US Employment Litigation Round-Up for September 2018

New NY Workplace Sexual Harassment Training and Policy Requirements Come into Effect

Upcoming Requirements: As described in the April 2018 Round-Up, New York State and New York City earlier this year each passed a package of laws strengthening worker protections against sexual harassment. While many of the substantive provisions have already come into effect, additional new policy and training requirements are newly effective. As of October 9, 2018, New York State employers are required to adopt updated sexual harassment policies, including a required sexual harassment complaint form and detailed information about how and when to file a claim. Employers may choose to adopt a “model” policy prepared by the state or one that is substantially similar.

In addition, both New York State and New York City will soon require employers to provide annual interactive sexual harassment training to their employees. The state has already issued sample training materials, and the city expects to do so in the coming months. Employers must use either these materials or ones that are substantially similar. Employers in New York City, of course, will have to comply with the requirements of both the state and the city. Under the state law, all employees must be trained with approved materials by October 2019. New York City’s training requirements come into effect on April 1, 2019, but the city has yet to establish a deadline by which the first training must occur.

Be on the lookout for a Legal Update from Mayer Brown providing more detailed information on these issues.

Ninth Circuit Reverses Class Certification in Uber Lawsuits Based on Arbitration Agreements

Decision: The Ninth Circuit has reversed class certification in several putative class actions filed on behalf of drivers on Uber’s platform, citing those drivers’ arbitration agreements.  In O’Connor v. Uber Technologies, Inc., current and former drivers filed several related putative class actions contending that Uber violated various California and federal statutes, including by allegedly misclassifying drivers as independent contractors rather than employees.  Although the drivers had entered into arbitration agreements with Uber that  included class action waivers, the district court had denied Uber’s motion to compel arbitration, holding that the arbitration agreements were unenforceable under California law.  The district court granted class certification and placed restrictions on Uber’s use of arbitration agreements with drivers.

The Ninth Circuit reversed.  Relying on its 2016 decision in Mohamed v. Uber Technologies, the court emphasized that the arbitration agreements had delegated the threshold question of arbitrability to the arbitrator and that the delegation was valid.  The Ninth Circuit rejected plaintiffs’ argument that, by opting out of arbitration, the lead plaintiffs in O’Connor had “constructively opted out of arbitration on behalf of the entire class,” holding that “[n]othing gave the O’Connor lead plaintiffs the authority to take that action on behalf of and binding other drivers,” and that the Federal Arbitration Act would preempt any state-law rule permitting that effort.  The court also rejected plaintiffs’ argument that the National Labor Relations Act (NLRA) rendered the class waiver in the arbitration agreements unenforceable in light of the Supreme Court’s decision in Epic Systems Corp. v. Lewis. 

The Ninth Circuit thus reversed the district court’s orders denying Uber’s motion to compel arbitration and granting class certification. 

Impact: The Ninth Circuit’s decision marks a significant victory for businesses. It underscores that the appropriate use of arbitration agreements provides companies and independent contractors with an alternative to class action litigation in court.  

Illinois Provides Paid Break Time for Nursing Mothers

Development: Effective upon its August 21, 2018 enactment, Illinois now provides expanded benefits for nursing mothers in the workplace. The Illinois Nursing Mothers in the Workplace Act was amended to require employers to provide paid break time for nursing mothers to express breast milk for up to one year after a child’s birth, regardless of the length of the break. The act previously required employers to provide “reasonable unpaid break time each day” for expressing breast milk, and employers were permitted to require that this break time run concurrently with existing compensated break time otherwise provided by the employer, with any time exceeding the existing break being unpaid. The amendment made several significant changes to the act’s requirements:

• The word “unpaid” has been removed.  Instead, employers must provide “reasonable break time” to an employee “each time the employee has the need to express milk,” and this break time “may not reduce an employee’s compensation” regardless of the break’s length.
• While the law previously stated that lactation breaks “must, if possible,” run concurrently with other break time, the amendment provides that lactation breaks “may” run concurrently with break time already provided by the employer but do not have to, and that such breaks must be given “as needed by the employee.”
• The amendment clarifies that the entitlement to lactation breaks extends for a period of “one year after a child’s birth.”
• The amendment replaces the exemption permitting employers to deny lactation breaks if doing so would “unduly disrupt the employer’s operation” with a significantly higher burden that permits employers to deny breaks only if they would “create an undue hardship” on the employer.

Effect: The amendment took effect immediately upon enactment. If they haven’t already, employers in Illinois should promptly review and update their lactation accommodation policies to ensure compliance with the amended act and should train their managers and supervisory personnel regarding the new requirements. Employers should also take steps to ensure that their timekeeping and payroll practices and policies reflect the amended law.

Second Circuit Revives Employee’s Title VII Claims for Sexual Orientation Discrimination

Decision: On September 10, 2018, the Second Circuit in Cargian v. Breitling USA, Inc., issued an order vacating the district court’s order granting summary judgment to the employer in the plaintiff’s sexual orientation discrimination action. Applying its recent en banc decision in Zarda v. Altitude Express, Inc., the appellate court held that the district court incorrectly concluded that discrimination based on sexual orientation is not actionable under Title VII of the Civil Rights Act of 1964. The Second Court emphasized that, although the district court had applied the Second Circuit law in effect at the time the summary judgment order was entered, Zarda overruled prior Second Circuit precedent, holding that Title VII does prohibit discrimination on the basis of sexual orientation. Accordingly, the Second Circuit reversed the summary judgment order and remanded the case to the district court to consider whether the “[plaintiff’s] claims can survive a motion for summary judgment [on his sexual orientation discrimination claim] after Zarda altered that legal landscape.”

Impact: As discussed in the March 2018 Round-Up, the question of whether Title VII prohibits discrimination on the basis of sexual orientation has been actively debated in both courts and administrative agencies. In February 2018, the Second Circuit joined the Seventh Circuit in holding that sexual orientation discrimination constitutes unlawful sex discrimination under Title VII. The Eleventh Circuit, on the other hand, has held that Title VII does not prohibit sexual orientation discrimination. While the Supreme Court will likely eventually be called on to resolve this circuit split regarding the scope of Title VII, a growing number of state laws and local ordinances prohibit sexual orientation discrimination, requiring attention from employers nationwide.

Connecticut District Court Holds Refusal to Hire Marijuana User Is Discriminatory

Decision: In Noffsinger v. SSC Niantic Operating Company, a district court in Connecticut recently held an employer liable for discriminating against a job applicant when it rescinded an employment offer after the applicant tested positive for medical marijuana use. The applicant was a registered medical marijuana user under the Connecticut Palliative Use of Marijuana Act (“PUMA”) and had disclosed her disability and prescription marijuana use before taking a pre-employment drug test. Nonetheless, after the applicant tested positive for marijuana, the employer rescinded the offer of employment. The employee filed suit, alleging, among other claims, that the nursing home had violated PUMA’s anti-discrimination provision, which bars employers from refusing to hire a person or otherwise penalizing an employee “solely on the basis” of the person’s “status as a qualifying [medical marijuana] patient” under state law. The court granted partial summary judgment to the employee, concluding that she had successfully asserted a PUMA discrimination claim.

The district court rejected the employer’s assertion that it was exempt from PUMA’s anti-discrimination provision because the statute allows discrimination if it is required by federal law, and the federal Drug Free Workplace Act (“DFWA”) barred it from hiring plaintiff. The district court concluded that DFWA neither requires drug testing nor prohibits employers from employing individuals who use illegal drugs outside of the workplace, “much less an employee who uses medical marijuana outside the workplace.” “That [the] defendant has chosen to utilize a zero tolerance drug testing policy in order to maintain a drug free work environment does not mean that this policy was actually ‘required by federal law.’” The court also disagreed with the employer’s argument that it had not discriminated against the applicant on the basis of her “status” as a medical marijuana patient but rather based on her use of marijuana itself. The court found that such a “restrictive interpretation of the statute” would “render the statute’s protection against PUMA-based discrimination a nullity, because there would be no reason for a patient to seek PUMA status if not to use medical marijuana.”

Impact: The district court’s employee-friendly decision in Noffsinger under Connecticut law differs from the approach taken by most courts in other states that have enacted medical or recreational marijuana laws. Courts in Oregon, California and Colorado have permitted employers to enforce zero-tolerance drug testing policies and take adverse employment action against employees or applicants who test positive for marijuana based on federal law, which prohibits such use. In another approach, the Massachusetts Supreme Court, recently ruled that an employee may pursue a disability discrimination claim under state law against her former employer for failing to accommodate the employee’s use of medical marijuana by making an exception to its drug policy. Given the differing views and evolving nature of this area of the law, employers should stay abreast of developments and modify their drug-related policies accordingly.