Just weeks before the United Stated Department of Labor (USDOL) regulations are set to increase the salary threshold for exempt employees throughout the country, the New York State Department of Labor is proposing an even higher threshold that will surpass the federal requirements for some New York employers as of December 31, 2017. On October 19, 2016, in addition to updating its regulations to match the minimum wage increases announced this past spring, the New York State Department of Labor proposed new changes to the salary basis minimums for exempt employees in New York.
On October 24, 2016, U.S. District Court Judge Marcia Crone of the Eastern District of Texas granted a nationwide preliminary injunction enjoining implementation of the Fair Pay and Safe Workplaces regulations. In addition to enjoining implementation of the reporting obligations, the court also enjoined enforcement of the pre-dispute arbitration ban on Title VII claims.
A legislative change that entered into force on October 1, 2016, affects multinationals with employees working in Germany. In order to comply with these recent changes, companies doing business in Germany should now double-check and, where necessary, adjust their standard employment contracts.
In an October surprise, the DOJ and FTC (collectively, the “Agencies”) released guidance for HR professionals on the application of the antitrust laws to employee hiring and compensation. The Agencies’ October 20, 2016 release, Antitrust Guidance for Human Resource Professionals, announced that “naked” agreements among employers not to poach each other’s employees and to fix wages and other terms of employment are per se illegal. Critically, for the first time, the Agencies warn that such agreements could result in criminal prosecution against individual HR professionals, other company executives, as well as the company. This Guidance, coupled with repeated requests to approach the Agencies to report such agreements, signals a significant shift in enforcement focus for the Agencies, including a further move to individual prosecutions, particularly when taken together with last year’s DOJ Yates Memorandum calling for more emphasis on individual executive liability.
This past March, we blogged about the U.S. Supreme Court’s decision in Bouaphakeo v. Tyson Foods, Inc., 136 S. Ct. 1036 (2016), a case in which the plaintiffs alleged that Tyson Foods improperly denied compensation for time spent putting on and taking off required protective gear at a pork processing facility. At trial, the plaintiffs presented experts who, based on sample data, determined the average number of minutes employees likely spent donning and doffing and the aggregate damages that would be owed to the class as a result.
Employment Partner & Co-chair of Orrick’s Whistleblowing Task Force Renee Phillips, and Cybersecurity & Data Privacy Associate Shea Leitch, recently authored an article in Corporate Counsel magazine titled “Cybersecurity Whistleblowing Is Murkier Than You May Think.”
The article covers the emerging issue of cybersecurity whistleblowing and discusses scenarios in which cybersecurity whistleblowers can step forward. In addition, the authors touch on best practices for companies when addressing internal complaints and how to mitigate potential scrutiny from regulatory agencies. To read the full article, please click here.
On September 29, 2016, the DOL released a final rule requiring federal contractors to provide seven days of paid sick leave annually. The rule implements a 2015 executive order from President Obama that we covered in greater detail here. More than 35,000 individuals and organizations submitted comments on the DOL’s proposed rule.
Earlier this year, we predicted that the Department of Labor’s Office of Federal Contract Compliance (“OFCCP”) would ramp up investigations directed at rooting out alleged discrimination by information technology companies. Many tech companies have indeed been the focus of increasingly intense and acrimonious investigations in 2016.
OFCCP took its enforcement efforts to the next level this week by filing a formal administrative complaint for violations of Executive Order 11246 (which prohibits discrimination by federal contractors). The complaint alleges that Palantir Technologies – a private software company headquartered in Palo Alto and recently valued at $20 billion – discriminated against Asian applicants for three positions (QA Engineer, Software Engineer, and QA Engineer Intern). Specifically, the OFCCP alleges that the company hired largely based on an employee referral system that resulted in statistically significant underrepresentation of Asian hires, given that the vast majority of applicants for these jobs were Asian. The complaint seeks to debar the company from future federal contracts and require “complete relief” for Asian applicants for these roles, including lost compensation, hiring, and retroactive seniority.
On Tuesday, September 20, 2016, twenty-one states filed a complaint in federal court in Texas challenging the new overtime rule finalized by the Department of Labor (“DOL”) in May of this year. The States seek to prevent implementation of the new rule, which is scheduled to become effective on December 1, 2016. That same day, fifty-five business groups, including several chambers of commerce, filed a similar lawsuit in Texas federal court to block the rule.
The “cat’s paw” doctrine, a concept first coined by Seventh Circuit Judge Richard Posner in 1990 and adopted by the Supreme Court in 2011, applies when an employee is subjected to an adverse employment action by a decision maker who does not have any discriminatory animus but who bases his or her decision upon information from another who has such an improper motive. In Vasquez v. Empress Ambulance Service, Inc., the Second Circuit recently held that the “cat’s paw” theory may be used to support recovery for Title VII retaliation, in addition to discrimination, claims and then extended the doctrine to permit liability if the individual with the discriminatory or retaliatory motive is a low-level employee, not just a supervisor.