Employment Cases and Regulations to Watch this Year
CASES
CRST Van Expedited, Inc. v. EEOC, No. 14-1375 (U.S. Supreme Court)
Issue: Can employers recover attorneys’ fees if the EEOC fails to satisfy its pre-suit obligations under Title VII?
The EEOC brought suit against the petitioner, an interstate trucking service, contending that a female driver-trainee and other similarly situated female employees had been sexually harassed and subjected to a hostile work environment by male lead drivers or co-drivers. The Eighth Circuit overturned the district court’s decision awarding $4.7 million in fees, which had concluded that the EEOC failed to satisfy its obligations before bringing suit on behalf of alleged sexual harassment victims.
Under Title VII, before the EEOC may bring a suit, it has the duty to investigate, to find reasonable cause and to conciliate claims. Of the 270 claims brought against CRST, the District Court found that 67 did not satisfy the pre-suit requirements. The Eighth Circuit overruled the lower court’s fee award, holding that because the failure to satisfy Title VII’s pre-suit obligations was not a ruling on the merits, CRST could not recover attorneys’ fees. The Supreme Court will hear oral arguments on March 28, 2016.
Green v. Brennan, No. 14-613 (U.S. Supreme Court)
Issue: When does the filing period start for a constructive discharge claim?
In Green, the Supreme Court will resolve a 5-3 circuit split over whether the filing period for a constructive discharge claim begins to run when an employee resigns, or at the time of an employer’s last allegedly discriminatory act giving rise to the discrimination. The Court heard oral arguments on November 30, 2015. In this case, a former U.S. Postal Services employee claimed he suffered racial discrimination. After being denied a promotion, Green contacted a USPS EEO counselor alleging he was denied the promotion because of his race. Between 2008 and 2009, Green expressed concern he was victim of retaliation, seeking help from EEO counselors twice.
Green was accused of criminal charges and on December 16, 2009, Green agreed to either resign or take a new job in exchange for the USPS not pursuing criminal charges. Green later resigned on February 9, 2010. 41 days after his resignation, Green contacted an EEO counselor to report his constructive discharge. To initiate a claim, a federal employee must report discrimination to an EEO counselor within 45 days of the matter the employee alleges was unlawful.
Green argues that the 45-day period starts when the employee resigns. The 10th Circuit held the 45-day period starts when the last discriminatory act occurred, which was December 16 when Green agreed to resign. The U.S. Solicitor’s Office agrees with neither – rather, it contends the 45-day period starts when the employee gives notice to resign, which was also December 16.
Encino Motorcars, LLC v. Navarro, No. 15-415 (U.S. Supreme Court)
Issue: Are service advisors at car dealerships exempt employees under the FLSA?
According to the National Automobile Dealers Association, there are more than 45,000 “service advisors” employed by franchised car dealerships in the U.S. Currently, salesmen, partsmen and mechanics are classified as exempt employees under the Fair Labor Standards Act (FLSA). The Ninth Circuit created a circuit split in holding the service employees non-exempt by following a DOL interpretation, which found that service advisors did not qualify under the FLSA exemption, because they did not meet the regulatory definition of any of the categories. Because the DOL’s interpretation was reasonable, the Ninth Circuit held they were required to follow its interpretation of the FLSA. However, this created a split with the Fourth and Fifth Circuits, which held that the service advisors performed job duties were “functionally similar” to those of a salesman, partsman and mechanic.
REGULATIONS
FLSA White Collar Exemption Changes
This summer, the Department of Labor will publish its latest update to the federal overtime regulations, vastly increasing the number of employees who may be eligible for overtime. Currently for a salaried employee to fall under the overtime exemption, he or she must earn $455 per week ($23,660 per year). This will rise to $970 per week ($50,440 per year). The qualification for highly compensated employees will increase from $100,000 to $122,148. The regulations will also establish a system to automatically update the minimum salary level to remain consistent with inflation.
Retaliation Guidance Update
On January 21, 2016, the EEOC submitted for public input an updated version of its enforcement guidance on employment retaliation claims. The EEOC previously updated its guidance in 1998. Since the last revision, the number of retaliation claims has doubled, growing to the most frequently raised claim brought before the EEOC. In its revised guidance, the EEOC has provided updates related to the best practices for employers to prevent retaliation, including effective written employer policies, training, providing of anti-retaliation advice to management, proactive follow-up and the review of employment actions to ensure EEOC compliance. The public comment period ended on February 24, 2016.
DOL Interpretation: Independent Contractor or Employee?
The DOL Wage and Hour Division issued an interpretive memorandum on July 15, 2015, providing guidance on when an individual is considered an independent contractor or an employee. Concluding that “most workers are employees under the FLSA’s broad definitions,” the main criteria in the employer/employee relationship is whether the worker is really in business for him or herself or is economically dependent on the employer. Given the DOL’s broad interpretation of “employee’, expect the independent contractor relationship to be heavily scrutinized in 2016.