Labor Secretary Resigns

Secretary of Labor, Alex Acosta resigned from his post amid pressure from the public due to the plea deal he negotiated with Jeffery Epstein while U.S. Attorney in the Southern District of Florida. In a press conference in the White House Rose Garden, President Trump announced that the Deputy Secretary of Labor, Patrick Pizzella will assume the role of Acting Secretary of Labor starting July 19, 2019. Pizzella was confirmed by the Senate in a 50-48 vote.

FortneyScott will continue to monitor any leadership changes within the DOL.

Supreme Court Limits Public Access to Private-Sector Records

The U.S. Supreme Court, in a 6-3 decision, reined in the ability of the media and other members of the public to access commercial and financial records provided to the government by private-sector businesses.  Under the Freedom of Information Act’s (“FOIA’s”) Exemption 4, the government is not required to disclose “commercial or financial information obtained from a person and privileged or confidential.”  Although seemingly straightforward, this language has been the source of much dispute and confusion, as many courts have held that information should only be deemed confidential under Exemption 4 if it can be shown that its disclosure would cause “substantial competitive harm.”  However, on June 24, the Supreme Court provided clarity on this issue through its opinion in Food Marketing Institute v. Argus Leader Media, d/b/a Argus Leader.  The majority opinion, written by Justice Gorsuch, overruled the “substantial competitive harm” standard, and held that information provided to the government is “confidential” under FOIA Exemption 4 – and, as a result, not subject to public disclosure – if the information is “both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy.”  As a result of this ruling, private companies which are required to provide sensitive data to the government, such as the pending EEO-1 Component 2 pay data submissions, can do so with more confidence that such information will not be made public.

Case History

In 2011, Argus Leader Media (“Argus”), a South Dakota newspaper, submitted a FOIA request to the U.S. Department of Agriculture (“USDA”) seeking information provided to the agency by retail stores regarding benefit payouts for food stamps under the Supplemental Nutrition Assistance Program (“SNAP”).  The USDA refused to disclose the requested information citing Exemption 4, and Argus filed suit.  The district court found in favor of Argus, holding that the USDA had not shown a likelihood of substantial competitive harm resulting from the disclosure of the requested information, and on appeal the Eight Circuit affirmed the district court’s decision.

Following the lower court decisions, the Food Marketing Institute (“FMI”) intervened in the case and petitioned the Supreme Court for review arguing that the “substantial competitive harm” standard applied by the Eighth Circuit improperly narrows Exemption 4 which requires only that information be confidential.  FMI asserted that the term confidential should be afforded its ordinary meaning – “something that is private and not publicly disclosed.”  In addition, the Department of Justice appeared in support of FMI arguing that data should be deemed confidential and not subject to disclosure under FOIA where it was reasonably understood to have been communicated to the government in confidence.

The Supreme Court’s Decision

Justice Gorsuch, writing for the majority, agreed with FMI and the Department of Justice, and noted that the language of Exemption 4 provided no basis for the “substantial competitive harm” standard which had been adopted by the lower courts.  In reaching this decision, Justice Gorsuch noted that the “ordinary, contemporary, common meaning” of the word “confidential” at the time FOIA was enacted simply required that in order for information to be deemed confidential it must be “customarily kept private” and, in the event information is disclosed to another party, assurances are provided that it will remain secret.  The majority found that here, the information at issue easily satisfied these conditions and fell under Exemption 4.

In addressing the “substantial competitive harm” standard, the Court held that in developing this interpretation the lower courts had ignored the plain language of the statute, and chose instead to apply their own interpretation of FOIA’s purpose.  By inferring that Exemption 4 only applied to information which would cause substantial competitive harm, lower courts had improperly narrowed the plain meaning of the statute as it was enacted.

In dissent, Justice Breyer pointed to the purpose of FOIA – to “permit access to official information long shielded unnecessarily from public view.”  With this purpose in mind, Justice Breyer noted that FOIA’s exemptions must be narrowly construed.  He further cautioned that as businesses tend to treat “as secret all information which need not be disclosed” the majority’s ruling would provide a great deal of leeway to deprive the public of information.

Looking Ahead

Moving forward, this ruling should have far reaching implications, as it provides the government with far more discretion to block the release of information that contains private-sector commercial or financial information.  Importantly, this decision should have an immediate impact as companies which are preparing to submit their EEO-1 Component 2 pay data, can now do so with confidence that their non-public information will be exempt from FOIA requests.

Supreme Court Adds Burden to Title VII Defense

On June 3, 2019, the U.S. Supreme Court decided that if employers wish to challenge a claim brought by a plaintiff alleging a violation of Title VII that was not part of the EEOC charge, they must act promptly to assert the defense that the claim is invalid. If the employer fails to challenge the claim at the outset for failing to exhaust administrative remedies by not observing the charge-filing requirement, an accused employer will waive this defense.

The High Court resolved a split among the Circuit Courts by ruling that the charge-filing requirement is not “jurisdictional,” but merely “procedural.” Failure to follow a “jurisdictional” requirement would permit an accused party to successfully challenge a claim at any time.

To read this case, Fort Bend County v. Davis, click here.

 

Eric H. Oppenheim, SHRM-SCP, SPHR Joins WorkPlace HR, LLC

An HR Consulting Firm Affiliated with Fortney & Scott, LLC,

A Leading Management Employment Law Firm in Washington, DC

Experienced business owner and Human Resources professional Eric H. Oppenheim, SHRM-SCP, SPHR has joined WorkPlace HR, LLC as the Executive Director. WorkPlace HR provides premium Human Resources consulting services which exceed client’s expectations through creative, efficient, and solution-oriented support.

Mr. Oppenheim formerly served as the Chief Executive Officer and Franchise owner of Republic Foods, Inc., a family business where he managed the operations and Human Resources for 17 restaurants in the Washington, DC metropolitan area. He is an experienced entrepreneur and leader with over 20 years of responsibility for strategic planning in managing day-to-day operations and Human Resource functions, including the development of policy and directing and coordinating Human Resources activities such as: recruitment, hiring, orientation, training, compensation, employee benefits, security, consumer issues, and employee services.

Mr. Oppenheim brings his wide-ranging experience and expertise in identifying, analyzing, and evaluating new business segments to support corporate diversification. Mr. Oppenheim’s successes have been recognized by Brand Leadership Awards for outstanding operational results.

In announcing that Mr. Oppenheim has joined WorkPlace HR, Jacqueline Scott, Vice President of WorkPlace HR, stated: “We are very fortunate to add Eric’s skill and talents to WorkPlace HR as WorkPlace HR continues to expertly address the rapidly expanding range of Human Resources issues employers are facing today.” David Fortney, President of WorkPlace HR, further noted, “With Eric leading WorkPlace HR, we are able to offer our clients top level Human Resources expertise and support in a highly efficient and cost-effective manner.”

Since the sale of Republic Foods, Inc. in 2017, Mr. Oppenheim has been a consultant in the manufacturing and food service industries; providing leadership training; developing and implementing marketing initiatives to drive profitability; and aligning cultural initiatives with organizational strategies to drive growth for his clients.

As a Human Resources professional, he has been involved with numerous advocacy efforts on Capitol Hill in his representation of small businesses. Mr. Oppenheim has actively participated with the U.S. Chamber of Commerce, the Society of Human Resource Management, and the National Franchisee Association have in the legislative process in support of and Human Resource professionals and the business community.

Mr. Oppenheim is certified as a professional trainer by the National Franchisee Association for their CORE Leadership Program. This program is designed to elevate the engagement, performance, and results of hospitality/restaurant teams by improving how management coaches, motivates, and communicates.

Mr. Oppenheim received his undergraduate degree in International Business from Ithaca College and his Master’s Degree in Human Resources and Organizational Development from Johns Hopkins University. He holds an SHRM-SPC as well as an SPHR Certification; has served on the Labor Expertise Panel for the Society for Human Resource Management since 2012, served on the Human Capital Measurement/HR Metrics Expertise Panel for the Society for Human Resource Management; holds a certificate in Strategic Decision Making and Human Resources from The Wharton School; and is the former chairman of the Government Relations Committee for Burger King Corporation. Additionally, Mr. Oppenheim has served on the Legislative Committee of the Maryland Chamber of Commerce, and he is an active member of the Society for Human Resource Management, the Human Resource Leadership Forum, and the Washington Area Compensation and Benefits Association.

WorkPlace HR, LLC and Fortney & Scott, LLC
WorkPlace HR provides premium human resources consulting services which exceed clients’ expectations through creative, efficient and solution-oriented support. WorkPlace HR offers a unique business approach premised on understanding and integrating each client’s strategic, operations, and human resources objectives. Additional information is available at www.workplacehr.com or by contacting Eric Oppenheim at eoppenheim@workplacehr.com or 202.689.1203.

FortneyScott is a Washington, DC-based law firm counseling and advising clients on the full spectrum of workplace-related matters. The firm has been recognized as one of the leading management employment law firms in the highly prestigious “Best Law Firms” for since 2011 by U.S. News & World Report and Best Lawyers. The firm offers clients the unparalleled experience and expertise of its attorneys, who formerly held senior positions at the U.S. Department of Labor, the Equal Employment Opportunity Commission, and other government agencies, in corporate legal staffs, in major law firms, and who served as a judge on an international tribunal.

Additional information is available at www.fortneyscott.com or by contacting David Fortney at dfortney@fortneyscott.com or 202.689.1201.

Colorado Passes Onerous Pay Equity Law, Expanding the State Law Patchwork

Colorado Governor Jared Polis (D) signed the Equal Pay for Equal Work Act on May 22, 2019, resulting in Colorado becoming the most recent state to join the patchwork of state pay equity laws that employers must navigate. The Colorado pay equity law becomes effective January 1, 2021, giving employers time to prepare and come into compliance.

The Colorado equal pay law provisions The Colorado law prohibits employers from discriminating between employees on the basis of sex, or on the basis of sex in combination with another protected status, for “substantially similar work.”  The Colorado law includes specific affirmative defenses, but the defenses under the new law are narrower than those provided under the federal Equal Pay Act and other state pay equity laws and the Colorado defenses likely will be more difficult for employers to meet. Specifically, a difference in pay can be justified if the employer can demonstrate that the wage differential is based upon a seniority or merit system or a system that measures earnings by quantity or quality of production or the employer can demonstrate:

  • All factors are applied reasonably;
  • Each factor accounts for the entire wage differential; and
  • Prior wage history was not relied on to justify a disparity in current wage rates.

The Colorado law also has an explicit ban on asking for salary history or relying on the salary history of prospective employees to determine their wage rate.

Employees claiming wage discrimination have expanded litigation rights, including that claimants may circumvent the administrative process and allowing for two years to file a lawsuit, instead of the usual 300 days to file an EEOC charge. There also are expanded remedies, including back pay for the entire time the violation continues, not to exceed six years. Additionally, an employer may be liable for economic damages in an amount equal to the difference between the amount that the employer paid to the employee and the amount the employee would have received had there been no violation, plus liquidated damages.

There is a good-faith exception, however. The additional payments are not permitted if the salary disparity was unintentional. The burden is on the employer to demonstrate that the act or omission giving rise to the violation was done in good faith.

Additional challenges for multi-state employers operating in Colorado.  Colorado joins a number of other states in passing comprehensive equal pay legislation, and more states are likely to continue the trend in the near future.  It is critical that employers, particularly those operating in multiple states, quickly get up to speed on their varying obligations.  Moreover, proactive pay audits under the protection of attorney-client privilege and, where appropriate, pay adjustments, will put employers in the best possible position to defend against what we expect will be an increase in complaints of compensation discrimination.

FortneyScott’s Pay Equity practice is dedicated to guiding employers through the changing and challenging world of pay equity. FortneyScott’s attorneys in Denver, Colorado and Washington, DC advise employers on compliance with the new Colorado pay equity law and additional workplace matters. Please contact FortneyScott for legal counsel and advice on complying with the Colorado fair pay law and the additional federal and state fair pay laws, and to enable your company to “get pay equity right.”

Update on EEO-1 Part 2 Pay and Work Hours Data Collection

On April 25, the Federal District Court in Washington DC ruled that the EEOC shall collect employer compensation and work hours data for all U.S. employers with 100 or more employees.  The Court has ordered that two years of compensation and work hours data be submitted.  It is certain that employers must submit 2018 data.  The Court ordered EEOC to soon decide whether employers will submit either 2017 or 2019 data.  Although all details have not been fully determined, the Court’s ruling included the following specifics:

  1. April 29, 2019 – EEOC will announce on its website that employers are to undertake preparations for filing their 2018 compensation and work hours data by September 30, 2019.
  2. May 3, 2019 – EEOC will communicate to the Court and to the Plaintiffs a second year of data that will be collected.  Specifically, the Court has ruled that EOOC can either collect 2017 compensation and work hours data or 2019 compensation and work hours data.
  3. September 30, 2019 – This is the date that employers’ 2018 compensation data must be submitted.  Additionally, in the event that the EEOC requires 2017 data to be filed, it also must be filed by this same date.
  4. March 31, 2020 – If the EEOC elects to require 2019 compensation data to be filed, instead of 2017 data, the compensation and work hours data must be filed by this date.
  5. April 5, 2021 – The Court has extended the authorization to collect compensation and work hours data to April 5, 2021.  The Court has relied on “tolling” principles for the time that the original EEO-1 data collection form was stayed by OMB.
  6. Rolling 20-day reports – the EEOC is to provide the Court with status updates every 20 days and the court is retaining jurisdiction to oversee and supervise implementation.  Additionally, the Court specifically stated that if there was a shortfall in the expected participation rate by employers in providing compensation data, that the EEOC was to extend the filing period until the historical reporting percentages are achieved.

For the District Court’s decision, click here.

A special webinar hosted by FortneyScott and DCI has been scheduled on Tuesday, April 30th  from 12-1 pm ET to provide employers in understanding what this means for them.  Please reach out to your FortneyScott attorney with whom you work to assist with compliance with these requirements.

To register for this timely webinar, click here.

Update on EEO-1 Part 2 Pay and Work Hours Data Collection

On April 25, the Federal District Court in Washington DC ruled that the EEOC shall collect employer compensation and work hours data for all U.S. employers with 100 or more employees.  The Court has ordered that two years of compensation and work hours data be submitted.  It is certain that employers must submit 2018 data.  The Court ordered EEOC to soon decide whether employers will submit either 2017 or 2019 data.  Although all details have not been fully determined, the Court’s ruling included the following specifics:

  1. April 29, 2019 – EEOC will announce on its website that employers are to undertake preparations for filing their 2018 compensation and work hours data by September 30, 2019.
  2. May 3, 2019 – EEOC will communicate to the Court and to the Plaintiffs a second year of data that will be collected.  Specifically, the Court has ruled that EOOC can either collect 2017 compensation and work hours data or 2019 compensation and work hours data.
  3. September 30, 2019 – This is the date that employers’ 2018 compensation data must be submitted.  Additionally, in the event that the EEOC requires 2017 data to be filed, it also must be filed by this same date.
  4. March 31, 2020 – If the EEOC elects to require 2019 compensation data to be filed, instead of 2017 data, the compensation and work hours data must be filed by this date.
  5. April 5, 2021 – The Court has extended the authorization to collect compensation and work hours data to April 5, 2021.  The Court has relied on “tolling” principles for the time that the original EEO-1 data collection form was stayed by OMB.
  6. Rolling 20-day reports – the EEOC is to provide the Court with status updates every 20 days and the court is retaining jurisdiction to oversee and supervise implementation.  Additionally, the Court specifically stated that if there was a shortfall in the expected participation rate by employers in providing compensation data, that the EEOC was to extend the filing period until the historical reporting percentages are achieved.

A special webinar hosted by FortneyScott and DCI has been scheduled on Tuesday, April 30th  from 12-1 pm ET to provide employers in understanding what this means for them.  Please reach out to your FortneyScott attorney with whom you work to assist with compliance with these requirements.

To register for this timely webinar, click here.

In Another Explicit Win for Employers, Supreme Court Says that Class Arbitration Must Be Explicitly Authorized

On April 24, the U.S. Supreme Court ruled that absent explicit authorization, class arbitration cannot be compelled. In Lamps Plus, Inc. v. Varela, the Court issued a 5-4 decision in favor of an employer, who had challenged the lower court’s ruling compelling class arbitration. The majority opinion, written by Chief Justice Roberts, concluded that an ambiguous agreement cannot provide the necessary “contractual basis” for compelling class arbitration.

The ruling is a victory for Lamps Plus following years of litigation. In 2016, a hacker posing as a company official persuaded an employee of Lamps Plus to disclose the tax filings of approximately 1,300 employees. The hacker used the information to file a fraudulent tax return in the name of Frank Varela, a Lamps Plus employee. Varela subsequently filed a class action against Lamps Plus on behalf of employees whose information had been compromised. Relying on the arbitration agreement in Varela’s employment contract, Lamps Plus sought to compel arbitration on an individual rather than a classwide basis, and to dismiss the suit. The district court rejected the individual arbitration request but authorized class arbitration. Lamps Plus appealed but the Ninth Circuit affirmed in 2017. The Supreme Court granted Lamps Plus’ subsequent petition for writ of certiorari on April 30, 2018.

Justice Roberts, writing for the majority, underscored the principle of consent under the Federal Arbitration Act (FAA), writing that under the FAA, arbitration “is a matter of consent, not coercion.” Citing to an earlier decision of the Court in 2010, Justice Roberts emphasized that the courts may not infer an affirmative contractual agreement to arbitrate where the language is ambiguous. That case – Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp. – involved an agreement that was completely silent on the availability of class arbitration and the Court there found that silence was not enough. Using the rationale in Stolt-Nielsen, the Court here held that ambiguity, like silence, does not suffice and the courts should not infer consent when it comes to fundamental arbitration questions.

Additionally, the Court recognized that the Ninth Circuit reached its conclusion based on California’s state rule that ambiguity in a contract should be constructed against the drafter.  This notion was raised by Justice Kagan in a dissenting opinion, noting that the rule is a common principle of contract interpretation that resolves ambiguities against the party. In addressing and rejecting that point, Justice Roberts held that the rule in fact conflicts with the FAA and is “flatly inconsistent with the foundational FAA principle that arbitration is a matter of consent.”

Today’s ruling is just the latest in a line of Supreme Court decisions that have backed arbitration. The decision comes nearly a year after the seminal decision in Epic Systems Corp. v. Lewis, which affirmed employers’ use of class action waivers in arbitration agreements that employees must sign. The Lamps Plus decision now further signals and extends a pattern in favor of employers when it comes to the use and scope of arbitration agreements in the employment context.

If you have any questions, please contact your FortneyScott attorney.

OFCCP Proposes Revisions to its Scheduling Letter and Expanded Data Collection

On April 12, 2019, OFCCP proposed significant changes to the agency’s Scheduling Letter process, notably by modifying the existing Compliance Review letter and significantly expanding the document and data requests and creating Compliance Check and Focused Review Letters for compliance evaluations under Executive Order 11246, Section 503 of the Rehabilitation Act (Section 503), and Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). As proposed, the sub-regulatory changes will increase contractors’ burdens significantly by expanding the data and documents that are to be submitted to OFCCP during a desk audit.  Although presented as technical updates, the changes are substantive and adverse to federal contractors’ interests.

Fortunately, the proposed letters are subject to review and approval by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act.  The OMB process allows for comments to be submitted by June 11, 2019.  Because of the review process, the proposed letters likely will not be effective until later this year.  Because a number of the new provisions considerably expand contractors’ obligations, it is likely that OMB will receive comments addressing whether OFCCP’s proposed sub-regulatory changes should be authorized and implemented.

Please check back for updates as FortneyScott will be closely monitoring developments.  If you have any questions or would like to discuss submitting comments, please contact your FortneyScott attorney.

 

EEOC Proposes Expensive and Uncertain Processes if the Court Orders a Deadline of September 30 for Employer Pay Data

On Wednesday, April 3, 2019, the Department of Justice informed the Federal District Court that the EEOC could implement pay data collection procedures if the court  orders employers to submit the W-2 pay and hours worked data required by EEO-1 Component 2 by September 30, 2019. However, the pay data collection would have to be performed by a contractor at a cost of $3 million and would result in significant uncertainties on security and accuracy matters.

DOJ’s submission, which included a declaration by EEOC’s Chief Data Officer, was in response to US District Court Judge Tanya S. Chutkan’s requirement that the government provide her with their plan to collect the EEO-1 Component 2 data. Judge Chutkan ruled on March 4, 2019 that the OMB’s decision to stay the EEOC’s revised EEO-1 information collection known as Component 2 was invalid and that it should be implemented immediately. When the EEOC opened its EEO-1 portal on March 18, 2019 seeking only Component 1 data of race, gender, ethnicity by EEOC category, the court, upon the request of plaintiffs, told the government to provide it with a plan for collecting Component 2 W-2 pay and hours worked data.

The submission states that collecting the pay data from employers by September 30th poses a number of issues. First, the Declaration of Dr. Sam Haffer, the EEOC’s Chief Data Officer, states that the data processes the EEOC uses to collect EEO-1 demographic data “are not capable of collecting employers’ 2018 Component 2 data” and that “it would take nine months to modify the EEOC’s current processes to support the collection of large amounts of sensitive Component 2 pay data from 2018.” As a result according to Dr. Haffer, the EEOC has determined that using a data and analytics contractor is its only alternative although “there is a serious risks that the expedited data collection process may yield poor quality data because of the limited quality control and quality assurance measures that would be implemented due to the expedited timeline.”

Meanwhile, a number of employer groups including The Institute for Workplace Equality represented by FortneyScott filed an amicus brief with the court asking that the pay data collection be postponed until 2020.

FortneyScott will keep you informed on the latest news involving the collection of Component 2 data.

To read the EEOC’s response, click here.