Everyone knows about the recent Supreme Court decision Obergefell v. Hodges with regard to gay marriage. Last year, President Obama entered an Executive Order prohibiting federal contractors from discriminating on the basis of gender identity and sexual orientation.  In recent years, there has been a gradual acceptance that discrimination against transgender individuals constitutes discrimination on the basis of sex prohibited under federal law Title VII of the Civil Rights Act of 1964. Now, for the first time, EEOC (Equal Employment Opportunity Commission), the federal agency charged with enforcing discrimination laws, held in a July 15, 2015 decision that discrimination on the basis of sexual orientation necessarily involves discrimination on the basis of sex and is unlawful under Title VII.

The significance of this decision is that employers cannot rely on the fact that Congress never added “sexual orientation” as a protected class to federal anti-discrimination laws which expressly name race, color, religion, sex and national origin as bases for protection.  Sexual orientation discrimination is now a subset of sex discrimination.

In reviewing the many claims of discrimination on the basis of sexual orientation, courts have consistently held that Title VII does not prohibit sexual orientation discrimination.  However, discrimination on the basis of what is referred to as “gender stereotyping” has been recognized, most notably in the 1989 Supreme Court decision in Price Waterhouse v. Hopkins.  There, the plaintiff claimed that she was denied a promotion because her employer found that her actions and conduct were not sufficiently feminine. The Court upheld her claim, stating that Title VII applied to discrimination because of gender, not just biological sex. 
Continue Reading Expanding Gay Rights

On July 6, 2015, the Department of Labor proposed changes to the manner in which overtime pay is calculated for executive, administrative and professional employees.  These employees, collectively referred to as white collar workers, have been exempt from overtime pay protections for many years.  To be considered exempt, the employees must meet certain minimum tests related to their primary job duties and be paid on a salary basis at not less than $455 a week ($23,660 a year), which amount was last updated in 2004.

Now, the Department of Labor proposes to update that salary level to $921 a week or $47,892 annually. These amounts represent calculations based on 2013 statistics; the adjusted levels as projected for 2016 would be $970 a week or $50,440 per year.

These changes are to the rules interpreting the exemptions under the Fair Labor Standards Act and can be enacted and approved without Congressional action.  However, there is a 60-day comment period (through September 4, 2015) during which individuals, corporations and other organizations can express opinions which could result in changes to the rule that is ultimately adopted.  It is not clear whether or when these proposed changes will become effective, and what actions opponents will take to try to block implementation.  Because these are regulations under the FLSA, not the statute itself, these rules will not be voted on by Congress.

If the rule is adopted and a worker would otherwise meet the definition of an executive, administrative or professional employee but earns less than $47,892 per year, that employee would have to be paid time and a half for hours worked over 40 per week.  In addition, in order to prevent the salary level requirements from becoming outdated, the Department of Labor proposes to automatically update the minimum salary levels on an annual basis.
Continue Reading What’s Happening With Changes to Overtime Requirements?

Matt Grosh recently talked about Cam and Mitchell from Modern Family as a backdrop to the IRS’s recent revenue ruling. That ruling recognized same-sex marriages for federal tax purposes even when a couple resides in a state that does not permit same-sex marriages.  The couple must only have been validly married in a state that recognizes same-sex marriage.

After last summer’s Supreme Court decision analyzing the Defense of Marriage Act, numerous questions arose regarding legal treatment of same sex couples.  Employers were confused about their obligations regarding benefits such as health insurance and retirement plans.  After consultation with the Department of Justice and the Department of Treasury (Internal Revenue Service), the United States Department of Labor (DOL) issued Guidance to Employee Benefits Plans on the definition of spouse and marriage.

The DOL advised that employers are to recognize "spouses" and "marriages" based on the validity of the marriage in the state where the couple was married rather than the state where they reside.  The DOL concluded that such an interpretation would make it easier for employers to uniformly administer benefits to all employees, in addition to offering more protection to same-sex couples.  In effect, the Department of Labor Regulations, Rulings, Opinions and Exemptions will assume that the term "spouse" refers to any individual who is legally married under any state law. Consistent with the IRS ruling, the terms "spouse" and "marriage" will not include individuals in domestic partnerships or civil unions.  


Continue Reading From ‘Philadelphia’ to ‘Modern Family’

Although I don’t spend much time watching TV, I came across the new Netflix series House of Cards in which all 13 episodes were released at once for back to back watching. I enjoyed the series for its political perspective, but found it interesting as an employment lawyer as well.

Claire Underwood played by Robin Wright is the cold and beautiful wife of Francis Underwood, House Majority Whip (Kevin Spacey). Claire is the director of the non-profit Clean Water Initiative (CWI). In the beginning of the season, she fires half her staff, assigning the actual serial ax job to the office manager, who is terminated by Claire immediately after the firings are completed. She then actively recruits Gillian Cole (Sandrine Holt). When Claire first interviews Gillian, she is ill and, even before she is hired, Claire sends her to her personal physician, all expenses paid, a novel recruiting tool. Once she is on the job for a few months, Gillian tells Claire that she is pregnant as an explanation of why she cannot fly on CWI business. Gillian begins missing work periodically, and childless Claire makes a remark questioning her priorities and commitment to CWI. Ultimately, Gillian defies Claire on a matter of principal and Claire fires her on the spot for her insubordination. When Claire is later visited by counsel, we find out that not only has Gillian sued CWI but that she will not accept any monetary amount to settle her claim. Gillian tells Claire that the publicity resulting from her suit will cost CWI, Claire and her high profile politician husband more than any settlement payment and insure a better world for her unborn child. She also has many witnesses happy to testify for her including the former office manager, and adds that any embellishment of her testimony is justified by the need to expose CWI as a sell-out to corporate interests.  


Continue Reading THINK Before You Fire – What Claire Underwood Did Wrong

In honor of Labor Day, Russell, Krafft & Gruber, LLP will be closed on Monday, September 3, 2012 , as we celebrate the dedication and achievements of the American worker. The first Labor Day was celebrated on Tuesday, September 5, 1882 in New York City as planned by the Central Labor Union. In the 1800s

You may have recently read that Rite Aid is paying almost $21 million to settle multiple claims that it improperly failed to pay time-and-a-half for hours worked over forty in a week by its managers. State statutes and the federal Fair Labor Standards Act (FLSA) regulate the payment of overtime wages. Careful attention needs to be paid to the so-called white collar administrative and executive exemptions, particularly in view of the increasing numbers of class action suits.

I work with employers who have questions regarding the proper classification of employees. The number one misconception that I still see is the belief that paying an employee an annual salary makes him exempt from overtime payment. Another major misconception is undue reliance on a job title or written description. It does not matter what the title of the job is or what the job description says – what matters is what the employee is actually doing. If the work that the employee performs changes, even if the job title doesn’t, the exemption status can change as well.

The Wage and Hour Division of the United States Department of Labor publishes fact sheets that are a good start in examining your particular situation. To qualify for the administrative exemption, the employee’s primary duty must be the performance of work directly related to management or general business operations of the employer and include the exercise of discretion and independent judgment. The executive exemption applies to those whose primary duty is managing a department, and who customarily and regularly direct the work of at least two full time employees or their equivalent.


Continue Reading Overtime – “Managers” Exempt or Not?