In a move that could have broad national effects on gay rights in the workplace, the Second Circuit ruled that discrimination based on sexual orientation violates Title VII of the Civil Rights Act, deciding in favor of the estate of a deceased skydiving instructor who was allegedly fired for telling a client he was gay.

On Monday, the United States Court of Appeals for the Second Circuit became the second federal appeals court to rule that Title VII encompasses sexual orientation discrimination in Zarda v. Altitude Express, joining the Seventh Circuit in its decision last year. This issue has divided courts for years, and even caused a split between the EEOC and the Department of Justice, with the former arguing in favor of including sexual orientation under Title VII’s protections and the latter arguing against it. The Second Circuit’s decision furthers a circuit split, which occurred when the Eleventh Circuit held that sexual orientation discrimination is not actionable under Title VII.

Chief Judge Robert A. Katzmann delivered the majority opinion and concluded, “Title VII’s prohibition on sex discrimination applies to any practice in which sex is a motivating factor. Sexual orientation discrimination is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted, making it impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account.”

In so holding, the majority adopted each of the theories advanced by the EEOC. Applying the “comparative test” to determine whether an employment practice constitutes sex discrimination, the court considered the example in the Seventh Circuit’s decision Hively v. Ivy Tech Community College. The court compared a lesbian woman to a heterosexual man and rejected the framing urged by the government, which would compare a woman attracted to people of the same sex with a man attracted to people of the same sex.  Finding that sexual orientation acts as a proxy for sex, the majority concluded that a lesbian treated differently than a heterosexual man due to her sexual orientation would not have been subject to an adverse action “but for” her sex.

The majority opinion also concluded that sexual orientation discrimination constitutes actionable gender stereotyping, held to be unlawful under Price Waterhouse v. Hopkins, and associational discrimination, borrowing principles from Loving v. Virginia.

In dissent, Judge Lynch argued that Congress did not intend to cover sexual orientation discrimination when drafting Title VII. The majority court acknowledged this fact, but also recognized that the legal framework for evaluating Title VII claims has changed dramatically over time. “Because Congress could not anticipate the full spectrum of employment discrimination that would be directed at the protected categories,” Katzmann explained, “it falls to courts to give effect to the broad language that Congress used.”

Employers operating within the Second Circuit – comprising New York, Connecticut, and Vermont – already should have in place policies prohibiting sexual orientation discrimination because those state laws expressly prohibit such conduct. But this decision provides a roadmap for the potential adoption by other circuits around the country, and suggests that the Supreme Court may settle the current circuit split.  Thus, employers are encouraged to adopt nationwide policies prohibiting sexual orientation discrimination to the extent they have not done so.

Additionally, the sweeping adoption by the majority opinion of the positions pressed by the EEOC should signal to employers to take seriously the actions by and guidance from the EEOC in this and other matters. For example, the EEOC will finalize new enforcement guidance on harassment shortly, and employers should expect the EEOC to aggressively enforce that guidance, including with respect to harassment based on sexual orientation.

See also Nathaniel Glasser’s video interview on this topic, from next Monday’s Employment Law This Week: “Second Circuit Says Title VII Covers Sexual Orientation Discrimination.”

Our colleague Daniel R. Levy, at Epstein Becker Green, has a post on the Trade Secrets & Employee Mobility blog that will be of interest to our readers: “It’s a Brave New World: Protecting Trade Secrets When Traveling Abroad with Electronic Devices.

Following is an excerpt:

Consider the following scenario: your organization holds an annual meeting with all Research & Development employees for the purpose of having an open discussion between thought leaders and R&D regarding product-development capabilities. This year’s meeting is scheduled outside the United States and next year’s will be within the U.S. with all non-U.S. R&D employees traveling into the U.S. to attend. For each meeting, your employees may be subject to a search of their electronic devices, including any laptop that may contain your company’s trade secrets. Pursuant to a new directive issued in January 2018 by the U.S. Custom and Border Protection (“CBP”), the electronic devices of all individuals, including U.S. citizens and U.S. residents, may be subject to search upon entry into (or leaving) the U.S. by the CBP. …

Read the full post here.

The United States is in the midst of an unusually lethal flu season, and health experts agree that despite inconsistencies in their effectiveness, flu shots are among the best ways to fight the spread of the flu. A recent holding from the Third Circuit Court of Appeals provides some good news for health care employers who require that their patient-facing employees receive flu shots, making it more difficult for employees to claim a religious exemption.

Courts have held that health care employers may require their patient-facing employees to be vaccinated against a number of diseases, including the flu.  Whether employers can mandate vaccinations for all employees has been a closer question.  A key issue faced by employers is determining whether an employee’s anti-vaccination beliefs qualify for a religious exemption.

In Fallon v. Mercy Catholic Medical Center, the Third Circuit considered the religious exemption, clarifying what may qualify as such. Paul Fallon, a psychiatric crisis intake employee of Mercy Catholic Medical Center (“Mercy”), refused to get his required annual flu shot. Fallon had successfully asserted a religious exemption for several years before Mercy changed its policy to require that employees seeking such exemptions provide a note from a clergy member. Fallon, who does not belong to a religious organization, did not provide the clergy note, instead outlining his “sincerely held beliefs” opposing the vaccine in a 22-page essay. Mercy determined that Fallon’s beliefs, however sincere, were not religious. It did not grant the exemption, and subsequently fired Fallon when he continued to refuse vaccination. Fallon sued Mercy for wrongful termination alleging religious discrimination and a failure to accommodate in violation of Title VII of the Civil Rights Act of 1964.

The District Court sided with Mercy, and the Third Circuit affirmed the decision. The court relied on the three-part modern definition of religion, as adopted in Africa v. Commonwealth of Pennsylvania, 662 F.2d 1025, 1032 (3d Cir. 1981): a religion (1) addresses fundamental and ultimate questions having to do with deep and imponderable matters; (2) is comprehensive in nature, consisting of a belief system as opposed to an isolated teaching; and (3) is often recognized by the presence of certain formal and external signs.  The court concluded that Fallon’s belief that “the flu vaccine may do more harm than good” amounted to nothing more than a concern about the health effects of the vaccine and demonstrated his disbelief of the scientifically accepted view that it is harmless to most people.  Therefore, Fallon could not meet either of the first two prongs of the Africa test.  In addition, Fallon was unable to meet the third pong because he could not demonstrate that his beliefs manifested in “formal and external signs,” such as services or the existence of clergy.    Accordingly, the court concluded that Fallon’s “beliefs do not occupy a place in his life similar to that occupied by a more traditional faith,” meaning that “[h]is objection to vaccination is . . . not religious and not protected by Title VII.”

While the court’s decision provides guidance for employers responding to anti-vaccination beliefs, the court recognized that anti-vaccination beliefs can be part of “a broader religious faith.”  Thus, employers should be mindful not to categorically deny all requests for religious exemptions based on anti-vaccination beliefs.

Employers also should follow the recent developments within the Department of Health and Human Services (HHS), which recently established a new Conscience and Religious Freedom Division in the Office for Civil Rights (OCR) and released a proposed rule that would provide protections for health care workers who refuse to participate in services that run counter to their religious beliefs or moral convictions.   In an HHS press release on January 19, 2018, Acting HHS Secretary Eric D. Hargan said that the creation of the Division constitutes “a rollback of policies that had prevented many Americans from practicing their profession and following their conscience at the same time,” adding that “Americans of faith should feel at home in our health system, not discriminated against.”  These developments, and the public comments by HHS officials, may signal a move to prevent employers from enforcing mandatory flu vaccination policies.

Last week, the federal Department of Health and Human Services (HHS) made two announcements aimed at providing additional protections for health care workers who object to providing services on moral or religious grounds.

On January 18, 2018, HHS announced the formation of a new Conscience and Religious Freedom Division in the HHS Office for Civil Rights (OCR).  The stated goal of the new division is to “restore federal enforcement of our nation’s laws that protect the fundamental and unalienable rights of conscience and religious freedom.”

The next day, on January 19, HHS released a proposed rule that would provide protections for health care workers who refuse to participate in services that run counter to their religious beliefs or moral convictions.  Finding support in the First Amendment and federal anti-discrimination statutes, the proposed rulemaking is intended to protect doctors and nurses with moral or religious objections to participating in certain procedures such as abortions, assisted suicide, sterilization, vaccination, and other matters of conscience.  Construed broadly, the rule may also cover conscience objections to treating transgender patients or issues of gender identity.

The proposed rule applies to entities that receive funds through programs funded or administered in whole or in part through HHS, such as hospitals, nursing homes, clinics, physician offices, universities, and more.  Public comments are now being accepted on the proposed rule through March 27, 2018.

The rule likely will lead to increased scrutiny from OCR and the newly formed Conscience and Religious Freedom Division.  The Washington Post has quoted OCR Director Roger Severino about the more than three-fold increase in the number of worker complaints related to moral and religious beliefs since President Trump’s election.  Severino stated that a career senior executive will be appointed to investigate such issues.  Under the rule, OCR would have the authority to initiate compliance reviews, conduct investigations, coordinate compliance, and use enforcement tools comparable to those available under other civil rights laws.

Once finalized, the rule will have an immediate impact on how health care providers assign employees, discipline for failures or refusals to perform certain services, and accommodate religious and moral beliefs.  The requirements may give rise to issues that will need to be addressed in collective bargaining agreements.  While we expect there to be legal challenges to the rule, employers should be prepared to both address employee concerns about providing services to which they have conscience objections, and to create alternative plans for treatment when such concerns are raised.

On January 11, New York’s City Council passed Int. No. 1186-A, which amends the New York City Human Rights Law to expand the definition of the terms “sexual orientation” and “gender.”  Previously, the law defined sexual orientation as meaning “heterosexuality, homosexuality, or bisexuality.” The new definition takes a broader view and offers a more nuanced definition that recognizes a spectrum of sexual orientations, including asexuality and pansexuality.  As amended, the law defines sexual orientation as:

[A]n individual’s actual or perceived romantic, physical or sexual attraction to other persons, or lack thereof, on the basis of gender. A continuum of sexual orientation exists and includes, but is not limited to, heterosexuality, homosexuality, bisexuality, asexuality, and pansexuality.

The law also offers clarity on the definition of “gender,” and continues to include a person’s gender-related self-image, appearance, behavior, expression, or other gender-related characteristic within its scope.

The new law will take effect on May 11, 2018.

Further emphasizing the split in authority on sexual orientation discrimination, last month the Eastern District of Missouri dismissed plaintiff Mark Horton’s claim that Midwest Geriatric Management LLC (“MGM”) violated Title VII by rescinding an offer of employment after learning that he is gay. Horton v. Midwest Geriatric Mgmt., LLC, Case No. 4:17CV2324, 2017 U.S. Dist. LEXIS 209996 (E.D. Mo. Dec. 21, 2017).

Horton asserted that MGM unlawfully discriminated against him on the basis of sex and religion. Horton’s sex discrimination claim comprised three theories: (1) sexual orientation is necessarily discrimination based on sex; (2) discrimination on the basis of his association with a person of a particular sex (his male partner); and (3) nonconformity with sex stereotypes.  In granting MGM’s motion to dismiss, the district court cited Eighth Circuit precedent from a 1989 holding that Title VII does not cover discrimination based on sexual orientation, and concluded that both the sex and religious discrimination claims were merely refashioned sexual orientation discrimination claims.

The Eighth Circuit precedent, which comports with a recent decision in the Eleventh Circuit, contrasts with the EEOC’s position, adopted by the neighboring Seventh Circuit in Hively v. Ivy Tech Community College. In that case, the Seventh Circuit held that “a person who alleges that [he] experienced employment discrimination on the basis of [his] sexual orientation has put forth a case of sex discrimination for Title VII purposes.” Hively v. Ivy Tech Cmt. College, 853 F.3d 339, 351-52 (7th Cir. 2017). The Hively court based its holding on a conclusion that there is no difference between a gender nonconformity claim and one based on sexual orientation. Thus, “a policy that discriminates on the basis of sexual orientation . . . is based on assumptions about the proper behavior for someone of a given sex.” Id. at 346. The Court further cited a “common-sense reality that it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex.” Id. at 351.  While the Seventh Circuit is the first federal appellate court to find sexual orientation covered by Title VII, the Second Circuit is considering the question in en banc review.

Unlike the Seventh Circuit’s approach, the Eighth Circuit draws a distinction between discrimination based on sex stereotypes and that based on “notions of heterosexuality and homosexuality,” finding that Title VII protects against the former but not the latter. Though the basis for the claim is not always obvious, here—because Horton directly tied each of his claims to his homosexuality—the Court did “not struggle with exactly where to draw the line between actionable discrimination based on what is alleged to be gender non-conforming behavior and non-actionable discrimination based on sexual orientation.”

Despite the circuit split and legal uncertainty on the federal level, employers should be aware that many state and local laws offer protections against sexual orientation discrimination. And properly pled gender nonconformity claims may be pursued even in jurisdictions that do not recognize sexual orientation discrimination.  Thus, employers should train their employees to treat all employees equally in the workplace to prevent such claims.

On January 8, 2018, former New Jersey Governor Chris Christie signed new legislation (the “Amendment”) amending the New Jersey Law Against Discrimination (“NJLAD”) to add breastfeeding as a protected class under the law. The Amendment, which takes effect immediately, makes it unlawful to discriminate or retaliate against an employee that the employer knows, or should know, is either breastfeeding or expressing milk for her infant child.

The Amendment also requires employers to provide reasonable accommodations to nursing women, unless it would result in an undue hardship to the employer, and specifically requires employers to provide:

  1. Reasonable break time each day for the employee to express breast milk for her child; and
  2. A suitable location with privacy, other than a toilet stall, in close proximity to the work area for the employee to express breast milk for her child.

To determine whether an accommodation would provide an undue hardship, the NJLAD provides that the following factors should be considered:

  • the overall size of the employer’s business with respect to the number of employees, number and type of facilities, and size of budget;
  • the type of the employer’s operations, including the composition and structure of the employer’s workforce;
  • the nature and cost of the accommodation needed, taking into consideration the availability of tax credits, tax deductions, and outside funding; and
  • the extent to which the accommodation would involve waiver of an essential requirement of a job as opposed to a tangential or non-business necessity requirement.

The Amendment also provides that breastfeeding employees are entitled to paid or unpaid leave as a reasonable accommodation, in the same manner as “provided to other employees not affected by pregnancy or breastfeeding but similar in their ability or inability to work.” While the Amendment does not provide an express right to leave, it requires employers to treat such a leave request as they would any other request for leave.

While many New Jersey employers have already been subject to similar requirements to provide breaks and private spaces for nursing mothers to express breast milk in accordance with the Patient Protection and Affordable Care Act’s 2010 Amendment to the federal Fair Labor Standards Act (“FLSA”), the key differences between the breast feeding protections in the FLSA and in the NJLAD are:

  1. Which employees are covered? The FLSA’s protections apply only to “non-exempt” workers (i.e., those workers entitled to overtime pay), while the NJLAD’s protections apply to all New Jersey employees.
  2. Which employers are covered? Small businesses (fewer than 50 employees) may not be covered by the FLSA break-time-for-nursing-mothers provision if they can demonstrate that compliance with the provision would impose an undue hardship. The NJLAD contains a similar “undue hardship” exception, but does not limit the exception to small businesses.
  3. How long must employers accommodate nursing mothers? Protections under the FLSA apply up until one year after the birth of the child, while the NJLAD’s protections do not provide a time limit and apply while the mother is “breast feeding her infant child.” The NJLAD does not define “infant child.”

What should employers do?

New Jersey employers should review their procedures and practices to ensure compliance with the Amendment by:

  1. Reviewing anti-discrimination and reasonable accommodation policies to ensure compliance with the law;
  2. Training supervisors and managers on how to handle accommodation requests related to breastfeeding;
  3. Providing an employee who is breastfeeding with reasonable break times and a suitable private location, other than a toilet stall, in close proximity to the work area to express breast milk for her child.

In addition, employers should consult with counsel before denying an employee an accommodation related to breastfeeding to determine whether an “undue hardship” may be established.

On January 12, 2018, the Maryland General Assembly completed its expected override of Governor Hogan’s May 25, 2017, veto of a bill it passed last April, joining eight other states, the District of Columbia, and various local jurisdictions (including Montgomery County, Maryland) already requiring employers to provide paid sick and safe leave.

As we reported  when the bill originally passed, the new law will require most employers with at least 15 employees to provide up to five paid days (forty hours) per year of sick and safe leave to their employees, and smaller employers to provide up to five unpaid sick and safe leave days. By overriding the veto, the General Assembly rejected Governor Hogan’s original proposal for a narrower bill that would have required paid leave only for business with 50 or more employees and provided tax incentives to smaller business that provide leave, as well as his more recent proposal for a three-year phase-in that also would allow employees to use the leave for any reason.

Under the Maryland Constitution, Art. II, Sec. 17(d), the bill is effective thirty days after the override vote, or February 11, although the General Assembly may act to delay implementation in whole or part. Accordingly, all covered employers should begin preparing to allow employees to accrue the leave at the statutory rate of one hour for every thirty hours worked, including temporary employees and part-time employees who work 12 or more hours a week. Leave can be used after the employee works 106 calendar days covered by the law. Employers may require (but need not) that employees use a minimum of four hours of leave at a time, and may require verification that the leave was used appropriately if the leave is used for more than two consecutive days. However, an existing paid leave policy that permits employees to accrue and use leave under at least equivalent terms and conditions satisfies the law’s requirements and need not be modified. Employers will be required to post an appropriate notice. The bill also leaves in place the existing, more generous law in Montgomery County, on which we previously also reported.

As 2017 comes to a close, recent headlines have underscored the importance of compliance and training. In this Take 5, we review major workforce management issues in 2017, and their impact, and offer critical actions that employers should consider to minimize exposure:

  1. Addressing Workplace Sexual Harassment in the Wake of #MeToo
  2. A Busy 2017 Sets the Stage for Further Wage-Hour Developments
  3. Your “Top Ten” Cybersecurity Vulnerabilities
  4. 2017: The Year of the Comprehensive Paid Leave Laws
  5. Efforts Continue to Strengthen Equal Pay Laws in 2017

Read the full Take 5 online or download the PDF.

The New York City Council recently passed two bills affecting New York City employers and their employees. The first bill, Int. No. 1399, passed by the Council on December 6, 2017, amends Chapter 12 of title 20 of the City’s administrative code (colloquially known as the “Fair Workweek Law”) to include a new subchapter 6 to protect employees who seek temporary changes to work schedules for personal events.  Int. No. 1399 entitles New York City employees to request temporary schedule changes twice per calendar year, without retaliation, in certain situations, e.g., caregiver emergency, attendance at a legal proceeding involving subsistence benefits, or safe or sick time under the New York City administrative code.  The bill establishes procedures for employees to request temporary work schedule changes and employer responses.  Exempt from the bill are employees: (i) who are covered by a collective bargaining agreement; (ii) who have been employed for fewer than 120 days; (iii) who work less than 80 hours in the city in a calendar year; and (iv) who work in the theater, film, or television industries.

The second bill, Int. No. 804-A, passed by the Council on December 19, 2017, amends New York City’s Human Rights law to require covered entities engage in a “cooperative dialogue” with individuals who may be entitled to a reasonable accommodation. Covered entitles include employers, providers of public accommodations and providers of housing accommodations.  The term “cooperative dialogue” means the process by which a covered entity and an individual who may be entitled to an accommodation engage in a discussion to identify what reasonable accommodations are available to assist the individual.  The bill requires the covered entity to provide the individual requesting an accommodation a written final determination identifying any accommodation granted or denied.  This determination may only be made after the parties have engaged, or the covered entity has attempted to engage, in the “cooperative dialogue.”

Mayor DeBlasio likely will sign both bills into law by the end of the year.  New York City employers should be prepared to comply with the new requirements.