Labor and Employment Law

In two December 24, 2019 decisions, the Missouri Supreme Court clarified and limited the application of the Missouri Human Rights Act (“MHRA”) to employers that are located in Missouri but have out of state employees.

The two cases, Tuttle v. Dobbs Tire & Auto Centers, Inc., SC97721, and State ex rel. Anheuser-Busch, LLC v. Moriarty, SC97845, both involved employers with headquarters located in Missouri. In the Tuttle case, the employee was manager of a Dobbs Tire store located in Illinois, and in the Anheuser-Busch case the employee was a sales director for a territory including several states other than Missouri, and lived and received his paycheck in Iowa. In both cases, the employee alleged he had been subject to age discrimination and other unlawful conduct in violation of the MHRA.

Both employers moved to dismiss the employees’ claims because the employees in question were not located in Missouri and thus, the employers argued, were not protected by the MHRA. The trial courts split on the issue — in the Tuttle case the employee’s claim was dismissed, but in the Anheuser-Busch it was allowed to proceed. The Missouri Supreme Court resolved this disagreement by siding with the employers, holding that although the allegedly discriminatory decision in each case was made in Missouri, the resulting injury (which was allegedly suffered outside of Missouri) controlled in determining whether the MHRA would apply.

Both cases had strong dissents, which focused on the same decision versus injury analysis as the majority’s opinions, but would have reached the opposite conclusion. Notably, Judge Breckenridge, sided with the employer in the Tuttle case, but the employee in the Anheuser-Busch decision. The reasons for Judge Breckenridge’s decision are not stated in the opinions, but the most likely explanation is that she drew a distinction between the facts of the Anheuser-Busch case, in which the employee worked with office support staff in Missouri and attended regular monthly meetings in Missouri, and Tuttle, which contained no specific allegations that the employee’s work was in any way connected to Missouri.

For employers based in Missouri these cases clarify that, in general, an out of state employee may be protected by federal law and the law of the state in which the employee is located (where the injury occurred), but will likely not be protected under the MHRA even if the employment decision is made in Missouri.

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 D. Leo Human.

On September 24, 2019, the United States Department of Labor released its final revised overtime rule under the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. (“FLSA”). 

Prior to the rule, the longstanding overtime exemption requirements were: (1) employee is paid on a salary basis rather than an hourly wage basis; (2) employee is paid at a salary level of at least $23,660 annually (or $455 per workweek); and (3) employee’s duties meet the elements of a professional, administrative, executive, or outside sales (collectively referred to as “white-collar”) exemption.  Requirements (1) and (3) remain unchanged by the new rule.  However the rule significantly modifies requirement (2) by raising the threshold salary level to $35,568 annually (or $684 per workweek).  Consequently, “white-collar” employees with a salary less than that amount will no longer be exempt, and therefore will need to record their time and be paid overtime for working more than 40 hours in a workweek.  This changed salary level has the potential to affect the wages of over 1.3 million U.S. workers. 

The rule goes into effect January 1, 2020, and applies to all employers covered by the FLSA.  In addition, the final rule modifies the threshold for “highly compensated” employees, who will now have to be paid an annual salary of $107,432 (previously $100,000) in order to meet that exemption. 

As a result of this final rule, employers should undertake a comprehensive and careful audit of their current wage and salary structure to ensure that they make appropriate adjustments for salaried employees classified as exempt currently earning between $23,660 and $35,568.  Based on each employer’s needs and staffing practices, there are several potential ways in which compliance with the new rule can be achieved, including: raising salaries, decreasing salaries to account for anticipated overtime, reclassifying employees, limiting or requiring pre-approval for overtime hours, redistributing workloads, using more part-time employees, using outside vendors to perform certain functions, and restructuring salaries to include bonuses/incentive pay. Employers may also want to reconsider and update all of their exempt/nonexempt classifications, particularly with regard to jobs that have changed since the last update of the rule in 2004. 

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.

On March 19, 2019, the Missouri Supreme Court held that an employee/plaintiff’s inconsistent positions regarding his ability to work in separate judicial proceedings may prevent his claim for damages for disability discrimination. The case illustrates the difficulty even sophisticated parties have in navigating state and federal employment discrimination laws.

Plaintiff, who suffered from muscular dystrophy, was employed as an administrative law judge (“ALJ”) in Missouri’s Division of Workers’ Compensation. Based on his claimed inability to work as an ALJ, plaintiff sought disability benefits from the state retirement system and also sought maintenance in his divorce proceedings from his wife. After learning that plaintiff had received disability benefits for employees who are unable to work, plaintiff’s supervisor ended plaintiff’s employment. Plaintiff sued under the Missouri Human Rights Act alleging disability discrimination and retaliation. At trial, plaintiff argued that he was disabled, but that he could have continued as an ALJ for many years, which was contrary to his previous statements in the divorce case that he was unable to work. The jury awarded plaintiff millions. The trial court’s judgment was affirmed by the appellate court.

The Supreme Court reversed and remanded on the issue of whether under the “judicial estoppel” doctrine plaintiff’s previous statements that he was unable to work should have prevented him from claiming at trial that he would have been able to continue working as an ALJ long into the future. The trial court had declined to apply judicial estoppel based on that statement because plaintiff had ultimately been unsuccessful in obtaining maintenance in his divorce from his claimed inability to work. But the Supreme Court held that judicial estoppel was not limited to cases where a benefit was obtained by a party’s claim in court, but is a flexible doctrine to protect the dignity of the courts. The Supreme Court therefore held that plaintiff was judicially estopped from seeking damages in his discrimination case against his employer based on a theory that he could continue to work as an ALJ, when he previously told a different court in his divorce proceeding that he could not work as an ALJ.

The takeaway is that employers should attempt to determine whether employees have taken positions in judicial or other proceedings that may be contrary to the claim that they are making against the employer. If so, the employer may have an estoppel defense to the claim. This case also illustrates that correct analysis of the legal issues when assessing and describing an employee’s limitations and ability to work may avoid problems down the road.

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 D. Leo Human.

On March 4, 2018 the United States District Court for the District of Columbia in National Women’s Law Center et al. v. Office of Management and Budget, No. 17-CV-2458, held that the Office of Management and Budget’s stay of the 2017 EEOC requirement that compensation be provided in the Revised EEO-1 report [required for employers with 100 or more employees or government contractors with 50 or more employees and a contract of $10,000 or more] should be set aside. On March 18, the EEOC opened its EEO-1 - Online Portal to receive the EEO-1 filings on or before May 31, 2019. The EEOC stated that it is diligently working on next steps in view of the Court’s above-referenced order, but did not provide any more definitive information. On March 19, 2019, in response to the National Women’s Law Center’s request for a status conference, the Court ordered the EEOC to inform the Court by April 3, 2019 of the EEOC’s timeline for employers to provide the paid data collection.          

We do not know whether employers will be required to provide the data by May 31, 2019, whether that deadline will be extended or whether the pay data may not be required until next year. We will attempt to keep you posted.

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.

On March 7, 2019, the U.S. Department of Labor (“DOL”) released proposed changes to the overtime regulations under the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. (“FLSA”).  Currently, the salary threshold for certain “white collar” employees to be exempt from overtime wages is $23,660 ($455 per week).  The proposed rule would increase that salary requirement to $35,308 ($679 per week).  The DOL also proposes that the “highly-compensated employee” exemption to overtime should be restricted to earners of at least $147,414 (currently $100,000). 

As you may recall, the DOL attempted to raise these salary thresholds in 2016, but that change was enjoined by the United States District Court for the Eastern District of Texas.  This current proposed change attempts to avoid injunction by: (1) increasing the thresholds by smaller amounts and, (2) not including automatic adjustments to the thresholds; rather, any further updates will also have to go through this notice and comment period.  This proposed change to the salary test could affect approximately one million American employees’ eligibility for overtime compensation and many employers’ salary structures.

If you desire to comment on how the proposed regulation might affect any or all aspects of your business, you can do so until approximately May 10, 2019.  To be most effective, you may want to consider commenting with an employment group or association, a Chamber of Commerce, or other appropriate group.  Please click here  to review the regulatory proposal and here  to comment if you desire (search for: “RIN 1235-AA20” in the search box).  The final regulation may differ from the proposed regulation.

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.

A pair of cases decided by the Supreme Court of Missouri yesterday held that two plaintiffs — a gay employee and a transgender student — both stated sufficient allegations to proceed with a lawsuit under the Missouri Human Rights Act (“MHRA”).

Each of these cases was focused on the legal requirements for proceeding with a lawsuit, so there was little discussion of specific facts relating to either plaintiff’s claim. In Lampley v. Missouri Commission on Human Rights, SC96828 (Mo. banc February 26, 2019), the plaintiff was a gay male who alleged that he was harassed by his supervisor. The Court held, by a 5-2 vote, that plaintiff’s claim of sex discrimination under the MHRA could proceed. The Court split on the rationale for its decision. Three judges adopted the “sex stereotyping” theory that has prevailed in federal courts applying federal anti-discrimination laws, under which plaintiffs may pursue a claim that they were subject to sex discrimination by their employer because they did not conform to generally-held sexual stereotypes. Two other judges explained the decision without adopting that theory, simply holding that plaintiff could proceed with a claim that he was treated “differently … because of [his] sex.”

In R.M.A. ex rel. Appleberry v. Blue Springs R-IV School District et al. No. SC96683 (Mo. banc February 26, 2019), the issue was whether plaintiff student could use a school bathroom consistent with his stated gender identity. The Court held, by the same 5-2 vote, that the student’s allegations that his “legal sex is male” and that he was discriminated against in the use of a public accommodation based on that legal sex, were sufficient to pursue a claim.

Though the specific rationales stated in each of these cases are not sweeping, we believe these cases’ practical effect is that employees and other plaintiffs who are transgender, gay or otherwise gender non-conforming will often be able to state an MHRA sex discrimination claim. This does not mean that such plaintiffs will necessarily prevail in their claims — that will depend on the facts of each case. But the rulings mean that employers should consider in making employment decisions that such persons likely have rights under the MHRA. Employers should also review and consider updating their policies with respect to gender non-conforming employees, and especially transgender, gay and lesbian employees. In addition, employers who are public entities or maintain public accommodations should review any policies they may have with respect to public restrooms to ensure compliance with the decision in R.M.A. 

The R.M.A. decision is of particular importance to school districts.  Previous transgender restroom cases in the school context had been brought under federal law (primarily Title IX, Title VII, or the federal constitution) but R.M.A. opens a state law cause of action as well, that could be available regardless of how the federal courts interpret those federal provisions.  Consequently, there is an additional, risky avenue by which school districts may be sued. 

Another important holding of the R.M.A. case is that school districts and their boards may be held responsible for public accommodation discrimination, allowing claims to be brought against more entities for this broadened category of discrimination.  In this case the plaintiff was a student, but the holding means it could be a parent or other individual as well.  

In light of the R.M.A. decision, school districts should review their policies and practices regarding transgender students, particularly with regard to access to restrooms, locker rooms, and other areas of public accommodation.  R.M.A. substantially increases the risk of litigation for school districts that do not allow use of facilities consistent with students’ gender identities.  

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 school lawyers if you have any questions.  

This update was prepared by Charles S. Elbert, Robert A. Useted, Kevin A. Sullivan, D. Leo Human, and Erin M. Leach.

In Janus v. AFSCME, Council 31 et al., 585 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.

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. 

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., 883 F.3d 100 (2d Cir. Feb. 26, 2018) and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., 884 F.3d 560 (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. 

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.

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.