Hair Styles May Be Protected Under Discrimination Laws

Q: Is it lawful to require employees or applicants to style their hair in a certain manner?

A: As with most employment-related questions, the answer is it depends.  While employers are generally allowed to adopt basic grooming policies, employers should seek to adopt policies that do not have a disparate impact on minorities and other persons protected by anti-discrimination laws.

In February 2019, the New York City Commission on Human Rights (“Commission”) generated headlines by releasing a legal enforcement guidance on race discrimination on the basis of hair.  The guidelines are designed to prohibit workplace grooming policies that may discriminate against Black people.  The Commission defines the term “Black people” to “include those who identify as African, African American, Afro-Caribbean, Afro-Latin-x/a/o or otherwise having African or Black ancestry.”  Per the Commission: “Bans or restrictions on natural hair or hairstyles associated with Black people are often rooted in white standards of appearance and perpetuate racist stereotypes that Black hairstyles are unprofessional.”  The Commission takes the position that the New York City Human Rights Law (“NYCHRL”) protects the right of Black people to maintain their natural hairstyle, which “includes the right to maintain natural hair, treated or untreated hairstyles such as locs, cornrows, twists, braids, Bantu knots, fades, Afros, and/or the right to keep hair in an uncut or untrimmed state.”

According to the Commission, grooming or appearance policies that ban, limit, or prohibit natural hair and hairstyles often associated with Black people violate the NYCHRL anti-discrimination provisions, including the section prohibiting discrimination in employment. Employers prohibiting employees from wearing their hair in cornrows, Afros, and other hairstyles associated with Black people risk facing liability under the NYCHRL.  The Commission stated: “Black hairstyles are protected racial characteristics under the NYCHRL because they are an inherent part of Black identity.”  Under the NYCHRL, it is therefore discriminatory to refuse to hire a Black applicant with cornrows because the hairstyle does not project the “image” that a Company is trying to represent—and companies may not use customer preference or health and safety concerns as an excuse for a prejudiced policy.

The Commission noted in a footnote of its legal enforcement guidance that grooming or appearance policies that “generally target communities of color, religious minorities, or other communities protected under the NYCHRL are also unlawful.” The Commission gave as examples: (i) a Sikh applicant being denied employment because of his religiously-maintained uncut hair and turban, (ii) an Orthodox Jewish employee ordered to shave his beard and cut his payot (sidelocks and sideburns), (iii) a salesperson being required to shave his beard despite a medical condition that makes it painful to do so, (iv) an older employee with gray hair being threatened that she will lose her job if she does not color her hair, and (v) a male server being ordered to cut his ponytail where similar grooming policies are not imposed on female servers.

This is not the first time a government agency has attempted to remedy employment discrimination related to Black hairstyles. In 2013, the United States Equal Employment Opportunity Commission (“EEOC”) unsuccessfully brought suit against an Alabama insurance claims company because the insurance company allegedly violated Title VII of the Civil Rights Act by discriminating against a Black applicant because she wore dreadlocks. See EEOC v. Catastrophe Mgmt. Sols., 852 F.3d 1018 (11th Cir. 2016).  In that case, Plaintiff Chastity Jones was offered a position as a customer service representative.  Prior to her start date, Ms. Jones was advised that the company did not permit dreadlocks and that she needed to cut them.  When Ms. Jones refused to cut her hair, her job offer was rescinded.  Although recognizing that dreadlocks were a common hairstyle worn by Black people, the Eleventh Circuit Court of Appeals (covering employers in Alabama, Florida, and Georgia) ultimately concluded that dreadlocks were not an immutable characteristic, and that the EEOC could not state a claim for intentional race discrimination against a company seeking to enforce its “race-neutral” grooming policy.  The United States Supreme Court declined to hear Ms. Jones’ appeal.

Although the NYCHRL only covers employers with four or more employees in New York City, employers nationwide should pay close attention to the Commission’s guidance as it could influence courts and other government agencies throughout the country. Before implementing any grooming policies—including those that could adversely impact individuals in a protected category of employment—Human Resources professionals should consult with qualified legal counsel to adopt lawful policies that do not create a “hairy” situation.

–Lee Tankle

Pros and Cons of Mandatory Arbitration Policies for Employment Disputes

Q.  Our company has a policy providing for mandatory arbitration of employment claims. I heard recently that some companies are moving away from these types of policies.  What are the pros and cons of requiring all employees to submit their employment claims to arbitration?

A.  There are a number of issues to consider regarding whether a company should require its employees to submit all employment claims to arbitration. These types of policies have been in favor since the 2018 United States Supreme Court opinion in Epic Systems Corp. v. Lewis, which endorsed mandatory arbitration agreements even where they resulted in employees waiving their rights to pursue claims in a class or collective action.

In light of the #MeToo movement, however, federal and state legislatures have taken steps to ban private resolution of sexual harassment claims. For example, New York State recently passed a law prohibiting not only the use of mandatory arbitration for sexual harassment claims, but also non-disclosure agreements relating to settlement of those claims.  Similar laws were passed in Washington and Tennessee in 2018, and comparable legislation has been introduced in several more states.  At the federal level, Congress currently is considering a bill called the Forced Arbitration Injustice Repeal (FAIR) Act, which would ban mandatory arbitration in employment and consumer agreements.

In addition, some companies have scaled back their mandatory arbitration policies in the face of employee resistance. In November 2018, for example, about 20,000 Google employees made their case against mandatory arbitration in a very public way when they walked off the job in protest of the company’s arbitration policy, which required employees to bring all claims for sexual harassment to arbitration.  Google waived the policy with respect to those claims only, but the employees pressed the company to abandon the policy for all employment-related claims, and Google eventually acquiesced.  On February 21, 2019, Google announced not only that it would end the mandatory arbitration policy altogether, but also that it would no longer require agreements that deny employees the right to bring class actions against the company.

Since that time, Facebook, Airbnb and eBay followed suit by modifying their policies to allow employees to bring sexual misconduct and harassment claims in court. Twitter also made a announcement touting that it has never required employees to submit employment claims to arbitration.

In the face of these developments, should companies compel their employees to submit all employment claims to arbitration?

There are certain advantages to arbitration as a process for resolving employment claims. First, in light of the Epic Systems decision, companies can require employees to bring their claims individually in arbitration, rather than banding together to pursue claims as a class or collective action.  Second, arbitration is a private proceeding and therefore provides an advantage to employers who would rather avoid the public embarrassment of what sometimes can be salacious allegations.  Third, the arbitration proceeding is a way to avoid having disputes heard by a jury, which may be more willing to award substantial sums to sympathetic plaintiff-employees.  Fourth, when compared with traditional litigation, the arbitration process is at least supposed to be a faster resolution of the dispute at a reduced cost.

However, companies are finding that, in practice, arbitration proceedings sometimes can be as lengthy and costly as court proceedings, particularly since the employer usually is responsible for the arbitrator’s fees on top of its own legal fees and expenses. In addition, arbitrators rarely grant summary judgment and are often more likely to split a decision down the middle, rather than rule completely in the employer’s favor.

With this in mind, your company should consider carefully whether mandatory arbitration is appropriate, giving thought to the company’s culture, industry standards and the evolving legal framework. If the company does decide to put a mandatory arbitration policy in place, it is important that it is drafted carefully with the assistance of counsel, taking into consideration state laws of your jurisdiction, to ensure that the provision will be found fair and enforceable.

Rogers Stevens

NLRB Provides Updated Guidance on Employer Policies and Handbooks

Q:        How does the current National Labor Relations Board view employee handbook policies?

A:        Under the Trump administration, the National Labor Relations Board (“Board”) has shifted in a more employer-friendly direction, including with respect to workplace policies.  In a December 2017 decision, the NLRB reassessed the standard for evaluating when neutral workplace rules violate the National Labor Relations Act (NLRA). In that decision, the Board defined three categories of employer handbook rules and policies: (1) rules that are generally lawful; (2) rules that warrant individualized scrutiny; and (3) rules that are plainly unlawful.

Those three categories were expanded in June 6, 2018, when the Board’s General Counsel issued a new Guidance Memorandum (18-04), providing updated guidance on how regional NLRB offices should investigate unfair labor practice charges involving employer handbook language and rules.

Category 1 Rules:  The Board has determined that employee handbook policies in this category generally are lawful, either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights, or because the potential adverse impact on protected rights is outweighed by the business justification associated with employer policy.  The examples provided in the Guidance Memorandum of the types of rules that fall into this category include:

  • Civility rules prohibiting “disparaging, or offensive language”;
  • No-photography and no-recording rules;
  • Rules against insubordination, non-cooperation, or on-the-job conduct that adversely affects operations;
  • Disruptive behavior rules (for example, prohibiting conduct that creates a disturbance on company premises or creates discord with clients or fellow employees);
  • Rules protecting confidential, proprietary, and customer information or documents;
  • Rules against defamation or misrepresentation;
  • Rules against using employer logos or intellectual property;
  • Rules requiring authorization to speak for the company; and
  • Rules banning disloyalty, nepotism, or self-enrichment.

Category 2 Rules:   The Board has concluded that Category 2 rules are not “obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications.” The Guidance Memorandum provides examples of rules that fall into this category, including the following:

  • Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment and do not restrict membership in, or voting for, a union;
  • Confidentiality rules broadly encompassing “employer business” or “employee information” (as opposed to confidentiality rules regarding customer or proprietary information, which would be considered lawful, or confidentiality rules more specifically directed at employee wages, terms of employment, or working conditions, which is prohibited);
  • Rules regarding disparagement or criticism of the employer (as opposed to civility rules regarding disparagement of employees, which is considered a lawful Category One rule);
  • Rules regulating use of the employer’s name (as opposed to rules regulating use of the employer’s logo/trademark, which is allowed as a Category One rule);
  • Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf, which is a lawful Category One rule );
  • Rules banning off-duty conduct that might harm the employer (as opposed to a rule banning insubordinate or disruptive conduct at work, which is a permitted Category One rule, or a rule specifically banning participation in outside organizations, which is an unlawful Category Three rule); and
  • Rules against making false or inaccurate statements (as opposed to lawful rules against making defamatory statements).

Category 3 Rules: The Board has found that rules in this category are generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule. The examples provided in the Guidance Memorandum of the types of rules that fall into this category include:

  • Confidentiality rules specifically regarding wages, benefits, or working conditions (such as a rule prohibiting employees from disclosing salaries and contents of employment contracts); and
  • Rules against joining outside organizations or voting on matters concerning the employer.

The Memorandum also advises the regional NLRB offices that they should no longer find unlawful any rule that could be interpreted as covering Section 7 activity and should now focus on whether the rule in question would actually be interpreted to cover Section 7 activity. The Memorandum instructs regional offices that “ambiguities in rules are no longer interpreted against the drafter, and generalized provisions should not be interpreted as banning all activity that could conceivably be included.”

Takeaways

The Board has moved significantly in the direction of limiting its influence over employer handbook policies. Whether a particular employer rule is lawful, however, may rest on subtle differences in policy language. Moreover, the Guidance Memorandum does not provide an exhaustive list of all lawful and unlawful handbook policies. For assistance in ensuring that your handbook rules do not impinge on employee rights to engage in concerted activity, we recommend consulting with labor and employment counsel.

Leigh McMonigle

 

New Jersey Minimum Wage to Increase to $15.00 by 2024

Q: I have employees who work in New Jersey.  What do I need to know about the minimum wage increase?

A: New Jersey recently passed a law that will raise the minimum wage by increments over the next five years.  The minimum wage, which currently is $8.85 per hour, will increase to $10.00 per hour on July 1, 2019.  It will rise to $11.00 per hour on January 1, 2020, and will increase by one dollar each subsequent year until January 1, 2024, when it will land at $15.00.  Future minimum wage increases after 2024 will be tied to inflation.

In enacting this law, New Jersey joins California, New York, Massachusetts and the District of Columbia on the list of states that have enacted legislation to implement a $15 minimum wage. Including New Jersey, nineteen states have or will increase their minimum wage in 2019.  A bill recently introduced in the House of Representatives would raise the national minimum wage to $15, far higher than the current federal hourly rate of $7.25.

While there are no exemptions for teen workers, under the New Jersey law, employees of small employers (defined as those companies who employ five or fewer employees) and seasonal employees are subject to a different minimum wage increase schedule. For these employees, the current minimum wage will increase to $10.30 on January 1, 2020, and then by $0.80 on January 1 of each subsequent year, up to $15.00 per hour on January 1, 2026.

Seasonal employment is defined as employment by an employer: (1) who exclusively provides services in a continuous period of not more than 10 weeks during June, July, August, or September; (2) for whom 2/3 or more of the employer’s gross receipts for the immediately preceding calendar year were received in a continuous period of less than 16 weeks; or (3) for which at least 75% of the wages paid by the employer during the immediately preceding year were paid for work performed during a single calendar quarter. Seasonal employment also includes employment by a non-profit or government entity during the period of May 1 to September 30 (so long as the employee is not employed by the employer outside of the period).

To prepare for the law, employers should ensure their annual budgets account for the increases, and that payroll personnel are prepared to implement them.

Jessica Rothenberg

Another Reset of NLRB’s Independent Contractor Test

Q.  What is the current standard for determining whether an individual is an employee or independent contractor for purposes of the NLRA?

A.   On Jan. 25, 2019, the Republican-led National Labor Relations Board affirmed the acting regional director’s decision that drivers of a shared airport ride service were independent contractors, not employees, and therefore not covered by the National Labor Relations Act.

The decision, which reverts back to the common law test for determining independent contractor status, will have a wide-ranging impact on other gig economy companies.

To read the full article, click here.

-Tracey E. Diamond and Susan K. Lessack