Employment Law

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).

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.

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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Who Can Sue Under the Fair Credit Reporting Act? A Claimant Must Now Have a Concrete Injury to Go to Court

shutterstock_270813506On May 16, 2016, the U.S. Supreme Court issued an opinion in the closely watched case Spokeo, Inc. v. Thomas Robins et al., addressing the issue of standing under the Fair Credit Reporting Act (FCRA). The Court held that in order to establish standing to sue, plaintiffs must show “an invasion of a legally protected interest” that is both “particularized and concrete.” In doing so, the Court vacated the Ninth Circuit’s prior holding that a consumer has standing under Article III to bring an action for statutory violations without alleging actual injury. See Spokeo Inc. v. Thomas Robins et al., case number 13-1339.

Spokeo operates a “people search engine” that provides information on contact data, marital status, age, occupation, and wealth level. In June 2013, the Federal Trade Commission (FTC) fined Spokeo for selling consumer profiles to potential employers without fulfilling its reporting obligations under the FCRA. The FTC’s pursuit of Spokeo, a non-traditional consumer reporting agency (CRA), signaled a more expansive application of FCRA provisions at that time, and set the groundwork for a civil action on related claims.

Thomas Robins subsequently brought action against Spokeo, alleging “willful violations” of the FCRA, which he claimed resulted in publication of inaccurate information about his job and wealth level that caused him psychological harm while struggling to find work. The district court dismissed the case, finding that Robins had failed to plead an injury-in-fact that could be traced to Spokeo. In February 2014, the Ninth Circuit reversed, holding that a showing of actual harm is not required for willful FCRA violations and that the suit could go forward under Article III without alleging actual injury.

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Digging Into the New Overtime Regulations

shutterstock_127335995 (002)In 2015, the Department of Labor (“DOL”) proposed substantial changes to the minimum salary level requirements, sought input on whether bonuses and incentives should be included in meeting the salary level test and considered changing the duties test to establish overtime eligibility. Taken together, these proposed changes would have had a drastic effect on the obligation of employers to pay overtime. On May 18, 2016, DOL issued its Final Rules and employers have until December 1, 2016 to comply. Overall, the changes strike a middle ground as DOL declined to adopt the more restrictive California 50% duties test. However, doubling the salary level threshold and other changes present significant economic and compliance challenges for employers. Below is a summary of key takeaways and steps employers should consider to address these changes and ensure compliance.

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