Below is a review of the posts on Facebook and LinkedIn from the past week. You can check out the full posts by clicking on the links.
The post on Sunday 9/22/2024 discussed seven issues to consider when conducting layoffs. Reductions in force and layoffs have become all too common these days. Employers should be aware of their rights and obligations and plan carefully. Let’s look at these seven key areas.
First, reductions in force: selection for layoff. Employers generally have broad discretion as to which employees to include in a layoff. Who is laid off usually depends on the need for a reduction in force. An example is in the post. However, keep in mind that employer discretion is not boundless. Federal laws prohibit selecting employees for layoff based on protected characteristics such as age, disability, race/ethnicity, religion, gender (including sexual orientation and gender identity) and national origin. Some examples of what is prohibited are in the post. And many states also have additional protected classes. What can happen if an employee believes there is a violation? See the post.
Next, contractual obligations. You know, employment agreements and (union) collective bargaining agreements. They must be reviewed prior to laying off the employee to see what might be contractually required. Some provisions that might be included are listed in the post, including confidentiality, non-solicitation, and many other restrictive covenants and employee obligations. Employers are advised to clearly communicate with impacted employees about their obligations at termination and thereafter.
Third, severance agreements. Most employees work at-will, meaning there is no contractual obligation to provide severance pay. But it is usually a best practice to offer every affected employee severance pay and/or benefits in exchange for a release of claims. What should the severance offer include? See the post for some bases to consider, including not only the amount but other things too. In exchange for the severance payment, the affected employees should sign a release (the effect of which is discussed in the post).
Severance agreements often prevents employees from disclosing the terms of the agreement or making statements that could be seen as harmful to the employer (a “non-disparagement provision”). But employers should keep in mind that the National Labor Relations Board recently determined that only very narrowly tailored confidentiality and non-disparagement provisions are lawful. Discuss your proposed agreement with an employment lawyer before presenting it to an effected employee and finding out you will not get what you expect to post-termination.
Other things to consider when looking at employee layoffs are older workers (the applicable statutory provisions are in the post), the WARN Act (a federal law, the provisions of which are described in the post and which must really be kept front of mind given the number of remote workers), payment for wages owed (and avoiding late payment penalties as in the post), and health coverage (including when this applies as discussed in the post).
TAKEAWAY: employers give layoffs great thought on the business side, but they must also consider the legal side. An employment lawyer can help with that.
The post on Monday 9/23/2024 noted the EEOC sues three employers for workplace harassment. Given the incredible lack of resources, it takes a lot for the EEOC to sue – don’t get on their naughty list! The EEOC’s statement as to the obligation of employers and rights of employees under Title VII of the Civil Rights Act of 1964 is in the post. So let’s take a look at the three suits that were filed in federal court under Title VII.
First is EEOC v. United Airlines, Inc. filed in Colorado. The suit was filed after a manager harassed an employee who was born in Mongolia by calling him a “chink” and more as noted in the post. The harassment took place during the height of the COVID-19 pandemic when Asian Americans were experiencing increased public hostility and violence. United allegedly failed to investigate for months and eventually the worker resigned. The EEOC’s statement as to this case is in the post.
The second case is EEOC v. Epiq Food Hall Woodbridge, LLC, et al, filed in Virginia. This suit was filed against the restaurant and its successor company after the owner subjected a Black general manager to numerous derogatory racial comments, telling him that he “look[ed] like [he] spoke thug language” and referring to him as the n-word and took many other acts as detailed in the post. After the continued racism and lack of a complaint procedure or HR department, the general manager was forced to resign. Again, the EEOC statement about this case is in the post.
The third case is EEOC v. Rivers Edge Enterprises, LLC d/b/a River’s Edge Bar and Grill in Florida. This suit was filed against the restaurant after one of its owners, who owns the bar with two of his brothers, subjected female employees to a sexually hostile work environment openly and on a daily basis as detailed in the post. To make things worse, the two brothers/owners witnessed the conduct but failed to take action. And when a female employee complained about the harassment, she was terminated. What the EEOC said about this case is also in the post.
All three suits were filed after the EEOC first attempted to reach a pre-litigation settlement through its administrative conciliation process.
Employers should be mindful that in the last fiscal year, the number of charges the EEOC received involving harassment jumped more than 28% to 31.354, the highest since it began monitoring harassment charge numbers in fiscal year 2010. Charges involving retaliation reached more than 46,000, a 31-year high. Links to EEOC resources on harassment and various types of discrimination are in the post.
TAKEAWAY: Treat all employees equally. Different treatment that is based on a protected characteristic will get you in very hot – and expensive – legal water.
The post on Tuesday 9/24/2024 noted City settled with Hyatt in third eminent domain suit involving condo properties. NOTE: this is a reminder that property in a condominium or homeowners’ association may still subject to other laws. Here we read about Sedona’s settlement of the third of five eminent domain suits filed against the owners of properties whose lots were partially condemned in order to secure right-of-way for a road extension project. The City Council approved the settlement with the Condominium Association, dba the Hyatt Residence Club, as a consent item on July 9 without discussion.
Let’s dig deeper. The plans for the road extension required the city to obtain rights-of-way or easements on 11 parcels held by nine separate owners. Four of the owners, who owned five of the relevant parcels, accepted the city’s initial offer of compensation. The remaining five landowners (for the other 6 parcels) refused that offer so the city had to file suit to condemn portions of those properties.
The city settled the first of those five suits on Jan. 12, 2023, for $256,000. The difference between the settlement amount and the initial offer is noted in the post. A second suit was settled on Oct. 24, 2023 by way of a land trade (the details of which are in the post).
And then there is the third settlement. The city’s initial offer for the needed right-of-way and easement was $223,299. The owner countered at $1,467,298. Mediation was held in November 2023. After that, the parties agreed to settle (for the amount noted in the post). As part of this settlement, the city will allow the owner to construct four private gates on its private property and more as noted in the post.
How much the city has paid to date, compared to its initial offers, and the current planned cost of the road extension (along with what that cost was in May 2019) are all in the post. And keep in mind that litigation remains ongoing with other owners.
TAKEAWAY: Property in a condominium or homeowners’ association is not exempt from other laws, including condemnation and eminent domain. Know your rights and get a knowledgeable attorney involved early in the process.
The post on Wednesday 9/25/2024 told us the EEOC wants a federal appellate court to provide guidance in applying SCOTUS’ new standard for discrimination cases – the continuing legacy of Muldrow. At issue is the new standard for determining the type of harm that constitutes an adverse job action in discrimination cases and how to apply that standard.
The pending case, Xu v. Lightsmyth Technologies, Inc., was brought by an Asian-American worker who alleges, among other things, that she was discriminated against when she was transferred within her company from an exempt manager position to a non-exempt role. The employer argued that Xu’s transfer was with no cut in pay or benefits and she was only transferred to accommodate her request that she be exempted from certain duties because she suffered from an eye condition. In May 2023 the federal trial court agreed that Xu did not suffer an adverse job action and therefore could not sustain a prima facie claim for discrimination.
Almost a year later, on April 17, 2024, the Supreme Court issued its decision in Muldrow v. City of St. Louis, which set out a new evidentiary standard under Title VII. In case you have forgotten, the holding in Muldrow is in the post (and in our prior posts).
Applying the new evidentiary standard is something several federal appellate courts are grappling with now in the wake of Muldrow. Relevant to most readers here is that the Third Circuits (which governs cases in PA and NJ) has revived at least one suit after applying the new standard. The Ninth Circuit heard oral argument in Xu on August 20, 2024. The EEOC was part of the arguments; what it argued and asked of the court is noted in the post.
This issue around the country comes about because in Muldrow the Supreme Court outlined the new evidentiary standard employees must meet when asserting a discriminatory transfer claim against an employer under Title VII. What most courts held prior to the Muldrow decision is noted in the post. Muldrow set forth the new standard’s criteria (as listed in the post).
In Xu, the federal trial court in Oregon used the old evidentiary standard that has now been abrogated by the Supreme Court (argued the EEOC). In its amicus curiae brief, the EEOC asked the court to act in light of the Muldrow decision. Keeping in mind that it is now under the Muldrow umbrella, during the 20-minute oral argument the court peppered both sides with questions about what constitutes an adverse employment action in the case. What the focus seemed to be on is noted in the post. What Xu’s attorney and the employer argued is in the post. The panel took the case under submission.
TAKEAWAY: Stay tuned. Muldrow is and will continue to effect great change in the courts around the country given the changed (and lessened) standard that now applies in discrimination cases.
In the post on Thursday 9/26/2024 we learned about Intel is under fire: the Anti-Defamation League (ADL) sues tech giant over rampant workplace antisemitism. The ADL joined an employment discrimination lawsuit against Intel, the first time in recent history that it has sued a major Fortune 500 company for alleged antisemitic discrimination in the workplace.
The lawsuit was filed as John Doe v. Intel Corporation in federal court in New York. The suit alleges that the plaintiff, an Israeli living and working in New York, was subjected to anti-Semitic harassment by a senior executive, that Intel failed to act and discriminated against the employee, ultimately retaliating against him for reporting the anti-Semitic behavior. The allegations in the complaint as to what the employee’s manager did are in the post (and make one cringe). Then, despite the employee’s outstanding performance and recent promotion, he was demoted after raising concerns about that behavior.
The ADL’s statement about the case and its import is also in the post. The ADL has reported a dramatic rise in anti-Semitic incidents across the US (8,873 recorded incidents in 2023 – a 140% increase from the previous year). What this tells us relative to the workplace arena is in the post.
In the suit, the plaintiff, a former vice president of engineering at Intel, claims that his termination was presented as a cost-cutting measure shortly after he reported to a manager known for supporting anti-Semitic views. Details on what the manager, an Egyptian native, did are in the post. Intel declined to comment on the ongoing litigation but did issue a statement that is in the post.
TAKEAWAY: employers may find themselves up against fierce opposition when discrimination or harassment takes place, especially given the current social environment in the US. The easiest way to avoid that is not to illegally discriminate or retaliate against employees.
The post on Friday 9/27/2024 relayed that the Community Associations Institute (CAI) files lawsuit against the US Treasury over Corporate Transparency Act (CTA) compliance. To those living in a community association, and especially those currently or considering serving on the board, this is huge. The suit was filed on September 10, 2024, challenging application of the CTA beneficial ownership interest filing requirements to community associations. Prior to filing suit, CAI had tried to work with Treasury and the Financial Crimes Enforcement Network (FinCEN) and lobbied for an exemption; when that failed, CAI filed suit.
The lawsuit challenges application of the CTA to community associations and highlights several key issue, including that community associations should be exempt from the act’s reporting requirements (the basis for the argument is in the post), FinCEN issued FAQs without following proper notice-and-comment procedures (the effect of which is in the post), FinCEN’s refusal to exempt community associations from the CTA is arbitrary and capricious (again, the basis of this is in the post), and more as listed and discussed in the post. CAI’s suit seeks judicial review of the exemption request and asks the court to declare the act inapplicable to community associations. CAI also requested a preliminary injunction to stay application of the act to community associations until a final court ruling is made.
Why the timing of the suit is so important, and what community associations need to be prepared for, is in the post. More information is available at www.caionline.org/cta.
TAKEAWAY: Application of the CTA to community associations may well cause even fewer people to volunteer for board positions; given the already-difficult job of filling all board positions, that is not a good thing. Stay tuned.
Finally, in the post yesterday 9/28/2024, we learned Penn State University to pay $703K in back wages to resolve alleged gender pay discrimination against female employees. The settlement comes after the Office of Federal Contract Compliance Programs (OFCCP) found that, since at least July 1, 2020, Penn State allegedly paid 65 women employees less than comparable men in facilities operations and maintenance, extension education, and senior administration jobs. Some examples of those covered are in the post. What OFCCP does, and what Penn State must do under the settlement in addition to paying the back wages, is all in the post.
TAKEAWAY: Treat similarly situated employees the same unless there is a valid legal basis to the contrary. It will be more expensive to right a wrong than to be right from the start. Get an employment lawyer involved if there are questions.
York, Pennsylvania 17403