On April 18, 2017, the Equal Employment Opportunity Commission (“EEOC”) filed a putative class action against the SLS Hotel South Beach in Miami, Florida (“Hotel”), alleging that the Hotel violated Title VII by firing black Haitian dishwashers who worked in the kitchen and serviced several restaurants in the Hotel – including the Bazaar by Jose Andres, Katsuya and Hyde Beach – and replacing them with white and Hispanic workers, who were supplied by a staffing agency, National Service Group (“NSG”).

This case highlights one of the EEOC’s asserted priorities in its strategic plan for the next six years, to address discrimination in “complex employment relationships” focusing on “temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy.” Here, although a staffing agency made the decision regarding who to hire to replace the terminated employees, the EEOC has stated that an employer may not shield itself from liability for discrimination simply by authorizing an agent to make its hiring or firing decisions, if those decisions are discriminatory.

The Complaint against the Hotel was filed by the EEOC after fifteen former employees lodged charges of discrimination with the EEOC based on their race, color and national origin, and the EEOC issued Letters of Determination after finding reasonable cause to believe that discrimination occurred. The Complaint asserts that black Haitian employees were treated worse than their Hispanic counterparts at the Hotel.  Among the allegations in the Complaint are that black Haitian employees were reprimanded for speaking Creole while Hispanic employees were not reprimanded for speaking Spanish; that black Haitian employees were referred to as “slaves” by other employees, including managers; and Haitian employees were forced to carry heavy items up the stairs, while Hispanic employees were not asked to perform those same tasks.  Further, the Complaint alleges that the Hotel decided to outsource staffing to NSG, but it did not encourage or notify its black Haitian employees to apply for positions with the agency.  Rather, according to the Complaint, black Haitian employees were provided a settlement agreement in English, though many cannot read the language, and were told they would only receive their final paycheck upon signing the agreement.  A press release from the EEOC further contends that the black Haitian workers were replaced “with light-skinned Hispanics.” For its part, the Hotel has spoken out against the allegations, contending that it conducted an investigation as soon as it received notice of the charges and found no evidence of wrongdoing.  Chief Legal Officer for the Hotel, James L. Greeley, stated that the Hotel has been cooperating with the EEOC, engaging in good faith attempts to resolve this matter, and will continue to fully defend the Hotel against false claims.

Our colleague Linda B. Celauro, Senior Counsel at Epstein Becker Green, has a post on the Financial Services Employment Law blog that will be of interest to many of our readers in the hospitality industry: “Seventh Circuit Panel Finds That Title VII Does Not Cover Sexual Orientation Bias.

Following is an excerpt:

Bound by precedent, on July 28, 2016, a panel of the U.S. Court of Appeals for the Seventh Circuit held that sexual orientation discrimination is not sex discrimination under Title VII of the Civil Rights Act of 1964. The panel thereby affirmed the decision of the U.S. District Court for the Northern District of Indiana dismissing the claim of Kimberly Hively, a part-time adjunct professor at Ivy Tech Community College, that she was denied the opportunity for full-time employment on the basis of her sexual orientation.

The importance of the Seventh Circuit panel’s opinion is not in its precise holding but both (i) the in-depth discussion of Seventh Circuit precedence binding it, the decisions of all of the U.S. Courts of Appeals (except the Eleventh Circuit) that have held similarly, and Congress’s repeated rejection of legislation that would have extended Title VII’s protections to sexual orientation, and (ii) the multifaceted bases for its entreaties to the U.S. Supreme Court and the Congress to extend Title VII’s prohibition against sex discrimination to sexual orientation discrimination.

The Seventh Circuit panel highlighted the following reasons as to why the Supreme Court or Congress must consider extending Title VII’s protections to sexual orientation …

Read the full post here.

Complying with employment law has become increasingly difficult given that various states and municipalities have passed legislation that seemingly contradicts federal guidance.[1] One state law that has been in the spotlight is North Carolina’s House Bill 2, the “Public Facilities Privacy and Security Act” (“HB2”), which was passed in an emergency legislative session on March 23, 2016, to overturn a local ordinance that was set to extend anti-discrimination protections to lesbian, gay, bisexual, and transgender (“LGBT”) individuals and would have allowed transgender individuals to use the restroom facilities that corresponded with their gender identity.

There are a number of legal challenges to these laws. Notably, the Department of Justice (“DOJ”) has filed a complaint, in United States v. State of North Carolina et al., against the state of North Carolina, the University of North Carolina (the largest employer in the state), and the North Carolina Department of Public Safety (“DPS”), alleging that they are discriminating against transgender individuals in violation of federal law as a result of the state’s compliance with, and implementation of, HB2.

Separately, Lambda Legal, the American Civil Liberties Union, the American Civil Liberties Union of North Carolina, and Equality North Carolina have jointly filed a lawsuit against North Carolina’s governor (Carcano v. McCrory), challenging HB2 in a North Carolina federal court. The complaint, brought by a student, employee, and professor at three separate North Carolina state colleges, alleges that HB2 is unconstitutional because it violates the Equal Protection and Due Process clauses of the Fourteenth Amendment by discriminating on the basis of sex and sexual orientation and invading the privacy of transgender people. The complaint also alleges that the law violates Title IX by discriminating against students and school employees on the basis of sex. The Carcano complaint alleges that “[e]mployers subject to Title VII also will violate the U.S. Equal Employment Opportunity Commission’s [EEOC’s] decree that discriminating against transgender people with respect to restroom use is impermissible sex discrimination.”

Following the news of these two lawsuits, Governor McCrory issued an executive order affirming the right of private-sector employers to establish their own restroom and locker-room policies. While this executive order alleviates the tension between state and federal law for private employers, public employers and employers that have restroom facilities for customers still face differing standards under state and federal law.

Indeed, the EEOC has offered specific guidance (“EEOC Guidance”) on restroom facility access rights for transgender employees that is contrary to the laws of North Carolina and other jurisdictions. The EEOC Guidance specifically refers to two cases addressing discrimination on the basis of gender identity, both of which offer direction for employers:

  • In Macy v. Dep’t of Justice (Apr. 12, 2012), the EEOC ruled that discrimination based on transgender status is sex discrimination in violation of Title VII.
  • In Lusardi v. Dep’t of the Army (Mar. 27, 2015), the EEOC held that denying an employee equal access to a common restroom corresponding to the employee’s gender identity is discrimination on the basis of sex.

The EEOC Guidance states that an employer cannot condition the right to use the restroom corresponding with the employee’s gender identity on the employee undergoing or providing proof of surgery or any other medical procedure, and an employer cannot avoid the requirement to provide equal access to a common restroom by restricting a transgender employee to a single-user restroom instead. See EEOC Fact Sheet: Bathroom Access Rights for Transgender Employees Under Title VII of the Civil Rights Act of 1964. Notably, the fact sheet states that contrary state law is not a defense under Title VII (citing to 42 U.S.C. § 2000e-7).

In addition to those protections promulgated by the EEOC, OSHA also recently issued guidance indicating that restroom access is a health and safety matter. Under OSHA’s sanitation standard, 29 C.F.R. § 1910.141, employers are required to allow employees prompt access to sanitary facilities. This standard is “intended to protect employees from the health effects created when toilets are not available.”

The OSHA standards, which laws such as HB2 appear to directly conflict, hold that employees should not be required to use a segregated facility apart from other employees because of their gender identity or transgender status. OSHA guidance also has several “model practices” that “all employees should be permitted to use the facilities that correspond with their gender identity.” OSHA advises that the best policies also provide additional options, which employees may choose, but are not required, to use. These include the following:

  • Single-occupancy gender-neutral (unisex) facilities
  • Use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls

The District of Columbia Office of Human Rights issued guidance in early June addressing restroom usage for transgender and cisgender employees. Washington, DC, enacted a law requiring that all single-stall restrooms be gender neutral. Even though this option is available to all employees, the DC guidance reiterates the position of the EEOC and OSHA that employers may not direct transgender employees to use only single-stall restrooms.

What Hospitality Employers Should Do Now

  • Comply with federal law even though it may contradict some state and municipal laws and until there is resolution in either United States v. State of North Carolina et al. or Carcano v. McCrory.
  • Consider creating policies or practices regarding transgender employees’ use of restroom facilities (including following OSHA’s guidance providing numerous restroom options, such as single-occupancy gender-neutral (unisex) facilities), and the use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.
  • Conduct training for human resources and line managers so that they are aware that they may not require transgender workers to use a particular restroom.

A version of this article originally appeared in the Take 5 newsletter “Five Key Issues Facing Employers in the Hospitality Industry.”

[1] While this article focuses on restroom facilities access for transgendered workers, please note that in the hospitality industry, these issues are also relevant with regard to the appropriate use of restroom facilities for customers.

Our colleague Nancy L. Gunzenhauser has a Technology Employment Law blog post that will be of interest to many of our hospitality industry readers: “Three States Seek to Bolster Fair Pay Laws.”

Following is an excerpt:

Following on the tails of recent updates in New York and California’s equal pay laws, New Jersey, Massachusetts, and California all have bills pending in their state legislatures that would seek to eliminate pay differentials on the basis of sex and other protected categories. …

While states are leading the charge with updates to equal pay laws, the EEOC is also stepping up equal pay enforcement with their proposal to modify the EEO-1 forms to include pay information. This push to gather more information regarding pay among various categories may lead to an increase in pay-related claims over the next few years. To help avoid such claims, employers should consider auditing job titles and compensation methods to ensure compliance with each jurisdiction’s equal pay laws.

Read the full post here.

Our colleague Laura A. Stutz has a Retail Employment Law Blog post that will be of interest to many of our hospitality industry readers: “EEOC Implements Nationwide Program to Disclose Employer Position Statements and Supporting Documents.”

Following is an excerpt:

The Equal Employment Opportunity Commission (“EEOC”) recently implemented nationwide procedures for the release of employer position statements to Charging Parties upon request. The new procedures raise concerns about disclosure by the EEOC of non-public personnel and commercial or financial information the employer may disclose to support its position with regard to the Charge.

Before releasing the supporting documents to the Charging Party, the EEOC will review the employer’s submissions and withhold only information the Commission decides should be considered confidential. The type of information considered confidential by the EEOC includes:

  • Sensitive medical information (except for the Charging Party’s medical information)
  • Social Security Numbers
  • Confidential commercial or confidential financial information
  • Trade secrets
  • Non-relevant personally identifiable information of witnesses, comparators or third parties, e.g., dates of birth in non-age cases, residential addresses, personal telephone numbers, personal email addresses, etc.
  • References to Charges filed with the EEOC by other Charging Parties

Read the full post here.

My colleagues Nancy L. Gunzenhauser, Kate B. Rhodes, and Judah L. Rosenblatt at Epstein Becker Green have a Retail Labor and Employment Law blog post concerning a recent EEOC modification to employment discrimination protection: “EEOC Rules Discrimination Based On Sexual Orientation Illegal Under Title VII.”

Following is an excerpt:

The EEOC held that “[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.”  The EEOC noted that sex-based considerations also encompassed gender-based considerations under Title VII. This ruling, if accepted by federal courts, would extend protection under Title VII to decisions made on the basis of sexual orientation. While only the Supreme Court can issue a final, definitive ruling on the interpretation of Title VII, EEOC decisions are given significant deference by federal courts.

Read the full original post here.

My colleagues Nathaniel M. Glasser and Kristie-Ann M. Yamane (a Summer Associate) at Epstein Becker Green have published a Financial Services Employment Law blog post concerning recent modifications to pregnancy discrimination that will be of interest to many of our readers: “EEOC Updates Pregnancy Discrimination Guidance.”

Following is an excerpt:

In the wake of the U.S. Supreme Court’s decision in Young v. UPS, [1]  the EEOC has modified those aspects of its Enforcement Guidance on Pregnancy Discrimination and Related Issues (“Guidance”) that deal with disparate treatment and light duty.

Under the prior guidance, issued in 2014, the EEOC asserted that a pregnant worker could prove a violation of the Pregnancy Discrimination Act (“PDA”) simply by showing that she was “treated differently than a non-pregnant worker similar in his/her ability or inability to work.”  The 2014 guidance also took the position that an employer could not refuse to offer a pregnant worker an accommodation by relying on a policy that provides light duty only to workers injured on the job.  The Supreme Court, however, was highly critical of and rejected this interpretation of the PDA, finding that it would require employers who provide a single worker with an accommodation to provide similar accommodations to all pregnant workers, irrespective of other criteria.

 Read the full original post here.

My colleague Nathaniel M. Glasser recently authored Epstein Becker Green’s Take 5 newsletter.   In this edition of Take 5, Nathaniel highlights five areas of enforcement that U.S. Equal Employment Opportunity Commission (“EEOC”) continues to tout publicly and aggressively pursue.

  1. Religious Discrimination and Accommodation—EEOC Is Victorious in New U.S. Supreme Court Ruling
  2. Transgender Protections Under Title VII—EEOC Relies on Expanded Sex Discrimination Theories
  3. Systemic Investigations and Litigation—EEOC Gives Priority to Enforcement Initiative
  4. Narrowing the “Gender Pay Gap”—EEOC Files Suits Under the Equal Pay Act
  5. Background Checks—EEOC Seeks to Eliminate Barriers to Recruitment and Hiring

Read the Full Take 5 here.

To register for this complimentary webinar, please click here.

I’d like to recommend an upcoming complimentary webinar, “EEOC Wellness Regulations – What Do They Mean for Employer-Sponsored Programs? (April 22, 2015, 12:00 p.m. EDT) presented by my Epstein Becker Green colleagues Frank C. Morris, Jr. and Adam C. Solander.

Below is a description of the webinar:

On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) released its long-awaited proposed regulations governing employer-provided wellness programs under the American’s with Disabilities Act (“ADA”). Although the EEOC had not previously issued regulations governing wellness programs, the EEOC has filed a series of lawsuits against employers alleging that their wellness programs violated the ADA. Additionally, the EEOC has issued a number of public statements, which have concerned employers, indicating that the EEOC’s regulation of wellness programs would conflict with the regulations governing wellness programs under the Affordable Care Act (“ACA”) and jeopardize the programs currently offered to employees.

During this webinar, Epstein Becker Green attorneys will:

  • summarize the EEOC’s recently released proposed regulations
  • discuss where the EEOC’s proposed regulations are inconsistent with the rules currently in place under the ACA and the implications of the rules on wellness programs
  • examine the requests for comments issued by the EEOC and how its proposed regulations may change in the future
  • provide an analysis of what employers should still be concerned about and the implications of the proposed regulations on the EEOC’s lawsuits against employers

Who Should Attend:

  • Employers that offer, or are considering offering, wellness programs
  • Wellness providers, insurers, and administrators

To register for this complimentary webinar, please click here.

We recommend our colleagues’ post on the Retail Labor and Employment Law blog: Three Lawsuits Brought by the U.S. EEOC Challenge Employer Separation Agreements, by Lauri F. Rasnick, Susan Gross Sholinsky, Frank C. Morris Jr., and Nancy L. Gunzenhauser.

Following is an excerpt:

The federal Equal Employment Opportunity Commission (“EEOC” or “Agency”) has been spending a fair amount of time in recent months challenging the validity and legality of employers’ separation agreements. This is apparently part of the EEOC’s core priorities, including “targeting policies and practices that discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or which impede the EEOC’s investigative or enforcement efforts.” … A summary of recent lawsuits follows …

Read the full post here and also see their client advisory: The EEOC Is Scrutinizing Separation Agreements: Does Yours Hold Up?