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 10/13/2024 talked about Loper Bright’s potential effect on federal labor and employment law: possible consequences for agencies and practitioners. You may recall that on June 28, 2024, the US Supreme Court’s Loper Bright decision overturned the 40-year-old Chevron doctrine (which, if you have forgotten, is explained in the post). In the over three months that have passed since that decision, we might know what a post-Loper Bright administrative state may look like for federal employment and labor law. Some of the areas that might be impacted are listed in the post.
Post-Loper Bright federal courts may take a more active role in scrutinizing agency rulemakings, enforcements, and adjudications. But there also might be less policy change if the White House changes parties since underlying law will not be so readily subject to political reversal. But let’s look at a few areas that may be, or already have been, affected in labor and employment.
Let’s start with the National Labor Relations Board whose General Counsel has been ambitious in attempting to reinterpret key, long-standing legal principles. Which may explain one thing – see the post. The NLRB’s recent landmark decision in Cemex, which overturned more than 50 years of law governing how the Board administers union elections, may not survive judicial scrutiny. The pre-Cemex environment is detailed in the post as is what Cemex changed. But Cemex may well be vulnerable post-Loper Bright partly because it is based on the NLRB’s reinterpretation of the NLRA based on the essential logic of a long-defunct NLRB case and partly because it arguably oversteps the relatively strict lines that the Supreme Court drew in a prior decision for when the NLRB may abandon the default secret-ballot election and impose a mandatory bargaining order on employers. The various courts’ different approaches to deference could lead to circuit splits and more Supreme Court involvement in federal labor law.
Loper Bright might also stall the NLRB’s attempts to further expand the Act’s reach. An example of what might happen without Chevron deference is in the post. And finally, but perhaps most consequentially, post-Loper Bright the Supreme Court may soon review direct constitutional challenges to the Board. As recently as September 2024, federal trial courts have split on whether to issue injunctions halting the NLRB’s enforcement actions on the basis set forth in the post. The issue may get to the Supreme Court because the US Department of Labor’s ALJs face similar constitutional challenges. See the post for more details.
Next up is the DOL for its post-Loper Bright challenges. A big one is that on August 23, 2024, the DOL’s so-called 80/20 tip-credit rule became one of the first casualties of Loper Bright – see the post for which federal court acted as well as the background and what changed.In the end the court held that the DOL’s final rule was a misinterpretation of the FLSA and was arbitrary and capricious under the Administrative Procedure Act. And there might be more casualties in the DOL arena too – see the post.
It may not only be a question of whether courts uphold DOL regulations, but if DOL feels constrained in how it subsequently enforces those rules. A few examples are in the post.
But here’s more. Arguably the most well-known casualty among federal regulations post-Loper Bright to date has been the final rule from the Federal Trade Commission (FTC) banning most noncompetition agreements under Section 5 of the FTC Act. In August 2024, a federal court in Texas issued a nationwide injunction against the FTC’s noncompete ban after finding the agency’s interpretation of the FTC Act was arbitrary and capricious under the APA. How the court made its decision post-Loper Bright is in the post. That may be only the start of the slippery slope as explained in the post.
And what about the EEOC? See the post.
TAKEAWAY: While the true impact of Loper Bright remains unclear at this point, what we may see in the short term is federal agencies scaling back on any ambitious regulatory action and just maintaining the status quo. We all wait ….
The post on Monday 10/14/2024 told us the EEOC sued two employers for sex discrimination to enforce Title VII. The EEOC’s General Counsel said that “Transgender people have the same rights as everyone else to be safe at work and to have their humanity respected … Employers … should know that … actions may have legal consequences.” Let’s look at the suits.
First is EEOC v. Starboard Group, Inc., d/b/a Wendy’s, and Starboard with Cheese LLC, in federal court in Illinois. In this case the EEOC alleged that the Wendy’s location subjected a class of transgender employees to pervasive sexual harassment including repeatedly subjecting them to misgendering, graphic sexual comments, and more as listed in the post. Employees said supervisors inquired about their genitalia and there were inappropriate actions related to misgendering, all as detailed in the post. Wendy’s terminated one employee and retaliated against the others in the way noted in the post. It also refused to update its records to reflect legal name changes.
The second case is EEOC v. Lush Handmade Cosmetics, LLC, filed in federal court in California after the manager at one location subjected employees to offensive physical and verbal sexual conduct, including unwanted touching of their buttocks and more as noted in the post. Lush failed to adequately investigate employee accounts of the manager’s behavior, the harassment continued, and at least two employees quit. The EEOC’s statement noted that the case “involves particularly egregious sexual harassment of LGBTQ+ employees by a volatile store manager who is still employed by Lush with power and authority over employees in his store” and talked about what the EEOC was seeking to protect.
Both suits were filed after conciliation efforts failed.
In fiscal year 2023, the EEOC received more than 3000 charges of discrimination based on sexual orientation or gender identity. The increase from FY22 is noted in the post (and does not bode well). And more than 56% of the EEOC’s 81,055 charges in FY23 allege retaliation, the highest number in over 30 years.
TAKEAWAY: Treat all employees the same, period.
The post on Tuesday 10/15/2024 was about statistics – EEOC case filings plummet: a look at the EEOC’s surprisingly sluggish FY2024. The EEOC filed 144 lawsuits in Fiscal Year 2023, but that momentum did not carry over into FY24. Only about 96 suits were filed in FY24. How that compares not only with FY23, but the past 30 years, is in the post. But even though the number of suits declined, those that were filed can help employers understand the EEOC’s priorities and what to expect going forward. The post also contains good graphs to illustrate the content.
In the years following the start of the COVID-19 pandemic, the EEOC scaled back its litigation efforts. Some statistics on FY2020, FY2021 and FY2022 as compared to those are in the prior decade are in the post. But things seemed to be ready to change in FY 2023. Why? See the post for the circumstances. And change it did. But the change did not last as the number of suits filed in FY2024 was back to pandemic levels and among the very lowest in the past three decades.
So why the change? A Democratic majority and Democratic General Counsel at the EEOC lead one to think it is not that partisan politics obstructed any of the Commission’s litigation goals. But one reason for the decline might be its resources. Budgetary issues are a concern as noted in the post. For example, just last month the EEOC was faced with a potential one-day furlough to address limited funding. What ended up happening is in the post. And then because of the increased filings in FY2023, the EEOC had more pending cases to deal with at the start of FY2024, further depleting resources.
The post details the number of EEOC lawsuits filed per-month from FY2021 through FY2024, noting trends and disparities.
And what about where the cases were filed (i.e., by which regional office)? The decreased filings were not across the board; a few EEOC Districts actually increased their FY2024 filings. The post points out a few Districts that saw increased filings and a few who had declines (including the Philadelphia District Office with the year’s largest decline (the numbers are in the post).
Despite the decline in actual number of cases filed, the underlying claims asserted in the filing cases track with prior years. The vast majority of the EEOC’s suits again were filed under Title VII and the ADA. Claims under other federal statutes also saw changes, including the first case in several years alleging violations of GINA (whose prohibitions are noted in the post for easy reference). The EEOC filings also saw the first lawsuits under the PWFA which went into effect June 27, 2023. Details about the EEOC’s final regulations about that Act are in the post.
More details about the numbers, filing bases and prior-year comparisons are in the post. Note that workplace harassment, and hostile work environment (including non-office environments) suits increased substantially. The post contains examples of some of the non-office work environment suits. What else the statistics show about the use of EEOC resources, and the impact on employers, is in the post. The statistics did bring one surprise: in FY2024, the Commission filed only four religion-based suits. Why that is surprising is in the post. Many of the suits brought in FY2023 were on behalf of employees terminated for refusing to comply with vaccine mandates on religious grounds, but that changed in FY2024. The EEOC may be done riding that wave.
TAKEAWAY: employers should not drop their guard. The EEOC requested a budget increase for FY 2025 which might result in more filings; because of that, employers should stay tuned to EEOC trends, emphasizing harassment and disability-related issues, and timely submit their EEO-1 Reports.
The post on Wednesday 10/16/2024 was about a condo association targeted by NJ after harassment in ‘Russian spy’ neighbor fight. No, this is not a sci-fi movie. The state Attorney General’s Office said a woman was repeatedly harassed by her condominium neighbors, who called her a “Russian spy,” and the case has now put the homeowners association in legal hot water too. This stems from a complaint filed on the basis of national origin and sex in violation of state law. The AG’s statement about the case is in the post. The next step is a negotiation between the parties. If they can’t reach a deal, the state might file a civil lawsuit against the people involved. The possible penalties if the defendants lose are noted in the post (and nothing to scoff at). The Condominium Association said that it has and will continue to address the alleged harassment, including those things noted in the post, and that it intends to protect the rights of all residents.
The underlying complaint was filed in September 2023 by a woman who owned a condo in The Summit complex. She alleged that Leo, the live-in boyfriend of Knepper, a neighboring condo owner, repeatedly subjected the complainant and her relatives to discriminatory and harassing slurs, threats and conduct since the spring of 2020 because she is a Russian woman. The AG concluded that Leo harassed her in multiple ways, including calling her a “Russian spy” while shining a flashlight at her, wielding an axe in a threatening manner, and the multiple other things noted in the post. The AG found sufficient evidence to reasonably support the claim that Leo interfered with the complainant’s right to access housing free from discrimination and other claims noted in the post.
And why is the association i8nvovled in the case? Because under that state’s discrimination law, landlords and condo associations may be held liable for harassment if they know or should know about the harassment, have the power to take steps to end the harassment, and fail to take prompt action to end the pattern of harassment. (Sounds a bit like the FHA too, right?) Allegedly Knepper and the condo association knew about Leo’s harassing conduct, but did not take prompt and effective measures to stop it. The association did take some action (as described in the post), but not enough. The AG reviewed dozens of videos and photos from the complainant’s security camera and personal cell phone, from 2020 – 2024 as part of its investigation.
TAKEAWAY: if your association knows of harassment of a resident, it should take reasonable steps to stop the harassment, including consulting with a community association lawyer
In the post on Thursday 10/17/2024 we learned that fire guts condo but association balks at paying its share to repair damages, and asked now what? The background is that a condo unit caught fire. It was an electrical fire with extensive smoke damage. The owner hired a contractor for restoration, after which the contractor billed the HOA for the work that was its responsibility. The association’s insurance carrier did not want to pay the contractor for the work estimate. The contractor already gutted the condo and the owners paid their part (from their insurance proceeds), but the association won’t pay for its portion of the work so the condo sits unfinished. The owners want to know what they can do to make the association pay its share so the work can get finished.
The answer may well be that it depends – on both state law and the insurance policy. One state’s law is discussed in the post and is probably fairly common. But what the answer really turns on is that it is the association which is responsible for the repairs, not the owner. Why that matters, and what the owner should have done, is detailed in the post. Because the owner did not proceed that way, it will probably be much more difficult for the owners to get the association to pay for the balance of the repair. A suggested roadmap is in the post, along with things to consider.
TAKEAWAY: Owners of units in community associations must know whose responsibility it is to repair and replace what parts of the unit and common elements; that is different from who ultimately plays for the repair/replacement. Ask a community association lawyer.
The post on Friday 10/18/2024 informed us that the Supreme Court of Pennsylvania holds there is no (insurance) coverage for losses caused by the COVID-19 shutdown orders. The decision was handed down on September 26, 2024, such that Pennsylvania joined the majority of states in holding that commercial property insurance policies do not cover losses caused by the government shutdown orders issued in response to the COVID‑19 pandemic. The cases are Ungarean v. CNA & Valley Forge Ins. Co. and Macmiles v. Erie Ins. Exch. The PA Supreme Court held that businesses were not entitled to coverage under their respective policies’ Business Income, Extra Expense, and Civil Authority coverages because the shutdown orders did not cause the requisite “direct physical loss of or damage to” property.
Ungarean came about after the government shutdown orders compelled a dental practice to close its business except for emergency dental procedures. Macmiles arose when the shutdown orders limited a bar’s business to takeout orders. The Court found coverage in Ungarean but not Macmiles; both decisions looked at the existence of the “direct physical loss of or damage to” property that was a criteria of coverage.
The language at issue in Ungarean is in the post. The Curt applied the plain and ordinary meanings of the words “physical,” “loss,” and “damage” and said that the only reasonable construction of the language at issue required either (1) the physical disappearance, partial or complete deterioration, or absence of a physical capability or function of the property (loss); or (2) a physical harm or injury to the property (damage). Based on that, what was required to invoke the insurance coverage is noted in the post. The Court’s analysis of the issue, and why it disagreed with the Pennsylvania Superior Court’s conclusion, is also in the post.
In the end, the Pennsylvania Supreme Court concluded that the dental practice did not allege the requisite “direct physical loss of or damage to” property, as the shutdown orders did not cause the physical alteration of property. Instead, what it found the dental practice alleged is in the post. And the Court also noted that even if loss of use might qualify as a “physical loss” in narrow circumstances, it did not in Ungarean because the dental practice still had the ability to access and use the premises for emergency dental procedures. The Court reversed and directed the Pennsylvania Superior Court to remand the matter to the trial court for entry of judgment in favor of the insurance carrier. And then based on its decision in Ungarean, the Court affirmed the Pennsylvania Superior Court’s decision in Macmiles.
TAKEAWAY: Sometimes what is intended by way of insurance coverage is actually excepted out or just does not come within the defined terms – know what coverage you have.
Finally, in the post yesterday 10/19/2024, we saw EEOC sues Inova Health for disability and age discrimination. Inova Surgery Center, LLC, which operates outpatient surgery centers in Northern Virginia, allegedly violated the ADA and ADEA by firing an employee because of her disability and age.
According to the suit, a 52-year-old radiologic technician requested an extension of her medical leave to recover from carpal tunnel surgery, but while she was still on approved medical leave Inova Surgery Center instead terminated her and replaced her with two co-workers, ages 24 and 35. The EEOC filed suit in federal court in Virginia after conciliation failed. What the EEOC seeks by way of damages (monetary and other) is listed in the post. Statements from both the EEOC’s Philadelphia and Washington District Offices are in the post.
TAKEAWAY: Don’t take adverse action against an employee based on a disability (actual or regarded as) or age – or any other (protected) characteristics other than legal bases. Get an employment lawyer involved.
York, Pennsylvania 17403