In a recent case out of a federal court in Houston, a former African American sales representative for FedEx received a jury verdict in the amount of $366M.  In that case, Jennifer Harris claimed that she opposed racial discrimination and that she was retaliated against and terminated for engaging in her protected activity.  She brought her claim under Section 1981, a federal law that lacks the EEOC administrative exhaustion requirement or the damages caps that apply to civil rights claims under Title VII.  And while the $366M verdict will likely be reduced because the punitive damages represented 314 times the compensatory damages found by the jury, the judgment entered by the Court will be significant.  FedEx apparently has insurance that may cover the portions of the judgment between $10M and $75M although there may be disputes over whether the punitive damages are covered by the applicable insurance policies or insurable under Texas law.  And, the jury verdict does not include amounts for back pay, front pay and attorney’s fees which will likely be awarded by the court and also significant.

FedEx had to know the case was not going well.  In Jury Question No. 3, the jury asked:

 

And then in Jury Question No. 4, they asked:

While Title VII cases can have significant liability, racial discrimination and retaliation claims under Section 1981 carry all the risk and danger of a Title VII race claim without the guardrails of statutory damages caps, administrative exhaustion requirements and a truncated statute of limitations.  Take these claims seriously or the jury may ask for a calculator.

Complaint

Jury Note 3

Jury Note 4

Jury Verdict

Employers are booking venues and planning for the annual company holiday party.  As these preparations are made, Human Resources should review these tips to reduce the likelihood of post-holiday party human resources hangovers.

Keeping Off Santa’s Naughty List Because of your Behavior at the Company Christmas Party

Proper Planning Now Can Lead to a Complaint Free Holiday Party

There are important mid-term elections occurring in Texas on Tuesday, November 8, 2022, from 7 a.m. to 7 p.m.  Early voting runs from October 24  though November 4, 2022. There are many statewide, state district and U.S. representative races to be decided in this election.

In Texas, employers are required provide employees with time off to vote if:

  • The employee has not already voted early by Election Day;
  • The employee does not have at least two consecutive hours off to vote on election day while the polls are open.

Time off to vote on election day must be paid only if the employee does not have sufficient time off to vote outside the voter employee’s working hours (i.e., two consecutive hours when the polls are open).  For example, an employee working from 8:30 a.m. to 5:30 p.m. does not have two consecutive hours to vote when the polls are open from 7 a.m. to 7 p.m.

The employer can proscribe the hours the employee will have off to vote so long as it is reasonable and sufficient for the employee to vote.

Employers with workforces that might the employer to provide time off to vote may consider a variety of options that may help reduce the impact on Election Day.  For example, employees can be encouraged, but not required, to vote early.  Similarly, an employer may consider an Election Day late arrival for the beginning of the shift or early departure at the end of the shift to provide voting employees with at least two consecutive hours to vote when the polls are open.  In addition, an employer could designate a particular two-hour block of time or schedule designated times when employees are released from work in order to vote and better accommodate the operations of the particular workforce.  Careful advance planning, with the advice and input of legal counsel, can balance the important need for employees to vote while reducing or minimizing the potential disruption to an employer’s operations.

 

EEOC regulations require employers to post notice of employee rights that protect employees from discrimination.  These posters must be posted in conspicuous places.  The EEOC has updated its “Know your Rights” posters.  Employers should update their posters with the most recent versions from the EEOC.  You can access the English and Spanish versions for posting below.

EEOC Know Your Rights Poster (English)

EEOC Know Your Rights Poster (Spanish)

In the weeks and months following the start of the COVID-19 pandemic, many employers were faced with the need to quickly conduct substantial reductions in force.  In making these decisions, the question frequently arose around whether an employer had to provide 60 days advance notice of a plant closing or mass layoff under the Workers’ Adjustment and Retraining Notification (“WARN”) Act or whether COVID-19 constituted a natural disaster giving rise to the natural-disaster exception to the notice provision.  Two years later, we have an answer –at least in Texas, Mississippi and Louisiana.

On June 15, 2022, the Fifth Circuit Court of Appeals held that the COVID-19 pandemic is not a natural disaster under the WARN Act.  The WARN Act requires covered employers to give affected employees sixty days’ notice before conducting a plant closing or mass layoff.  One exception to the sixty day notice requirement is the natural-disaster exception.  When this exception applies, shorted notice or no notice is required.

In Easom v. U.S. Well Services, Inc., U.S. Well Services, Inc., an oil and gas producer, experienced a substantial loss of business beginning in March 2020.  This loss of business was caused by a combination of factors including a price conflict between Russia and Saudi Arabia and a precipitous drop in the price of oil resulting from the reduced demand for travel, oil and gas caused by the COVID-19 pandemic.

U.S. Well Services laid off a substantial number of its crews sufficient to qualify for WARN Act notification.  Rather than providing any period of advance notice, the company terminated the employees with no notice and told them:

Your termination of employment is due to unforeseeable business circumstances resulting from a lack of available customer work caused by the significant drop in oil prices and the unexpected adverse impact that the Coronavirus has caused.

The laid off employee filed suit alleging violations of WARN.  U.S. Well Service defended that it was not required to provide any advance notice under the natural-disaster exception.  The employee countered that COVID-19 was not a natural disaster and even if it was, it was not the direct cause of the layoffs.

The district court certified two questions for interlocutory appeal to the Fifth Circuit.  First, does COVID-19 qualify as a natural disaster under the WARN Act’s natural-disaster exception?.  Second, does the WARN Act’s natural-disaster exception incorporate but-for or proximate causation?  For the reasons explained by the Court, it held that the COVID-19 pandemic is not a natural disaster under the WARN Act and that the natural-disaster exception incorporates proximate causation.

And employer’s beware (and mass action attorneys rejoice), the statute of limitations for a WARN Act claim is at least two years.  Thus if there was a  plant closing or mass layoff caused by COVID-19 where the employer failed to provide 60 days advance notice of the employment action believed the pandemic was a natural disaster, there may still be time for employees to bring claims over those actions.

You can download Easom v. U.S. Well Services, Inc. here.

Many employers have implemented mandatory arbitration programs to resolve disputes with employees.  When sued by an employee, an employer with a mandatory arbitration provision occasionally delays seeking an order compelling the lawsuit into arbitration.  When a delay occurs, the party seeking to keep the case in court (usually the employee), may resist arbitration arguing that the employer waived its right to have the case decided in arbitration by delaying seeking to compel the case into arbitration.

Historically, to show that a party waived its right to arbitrate rather than litigate the dispute, the party opposing arbitration had to show that the party seeking arbitration waived its right to arbitrate by acting inconsistently with that right –usually through delay and proceeding in the court system.  Additionally, the opposing party also had to show that it was prejudiced by the inconsistent actions or delay.  Showing prejudice was very difficult.  So long as the party seeking arbitration had not sought rulings on dispositive issues or waited an unreasonably long period (often more than six months of engaging in litigation or right before trial), courts rarely found that a party was prejudiced by the delay in seeking arbitration.

Last month, the U.S. Supreme Court dispatched the prejudice element required to show waiver.  No longer is a party required to show that it was prejudiced by its adversary’s delay in seeking arbitration.  The prejudice requirement is an arbitration-specific procedural rule that is not authorized by the Federal Arbitration Act.  Thus, an employer who wants to preserve its contractual right to arbitrate its dispute with an employee should make that request timely and avoid acting inconsistently with the right to arbitrate.

You can read the entire Supreme Court opinion in Morgan v. Sundance, Inc. here.

On March 3, 2022, the President signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“Act”).  The new law amends the Federal Arbitration Act to prohibit the enforceability of mandatory, predispute arbitration agreements and class action waivers of sexual assault and sexual harassment disputes.  The passage of the law comes as a major victory for the #MeToo movement.  The amendment provides as follows:

  • Makes voidable, at the election of the plaintiff, any predispute mandatory, arbitration agreement or joint-action waiver of conduct constituting sexual assault or sexual harassment;
  • Requires courts, not arbitrators, to determine the validity and enforceability of an agreement to arbitrate regardless of any delegation clause contained in the arbitration agreement;
  • Defines Sexual Assault Dispute to include a dispute involving a nonconsensual sexual act or sexual contact, as such terms are defined in section
    2246 of title 18 or similar applicable Tribal or State law, including when the victim lacks capacity to consent.
  • Defines Sexual Harassment Dispute to mean a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.
  • The law takes effect immediately and applies to any claims made after the effective date.
  • The law does not affect predispute arbitration and class action waivers outside the sexual assault/discrimination context, nor does it address waivers of jury trial that are enforceable in many states including Texas.

The new law raises questions that will have to be answered by the Courts such as what about disputes that include sexual assault/harassment claims along with other claims not covered by the Act?  Will courts sever out the sexual assault/harassment claims and retain jurisdiction while sending the other claims to arbitration?

Employers using mandatory arbitration or class action waivers with their workforce (or are considering doing so) should have their existing policies and arbitration agreements reviewed to determine whether they need to make any changes to account for the Act.

 

Enforcement of the Biden Administration’s three vaccine mandates (i.e., government contractor, CMS and large employer mandates) had been stayed or partially stayed by various federal courts.  The OSHA Emergency Temporary Standard (ETS) applicable to most employers having 100 or more employees was stayed by the Fifth Circuit Court of Appeals prohibiting enforcement of the rule.  However, on December 17, 2021, the Sixth Circuit Court of Appeals, the court chosen by lottery to hear the consolidated appeals challenging the ETS, dissolved the stay that the Fifth Circuit put in place.  Thus, employers with 100 or more employees that are not specifically exempted from the standard must now take steps to comply with the emergency rule.

With the stay dissolved, employers are now required to comply with the non-testing requirements by January 10, 2022 and the testing requirements by February 9, 2022.  For a more detailed review of the requirements, you can read more here.

Here is a copy of the Sixth Circuit’s lengthy opinion lifting the stay.

 

Some of the best lessons are those learned not through our own mistakes; but rather by the mistakes of others.  We get all the same knowledge without the pain associated with learning by our own mistakes.  Fifteen years ago, Radio Shack was blasted for communicating the layoff of over 400 workers to the employees by text message.  Communicating important employment actions like layoffs and terminations by mass e-mail and text seems impersonal and should be avoided if possible.

Last week, Better.com gave the HR world another lesson to avoid.  The CEO apparently invited 15 percent of his workforce (or 900 employees) to a Zoom meeting where he unceremoniously advised them that they were terminated immediately.

Here is a capture of the Zoom call

https://www.youtube.com/watch?v=gpjqbvLkPUw

While I get the efficiency needed when necessity requires the communication of an employment action to a large number of the workers simultaneously, there must be a better method than the mass Zoom meeting used by Better.com.  Be better Better.com.

 

On November 4, 2021, OSHA issued its Emergency Temporary Standard (“ETS”) on mandatory COVID-19 vaccination and/or testing. The ETS requires that employers with more than 100 employees require most employees get vaccinated or undergo weekly COVID-19 testing and masking. OSHA’s ETS preempts any conflicting state or local laws.

  1. What does the ETS require?

The ETS requires employers with more than 100 employees to implement written policies that either require vaccinations or require weekly testing and masking. Employees are considered “fully vaccinated,” and therefore are exempt from the testing and masking requirement, two weeks following a final dose of a COVID-19 vaccine.

  1. When does the ETS go into effect?

OSHA’s ETS goes into effect on or about November 5, 2021. Although the ETS is temporary and effective only for six months, it serves as a proposal for a permanent standard. The permanent standard, if adopted, must be finalized within six months after publication of the ETS. The compliance date for all provisions of the ETS, except COVID-19 testing for employees not fully vaccinated, is on or about December 5th. Employers must comply with COVID-19 testing requirements for employees not fully vaccinated by on or about January 5th.  Employer must implement their vaccine policies within 30 days of the effective date and employers have 60 days to establish a testing regime.

  1. How is the 100 employee standard determined?

In determining whether a company meets the 100-employee threshold, employers must include all employees across all U.S. locations, regardless of either the employees’ vaccination status or where the employees perform work. Exempt employees are also included to determine whether an employer meets the 100-employee threshold. Part-time workers count towards the 100-employee requirement, while independent contractors do not. Moreover, franchisor-franchisees, staffing agencies, and multi-employer worksites have specific rules regarding who constitutes an employee that must be counted towards the threshold. The ETS applies to any employer who has 100 employees at any time during the pendency of the ETS.

  1. Are any employees exempted from the ETS?

Yes, some employees of covered employers are exempt from the ETS. The ETS does not apply to either workplaces covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors or those  subject to the requirements of the Healthcare ETS.

The ETS further does not apply to employees who are entirely remote and do not report to an office or workplace with others present, employees while working from home, or employees who work exclusively outdoors. An employee works “exclusively outdoors” when that employee works outdoors for the duration of every workday except for de minimis use of indoor spaces (including use of multi-stall restrooms).   Also excepted from the vaccine requirement are those employees for whom: a vaccine is medically contraindicated or medical necessity requires a delay in vaccination.  The standard also excepts employees who are legally entitled to a reasonable accommodation for disabilities or sincerely held religious beliefs.

  1. What is a written policy under the ETS?

Employers must create a comprehensive written policy, regardless of whether the employer plans to require vaccines or mandate testing and masking. This policy should include any exclusions from the policy, paid time and sick leave for vaccination purposes, the information required to be provided to employees, any testing and masking requirements, and disciplinary actions for those employees who do not comply with the policy. If an employer has employees who are both vaccinated and unvaccinated, the employer must develop and include the relevant procedures for two sets of employees.

  1. What records must employers make and maintain?

The ETS requires employers to determine and make a record of each employee’s vaccination status. These records are confidential medical information. Acceptable proof of vaccination status includes: (a) the record of immunization from a health care provider or pharmacy; (b) a copy of the COVID-19 Vaccination Record Card; (c) a copy of medical records documenting the vaccination; (d) a copy of immunization records from a public health, state, or tribal immunization information system; or a copy of any other official documentation that contains the type of vaccine administered, date(s) of administration, and the name of the health care professional(s) or clinic site(s) administering the vaccine(s). When none of the above can be obtained, a signed, sworn and dated employee attestation is acceptable.

For unvaccinated employees, employers must keep a record of each test result provided by each employee. All records must be kept for the duration of the ETS as confidential medical records.

  1. What types of testing and facial coverings are acceptable under the ETS?

An acceptable COVID-19 test is one that is FDA approved, administered via the test’s authorized instructions, and is not self-administered and self-read unless observed by the employer or authorized telehealth proctor. FDA-approved tests include those with Emergency Use Authorization. The tests must be completed once every seven days, irrespective of the number of days worked by the employee. An employee must provide their employer with a test result no later than the 7th day following the date on which they last provided a result.

An acceptable face covering has two layers of breathable fabric tightly woven and without any holes or openings. The face covering must fit snugly and completely cover the nose and mouth.

  1. What pay must employers provide to employees under the ETS?

An employer must provide up to four hours of paid leave to each employee, during work hours, to receive each of their COVID-19 vaccinations. The paid time may not be offset by any other leave that the employee has accrued. Additionally, employers must provide reasonable time and paid sick leave to recover from any side effects of the vaccine. This paid sick leave may be in the form of accrued sick leave but, if an employee does not have any sick leave accrued, leave must be provided. Employers are not, however, required to reimburse employees for transportation costs in traveling to and from the vaccine site(s).

If an employee chooses to get vaccinated outside of working hours, an employer is not obligated to grant paid time to the employee for the time spent receiving the vaccine. However, employers must still allow the employee reasonable time and paid sick leave to recover from any side effects that the employee experiences during scheduled work time. Employers are not required by the ETS to pay for the costs associated with testing employees who elect not to be vaccinated although state law or other agreements could require employment reimbursement of those costs.

  1. What information must be provided to employees under the ETS?

An employer must provide all employees, in a language and at a literacy level the employee understands, information on: (a) the requirements of the ETS and any employer policies and procedures established to implement those requirements, including specifics about vaccination availability and non-vaccinated employee requirements; (b) COVID-19 vaccine efficacy, safety, and the benefits of being vaccinated; (c) OSHA’s prohibition against retaliation; and (d) the potential for criminal penalties for knowingly providing false information.

  1. What are an employer’s obligations when an employee tests positive for COVID-19?

If an employee tests positive for or is diagnosed by a licensed healthcare provider with COVID-19, the employer must immediately remove the employee from the workplace. The employee may not be permitted to return to work until: (a) the employee receives a negative COVID-19 nucleic acid amplification test result upon confirmatory testing; (b) the employee meets the return-to-work criteria in the CDC’s “Isolation Guidance;” or (c) the employee receives a recommendation to return to work from a licensed healthcare provider.

Following a positive COVID-19 test or diagnosis, the testing requirements of the ETS are suspended for the employee for 90 days.

You can review the ETS here.