In April, the Ninth US Circuit Court of Appeals ruled in an en banc rehearing of a case decided by a three-judge panel last year that differences in past salaries don’t justify disparities in pay between male and female employees in the same role. The unanimous ruling, authored by the late Judge Stephen Reinhardt, concluded that even though the Fresno, California, school district’s pay structure was not discriminatory in intent, it perpetuated gender-based wage disparities in a manner “contrary to the text and history of the Equal Pay Act.”
Because pay gender disparities in pay may have arisen from sex discrimination, the court reasoned, a system that allows these gaps to persist throughout an employee’s career effectively functions to “perpetuate rather than eliminate the pervasive discrimination at which the Act was aimed.” The Ninth Circuit’s judgment is in keeping with a trend that has been building up over the past few years in which employers are feeling greater pressure to stop basing pay structures on salary history, due to the potential for perpetuating unfair pay gaps. Appeals courts have divided on the question, however, with the 10th and 11th Circuits also finding that salary history-based pay systems are not exempt from Equal Pay Act claims, while the Seventh and Eighth Circuits have disagreed.
A circuit court split is often a prelude to Supreme Court review of a legal question. The Fresno school district had planned to appeal the Ninth Circuit’s ruling to the highest court, but had suspended that process while it attempted to reach a settlement with the plaintiff, Aileen Rizo. Now, however, the settlement talks have broken down and the district is preparing to petition the Supreme Court for review next month, Erin Mulvaney reports at the National Law Journal. That doesn’t mean the court will take the case, Mulvaney notes, but “any petition would likely fuel friend-of-the-court briefs”:
Senate Republicans including Mike Lee (Utah), Marco Rubio (Florida), and Joni Ernst (Iowa) are talking up a new proposal from the Independent Women’s Forum, a conservative economic policy shop, to establish a mechanism for US parents to access paid leave without creating additional costs for their employers by deferring their Social Security benefits in retirement, the Hill reports:
According to IWF’s six-page proposal, parents could take up to 12 weeks and receive on average 45 percent of their pay in a Social Security parental benefit that’s calculated using the same formula as Social Security disability benefits. The IWF estimates the average wage worker would receive $1,175 per month.
Lee said lawmakers are trying to figure out how to structure benefits so they are delivered to families when they need them, how the federal law should interact with state paid leave laws and how to keep the law from hastening the Social Security Trust Fund’s 2034 insolvency date.
Several House Democrats released statements criticizing the proposal, calling it “woefully insufficient” and arguing that working Americans should not have to forgo Social Security benefits to spend time with their newborn children. Democratic Rep. Rosa DeLauro also insisted that “any paid leave plan that reflects the needs of working people and families must address the need to deal with a personal or family member’s serious illness.”
The US is the only industrialized nation and one of only three countries in the world not to mandate paid time off for new parents, though the Family and Medical Leave Act guarantees mothers the right to unpaid leave during pregnancy and after childbirth. Many US employers, including the 20 largest private employers, offer some amount of paid parental leave, but millions of Americans lack access to this benefit.
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The US Department of Justice is planning to bring criminal enforcement actions against employers who collude to hold down wages and prevent employees from changing jobs through non-poaching agreements, Roy Maurer reports at SHRM:
Makan Delrahim, the assistant attorney general for the department’s antitrust division, said that his team has been reviewing potential violations of the antitrust law prohibiting nonpoaching agreements and that added enforcement actions will be taken this year. … “In the coming couple of months, you will see some announcements, and, to be honest with you, I’ve been shocked about how many of these there are, but they’re real,” he said.
“While no criminal charges have yet been brought against employers for entering no-poach or wage-fixing agreements, that is about to change,” said Dee Bansal, an attorney in the Washington, D.C., office of law firm Cooley LLP. “The Trump administration has voiced support of this Obama-era policy.”
In 2016, Massachusetts state lawmakers failed to reach a compromise over a bill that would strictly limit companies’ ability to enforce non-compete clauses in employees’ contracts, slowing the momentum of a trend among states to restrict the use of these agreements in roles where they were unnecessary or would overly limit employees’ future career prospects. The bill was widely expected to be revisited in the state’s next legislative session; sure enough, it has, and members of the Massachusetts House and Senate are now close to reaching a deal on a bill that satisfies both houses’ concerns, Jon Chesto reports at the Boston Globe:
There are still some issues to be worked out between House and Senate negotiators. The legislation will most likely include noncontroversial elements such as bans on using noncompetes for lower-paid hourly workers, such as camp counselors and sub-shop employees. But the two sides have yet to agree on how long noncompete contracts can remain in force. In 2016, the House leadership supported up to 12 months, while the Senate backed a three-month limit. Another potential sticking point: the wording for how departing employees should receive payments, known as “garden leave,” while their noncompetes are in effect.
Advocates for curbing the use of non-competes in Massachusetts say it harms the state’s ability to leverage its highly educated workforce and become a full-fledged tech startup hub like California, which is one of the few states where the use of such clauses is almost always prohibited and where courts generally have refused to recognize them. Most other states have laws that limit the use of non-competes to the protection of trade secrets and other confidential information, but impose a varied range of standards for determining whether an agreement is enforceable.
Lawmakers in three other states—New Hampshire, Pennsylvania, and Vermont—are also considering new restrictions this year, Jackson Lewis attorneys Daniel P. Schwarz, Martha Van Oot, Erik J. Winton and Colin A. Thakkar write at SHRM:
At an event organized by the Jack Kemp Foundation last week, US Secretary of Labor Alexander Acosta expressed support for a speedy overhaul of US employment laws to account for the advent of the gig economy and the changing relationship between workers and employers today, Chris Opfer reported at Bloomberg BNA. The secretary said the government needed to “keep pace with the pace of change in the private sector” and “re-examine the rules that regulate the employer-employee relationships that have an impact on the ability of individuals to work in a modern system.”
Acosta’s concern reflects a growing understanding that the employment laws and regulations written in the 20th century don’t account for the way many people work today and in particular, that some new form of employment classification may be needed to reflect the situation of people like Uber and Lyft drivers, who work as independent contractors but resemble regular employees in many aspects. The rights and obligations of these individuals and the platforms through which they find work are currently a legal gray area, being defined in the courts through litigation rather than by Congress.
That US employment laws need updating to account for today’s very different labor economy is not especially controversial, but what those updates should look like is hotly debated: Labor activists want gig economy workers to enjoy the same protections as traditional employees and progressive gig economy companies want a new social safety net for these workers based on portable benefits, whereas other businesses and lobbying groups want to limit regulation of this emerging economy as much as possible.
The US National Labor Relations Board considers arbitration agreements that bar employees from bringing class-action lawsuits against their employers invalid, according to a brief the NLRB filed in three cases the Supreme Court is hearing together on the legality of these class-action waivers, Allen Smith reports at SHRM:
Class-action waivers violate the National Labor Relations Act’s (NLRA’s) right to protected concerted activity, the NLRB argued in the brief written by General Counsel Richard Griffin Jr., an appointee of President Barack Obama whose term expires Nov. 4. The NLRB’s brief contradicts the Department of Justice’s (DOJ’s) June 16 brief in favor of class-action waivers—which was a shift from the DOJ’s position under the Obama administration. …
The NLRA’s right to protected concerted activity “is the core substantive right protected by the NLRA and is the foundation on which the act and federal labor policy rest,” the board stated. “An arbitration agreement requiring employees to resolve legal disputes solely on an individual basis is thus comparable to an unlawful contract providing that employees can be fired on the basis of age, contrary to the Age Discrimination in Employment Act, or paid less than the minimum wage, contrary to the Fair Labor Standards Act (FLSA).” Such unlawful contracts would not be permitted, so the Supreme Court similarly should not let the core purpose of the NLRA be undermined, the NLRB argued.
In a development welcomed by many employers, the Justice Department in June reversed its position on this issue, switching sides to argue on behalf of employers and against the NLRB. At the time, Greensfelder attorney Katherine Fechte described the change of position as “unprecedented” in a labor-related case:
President Donald Trump’s administration said in a court filing last week that it intends to rethink the controversial new US overtime rule developed by the previous administration last year, the Washington Examiner reports:
Justice Department lawyers … defended the prior administration from charges that it violated the Administrative Procedures Act, which covers federal rulemakings, but also said the current administration would rethink the rule.
“The department has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be. Accordingly, the department requests that this court address only the threshold legal question of the department’s statutory authority to set a salary level,” the lawyers stated. Restarting the public question process is a prerequisite before the department can overturn it and establish a new threshold. The Justice Department did not indicate what the administration thought the new level would be.
In the new rule drafted in the final year of Barack Obama’s presidency, the Labor Department had sought to raise the salary threshold at which employees are exempt from overtime pay from $23,660 to $47,476, but the new rule was challenged in court, blocking its implementation and keeping it tied up in litigation until the White House changed hands in January. Trump himself did not stake out a firm position on the rule during last year’s presidential campaign, but his Labor Secretary Alexander Acosta touched on it in his confirmation hearing, saying that the threshold was overdue for an update but expressing concern that doubling it all at once would put undue stress on the economy.