Welcome to Labor of Law. We're closely watching this case: The U.S. Justice Department, representing the EEOC, just got additional time in the U.S. Supreme Court to respond to a cert petition in a transgender workplace dispute. Which side will DOJ take? And more: the Sixth Circuit extends Epic Systems to reach the Fair Labor Standards Act. Plus: some new observations on ban-the-box enforcement as states announce enforcement actions. And scroll down for client work in big new cases.

➤➤ I'm Erin Mulvaney in Washington, D.C., covering labor and employment from the Swamp to Silicon Valley. Follow this weekly newsletter for the latest analysis and happenings. If you have a story idea, feedback or just want to say hi, I'm at [email protected] and on Twitter @erinmulvaney. Thanks for reading.

 

 

Some Thoughts on 'Ban-the-Box' Enforcement

State enforcement of “ban-the-box” rules is gaining steam, as we've seen from recent New York and Massachusetts actions. These are rules that restrict how much employers can probe of job applicants about any prior criminal history.

New York's attorney general recently announced a series of enforcement actions against big retailers. Massachusetts brought its first ban-the-box action in June.

“Everyone deserves a fair chance when being considered for employment,” BarbaraUnderwood (above), the New York attorney general, said in June. “Ban the Box helps protect New Yorkers from discrimination and ensure that a job applicant's qualifications are the focus during the hiring process. My office will continue to enforce the law as we work to ensure all New Yorkers get the fair shot they deserve.”

The National Employment Law Project estimated that nearly three-fourths of the country lives in a jurisdiction that has a rule restricting how companies can use criminal background checks. Here are some labor lawyers' thoughts on the trend:

>> “We have reached a place where there are so many ban-the-box laws throughout the United states, it's become a very large minority,” Joe Schmitt, a labor and employment shareholder at Nilan Johnson Lewis in Minnesota. “I flipped in the last two years—I used to tell clients to comply piecemeal and have a box and eliminate for others. Now, I say create a uniform policy avoiding the question.”

>> On the Massachusetts action, Epstein Green's Carly Baratt wrote in a blog post: “These actions highlight that businesses operating in jurisdictions with ban the box laws must ensure that their pre-hiring practices comply with such laws or risk regulatory fines, not to mention public disrepute and potential civil liability.”

>> Stephen Woods, an Ogletree, Deakins, Nash, Smoak & Stewart shareholder in South Carolina, said the patchwork of laws is a compliance headache for employers, and he described some of the stricter laws as regulatory overreaching. Some employers, he said, are creating policies that group certain areas together, while others take a national approach or plot state-by-state. Large companies have pushed for certainty and a uniform policy either way, he said. He said, “Ban-the box has become a misnomer because what it really is, is a complicated set of restrictions.”

 

 

Docket Checks: LGBT Cases at SCOTUS; FLSA & Arbitration, and More

➤➤ A federal appeals court Wednesday broadened the reach of a U.S. Supreme Court ruling that strengthened the ability of companies to squash employee class actions through mandatory arbitration agreements. The Supreme Court in Epic Systems v. Lewis, confronting the National Labor Relations Act, said employers can use waivers to restrict class actions. The U.S. Court of Appeals for the Sixth Circuit applied the Epic Systems ruling to the Fair Labor Standards Act. Judge Amul Thapar, writing for the unanimous panel, said the Fair Labor Standards Act doesn't “displace” provisions of the Federal Arbitration act requiring judges to enforce arbitration agreements as written. “Whether modern arbitration practice is consistent with Congress's goals for the FLSA is a question that only Congress can answer,” Thapar wrote. “Our role is to interpret and analyze the statute's text.” Seyfarth Shawpartner Gerald Maatman Jr. represented the company, Kelly Services Inc. Jason Thompson, senior shareholder at Sommers Schwartz, advocated for the workers. Read the full decision here.

➤➤ SCOTUS is asked to ignore circuit split on sexual orientation discrimination. The law firm Freeman Mathis & Gary, defending Clayton County, Georgia, in a discrimination fight over sexual orientation, told the U.S. Supreme Court the U.S. Court of Appeals for the Eleventh Circuit got it right in a finding that sexual orientation discrimination is not prohibited under federal law. The case is one of several that confront the scope of Title VII protection. Read more in The Daily Report.

➤➤ Meanwhile, the U.S. Justice Department solicitor, Noel Francisco, this week asked the Supreme Court for an extension of time to file the government's brief in the closely watched transgender workplace discrimination case R.G. & G.R. Harris Funeral Homes Inc. v. EEOC. The agency's responsive brief was due Aug. 23—but Francisco requested, and got approval for—the deadline to be pushed to Sept. 24. He blamed the delay on “the heavy press of earlier assigned cases to the attorneys handling this matter.” L&E lawyers are watching how DOJ responds in this case, ever since U.S. Attorney General Jeff Sessions rescinded broad guidance giving protection to transgender individuals. Will DOJ back the EEOC in this case, or ask the court to overturn a federal appeals court ruling that found in favor of the funeral home employee? The EEOC is the plaintiff in the suit. DOJ lined up against the EEOC in the Zarda LGBT workplace case in the Second Circuit. We saw a situation recently in the Supreme Court—in the Lucia case, involving the SEC's ALJs—where DOJ decided not to defend the appeals court ruling. SCOTUS picked O'Melveny & Myers partner Anton Metlitsky to argue the “orphaned” position.

➤➤ EEOC prevails against UPS in an ADA lawsuit. A federal district court in Kansas granted the U.S. Equal Employment Opportunity Commission's motion for judgment in a case against UPS. The agency sued over alleged violations of the Americans With Disabilities Act. The complaint alleged a collective bargaining agreement that compensated medically disqualified drivers at a lower rate than those who were disqualified for non-medical reasons. The court found “paying employees less because of their disability is discriminatory under any circumstance.” A team from Armstrong Teasdale LLP represented UPS.

➤➤ A New Jersey court says an employee can be suspended for medical marijuana use. A federal court ruled for a company that said a forklift driver could be indefinitely suspended because he used medical marijuana. Daniel Cotto sued his former employer Ardagh Glass when the company refused to let him return to his job following a former workplace accident because he couldn't pass a drug test. Cotto claimed he needs medical marijuana, prescribed by a doctor, to alleviate neck and back pain from a past injury. DLA Piper LLP's Paul Erian represented Ardagh Glass. Read the firm's motion to dismiss here.

 

 

 

How States Could Try to Blunt 'Janus' Decision

Public-sector unions will certainly feel the pinch from Janus v. AFSCME but some states are pushing back. The Supreme Court decision this term found that public-sector unions can't force non-members to pay fair-share fees, hampering one source of revenue

Pennsylvania Democrats, in a state that leads the nation in teacher strikes, said they would introduce a bill requiring unions to explain to new employees the benefits of union membership. A separate bill, according to a Seyfarth Shaw alert, “would require public-sector unions to obtain a majority vote of all employees, including non-union employees, to authorize a strike.”

California legislation and a recent Ninth Circuit ruling in the case Interpipe Contracting v. Becerra show how states might attempt to mitigate the blow of Janus, according to a Seyfarth analysis. The case confronted a state law that imposed new limits on so-called “wage credits.” Seyfarth's Timothy Hoppe wrote that the direct impact may be relatively small. “Nevertheless, given the potential financial implications of the Supreme Court's recent Janus decision on public sector unions, this probably is not the last legislation pro-labor states will pass to make it easier for unions to raise funds.”

Meanwhile, labor had a big win in Missouri, where voters rejected a referendum election that essentially would have expanded Janus' impact to the private sector. Unions outspent their counterparts five to one in that campaign. “I would think that if a state is contemplating right-to-work, it would have to take a close look at what happened in Missouri,” said Robert Stewart, St. Louis-based shareholder at Ogletee, Deakins, Nash, Smoak & Stewart. “If you are going to get outspent 5-1, you better not pick that fight. The unions did an expensive and extensive campaign. Any state contemplating such a measure, better look at the money.”

 

 

 

Who Got the Work

 

>> A former Morgan Stanley lawyer named Christopher Garvey alleges the bank pushed him out after raising alleged FCPA and securities concerns. Garvey's case is pending at the U.S. Labor Department, my colleague C. Ryan Barber reports at the NLJ. Sarah Bouchard, co-leader of the whistleblower team at Morgan, Lewis & Bockius, represents Morgan Stanley. The bank contends Garvey voluntarily resigned.

>> Nike Inc. faces a class action lawsuit in Oregon, filed by women who claim the company allowed a culture of sexual harassment and gender discrimination to persist, The New York Times reports. The lawsuit comes in the wake of an ousting of top executives and an investigation into the good ol' boys culture at the retail giant. A team from Markowitz Herbold represents the plaintiffs.

>> Proskauer Rose partner Connie Bertram and her firm have agreed to end the $50 million gender discrimination lawsuit that Bertram lodged against the law firm last year. Kathleen McKenna of Proskauer led the firm's defense. David Sanford of Sanford Heisler Sharp represented Bertram. Read more here.

>> A news company is suing one of its former reporters for refusing to let go of a Twitter handle post-employment. We mentioned this case recently—and it's one to track. My colleague Rhys Dipshan has more on the complaint here. Laura Windsor of the law firm Williams Mullen—where she chairs the L&E practice—represents plaintiff BH Media Group in the case in U.S. District Court for the Western District of Virginia.

Around the Water Cooler

>> JPMorgan's lawyers at McGuireWoods asked a Labor judge to pause a gender-bias case after the SCOTUS ruling in Lucia. [NLJ]

>> Plaintiffs lawyers are working together in the aftermath of Epic Systems. [Bloomberg Law]

>> Meanwhile, here's a cautionary tale for employers imposing mandatory arbitration. [Reuters]

>> “Artificial intelligence promises to make hiring an unbiased utopia.” [Bloomberg]

>> “When Harry Fired Sally.” Analysis of the “punishment gap” in the financial services sector. [Bloomberg]

>> California's worker classification debacle won't be resolved soon. [Bloomberg Law]

>> There's an existential question at gig companies, ex-Uber engineer Susan Fowler says. “What have we done?” [Vanity Fair]

>> Six things working women should pretend they can't do. [Financial Times]

>> “An emerging area for workplaces.” The push for gender neutrality. [CNN]

Correction: Our Labor of Law newsletter on Aug. 9 incorrectly stated when EEOC member Chai Feldblum would leave the agency. Feldblum's term expired July 1, and her re-nomination faces criticism, but she can remain at the EEOC likely until January, not the end of August, if she is not confirmed to a new term.