BSCR Firm News/Blogs Feed

Missouri Proposition A Increases Minimum Wage to $15 starting in 2026.

10 Dec 2024

ABSTRACT: Missouri’s Proposition A will increase the minimum wage to $13.75 beginning January 2025, then to $15 in 2026, and will allow employees to earn one hour of paid sick leave for every 30 hours of work.

Prop A

On Election Day 2024, nearly 58% of Missouri voters voted to pass Proposition A, increasing the State’s minimum wage to $15 and requiring many businesses to provide paid sick days. This is the third time since 2006 Missourians have voted to increase the minimum wage. Missouri now joins 18 other states and the District of Columbia in requiring employers to provide sick time, and it is estimated that some 728,000 workers, or approximately 1 in 3 of Missouri’s working parents who previously did not have access to paid sick leave will now become eligible.

Minimum wage

Under the provisions of Proposition A, the Missouri minimum wage will increase from the current rate of $12.30 per hour, to $13.75 on January 1, 2025, and again to $15 on January 1, 2026. Proposition A also allows for an annual adjustment based on inflation to automatically trigger on January 1^st of each subsequent year. Additionally, if the federal minimum wage, currently set at $7.85, were to ever exceed Missouri’s minimum wage, the Missouri minimum wage would automatically increase to match the federal rate.

Certain categories of employment will be exempt from the increase, including governmental entities such as school districts, certain casual and seasonal employees, and retail workers at businesses whose annual gross volume sales are less than $500,000.

Of the estimated 2,760,000 estimated Missouri workers, the increase is projected to directly impact approximately 677,000, or 1 in 4 Missouri workers. Of those, an estimated 60% are women, and more than 86% have family incomes at or below the poverty line. When the $15 minimum wage increase goes into full effect in 2026, Missouri full-time minimum wage-earning workers who had previously earned $492 per week before taxes will see an increase to $600 per week before taxes.

With the increase to a $15 minimum Missouri will have the nation’s fifth highest minimum wage, tied with Maryland and New York, behind only New Jersey, Connecticut, California, and Washington, which currently has the nation’s highest minimum wage at $16.28 an hour.

Sick leave

Under Proposition A, beginning May 1, 2025, employers with 15 or more employees on its payroll for twenty or more different calendar weeks, consecutive or otherwise, will be required to provide one hour of paid sick leave for every 30 hours worked, or up to 56 hours, or seven days per year. Employees at companies with fewer than 15 employees can earn up to 40 hours, or five days sick leave per year. Employees will be allowed to carry over up to 80 hours unused sick leave per year.

Employees can use their earned paid sick time for mental or physical illness, injury, conditions, or diagnosis, care for a family member with a mental or physical illness, injury, conditions, or diagnosis, or for absences due to domestic violence or recovery from domestic violence for the employee or a family member.

Employer Take-aways.

Under the provision of Proposition A, starting April 15, 2025, employers will be required to provide employees with written notice about earned paid sick time. Written notice must include the contact information for the Missouri Department of Labor and Industrial Relations. Employers who do not comply with notice and posting requirements will be guilty of an infraction with each day of violation constituting a separate offense.

Employers must retain records documenting hours worked by employees and earned paid sick time taken for a period of at least three years. Although it is not required to do so, the Department of Labor and Industrial Relations may request such records in order to monitor compliance with state requirements.

If an employee uses paid sick time for three or more consecutive workdays, an employer may require reasonable documentation the paid sick time is used for purposes permitted by the law, such as mental or physical injury, care for a family member, or domestic violence. However, disclosure of the details of an employee’s personal or family members conditions cannot be required.

Use of paid sick time cannot be counted as an absence that may lead to or result in any adverse action to the employee. Employees will have the right to bring a civil action if earned paid sick time is denied or the employee is subject to any retaliatory actions. The right to bring such claims will be subject to a three-year statute of limitations. In such a civil action, if a court finds a violation it may grant relief in the full amount of any unpaid earned sick time, any actual damages, reinstatement, back pay, and an additional amount equal to twice any unpaid earned sick time as liquidated damages, as well as costs, and other legal or equitable relief.

The Department of Labor and Industrial Relations may investigate complaints regarding non-compliance and may establish means of enforcement including subpoenaing testimony, books, records, and other evidence relative to an investigation, issuing notices of violation, holding hearings on notices of violation, making determinations, and imposing fines for willful violation of up to $500 per day of each day of a continuing violation.

Any employer who willfully violates or fails to comply with any of the provisions and requirements shall be guilty of a class C misdemeanor.

Healthcare Unionization: Navigating the New Labor Landscape

22 Nov 2024

ABSTRACT: With unionization efforts on the rise among healthcare professionals, including physicians, employers must stay informed on evolving labor laws and the NLRB. Learn how proactive engagement, including reviewing restrictive covenants, can help maintain a stable workforce.

As we have already reported, NLRB may as well stand for “No Longer Relegated to the Backburner.” Unions and the National Labor Relations Board are active all across the country and in all types of industries. The healthcare industry is no exception. These changes go beyond impacting the nursing staff or environmental services staff; they are affecting physicians as well. Recently, the National Labor Relations Board certified the union election in Minnesota of more than 130 Allina doctors at Mercy and Unity Hospitals. This certification and election result may be a harbinger of changes to come. Healthcare employers need to follow the legal landscape surrounding these important union updates or risk being caught off-guard in this new labor environment.

As in other industries, concerns about burnout, increasing demand for services, and a younger generation asking for more work-life balance should not be ignored. Asking younger physicians who feel burnt out or stressed to accept that the practice of medicine is simply a “calling” is not a good labor relations tactic. If employers refuse to answer these calls for help, Union infrastructure is ready to listen to physicians who could be feeling unheard.

Healthcare professionals should anticipate unionization efforts and ensure their workplace practices are union neutral. The recent NLRB opinions are good starting points for any in-house risk manager or corporate counsel for hospitals that have not predicted or anticipated this sudden change in the union landscape.

Restrictive covenants will be placed squarely in its crosshairs if and when physicians unionize. The NLRB General Counsel has cautioned that overbroad non-competes are “unlawful because they chill employees from exercising their rights under Section 7 of the National Labor Relations Act, which protects employees’ rights to take collective action to improve their working conditions.” These covenants also may interfere with employees’ rights to participate in collective bargaining.

These restrictive covenants, common in the healthcare industry, are designed to prevent the poaching of valuable talent and protect patient relationships.

Even if your hospital or medical group is not facing a union campaign, overbroad restrictive covenants should be revised to avoid employee dissatisfaction and potential legal challenges. This includes narrowly tailoring these provisions to your organization’s objectives and avoiding unduly restricting a physician’s rights. If this language has not been updated in a while, now is a great time to consider whether the contractual language is consistent with state and/or recent NLRB opinions.

By staying informed on labor relations, healthcare employers can position themselves advantageously in this rapidly changing environment. Medical professionals are increasingly similar to other professionals in the modern workforce, with evolving expectations of what a work-life balance means to them and what they believe union membership can offer. This shift offers healthcare employers an opportunity to address employees’ concerns and manage labor relations effectively and proactively. While not all changes are foreseeable, staying vigilant and adhering to best practices in labor law will allow employers to maintain a stable, engaged, and productive workforce.

NLRB Says Certain "Stay-or-Pay" Provisions in Employment Contracts Interfere with Employees' Section 7 Rights

29 Oct 2024

ABSTRACT: “Stay-or-pay” provisions – which require an employee to reimburse the employer for certain expenses if they leave their job early on – are becoming increasingly common in employment contracts. Recent NLRB guidance emphasizes the opportunity for informed decision-making, reasonableness, and clarity to make sure these provisions do not infringe on employees’ Section 7 rights.

Following NLRB General Counsel Jennifer Abruzzo’s May 2023 guidance on non-compete provisions that the agency deems to violate the National Labor Relations Act, the NLRB has now turned its attention to “stay-or-pay” provisions that may run afoul of the Act.

A “stay-or-pay” provision is created when an employer requires an employee to pay a monetary reimbursement or penalty if their employment is terminated before a certain amount of time is up. These can take many forms in employment agreements, including repayment for expenses such as: training, licensing or education expenses, sign-on bonuses, relocation stipends, or even charging a general “quit fee” for termination of employment before the timeframe expires. These provisions are increasingly present in various industries and some do not differentiate between voluntary or involuntary termination.

The NLRB’s position on “stay-or-pay” clauses is that they are presumptively unlawful. However, employers can overcome that presumption if they show that the provision advances a legitimate business interest and is narrowly tailored to minimize interference with employees’ Section 7 rights to self-organization, union membership, and collective bargaining. Specifically, employers must prove that the provision 1) is voluntary and entered into in exchange for a benefit to the employee, 2) specifies a reasonable payment amount, 3) has a reasonable timeframe the employee is required to “stay,” and 4) does not require an employee who is terminated without cause to pay.

Voluntary and in Exchange for a Benefit

The GC’s new guidance specifies that employees must be able to “freely choose” whether to enter the agreement and not face undue financial penalties or adverse consequences from their employer if they elect not to enter into it. Training repayment agreements are one example of this. Requiring employees to reimburse their employer for optional training is permitted under the NLRA. However, requiring repayment for mandatory training is considered a violation. This is because optional agreements and repayment for optional training allow employees to freely choose whether they will enter into this agreement and their employment is not conditioned on the provision. Under a mandatory agreement, employees are considered more likely to be “chilled” from engaging in protected conduct under Section 7 due to fear of financial penalties in addition to adverse employment actions or retaliation.

Licensing and educational requirements are also examples of an exchange for a benefit. Requiring an employee to repay any employer expenses for obtaining or maintaining a license or credential required to do the employee’s job is permitted because 1) the employee could optionally pay the expenses out of pocket, and 2) the license or credential is a benefit to the employee that they can use outside of their current job. However, the NLRB does specify that the employee must have discretion in the third-party vendor they take the classes from and they may not be required to take classes from the employer. Educational programs also usually have alternative financing options besides receiving funding from your employer, so this is considered sufficient employee discretion under the NLRA.

Specifies a Reasonable Payment Amount

A payment amount would be considered “reasonable” if it is equal to or less than the cost the employer shouldered to benefit the employee. When the cost is more than what the employer paid for the benefit, the provision no longer furthers a legitimate business interest and is deemed unlawfully restrictive and coercive. In addition, the reasonable payment amount must be stated up front in the contract and disclosed to the employee before accepting the benefit. That way, the employee can make an informed decision about entering the agreement and have full transparency about what would be required of her, should she leave early.

Reasonable “Stay” Timeframe

The NLRB does not specify an exact amount of time that would be considered “reasonable”, stating that a reasonable amount of time will be determined on a case-by-case basis. The factors considered include but are not limited to: the cost of the employee benefit, value to the employee, and the employee’s compensation. For example, if the cost of the benefit is higher, the timeframe can be longer and vice versa. Another consideration is whether the required repayment amount decreases, the longer the employee has been on the job.

Exempted from Payment if Terminated Without Cause

If the contract states the employee is required to pay a certain amount if their employment is terminated for any reason, then it is considered unduly coercive and a violation of the NLRA. A “stay-or-pay” provision must state that the employee will not be indebted to their employer if they are terminated without cause. “Without cause” in this context includes termination for reasons already prohibited by the NLRA. The rationale behind this is knowing that they will face financial penalties if they are fired for any reason will especially discourage employees from engaging in protected conduct under Section 7.

Takeaways

In the agency’s view, the key word for “stay-or-pay” provisions is “optional.” Employees must be given discretion about entering the agreement in the first place where they receive their education and training from, and whether to take the funding for the benefit or pay out-of-pocket. If the training is mandatory and the benefits are not transferrable to another position, then employees should not be required to repay the employer.
Employees need to not only have options, but the ability to make an informed decision. An employee subject to a “stay-or-pay” provision should be made aware of the specific reasonable repayment amount and the required reasonable timeframe up front in the contract.
These provisions also should clearly state that employees that are terminated without cause are exempt from a repayment requirement to avoid any unlawful coercion.

Read the full Memorandum from the NLRB here.

No Longer Relegated to the Backburner: The NLRB is in for a Wild End to 2024

17 Sep 2024

ABSTRACT: With high profile cases and famous personalities, the NLRB is now at the center of litigation that will shape the landscape of labor law for decades.

Like John Travolta in Pulp Fiction, or Cher with her Believe album, or the Red Sox comeback from a 3-games-to-1 deficit against the Yankees, the National Labor Relations Board has experienced a remarkable return to relevance over the past few years. Few could have predicted that the NLRB would be thrust back into the spotlight, but some recent developments and upcoming events will either launch its importance into the stratosphere or rip it to shreds like an errant rocket.

SpaceX v. NLRB

Speaking of rockets, the saga between SpaceX and the NLRB continues in the Fifth Circuit. In 2022, employees of SpaceX published an open letter online, criticizing CEO Elon Musk for his comments and behavior related to his management of Twitter (now known as X). In the letter, the SpaceX employees said, among other things, that Musk’s behavior made it difficult for them to do their jobs, pointing in particular to a payment by SpaceX of $250,000 to settle a sexual harassment claim against Musk. SpaceX conducted an intensive investigation into who organized the open letter, and ultimately terminated eight employees, claiming that the employees induced signatures from co-workers through threats and intimidation. The fired employees filed an unfair labor practice charge with the NLRB in California. The Board determined that SpaceX violated the Act by interrogating its employees about protected concerted activity and retaliating against employees engaged in protected conduct.

In a case with potentially massive consequences for the Board, SpaceX filed suit against the NLRB, not in California federal court, but in the Southern District of Texas. SpaceX claims that even though all the operative events of the charge occurred in California, the presence of SpaceX employees in Texas confers jurisdiction on the federal courts in Texas. SpaceX has argued that a Board decision in California affects the working conditions of Texas employees, a legal theory that has led to a complicated jurisdictional dispute. The District Court declined jurisdiction over the dispute and transferred the case to California. But on appeal, the Fifth Circuit found that the jurisdiction was proper and ordered the District Court to request that the Central District of California transfer the case back to Texas, where it is now pending again.

Potentially even more important than the meaty jurisdictional issue is the multi-faceted challenge SpaceX has launched against the NLRB’s very existence. In its Petition for Declaratory and Injunctive Relief, SpaceX has argued that the Board’s composition violates Article II of the Constitution, which requires the President to have sufficient control over administrative law judges. That ALJs can only be terminated for cause by officers who themselves can only be terminated for cause, SpaceX argues, deprives the President of the oversight endowed by the Constitution. Moreover, SpaceX alleges, the fact that the NLRB exercises executive, legislative, and judicial powers all within one agency violates separation of powers and due process. Finally, the NLRB’s make whole remedies violate the Seventh Amendment right to trial by jury.

In short, SpaceX is asking the Courts for a radical reorganization of the NLRB. Is this challenge to the Board’s operations and structure something of a longshot? Perhaps. But if the requested relief is granted and affirmed by the Supreme Court, the Board would essentially cease to be able to function in any meaningful way.

UAW v. Musk and Trump

And speaking of famous billionaires opining on labor matters, the United Auto Workers recently filed an unfair labor practice against Elon Musk and Donald Trump for comments they made in a recent interview on Twitter (“X”). In their discussion, Trump suggested that Musk fire any employees suspected of forming a labor union. The next day, UAW filed the ULP charge, alleging that the statements infringe upon employee’s Section 7 rights to form and join the labor union of their choosing. The charge was light on details, but will no doubt follow the guidance of NLRB GC Jennifer Abruzzo, who has advocated for an expansive interpretation of the Act, where any language that would tend to chill union organizing infringes on employees’ Section 7 rights.

The Board is very likely to sympathize with that argument, but will the Courts agree? It seems logical that Musk’s comments might dissuade employees of his companies (Tesla, SpaceX, Twitter) from considering organizing, as may employees of the Trump Organization. But Trump’s comments carry the added difficulty (and no doubt fascinating First Amendment issues) of the fact that Trump participated in the interview as a candidate for President. Surely, a political candidate can offer an opinion on the Board, its enforcement priorities, and unions generally, but the Board has its work cut out for it dissecting the statements, context, and thorny legal issues involved.

Lion Elastomers, LLC v. NLRB

Assuming the NLRB emerges unscathed from the pending SpaceX litigation, a recent decision from the Fifth Circuit seeks to curtail the Board’s whipsawing back and forth between Presidential administrations. In Lion Elastomers, LLC, v. NLRB, the Fifth Circuit held that the Board should not be permitted to change its litigation positions while an appeal is pending in one of the Circuit Courts of Appeal. In May 2020, the Board determined Lion Elastomers committed unfair labor practices by threatening, disciplining, and discharging an employee for engaging in protected activities. When determining whether a union member’s behavior was protected activity, the Board applied the four factors adopted in Atlantic Steel Co., which considered (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice. In June 2020, Lion Elastomers filed a petition for review of the Board’s Decision.

Only one month later and even before briefing of the Board’s decision, the Board issued General Motors LLC, which replaced the Atlantic Steel factors, to assess whether employees have been unlawfully discharged or discipled in connection with activity protected by Section 7 of the NLRA. Instead, the Board would apply the Wright Line burden-shifting framework which required an initial showing that (1) the employee engaged in Section 7 activity; (2) the employer knew of that activity; and (3) the employer had animus against the Section 7 activity, which must be proven to show a causal relationship between the discipline and Section 7 activity. The Wright Line standard generally makes it easier for employers to show the employee’s misconduct caused the discipline or discharge, not the protected activity. Additionally, General Motors ruled that the Board would apply Wright Line retroactively to all pending cases. The Court then granted the NLRB’s motion to remand, based on the Board’s decision in General Motors.

Then in May 2023, the Board issued a Supplemental Decision and Order that overruled General Motors and returned to earlier precedent, which included the analysis issued in Atlantic Steel. However, the Fifth Circuit instructed that its remand Order was “not an invitation for the Board to reconsider what legal standards should apply but rather an instruction to apply the legal standards in General Motors.” By overturning its own decision, the Board exceeded the scope of the remand. Even further, without giving Lion Elastomers the opportunity to present any argument under this new theory before any decision is made, the Board violated Lion Elastomers’ due process rights when it overturned General Motors.

The Court ultimately vacated the Board’s Supplemental Decision and Order and issued a remand for the Board to apply General Motors to the present case based on the presumption that the parties to an adjudication will be afforded a full opportunity to be heard before the Board makes any determination.

Key Takeaways

So now that NLRB may as well stand for “No Longer Relegated to the Backburner,” what should employers do?

First, keep in mind much union activity arises from dissatisfied employees who perceive that management is not responsive to their needs. In many cases, listening sessions, employee surveys, or just an overall review of safety measures, salary, benefits, and other working conditions can avert having employees turn to a union for outside assistance. After all, why pay union dues to improve conditions if things are going well? (One caveat: if an organizing campaign is underway, an employer may not promise to make improvements to the workplace if employees reject the union).

Second, front-line managers should be trained on how to respond to union organizing campaigns, including recognition that audio and video recording is easier than ever before. Any speech, interrogation, or off-hand remark could end up as an exhibit in a Board hearing. Keep in mind that unions regularly employ “salts” for the sole purpose of getting hired by a company to recruit members or uncover unfair labor practices.

Third, recognize when employees are engaged in protected concerted activity and avoid retaliatory actions. Any time an employee makes a complaint regarding working conditions, wages, or hours, employers should treat it as protected activity (unless it can be said with near certainty that the complaint is purely personal).

Finally, it helps take a holistic view of your company and its public image. There are innumerable social media accounts dedicated to trying to shame companies, to garner clicks. Media sensationalism can also play a role, where excerpts from ALJ and Board decisions being plastered across headlines without context or the employer’s point of view. For example, the social media/news aggregation site Reddit has been a hotbed of pro-union and anti-employer activity. The subreddit r/antiwork became famous for pointing out companies who were behaving badly, but the subreddit also has a “Win!” flair for posts when companies treat their employees well. Over 2.8 million users are subscribed, and countless more see stories across social media or through word of mouth about employers who are doing the right things.

The end of 2024 will be a wild ride for the NLRB and labor lawyers alike. This blog will continue to monitor and report on important updates in this fascinating area.

Preventing Harassment in the Construction Industry

05 Aug 2024

ABSTRACT: Harassment in the construction industry is a key focus of the EEOC’s strategic enforcement plan. Its “Promising Practices” provide employers guidance to preventing and responding to harassment.

The EEOC has recently published its Promising Practices For Preventing Harassment In The Construction Industry to aid employers in addressing and preventing harassment based on race, sex, national origin, or other protected characteristics. Rather than having the force of law, rule, or regulation, the Promising Practices reflects the EEOC’s experience with practices it has found to be effective in preventing harassment. The Promising Practices do not constitute a “safe harbor” from liability for employers who put them into practice, but implementing and applying these practices can help to perfect available affirmative defenses, curry favor with judges and juries deciding harassment cases, and most importantly, potentially prevent harassment in the first place.

The practices identify five core principles the EEOC finds effectively address harassment:

Committed and engaged leadership;
Consistent and demonstrated accountability;
Strong and comprehensive harassment policies;
Trusted and accessible complaint procedures; and
Regular, interactive training tailed to the audience and the organization.

Application of these principles has many benefits. Studies show workplaces replete with harassment have higher levels of turnover, higher rates of workplace injuries, lost productivity, and greater difficulty attracting high quality talent. Juries are unlikely to punish employers who are trying to prevent and combat harassment, even if their efforts fall short. Conversely, unengaged or passive leadership and policies that go unenforced are likely to draw their ire.

Importantly, these principles closely track the Faragher-Ellerth affirmative defense under Title VII, which is also applied in many states. An employer is completely relieved of liability for supervisor harassment that does not end in tangible employment action if it can show that: (1) the employer exercised reasonable care to prevent and promptly correct any sexually harassing behavior and (2) that the employee unreasonably failed to take advantage of preventive or corrective opportunities. Engaged leadership that holds harassers accountable under its policies, provides robust and anonymous reporting procedures, and conducts regular training can feel more confident in resisting potential legal claims. The Promising Practices, if adopted, very likely satisfy the “reasonable care” prong of Faragher-Ellerth. An employee probably also acts unreasonably if effective reporting channels exist but he or she fails to utilize them.

Risk Factors

In discrimination and harassment cases, courts frequently look at the totality of the workplace and workforce demographics for evidence that raises an inference of discrimination or unfair treatment. Certain factors not only raise the risk that harassment will occur, but also may be circumstantial evidence of discriminatory intent, lack of reasonable care in preventing harassment, or failure to adequately respond to complaints of harassment.

The risk factors identified by the EEOC include: (1) a homogenous workforce; (2) workplaces where employees are pressured to conform to stereotypes; (3) decentralized workplace; (4) multiple employers present; and (5) project-based workplaces.

General Contractors Should Lead the Way

Promising Practices identifies general contractors as being uniquely positioned to coordinate preventative measures on job sites with multiple employers. If subcontractors do not have the resources to implement and enforce anti-harassment policies, general contractors may be able to step in. In recent years, both the EEOC and NLRB have sought to greatly expand their “joint employer” rules, so general contractors have additional incentives to prevent and correct harassment. The EEOC suggests that a “no wrong door” system, whereby all subcontractors are required to re-route harassment complaints to the appropriate channels, may be appropriate where many subs are present on-site.

Remedying Complaints

In most instances, the subject of the harassment simply wants the harassment to stop. Few employees are looking to set up a discrimination lawsuit, but every complaint and investigation should be treated with the requisite seriousness as if a lawsuit may one day result. That includes adequate record-keeping, interviews with all parties and witnesses, a thoughtful response, and meaningful actions that are likely to end the harassment.

Transferring one of the involved employees may seem tempting. If the subject is separated from the harasser, then problem solved, right? Not necessarily. While courts have previously held that separating a harasser from the subject can be an effective response, that may no longer be the case. In an important development from this past Supreme Court term, the Court clarified that a claimant does not need to show significant harm, only some harm, to state a discrimination or retaliation claim. As discussed in a previous post on this blog, a transfer without any change in pay or benefits can suffice to state a claim under Title VII. In the construction industry, there are frequently differences in prestige among different assignments, even within the same trade or same project. In an industry in which it is difficult to distinguish oneself, particularly for women, seemingly minor changes to the terms and conditions of employment can have large consequences. A re-assignment, even with the same pay, hours, and benefits, constitutes an adverse employment action if it is viewed as a less favorable path for advancement, training opportunities, or prestige.

The Role of Unions

Collective bargaining agreements regularly include terms such as rates of pay, hours, and on construction projects, jurisdictions for particular bargaining units and union members. An oft-overlooked provision present in most CBAs is a nondiscrimination provision, which typically prohibits discrimination in application of the terms and conditions of employment. This has been interpreted to include harassment and discrimination on the basis of a protected characteristic and is frequently the source of a claim for breach of the union’s duty of fair representation (which exists whether there is a non-discrimination clause or not).

Although not usually the designated channel for reporting harassment, union stewards are frequently employees’ first contact when problems arise. Union stewards can assist employees in identifying reporting channels and encouraging reporting of inappropriate conduct.

What deference will Courts afford to the Promising Practices?

In light of the recent Supreme Court decision in Loper Bright Enterprises v. Raimondo, which overturned the Chevron doctrine, many may be wondering about whether courts will follow EEOC guidance in harassment suits. The Promising Practices do not have the force of law, but the EEOC’s authority to issue educational materials is enshrined in the original text of Title VII, as part of the EEOC’s statutory purpose of providing education to employers and prevention of unlawful discrimination in employment. Courts are free to reject any portion of the Promising Practices that may be an “interpretation” of Title VII’s terms. However, Courts regularly look to EEOC policy guidance and publications to determine whether an employer has put in place effective and reasonable policies and procedures to address harassment and discrimination. Loper Bright is very unlikely to change that.

Corporations Owned or Operated by Religious Organizations Exempt From MHRA

26 Jul 2024

ABSTRACT: The Eastern District Court of Appeals finds that the Missouri Human Rights Act exempts employers from liability if they are corporations and associations owned or operated by religious or sectarian organizations.

Jeanette Layton originally filed a complaint with the Missouri Commission on Human Rights, alleging age discrimination against Mercy Health and Mercy Hospitals East Communities. After Layton made a timely request for a right-to-sue letter, the Commission responded instead that they lacked jurisdiction because Mercy Health was operated by the Roman Catholic church, and thus was exempt as a religious organization employer under the Missouri Human Rights Act. Layton then filed a petition for a writ of mandamus to compel the Commission to rescind closure of its file and to issue Layton a notice of right-to-sue. The circuit court granted the writ. The Commission and Mercy Health appealed, and the Court of Appeals affirmed the circuit court's judgment ordering the Commission to issue Layton a right-to-sue letter and to close its proceedings relating to the complaint after the 180-day period had passed.

At the direction of the Court of Appeals, the circuit court commenced bifurcated proceedings, to first determine whether Mercy Health was operated by a religious organization, and therefore exempt from MHRA coverage. Mercy then moved for summary judgment, arguing that as a corporation operated by a religious organization, they were excluded from the statute's coverage. Summary judgment was granted, and this appeal followed.

The appeals court noted that the term “employer” under the Missouri Human Rights Act does not include corporations and associations owned or operated by religious or sectarian organizations. The court emphasized that, a 2017 amendment to the MHRA which changed the operative language from "owned and operated" to "owned or operated”, was critical to the decision. This amendment was adopted by the legislature after the Missouri Supreme Court decision in Farrow v. Saint Francis Med Ctr., which had held that non-profit corporations cannot be “owned” under Missouri law..

Because there was no dispute that Mercy Health was operated by the Roman Catholic church, there was no genuine material issue of fact, and the appeals court upheld the trial court's grant of summary judgment.

Employers should be aware that even if they are exempt from claims of discrimination under the Missouri Human Rights Act, they may not be exempt under other applicable federal or state anti-discrimination laws. Employers should contact an attorney for advice on dealing with specific scenarios regarding their status within the Missouri Human Rights Act and other applicable statutes.

Traditional Equitable Principles Guide NLRB Section 10(j) Preliminary Injunctions

23 Jul 2024

ABSTRACT: The Supreme Court rejects special injunction rules for NLRB cases, applying traditional equitable framework.

Supreme Court Makes it More Difficult for the NLRB to Obtain Preliminary Injunctions

It will now be more difficult for the National Labor Relations Board to obtain preliminary injunctive relief on behalf of aggrieved employees in pending Board cases. On June 13, 2024, in Starbucks Corporation, Petitioner v. Kathleen McKinney, Regional Director, the United States Supreme Court determined that courts must evaluate petitions for § 10(j) preliminary injunctions made by the National Labor Relations Board (“NLRB”), using the well-known traditional four-factor test, which requires a plaintiff to make a clear showing that: (1) the plaintiff is likely to succeed on the merits; (2) is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in the plaintiff’s his favor; and (4) that the requested injunction is in the public interest. Winter, 555 U.S. 7, 20-22. This holding is expected to make it much more difficult for the NLRB to obtain quick preliminary injunctions against employers during the pendency of administrative enforcement proceedings, which proceedings often take years to bring to a final resolution.

The Starbucks Case

The decision arises out of a much-publicized group of Starbucks employees seeking to unionize in 2022.Six employees at a Memphis, Tennessee Starbucks location announced plans to unionize and created an organizing committee. Several employees invited a local television station news crew to the store, after hours and in violation of company policy, to support their efforts to unionize, resulting in termination of several employees. The union working with the employees filed charges with the NLRB, alleging unlawful interference with the employees’ right to unionize and discrimination against union supporters. The NLRB then issued an administrative complaint against Starbucks, which resulted in the Regional Director filing a §10(j) petition in the United States District Court for the Western District of Tennessee and seeking a preliminary injunction that would require Starbucks to reinstate the terminated employees, among other requested relief.

The National Labor Relations Act (the “Act”) allows the NLRB to bring in-house enforcement proceedings against employers for engaging in alleged unfair labor practices. Section 10(j) of the Act authorizes the NLRB to seek, and a federal district court to issue, a preliminary injunction while administrative enforcement proceedings take place. The statutory language stated an injunction could issue as the district court deems “just and proper.” A circuit split emerged regarding the standard for when an injunction is “just and proper,” and whether § 10(j) created a special, relaxed standard for issuance of an injunction. The question presented to the United States Supreme Court by the Starbucks case was whether the traditional four-factor test for a preliminary injunction established in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), governs the NLRB’s petitions under §10(j), which the Supreme Court ultimately answered in the affirmative.

District Court’s Analysis

In considering the NLRB’s § 10(j) petition, the district court applied a two-part test previously established by the Sixth Circuit. The Sixth Circuit test requires the Court to determine whether “there is reasonable cause to believe that unfair labor practices have occurred,” and whether injunctive relief is “just and proper.” See McKinney v. Ozburn-Hessey Logistics, LLC, 875 F.3d 333, 339 (2017). Here, the District Court granted an injunction to the NLRB under this test, which decision was subsequently affirmed by the Sixth Circuit. Under the Sixth Circuit’s standard, the Board only needed to determine that the unfair labor practice charge appeared to have merit. The Court had previously held that reasonable cause exists where a charging party’s legal theory was substantial and not frivolous. As the Court pointed out, it would be difficult to imagine a scenario in which a district court would find that a party’s legal theory was frivolous.

Analysis of the Majority Opinion

The Supreme Court first noted that a preliminary injunction is an “extraordinary” equitable remedy that is “never awarded as of right.” Winter, 555 U. S., at 24. In fact, it is well-established that the purpose of a preliminary injunction is to preserve the relative positions of the parties until a trial on the merits can be held. Generally, absent a clear mandate from Congress, courts must adhere to the traditional four-factor Winter test. The Supreme Court ultimately determined that nothing in the text of §10(j) overcomes the presumption that the four traditional criteria govern a preliminary-injunction request by the NLRB.

Again, §10(j) authorizes a district court “to grant to the Board such temporary relief . . . as it deems just and proper.” The Supreme Court did not understand this statutory directive to jettison the normal equitable rules. Rather, the Court explained the phrase “just and proper” calls upon the discretion that courts have traditionally exercised when faced with requests for equitable relief.

The Supreme Court pointed out that §10(j)’s text does not compare to the language that Congress has used in the past when it intended to depart from the traditional equitable rules. The Court noted historically some statutes have increased the burden for obtaining an injunction, while others expressly relieved the party moving for an injunction from showing that he or she can satisfy one of the traditional criteria. For example, there is a lower standard where the President and Attorney General petition the district court to enjoin strikes in certain industries or when there is a threat to national health or safety. At the other end of the spectrum, there is a heightened showing in criminal appeals dealing with prison conditions. Trademark cases also generally have a relaxed standard given the interests at stake.

To the contrary, §10(j), however, does not include any specific directive that demonstrates Congress intended to alter the traditional four-part test. For this reason, the Supreme Court held, because nothing in the text of §10(j) overcomes the presumption that traditional equitable principles apply, district courts considering the NLRB’s request for a preliminary injunction are in fact required to apply the Winter four-part test.

In arguing its cause, the NLRB focused on the fact Congress made the Board responsible for deciding charges of unfair labor practices. Further, it pointed out Congress required that courts of appeals review the NLRB’s final decisions with due deference. The NLRB argued these factors support the application of the Sixth Circuit’s less exacting reasonable-cause standard. Rejecting the Board’s argument, the Supreme Court cautioned the Sixth Circuit’s reasonable-cause standard substantively lowers the burden for obtaining a preliminary injunction by requiring courts to defer to the NLRB’s preliminary view of the facts, law, and equities.

The NLRB further argued the traditional four factor test risks replacing the Board’s adjudicatory authority by allowing the district court to conduct an independent assessment of the merits and equitable factors. While the Supreme Court acknowledged that §10(j) proceedings are different from traditional preliminary-injunction proceedings in that the NLRB and not the district court, adjudicate the claims, the Supreme Court rejected this NLRB’s concern, noting no matter what evidence the district court considers or how deep it dives into the merits, the NLRB remains free to reach its own legal conclusions and develop its own record in its administrative proceedings. Further, it held, since irreparable harm and the other equitable factors are not part of the unfair-labor-practice claim, the district court’s assessment of those factors is wholly irrelevant to the NLRB’s adjudicatory authority.

Ultimately, the Supreme Court held that district courts must apply the traditional four factors articulated in Winter when considering the NLRB’s requests for a preliminary injunction under §10(j).

Key Takeaways

This Supreme Court’s decision is viewed as a win for employers, weakening the NLRB’s ability to easily obtain preliminary injunctions in favor of employees, while lengthy administrative enforcement proceedings are pending.

While district courts may now be less likely to grant injunctive relief, the decision is unlikely to deter the Board from seeking injunctions in the future. In 2022, the Board’s general counsel Jennifer Abruzzo called 10(j) injunctions among the most important tools for enforcing labor rights. She encouraged the aggressive use of 10(j) injunctions to spur voluntary interim settlements to maintain the status quo pending Board proceedings.

The decision in no way affects the burden or standard of proof in Board proceedings as it concerning claimed retaliation against employees. The decision was also issued before the Supreme Court’s Loper Bright v. Raimondo decision discarding the Chevron doctrine, so it remains to seen the degree to which courts will defer to the Board’s “labor law expertise” when interpreting the National Labor Relations Act.

Supreme Court: Discrimination Plaintiffs Need Only Show "Some" Harm to State a Claim

11 Jun 2024

ABSTRACT: Title VII plaintiffs need not show “significant” harm arising out of adverse employment actions to state a claim, Supreme Court holds.

In a long-awaited and highly anticipated opinion, the Supreme Court held that a Title VII claimant alleging a discriminatory job transfer must only show that the transfer caused “some” harm with respect to the terms and conditions of her employment. In Muldrow v. City of St. Louis, the high court rejected the heightened standard adopted by the Eighth Circuit requiring “materially significant” harm, as being contrary to the law’s plain language.

Background

The facts of this case illustrate why Muldrow was the perfect case for challenging the Eighth Circuit’s heightened standard. The record depicts Muldrow as a rockstar detective within the St. Louis Police Department. She worked in the Intelligence Division, a leader in both the Gang Unit and the Gun Crimes Unit, and she was deputized to work on a prestigious FBI task force, a “premier position” in the Department. Muldrow was described as a reliable “workhorse” and her performance reviews were consistently outstanding.

Despite all these positive reviews of Muldrow, her new boss, Commander Deeba, requested she be transferred out of the Intelligence Division when he took over. He stated that a different officer, who happened to be male, would be a “better fit” for the dangerous work in the Intelligence Division. Deeba also frequently did not use Muldrow’s title of “Sergeant” and referred to her as “Mrs.” Even though Muldrow did not wish to transfer to a different department, the St. Louis Police Department approved Deeba’s request and Muldrow was given a uniformed position in the Fifth District. This new position, while equal in rank, salary, and benefits, was not considered to be as prestigious, and Muldrow’s responsibilities were significantly different from her previous position. She also worked on a “rotating schedule” that included weekend shifts, instead of her previous regular Monday through Friday schedule. She also lost access to her take-home police vehicle.

Sergeant Muldrow’s Title VII Claim

Muldrow brought a Title VII claim against the City of St. Louis claiming she was removed from her position at the Intelligence Division due to her sex, which adversely affected the terms and conditions of her employment. In her complaint, she states she lost both professional opportunities and material benefits of her job as a result.

The District Court granted the City summary judgment, and the Court of Appeals affirmed, stating that Muldrow could not meet her burden of showing a “materially significant disadvantage” as a result of her transfer. Both lower courts held Muldrow’s Title VII claim could not be supported by “only minor changes in working conditions,” and failed to adduce evidence that claimed losses of networking opportunities actually harmed her career prospects. As she continued to be a supervisor in her new role, her job duties were largely the same, said the District Court, as it disregarded or found immaterial the facts about her new schedule or lack of a take-home car. As a result, she could not establish that the harm incurred was “significant.”

Supreme Court’s Holding and Analysis

The language of Title VII and Supreme Court precedent, such as in Oncale v. Sundowner Offshore Services, Inc., for example, requires Muldrow to show that her transfer caused “some” negative change in the terms or conditions of employment. The “materially adverse” employment action standard has been applied by various Courts in determining whether a plaintiff states a claim, consistent with the Eighth Circuit approach. But the Supreme Court has now taken a broader view of “terms and conditions” of employment to include less valuable, less tangible benefits of employment. And the plain language of Title VII does not require a claimant to show that a negative employment action, such as Muldrow’s transfer, caused “significant” harm.

The Court rejected the City’s main textual arguments. Title VII’s prohibition on hiring, firing or “otherwise to discriminate against” a person based on a protected class does not mean that only job actions on the level of hiring or firing fit the bill. Rather, harmful discrimination can result from a multitude of employment actions. The Court also rejected the City’s argument that the Court’s 2006 holding in Burlington Northern v. White, established a “significant harm” standard. This holding only applies under Title VII’s anti-retaliation provision when a retaliatory action has consequences that are “materially adverse” and cause “significant harm.” Since this a transfer challenge under the “terms and conditions” of employment provision, Muldrow is not required to show the job transfer caused material, significant harm. She must only show that some harm resulted.

The City also argued, unsuccessfully, that a “significant harm” standard is necessary to protect the already overwhelmed court system from another flood of Title VII litigation. The Court rejected this argument and stated there are several other ways to dismiss frivolous Title VII claims.

Big Takeaways

The City was likely right that allowing plaintiffs to proceed with claims without demonstrating a “significant” harm will cause an uptick in Title VII litigation. The fee-shifting provisions of Title VII and § 1981 will very likely make claims with tiny damages more attractive to the plaintiffs’ bar. Courts should be mindful, however, that the attorney’s fees are discretionary and should limit fee awards in proportion to the plaintiff’s recovery as a bulwark to a flood of Title VII litigation. Indeed, unlike FLSA litigation where plaintiffs recover relatively small sums with large fee awards, nominal harm under Title VII should not result in massive fee awards.
The Court stated that “terms and conditions of employment” under Title VII should be interpreted broadly, so employers cannot seek shelter in the fact that an employee’s salary and title remain the same. Although not addressed by the Court, it would appear that reputational harm (e.g., the mere fact of a change to employment terms and conditions) will be sufficient to state a claim for damage under Title VII. Changes to scheduling, perks, opportunities for advancement, and prestige, and anything of value to employees other than money will be sufficient to state a claim.
The opinion’s focus on “discrimination” as meaning any differential treatment, regardless of harm may lend credence to concerns that the Court is moving away from Title VII’s remedial purpose in implementing the Reconstruction Amendments. Muldrow, along with Students for Fair Admissions v. Harvard (which does not address Title VII), may add ammunition to challenges to workplace Diversity, Equity and Inclusion (DEI) efforts.
Numerous lawsuits have already been filed alleging “reverse discrimination” and other non-traditional discrimination claims. The next few years could significantly change the legal landscape when it comes to employers’ efforts to address the needs of historically disadvantaged groups. However, the decision in Muldrow provides little clarity to employers navigating the minefield of both recruiting diverse talent and avoiding litigation.

* Allison Garrett, Law Clerk, assisted in the research and drafting of this post. Garrett is a graduate of the University of Missouri School of Law and will be sitting for the Missouri Bar Exam in July 2024.

EEOC Says Supreme Court's College Admissions Diversity Ruling Does Not Impact Private Employer Diversity Initiatives

05 Jun 2024

ABSTRACT: Vice Chair Jocelyn Samuels of the Equal Employment Opportunity Commission recently spoke at the American Bar Association conference on Equal Employment Opportunity law, reiterating her stance that the U.S. Supreme Court’s recent decision that race-based university admissions policies are unconstitutional does not apply to the “vast majority” of private employers’ diversity, equity, and inclusion efforts. But various state attorneys general and legislators do not share that view, and the issue is far from resolved.

During a panel discussion at a recent American Bar Association Conference on Equal Employment Opportunity the Vice Chair took the position that the Supreme Court’s June 2023 decision that race-based university admission policies are unconstitutional does not apply to the “vast majority” of private employers’ diversity, equity and inclusion efforts.

The Vice Chair’s comments pertain to the recent United States Supreme Court decision (“SFFA decision”) in a pair of cases – Students for Fair Admission v. President & Fellows of Harvard and Students for Fair Admissions v. University of North Carolina – where the high court struck down the affirmative action admission policies at those universities, finding they violated the Equal Protection Clause of the 14^th Amendment. Ever since that decision, there has been much speculation and discussion as to whether the employment practices of private businesses that focus on Diversity, Equity and Inclusion initiatives would face a similar fate if challenged. Threats, legislation, and lawsuits opposing those initiatives have followed across the nation. In her comments, Vice Chair Samuels cautioned employers against abandoning the DEI programs geared towards diversifying applicant pools and promoting equal employment opportunities in the workplace.

Students for Fair Admission v. Harvard/UNC and the Aftermath

In a 6-3 split decision, the United States Supreme Court ruled the colleges’ affirmative action policies that explicitly use race as a factor for admissions are unconstitutional and fail strict scrutiny.

While the SFFA decision does not mention or address employer’s DEI initiatives, Justice Gorsuch’s concurring opinion may have opened the door. In his concurrence, while analyzing the issue before the Court under Title VI, Justice Gorsuch directly quoted language from Title VII, noting Congress made it unlawful for employers to discriminate against any individual because of that individual’s race, color, religion, sex, or national origin.

Following the Supreme Court decision, on July 13, 2023, Attorneys General from thirteen different states jointly sent letters to Fortune 100 companies to remind them of their obligations as an employer to refrain from discriminating on the basis of race, whether under the label of DEI or otherwise and threatening legal consequences for the continuation of such programs.

Shortly thereafter, on July 17, 2023, Arkansas Senator Tom Cotton sent letters to over 50 law firms, threatening investigation and litigation over DEI initiatives that include race-based hiring quotas and benchmarks asserting his belief that the Supreme Court’s decision extends to private employers.

Democratic Attorneys General responded to the July 13^th letter, reassuring companies that corporate DEI efforts are legal and asserting their position that the Supreme Court decision has no bearing on private employer hiring practices.

Additionally, in the wake of SFFA, ten states have enacted anti-DEI legislation, while another fourteen have proposed anti-DEI legislation.

EEOC’s Reaction to the Aftermath So Far

Addressing the strong and widely disparate reactions to the Supreme Court ruling, Vice Chair Samuels expressed her view that the discussions surrounding the expansion of the SFFA decision to employment programs are overblown, noting there is nothing about the SFFA decision that applies to the vast majority of DEI programs. Samuels highlighted that one of the EEOC’s stated priorities is to support employers in evaluating their DEI initiatives to make sure they are lawful. She also advised the EEOC has various resources available for employers that are aimed at identifying the types of DEI-initiatives the agency thinks remain lawful after SFFA.

What Next?

In the meantime, while we float in these murky waters and await further guidance, here are some things to consider regarding DEI initiatives in the workplace. While we will continue to monitor litigation challenging employment-based DEI initiatives in the wake of SFFA, so should you. Monitor how courts are applying the holdings of SFFA and interpreting anti-DEI legislation. Review current DEI-initiatives and consider amending policies that focus on quotas and benchmarks; instead, make the primary focus of the initiatives the removal of potential biases in recruiting and hiring decisions. Be mindful of your recruitment pool, explore all available avenues to identify qualified candidates, and consider your selection criteria. Draw upon the diversity you already have in the workplace to establish a diverse hiring team. Finally, use the resources suggested and offered by the EEOC, as you shape and amend your initiatives while you strive to meet your obligations to truly be an Equal Opportunity employer. Stay tuned to this evolving legal battlefield, which fight we anticipate is just getting started.

* Kaleb McKinnon, Law Clerk, assisted in the research and drafting of this post. McKinnon is a graduate of Drake University Law School and will be sitting for the Missouri Bar Exam in July 2024.

Discriminatory Harassment Requires Pervasive Conduct

29 May 2024

ABSTRACT: The Missouri Court of Appeals reverses Judgment on gender-based harassment claim, holding a singular comment is not enough to warrant the discriminatory conduct as pervasive, viewed objectively by a reasonable person.

Beatrice Young sued her former employer, the Missouri Department of Corrections in the Circuit Court of Jackson County, alleging discrimination, harassment, and retaliation based on her race, sex, and national origin. After a five-day trial, a jury awarded Young actual and punitive damages, and attorney’s fees, for gender-based workplace harassment and retaliation. The DOC appealed.

Young began working for the DOC as a Corrections Officer I, providing security to prisoners and prison visitors, conducting inmate searches and counts, and supervising prisoner movement and activity. Four years later, Young was promoted to Corrections Officer II, now ranking Sergeant, and was transferred to the Kansas City Reentry Center. There, a subordinate Corrections Officer I who was unhappy with Young’s supervisory directives, crudely complained about Young, making a sexually demeaning comment to other employees. The explicit comment came to light when a co-worker made an internal complaint against the Corrections Officer I who made the comment.

A successful claim of a hostile work environment requires the plaintiff show: (1) she is a member of a group protected under the Missouri Human Rights Act; (2) she was subjected to unwelcome harassment; (3) the plaintiff’s membership in the protected group was a contributing factor in the harassment; and (4) a term, condition, or privilege of the plaintiff’s employment was affected by the harassment.

On appeal, the DOC only challenged the sufficiency of Young’s evidence regarding the fourth element of a sexual harassment claim. In Matthews v. Harley-Davidson, the Missouri Supreme Court clarified that “harassing conduct must be severe and pervasive enough to create a hostile or abusive working environment as viewed subjectively by the claimant and as viewed objectively by a reasonable person.” The hostility of an environment is analyzed by the totality of the circumstances, including the frequency and severity of the harassing behavior, the extent to which it was physically threatening or humiliating, and whether it unreasonably interfered with the plaintiff’s work performance.

When analyzing Young’s sexual harassment claim, the Court ultimately determined Young’s claims were not objectively sufficiently severe or pervasive that it altered the conditions of her employment. While the comment was “undeniably offensive and inappropriate in the workplace,” it was a single comment, made only once. Even though other inmates and employees who learned of the offensive comment expressed sympathy and concern for Young and offered to assist by filing internal complaints against the harassing employee, this singular comment could be construed as “pervasive.”

The Court further observed that there was no evidence to show that the offending comment itself was stated directly to Young or that Young was meant to hear it. Additionally, the intensity of the comment was diminished due to the fact it was made by a subordinate, rather than a superior.

Young’s success depended on further evidence of offensive conduct. She may have been successful if there were additional comments to “describe, invite, or threaten violent or sexual acts.” For example, in Bracely-Mosley v. Hunter Engineering, the incidents involved direct physical contact or threatened physical contact, which caused the plaintiff to suffer mental and physical conditions that required medical treatment. However, even with threats of violence, a claim still requires “pervasive” harassment, typically associated with “day-to-day harassment” that “poisons and permeates” the work environment.

The Court of Appeals in Young acknowledged that while the behavior in question was unacceptable, “some inappropriate behavior objectively does not rise to the level of actionable harassment as a matter of law.”

While plaintiffs may allege significant facts constituting gender-based harassment, this case reaffirms the notion that conduct must be continually hostile to rise to the level of pervasiveness needed in order to withstand summary judgment or a judgment notwithstanding the verdict. Defendants should be ready to challenge generic allegations that seem to be more of a one-off instance rather than workplace harassment.