ladder in the supply room, holding a white sheet over another supervisor’s head to resemble a Ku Klux Klan hood.

By Edgar M. Rivera, Esq.

For those who follow The Harman Firm Blog, you may recall our article “Second Circuit Addresses Alcoholism Perceived Disability Claims Under NYCHRL,” in which we reported that the Second Circuit in Makinen v. City of New York certified the question of whether §§ 8-102(16)(c) and 8-107(1)(a) of the New York City Human Rights Law (NYCHRL) preclude a plaintiff from bringing a disability discrimination claim based solely on a perception of untreated alcoholism. Section 8-107(1)(a) prohibits discrimination based an actual or perceived disability. But in the case of alcoholism, § 8-102(16)(c) limits the applicability of the term “disability” to cover only employees who are recovering or have recovered from alcohol use disorder and are currently free from abuse. On October 17, 2017, the Court of Appeals of New York answered the certified question in the affirmative.

Plaintiffs Kathleen Makinen and Jamie Nardini served as New York Police Department (NYPD) officers for several years and, during that time, were falsely accused of abusing alcohol by their respective former partners. Ms. Nardini’s former partner—also the father of her daughter—accused Ms. Nardini of abusing alcohol in the midst of a tumultuous breakup and ongoing custody battle, which led the NYPD to refer Ms. Nardini to its Counseling Services Unit, where she was diagnosed as suffering from alcohol abuse. She accepted treatment only under threat of suspension. Ms. Makinen was similarly referred to the NYPD’s Counseling Services Unit while embroiled in a custody dispute with her former husband. On multiple occasions, Ms. Makinen’s former husband and his family members alleged that Ms. Makinen drank excessively, drove while drunk, and abused her children. The Counseling Services Unit diagnosed Ms. Makinen—like Ms. Nardini—with alcohol dependence, and Ms. Makinen reluctantly agreed to attend a four-week inpatient rehabilitative treatment program to avoid disciplinary actions.  It is undisputed, however, that neither plaintiff was actually an alcoholic.