Decades Later, Questions Linger Over Disability Access Online, But ADA Litigation Continues

When the Americans with Disabilities Act (ADA) was enacted in 1990, computers used floppy disks and the “World Wide Web” was still being tested by scientists at CERN.  So while the law’s drafters had a good sense of what access would look like in the physical world, they had no idea what sort of economic and social changes were in store with the birth of the Internet.

Fast forward to 2016, and the law is still murky as to disability access issues online.  But that uncertainty has not stopped the plaintiffs’ bar from filing lawsuits claiming that websites are inaccessible to users with disabilities and thus violate the ADA.

Many disabled individuals access the Internet using assistive technologies.  For example, blind individuals or those with low vision can use screen readers that read website content aloud for them.  Websites that are incompatible with assistive technology can create barriers for users with disabilities and give rise to costly and uncertain litigation.

In December 2014, we issued a client alert that discussed the growing risk of litigation under the ADA and derivative state laws arising from websites or mobile apps that allegedly discriminate against disabled individuals.  As we noted then, despite more than a decade of litigation, basic questions have remained muddled, including whether Title III of the ADA (which requires access to places of public accommodations for disabled individuals) applies to websites.  Businesses were hoping for clarity in the form of proposed regulations by the Department of Justice (DOJ), which had been slated for March 2015.  But more than a year after the fact, we are still waiting on regulations and uncertainty remains (although this has not stopped the groundswell of litigation, particularly in California).

Until recently, courts have generally held that Title III does not apply to online-only services because they do not have a nexus with any physical location.  And while some courts have continued to uphold the nexus requirement, other recent decisions have held that certain websites were public accommodations subject to the ADA even though they had no physical place of public accommodation.  This confusion has even led to the same business (Netflix) being subjected to different standards in different circuits (no “nexus” needed in the First Circuit, while nexus required in the Ninth Circuit).  These different approaches have caused a split between circuits, meaning this question of whether Title III applies to online-only businesses may eventually be headed to the Supreme Court.

As we noted in our client alert, the DOJ looked ready to propose the Web Content Accessibility Guidelines (WCAG) 2.0, Level AA as the standard required for public accommodations for private/non-government websites.

But, in late 2015, the DOJ announced that it would not finalize regulations under Title III until fiscal year 2018 at the earliest.  One reason for the delay was that the DOJ wanted to wait for similar guidelines for government agency and contractor websites under Title II of the ADA, which it stated would “facilitate the creation of an important infrastructure for web accessibility that will be very important” for Title III rulemaking.  At that time, the DOJ expected the Title II guidelines to be finalized by the summer of 2016.

However, in April 2016, the DOJ pushed back the Title II process, seeking further input on questions about the scope of web content (e.g., mobile apps) that would be covered by the guidelines, as well as further questions on which WCAG standard to adopt.  The public comment period for the proposed Title II rules remains open until August 8, 2016.

In the meantime, the plaintiffs’ bar is showing no signs of letting up.  Some firms seem to be setting up a cottage industry in this area.  As the Chicago Tribune reported, one law firm has sent 25 demand letters – just to companies in real estate and homebuilding.  And in March 2016, a California state court became the first in the nation to rule that a retailer violated the ADA due to a website that is not accessible to individuals with vision-related disabilities.  The judge in Davis v. BMI/BNB Travelware, no. CIVDS-1504682 (San Bernardino Superior) (Mar. 21, 2016) granted plaintiff’s motion for summary judgment, holding that the defendant luggage retailer violated the ADA and California’s Unruh Act.  The judge ordered defendant to pay $4,000 in statutory damages and attorneys’ fees and to take steps necessary to make its website “readily accessible to and useable by individuals with visual impairments…”  Troublingly, the court order did not include any details as to the standard by which accessibility/compliance would be measured.

So while this long process continues to unfold, businesses and organizations should take a close look at their websites to determine whether they meet WCAG 2.0 Level AA standards (which every indication from the DOJ has suggested will be the relevant standard).

Germany’s Financial Regulator Establishes New Whistleblower Platform

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Last week, Germany’s Financial Supervisory Authority (BaFin) unveiled a centralized platform for receiving whistleblower complaints, including anonymous complaints, of alleged violations of supervisory provisions within the financial sector.  The move appears to represent a shift in German ideology toward a more favorable view of anonymous reporting, which for many years was discouraged in Germany and more broadly in the EU due to the risk of “organized systems of denouncement.”  Under the new program, whistleblowers may submit reports in writing (on paper or electronically), by phone (with or without recording the conversation), or verbally.  BaFin’s press release announcing the program states that it will make the anonymity of whistleblowers a “top priority,” and that it will not pass on the identity of whistleblowers to third parties.  The program is “aimed at person with a special knowledge of a company’s internal affairs – for example because they are employed there or have some other contractual relationship or relationship of trust with the company.”

BaFin was required to implement this new platform due to an amendment to the German Act on Financial Services Supervision.  Notably, the Act only applies to the financial services sector, not including external accountants, tax consultants and attorneys. It provides that employees working in the financial services sector may not be held liable for reporting potential or actual breaches of law under either employment law or criminal law, unless the report was false or grossly negligent.

In addition to BaFin’s own platform, the Act requires covered financial institutions to provide internal procedures for employees to report violations of supervisory rules, including anonymously. However, the Act provides no details as to implementation, Board responsibilities, or the protection of whistleblowers. Therefore, banks and insurers will want to stay abreast of further developments in this area.

Notably, the German Act implements an EU regulation recently adopted, and reporting procedures regarding violations of supervisory rules are currently being harmonized throughout Europe.  As a result, financial institutions can expect similar provisions to be enacted in other EU jurisdictions. The German act is also another example of the growing efforts of governments to encourage reporting of wrongdoing to regulators. For example, the Ontario Securities Commission recently enacted regulations patterned after Dodd-Frank which will become effective on July 14 that establish a whistleblower office at OSC which will provide for cash awards to whistleblowers whose reports result in enforcement actions and fines.

In light of these important developments, companies with German operations, particularly in the financial services sector, should review and update their whistleblower policies and procedures to ensure they are in accordance with the new law and with best practices.  Companies will want to have robust mechanisms for employees, as well as vendors and other third parties, to report violations of law internally and for those concerns to be promptly and properly investigated.  By creating a trusting environment for whistleblowers to report internally, a company can go a long way toward uncovering and remedying violations of law quickly and effectively and without regulatory intervention.

California Enacts New PAGA Amendments as Part of Governor’s Budget Bill

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The Private Attorneys General Act of 2004 (“PAGA”) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees and the state of California for Labor Code violations. In January, Governor Brown submitted a budget proposal that sought greater oversight of PAGA claims and amendments to the PAGA statute. On June 15, 2016, the California Legislature approved Governor Brown’s budget proposal which included significant amendments to PAGA (Labor Sections 2698-2699.5). SB 836 went into effect on June 27, 2016 and provides:

  • The Labor and Workforce Development Agency (“LWDA”), the agency which coordinates workforce programs by overseeing seven major departments that serve California businesses and workers now has 60 days to review a notice under Labor Code § 2699.3(a). Prior to the amendments, the LWDA had 30 days to review. Additionally, the time for the LWDA to investigate a claim is extended to 180 days (it was 120 days);
  • A Plaintiff cannot file a civil action until 65 days after sending notice to the LWDA (previously 33 days);
  • The LWDA must be provided with a copy of any proposed settlement of a PAGA action at the time it is submitted to the court;
  • A copy of the court’s judgment and any other order that awards or denies PAGA penalties must be provided to LWDA;
  • All items that are required to be provided to the LWDA must be submitted online, including PAGA claim notices and employer cure notices or other responses;
  • A $75 filing fee is required for a new PAGA claim notice and also for any initial employer response to a new PAGA claim notice. The filing fee may be waived if the party on whose behalf the notice or response is filed is entitled to in forma pauperis status; and
  • When a plaintiff files a new PAGA lawsuit in court, a filed-stamped copy of the complaint must be provided to LWDA. This requirement only applies to cases in which the initial PAGA claim notice was filed on or after July 1, 2016.

Although SB 836 is a modest version of the Governor’s original proposal, employers should still expect to see significant changes in litigating PAGA claims. Providing the LWDA additional time to review and investigate PAGA claims should help to weed out frivolous claims that employers incur significant costs to defend in court. However, the LWDA is likely to become more active in reviewing proposed PAGA settlements, which could complicate the settlement process and lead to higher litigation costs if the LWDA chooses to intervene. Additionally, employers can expect to see delays in the LWDA’s ability to process online submissions given that no online filing or payment systems have been developed. In the interim, the LWDA requests that all required online filings be sent to PAGAfilings@dir.ca.gov and that all payments be mailed to the Department of Industrial Relations.

The Right to Disconnect

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The French government has presented before Parliament the “El Khomri” bill which, if passed, should modify a significant part of the employment law framework in France.

Among various provisions, the bill mentions the right, for the employees, to disconnect.

Indeed article 25 of the bill states that the employer has to regulate the employees’ use of digital tools in order to protect their private and family life as well as resting periods.

More specifically, it is provided that the terms and conditions related to the right to disconnect are part of the topics which must be discussed on an annual basis between the employer and the employees’ representatives, during the mandatory negotiations related to the quality of work life. The purpose of it is to ensure the respect of rest time provisions and minimum leave.

This does not entail an absolute obligation to stop all email exchanges during weekends or out of working hours. Instead, it should help employers defining new rules within the company in order to achieve a good work/private life balance.‎

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California Legislators Aim to Make Prior Salaries a Thing of the Past

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A few months ago, the California State Assembly introduced AB 1676, a bill that not only would have prohibited employers from asking job applicants about their compensation history, but also would have required employers to provide pay scale information upon reasonable request. A nearly identical bill passed through the Assembly and Senate before it was vetoed by the Governor toward the end of last year. In his veto statement, the Governor expressed concern that such a measure “broadly prohibits employers from obtaining relevant information with little evidence that [it] would assure more equitable wages.”

As we previously reported, the Fair Pay Act (the “FPA,” Labor Code § 1197.5) requires “equal pay for substantially similar work” based on the employee’s skill, effort and responsibility, and similar working conditions. To the extent a disparity exists between employees of the opposite sex, it must be reasonably based on one or more the factors enumerated within the statute.

Perhaps hoping to avoid repeating history, proponents of AB 1676 have taken a new approach. In place of the provision prohibiting inquiries about prior salary history is new language that amends the FPA to state that “[p]rior salary shall not, by itself, justify any disparity in compensation.”

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Labor Laws and Federal Contracting Intersect: How Universal Health Systems Could Subject Federal Contractors to False Claims Act Liability

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This post was drafted with contribution from Annie Prasad, law clerk.

The Supreme Court has made federal contracting more treacherous by extending the reach of False Claims Act (“FCA”) liability.  While the decision related to FCA liability for misrepresentations related to staffing levels, the case may provide a roadmap for federal officials looking to trigger FCA claims against contractors who are noncompliant with federal labor laws enforced by the Department of Labor.  Specifically, those at risk of debarment or cancellation of contracts due to noncompliance with Executive Order 11246 or the proposed Fair Pay and Safe Workplaces Executive Order may be at risk of more serious penalties.

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Brexit: What Does it Mean for Employers in the U.K.?

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We set out below our best guess on where this leaves employees, management and HR in the UK.

Firstly as we have all heard repeatedly today, nothing is going to change immediately and that is the same for employment law.  It will be years before any changes are made and for the time being, everything remains the same and critically, no one has to leave.

Much of our employment law is just that – employment law driven solely by the UK.  We then have laws that have been enacted into UK law as a result of European directives – so those laws are the ones that may, at some point in the future, be targeted.  Our guess at Orrick is that changes where they happen will be focused on consultation rights, holiday pay and working time.  Worker involvement has never had the same traction in the UK that it has with our European counterparts and the UK has always viewed employee consultation with a degree of skepticism.  For this reason, we think it may eventually be a focus for change.

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It’s Contagious: Paid Sick Leave and Minimum Wage Hikes Spread to Los Angeles and San Diego

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Paid sick leave is on the rise, as we reported here, here, here, and here.  As we approach the one-year compliance anniversary for state-mandated paid sick leave, employers now face additional compliance wrinkles in the Los Angeles and San Diego markets.  Earlier this month, both Los Angeles and San Diego passed paid sick leave and minimum wage ordinances that take effect (and require compliance) as soon July 2016.

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It’s All a Matter of Degree – Fourth Circuit Upholds Four-Year Front Pay Award and Tuition Reimbursement in SOX Case

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*This post was drafted with contribution from Ashley Gambone, law clerk.

Affirming a SOX victory for an employee, the Fourth Circuit in a 2-1 decision in Gunther v. Deltek upheld a Department of Labor award of four-years of front pay to a former financial analyst of a software firm and also affirmed an award of tuition reimbursement for a four-year, full time, college degree program.  The Fourth Circuit’s Gunther decision discusses the standards for proving or disproving a causal connection in SOX cases, for meeting the after-acquired evidence standard to cut off damages, and for proving entitlement to front pay and other damages under SOX.

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OFCCP’s New Sex Discrimination Regulations Bring Few New Requirements But Highlight Need for Contractors to Revisit Policies and Practices

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On June 14, 2016, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) unveiled its final sex discrimination guidelines governing covered federal contractors.  The OFCCP proposed changes to the rule on January 30, 2015 and the official comment period closed on April 14, 2015, following a two-week extension so that it could take comment on the Supreme Court’s pregnancy discrimination decision in Young v. United Parcel Serv., Inc.  The final rules come six months after the expected date on the fall regulatory agency but were released to coincide with the White House Council on Women and Girls first “United State of Women” summit, which was also held on Tuesday. Our coverage of that event can be found here

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