Confidentiality Rule That Prohibits Discussions About Salary Violates The NLRA

NLRB v. Long Island Association, ___F. 3d___(2d Cir. Aug. 31, 2017, is an interesting decision. The Court holds that an employer violated 8(a)(1) of the NLRA for discharging an employee who refused to sign an employer's confidentiality rule. That rule, among other things, stated that employees cannot disclose salaries. Of interest is that this employer was not organized and this is yet another example of the application of the NLRA to non-union employers. As the court stated:

 “The [NLRB] has long adhered to and applied the principle that discipline  imposed pursuant to an unlawfully overbroad rule is unlawful.” The Cont’l Grp., 3 Inc., 357 N.L.R.B. 409, 410 (2011). This is called the Double Eagle rule after Double  Eagle Hotel & Casino, 341 N.L.R.B. 112 (2004). See The Cont’l Grp., Inc., 357 N.L.R.B. 5 at 410. One of the central concerns animating the Double Eagle rule is that “the  mere maintenance of an overbroad rule tends to inhibit employees who are  considering engaging in legally protected activities by convincing them to refrain  from doing so rather than risk discipline.” Id. at 411. Thus, “[a]n employer is not free to evade liability through the device of utilizing a rule prohibiting activity protected by Section 7 of the [NLRA] and by then basing its discipline on the fact that the employee has violated the rule, thereby being insubordinate.” Kolkka  Tables & Finnish‐Am. Saunas, 335 N.L.R.B. 844, 849 (2001). In other words, “an employer may not discharge an employee for refusing to comply with an unlawful order prohibiting protected activity.” Quantum Elec., Inc., 341 N.L.R.B. 15 1270, 1280‐81 (2004). The rule that has emerged, therefore, is “that an employer  may not take coercive action against an employee . . . for refusing to comply with a policy that . . . itself deters protected activity” in violation of Section 8(a)(1)

Court Invalidates Obama's Over-Time Rules

In Nevada v. U.S. Dep’t. of Labor, ____F. Supp. 2d____(E.D. Tx. Aug. 31, 2017), the court declared President Obama's Over Time Rule, 81 Fed Reg. 32, 391 invalid.

The Court found that the exemptions for executive, administrative and professionals set forth in 29 U.S.C. 213(a)(1) were meant by Congress to be defined by the duties that the employees performed. The Department of Labor has long had a Salary Basis test which required that employees earn a certain salary in order to be exempt. The Final Rule more than doubled the previous minimum salary level, increasing it from $455 per week ($23,660 annually) to $913 per week ($47,476 annually) and the court found that this would make the employees duties irrelevant if it fell below the minimum level. Interestingly, the court found that the prior salary test ($ 455 per week), was consistent with Congressional intent because the Department used that level of salary to identify a category of employees Congress intended to exempt.

 It would appear no salary basis test is currently in place in the Eastern District of Texas. 

7th Circuit Holds That Cosmetology Students Are Not Employees Under The FLSA

The Seventh Circuit Court recently held that cosmetology students are not employees. In Hollins v. Regency Corp., ___ F.3d ___, No. 15-3607, 2017 WL 3474266 (7th Cir. Aug. 14, 2017), Chief Judge Diane Wood wrote the opinion of a unanimous panel of the Seventh Circuit affirming the grant of summary judgment against former cosmetology students who alleged they were employees of their cosmetology schools when they 1) were practicing skills on paying members of the public and 2) were performing “menial tasks,” such as sanitation, greeting guests and selling products. The Court applied the economic realities test. The lower court ruled against the students.

It is Discrimination To Fire a Woman Because She Is Too Cute

Edwards v. Nicolai, ____A.D.3d___(1st Dept. Aug. 22, 2017), is likely to become a landmark employment discrimination. There, a female therapist was fired for being "too cute" Significantly, no sexual harassment or even a relationship existed between the Plaintiff and her supervisor who fired Plaintiff at his wife's insistence. As the court explained:

The court erred, however, in dismissing the causes of action for gender discrimination under the NYSHRL and the NYCHRL. It is well established that adverse employment actions motivated by sexual attraction are gender-based and, therefore, constitute unlawful gender discrimination (see e.g. Williams v New York City Hous. Auth., 61 AD3d 62, 75 [1st Dept 2009], lv denied 13 NY3d 702 [2009] [sexual harassment is "one species of sex- or gender- based discrimination"]; see also Oncale v Sundowner Offshore Servs., Inc., 523 US 75, 80 [1998]; King v Board of Regents of Univ. of Wis. Sys., 898 F2d 533, 539 [7th Cir 1990]). Here, while plaintiff does not allege that she was ever subjected to sexual harassment at WSCW, she alleges facts from which it can be inferred that Nicolai was motivated to discharge her by his desire to appease his wife's unjustified jealousy, and that Adams was motivated to discharge plaintiff by that same jealousy. Thus, each defendant's motivation to terminate plaintiff's employment was sexual in nature.
Defendants' reliance on certain cases in the "spousal jealousy" context is misplaced. Because these cases involve admitted consensual sexual affairs between the employer and the employee, they are distinguishable (see Rainer N. Mittl, Ophthalmologist, P.C. v New York State Div. of Human Rights, 100 NY2d 326, 332 [2003]; see also Mauro v Orville, 259 AD2d 89, 92-93 [3d Dept 1999], lv denied 94 NY2d 759 [2000]; Tenge v Phillips Modern Ag Co., 446 F3d 903, 910 [8th Cir 2006]). In such cases, it was the employee's behavior - not merely the employer's attraction to the employee or the perception of such an attraction by the employer's spouse - that prompted the termination. Here, assuming the truth of the allegations of the amended complaint, as we are required to do upon a motion to dismiss, plaintiff had always behaved appropriately in interacting with Nicolai, and was fired for no reason other than Adams's belief that Nicolai was sexually attracted to plaintiff. This states a cause of action for gender discrimination under the NYSHRL and the NYCHRL.

A New York Law Journal article about this case is available here.  (registration required). The lower court decision, available here, reached a contrary result and extensively analyzed case law. My view is that this issue was wide open in New York and the Appellate Division is correct.

What is significant about this case, from a legal prospective, is that it potentially involves an entire new class of cases involving appearance based discrimination. And if someone is fired because they are not "cute enough," a cause of action may also be stated.

Notice of Claim Required In Action Against Charter School

Is a Notice of Claim required before commencing suit against a Charter School?The answer is generally yes, in New York. See, JP v. Bronx Community Charter School, ___Misc.3d___(Bronx Co. July 7, 2017). Why? Because they are considered public schools.

Retired Employee Looses Tenure Protection

Richardson v. City of New York, ___F. Supp. 2d ___(S.D.N.Y. Feb. 23, 2017), is an interesting case concerning the interaction of a retirement with the right to a hearing. A tenured administrator retired while an OSI disciplinary investigation was still taking place. Several years later, that administrator learned that she was on the invalid list after she applied for a different position. The court held that because the administrator resigned, she had no property interest which would trigger the right to a due process hearing. The plaintiff also did not have a protected "liberty interest". As the court explained:

As regards Richardson's alleged property interest, "there is no constitutionally protected property interest in prospective government employment." See Abramson v. Pataki, 278 F.3d 93, 100 (2d Cir. 2002). Richardson thus cannot allege a deprivation of property resulting from her placement on the Ineligible List. And indeed Richardson does not appear to contest Defendants' argument that she lacks a property interest in her security clearance. The cases cited by Richardson in which a property interest was found arose only in the context of termination of existing employment, not the denial of future employment. See, e.g., Locurto v. Safir, 264 F.3d 154 (2d Cir. 2001); Otero v. Bridgeport Housing Auth., 297 F.3d 142, 151 (2d Cir. 2002).
As regards the deprivation of a liberty interest, Richardson does not adequately allege a "stigma plus" due process violation. See, e.g., Behrend v. Klein, No. 04 Civ. 5413, 2006 WL 2729257, at *7 (E.D.N.Y. Sept. 25, 2006). A stigma-plus claim requires a plaintiff to show (1) a stigmatizing statement that "effectively put[s] a significant roadblock in that employee's continued ability to practice his or her profession," Donato v. Plainview-Old Bethpage Cent. Sch. Dist., 96 F.3d 623, 631 (2d Cir. 1996); (2) public dissemination of that statement; and (3) that any stigmatizing statements were made in close temporal proximity to the plaintiff's dismissal from government employment. See Segal v. City of N.Y., 459 F.3d 207, 212 (2d Cir. 2006).
Here, Richardson has failed to carry her burden at this stage, as she has not adequately alleged that any potentially stigmatizing description of her conduct was disseminated publicly. She only claims that her security clearance was denied, not that her prospective employer was ever informed of the nature of the charges against her. (Compl. ¶¶ 40-43.) She nowhere alleges that the report of the investigation was made public, or that the DOE's denial of her security clearance entailed the disclosure of the reasons for the denial. See McPherson v. N.Y. City Dep't of Educ., 457 F.3d 211, 216-17 (2d Cir. 2006) (affirming dismissal of a stigma-plus claim where "the reasons for placement on the `Ineligible/Inquiry List' remain confidential, and Plaintiff has provided no evidence suggesting otherwise").
Accordingly, Richardson's due process claim must be dismissed.

Procedural Arbitrability Questions Are For The Arbitrator To Decide

Matter of City of Yonkers v. Yonkers Firefighters, ___A.D. 3d___(2d Dep't. Aug. 9, 2017) illustrates how difficult it is to stay a labor arbitration and that questions concerning procedural arbitrability are for the Arbitrator. As the court explained:

The City's contention that arbitration was precluded because Local 628's grievance was not timely pursuant to step one of the grievance procedure is without merit. The "threshold determination of whether a condition precedent to arbitration exists and whether it has been complied with, is for the court to determine" (Matter of Village of Chester v Local 445, Intl. Bhd. of Teamsters, 118 AD3d 1012, 1013; see Matter of Incorporated Vil. of Floral Park v Floral Park Police Benevolent Assn., 131 AD3d at 1242; Matter of Town of N. Hempstead v Civil Serv. Empls. Assn., Inc., 78 AD3d 847, 848). By contrast, "[q]uestions concerning compliance with a contractual step-by-step grievance process have been recognized as matters of procedural arbitrability to be resolved by the arbitrators, particularly in the absence of a very narrow arbitration clause or a provision expressly making compliance with the time limitations a condition precedent to arbitration" (Matter of Enlarged City School Dist. of Troy [Troy Teachers Assn.], 69 NY2d 905, 907; see Matter of Triborough Bride & Tunnel Auth. [Dist. Council 37 of Am. Fedn. of State, County & Mun. Empls., AFL-CIO, 44 NY2d 967, 969; Matter of Incorporated Vil. of Floral Park v Floral Park Police Benevolent Assn., 131 AD3d at 1242; Matter of Hartsdale Fire Dist. v Greenburgh Uniform Firefighters Assn., Inc., Local 1586, IAFF, AFL-CIO, 55 AD3d 731, 732). As the CBA does not specify that timely commencement of the grievance is a condition precedent to arbitration, the issue of whether Local 628 timely initiated the grievance at step one must be resolved by the arbitrator, not the court

Sitting Next To A Superstar May Improve Your Performance

Use your Seat to Get Ahead is an interesting Wall Street Journal article from August 8, 2017 which readers may find of interest. The premise of the article is that your work performance may improve when you sit next to a superstar employee. As the article states:

Proximity to high achievers can lift people’s performance in various jobs, via inspiration, peer pressure or new learning, a growing body of research shows. The findings offer a silver lining to anyone annoyed at the current fad of flexible office-seating arrangements; employees can use them to their advantage.
Simply sitting next to a high achiever can improve someone’s performance by 3% to 16%, according to a two-year Northwestern University study of 2,452 help-desk and other client-service workers at a technology company.

Not Every Mistake is Disqualifying Misconduct For Unemployment

Matter of Humphreys, ____A.D.3d____(3d Dept. August 3, 2017), illustrates an important principal. Namely, not all forms of misconduct are disqualifying for unemployment purposes. Unfortunately, distinguishing between what is misconduct and what is not is often difficult.
Here, a security guard made the following statement to another security guard:   "if people mess with him, mess with his money, he would cut them." 
In finding that this did not constitute misconduct, the court reasoned:

Whether a claimant's actions rise to the level of disqualifying misconduct is a factual issue for the Board to resolve, and not every mistake, exercise of poor judgment or discharge for cause will rise to the level of misconduct" (Matter of Jensen [Victory State Bank—Commissioner of Labor, 126 AD3d 1207, 1207-1208 [2015] [internal quotation marks and citations omitted]; accord Matter of Muniz [Mitarotonda Servs., Inc.—Commissioner of Labor], 140 AD3d 1426, 1427 [2016]). "Pursuant to our limited review, this Court may not weigh conflicting evidence or substitute its own judgment, and if, as here, the findings turn on the credibility of witnesses, we may not substitute our perceptions for those of the agency" (Matter of Suchocki [St. Joseph's R.C. Church—Commissioner of Labor], 132 AD3d 1222, 1223 [2015] [internal quotation marks and citations omitted]; accord Matter of Kacperska-Nie [DePaula & Clark, Inc.—Commissioner of Labor], 144 AD3d 1303, 1304 [2016]).
Here, the security guard, to whom claimant made the statement regarding cutting people, testified that he felt that the statement was a work-related threat because claimant was always worried about losing his job or having his hours cut. While there was evidence presented that claimant had also previously made disparaging remarks about female coworkers, the employer's security manager testified that claimant's employment was terminated solely because his statement regarding cutting people violated the employer's rules prohibiting workplace harassment and fighting, and not for any other conduct. The Board, however, credited claimant's testimony that the statement he made was not work-related or intended as a threat against any of his coworkers, but instead referred to a personal issue regarding individuals who had recently harassed his family. Inasmuch as the Board is the final arbiter of factual and credibility issues, its determination that claimant's statement, although inappropriate, did not create a hostile work environment and did not rise to the level of disqualifying misconduct is supported by substantial evidence and it will not be disturbed, even though there is evidence in the record that could support a contrary conclusion

2d Circuit Issues Major FMLA Case Rejecting But For Standard

Woods v. Star Treatment, ___F.3d___(2d Cir. July 19, 2017), is an important FMLA case to be aware of. The 2d Circuit holds that the "motivating standard" as opposed to the "but for" causation standard is applicable in FMLA discharge cases. This standard is much easier for plaintiffs to meet.
Interestingly, the 2d Circuit also held that the court erred by allowing the jury to draw a negative inference because of the plaintiff's invocation of the 5th Amendment during a deposition reasoning:

The instruction accurately states the law insofar as “the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them.” Baxter v. Palmigiano, 425 U.S. 308, 318 (1976). Such adverse inferences are appropriately admitted, however, only if they are relevant, reliable, and not unduly prejudicial. See Brink’s Inc. v. City of New York, 717 F.2d 700, 710 (2d Cir. 1983). We conclude that the district court exceeded the bounds of its discretion in admitting and permitting the adverse inferences to be drawn here. First, most of the questions in Woods’s deposition were merely whether Woods had been accused of something. Even assuming her answers would have been “yes,” accusations have little, if any, probative value because the innocent and guilty alike can be accused of wrongdoing. Without more, accusations do not “impeach the integrity or impair the credibility of a witness.” Michelson v. United States, 335 U.S. 469, 482 (1948). Thus, Woods suffered acute prejudice from the admission of adverse inferences based on her answers to those deposition questions and from the court’s related instructions. 22 Second, Woods suffered even harsher prejudice from the admission of an adverse inference based on her invocation of the Fifth Amendment in response to being asked whether she was ever convicted of any immoral or unethical conduct. Federal Rule of Evidence 609(a)(2) permits the admission of a conviction only when the crime is a felony or the court “can readily determine that establishing the elements of the crime” required proving a “dishonest act or false statement.” The district court here failed to consider whether the requirements of Rule 609(a) were met. The results of a Rule 609(a) analysis are especially important in this case because the record is unclear as to what, if any, crime Woods was convicted of. Indeed, there was only a reference to “disorderly conduct,” which is not necessarily “dishonest,” much less “immoral” or “unethical.” An adverse inference based upon Woods declining to answer that deposition question is of questionable probative value on the issue of her credibility. Third, the danger of unfair prejudice is high when a jury is told that a witness declined to answer a question by invoking the Fifth Amendment; the implication is, at best, that the witness refused to answer because she had something to hide. We tolerate some danger of prejudice from such inferences in civil cases, unless it substantially outweighs the probative value of those inferences. See Brink’s Inc., 717 F.2d at 710. Here, the way in which Woods’s Fifth Amendment invocation was raised and later argued at closing elevated the prejudice to an intolerable level. Woods’s Fifth Amendment invocation 23 was repeatedly emphasized—defense counsel raised it during Woods’s crossexamination, the district court instructed the jury on it, and defense counsel argued it during his summation. Although defense counsel attempted to moderate this line of argument, see J. App’x 632 (“I am not hanging my hat on [the] Fifth Amendment invocation.”), he did so only after forcefully highlighting the inferences that the jury was permitted to draw. In arguing that the entire case hinged on Woods’s credibility, defense counsel told the jury “you are permitted in this case to infer that Ms. Woods was the subject of a government grand jury investigation, was accused of fraud, lying, fabricating events, and misrepresenting facts to the government and was then convicted of a crime.” Id. Defense counsel’s statement was consistent with the district court’s instruction, but the inferences that the jury was permitted to draw did not necessarily mean anything with respect to Woods’s credibility or character for truthfulness. Apart from allowing such vigorous argument on this point, the district court erred by failing to engage in the required Rule 403 analysis. See Brink’s, Inc., 717 F.2d at 710. In our view, the unfair prejudice Woods suffered substantially outweighed the minimal, if not immaterial, probative value of Woods’s Fifth Amendment invocation. Accordingly, it was error for the district court to admit those invocations into evidence and to instruct the jury as to what it was allowed to infer from them.