Released February 2, 2024

NEW LAWS ENACTED

  • California’s new law increasing penalties on employers for retaliating against employees went into effect on January 1, 2024. SB497 makes it easier for employees to assert that they were retaliated against by their employers and provides for a $10,000 penalty per employee per violation when employers are found to have retaliated against employees.

PENDING BILLS

  • A bill (S.1602) is progressing in New Jersey’s legislature which would make it illegal for employers to discriminate against employees based on height and weight. The bill, if passed, would New Jersey the second U.S. state to prohibit this type of discrimination, behind Michigan. Washington D.C. and several cities—including New York City, San Francisco, and Madison, Wisconsin—also currently prohibit body- or appearance-related discrimination.

COURT & AGENCY NEWS

  • The S. Department of Labor (DOL) increased fines and penalties for violations of the Occupational Safety and Health Act (OSH Act). The OSH Act requires all employers to provide a safe working environment free from known hazards. Employers who violate the OSH Act will now face increased fines and penalties, underscoring the importance of educating employees about how to stay safe and healthy from applicable hazards in their workplace.
  • On January 17, 2024, the S. Court of Appeals for the Fourth Circuit (covering Maryland, Virginia, West Virginia, North Carolina and South Carolina) issued a ruling in Tartaro-McGowan v. Inova Home Health, LLC that provides guidance to employers on what constitutes a reasonable accommodation, and whether or not an employer must implement an employee’s preferred accommodation.
  • The Supreme Court of the United States heard oral argument in December in a case which may make it easier for employees to sue employers for discrimination in situations where the employer’s alleged discriminatory acts did not have a measurable economic impact on the employee. The decision is expected to be released in 2024, and many commentators are expecting the Court to rule in favor of the employee. This case underscores the importance of preventing discrimination in the workplace, and proactively training supervisors and managers to be attuned to possible situations and employment decisions that could be potentially discriminatory.
  • The S. Department of Labor has published its final rule, known as the “2024 Rule” giving guidance on the factors to consider when classifying a worker as either an employee or an independent contractor. Misclassification of a worker as an independent contractor has significant legal risks. Workers who previously qualified for independent contractor status under the two factors of the 2021 Rule may no longer qualify under the six-factor 2024 Rule. The 2024 Rule will take effect March 11, 2024.

 For the full stories, keep reading below.

NEW LAWS ENACTED

California Increases Retaliation Penalties and Makes it Easier for Employees to Prove Retaliation 

California’s Senate Bill 497, effective January 1, 2024, makes it easier for employees to substantiate retaliation claims and increases penalties against employers who are found to have retaliated.

The bill amends California Labor Code Sections 98.6, 1102.5, and 1197.5, to introduce a rebuttable presumption of retaliation, which streamlines the process for employees to establish a retaliation case. This presumption arises if an employer takes adverse action against an employee within 90 days of engaging in certain protected activities, such as filing complaints, participating in investigations, or exercising rights under labor laws.

In California, there is typically a three-stage process for litigating retaliation claims. In the first stage, the employee must establish a prima facie case of retaliation: this consists of the employee alleging that they had engaged in a protected activity, that their employer took an adverse action against them, and that there was a causal link between the two. The second stage then involves the employer providing a legitimate, non-retaliatory reason for its actions; in the final stage, the employee must prove that the employer’s provided reason was simply a pretext for the retaliation.

SB 497 simplifies this process by allowing the employee to satisfy the first stage of the process if the adverse action simply occurs within the 90-day timeframe. Employers must then present a legitimate, non-retaliatory reason, and if successful, the burden then shifts back to the employee in step three to demonstrate retaliation despite the provided justification.

In addition to the streamlined process, SB 497 also provides several other protections for employees:

  • Imposes civil penalties of $10,000 per employee per violation, to be awarded to the affected employee.
  • Strengthens protections for employees engaging in various forms of protected conduct, such as disclosing information to government agencies or testifying in investigations. The increased fine noted above would apply to such conduct.
  • Reinforces the prohibition against retaliation for employees discussing wages or inquiring about colleagues’ salaries. The law also applies the same rebuttable presumption/streamlined process if an employer takes adverse action against an employee within 90 days of exercising wage-related rights and activities.

This new law and its increased penalties underscore the importance of proactively training supervisors and managers on what constitutes retaliation, how to avoid it, and how to adhere to their company’s anti-retaliation policies.

New Jersey Looks to Become Second State in the Nation to Prohibit Discrimination Based on Height and Weight

New Jersey is poised to address another form of discrimination as lawmakers advance a bill (S.1602) to add height and weight as protected classes under the state’s anti-discrimination law. Sponsored by Senator Andrew Zwicker (D-Middlesex) and currently pending in the Senate, the bill, if passed, would make New Jersey the second state (behind Michigan) to prohibit height and weight discrimination. Washington D.C. and several cities—including New York City, San Francisco, and Madison, Wisconsin—also prohibit body- or appearance-related discrimination.

New Jersey’s current law, the New Jersey Law Against Discrimination (NJLAD), prohibits discrimination based on various characteristics including race, religion, national origin, age, sex, pregnancy, familial status, marital status, affectional or sexual orientation, gender identity and expression, atypical hereditary cellular or blood trait, genetic information and mental or physical disability.

When discussing the proposed bill, Senator Zwicker emphasized the gravity of discrimination based on body size. News articles have noted that some employers have used height and weight requirements as a “loophole” to effectively discriminate based on gender, particularly in industries where appearance is a focus, such as flight attendants or restaurant servers.  They also cite to studies which found that individuals facing weight bias often experience challenges in the workplace, including fewer job opportunities, lower wages, and an increased risk of harassment from colleagues.

It should be noted that the bill does allow for exceptions if height or weight is a bona fide occupational qualification. While there are no federal protections against height or weight discrimination, more cities and states are expanding the list of their protected classes to include body appearance-related characteristics. This bill reflects this broader trend in employment law evolution to include more characteristics protected from discrimination. As a best practice, employers should consider reviewing policies and training to ensure both address protected characteristics as they evolve.

Department of Labor Increases Civil Money Penalties for 2024 under the Occupational Safety and Health Act

The U.S. Department of Labor (DOL), which is tasked with enforcing federal OSHA law, has released a final rule which increases the civil money penalties for violations of the Occupational Safety and Health Act (OSH Act) to adjust for inflation. This is an annual process conducted at the start of each year to ensure the penalties and fines associated with violations of certain laws enforced by the DOL keep pace with inflation. The risk of facing increased fines and penalties serve as an important reminder to employers of their requirements under the OSH Act.

The OSH Act was adopted to help ensure a safe and healthy work environment through the creation of comprehensive safety and health standards. Fundamentally, the OSH Act mandates that employers create workplaces free of recognized hazards that could result in serious harm or fatalities, from harmful chemicals to workplace violence. This general requirement is accomplished through the creation of specific safety standards, inspection requirements, hazardous communication standards, emergency action plans, and record keeping requirements.

Integral to the OSH Act’s effectiveness is the requirement that all employers adopt and implement effective training programs. Employers are required to conduct training sessions to educate employees about workplace hazards, proper utilization of protective equipment, and emergency procedures. This educational component is intended to help foster a culture of safety within the workforce.

As part of the OSH Act, the Occupational Safety and Health Administration (OSHA) is empowered to issue fines and penalties against employers who violate OSH Act and the associated regulatory requirements. Annually, the Department of Labor issues updated regulations to ensure that the fines and penalties levied against employers keep pace with inflation. These annual updates serve as important reminders to employers regarding the need to comply with all OSH Act requirements and the importance of educating employees about how to stay safe and healthy from applicable hazards in their workplace.

Fourth Circuit Provides Additional Guidance on the Accommodations Employers are Required to Provide to Employees with Disabilities

On January 17, 2024, the U.S. Court of Appeals for the Fourth Circuit reinforced key aspects of the Americans with Disabilities Act (ADA) concerning reasonable accommodations for employees with disabilities, such as which types of accommodations may be reasonable, and which may not be.

In the case of Tartaro-McGowan v. Inova Home Health LLC, the defendant home health care company required its clinical managers, including the plaintiff, to make “direct patient care field visits” to help address a staff shortage during the COVID-19 pandemic. Plaintiff requested that she be completely exempted from such field visits as an accommodation to her chronic arthritis in her knees, which limited her ability to bend, squat, kneel, or otherwise put stress on her knees. The employer proposed an alternative solution as an accommodation—allowing her to pre-screen and select which patients she would visit, which would enable her to avoid visiting patients that would require such movements. However, the plaintiff asserted that selecting patients whose care would not require these moments would not be a complete solution, alleging that an unexpected situation could come up during a field visit that might require her to squat, kneel, etc. When plaintiff continued to insist that a complete exemption from field duties was needed, the employer terminated her employment and the plaintiff filed a legal action under the ADA, alleging a failure to accommodate her disability, illegal termination, and retaliation.

The Fourth Circuit (which covers Maryland, Virginia, North Carolina, South Carolina, and West Virginia) affirmed the lower court’s dismissal of the plaintiff’s claim. The Court ruled in favor of the employer in this case because the employer had offered other reasonable options to accommodate the employee. In doing so, the Court emphasized that:

  • The ADA does not require an employer to select an employee’s preferred accommodation if another reasonable, effective accommodation exists; rather, it is the employer’s discretion to choose between such reasonable accommodation alternatives.
  • Employers are not required to remove even a non-essential job function if an alternative reasonable accommodation exists that would enable the employee to still perform that function.
  • “The ADA requires reasonableness, not perfection. Reasonableness does not demand that an accommodation have an airtight solution to every contingency conceivable.”
  • The determination of what is “reasonable” “is sensitive to the particular circumstances of the case.”

Employers with 15 or more employees are generally obligated under the ADA to provide reasonable accommodations to qualified employees with disabilities, absent an undue hardship to the employer. A foundational aspect of the ADA is the interactive process, requiring employers to engage in a collaborative dialogue with employees with disabilities who are seeking accommodations. The interactive process involves understanding the barriers faced by the employee and finding effective, reasonable solutions. Accommodations can take various forms, including changing job tasks, providing reserved parking, improving accessibility, modifying the presentation of tests and training materials, providing or adjusting products or equipment, allowing flexible work schedules, and reassigning to a vacant position.

Navigating the interactive process can be complex and highly fact-specific. As a best practice, employers should ensure all supervisors and managers are trained to recognize when a request for accommodation has been made by an employee and how to respond to such requests appropriately, to help the employer comply with its obligations under the ADA.

The Supreme Court of the United States Hears Oral Arguments Regarding Unlawful Discrimination

On December 6, 2023, the U.S. Supreme Court heard oral arguments in the case of Muldrow v. City of St. Louis regarding a claim of employment discrimination under Title VII of the Civil Rights Act of 1964. The case centers on whether a plaintiff must demonstrate tangible harm or a significant disadvantage resulting from an adverse job action to establish a discrimination claim or, alternatively, whether any differential treatment based on a protected characteristic is sufficient for a claim to be made.

In the case, Jatonya Muldrow, a sergeant in the St. Louis Police Department, argued that her lateral transfer within the department’s Intelligence Division constituted sex discrimination under Title VII, even though she did not suffer significant economic disadvantages as a result. The central issue lies in whether the term “discriminate against” in Title VII encompasses any distinctions or differences in treatment that do not cause injury, as opposed to the lower court’s (Eighth Circuit’s) imposition of a “significant disadvantage” requirement.

Muldrow’s counsel asserted that any decision in the workplace based on a protected characteristic is inherently harmful, while the City of St. Louis argued that Title VII requires not just differential treatment but also some “significant, material objective harm.” The City contended that a harm requirement is consistent with past court decisions and serves to separate meritorious cases from trivial personnel actions, preserving judicial resources.

Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against employees based on sex, among other characteristics. The Supreme Court, if it rules in Muldrow’s favor, may make it easier for employees to prove an employer violated Title VII by removing a requirement that employees show they were economically harmed by the discrimination. It is unclear whether the Court’s ruling will simply address the particular type of action taken against the employee in this case—a transfer—or whether other types of workplace changes (such as changes in schedules, supervisors, or location of work, to name a few) may be sufficient to show discrimination even when no economic damage results from the employer’s actions.

Many Supreme Court commentators expect the Court to rule in Muldrow’s favor when it releases its decision later in the 2024 session. This case underscores the importance of preventing discrimination in the workplace, and proactively training supervisors and managers to be attuned to possible situations and employment decisions that could be potentially discriminatory.

The Department of Labor Issues New Rule Regarding the Classification of Workers as Employees or Independent Contractors

The U.S. Department of Labor’s (DOL) new rule on the classification of employees and independent contractors, known as the “2024 Rule,” is set to take effect on March 11, 2024. This rule, initially published in 2022, replaces the previous 2021 guidance and introduces a six-factor analysis to determine proper classification under the Fair Labor Standards Act (FLSA). The 2024 Rule serves as guidance for employers and courts in complying with the FLSA.

Misclassifying workers can lead to severe legal consequences for employers. If employers are found to have misclassified workers, employers may then be held accountable for back pay and other owed compensation (such as overtime pay, etc.) to those workers who should have been given those benefits as employees. Legal penalties, fines, and potential litigation from misclassified workers further contribute to the risks.

The 2021 Rule aimed to simplify the classification process by focusing on two “core” factors: the nature and degree of control over the work and the individual’s opportunity for profit or loss. However, the 2024 Rule, effective from March 11, 2024, represents a departure from the streamlined approach. It reverts to a “totality of the circumstances” standard, introducing a six-factor test that includes the opportunity for profit or loss, investments by the worker and employer, degree of permanence of the work relationship, nature and degree of control, extent to which the work performed is integral to the employer’s business, and the skill and initiative of the worker. Unlike the 2021 Rule, the 2024 Rule avoids presuming the weight of any single factor, and instead emphasizes a holistic assessment.

The 2024 Independent Contractor Rule is a significant shift in worker classification rules. Workers who previously qualified for independent contractor status under the 2021 Rule may no longer qualify under the 2024 Rule. Finally, while the 2024 Rule applies to the Federal requirements under FLSA, employers must continue to consider state-specific rules when determining a worker’s independent contractor status.

Disclaimer: this information is not intended as legal advice. Please consult with legal counsel to ensure your organization’s compliance with applicable legal requirements.