We published an article in Club Director, titled “Harassment and the #MeToo Movement in the Private Club Industry.” Following is an excerpt:

The recent heightened awareness to sexual harassment issues affects a wide range of industries, and has prompted employers to consider ways to get ahead of the problem. In order to reduce the risk of such complaints, private clubs may take a number of proactive steps.

Anti-Harassment Policy: Clubs should develop a zero-tolerance policy against harassment that includes, at a minimum, the following elements:

  • Expressly prohibit any sexually harassing or inappropriate behavior by staff or members toward employees, guests, members or patrons.
  • Define sexual harassment, making clear that it includes inappropriate relations, touching, and communication (i.e., emails, phone calls, text messages, or messages through social media).
  • Firmly state that any individual (staff or members) found to have engaged in sexually harassing behavior will be subject to discipline and/or immediate dismissal or expulsion.

Click here to download the full version in PDF format.

Our colleagues Jeffrey H. Ruzal, Adriana S. Kosovych, and Judah L. Rosenblatt, attorneys in the Employment, Labor & Workforce Management practice, co-authored an article in Club Director, titled “Recent Trends in State and Local Wage and Hour Laws.”

Following is an excerpt:

As the U.S. Department of Labor (DOL) appears to have relaxed its employee protective policy-making and enforcement efforts that grew during the Obama administration, increasingly states and localities have enacted their own, often more protective, employee-protective laws, rules and regulations. To ensure full wage and hour compliance, private clubs should consult their HR specialists and employment counsel and be mindful of all state and local requirements in each jurisdiction in which they operate and employ workers. Here are just some of the recent wage and hour requirements that have gained popularity among multiple jurisdictions.

Click here to download the full version in PDF format.

So far, 2018 has brought an increasing number of labor and employment rules and regulations. To help you stay up to date, we are pleased to introduce the Employment, Labor & Workforce Management Webinar Series.

Epstein Becker Green’s Hospitality service team took a deeper dive into our recently released Take 5 during the first webinar. Topics discussed include:

  • Additional measures to protect lesbian, gay, bisexual, and transgender employees in the hospitality workplace
  • Compliance training in the hospitality workplace
  • Transactional due diligence, including labor relations issues
  • The risk of self-reporting overtime and minimum wage violations under the Payroll Audit Independent Determination (PAID) program

Watch a recording of the webinar video here and download the webinar presentation slides.

Last week, the EEOC released its latest edition of its federal sector Digest of Equal Opportunity Law, a quarterly publication featuring recent Commission decisions and federal court cases selected by EEOC’s Office of Federal Operations. This edition features an article titled, “Promising Practices for Preventing Harassment,” which is the fruition of an EEOC task force on workplace harassment. The article, which is particularly timely given the #MeToo movement, advances five core principles to deter and remedy harassment: (1) committed and engaged leadership; (2) consistent and demonstrated accountability; (3) strong and comprehensive harassment policies; (4) trusted and accessible complaint procedures; and (5) regular, interactive training tailored to the audience and the organization.

The utility of this article is not the simple identification of these principles, which are familiar and uncontroversial, but rather its identification of practices/strategies an employer can implement to achieve these aims. These recommendations include:

  • Regularly and effectively train supervisors and managers about how to prevent, recognize and objectionable conduct that, if left unchecked, may rise to the level of prohibited harassment.
  • Direct staff to periodically, and in different ways, test the complaint system to determine if complaints are received and addressed promptly and appropriately.
  • Create a harassment complaint system with multiple avenues of complaint.
  • Conduct live, interactive harassment training on a regular basis.

Helpfully, the articles also enumerates specific statements that should be included in a harassment policy, including but not limited to, that:

  • The policy applies to employees at every level of the organization, as well as to applicants, clients, customers, and other relevant individuals;
  • Harassment based on, at a minimum, any legally protected characteristic is prohibited;
  • Employees are encouraged to report conduct that they believe may be prohibited harassment (or that, if left unchecked, may rise to the level of prohibited harassment), even if they are not sure that the conduct violates the policy;
  • The employer will provide a prompt, impartial, and thorough investigation;
  • The identity of individuals who report harassment, alleged victims, witnesses, and alleged harassers will be kept confidential to the extent possible and permitted by law, consistent with a thorough and impartial investigation;
  • The organization will take immediate and proportionate corrective action if it determines that harassment has occurred; and
  • Retaliation is prohibited, and that individuals who report harassing conduct, participate in investigations, or take any other actions protected under federal employment discrimination laws will not be subjected to retaliation.

As the article acknowledges, these practices are not legal requirements under federal employment discrimination laws. However, employers should take note of these recommendations as they may enhance employers’ compliance efforts in both the short- and long-term.

Massachusetts employers should take note of a provision in the Massachusetts criminal justice reform law – signed into law last week – that amends the type and scope of questions an employer may ask an applicant about his or her criminal history following an “initial written employment application.”

Since 2010, Massachusetts has prohibited public and private employers from requesting criminal record information in a prospective employee’s “initial written employment application” (commonly known as a “ban the box” provision). Following receipt of an “initial written employment application,” Massachusetts employers were further prohibited from inquiring about (1) an arrest, detention, or disposition regarding any violation of law in which no conviction resulted; (2) a first offense for drunkenness, simple assault, speeding, minor traffic violations, affray, or disturbance of the peace (all classified as misdemeanors); or (3) any conviction for a misdemeanor where the date of conviction, or the completion of any resulting period of incarceration, occurred five or more years prior to the date of the application, unless such person has been convicted of any offense within the preceding five-year period.

The new law, effective October 13, 2018, modifies one of these existing restrictions and adds yet another constraint. First, the law decreases the period in which an employer can ask about a misdemeanor conviction or a resulting incarceration from five to three years preceding the date of the employment application.  In other words, an employer cannot ask an applicant questions about misdemeanor convictions/resulting incarcerations that occurred three or more years prior to the date of the employment application, unless the applicant was convicted of any offense within the preceding three years.  Second, the law creates a blanket prohibition as to any and all inquiries about sealed or expunged criminal records.  Consequently, these amendments afford expanded privacy and protection to candidates.

In light of these amendments, employers should revisit their hiring practices and procedures, and potentially provide supplemental training to those individuals involved in the hiring process.

The federal Equal Pay Act (“EPA”) mandates equal pay for equal work regardless of sex.  Employers that pay men and women different wages for the same work are strictly liable for violations of the EPA unless they can show that one or more of four exceptions apply to explain the wage disparity. The four statutory exceptions are seniority, merit, the quantity or quality of the employee’s work, or “any other factor other than sex.”  The Ninth Circuit recently took up the question of the meaning of the fourth, catchall exception – “any factor other than sex” – in order to consider whether an employer may rely, in whole or in part, on an employee’s prior salary as a basis for explaining a pay differential in Aileen Rizo v. Jim Yovino.

Rizo was a math consultant who worked for the Fresno County Office of Education (“County”). After learning that comparable male employees were earning more for the same work, Rizo filed suit against her employer, alleging that its practice of calculating the salaries for newly hired employees based on their salary history violated the EPA. The County did not dispute that Rizo was paid less than her male counterparts, but it argued that basing her salary on past earnings was a lawful reason for the pay differential as it constituted a “factor other than sex” under the EPA.

On April 9, 2018, the Ninth Circuit sitting en banc rejected the County’s argument. The Court held that “prior salary alone or in combination with other factors cannot justify a wage differential.” Writing for the majority, Judge Reinhart stated that justification of a pay disparity based on “‘any other factor other than sex’ is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.” The Court explained that the terms “job-related” and “business-related” are not synonymous and that an employer cannot explain a pay differential based on the benefit to the business as opposed to a legitimate work-motivated consideration.  Some examples of job-related factors identified by the Court included shift differentials, job hazards, physical job requirements, and training.  Unlike each of these things, past salary was not a “job-related” factor but rather, potentially, a business-related factor.

The Court further opined that permitting an employer to rely on historical pay information was inconsistent with the purpose of the EPA, which was to correct past pay discrepancies caused by sex discrimination.  “It is inconceivable,” wrote Reinhart, “that Congress, in an Act the primary purpose of which was to eliminate long-existing ‘endemic’ sex-based wage disparities, would create an exception for basing new hires’ salaries on those very disparities….”  Thus, the majority concluded that relying on past salary in order to explain a wage differential was improper, even if it was only one of the factors ultimately considered.  Confusingly, the Court also noted that there could be instances in which past salary might play a role in individualized negotiations and declined to resolve whether past salary could be taken into account in such circumstances.  However, given the broad pronouncement against factoring past compensation into current salary considerations, it would seem unlikely that the current court would countenance such an exception.

In finding that past salary may never be considered, the Rizo decision overrules the Ninth Circuit’s prior ruling in Kouba v. Allstate Insurance Co. 691 F.2d 873 (9th Cir. 1982).  Kouba held that past salary could be one of the factors considered by employers in evaluating pay, as it was a “factor other than sex” permissible to justify pay gaps between men and women under the EPA.  Notably, four of the eleven judges on the panel concurred with the decision in Rizo, because salary history was the sole reason for the pay disparity, but separated from the majority on the issue of excluding salary history from consideration under any circumstance.  The Rizo decision has also exacerbated a circuit split on whether salary history may be considered, and to what extent.  While certain circuits have taken an approach similar to the concurring judges in Rizo, permitting it as long as it is not the sole basis for a pay disparity, the Seventh Circuit has held that salary history is always a legitimate factor other than sex.

While California employers are no longer entitled to inquire about past salary as part of the job application process as of January 1, 2018, in light of the Rizo decision, employers with operations in California, Oregon, Washington, Idaho, Montana, Nevada, Arizona, Alaska, and Hawaii may wish to take actions to ensure that any pay disparities are not based on salary history, such as not asking about salary history during the hiring process (even in states where this practice is not prohibited by law) and conducting pay equity audits.

Our colleague  at Epstein Becker Green has a post on the Wage and Hour Defense blog that will be of interest to our readers in the hospitality industry: “Federal Court Concludes That 7-Eleven Franchisees Are Not Employees of 7-Eleven.

Following is an excerpt:

In November 2017, four convenience store franchisees brought suit in federal court against 7-Eleven, Inc., alleging that they and all other franchisees were employees of 7-Eleven. The case was filed in the United States District Court for the Central District of California, entitled Haitayan, et al. v. 7-Eleven, Inc., case no. CV 17-7454-JFW (JPRx).

In alleging that they were 7-Eleven’s employees, the franchisees brought claims for violation of the federal Fair Labor Standards Act (“FLSA”) and the California Labor Code, alleging overtime and expense reimbursement violations. The trial court granted judgment in 7-Eleven’s favor, concluding that 7-Eleven was not the four franchisees’ employer under California law or federal law. …

Read the full post here. 

Featured on Employment Law This Week: Under the recently signed Consolidated Appropriations Act, Congress has amended the FLSA to address tip pools. The amendment prohibits employers from keeping employees’ tips or distributing any portion of the tips to managers or supervisors. Non-tipped, back-of-the-house employees, like cooks and dishwashers, may participate in tip pools when the employer pays at least the minimum wage and does not take a tip credit. The amendment also provides for enhanced damages and penalties when employees are deprived of tips.

Watch the segment below:

The first quarter of 2018 has already stirred up an array of legal matters that employers in the hospitality industry should be conscious of, both in their day-to-day operations and long-term planning. In February alone, the U.S. House of Representatives passed legislation to curb lawsuits focused on the inaccessibility of brick-and-mortar business establishments and a federal appeals court ruled that discrimination based on sexual orientation violates Title VII of the Civil Rights Act of 1964 (“Title VII”). Earlier this month, the U.S. Department of Labor announced a pilot program that will allow employers to avoid potential penalties for overtime and minimum wage violations. In addition, the #MeToo movement continues to be top of mind across all industries, and hospitality employers should be vigilant in their training and employee awareness efforts. Due diligence in change-of-ownership transactions should include labor relations issues, especially with unionized employees.

This edition of Epstein Becker Green’s Take 5 addresses important and evolving issues confronting employers in the hospitality industry:

  1. Will Congress Slam the Breaks on ADA “Drive By” Lawsuits?
  2. Expanding Sex Discrimination Protection to LGBT Employees in the Hospitality Industry
  3. Effective Compliance Training in the Hospitality Industry in the Wake of #MeToo
  4. Transactional Due Diligence Should Include Labor Relations Issues
  5. Voluntary PAID Program Permits Employers to Escape Potential High Penalties for Self-Reported FLSA Violations—but at What Risk?

Read the full Take 5 online or download the PDF.

Our colleagues , at Epstein Becker Green, have a post on the Wage and Hour Defense Blog that will be of interest to many of our readers in the hospitality industry: “Initial Discovery Guidelines May Fast-Track Early Disclosure Requirements in Individual FLSA Cases.”

Following is an excerpt:

Depending on the jurisdictions within which they operate, certain employers and their counsel will soon see a significant change in early mandatory discovery requirements in individual wage-hour cases brought under the Fair Labor Standards Act (“FLSA”).

A new set of initial discovery protocols recently published by the Federal Judicial Center (“FJC”), entitled Initial Discovery Protocols For Fair Labor Standards Act Cases Not Pleaded As Collective Actions (“FLSA Protocols”), available here, expands a party’s initial disclosure requirements to include additional documents and information relevant to FLSA cases. These Protocols apply, however, only to FLSA lawsuits that have been filed in participating courts that have implemented the Protocols by local rule or by standing, general, or individual case order. …

Read the full post here.