Hunton Employment & Labor Perspectives

On April 29, 2024, in compliance with President Biden’s October 2023 Executive Order addressing artificial intelligence, the Department of Labor’s Wage & Hour Division (WHD) issued guidance regarding the potential risks posed by employers using AI tools to monitor or augment worker productivity to violate the Fair Labor Standards Act (FLSA).

On February 8, 2024, the U.S. Supreme Court issued a unanimous opinion holding that a whistleblower with a retaliation claim under the Sarbanes-Oxley Act of 2002 (“SOX”) does not need to establish that their employer acted with “retaliatory intent” to succeed on their claim. An employee must merely show that their protected whistleblowing activity was a “contributing factor” in an adverse employment action against them by their employer. Murray v. UBS Securities, LLC, 144 S.Ct. 445 (2024). An employer’s retaliatory intent or lack of animosity is “irrelevant.”  Id. at 446.

The California Supreme Court has clarified that state whistleblower retaliation claims should not be evaluated under the McDonnell Douglas test, but rather under the test adopted by the California legislature in 2003, thus clarifying decades of confusion among the courts.

Imagine this: you are an employer in California, and you recently hired a new employee.  You ran your own background check, which did not turn up any criminal convictions.  However, the employee’s job duties include submitting online applications to a government agency, which requires the employee to complete a Live Scan background check with the Department of Justice.  The Live Scan reveals that the employee has a past criminal conviction that will prevent her from submitting the applications.  You terminate the employee, and she tells you the conviction was judicially dismissed.  What do you do?

The California Department of Fair Employment and Housing (“DFEH”) just last month filed an enforcement action in Los Angeles Superior Court against Riot Games, Inc. (“Riot Games”) to compel compliance with its ongoing investigation into allegations of gender discrimination, sexual harassment, sexual assault, and retaliation.  While the identified claims are broad, the primary thrust appears to be the contention that female employees at Riot Games are paid less than their male counterparts.

A memorandum recently released by the Occupational Safety and Health Administration (OSHA) has clarified the agency’s position on whether safety incentive programs and post-accident drug testing would be considered retaliatory pursuant to its controversial recordkeeping rule published on May 12, 2016.  This rule prohibits employers from retaliating against employees who report work-related injuries or instituting procedures that could chill employees from reporting work-related injuries. In the accompanying interpretative documents, OSHA specifically identified workplace safety incentive programs and post-accident drug testing policies as procedures that were likely to deter employee reporting, and therefore would be subject to increased scrutiny by the agency.

Last week, the United States Supreme Court released its decision in Digital Realty Trust v. Somers, where the Court unanimously adopted a narrow reading of the Dodd-Frank Act’s anti-retaliation “whistleblower” provision.  The Court held that the provision applies only to individuals who report securities violations directly to the Securities and Exchange Commission.

The case involved Paul Somers, a former employee of Digital Realty Trust, who alleged that the company terminated him after he internally reported suspected violations of securities law by the company.  Somers, however, never reported any of the suspected securities violations to the SEC.

On January 21, 2016, the EEOC announced that it will seek public input on proposed enforcement guidance addressing retaliation and related issues under federal employment discrimination laws.  The EEOC issued its last guidance update on the subject of retaliation in 1998.  The EEOC’s 73 page draft guidance is available for review here and the 30-day input period ends on February 24, 2016.

For years, there has been nearly universal agreement among the courts that managers do not engage in “protected activity” for retaliation claim purposes under most employment laws when they raise concerns about compliance issues in the regular course of performing their job duties. The traditional reasoning held that a manager whose job includes evaluating and/or reporting compliance issues, and who does so in furtherance of his or her job duties, should not become cloaked in anti-retaliation protection for merely doing the job he or she is employed to do. Instead, to engage in protected activity, the manager must step outside his or her role as a manager and become adversarial to the employer. The so-called “manager rule” has been consistently used by courts to reject retaliation claims under various employment statutes by human resources professionals and supervisors who report employment-related compliance issues related to other employees.

On Tuesday, the United States Supreme Court held that the whistleblower protections that apply to employees of publicly traded companies under Section 1514A of the Sarbanes-Oxley Act, also  extend to employees of private contractors and subcontractors that serve those public companies.

A surgeon recently brought suit against his employer, in Staveley-O’Carroll v. Penn State Milton S. Hershey Medical Center, alleging that he was fired in violation of the Family and Medical Leave Act (“FMLA”).  No. 1:13-cv-01555-YK (M.D. Pa. filed June 18, 2013). Interestingly, the surgeon is not claiming that he was entitled to, requested, or took FMLA leave.  Rather, he claims that he was retaliated against for defending his secretary’s FMLA rights.

EMPLOYMENT DECISIONS

Vance v. Ball State University: Narrow Definition of Supervisor in Harassment Suits
In Vance, the Supreme Court announced a narrow standard for determining which employees constitute “supervisors” for purposes of establishing vicarious liability under Title VII. In a 5-4 decision, the Court decided that a supervisor is a person authorized to take “tangible employment actions,” such as hiring, firing, promoting, demoting or reassigning employees to significantly different responsibilities. The majority opinion rejected the EEOC’s ...

The U.S. Department of Labor provides general information and compliance guidance regarding numerous wage, hour, employment, and labor laws via “fact sheets” which are available to employees, employers, and the general public. Fact sheets can serve as helpful reference and compliance material for employers. On December 23, 2011, the DOL issued three new fact sheets on the issue of unlawful retaliation.  These newly released fact sheets address retaliation under the Fair Labor Standards Act (“FLSA”), the Family and Medical Leave Act (“FMLA”), and the Migrant and Seasonal Agricultural Workers Protection Act (“MSPA”).

The Fair Labor Standards Act, 29 U.S.C. 215(a)(3) ("FLSA") forbids an employer from retaliating against an employee for making prior FLSA complaints.  Simple concept, one would think.  But with most employment related legal issues, the "devil" is often in the details.  What is an "employee," exactly, under the FLSA?  Does it include an applicant for employment, who is retaliated against by a prospective employer?  A divided panel of the U.S. Court of Appeals for the Fourth Circuit recently ruled that the answer is "no," rejecting a claim that a prospective employer violated the FLSA by rescinding an employment offer to an applicant after learning about a FLSA lawsuit the applicant filed against her prior employer.  Dellinger v. Sci. Applications Int'l Corp., 2011 U.S. App. LEXIS 16635 (4th Cir. Aug. 12, 2011).

On August 8, 2011, the Second Circuit issued a decision in Millea v. Metro-North Railroad Co., taking an expansive view of the Family and Medical Leave Act’s (“FMLA”) anti-retaliation provision.  Turning to Title VII for guidance, the Court held that the jury should have received an instruction that broadly defined the term “materially adverse action.”

A recent Tenth Circuit decision sends a strong message that the court takes seriously the jurisdictional prerequisite that plaintiffs exhaust their administrative remedies in a Title VII claim prior to taking a claim to court.  The process to do so is well-known -- before an employee can file a lawsuit alleging discrimination against his or her employer, he or she must file a charge with the U.S. Equal Employment Opportunity Commission (“EEOC”).  Requiring individuals to exhaust their administrative remedies prior to filing a lawsuit serves, hopefully, to eliminate facially meritless charges, facilitate internal resolution, and help avoid litigation.  This is often the case, as many charges filed with the EEOC never end up on a court’s docket.  But what happens if the parties are already enmeshed in litigation and the plaintiff claims that the defendant’s conduct during the course of that litigation is retaliatory?  Can the plaintiff amend his or her complaint to include that allegation?  Or must he or she go back to the EEOC and file a charge for that claim?  In McDonald-Cuba v. Santa Fe Protective Services, Inc., the Tenth Circuit held that the latter is true.  No. 10-2151 (10th Cir. May 9, 2011).  The Fourth came down the other way in a similar case.

The 2010 fiscal year was a busy one for the EEOC as employees filed a record number of charges.  See A Year In Review: EEOC Charges & Trends.  This wave of charges is historic -- not just because of the number of charges filed, but also because of the evolving trends in the types of claims made. Unfortunately for employers, these trends will likely continue in 2011 and beyond.

Historically, the most common types of claims filed were those of race and sex discrimination. Although these particular types of claims remain prevalent (the number of both race and sex discrimination claims increased in 2010), other types of claims are emerging at an alarming rate due to recent changes in the legal landscape.

On January 4, 2011, President Obama signed the FDA Food Safety Modernization Act (FSMA), which seeks to promote food safety by enacting strict safety standards in the food industry. In addition to the enactment of safety standards, Section 402 of the FSMA ensures sweeping protections for whistleblowers in the industry. The FSMA whistleblower protection applies to any “entity engaged in the manufacture, processing, packing, transporting, distribution, reception, holding, or importation of food.” The anti-retaliation provisions protect any employee of a covered entity who provides to the employer, the federal government, or the Attorney General of a State information that the employee reasonably believes constitutes a violation of the FSMA; testifies or is about to testify about any such violation; assists or participates in any such proceeding; or objects to or refuses to participate in any activity that the employee reasonably believes is a violation of the FSMA.

Expanding on our December 21 post, the U.S. Equal Employment Opportunity Commission on January 11, 2011, announced that private sector workplace discrimination charge filings reached the “unprecedented level” of 99,922 during fiscal year 2010, which ended on September 30, 2010.  According to the data, all major categories of charge filings in the private sector, including charges against state and local governments, increased significantly.

Committees in both the House and the Senate heard testimony this week regarding the Protecting Older Workers Against Discrimination Act (H.R. 3721 and S. 1756).  Democrats introduced the Act last fall with hopes of restoring employees’ rights under the Age Discrimination in Employment Act (“ADEA”) by overturning the Supreme Court’s decision in Gross v. FBL Fin. Servs. Inc., 557 U.S. __ (2009).

A panel of the U.S. Court of Appeals for the Ninth Circuit recently held in Alvarado v. Cajun Operating Company, that compensatory and punitive damages are unavailable to a  plaintiff who brings an ADA retaliation claim.  Consistent with a prior Seventh Circuit ruling  in Kramer v. Banc. of Am. Sec., 355 F.3d 961 (2004), the Alvarado Court found that the ADA specifically excludes a retaliation claim under Section 12203 from awards of  compensatory and punitive damages.  The court reasoned that Section 1981(a)(2) of the ADA does not list claims brought under section 12203 as one of the enumerated categories of claims meriting compensatory and punitive damages.  Since the statute specifically enumerated other claims under the ADA where punitive and compensatory damages are proper remedies, the court found that Congress intended for those claims, and not those under Section 12203, to get punitive and compensatory damages as a remedy.  In addition, the court held that since ADA retaliation claims are only subject to equitable relief, no jury trial is available.

As a recent decision by the U.S. Court of Appeals for the Fourth Circuit makes clear, the fact that an employer prevailed against an employee’s Sarbanes-Oxley claim in an administrative proceeding cannot be used to bar a new trial of the claim in federal court.  The U.S. District Court for the District of Maryland dismissed a former employee’s SOX lawsuit on the ground that it was precluded by an administrative law judge’s granting of the employer’s motion for summary decision.  The Court of Appeals, in a ruling of first impression, held that the lower court erred and vacated its dismissal in Stone v. Instrumentation Lab Co., 4th Cir., No. 08-1970, 12/31/09.

The EEOC reported that workplace discrimination charges reached near-record highs in 2009.  According to the EEOC, there were 93,277 charges filed in fiscal year 2009 -- the second-highest level in its history. 

A recent decision of the U. S. District Court for the District of Columbia has cast doubt on the view that employees have no reasonable expectation of privacy in work email accounts.  Specifically, in Convertino v. United States Department of Justice,  Judge Royce C. Lamberth held that an employee’s communications with his attorney, sent to and received on the employee’s work email account, were protected from disclosure by the attorney-client privilege, even though the employer regularly accessed and saved such email communications.