2014 Employment Law Developments and Predictions for 2015

By: Megan J. Muoio, December 31, 2014

There have been a number of notable employment law developments in 2014, and employment issues for employers will continue to be dynamic into 2015. The Equal Opportunity Employment Opportunity Commission (EEOC) has initiated significant litigation and issued substantial regulations, while the National Labor Relations Board (NLRB) has pushed the envelope regarding employees’ rights issues. The Supreme Court has also been especially active in the employment law area, handing down decisions relevant to the religious rights of employers and considering issues regarding social media use in the workplace. New issues, such as transgender employee rights and the limits of pregnancy discrimination law, are in flux and look to be the focus of continued attention throughout the next year. Emerging technologies and new forms of social media continue to test employers’ workplace policies and change the landscape of employer-employee relationships. And, as always, states and local municipalities have been actively passing new employment law regulations and, in some ways, are at the forefront of the trends to come in 2015.

The EEOC’s Busy 2014

The EEOC spent much of 2014 focused on agency-initiated litigation and filed 5,000 fewer charges of discrimination than it did in 2013. The EEOC commenced litigation challenging employers’ use of severance agreements and what it considers overly burdensome wellness programs.

  • The EEOC sued CVS Pharmacy, Inc. over the use of common provisions in CVS’s separation agreements, claiming that the provisions deter employees from filing charges of discrimination with the EEOC and hamper the EEOC’s ability to investigate potential discriminatory situations. Although the case is only against one large employer, the fact that the EEOC has challenged provisions used by employers large and small in their severance agreements means that the impact of this litigation could have far-reaching effects.
  • The EEOC also sued to stop implementation of a wellness initiative that was set to be implemented by Honeywell International Inc. in January 2015. Honeywell’s program, like many others recently implemented by employers, requires employees and their family members to disclose health information and undergo diagnostic testing or face substantial health insurance surcharges. The EEOC has challenged whether such programs are truly voluntary for employees, and the progress of this case will be closely watched in 2015.

The EEOC has also been active in issuing guidance on matters such as employers’ accommodation of employees’ religious garb and the use of background checks by employers.

  • In issuing guidance regarding the accommodation of religious garb, the EEOC has stated that employees do not need to use magic words in requesting an accommodation, or even use words at all where the religious observation is obvious.
  • Regarding background checks, the EEOC has coordinated with the Federal Trade Commission to issue guidance that restricts employers’ use of background check information if the information could have a disparate impact on a particular protected class.

The NLRB’s Continued Campaign on Behalf of Employees

The NLRB has taken significant steps to strengthen employees’ rights, especially within the context of labor organization under the National Labor Relations Act (“NLRA”). First, the NLRB expanded the scope of what is considered “concerted activity” under Section 7 of the NLRA and overturned an earlier NLRB decision that defined concerted activity in a more narrow way. The NLRB now interprets Section 7 as involving concerted activity even when activity addresses the concern of a single employee.

The NLRB also expanded the possible scope of employees’ rights by issuing guidance on “joint employers.” In an advice memorandum, the NLRB general counsel indicated that the NLRB will treat McDonald’s as a “joint employer” with its franchisees, making McDonald’s liable for the unfair labor practices of franchise owners to their employees. This memorandum comes after a year of labor protests and other employment activity at McDonald’s franchises around the country, and the change in the criteria for joint employer status could dramatically affect McDonald’s and many other large franchise corporations.

The Supreme Court Considers Important Employment Law Cases

The Supreme Court decided two important employment law cases in 2014, and has heard oral argument on a third with the decision to come in 2015.

  • In June 2014, the Supreme Court held in the case of Burwell v. Hobby Lobby Stores, Inc. that closely-held corporations could object to providing contraceptive benefits to their employees based on the corporation’s sincerely-held religious beliefs. This decision means that certain corporations are not obligated to provide certain types of coverage for their employees in group insurance plans, as mandated under the Affordable Care Act.
  • In December 2014, the Supreme Court issued a decision holding that time spent by employees going through security screening required by their employers was not compensable time under the Fair Labor Standards Act.
  • This fall, the Supreme Court heard oral argument in Young v. UPS, in which a pregnant employee of UPS claims that her employer violated the Pregnancy Nondiscrimination Act by failing to provide reasonable accommodation for the employee’s pregnancy-related work limitations. A decision in that case, which will have wide-ranging effects for employees and employers, is expected in the Spring of 2015.

New Issues and Emerging Technologies

The growing use of social media and other new technologies by employees and job applicants continued to challenge employers in 2014.

  • The NLRB held that workers have a statutory right to use an employer’s email system to engage in discussions about the terms and conditions of their employment, overturning an earlier Board decision that stated that employees did not have a right to use an employer’s email system for non-business purposes.
  • The NLRB also held that a Facebook “like” would be considered concerted activity within the meaning of the NLRA, and that employees’ discussion of the terms and conditions of their employment on Facebook could be a protected labor activity. This expands employees’ ability to discuss their employment on social media without being subject to adverse employment action.
  • A number of NLRB decisions enhanced employees’ rights to discuss their wages and terms of their employment by holding that employers’ social media policies were unlawful under the NLRA. The NLRB held that social media policies that prohibit gossip, “disrespectful” discussions of employment terms, or the sharing of “unfavorable” information about an employer could restrict employees’ rights to discuss their employment and organize under the NLRA.

In addition to developments at the intersection of technology and employment law, employers have been tracking developments in other emerging areas, such as rights for pregnant employees and transgender employees.

  • The EEOC was on the forefront of the issue of discrimination against transgender employees in 2014 when it initiated two separate lawsuits against employers who had allegedly terminated employees as a result of their transgender status or transition. The EEOC has argued that discrimination of transgender individuals violates Title VII of the Civil Rights Act of 1964.
  • The EEOC issued the first comprehensive guidance on the issue of pregnancy discrimination in 30 years in July of 2014, which was controversial within the EEOC because of the Supreme Court’s impending review of Young v. UPS. The EEOC took the position that employers are required to make reasonable accommodations for employees who are attempting to get pregnant, are pregnant, or who are breastfeeding.

The View from States and Local Municipalities

Finally, significant legislation affecting employers has been debated and enacted in States and local municipalities around the country. Some examples of employment law trends on the local level are:

  • “Ban the box” legislation, which seeks to eliminate the section on a job application that asks about an employee’s criminal background. These laws have been passed in at least 29 cities or counties and four states – including New Jersey. Ban the box legislation is currently pending in New York City.
  • Paid sick leave provisions have been enacted in 16 states and 12 cities in 2014, including 8 cities in New Jersey and in New York City. The specifics of the provisions vary but overall represent an improvement in the benefits available to employees.
  • Laws banning employers from making employment decisions based on employees’ credit information are on the rise and will continue to develop in 2015. The New York City Council held hearings on proposed legislation in 2014 and is expected to continue to consider banning employers from using credit information in hiring in 2015.

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