Maine DOL Proposes Rulemaking to Incorporate New Federal Overtime Rule

Earlier this month, the Maine Department of Labor announced proposed changes to its regulations that would align them to be consistent with changes being made to federal overtime regulations. The new federal overtime rule, which goes into effect on December 1, 2016, updates the salary threshold needed to qualify for the so-called “white collar” exemption under the federal Fair Labor Standards Act. That exemption applies to employees employed in a bona fide executive, administrative, or professional capacity.

In its notice of rulemaking, Maine DOL proposes to incorporate the changes in the federal overtime rule into its own rules so as to make them consistent with each other. The Maine DOL notes that these changes would include increasing the salary threshold to $913.00 a week for qualifying executive, administrative and professional exempt employees. The current salary threshold is $455 a week.

A public hearing on the proposed changes is scheduled for November 3, 2016, and the public may submit comments until noon on November 14, 2016. 

As noted in Maine DOL’s announcement, the new federal overtime rule will apply to employers throughout Maine beginning on December 1. Consequently, employers should not take Maine DOL’s recent rulemaking notice as a reason to delay implementing changes that may be required as a result of the new federal overtime rule.

Governor’s Panel Supports Maine Human Rights Commission

In response to concerns about the Human Rights Commission, Governor LePage, by Executive Order, established the Maine Human Rights Commission Review Panel on October 14, 2015. The Panel issued its Findings on September 27, 2016. The Review Panel consisted of eight members including an attorney who represents respondents before the MHRC, an attorney who represents complainants before the MHRC, a person recommended by the National Federation of Independent Businesses, a person recommended by the Maine Apartment Owners and Managers, a person recommended by Pine Tree Legal, a person with working knowledge of and familiarity with best administrative investigative practices and one person recommended by the Maine Human Rights Commission. The purpose of the Review Panel was to conduct a review of the structure and operation of the Maine Human Rights Commission to identify factors which may cause the perception of prejudice against respondents and bias in favor of complainants and to identify rules and practices that are unduly burdensome or unfair and to issue a report with recommendations.

After the Review Panel met thirteen times and did an extensive review of the Commission itself, its rules and regulations and interviewed Commissioners and staff, the Panel “unanimously agreed that the MHRC, its Commissioners and its staff are not actually prejudiced, biased or unfair towards respondents of complainants”. It went on to find that the vast majority of cases were heard or decided in favor of respondents and that there is no evidence that there is a bias or prejudice against either complainants or respondents. The Panel found that the MHRC was “devoted to its mission and desired to be fair and unbiased to all its parties”. The Panel agreed that the powers and duties of the Maine Human Rights Commission under the Maine Human Rights Act should be sufficient, well-staffed, well-funded and well-trained. The Panel made a series of recommendations including:

1. Hire a management consultant/efficiency expert. 
2. Hire more investigators to investigate. 
3. Use intake specialists. 
4. Increase education and training for MHRC staff and Commissioners. 
5. Increase number of administrative staff. 
6. Modernize computer and technology systems. 
7. Expand mediation program. 
8. Establish a dual track system and consider changing state law to require 180 days before right to sue letter issued. 
9. Improve and streamline requests from the MHRC for information, discovery and document requests. 
10. Increase and improve public relations and outreach. 
11. Commissioners should be appointed in a timely fashion. 
12. Filing fees. 
13. Increase the MHRC’s budget. 

All in all, this report established what the attorneys practicing in this area know to be the case. The Human Rights Commission does the best that it can on a very limited budget and is fair to the parties that appear before it, even though the process takes far too long.

Supreme Court Begins New Term with Few Employment Cases

The Supreme Court of the United States will begin its new term on October 3rd with a quiet slate of cases for employers. Among the few employment-related cases set for review include one involving whether the acting general counsel of the NLRB was validly appointed by President Obama under a federal vacancy statute (NLRB v. SW General, Inc.) and another involving the judicial standard of review for enforcing EEOC investigative subpoenas (McLane v. EEOC). Although these cases are not likely to set employers’ hearts afire, it is possible that the Court will add to its docket as it considers other pending petitions for review.

In terms of its composition, the Supreme Court will begin its new term as it ended its last one: with a vacancy. Although President Obama nominated Judge Merrick Garland from the D.C. Circuit Court of Appeals last March to replace Justice Scalia, the Senate has not acted on the nomination. As a result, the eight-member Court continues to risk deadlocking in some cases, as it did last term when considering the constitutionality of compulsory union dues in Friedrichs v. California Teachers Association. In that case – just as it does whenever it deadlocks – the Court affirmed the judgment below, which had held that mandatory “fair share” fees did not violate public employees’ First Amendment rights.

Whether the Court’s composition has played a role in its selection of cases this term is an open question. In this election year, it is also a question that is likely to persist until after November.

Employees Find “Cat’s Paw” Theory to be the Cat’s Meow

Employees are continuing to find success with the “cat’s paw” theory to prove employment discrimination, evidenced by two recent federal court decisions.

The “cat’s paw” theory references an old Aesop’s fable in which a monkey tricks a cat into doing work for his own benefit: the monkey puts the cat to work pulling chestnuts from a fire, which rewards the monkey with a hot meal, but which rewards the cat with only burnt paws. In the employment law context, the theory holds that an employer may get its paws burnt – i.e. be liable for discrimination – where it is manipulated into taking adverse action against an employee based on information from a supervisor who harbors discriminatory animus towards the employee. The theory, which the Supreme Court addressed in 2011 in a USERRA case, Staub v. Proctor Hospital, therefore gives employees a tool to show that discrimination was a proximate cause for an adverse action—even where the ultimate decision-maker was not aware of a supervisor’s discriminatory intent and the supervisor did not participate in the decision.

For example, in a recent case from the federal district court in Kansas, Canfield v. Rucker, an employee escaped summary judgment on her Title VII discrimination claim where there was conflicting evidence as to whether a superior influenced her termination. The employee had alleged that the superior – who was the assistant secretary of state for the State of Kansas – showed discriminatory animus by telling the employee’s relative that she was being fired for not going to church. The Secretary of State’s Office argued, however, that the assistant secretary had merely rubber-stamped the employee’s termination and that the decision had actually been made by one of the employee’s direct supervisors, who had allegedly conducted an independent investigation into the employee’s conduct and was therefore unbiased. Echoing Staub, the court found that there was sufficient evidence in the record to show that the assistant secretary was a proximate cause for the termination – including evidence that the assistant secretary had discussed the termination with the employee’s supervisor – and rejected the notion that the alleged independent investigation by the supervisor necessarily precluded a cat’s paw claim, particularly where there was a question as to whether the assistant secretary had influenced the termination in some way.

Similarly, the Second Circuit Court of Appeals recently held in Vasquez v. Empress Ambulance Service, Inc. that an employer may be liable under a cat’s paw theory if it negligently gives effect to the retaliatory intent of a non-supervisory co-worker. In this case, the plaintiff filed an internal complaint about sexually graphic text messages that she had received from a co-worker. After the complaint was filed, the co-worker manipulated certain text messages to make it appear as though he and the plaintiff had been involved in a consensual sexual relationship, and he provided the manipulated texts to management. The committee investigating the complaint relied on the doctored messages to conclude that it was the plaintiff who was engaging in sexual harassment and terminated her employment – notwithstanding the plaintiff’s insistence that the co-worker was lying and her offer to show her own cell phone as proof, which the committee declined to view. Vacating the judgment of the district court, which had held that the co-worker’s retaliatory intent could not be attributed to the employer, the Second Circuit held that liability may be imputed to the employer if it “negligently allows itself to be used as a conduit for even a low-level employee’s discriminatory or retaliatory prejudice.” 

In the First Circuit, the cat’s paw theory has met with mixed success. For example, in 2004, the Court held in Cariglia v. Hertz Equipment Rental Corporation that an employer may be liable when a neutral decision-maker takes adverse action against an employee based on information that is manipulated by a supervisor with discriminatory animus. More recently, however, the Court held in Ameen v. Amphenol Printed Circuits, Inc. that an employee’s retaliation claim under a cat’s paw theory was “effectively declawed” where the employee failed to demonstrate any evidence of discriminatory animus.

For employers, these decisions highlight the importance of conducting thorough internal investigations and ensuring that such investigations take into account possible retaliatory or discriminatory motives of supervisors and co-workers who provide information, especially if the investigation results in an adverse action against an employee. As the above cases make clear, an employer’s failure to do so may result in it being the moral of a very unpleasant story.

EEOC Issues New Enforcement Guidance on Retaliation

Earlier this week, the EEOC issued its final Enforcement Guidance on Retaliation and Related Issues.  The new guidance is the first update to the EEOC’s compliance guide on retaliation since 1998, and it marks the end of the process that began in January 2016 when the EEOC first proposed the new guidance.  The new guidance covers retaliation under each law enforced by the EEOC, including Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Rehabilitation Act, the Genetic Information Nondiscrimination Act, and the Equal Pay Act.

The final guidance reflects the growing trend in retaliation claims – indeed, according to the EEOC, retaliation is the most frequently alleged basis of discrimination and is asserted in nearly 45% of all charges received by the agency.  The new guidance is not likely to slow this trend.  This is because it takes a broader view – and therefore a more employee-friendly view – on each of the three elements that an employee must prove to prevail on a retaliation claim: (1) protected activity; (2) an adverse action by the employer; and (3) a causal connection between the protected activity and the adverse action.

For example, with respect to “protected activity,” the EEOC notes that this can include either “participating” in a complaint process under one of the laws enforced by the EEOC (such as by filing a complaint or serving as a witness), or reasonably “opposing” discrimination made unlawful by one of the laws (such as by complaining about allegedly discriminatory conduct or otherwise communicating a reasonable belief of a perceived violation).  The guidance, however, further clarifies that although protection for “opposition” is limited to those individuals who act with a reasonable belief that the alleged conduct is unlawful, “participation” in an EEO process – including the filing of an internal complaint – is protected regardless of whether the underlying allegation is based on a reasonable belief that discrimination has occurred or is likely to occur.  The EEOC does point out in the guidance that its interpretation does not give employees free rein to file baseless complaints without consequence, but it also cautions that employers who dole out those consequences unilaterally, rather than bringing evidence of bad faith to light in the context of the EEO process, will face greater scrutiny.

The guidance also sets a low bar for what can constitute a materially adverse action.  According to the guidance, a materially adverse action is any action that would reasonably be likely to deter protected activity, which includes not just obvious work-related employment actions like discharge, suspension, refusal to promote or hire, or work-related threats, warnings, and reprimands, but also actions that have no tangible effect on employment or that take place entirely outside of work.  This would include, for example, threatening reassignment, scrutinizing work or attendance more closely than for other employees, or making disparaging remarks about the person to others or the media.

The EEOC guidance offers some “promising practices” for employers to use to reduce the likelihood of a retaliation claim. Chief among those is a clearly written anti-retaliation policy that provides specific examples of what actions may constitute retaliation, as well as a clear explanation that retaliation can be subject to discipline, including termination. Clearly, though, none of these practices will insulate an employer from liability or the obligation to analyze potential retaliation issues on a case-by-case basis.

Social Media and the FMLA

Imagine for a moment: you are the administrator for a skilled nursing facility and your activities director has just informed you of a need to take FMLA leave for shoulder surgery.  You grant the FMLA request and your activities director takes the full twelve weeks he is allowed.  You then learn from his physician that he will need to extend his leave by an additional thirty days to complete physical therapy, which, of course, you oblige as non-FMLA leave.  Everything is fine – until you learn at some point during the director’s non-FMLA leave that he has been quite active and merry during his entire leave, evidenced by numerous Facebook posts showing him visiting Busch Gardens theme park in Tampa (twice), visiting St. Martin for several days, and posing by shipwrecks and cavorting in the ocean.  You learn he also may have been texting pictures of holiday decorations at Busch Gardens to his co-workers, ostensibly to share with them ideas for decorating the facility for the holiday season.  What do you do…what can you do?

This was the actual situation that faced the employer in a recent case from a federal district court in Florida, Jones v. Gulf Coast Health Care of Delaware, LLC.  Ultimately, the facility decided to terminate the activities director, believing that his Facebook and texting activity showed poor judgment as a supervisor and negatively impacted his co-workers.  The facility also claimed that the director’s conduct was prohibited by the facility’s social media policy, which prohibited any “social media usage that adversely affects job performance of fellow associates,” among other things.  The activities director – who later sued alleging FMLA retaliation – claimed that no specific violation of the social media policy was ever given to him as a reason for his termination and that, instead, he was told his was being terminated for abusing the FMLA.

In the end, the court found that the director failed to show causation – i.e. that he was retaliated because of his request to take FMLA leave – and that his retaliation claim therefore failed as a matter of law.  On this point, the court explained that the facility terminated the director for actions while on his FMLA and non-FMLA leave, not for requesting and taking the leave in the first instance, and that courts are generally not in the business of determining whether an employer’s personnel decisions are prudent or fair – as long as they comply with the law.

In this case, the court did not opine in detail on whether the facility’s social media policy tended to make its termination decision more fair than not – nor did it address the interesting question of how the facility actually obtained the director’s social media posts.  On summary judgment, the facts must be construed in the plaintiff’s favor and, in this case, the director disputed that he was told his termination was related to a violation of the social media policy.  Nonetheless, it is more likely than not that the facility’s social media policy would have substantiated its legitimate termination decision – just as it would tend to do for any other employer facing a similar situation.

DOL’s Persuader Rule Enjoined

Earlier this week, a federal district court in Texas granted a nationwide preliminary injunction that halts the Department of Labor's implementation of its Persuader Final Rule: Nat'l Fed'n of Indep. Bus. v. Perez (N.D. Tex. June 27, 2016). The development was welcome news for employers, who would have been required to comply with the Final Rule beginning July 1, 2016.

The Final Rule represents DOL's new interpretation of the so-called "advice exemption" under the Labor-Management Reporting and Disclosure Act (LMRDA). Under the LMRDA, employers are required to report relationships with labor consultants who are engaged to persuade employees on union activities. However, the LMRDA does not require employers to file reports when a consultant has been engaged to give "advice," which has been interpreted to include "indirect" persuasion activities. As a result, the advice exemption has historically limited an employer's reporting obligations to those situations when a consultant has been engaged to have direct contact with employees.

The Final Rule significantly narrows the advice exemption by requiring employers to report not only "direct" persuader activities, such as when a consultant is hired to speak with employees in the midst of a union campaign, but also "indirect" persuader activities, such as when a consultant is hired to prepare scripts for managers or otherwise coach supervisors on communications to employees.

The concern of many employers - and their consultants - has been that the Final Rule will stifle the ability of employers to obtain timely advice and will discourage consultants from providing many services, such as trainings and seminars on union matters, which could become subject to reporting requirements under the rule. The federal district court in Texas agreed. In addition to finding that the Final Rule likely infringes on employers' free speech and exceeds the DOL's rule-making authority, the court found that the rule essentially eliminates the advice exemption under the LMRDA and is therefore "defective to its core."

Under the court's ruling, the DOL is only preliminarily enjoined from implementing the Final Rule pending final resolution of the case, which could include any appeals by DOL. Consequently, although the Final Rule's implementation may no longer be imminent, it remains an issue that employers and their consultants must continue to monitor.