Say It Again: No Common Question Binds a Class Subject to Thousands of Individualized Pay Decisions

Echoing an increasingly familiar refrain, another district court has declined to certify a class of women bringing pay equity claims on the basis that they did not present a common question capable of producing a common answer to “the crucial question why was I disfavored.” Relying largely upon Wal-Mart Stores, Inc. v. Dukes, the court found certification inappropriate because the putative class members were subject to countless independent decisions involving the judgment and discretion of individual managers. The case also serves as another reminder that courts (including California state courts) will not accept an overly simplistic analysis comparing broad job categories or titles, but will continue to look at actual business practices and job responsibilities to ensure comparators are “similarly situated” so a meaningful pay comparison can be made. READ MORE

All Aboard! California Law Requires More Female Representation on Boards of Directors

As part of its effort to close gender-based pay gaps, California will now require companies to increase female representation on boards of directors.

Currently, one in four publicly held corporations in California have no women on their boards of directors. SB 826, which Governor Jerry Brown signed into law at the end of September, requires that all publicly held corporations based in California have at least one woman director by December 31, 2019. That is not the end of the requirements; by December 31, 2021, companies with five authorized directors must have a minimum of two female board members, and companies with at least six directors must have a minimum of three females on the board. The California Secretary of State will publish the names of compliant and non-compliant companies on an annual basis. In addition to the “name and shame” provisions, non-compliant companies face fines of $100,000 for the first violation and $300,000 for subsequent violations.

The sponsors of the bill, Sens. Hannah-Beth Jackson (D-Santa Barbara) and Toni Atkins (D-San Diego), stated when introducing the bill: “More women directors serving on boards of directors of publicly held corporations will boost the California economy, improve opportunities for women in the workplace, and protect California taxpayers, shareholders, and retirees. . . . Yet studies predict that it will take 40 or 50 years to achieve gender parity, if something is not done proactively.”  The bill cites numerous independent studies stating that publicly held companies perform better in terms of profitability, productivity, and workforce engagement when women serve on their boards of directors. It follows the lead of Germany, France, Spain, Norway, and the Netherlands that have addressed the lack of gender diversity on corporate boards by instituting quotas requiring 30 to 40 percent of seats be held by female directors.

Gov. Brown noted in his signing letter that corporations have been considered “persons” for more than a century, so they should reflect the “persons” who make up America as a result.  The California Chamber of Commerce and a coalition of other businesses opposed the bill and argued that the mandate is unconstitutional and a violation of California’s civil rights statutes. While Gov. Brown acknowledged that the law could face legal challenges, he noted that “recent events . . . make it crystal clear that many are not getting the message.” Therefore, he felt signing the bill into law was a necessary measure.  No lawsuits have yet been filed.

In the meantime, California-based publicly held companies should act promptly to ensure that their boards of directors include the number of women directors needed to comply with the statute.

To-Do’s for Employers in Germany: No More Automatic Forfeiture of Vacation Entitlements

Introduction

The German Federal Vacation Act (Bundesurlaubsgesetz) provides that vacation has to be approved and taken in the current calendar year. The employee is meant to actually take the vacation and enjoy a rest. READ MORE

(Tip) Credit Where (Tip) Credit Is Due: DOL Reverses Course on Treatment of Tipped Employees

On November 8, 2018, the Department of Labor published an Opinion Letter (FLSA2018-27) reissuing its January 16, 2009 guidance (Opinion Letter FLSA2009-23) and reversing the agency’s Obama-era position on the 20% tip credit rule. The letter marks another significant shift in Department of Labor policy, and among the first major changes in federal tip credit policy over the last decade. READ MORE

Frankfurt’s Brexit Pitch – Banks in Germany Will Soon be Able to Fire Top Bankers More Easily

 

Undoubtedly driven by an interest in drawing UK-based banks to Frankfurt and becoming an EU hub for US banks post-Brexit, the German government recently picked up a proposal to relax dismissal protection for high-earning bankers. So it may very well soon be easier for banks in Frankfurt to part with their top employees. READ MORE

Does Title VII Protect Gay & Transgender Employees? The Supreme Court May Soon Decide.

As early as November 30, 2018, the U.S. Supreme Court will decide whether to hear three high profile employment cases that question whether Title VII’s ban on sex discrimination protects gay and transgender employees.  These cases have significant implications on the proper scope of Title VII and the rights of the LGBT community in the workplace.

Under Title VII, an employer has engaged in “‘impermissible consideration of … sex … in employment practices’ when ‘sex … was a motivating factor for any employment practice,’ irrespective of whether the employer was also motivated by ‘other factors’.”

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Tech Giants Continue To Face The Equal Pay Litigation Spotlight

In recent years, the volume of equal pay lawsuits has continued to increase in Silicon Valley, despite technology companies reaffirming their commitment to equal pay policies and practices. Earlier this month, Hewlett Packard Enterprise Co. (“HP”) was hit with the latest equal pay lawsuit. The class action lawsuit, filed in Santa Clara Superior Court, alleges that HP discriminated against its female workers by paying them less than their male counterparts and funneling women into certain jobs based on stereotypes. READ MORE

Tenth Circuit Holds that Failure-To-Accommodate Claims Require Adverse Employment Action

On October 11, the Tenth Circuit held that a failure-to-accommodate claim under the Americans with Disabilities Act (“ADA”) requires a showing of an adverse employment action, cementing a circuit split and making the issue ripe for U.S. Supreme Court review. READ MORE

California Court of Appeals Casts Doubt on Continued Validity of Employee Non-Solicitation Provisions

Last week, the Court of Appeal for California’s Fourth Appellate District ruled that an agreement prohibiting former staffing company recruiters from soliciting their former employer’s employees is unenforceable under California Business & Professions Code section 16600. The court reasoned that the employee non-solicitation provision was too onerous on the recruiters’ ability to practice their profession i.e., recruiting employees. In rendering the decision, the court called into question long-standing precedent that upheld employee non-solicitation provisions, which are routinely included by California employers in employment and confidentiality agreements with their employees.

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NY Harassment Update: NYS Releases Sexual Harassment Prevention Training Videos and NYC Releases Sexual Harassment Prevention FAQs

Late last month, the New York State Department of Labor released model sexual harassment prevention training videos that employers can use to train their employees, available here. While a welcome development, the videos alone do not fully comply with the State’s requirement that sexual harassment prevention training be “interactive” – employers must ensure that employees have the ability to ask questions and receive answers to their questions. The New York City Commission on Human Rights has also provided some new and welcome guidance to employers, releasing FAQs regarding NYC’s new sexual harassment prevention laws, available here. The FAQs primarily address which employers must conduct sexual harassment prevention training and how to calculate an employer’s number of employees for purposes of determining whether the employer is subject to the training requirements. READ MORE