Skip to content

The Hogan Lovells Global employment team is holding a webinar on September 26th to highlight current trends in the enforcement of covenants and protection for confidential information in France, Germany, Italy, the Netherlands, Spain, the UK and the U.S. We will discuss the key issues and what they mean in practice for multi-national employers.

Many multi-national employers would like to take a global approach to protecting confidential information and shielding their business against competition from former employees. However, local laws inevitably constrain how far this can be achieved. Some countries require employees to be compensated for entering into non-compete agreements. What is permitted in one jurisdiction in terms of the scope or duration of a restriction may not be enforceable in another.

Please join us for a lively discussion on these key issues affecting your business.

Click here to RSVP.

Beginning on July 1, 2019, Virginia employers must, for the first time, disclose certain employment records of current and former employees upon request. See Va. Code § 8.01-413.1. This blog post answers some essential questions about the new law.

What does the law require an employer to disclose? The law states that upon request of a current or former employee, or employee’s attorney, an employer must disclose: “a copy of all records and papers retained by the employer in any format, reflecting (i) the employee’s dates of employment with the employer; (ii) the employee’s wages or salary during the employment; (iii) the employee’s job description and job title during the employment; and (iv) any injuries sustained by the employee during the course of the employment with the employer.”

When must the disclosure be made? Employers must provide this information within 30 days of the request. If unable to meet this deadline, the employer must notify the requester in writing of the purpose of the delay and disclose the materials within 30 days of its written notification.

Are there any exceptions to disclosure? In certain limited circumstances, the records must be furnished to the employee’s attorney or authorized insurer rather than the employee—including where the employee’s doctor has included in the employee’s records a statement that furnishing the records to the employee would be reasonably likely to endanger the life or physical safety of the employee, or where the records make reference to another person (other than a health care provider) and the access requested would be reasonably likely to cause substantial harm to such referenced person.

Who bears the cost of the disclosure? The employer may charge the requester a reasonable fee for making copies and processing the request.

What is the consequence if an employer fails to comply? Upon failure of any employer to comply with the new law, the employee or his attorney may demand the documents by subpoena. If the employer’s noncompliance is willful, the court may award damages for all expenses incurred by the employee to obtain their employment record, reasonable attorneys’ fees, and a refund of the fees charged by the employer to the employee for fulfilling the request. “Willful” noncompliance means: “(i) . . . failing to respond to a second or subsequent written request, properly submitted by the employee in writing, without good cause or (ii) . . . imposing a charge in excess of the reasonable expense of making the copies and processing the request for records or papers.”

When does the law take effect? July 1, 2019.

What should employers do to comply? Virginia employers should consider revising any policy that may prohibit employees from obtaining access to any personnel records to allow the disclosures required by this law. Employer should also consider establishing a process for timely responding to employee requests for the records covered by this law, including designating who will be tasked with determining what records must be disclosed and gathering and providing this information.

* * * *

For more information regarding this law, please speak to the author listed in this article or the Hogan Lovells lawyer with whom you work. A special thanks to summer associate Kellie Majcher for her assistance with this blog post.

On June 14, 2019, the United States Court of Appeals for the District of Columbia Circuit rejected the argument that a university should be entitled to special academic deference in employment discrimination claims concerning denial of tenure brought under Title VII of the Civil Rights Act of 1964 (“Title VII”). Mawakana v. Bd. Of Trustees of the Univ. of the Dist. Of Columbia, No. 18-7059 (D.C. Cir. June 14, 2019).

In Mawakana, an African American professor brought suit after he was denied tenure by the University of the District of Columbia (“UDC”). He failed to receive a recommendation for tenure at each step of UDC’s process, including from the relevant faculty committees, the dean and the provost, as well as in the final decision by the university president. Mawakana sued UDC for, among other things, race discrimination under Title VII and the District of Columbia Human Rights Act (“DCHRA”). The district court granted UDC’s motion for summary judgment and dismissed Mawakana’s claims, reasoning that it was required to accord “heightened deference” to UDC’s “academic decisions.” Like the district court here, some courts in prior decisions, including in the District of Columbia, have suggested that they are reluctant to find discrimination in faculty tenure or promotion decisions. See, e.g., Okruhlik v. Univ. of Arkansas, 395 F.3d 872, 879 (8th Cir. 2005) (“The academic setting and complex nature of tenure decisions, however, distinguishes them from employment decisions generally.”); Elam v. Bd. of Trustees of Univ. of D.C., 530 F. Supp. 2d 4, 17 (D.D.C. 2007) (citing Okruhlik for the proposition that “a court must be particularly wary of second-guessing a university’s decisions concerning faculty members”); Jiminez v. Mary Washington Coll., 57 F.3d 369, 376 (4th Cir. 1995) (“We commence with the premise that while Title VII is available to aggrieved professors, we review professorial employment decisions with great trepidation.”).

The D.C. Circuit’s analysis of academic deference

The D.C. Circuit reversed the district court’s grant of summary judgment to UDC, holding that United States Supreme Court precedent “and the concept of academic freedom do not entitle a university to special deference in Title VII tenure cases.” Although the Court acknowledged that the Supreme Court in University of Michigan v. Ewing, 474 U.S. 214 (1985) held that courts must defer to universities in reviewing the “substance of a genuinely academic judgment” made in “good faith,” the question in a Title VII case is “whether the employer acted in good faith.” More specifically:

Ewing dictates that a court cannot second-guess a university’s decision to deny tenure if that decision was made in good faith (i.e., for genuinely academic reasons, rather than for an impermissible reason such as the candidate’s race) . . . . A Title VII claim requires a court to evaluate whether a university’s decision to deny tenure was made in good faith (i.e., for academic reasons rather than for an impermissible reason such as the applicant’s race).

In a footnote, the court, surveying a number of cases across the country, highlighted that many (but not all) other courts have applied “the same Title VII standard to faculty members as to other discrimination plaintiffs,” and that upon a “close examination,” even the cases that “express[ed] solicitude” related to faculty employment decisions effectively were not applying a different Title VII standard.

The court also reversed summary judgment on Mawakana’s claims under the DCHRA, noting that the legal analysis of a race discrimination claim under Title VII and the DCHRA is the same.

Having disposed of the argument that UDC is entitled to academic deference; the D.C. Circuit viewed the evidence in the light most favorable to the professor, as required at the summary judgment stage, and held a reasonable jury could find that race was a motivating factor in UDC’s decision to deny Mawakana tenure. In reaching this decision, the court was heavily influenced by evidence concerning the dean, who in the court’s view, while not the ultimate decision-maker, was a proximate cause of the ultimate negative decision. The court relied on evidence presented by the professor, including that the dean:

  • sometimes applied stricter review criteria to black applicants for tenure, such as disfavoring co-authored works for black applicants but not white applicants;
  • supported every white applicant for tenure during her time as dean but raised concerns about more than half of the black applicants;
  • had dissuaded two black faculty from applying for tenure; and
  • changed her position on issues that were subsequently relevant to the tenure decision, such as originally speaking favorably of an article by the professor and later stating that it did not meet tenure standards.

Applying the Mawakana decision

While the D.C. Circuit’s decision rejects the concept of special deference in cases involving academic judgment, it is important to underscore the limits of the Mawakana holding. While the D.C. Circuit has held that courts should not place a “thumb on the scale” of a university in an employment discrimination simply because of “academic deference,” the case does not mean that an employment discrimination plaintiff can prevail on a discrimination claim by convincing a court that a university’s academic judgment was simply incorrect or unwise. If it can be shown that the university made a genuine academic decision—just like if a non-university employer has made a genuine business decision—a plaintiff cannot prevail (or survive summary judgment) simply by second guessing academic (or business) judgment. Courts have often stated that they do not “serve as a super-personnel department that reexamines an entity’s business decisions.” Barbour v. Browner, 181 F.3d 1342, 1346 (D.C. Cir. 1999). This principle applies equally in and out of the higher education context. Additionally, the D.C. Circuit was careful to point out that, even absent academic deference, it may be “especially difficult” as a practical matter for an employment discrimination plaintiff to succeed in challenging a tenure decision, given, among other things, the complexity of the decision and the numerous decision makers involved.

Furthermore, the D.C. Circuit did not address whether its holding extends beyond employment discrimination cases. Therefore, the court’s decision does not necessarily preclude an academic deference argument in another context, such as in a breach of contract case. See Brown v. The George Washington Univ., 802 A.2d 382, 385 (D.C. 2002) (granting summary judgment on breach of contract claim to university that did not promote professor or renew her contract; explaining that the court must “proceed with particular caution” and “only rarely assume academic oversight, except with the greatest caution and restraint, in sensitive areas as faculty appointment, promotion, and tenure” (quotation marks omitted)); Alden v. Georgetown Univ., 734 A.2d 1103, 1109 (D.C. 1999) (granting summary judgment on breach of contract claim to university that dismissed student from school, emphasizing the heavy burden a plaintiff faces in an academic dismissal case due to the need to defer to a university’s academic judgment).

Nonetheless, the Mawakana decision makes clear that universities should strive in the tenure decision process to:

  • have clear policies and criteria;
  • apply the policies and criteria consistently and evenhandedly;
  • treat similarly situated people similarly; and
  • assure that those involved in the different stages of the process understand their responsibilities and the university’s anti-discrimination policies.

For more information on the Mawakana case or any other employment or higher education law issues, please contact one of the authors of this article or the Hogan Lovells lawyer with whom you work.

 

 

We previously reported here that in April of this year, a federal judge set September 30, 2019 as the deadline for covered employers (i.e., having at least 100 employees) to submit pay data in Component 2 of their EEO-1 reports. This month, the Equal Employment Opportunity Commission (EEOC) posted its online filing portal to be used for Component 2 data submissions, which is a different portal than that used for Component 1 submissions. This portal is located at eeoccomp2.norc.org and contains helpful guidance materials regarding the Component 2 survey. The portal is not yet open for submissions. On July 12, the EEOC will begin providing employers with log-in information via email and/or US Postal Service, and on July 15 the portal will open.

By September 30, 2019, covered employers must use this portal to submit for calendar years 2017 and 2018 the total number of full-time and part-time employees in each established race/ethnicity and gender category, in each of 12 pay bands established by the EEOC, for each EEO-1 job category. A sample EEO-1 Component 2 form demonstrating the information to be submitted is located here. To determine an employee’s pay, an employer must use W-2 box 1 income. Employers must also report for both years the number of hours worked (in the aggregate) by all of the employees accounted for in each of the 12 pay bands for each EEO-1 job category. For non-exempt employees, the employer reports the total number of hours worked for the entire calendar year. For exempt employees, the employer can either provide actual hours worked if it maintains such information, or use a 40 hour-per-week proxy for full-time workers or a 20 hour-per-week proxy for part-time employees, multiplied by the number of weeks they were employed during the year.

Employers should prepare in advance of the September 30 deadline by collecting and confirming for each full-time and part-time employee:

  • Race for 2017 and 2018 snapshot period
  • Gender for 2017 and 2018 snapshot period
  • 2017 W-2 box 1 income
  • 2018 W-2 box 1 income
  • 2017 total hours worked
  • 2018 total hours worked

The EEOC explains on its portal that the 2017 and 2018 snapshot periods are an employer-selected pay period between October 1 and December 31 of 2017 and 2018, respectively. The EEOC also states that employers can choose different snapshot periods for the two years.

As the September 30 deadline approaches, employers should continue to watch the EEOC’s portal for updates and additional guidance. Employers should also be prepared for the possibility of a decision by the U.S. Court of Appeals for the D.C. Circuit that could change the pay data submission requirements. The federal government filed an appeal with the D.C. Circuit seeking to overturn the court order requiring the submission of pay data as part of the EEO-1 report but, as of the date of this post, has not requested a stay of the September 30, 2019 due date, nor has the government filed any brief or motion in the appeal so far.

For more information about EEO-1 reporting, or any other legal issues in the workplace, contact the authors of this article or the Hogan Lovells lawyer with whom you work.

Last week, the New York State Legislature passed a bill prohibiting employers from asking about the salary history of prospective and current employees. Aimed at curtailing wage discrimination and pay disparity, the bill applies broadly. The bill, in its current form, applies to all employers along with recruiters or similar entities that connect applicants with employers.

Under the bill, an employer may not consider wage or salary history in deciding whether to (1) offer employment, (2) promote or (3) determine an employee’s wage or salary. It would also prohibit making disclosure of wage or salary history a pre-requisite for an interview, consideration for an offer, continuing employment, or a promotion.

The only way an employer may obtain this information is if the individual voluntarily offers the information without prompting.  In such an instance, the employer may inquire and confirm the wage or salary history.  The bill includes an anti-retaliation provision, and permits aggrieved  applicants/employees to seek damages, injunctive relief and attorney’s fees.

Governor Cuomo has expressed public support for this measure, and will likely sign it into law.  We will be sure to keep you updated.

On June 26, 2019, Judge Denise Cote, of the Southern District of New York, granted a motion to compel arbitration of an employment discrimination, retaliation and sexual harassment claim—despite recently passed NY law, NY CPLR § 7515 (“Section 7515”), invalidating provisions that require employees to arbitrate sexual harassment claims.

Judge Cote observed that Section 7515 applies only to the extent not “inconsistent with federal law” and that the arbitration provision at issue was to “be governed by and interpreted in accordance with the Federal Arbitration Act (FAA).”  Quoting the U.S. Supreme Court precedent, Judge Cote further recognized that “the FAA reflects both a liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract.”  Ultimately, the Court held that applying Section 7515 to invalidate the arbitration agreement “would be inconsistent with the FAA” and that the FAA’s strong presumption that arbitration agreements are enforceable . . . is not displaced by” the NY law.

This decision, though it may be appealed, is a significant development for employers who wish to continue to use mandatory arbitration agreements in the wake of Section 7515.

 

Effective July 1, 2019, the District of Columbia minimum wage will increase to $14.00 per hour, from the current $13.25 per hour. The new rate will apply to all employers, regardless of size. The upcoming increase to the minimum wage is part of a series of increases that began with the passage of the District’s “Fair Shot Minimum Wage Amendment Act of 2016.” The rate will increase again to $15.00 per hour on July 1, 2020 and then increase in successive years starting in 2021 in proportion to the Consumer Price Index increase.

The base minimum wage for tipped employees also will increase on July 1 to $4.45 per hour. If an employee’s averaged weekly hourly tip earnings, added to the base minimum wage, do not equal the new minimum wage, the employer must make up the difference.

Approximately 20 states have increased or will increase their minimum wage rates in 2019, which follows similar increases in 2018. The District of Columbia’s minimum wage rate is among the highest rates in the country.

District of Columbia employers with minimum wage employees should adjust their practices as appropriate.

Many employers offer paid parental leave policies to employees, affording new parents paid time off to care for a new child. Though some employers offer paid parental leave to both new mothers and fathers of equal length, many others offer substantially longer leaves to primary caregivers. Bifurcated parental leave policies for primary and non-primary caregivers are not illegal per se. However, employers should be cautious to ensure that their policies do not rely upon sex-based stereotypes to make classifications and allocate benefits.

Title VII of the Civil Rights Act of 1964 (“Title VII”) makes it “an unlawful employment practice for an employer … to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s … sex.” In effect, Title VII prohibits employers from making classifications or implementing policies that intentionally discriminate based on sex, including any sex-based classifications or sex-based stereotypes exhibited through the administration of employee benefits, such as paid parental leave policies. Numerous states, including New York, California, and New Jersey, also have their own laws that prohibit discrimination against employees on the basis of sex with regard to compensation, terms, conditions, or privileges of employment.

There has been an uptick in lawsuits by male employees alleging that their employer’s paid parental leave policies unlawfully discriminate against fathers by presumptively offering longer periods of paid parental leave to mothers. An example of such a policy is where “biological mothers” are provided 10 weeks of paid parental leave and “biological fathers” only 2 weeks. Or, a policy that provides “primary caregivers” longer periods of paid leave than “non-primary caregivers” and assumes that the “primary caregiver” is a female. That is, a policy that puts a greater burden on a male to show that he is the “primary caregiver.” Why? Because such a policy presumptively qualifies women as a “primary caregiver,” and thereby allocates benefits differently based on the sex of the employee.

In light of the current climate, all employers should carefully examine their policies to ensure that they administer parental leave and related return-to-work benefits in a manner that ensures equal benefits for male and female employees and utilizes sex-neutral criteria and procedures. The Hogan Lovells employment team has extensive experience drafting and advising on employment policies, and is prepared to assist with any questions or concerns. For more information about the above, or any other legal issues in the workplace, contact the authors of this article or the Hogan Lovells lawyer with whom you work.

In an Opinion Letter released on Tuesday, May 14, the Office of the National Labor Relations Board’s General Counsel opined that Uber drivers are not legal “employees” for the purposes of federal labor laws. This opinion, written by Associate General Counsel Jayme L. Sophir, comes less than a month after a similar Opinion Letter was issued by the Department of Labor signaling a trend in favor of federal agencies classifying gig economy employees as independent contractors. Applying the common-law agency test, the Office of the General Counsel concluded that UberX and UberBLACK drivers should be classified as independent contractors rather than employees. In explaining their decision, they noted that factors such as the “virtually unfettered freedom” that drivers had to set their own work schedules, that drivers chose their own work location by choosing where to log into the app, and that drivers could—and often did—work for competitors belied a finding that Uber maintained the sort of control over its drivers that is indicative of an employer-employee relationship.

This decision could significantly curtail certain protections afforded to Uber drivers under federal law including their ability to form a union. That being said, the opinion should not be looked at as precedent with respect to determining whether an employee is misclassified as an independent contractor. This is because many states, including California, Massachusetts, and New Jersey apply a much more employee-friendly standard when determining whether an employee is misclassified. As we have previously noted, this is a pivotal time for the shifting landscape of the gig economy and Tuesday’s Opinion Letter represents a victory for those who believe gig economy workers should be classified as independent contractors rather than employees. The Employment Group at Hogan Lovells is committed to following the latest developments in labor and employment law and will continue to provide updates as they occur.

As part of the international commitments recently assumed by Mexico, on April 29, 2019, the Chamber of Senators approved the Bill through which Several Provisions of the Federal Labor Law and certain secondary laws in matters of Labor Justice, Freedom of Association and Collective Bargaining are amended (the “Reform“). The Reform will enter into force as soon as it is published in the Federal Official Gazette.

Below please find the most relevant pieces of the Reform.

1.  LABOR AUTHORITY

  • The Conciliation and Arbitration Labor Boards (the current labor authority) are eliminated. Labor disputes will be resolved by the Courts which depend on the judicial branch (Labor Courts).
  • The Conciliation and Registry Labor Centers (“the Labor Centers”) will be the Conciliatory Authority in which the parties must appear before starting a labor conflict. Collective Bargaining Agreements at both federal and local levels must be registered before the Federal Conciliation and Registry Labor Center.
  • Modifications to the labor procedure are established, such as: a mandatory initial conciliation stage, new rules for offering and presenting evidence, procedures for the deposit of severance before the Court in the event that a reinstatement is not applicable, rules for the burden of proof, use of technologies during the procedure, among others.
  • The following actions will be considered inappropriate: to require the execution of blank papers at the time of hiring, alteration of a document signed by the employee, and demand the ownership of a collective bargaining agreement without having any workers affiliated to the corresponding Union, among others.
  • The Local and Federal Conciliation Courts and Centers should begin its duties in three years and four years respectively, as of the effective date of the Reform. The registration activities of the Conciliation Centers will begin in the following two years as of the effective date of the Reform.
  • The matters currently in process before the Ministry of Labor and the Labor Boards will be concluded before these authorities, in accordance with the law in force at the time of the beginning of such matters. Likewise, the Labor Board will resolve all the labor processes that begin after the effective date of the Reform until the Labor Courts enter into their duties.

2.  FREEDOM OF ASSOCIATION AND COLLECTIVE NEGOTIATION

  • Unions must adapt their statutes to guarantee union democracy, including the election of the board members through a personal, direct, free and secret vote. The aforementioned must be done within one year as of the entry in force of the Reform.
  • The Federal Conciliation Center will establish a consultation procedure on collective bargaining agreements and the negotiation of annual reviews, including a record of representativeness of the Union, the distribution of such consultation in the workplace and the worker’s approval to the negotiations through a personal, free and secret vote.
  • The collective bargaining agreements currently in place should be reviewed at least once a year during the next four years following the entry into force of the Reform. If this revision is not made within such period and in accordance with the new consultation processes by the workers, the agreement will be terminated.
  • Employers are prohibited from interference with the decision of workers with respect to who should represent them in collective bargaining, or perform any act to exercise control over the union to which the workers belong.
  • If unions incur in extortion acts against employers in order to desist from a strike or claim of ownership, this may result in the cancellation of the union registration, among other penalties.
  • Exclusion clauses for separation of the Union in collective bargaining agreements are prohibited.

3.  NEW EMPLOYER OBLIGATIONS

  • The main obligations for employers effective as of the entry into force of the Reform are the following:
  • Include in the individual employment contracts the beneficiaries of the employees in case of death or disappearance, in terms of the Law.
  • Delivery of salary receipts to workers in printed form, including the breakdown of the earnings and deductions for the time worked, which must be signed by the employees. However, these can be replaced by digital tax receipts (CFDI) and will serve as evidence if they are verified in the Tax Administration Service website.
  • Provide employees with a copy of the collective bargaining agreement and its annual reviews within 15 days after its filing it in the Federal Conciliation Center. The delivery can be evidenced with the signature of receipt of the employee.
  • Implementation of a protocol of anti-discrimination, workplace violence and sexual harassment.
  • Establish and distribute in the work center the procedure requested by the Federal Conciliation Center regarding the consultation of collective agreements and the procedure requested by the Union regarding the negotiations of collective bargaining agreements.
  • New obligations are established for employers in special jobs, such as jobs in the mining industry, crew and aeronautics, field workers, etc.
  • Employers must register domestic workers in the compulsory social insurance regime, once the necessary regulatory adjustments are approved and entered into force.

The Hogan Lovells employment team in Mexico has extensive experience drafting employment and labor contracts, based on the specific needs of the business and the new legal framework. If your employment and labor agreements need to be reviewed in light of this Reform we are ready and able to assist. Should you require specific advice on this Reform and potential implementation, please feel free to contact us.