Equal Employment Opportunity Commission (EEOC)

It is no secret that more U.S. workers are electing to put off retirement and remain in the workforce longer. Given the current labor shortage (lowest unemployment rate in 18 years), this is great news for companies as retaining experienced workers decreases turnover cost and provides immeasurable value in other areas of corporate performance. However, there is a tendency among some companies to “get younger” since experienced workers are often the most highly compensated employees and the newer crop of workers are digital natives that tend to be more technologically fluent.

Given this context, it is unsurprising that age discrimination has become the hot-button workplace discrimination issue in the media (notwithstanding sexual harassment, of course). On June 26, the U.S. Equal Employment Opportunity Commission (“EEOC”) released a report titled The State of Older Workers and Age Discrimination 50 Years After the Age Discrimination in Employment Act. A few of the key takeaways:

  1. Statistics suggest age discrimination is pretty common in today’s workforce. 90% say it is somewhat or very common, and more than 60% of workers 45 and older admitted to witnessing or experiencing age discrimination.
  2. Certain groups are particularly vulnerable – women, minorities and tech workers. In the technology industry, workers are sensitive to the fact that they may be replaced by younger workers – more than 40% of older tech workers are worried about losing their job because they fear age is a liability to their career.
  3. Older workers that lose jobs have much more difficulty finding a new job. This is important because if a worker remains out of work, they may be more likely to institute litigation against their former employer for discrimination.

South Carolina employers are advised to think critically when making decisions about your more experienced workers. Perhaps it is time for your organization to rethink outdated company policies about when a worker should retire, and rethink traditional “succession planning” measures that often disadvantage experienced workers. As more millennials enter the workforce, now is the time to think about how you onboard and train employees regarding stereotypes of the older generation.

Pregnant woman at workThe South Carolina Pregnancy Accommodations Act, found here, was signed into law on Friday, May 18, 2018. The Act amends the South Carolina Human Affairs Law. In passing the legislation, the General Assembly stated,

It is the intent of the General Assembly by this act to combat pregnancy discrimination, promote public health, and ensure full and equal participation for women in the labor force by requiring employers to provide reasonable accommodations to employees for medical needs arising from pregnancy, childbirth, or related medical conditions. Current workplace laws are inadequate to protect pregnant women from being forced out or fired when they need a simple, reasonable accommodation in order to stay on the job. Many pregnant women are single mothers or the primary breadwinners for their families; if they lose their jobs then the whole family will suffer. This is not an outcome that families can afford in today’s difficult economy. Continue Reading South Carolina Pregnancy Accommodations Act

According to the Centers for Disease Control (“CDC”), the United States experiences a flu season each year. With this year’s flu season considered one of the worst since the 2009-2010 pandemic, many employers wish to implement policies to protect the workplace and wonder whether they can implement policies mandating vaccination for their employees. This desire is particularly present in healthcare because those employees are charged with protecting patient safety and more often exposed to patients with compromised immunity. Continue Reading Employer Policies Involving the Flu Vaccine and Discrimination Under Title VII

Sexual Harassment Complaint Form

The latest headlines confirm the 2016 findings published by the Equal Employment Opportunity Commission (EEOC) that workplace harassment too often goes unreported. The EEOC reports that “approximately 70% of the individuals who experienced harassment never even talked with a supervisor or manager,” meaning that they didn’t report it to their employer. The EEOC found the most common response of any employee who experienced sexual harassment was not to report it but to avoid the harasser, or ignore or attempt to forget the behavior. The reason for not reporting it was that the victim feared they would not be believed, they would be blamed or ostracized, or that they would be retaliated against.

As an “employer’s lawyer” I am often faced with advising clients when these claims are made under an anti-harassment and non-discrimination policy. The victim’s concerns about reporting are legitimate – historically those feared reactions to a sexual harassment report have often borne fruit. Over the years, I believe employers have become much more sensitive to this issue. However, even the most diligent employers on this issue often find themselves noncompliant with Title VII, the law that applies to any employee’s claim of harassment or discrimination. I continue to be surprised that there are many employers who don’t know if they are subject to this law, don’t have a policy prohibiting harassment or discrimination, and don’t follow the EEOC’s guidance as to the specific investigation that has to be performed. So in the wake of all of the press on sexual harassment, it is a good time to take stock of your compliance practices.

Here are some helpful things to keep in mind:

  • Title VII is applicable to employers with 15 or more employees.
  • Title VII requires employers to have a written anti-harassment, anti-discrimination policy with two or more avenues for reporting.
  • The policy must not only reference sexual harassment, but all forms of harassment.
  • The policy must define what is illegal harassment and discrimination.
  • An employer must respond to any complaints under the policy, whether verbal or written.
  • An employer must perform a very specific investigation outlined by the EEOC and the investigation must be timely.
  • An employer must then take any discipline that the investigation’s outcome requires.
  • An employer must then communicate the outcome of the investigation to the employee, although the employer need not tell of the specific discipline if discipline is imposed.
  • An employer must then follow up with the victim to make sure retaliation is not occurring whether or not the underlying investigation resulted in a finding that harassment or discrimination occurred.
  • Retaliation can take many forms.
  • During an investigation, an employer should not change any terms or conditions of the alleged victim’s employment or relocate the victim to make the victim more comfortable – only the alleged offender can be moved or sent out on administrative leave.

These thoughts spring from my observations over the years to the current day regarding employers’ policies and practices. The Fourth Circuit Court of Appeals, our jurisdiction, will not enforce a policy if it is not effective and the steps above are required for an employer to argue its policy is effective.  It is not sufficient to merely have the policy.

Additionally, it is crucial that the leaders in an employer’s organization set the example. Off-color jokes should be prohibited and certainly should not be made by those in charge. Offenders should be dealt with swiftly. Supervisors and leaders truly are held to a higher standard of behavior in the workplace because they set the example. So often employers don’t wish to take any action towards the offender because the offender is so integral to the organization’s success. However, that is exactly the type of situation that creates the possibility for vulnerability on this front as we are seeing in the news today. If employers wish to avoid liability in cases of this nature, they must follow the process diligently and timely, and not be afraid to take discipline when it is required, no matter whom the alleged offender is.

The ruling in the AARP v. EEOC case may be detrimental to employers and their healthcare plans because the EEOC may either reduce the percentage of its allowable inducement (or penalty) below 30% of the employee cost for participation in any employer-sponsored “wellness” program to be considered voluntary or possibly return to its former position that any reward or penalty renders participation involuntary.

The Americans with Disabilities Act (ADA) permits an employer to conduct voluntary medical examinations including voluntary medical histories, including health risk assessments, as part of an employee health program. The Genetic Information Nondiscrimination Act (GINA) also permits the voluntary collection of genetic information. Prior to May 2016 when the EEOC issued its “wellness regulations,” the EEOC’s position was that the ADA also prohibited penalizing or rewarding any employee for completing a health risk assessment that sought medical or disability-related inquiries or participating in any health insurance program, such as a “wellness” program, on the grounds that the reward for doing so rendered participation involuntary. On May 16, 2016 when the EEOC passed its “wellness” regulations, the EEOC concluded that the ADA would not be violated if any incentive or penalty for participation in a “wellness” program was valued at 30% of the employee-cost of plan participation or less. We addressed the EEOC’s 2016 regulations in this blog post.

The AARP’s lawsuit against the EEOC alleged that employees who cannot afford to pay a 30% increase in premiums will be forced to disclose their protected information on health risk assessments or participate in the “wellness” programs when they would otherwise choose not to do so, thereby rendering the award for participation or penalty for refusal to participate involuntary and, thus, prohibited by the ADA. The AARP also alleged that the incentives allowed by the “wellness” regulations were inconsistent with its previous position on incentives.

The 36 page opinion is lengthy but, in short, the D.C. Circuit Court concluded neither the ADA nor GINA defined the term “voluntary” and that the statutes were ambiguous on this point. The federal court went on to conclude that the EEOC’s definition of voluntary in its “wellness” regulations as a 30% employee cost or less for providing medical information as part of a “wellness” program was unreasonable and not adequately explained. The EEOC’s reliance on the Health Insurance Portability and Accountability Act (HIPAA) was unjustified because: 1) HIPAA was promulgated to prevent health insurance discrimination and does not contain an explicit voluntary requirement as ADA and GINA do; and 2) HIPAA expressly permits use of any amount of incentives for participation in “wellness” programs, only applying the rule that the reward may not exceed 30% of the employee and dependents’ total cost of healthcare coverage if the “wellness” program requires satisfaction of a health-related factor to receive the award. Nor was the Court persuaded by the EEOC’s reliance on what it termed current insurance rates to justify the 30% incentive level when the regulation did not elaborate on what those rates are, how the EEOC evaluated them or what bearing they have on the voluntary aspect crucial to the analysis.

For several years prior to the EEOC’s May 15, 2016 regulations, employers, plan administrators, health insurers and brokers hoped that the EEOC would reconcile its position with the Affordable Care Act and HIPAA, which expressly permitted employers to monetarily incentivize employees to participate in wellness programs. While the EEOC’s “wellness” regulations were replete with a number of caveats and conditions, they did at least determine that providing a reward for participation was no longer proof that participation was involuntary. The D.C. District Court’s August 24, 2017 ruling has the potential to result in a setback on the EEOC’s step forward towards that goal.

The opinion can be accessed in its entirety here.

David Donovan of South Carolina Lawyers Weekly posted an article, “The Pence Policy: Male-Female Interaction Rule May Have Pitfalls for Employers”, which addresses how Vice President Pence’s policy to never eat alone with a woman other than his wife might disadvantage women if the policy was employed in the workplace because of lost mentoring or career-advancement opportunities.  While the reader may well think the association of Vice President Pence’s policy to gender discrimination is far-fetched, the possible consequence of unintentional discrimination is not so tenuous.

If a workplace is predominately staffed with male supervisors and those supervisors are discouraged from fraternizing with members of the opposite gender, then female employees will be excluded from informal mentoring opportunities, ideas shared over lunch or other social events. This dichotomy not only applies to the male-female demographic, but any demographic where the majority is a certain race, national origin, or religion, and the minority is not.

A take-away from the best diversity training I’ve ever heard was that we all tend to associate with those who are like us. We choose to go to lunch or to have social interaction with those folks we most identify with and, as a result, those who are not like us aren’t included.  I do not discredit Vice President Pence’s policy and can understand his reasons for following it. When a manager, supervisor or executive adopts a policy like the one espoused by Pence, how can employers insure against unintentional employment discrimination?

Mr. Donovan consulted me in the context of lost training opportunities when researching his article. If an employer streamlines or standardizes its training process and implements it during work hours as part of a formal program, the employer is avoiding the effects of unintentional discrimination as well as creating a defense to any such claims.  Putting processes in place for training is wise for other reasons as well, including a consistent outcome or quality of the service or product offered by the company.  Employers’ lawyers (including me) often advise against one-on-one meetings between supervisors and subordinates when the purpose of the meeting is for counseling or discipline.  However, supervisors should be encouraged to train subordinates consistently and equally.  While formal training can be standardized, day-to-day observations as to how a specific employee might improve are, by necessity, individualized.

Supervisors should strive to engage in efforts to improve subordinates equally and can do so without compromising principles similar to those expressed by Vice President Pence. Communicate discreetly but in the open with a subordinate.  Include comments about how subordinates might improve on their annual or other periodic reviews. Include areas for improvement under discussions at department meetings without identifying those employees who provided the examples for improvement.  There are surely many more opportunities for a supervisor to ensure that all of the subordinates in the supervisors’ department are receiving the same or similar advantages.

Last week, in the case of EEOC v. Consul Energy, Inc., the Fourth Circuit affirmed a $586,860 judgment for a coal miner who claimed that his employer (Consul Energy) failed to accommodate his religious beliefs and constructively discharged him when it forced him to use a biometric hand scanner to monitor work hours. The employee alleged that the use of the hand-scanning system would cause him to be marked with the Mark of the Beast, which, according to his understanding of the Bible’s Book of Revelation, would associate him with the Antichrist and allow the Antichrist to manipulate him. The biometric hand scanner required employees to scan their hand, and the shape of the hand was linked to the employee’s unique employee number. It did not detect or place a mark on the hand. The employer was unwilling to allow the employee to check in and out by other means, even though two other employees were allowed to check in by entering their employee numbers on a keypad because they had hand injuries. The employee retired under protest. At trial, the jury returned a verdict of $150,000 in compensatory damages, and the court subsequently awarded $436,860 in front and back pay and lost benefits.

On appeal, the employer primarily argued that it did not violate Title VII’s reasonable accommodation requirement because there was no conflict between the employee’s bona fide religious beliefs and the requirement that the employee use the hand scanner system. In essence, the employer’s argument was that the employee misunderstood the Book of Revelation. It argued that the Mark of the Beast is a physical mark that would be placed upon the right hand. According to the employer, there could be no conflict because the scanner system did not give a physical mark on his hand, and, moreover, it was allowing the employee to scan his left hand rather than his right hand. The employer even presented evidence that the employee’s pastor disagreed the employee’s view of a connection between the scanner and the Mark of the Beast.

The Fourth Circuit held that the employee’s argument “is beside the point” because it is not the employer’s place “to question the correctness or even the plausibility of [the employee’s] religious understandings.” All that matters is that the employee sincerely holds the beliefs, and that such beliefs conflict with an employment requirement.

The employer also argued there was no adverse employment action because the employee voluntarily quit. The Fourth Circuit, following recent Supreme Court cases, made it clear that an employee asserting a constructive discharge claim does not need to show “deliberateness” or “intent”- i.e., that the employer denied the accommodation to provoke the employee’s retirement. Rather, the question is whether the employer’s discriminatory conduct subjected the employee to circumstances that were so intolerable that a reasonable person would quit. The Fourth Circuit found substantial evidence that the employee was in an intolerable position by the employer’s refusal to accommodate the employee by requiring him to use a scanner system that he believed would render him a follower of the Antichrist.

This case is an excellent reminder that sincere religious beliefs do not have to identify with the beliefs of a particular sect, even where the employee appears to be a member of the sect. This case is also a reminder that the failure to appreciate the distinction between sincere religious beliefs and what are often viewed as legitimate religious beliefs can be a costly misunderstanding.

Last week, Senators Lamar Alexander (R-Tennessee) and Pat Roberts (R-Kansas) urged President Trump to rescind the new requirements of the revised EEO-1 form. I originally wrote about the proposed EEO-1 form last fall – you can find my blog post here. The revised form requires, for the first time, that covered employers submit pay data to the government. The purpose is to assist the EEOC in identifying and eradicating pay discrimination based on gender, race, and other protected categories.

According to the Senators, “[t]hese revisions will place significant paperwork, reporting burdens, and new costs on American businesses, and will result in few jobs created and higher prices for American consumers.” The EEOC projected it would take the approximately 61,000 covered employers a total of about 1.9 million hours and cost $53.5 million to complete the new forms.[1] However, the United States Chamber of Commerce claims the figures are closer to 8 million hours and $400 million to comply.[2]

The EEOC had initially set a September 2017 deadline for companies to file the new report. After much pushback from the business community, the first reports under the new rules are due by March 31, 2018. This gives elected officials plenty of time to try and convince the Trump Administration to reverse course. The reversal must come from the Office of Management and Budget, which is led by former South Carolina Representative Mick Mulvaney.

This update serves as a reminder to employers to be proactive regarding pay discrepancies. Employers should consider conducting an internal audit to determine whether there is a legitimate business reason for differences in pay among similar categories of employees.

[1] https://www.bna.com/scrap-eeoc-pay-n57982086684/

[2] Id.

In prior posts, we have noted that HR professionals should acknowledge the tension between making hiring decisions based on an applicant’s criminal history and avoiding Title VII liability, if refusing to hire certain individuals based on these prohibitions results in disparate treatment of or disparate impact on protected classes of individuals under Title VII (e.g., race, national origin, gender). In recent years, the “Ban the Box” Movement has gained traction in an effort to place restrictions on the types of criminal conduct that employers may consider and how they may consider it, with the stated goal of affording persons with histories of criminal conduct opportunities for gainful employment. At the federal level, the EEOC complemented these efforts when it issued its 2012 Enforcement Guidance entitled, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.” In this Guidance, the EEOC emphasized that criminal background check practices may have a disparate impact on, for example, African American and Hispanic men who have a statistically higher arrest and incarceration rate than other classes of individuals. Accordingly, the EEOC’s Guidance outlined what it believes to be an employer’s best practices for complying with Title VII when handling an applicant’s criminal history. In 2015, the Obama Administration adopted a “ban the box” policy in federal employment by modifying certain rules to delay inquiries into an applicant’s criminal history until later in the hiring process.

At the state level, according to the National Employment Law Project, 25 states have adopted policies that prohibit inquiring into or considering an applicant’s criminal history until after consideration of the applicant’s qualification, largely in the public employment sector. In nine of those states, private employers also are prohibited from requesting criminal history information until later in the hiring process. South Carolina currently is not one of those states.  However, if any one of the four bills (H. 3059, H. 3062, S. 191, S. 192) currently pending before the South Carolina General Assembly is passed, “ban the box” could be a statutory, statewide policy in South Carolina.

Collectively, all 4 bills propose to codify in statute the following general concepts:

  • “Conviction of crime”   The types of criminal history that an employer is permitted to consider is specifically defined. The House bills seek to limit criminal convictions to felonies, “gross misdemeanors” and misdemeanors involving possible incarceration. The Senate bills involve convictions, guilty pleas, nolo contendere pleas and bond forfeitures for crimes involving possible incarceration. All of the bills specifically exclude consideration of any arrests that did not result in a conviction, expunged convictions and/or charges that were not pressed or dismissed.
  • Ban the Box         No public or private employer may inquire, consider or require disclosure of an applicant’s criminal record until after either (1) the applicant is selected for an interview, or (2) if interviews are not conducted, a conditional offer of employment is made to the applicant. Employers exempt from this prohibition include the S.C. Department of Corrections, financial institutions (H. 3062 only) and employers with a statutory duty to conduct a criminal background check or otherwise inquire into an applicant’s criminal history.
  • Denial of Employment or Licensure       No public employer or professional licensing authority[i] may deny employment or licensure on the basis of the applicant’s criminal conviction unless the crime “directly relates” to the position or occupational license sought. Factors that an employer must consider to determine whether a crime “directly relates” to the position or license sought are: (1) the nature and seriousness of the crime; (2) the relationship between the crime and the purposes of regulating the position of public employment or occupation for which licensure is sought; (3) the relationship between the crime and the ability, capacity and fitness required to perform the duties of the position or occupation; and (4) the amount of time since the crime was committed.
  • Opportunity to Demonstrate Rehabilitation      For public employment, even if a crime is “directly related” to the position, the applicant has an opportunity to present “competent evidence of his sufficient rehabilitation and present fitness to perform the duties of employment.” The bills enumerate several types of evidence, including U.S. Department of Defense Form 214 indicating an honorable discharge or separation under honorable conditions following a criminal conviction, and a statement from a correctional institution at least one year after release showing compliance with all terms and conditions of probation or parole. The public employer must also consider other individualized assessment factors, including all circumstances surrounding the crime and conviction and the applicant’s age at the time the crime was committed.
  • Grievance Rights and Enforcement       Under the House bills, if an applicant for public employment or occupational licensure ultimately is denied based on his or her criminal history, the applicant may pursue a grievance process under the Administrative Procedures Act. In addition, violations of the “ban the box” provisions by private employers will be enforced by the South Carolina Human Affairs Commission through the imposition of monetary penalties.
  • Tax Incentives     Under S. 191, an employer is eligible for a state income tax credit for hiring a “qualified ex-felon” for certain threshold amounts of hours. A “qualified ex-felon” is an individual who was convicted of any felony codified under state law and if hired less than 2 years after release from prison, has not been convicted of another criminal offense. At this time, it is difficult to determine whether or when any of the bills will move forward during the Legislative Session, either in their current versions or modified. Although the bills are an attempt to further the goal of gainful employment of individuals with criminal histories, the bills as written appear to be an overreach into the discretion that an employer – whether public or private – exercises in the hiring process. The codification of an employer’s hiring processes and procedures, and the factors that the employer can – and importantly, cannot – take into consideration appear to impose a one-size-fits-all approach to hiring. What’s more, if the proposed requirements are passed primarily in the context of public employment, there is a risk that those requirements will be extended to private employers in the future.

[i]              Only the House bills address occupational licensing authorities.

The Equal Employment Opportunity Commission (“EEOC”) just released an updated EEO-1 reporting form that requires employers to provide employee pay data beginning in March 2018. A sample of the proposed form can be found here.

Importantly, many companies are not required to complete an EEO-1 form. With limited exceptions, only private employers with one hundred (100) or more employees and federal contractors with fifty (50) or more employees must make the filing each year.

This is the first time that pay information will be reported on the EEO-1 filing. According to the EEOC, collecting pay data from the EEO-1 Form will help improve investigations into pay discrimination based on gender, race, and ethnicity. Critics argue that the data will not serve the agency’s intended purpose and will increase administrative costs on employers.

These changes highlight the EEOC’s current focus on equal pay issues. Employers should be proactive and consider conducting an internal audit to determine whether you have pay disparities that need to be addressed. Identifying pay disparities in advance can help companies decide whether a pay adjustment should be made or whether the disparities can be explained through legitimate justifications.