Employment Flash – May 2019

This edition of Employment Flash looks at developments in labor and employment law, including regarding a DOJ appeal of the EEOC's heightened pay reporting requirements, the NLRB's decision narrowing the circumstances under which a successor employer forfeits its right to set initial employment terms, a series of recently issued NLRB advice memos, New York City's ban on marijuana testing for job applicants and a bill in California similar to one in New York that would prohibit discrimination based on hairstyles.

US Supreme Court Says Class Arbitration Must Be Explicitly Authorized EEO-1 Update: Appeal of Heightened Pay Reporting Requirements DOL Issues Opinion Letter Regarding Gig Economy Worker Classification NLRB Advice Memoranda Issued in May 2019 NLRB Advice Memoranda Issued in April 2019 NLRB Narrows 'Perfectly Clear' Successor Doctrine Social Security Administration Resumes Notifying Employers With 'No-Match Letters' New York City Issues Final Guidance to Employers on Sexual Harassment Training New York City Bans Marijuana Testing of Job Applicants New York City Releases Three Model Lactation Accommodation Policies Ninth Circuit Rules California's 'ABC' Test for Independent Contractor Classification Applies Retroactively California May Join New York in Prohibiting Discrimination Based on Hairstyles Massachusetts Supreme Court Rules Commission-Only Employees Entitled to Overtime US Supreme Court Says Class Arbitration Must Be Explicitly Authorized

On April 24, 2019, the U.S. Supreme Court ruled in Lamps Plus, Inc. v. Varela, No. 17-988, 2019 WL 1780275 that, under the Federal Arbitration Act, courts may not infer consent to arbitrate on a classwide basis from an ambiguous agreement. The Court in Lamps held that, like silence in Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, ambiguity does not provide a sufficient basis to conclude that the parties agreed to sacrifice the principal advantages of individual arbitration. The Court noted that class arbitration undermines some of the most important benefits of individual arbitration because class arbitration is more expensive, more complex procedurally and more time-consuming than individual arbitration.

EEO-1 Update: Appeal of Heightened Pay Reporting Requirements

As reported in the March 2019 issue of Employment Flash, a federal district court in National Women's Law Center v. Office of Management and Budget, No. 17-CV-2458-TSC (D.D.C. March 4, 2019), vacated the stay that the Office of Management and Budget (OMB) placed on the earlier OMB-approved EEO-1 form requiring reporting of employee compensation data, broken down by ethnicity, race and sex. On May 1, 2019, pursuant to the district court's order for the Equal Employment Opportunity Commission (EEOC) to collect two years of data, the EEOC announced it would collect compensation data, broken down by ethnicity, race, and sex, for years 2017 and 2018. The EEOC announced that covered employers — those employers with at least 100 employees and government contractors with 50 or more employees and at least $50,000 in contracts — must file the required compensation data by September 30, 2019.

On May 3, 2019, just two days after the EEOC's announcement, the Department of Justice appealed National Women's Law Center to the U.S. Court of Appeals for the District of Columbia Circuit. This appeal could potentially delay the September 30, 2019, deadline for the collection of compensation data based on ethnicity, race and sex. Nonetheless, because the appeal has no immediate impact on the district court's decision, covered employers should continue to prepare to submit the required compensation data for years 2017 and 2018 to the EEOC by the September 30, 2019, deadline.

DOL Issues Opinion Letter Regarding Gig Economy Worker Classification

In an April 29, 2019, opinion letter, the Wage and Hour Division of the Department of Labor (DOL) concluded that the service providers of an anonymous virtual marketplace company (VMC) were properly classified under the federal Fair Labor Standards Act (FLSA) as independent contractors of the VMC. According to the DOL, economic dependence is the touchstone for determining whether a worker is an employee (rather than an independent contractor) entitled to the FLSA's protections. Applying the "economic realities" test, the DOL concluded that none of the six factors of the test demonstrated that the service providers were economically dependent upon the VMC. Specifically, the DOL found, among other things, that (i) the service providers appeared to have complete autonomy over their work hours, subject to minimal, if any, supervision by the VMC, (ii) the service providers were free to work for competitors of the VMC during and upon termination of their engagement with the VMC, and (iii) while the VCM retained some ability to control prices, the service providers controlled the determinants of profit or loss because they could choose different types of jobs with different prices, work on as many jobs as they saw fit and negotiate the price of their jobs.

Notably, DOL opinion letters are not binding upon courts. Also, while it provides guidance as to the DOL's views, the opinion letter described above applies solely to the anonymous VMC that requested the letter under the specific facts presented. Furthermore, worker classification tests under state wage and hour laws can be stricter than the FLSA's economic realities test, and several states favor classifying workers as employees rather than independent contractors.

NLRB Advice Memoranda Issued in May 2019

On May 14, 2019, the National Labor Relations Board (NLRB) issued a series of backdated advice memoranda that directed the regional...