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Friday, June 29, 2018

Supreme Court Holding Hurts Public Sector Unions

In Janus v. AFSCME, Council 31 et al., ___ U.S. ___ (June 27, 2018) the Supreme Court of the United States, in a 5-4 decision, overruled its 1977 precedent and held that states cannot compel non-members of Unions representing public employees to pay agency (sometimes called fair share) fees, which presumably relate only to the Union’s collective bargaining activity. The majority opinion held that forcing non-members to pay these agency fees violates their free speech and freedom of association rights under the First Amendment to the U.S. Constitution.

The case involved the Illinois Public Labor Relations Act, which allows public employees to select a union as their exclusive bargaining representative.  Employees who are represented by the union, but who decline to join it, must pay an agency fee to cover the collective bargaining duties of the union, but are not required to pay full dues, which also pay for the union’s political and ideological projects. Holding the agency fee requirement to be unconstitutional, the Court overruled its Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977) decision, which upheld a similar agency fee as constitutional. The dissent in Janus accused the majority of using the First Amendment to intervene in economic and regulatory policy and stated there was no good reason to overrule Abood, which it said struck a balance between First Amendment rights and governments’ interests in running their workforces.  

The decision likely applies to other states that require such agency fees. The decision does not apply to private sector or federal employees. While Missouri statutes relating to public employee bargaining (R.S.Mo §105.500 et seq.) do not require payment of an agency fee, the Missouri Court of Appeals upheld a fair share provision in a collective bargaining agreement in Schaffer v. Bd. of Ed. of the City of St. Louis, 869 S.W.2d 163 (E.D. Mo. 1993). To the extent it compels payment of fair share fees, that decision likely will no longer be followed in Missouri because of the holding in Janus.  

The Janus decision probably will hurt unions representing public sector employees because they will lose the agency fee revenues from non-members.    

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertising.

This update was prepared by Charles S. Elbert and Erin M. Leach.



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Tuesday, May 22, 2018

Employers can Enforce Agreements in which Employees Waive Class Action Relief in Favor of Individualized Arbitration

This week, with a holding helpful to employers, the Supreme Court of the United States ruled that clauses in employment agreements requiring individualized arbitration of employment disputes are valid and enforceable.  EPIC Systems Corp. v. Lewis, No. 16-285 (U.S. May 21, 2018).  This decision allows employers to obtain a valid waiver of class and collective action proceedings from their employees, in favor of arbitration of the employee’s own individual claim.

The facts at issue were routine:  (1) employee entered into agreement with employer that included a provision requiring individual arbitration of any dispute; (2) after termination of employee’s employment, employee sued employer, as part of a nationwide class of employees, alleging failure to pay overtime in violation of the Fair Labor Standards Act; and (3) employer moved to compel individual arbitration according to the contract language. 

The question for the Supreme Court was whether employees can agree to and be held to such individualized proceedings, or whether such a clause was unenforceable, allowing the case to proceed as a class action.  The employees argued that their statutory rights to collective action should prevent employees from agreeing to arbitration of only their individual claims.  Four justices agreed, recognizing that if an employee can only bring one individual claim, claimants, particularly those with smaller, low-value claims, may be left without a practical or economically viable remedy.  But the majority held in favor of employers, citing the Federal Arbitration Act, which has long granted deference to the use of arbitration and arbitration agreements. 

This holding by the nation’s highest court provides a valuable opportunity for employers to manage their risk of facing expensive, and potentially dangerous, class or collective actions by their employees.  If your business does not already have individualized arbitration agreements in place with its employees, the EPIC case should provide a nudge to consider such agreements.  We encourage employers to review their current employment contracts and to give thought to whether individualized arbitration is workable for your business and employees.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions. The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Kevin A. Sullivan, D. Leo Human, and Erin M. Leach. 


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Thursday, March 15, 2018

Title VII Held to Prohibit Discrimination Against Gay Skydiving Instructor and Transgender Funeral Director

We previously wrote (see our post on the Hively decision, here) about the Seventh Circuit’s 2017 holding that the prohibition of sex discrimination in Title VII of the Civil Rights Act of 1964 (“Title VII”) also prohibits sexual orientation discrimination.  Two new cases further support an expansive definition of “sex” under Title VII, another prohibiting sexual orientation discrimination and one prohibiting transgender identity discrimination. See  Zarda v. Altitude Express, Inc., ___ F.3d ___ (2d Cir. Feb. 26, 2018) and EEOC v. R.G. G.R. Harris Funeral Homes, Inc., ___ F.3d ___ (6th Cir. Mar. 7, 2018).

The employee in Zarda was a skydiving instructor who claimed that his employment was terminated for telling a female customer that she should not worry about being strapped to him because he was “gay and ha[d] an ex-husband to prove it.” The court found the employee’s sexual orientation is protected by Title VII because sexual orientation discrimination is: (a) directly related to sex in that it involves treating a man who is attracted to men differently than a woman who is attracted to men; (b) based on sex stereotypes in that it assumes that a man should be attracted to women, and vice versa; and (c) associational discrimination in that it involves treating an employee differently based on the sex of the person(s) he associates with.  Consequently, the employee could proceed to trial on his claim of sex discrimination.   

The employee in Harris Funeral Homes was a biologically male funeral director who presented as male for the first six years of employment, but who informed the employer that she identified as female and would begin presenting that way in the workplace, and then was fired.  The Sixth Circuit held that the employee’s transgender/transitioning status fell under the umbrella of Title VII’s “sex” because it “is analytically impossible to fire an employee based on that employee’s status as a transgender person without being motivated, at least in part, by the employee’s sex.”  Of further interest in this case were the employer’s religious liberty defenses, which the Sixth Circuit rejected in ruling in favor of the employee.

These cases illustrate that although protecting such traits may not have been Congress’ original purpose in enacting Title VII, prohibitions in statutes “often go beyond the principal evil to cover reasonably comparable evils.”  See Zarda at *27 & Harris Funeral Home at *18.  Because the Second and Sixth Circuits’ interpretations of Title VII’s language and purpose are not shared by all federal circuit courts across the country (see Hively for further discussion of the circuit split), the Supreme Court may need to decide what “sex” actually means under Title VII.  Until that question is finally decided, however, employers should be aware that the term may be broader than anticipated.

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Charles S. Elbert, Kevin A. Sullivan, and Erin M. Leach. 


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Thursday, March 8, 2018

EEOC Statistics Fiscal Year 2017 – Retaliation Again is #1

It’s that time of year - on January 25, 2018, the Equal Employment Opportunity Commission (“EEOC”) released its Fiscal Year 2017 statistics summarizing the data collected from its year ending September 30, 2017.  The full report and access to the data tables can be found here.

The EEOC reports that it received 84,254 charges last year, which is less than the 91,503 charges in 2016 and the 89,385 charges in 2015. Although we have not researched the issue, this decrease may be attributable to relatively low unemployment. 48.8% of 2017 claims were based on allegations of retaliation. This indicates, once again, that employers must carefully consider any potential adverse employment action not only for possible discrimination against a protected class, but also to avoid the appearance of retaliation. Retaliation claims can be easier for plaintiff to prove than discrimination claims. Other claims most often alleged were race (33.9%), disability (31.9%), sex (30.4%), and age discrimination (30.4%), in that order. Please note that these claim percentages, which do not even cover all claims (such as national origin, religion and genetic information) add up to more than 100% because many charges allege more than one claim.

99,109 charges were resolved in FY 2017. Enforcement proceedings administered by the EEOC itself garnered $398 million in total monetary relief in 2017.

Once again, the take away from these statistics is that employers should be proactive in educating employees, particularly supervisors/managers, about their obligations under the law.  We believe that training to properly and fairly evaluate, discipline, supervise, and otherwise deal with employees is a key element in reducing charges of discrimination.

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertising.  

This update was prepared by Charles S. Elbert.


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Wednesday, December 6, 2017

Harassment Training is the Right (and Necessary) Thing to Do

Sexual harassment claims currently are big news because prominent film makers, actors, television personalities, executives and United States legislators have been identified as serial harassers. Under pressure, some alleged harassers have confessed, while others have at least acknowledged that their actions were inappropriate. We may be witnessing a sea change in exposing harassers and holding them accountable. Even the United States Congress has recognized the seriousness and pervasiveness of the problem by requiring sexual harassment training of its members and employees.

We have been advocating all forms of harassment training for decades because preventing harassment is the right thing to do and makes excellent business sense. Training can help avoid harassment and its adverse effects on employee morale and productivity. Training also can help avoid claims and the costs of defending those claims. Some states (not Missouri and not Illinois for private sector employers) are requiring sexual harassment training by certain employers. So, if your organization has not done so within the last two years, we strongly recommend that it promptly require that all employees, not just supervisory employees, attend harassment training. This training should include not only the prohibition on sexual harassment, but also harassment based on any protected class, such as race, sex, religion, national origin, age and disability. The training should be documented.

We will be pleased to provide, or assist your organization in providing, that training. Regardless of whether we are involved, training should include the most current changes and interpretations in the law regarding harassment. Clearly an unintended consequence of the alleged serial harassers’ actions is a reminder and great opportunity to make sure your organization is doing the right (and necessary) thing!

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions. 

This update was prepared by Charles S. Elbert and Erin M. Leach.


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Friday, November 3, 2017

Missouri Court Rules that Gay Employee’s Sex Stereotyping Allegations Constitute Sex Discrimination Claim Under MHRA

On October 24, 2017, in Lampley v. Mo. Commission on Human Rights, the Missouri Court of Appeals, Western District, held that sex stereotyping, including as it pertains to a gay or lesbian employee, is sex discrimination under the Missouri Human Rights Act (“MHRA”).  That sex stereotyping claims would be recognized under the MHRA is not particularly surprising, given the U.S. Supreme Court’s holding in Price Waterhouse v. Hopkins, 490 U.S. 228, 251 (1989); see also R.M.A. v. Blue Springs R-IV School Dist., No. WD80005 (Mo. App. W.D. July 18, 2017). [For more information on this recent trend in federal law, see our April 7, 2017 Blog Post.]

The Missouri Commission on Human Rights (“MCHR”) determined that it had no jurisdiction over Lampley’s complaints, because he is gay and sexual orientation is not a protected class under Missouri law.  See Pittman v. Cook Paper Recycling Corp.478 S.W.3d 479, 483 (Mo. App. W.D. 2015).  The MCHR interpreted Lampley’s allegation that “his behavior and appearance contradicted the stereotypes of maleness held by his employer,” as related to sexual orientation.  Lampley petitioned the court for administrative review, arguing that his charge be recognized as a sex discrimination claim instead.  He pointed out that in his Charge of Discrimination he had checked the boxes for “sex discrimination” and “retaliation,” not the box labeled “other.”

The Missouri Court of Appeals, in reversing the circuit court’s order granting summary judgment to the MCHR, held that Missouri’s existing case law “readily accommodates a sex stereotyping claim,” and that Lampley’s allegations fit within that cause of action.  Lampley’s allegation was that his unfair treatment was based on his sex not his sexual orientation, meaning that, as a man, he had been treated differently than women who exhibited a similar “behavior and appearance.”  In reaching this conclusion and allowing Lampley’s claim to go forward, the Court made clear that, under a sex stereotyping theory, the plaintiff’s sexual orientation is immaterial. 

The take away for employers is that sexual orientation discrimination claims, even though not currently a protected class under the MHRA, may be pursued if plaintiffs can frame their Charge of Discrimination and lawsuit as sex stereotyping. 

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Charles S. Elbert, Kevin A. Sullivan, and Erin M. Leach.


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Friday, September 1, 2017

EEO-1 Report Filing Requirement Update

On August 29, 2017, an Administrator of a branch of the Office of Management and Budget (“OMB”) initiated a review and immediate stay of EEO-1 report changes. These changes were to require employers to provide data on employees’ hours worked and wages paid. The EEO-1 report filing requirement generally applies to employers with 100 or more employees and federal contractors with more than 50 employees. The OMB Memorandum is here.

Employers should use the previously approved EEO-1 report form during the stay (see statement of EEOC Acting Chair Victoria A. Lipnic). The filing date currently is March 31, 2018. Although the reporting requirement has been stayed, the EEOC and Office of Federal Contract Compliance programs are very interested in equal pay issues, so employers should continue to take action to make sure that their compensation systems do not create or reflect disparities based on gender or race/ethnicity.

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Charles S. Elbert.


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Wednesday, July 5, 2017

Leveling the Playing Field - Missouri Governor Signs MHRA and Whistleblower Amendments

Last Friday, Missouri Governor Eric Greitens signed Missouri Senate Bill 43 (SB 43), amending the Missouri Human Rights Act (MHRA) and codifying the requirements for a whistleblower claim under Missouri law. The bill can be found here. This bill, which will become effective on August 28, 2017, represents a significant change in certain employment laws affecting our Missouri clients and will reduce uncertainty for businesses facing discrimination, retaliation and whistleblower claims.

The MHRA amendments in SB 43 adopt the “motivating factor” causation standard for employment discrimination and retaliation claims, abrogating a series of Missouri state court decisions that had imposed the lower “contributing factor” standard. In doing so, SB 43 brings Missouri in line with federal causation standards and requires plaintiffs to prove that unlawful animus motivated the challenged employment decision. SB 43 also adopts federal court evidentiary standards that should make it easier for defendants in MHRA cases to prevail in weak cases without the need for a trial. The amendments further impose caps on non-economic damages that are based on the size of the employer/defendant, ranging from a $50,000 cap for employers with less than 100 employees to a $500,000 cap for employers with more than 500 employees. The bill eliminates individual liability for supervisors — again bringing Missouri law in line with the federal standard — and makes other statutory changes that clarify the timing and administrative process requirements that an employee must complete before pursuing a claim.

SB 43 also codifies, for the first time, the whistleblower cause of action under Missouri law. Prior to this bill, whistleblower claims existed because of common law judicial decisions, not statute. In addition to codifying this claim, SB 43 clarifies the causation requirement for such a case (again adopting the “motivating factor” standard over the lower “contributing factor” standard), imposes damage caps, excludes governmental entities from whistleblower liability,
and clarifies and restricts what kinds of policy violations may give rise to a whistleblower claim.

Because the new law is not effective until August 28 — and because some key provisions of the law may not be applied retroactively — the full effects of SB 43 may not be felt for some time. In the long run, however, SB 43 should help level the playing field for employers in MHRA and whistleblower cases.

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such. Please contact one of our labor and employment lawyers if you have any questions. The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Charles S. Elbert and D. Leo Human.


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Tuesday, May 23, 2017

Missouri Supreme Court Clarifies Wrongful Discharge in Violation of Public Policy Claim

On May 16, 2017, the Missouri Supreme Court issued an opinion in Newsome v. Kansas City, Missouri School District, No. SC95538 (Mo. banc), which clarified Missouri law by holding that on a wrongful discharge in violation of public policy claim:  (1) the judge, not the jury, decides whether a legal violation occurred; and (2) a preventative report of wrongdoing can support such a claim.  By way of background, a public policy wrongful discharge claim allows an employee to sue an employer if the employee was terminated for refusing to violate the law or any public policy found in the constitution, statutes, or regulations or for reporting violations of the law to superiors or proper authorities.  In Newsome, plaintiff (purchasing manager for the school district) refused to approve one purchase request and reported two purchase requests to his supervisor on the basis that the requests violated Missouri’s school contracting law (R.S.Mo. § 432.070).  Three days after the second report, plaintiff was given the option of resigning with severance or termination of employment, and later brought the wrongful discharge claim.  The jury returned a verdict in plaintiff’s favor and awarded $500,000 in damages, and the school district appealed.

On appeal, the school district argued that the trial court had erred by giving the jury the plaintiff-requested instruction that an element of the wrongful discharge claim was that plaintiff “reasonably believed” the payment requests violated Missouri’s school contracting law and that the jury should have been instructed that it needed to find that the requests violated the law to find the employer liable.  The Missouri Supreme Court found that the “reasonably believed” instruction was erroneous, but also found that the jury should not be instructed about an actual violation of law because that element “is an issue of law for the circuit court to decide in determining whether plaintiff has made a prima case. . . . before submission of the case to the jury.”  This ruling is significant because: (1) it rejects an argument made by plaintiffs in these cases that they only need to prove that they “reasonably believed” that the conduct violated the law; and (2) it clarifies that the judge, not the jury, decides whether the alleged conduct violated the law, and, if the judge finds no violation occurred, the claim presumably would be dismissed. 

The school district further argued on appeal that the verdict in plaintiff’s favor should be reversed because plaintiff only refused to approve and reported “requests” for payments that “would” violate public policy, rather than payments made in violation of the school district contracting law.  The Missouri Supreme Court rejected this argument, holding that plaintiff “did not have to wait for the purchase to be finalized before he reported his concerns.”  The Court found that accepting the school district’s argument “would mean no whistleblower protection for preventative reporting, which would be inconsistent with” the purpose of such a claim.  Therefore, employers should be aware that terminating an employee for making a preventative report of illegal activity could subject them to liability.

The foregoing is for informational purposes only, does not constitute legal advice regarding any particular situation, and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Charles S. Elbert and Kevin A. Sullivan.


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Friday, April 7, 2017

Seventh Circuit Rules that Sexual Orientation Discrimination is Prohibited by Title VII

On April 4, 2017, in Hively v. Ivy Tech Cmty. Coll. of Indiana, No. 15-1720, the Seventh Circuit en banc (all of the judges), on rehearing of a panel decision disallowing the plaintiff’s claim, became the first federal Court of Appeals to hold that discrimination based on sexual orientation is prohibited by Title VII of the Civil Rights Act of 1964.  Title VII makes it unlawful for employers to discriminate on the basis of “race, color, religion, sex, or national origin.”  42 U.S.C. § 2000e-2(a).  The ruling did not carve out sexual orientation as a separate protected class, but rather found that “sexual orientation” is encompassed within “sex” and is therefore already protected by federal law. 

In Hively, the plaintiff had applied six times for a full-time professor position at Ivy Tech and was denied a position each time, allegedly because she is a lesbian.  Hively filed a discrimination claim based on sexual orientation, which was dismissed by the district court because sexual orientation is not enumerated as a protected class in Title VII.  The Seventh Circuit reversed the lower court, holding that “a person who alleges that she experienced employment discrimination on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes.” 

There has been a long debate over sexual orientation and related claims under Title VII, stemming in large part from a 1989 U.S. Supreme Court decision: Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), in which the Court held that an accountant alleging that she was treated differently in partnership considerations based on “sex-stereotyping” – because she did not act, dress, or talk “femininely” enough – could have a claim under Title VII.  Since Price Waterhouse, lower courts have struggled to delineate between claims of discrimination based on sex-stereotyping, which is prohibited by Title VII, and those based on sexual orientation, which most Circuit Courts (including the Eighth Circuit, in which Missouri sits) have held is not prohibited by the current law.  But as the court in Hively pointed out, that distinction is sometimes very difficult to draw, because homosexuality is often “the ultimate case of failure to conform” to sex stereotypes, in that the stereotype is men partnering with women and vice versa. 

For employers in Illinois and other states in the Seventh Circuit, Hively creates binding precedent and must be followed (unless it is reversed).  For employers elsewhere, this case may signal the beginning of a trend in favor of finding Title VII protection for LGBT employees, especially after the Supreme Court found a constitutional right to same-sex marriage in Obergefell v. Hodges, 135 S.Ct. 2584 (2015).  On the other hand, Congress has consistently heard and failed to adopt an amendment to Title VII adding sexual orientation as a protected class, so this decision might spur it to act.  Some states and cities already have laws or ordinances providing that sexual orientation is a protected class. 

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Charles S. Elbert, Kevin A. Sullivan, and Erin M. Leach.


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Thursday, March 23, 2017

U.S. Supreme Court Clarifies School Districts' Obligation to Provide Free Appropriate Public Education

The United States Supreme Court handed down its decision on March 22, 2017 in Endrew F. v. Douglas County School District, No. 15-827 (3/22/2017), regarding the standard for determining whether a child has been offered a Free Appropriate Public Education ("FAPE").

In the unanimous (8-0) decision, the Court held that each Individualized Education Program (“IEP”) must be “reasonable” and must be “reasonably calculated to enable the child to make progress appropriate in light of his circumstances.”  This holding clarifies, but does not overrule, the standard previously adopted in Board of Ed. of Hendrick Hudson Central School District v. Rowley, 458 U.S. 176 (1982), that the IEP must be “reasonably calculated to enable the child to receive educational benefits.” The school in Endrew had argued that Rowley referred to “some educational benefit” and therefore that the benefits provided must be “merely more than de minimis”; however, the Supreme Court expressly rejected this much-lower standard.

The Endrew Court made clear that there is no bright-line test.  For example, a child who is making passing marks and advancing from grade to grade is not necessarily being given a FAPE.  Similarly, a child who is not making passing marks and advancing from grade to grade is not necessarily being denied a FAPE, because that is not a reasonable expectation for every child. Instead, the IEP must be “appropriately ambitious in light of [the child’s] circumstances.”

Finally, the Court stated that the fact that its decision does not announce a bright-line rule is not an “invitation to the courts to substitute their own notions of sound educational policy for those of the school authorities which they review.”

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  The choice of a lawyer is an important decision and should not be based solely on advertisements.

This update was prepared by Robert A. Useted and Erin M. Leach.


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