Eight of Nine Justices Agree: Religious Discrimination Claim against Abercrombie Lives On

In an almost unanimous decision, the United States Supreme Court issued an opinion yesterday allowing the former 17 year-old Abercrombie & Fitch applicant who attend her interview wearing a hijab to continue her religious discrimination claim against the company.

Samantha Elauf, the job-seeker and hijab-wearer, applied for a sales an Abercrombie & Fitch store in 2008. While she nailed the interview, Abercrombie refused to hire Elauf because she wore a hijab. According to Abercrombie & Fitch at the time, Elauf’s religious headscarf did not meet the “look policy,” which bans hats, required to work as a sales person at the company.

Elauf did not take this rejection letter sitting down. With the help of the U.S. Equal Employment Opportunity Commission, Elauf sued the retailer for religious discrimination. Title VII of the Civil Rights Act of 1964, among other matters, prohibits employers from refusing to hire an applicant because of that applicant’s religious beliefs. Title VII also requires employers to reasonably accommodate employees’ religious beliefs.

So what possible defense could Abercrombie offer at this point, keeping in mind that scantily dressed models do not provide a legal defense to religious discrimination?

Answer: knowledge. Or, more accurately, lack thereof.

Abercrombie argued that it could not have known to make a religious accommodation to its “look policy” because Elauf never requested one. Eight of the nine judges did not buy this argument, finding that the only relevant question was whether Elauf’s headscarf was a “motivating factor” in Abercrombie’s decision not to hire the applicant.

Writing for the majority, Justice Antonin Scalia stated that “[m]otive and knowledge are separate concepts.” Justice Scalia further wrote that “an employer who acts with the motive of avoiding accommodation may violate [the law] even if he has no more than an unsubstantiated suspicion that accommodation would be needed.”

Fellow member of the conservative group of the Supremes (a.k.a. the Supreme Court justices), Justice Samuel Alito posed a question during the February 2015 oral arguments that made Abercrombie’s “lack of knowledge” defense sound like a joke.

“So the first is a Sikh man wearing a turban. The second is a Hasidic man wearing a hat. The third is a Muslim woman wearing a niqab. The fourth is a Catholic nun in a habit. Now, do you think…that those people have to say, ‘We just want to tell you, we’re dressed this way for a religious reason. We’re not just trying to make a fashion statement’?” Justice Alito asked.

The bottom line for business owners is this: “the applicant did not ask for a religious accommodation” is not necessarily a defense to a religious discrimination case. The Supreme Court appears to be sending a message that, when it is obvious that an applicant may request a religious accommodation, the employer cannot refuse to hire an applicant because of that potential accommodation, then avoid liability because of a technicality.

The Hobby Lobby Decision: What does it really say?

Besides the United States’ unexpected, and truly awesome, performance in the World Cup, the topic that has attracted the most attention and commentary this week is the already infamous US Supreme Court Hobby Lobby decision.

Unfortunately, much of the information being disseminated does not accurately report what actually happened in the case or what the Supreme Court actually decided.

So what does the Hobby Lobby decision really say?

Let me break it down for you.

The laws at play:

The Religious Freedom Restoration Act of 1993 (the “RFRA”) prohibits the government from substantially burdening an individual’s exercise of religion, even if the burden arises from a general rule (as opposed to a rule specifically targeting religion or the exercise of religious beliefs). As of 2000, when it was amended by the Religious Land Use and Institutionalized Persons Act of 2000, the RFRA also includes “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.”

The lawsuit:

The owners of three (3) closely held, for-profit corporations sued the federal Department of Health and Human Services (among other agencies).

The lawsuits claimed that the requirement under the Patent Protection and Affordable Care Act of 2010 (the “ACA”) that a corporation must provide employees access to contraceptives designed to prevent the development of an already fertilized egg violates the sincerely held religious belief of the owners (not of the corporation) that life begins at conception. Thus, the owners argued, this portion of the ACA violates their rights under the RFRA and the Free Exercise Clause.

Points to know:

  • The Decision Only Applies to Contraceptives that Prevent an Already Fertilized Egg from Further Development.

The ACA generally requires non-exempt employers to provide twenty (20) separate types of contraceptives approved by the federal Food and Drug Administration. Only four (4) of the twenty (20) contraceptives are designed to prevent an egg that has already been fertilized from attaching to the uterus wall and developing further (i.e., the “morning after pill” and IUDs).

The three (3) lawsuits only objected to those four (4) contraceptives designed to prevent a previously fertilized egg from further development.

The Hobby Lobby decision does not affect the remaining sixteen (16) contraceptives designed to prevent the fertilization of an egg. The Supreme Court’s decision thus does not prevent Hobby Lobby employees from access to those forms of contraceptives, nor does it release Hobby Lobby (and other qualifying corporations) from the responsibility to provide insurance coverage for those remaining sixteen (16) contraceptives.

  •  The Decision Only Applies to For-Profit, Closely Held Corporations.

The Hobby Lobby decision does not exempt all employers from the contraceptive requirements of the ACA; rather, it only applies to closely held corporations. Generally, a “closely held corporation” is one owned by a small number of individuals. The Internal Revenue Service defines “closely held corporation” as a corporation where (i) five (5) or fewer people own more than fifty percent (50%) of the company’s outstanding stock at any time during the last half of the tax year, and (ii) the company is not a personal service corporation. Thus, the employees of publicly traded companies (like Coca-Cola) are not affected by the Hobby Lobby decision.

The Future of Hobby Lobby

The Supreme Court’s majority opinion in Hobby Lobby clearly limits the scope of its decision to closely held, for-profit corporations. Justice Ginsberg’s dissent, however, hints at a potential broader application of the Hobby Lobby decision by identifying other cases from courts across the nation where “commercial enterprises [have sought] exemptions from generally applicable laws on the basis of their religious beliefs.”

Justice Ginsberg questions whether this particular decision will also apply to other religious-based objections to the ACA’s requirements, such as blood transfusions, antidepressants, medications derived from pigs (such as anesthesia, intravenous fluids, or pills coated with gelatin), and vaccinations.

Of course, it is impossible to predict exactly how the Hobby Lobby decision will be applied by state legislatures and courts, or whether publicly traded companies will challenge the ACA under the same arguments as the three (3) closely held corporations. A savvy business owner, however, will remain cognizant of any new developments stemming from the Hobby Lobby decision or other objections to the ACA.

If you are ever in any doubt about how a state or federal law or recent court decision may impact your business, speak to a business attorney at Briskin, Cross & Sanford.  Our business is to know.

The Fair Labor Standards Act: A Primer

The Fair Labor Standards Act (FLSA) is a federal law that governs minimum wage and overtime, record keeping, and youth employment laws.

Since July, 2009, the federal minimum wage for “covered,” “non-exempt” workers has been $7.25 per hour.  In addition, unless they are “exempt employees,” workers covered by the Act must receive overtime pay equal to at least time-and-a-half for hours worked in excess of 40 in a workweek.  Kids younger than 14 can only usually be employed by their parents, as actors or performers, as casual babysitters, or delivering newspapers.  Older kids have fewer restrictions, but are still usually restricted as to hours and prevented from working in certain hazardous occupations.  Employers of non-exempt workers are generally required to keep accurate (though not particularly extensive) records containing identifying information about the employee and data about the hours worked and the wages earned.

Sound simple?

If only it were.

Let’s start with a short quiz.

  • How many employees does a company have to have before it is required to offer health care under the Affordable Care Act?

If you said 50, you would be correct, for the time being anyway.

  • How many employees do you have to have to be liable for Title VII discrimination based on race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information?

Are you up on your anti-discrimination law?  If you said at least 15, you are probably right (though the Immigration Reform and Control Act of 1986 (IRCA) prohibits discrimination on the basis of national origin by smaller employers with 4 to 14 employees).

Ok, let’s get back to the FLSA.

  • How many employees do you have to have to be subject to the minimum wage and overtime, recordkeeping, and youth employment laws of the FLSA?

50?  No.

15?  No again.

Well, it’s a trick question, really.  The answer is that it really doesn’t matter how many employees you have.  All you have to be to be subject to the FLSA is to be engaged in a “covered enterprise.”

  • So, what’s a covered enterprise?

One that has at least 500,000k in annual revenue; OR one that runs a hospital, old-age home, home caring for the sick or mentally ill or a school; OR one that carries out the work of a public agency.

At this point you may be asking yourself why, under this definition of a covered enterprise, are minimum wage and the rest of the FLSA requirements are such a big deal?

Oh, yes… even if your business is not a “covered enterprise,” your employees will be likely still subject to the FLSA if they are (1) engaged in interstate commerce or in the production of goods for interstate commerce, or in any closely-related process or occupation directly essential to such production; (2) if they work in communications or transportation; regularly use the mails, telephones, or telegraph for interstate communication, or keep records of interstate transactions; handle, ship, or receive goods moving in interstate commerce; regularly cross State lines in the course of employment; or work for independent employers who contract to do clerical, custodial, maintenance, or other work for firms engaged in interstate commerce or in the production of goods for interstate commerce.

As you probably suspected, if that’s not quite everyone, it’s certainly a fairly large segment of the 155,613,000 or so members of the US workforce.

Of course there are a few wrinkles.

You may have heard that salaried employees are exempt from the FLSA, but just because an employee is paid a salary, this does not necessarily mean the employee is automatically exempt from the requirement to pay overtime, otherwise employers could simply pay all hourly employees an equivalent weekly salary and get around the law.

In fact, exemption from the wage and hour laws is only gained under one of these specific exemptions, each of which requires a salary of at least $455 per week :

  • Executive Exemption (requires that the employee be engaged primarily in managing the business or a business subdivision, directing at least two full-time employees and have authority to hire and fire or at least recommend hiring and firing).
  • Administrative Exemption  (requires that the employee be engaged in the performance of office or nonmanual work directly related to the business and the performance of tasks that include discretion and independent judgment in matters of significance).
  • Professional Exemption  (requires that the employee be required to use advanced knowledge,intellectual in character, requiring the consistent exercise of discretion and judgment–sometimes called the “learned professions” exemption).
  • Creative Professional Exemption  (requires that the employee be engaged in work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor).
  • Computer Employee Exemption  (requires that the employee be a computer systems analyst, computer programmer, software engineer or other similarly skilled worker making the equivalent of at least $27.63 an hour).
  • Outside Sales Exemption  (requires that the employee engaged in sales away from the employer’s place of business).
  • Highly Compensated Employees. (requires that the employee performs at least one other duty of an exempt employee).

So what sorts of jobs are typically non-exempt?

  • Blue collar workers, NO MATTER HOW HIGHLY PAID, in production, maintenance, construction and similar positions, trades such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers.
  • Public Safety, police, fire, first responders, paramedics, prison officers, park rangers, EMTs, ambulance personnel, hazmat workers, parole officers, probation officers… all regardless of rank or pay.

Other frequently asked questions:

What is Georgia’s minimum wage?

  • $5.15/hour.  In fact, only Minnesota, Arkansas, Georgia and Wyoming have minimums below the federal level at the moment.

If the Federal minimum wage is $7.25/hour, does it really matter if Georgia’s minimum is $5.15/hour?

  • Generall, no.  Federal law will trump state law in most if not all cases.

What about wait staff and bar tenders?  Do they have to earn minimum wage?  Are there any other exceptions?

  • The Georgia minimum wage for tipped employees is $2.13 per hour, the same as the federal minimum wage for tipped employees. The Georgia tipped wage applies to employees like waitresses, waiters, bartenders, valets, and other service employees who earn more than $30 in tips a month, BUT they must still earn at least minimum wage for the number of hours worked.
  • “Youth Minimum Wage Program” allows Kids under 20 to be paid a special minimum wage of $4.25 per hour for the first 90 days of employment with any employer. After the first 90 days have passed (or when the employee turns 20, whichever comes first) the employee must be given a raise to the full minimum wage.
  • There are certain exceptions for which employers have to obtain special certificates from the DOL (e.g., full time student program, student learner program, certain employees with disabilities).
  • Certain nonprofits apply for permission to hire at 85% of minimum wage.
  • There is also a range of special exceptions to minimum wage, overtime, and child labor laws that relate to specific jobs or professions, some of which are exempt from some parts of the law but not other parts, e.g., Airline employees (exempt from overtime requirements); Amusement/recreational employees in national parks/forests/Wildlife Refuge System (overtime); Babysitters on a casual basis (exempt from minimum wage and overtime requirements if employed on a casual basis); companions for the elderly; certain domestic employees who live-in; firefighters working in small (less than 5 firefighters) public fire departments; local delivery drivers and driver’s helpers; motion picture theater employees; newspaper delivery (minimum wage, overtime, and child labor laws); youth employed by their parents; and a range of others.

It is also important to note that minimum wage, overtime, and child labor laws apply equally to documented and undocumented workers alike.  Not only this, but the FLSA has specific record keeping requirements that are often violated by businesses who fail to keep proper records regarding undocumented workers, subjecting the business to greater penalties for violation when they are caught.

Penalties under the FLSA may include payment of all back wages or unpaid overtime, plus an equal amount as liquidated damages, plus, frequently, attorneys’ fees and court costs.  If the secretary of labor brings suit, willful violators can be assessed a fine of up to $10,000 plus imprisonment.  Additionally, employers who violate child labor provisions can be fined $11,000 per employee, increased to $50,000 per employee for death or serious injury, and doubled when violations are willful or repeated.  Moreover, not only the company itself, but owners, officers, even supervisors can be held personally responsible. 

The bottom line is that the FLSA applies to almost everyone, its complexity means that it is frequently misunderstood, and, unlike most federal laws governing employment relationships, it applies to both large and small businesses.

If you are in any doubt as to whether or not you, as an employer, are in compliance with the FLSA (which, it has to be said, involves far more than this brief summary could possibly suggest), speak to an employment lawyer at Briskin, Cross & Sanford, LLC.

Unemployment benefits and domestic violence victims: an unlikely duo

Pay attention, Georgia employers. In an unexpected turn of events, the Georgia Court of Appeals in Scott vs. Butler, et. al. (June 4, 2014) recently decided that Georgia employees who are also domestic violence victims may receive unemployment benefits if the employee quits because the attacker contacts or seeks the employee at work.

This is true even if the employer did not create or contribute to the dangers affecting the employee.

Employees in Georgia are generally denied unemployment compensation if the employee, without good cause, voluntarily quits or leaves employment. Georgia law does allow unemployment benefits when the former employee becomes unemployed through no fault of their own.

This new basis for unemployment benefits started with a claim filed by Latresha Scott against Variety Stores, Inc. Ms. Scott had a violent history with her ex-boyfriend, who had been arrested on multiple occasions for physically attacking Ms. Scott (including kicking her in the stomach during her pregnancy) and even attempting to strangle Ms. Scott with a belt shortly after she delivered their younger child.

Despite myriad restraining orders, the ex-boyfriend found Ms. Scott’s place of employment with Variety Stores, Inc. and began contacting her there. Ms. Scott ultimately resigned from Variety Stores, Inc. because she did not feel safe coming to work, and filed for unemployment compensation.

Scott’s employer opposed the claim, citing the fact that Scott had resigned voluntarily from her position at no fault of the employer.  A hearing officer found in favor of the employer and denied Scott’s application, ruling that, while Scott “may have considered the work environment to have been difficult,” she had “the burden to do whatever a reasonable person would do to retain her employment.”  Hence, since her resignation was based upon “personal reasons” and not a good, work-connected cause, she was not entitled to unemployment compensation.  The Board affirmed the ruling, and the Superior Court of Fulton County subsequently affirmed the Board’s decision.

The Georgia Court of Appeals, however, reversed the Board’s finding on the basis that, even though the employer did not create or contribute to the dangers Scott faced, to deny someone benefits in such circumstances as Scott’s would effectively be to force her to work in a dangerous environment and would place her and others at risk of violence due to circumstances that beyond their control.

The bottom line for employers is this: if a domestic violence victim quits because her or his attacker seeks out the victim at work, the employer will most likely be on the hook for unemployment benefits.

If you are ever in doubt as to whether or not you are liable for unemployment benefits when one of your employees leaves, take the time to speak with an employment lawyer at Briskin, Cross & Sanford to see what both your rights and your obligations may be under this ever changing area of law.

DSM-5: What it Means and Why Employers Need to Pay Attention

The American Psychiatric Association published a new edition of the Diagnostic and Statistical Manual of Mental Disorders (aka “DSM-5”) in May 2013, which serves as guidelines to diagnose mental disorders.

The 2013 DSM-5 identifies a myriad of new mental diagnoses, including binge eating, premenstrual dysphoric disorder, and “mild neurocognitive disorder,” which rather vaguely refers to a person who may struggle a bit to learn, remain attentive, or remember things, but does not have any other mental disorder and is able to live without assistance.

So how does DSM-5 affect businesses and, more specifically, employers?  Right now, it does not. But it may soon.

The Americans with Disabilities Act and the ADA Amendments Act prevent employers from discriminating against employees because of the employee’s disability and require the employer to reasonably accommodate an employee’s disability. While DSM-5 does not directly affect the laws that comprise the ADA, it is anticipated that courts will use the expansive diagnoses identified in DSM-5 to broaden the definition of “disability” under the ADA and the ADA Amendments Act, although it will probably take several cases before it is clear how DSM-5 will affect the ADA and the ADA Amendments Act. The inevitable result will most likely be be an increase in lawsuits because of an employer’s failure to accommodate an employee’s disability.

Practically, this means that employers need to make sure that they have written guidelines and policies identifying how to apply for and accommodate employee’s requests for accommodation. Employers also need to make sure the employees handling the applications and accommodations and properly trained on how to do so.

For more information about the DSM-5 and its diagnoses, you can read the Diagnostic and Statistical Manual of Mental Disorders yourself at http://www.dsm5.org.  For assistance in protecting your business and ensuring that your employment policies comply with the law, talk to an employment lawyer at Briskin, Cross and Sanford.

Memorandum Raises Price Tag for Exempt Employees

The Fair Labor Standards Act (“FLSA”) is the federal statute that requires all employees receive minimum wage for each hour worked and requires all non-exempt employees to receive overtime pay of time-and-a-half for each hour worked per week over 40 hours.

One type of employees – known as exempt employees – are not entitled to overtime pay under the FLSA if certain requirements are met. Arguably the most commonly used exemption by employers is for executive, administrative, or professional employees.

This executive, administrative, or professional exemption includes several complicated requirements that must be satisfied in order for an employee to legally be exempt from overtime under the FLSA. The single, straightforward requirement until now was that the employee must receive a salary of at least $455/week to qualify for this exemption.

Last Thursday, however, President Obama signed a memorandum requiring the Secretary of Labor to increase the salary requirement for the executive, administrative, or professional exemption. This salary requirement of $455/week was established in 2004. Adjusting for inflation, $455/week in 2004 is actually worth $553/week today.

Although the federal rule was originally designed to limit overtime for highly paid employees, the failure to raise the salary requirement for the last ten years means that it now covers workers earning as little as $23,000 a year.  As the President noted in a White House signing ceremony on March 13, 2014, “It doesn’t make sense that in some cases this rule actually makes it possible for salaried workers to be paid less than the minimum wage…. If you’re working hard, you’re barely making ends meet, you should be paid overtime. Period.” US Dept of Labor Newsletter, March 13, 2014.

As with all stories, there are two sides to President Obama’s memo. Businesses are crying out that raising the salary requirement also raises the cost of business and reduces the incentive for businesses to hire new employees. Supporters of the raise in salary counter by arguing that the raise will give the employees more money to spend, thus stimulating the economy.

Failure to meet the minimum salary requirement of the executive, administrative, or professional exemption means that the non-exempt employee is entitled to overtime pay. Failure to pay overtime to a non-exempt employee could result in damages against the business, as well as its individual owner, in triple the amount of unpaid overtime, plus the employee’s attorneys’ fees.

Savvy business owners will keep a close eye on Secretary of Labor Tom Perez in the coming months and may expect enforcement action as the Department of Labor seeks to make examples of businesses not complying with the updated rule.  If you are in any doubt about your obligations under the FLSA, or any other employment law, the employment lawyers at Briskin, Cross & Sanford will be happy to speak with you.

Behind closed doors: good intentions or good old boys’ club?

The story goes that the Texas law firm of Scheef & Stone at one point enforced a policy that prohibited males and females from being alone together both in the workplace and outside the workplace.

While it is certainly conceivable that such a policy might have represented the firm’s (albeit misguided) attempt to avoid situations where sexual harassment might arise, according to the complaint filed against the firm by one of its female partners, the unwanted effect of this policy was actually to build a segregated workplace that harmed the firm’s female employees rather than protected them.

The complaint filed against Scheef & Stone alleges that this policy effectively created a workplace culture where male attorneys worked, and even socialized, primarily if not exclusively, with other male attorneys, shutting out female lawyers and hindering their ability to develop professional relationships within the firm.  The result, it was alleged, was greater opportunity for male rather than female attorneys and ultimately lower pay for the the women lawyers in the firm.  Scheef & Stone denied the allegations, including implementing a “closed doors” policy, claiming that the plaintiff simply disagreed with the firm’s business decisions, which it said were not based on gender.

While Georgia employers with similar (formal or informal) policies may think that they can breathe a small sigh of relief in that the complaint against Scheef & Stone was filed under the Texas Commission on Human Rights Act and not a state or federal law available to Georgia plaintiffs, the issues raised by the case are certainly relevant to business in all states, including Georgia. Any employer with fifteen (15) or more employees is subject to Title VII of the Civil Rights Act of 1964, which prohibits any form of discrimination based on an employee’s sex, and it is hardly a stretch of the imagination to see the potential of a Title VII lawsuit arising out of a policy similar to the one allegedly used by Scheef & Stone.

The bottom line is that any policy–from an official firm rule to an informal management policy–that seeks to treat one employee differently from another because of her or his race, sex, age, religion, national origin, or disability, even those policies that a company or manager may allegedly seek to put in place for the protection of the employee, should be examined very carefully with an employment lawyer, as there is a good chance that such actions will not only be perceived differently by the employee receiving the “protection,” but they may well also be illegal under a range of state and federal employment laws.  The employment lawyers at Briskin, Cross & Sanford are always happy to discuss your employment practices and help you develop policies and procedures that comply with both state and federal law.