Virginia Set to Legalize Recreational Marijuana

By: Jarrad Wright

Virginia is on the verge of making history and becoming the first state in the South to legalize and regulate recreational marijuana.  Last year the General Assembly decriminalized marijuana by eliminating criminal sentences and replacing them with small fines.  Now, on February 2, 2021, the House, in an 55-42 vote, passed HB2312 which sets forth a regulatory framework for legal sales of recreational marijuana.  A few hours later, the State Senate bill later that day passed SB1406 in a 23-15 vote.

The two bills are similar in that they set forth a regulatory authority to handle the taxing and sale of recreational marijuana, but there are differences between the two bills that will require reconciliation between the two chambers.  For example, the Senate version allows local governments to opt-out of sales and requires another vote by the General Assembly to finalize the regulatory process.  Accordingly, the reconciliation process between the competing bills is ongoing, and Governor Northam has indicated that he will likely sign the final bill into law.

Although the form of the regulatory scheme for marijuana sales is becoming in focus, Virginia employers have many unanswered questions.  For example, both bills restrict the ability for anyone to obtain criminal records related to marijuana checks and this will impact background checks run by employers in the hiring process.

Another important question is whether employers can maintain their current drug testing policies and, relatedly, whether employers will be able to fire employees for positive marijuana tests.  The current House and Senate bills do not address these issues directly.  Under current law employers can maintain drug testing policies for marijuana, and current Virginia law generally allows employers latitude in setting policies that allow them to test and to fire employees for legal drug use outside of working hours.  The only statutory exception is that public employers are prohibited from firing employees for tobacco use outside of work hours.  The current bills in the General Assembly does not change this general framework, and unless the General Assembly addresses these issues during the reconciliation process, presumably Virginia employers will still be allowed to have policies for drug testing and policies allowing them to fire employees for positive marijuana tests.

However, the law is developing quickly, and there is a distinct possibility that the General Assembly addresses these issues in reconciliation or in upcoming bills.  Moreover, if not addressed by the General Assembly this issue is likely to be litigated as it has been in other states such as Colorado.  In that state, courts recognized employers’ rights to maintain drug testing.  As time goes on and because the General Assembly is setting forth a public policy to decriminalize and to raise tax revenue for pre-kindergarden through marijuana sales, a court in theory could hold the opposite view.

Ultimately, Virginia’s law concerning marijuana usage is rapidly changing and employers need to be aware that there are likely to be many changes in the upcoming year. While the General Assembly is working on the current legislation, elections will occur in November, and the scope and breadth of the changes are likely to impact some races in the state.  Moreover, just as other states have had to make adjustments as they have legalized and regulated marijuana, Virginia is likely to make adjustments for the foreseeable future to address unforeseen issues.  Virginia employers, especially those working with federal contracts or those with offices in multiple states, should continue to monitor the changing regulatory environment to make sure their policies stay compliant.

Virginia Law Targets Worker Misclassification

By: Jayna Genti, DiMuroGinsberg P.C.

Companies misclassifying their employees as independent continues to be a hot-button issue throughout the country, and Virginia is no exception. In the last year alone, legislation related to independent contractor misclassification was introduced at the federal level and in at least 20 states. New Jersey and California recently enacted employee misclassification laws, and other states including New York are considering similar legislation.

Virginia Acts to Prevent Misclassification

In 2019, Virginia Governor Northam issued an executive order calling for an inter-agency task force to make recommendations on how to address the issue.  The study results issued last November found that about 214,000 Virginia workers are misclassified as contractors, costing the Commonwealth some $28 million in tax revenues each year.

In response to the task force’s recommendations, the Virginia General Assembly passed legislation this term that seeks to prevent misclassification and to penalize those employers who misclassify their workers.  Governor Northam recently signed the legislation into law, which will take effect January 1, 2021.

Classification of Employees

Under the new law, the Virginia Department of Taxation will determine whether a worker is an employee or independent contractor by applying Internal Revenue Service guidelines.  The IRS guidelines involve a multi-factor analysis, with the most important being the level of control exercised by a company.  In making the requisite assessment, the presumption will be that a worker who performs a service for an employer for pay will be considered an employee unless the individual or his or her employer demonstrates that she is an independent contractor.

Penalties and Enforcement

The new Virginia misclassification law has some real teeth.  Businesses that improperly treat their employees as independent contractors will be subject to a fine of up to $1,000 per worker for a first offense.  Maximum fines will increase to $2,500 per misclassified individual for a second offense, and up to $5,000 per misclassified individual for a third or subsequent offense.

The new legislation also prohibits the awarding of public contracts to employers that misclassify workers.  Debarment will last for up to one year for a second offense and up to two years for a third offense.  The legislation further requires the Virginia Department of Taxation to share information to help with enforcement.

Further Efforts to Halt Misclassification

The new Virginia law imposing penalties for employee misclassification will not be the end of the story.  Further efforts are likely to be forthcoming to crack down on employers who misclassify their workers, and deny tax revenues to both states and the federal government.  The impetus for the Commonwealth to move quickly against employee misclassification has arisen as a result of the recent federal legislation extending unemployment insurance to gig workers and other independent contractors who do not traditionally receive unemployment when they cannot work.  Unemployment benefits are funded by specific payroll taxes on employee pay.  Companies, however, do not pay unemployment insurance for independent contractors, even though they will now be able to receive unemployment benefits courtesy of the federal government.

Thus, we can expect heightened scrutiny on companies that misclassify employees as independent contractors and, thereby, evade their obligation to pay unemployment taxes.  As it stands, misclassification already has reportedly denied the Commonwealth substantial revenue, and this concern will only be heightened by the current COVID-19 pandemic and the stay-at-home orders shuttering many businesses.

Bottom Line

Going forward, you can expect greater attention by Virginia enforcement and investigative agencies to claims of worker misclassification.  Those agencies are on high alert for violations of the law and undoubtedly will use the full spectrum of available enforcement mechanisms to crack down and penalize those employers that evade the law.  The stakes of losing at the agency level are high and can lead to fines, legal expenditures, and litigation.

Given the continuing evolution of these and other related employment law matters, you are well advised to undertake a thorough assessment of the appropriateness and defensibility of classifying any members of your workforce as independent contractors.  Such an evaluation should be undertaken under the direction of an employment law attorney who is well versed in these matters and can review your policies and present workforce classifications to ensure legal compliance.  Misclassification no longer will result in simply a slap on the wrist.  Real penalties will now be imposed.

Virginia creates Office of Civil Rights to target discrimination

By: Billy B. Ruhling, II, DiMuroGinsberg P.C.

Virginia Attorney General (AG) Mark Herring has launched a new Office of Civil Rights to help protect residents from discrimination. The move is seen as a response to the cultural awakening the nation experienced in 2020 after high-profile police shootings and the recognition that once-common offensive behavior toward certain gender groups is no longer acceptable in the Old Dominion.

What’s changing

On January 5, 2021, Herring announced the existing Office of Human Rights would be restructured to create the new Office of Civil Rights. Along with the name change, the staffing will increase significantly, and the new office’s scope and reach will be more encompassing.

The Office of Civil Rights will be staffed by seven attorneys and six staff members, which is a dramatic uptick from the Office of Human Rights’ previous complement of just one lawyer and three staffers.

The change builds upon a series of bills passed in the Virginia General Assembly in 2020 authorizing the AG to investigate discrimination in local police departments and enhancing the agency’s ability to protect LGBTQ rights and root out gender-based discrimination.

As Herring explained when announcing the change, “The Office of Civil Rights will enhance our ability to protect Virginians from discrimination in housing, employment and public life, as well as allow us to tackle new responsibilities, like ‘pattern and practice’ investigations that can root out and end unconstitutional policing and enforcing protections against discrimination for LGBTQ Virginians.”

You can reach the new office at 804-786-2071 or by e-mail at CivilRights@oag.state.va.us.

Billy B. Ruhling, II, is an attorney at DiMuroGinsberg P.C. in Alexandria, Virginia, and can be reached at bruhling@dimuro.com.

Co-Worker’s Offensive Statements to Colleague May Not Give Rise to Hostile Work Environment Claim

By: Stacey Rose Harris

Nicole Bazemore is an African-American who worked at Best Buy.  One day at work, her white colleague, Anne Creel, held up a hazelnut and said that she used to refer to those kinds of nuts as “N[….]r T[…]s.”  Bazemore was deeply offended and reported Creel’s conduct to management.  After some time, Bazemore was told that the situation had been addressed, but she was not told specifically what action was taken.  Creel did not make these statements again, but she was also not fired.  Nevertheless, Bazemore was deeply humiliated by the incident and believed it should have been addressed more publicly and with more severity.  She sued Best Buy in federal court in Maryland, asserting a claim of hostile work environment under Title VII of the Civil Rights Act.

Best Buy moved to dismiss Bazemore’s claim, arguing that Creel’s conduct could not be imputed to it.  Specifically, to state a claim against an employer for hostile work environment, the plaintiff must allege four elements: (1) that she was subject to unwelcome conduct; (2) based on her race or sex; (3) that was severe enough to make her work environment hostile or abusive; and (4) which conduct is imputable to her employer.

The question of imputation was the subject of the court’s analysis.  This element was problematic for Bazemore because the statement was made by a co-worker, not a superior.  The law in the Fourth Circuit is that, to show imputation, a plaintiff must allege that the employer knew, or should have known, about the harassment and failed to take action reasonably calculated to stop it.  Bazemore had alleged that she informed Best Buy of Creel’s statement; that Best Buy had taken action (albeit not action as forceful as Bazemore would have liked), and that Creel’s conduct did not repeat.  Based on Bazemore’s own allegations, she failed to show that Best Buy knew or should have known of the conduct and failed to take reasonable actions to stop it.  When the wrongdoer is a superior, it is more difficult for the employer to overcome the burden of showing that it did not know of, or took reasonable actions, to stop the conduct.

Even if Best Buy’s corrective measures were not as strong as Bazemore would have liked, the Court noted that it does not “does not sit as a kind of super-personnel department weighing the prudence of employment decisions made by firms charged with employment discrimination . . ..” Rather, Bazemore’s allegations that Best Buy did address the situation, and that Creel’s conduct did not occur again, were sufficient to defeat Bazemore’s ability to satisfy the fourth element of her claim.

The take-away of this ruling for employers is to take immediate action in response to racially or sexually offensive remarks, and document those efforts, including follow-up.  These kinds of measures may be sufficient to defeat a claim of hostile work environment when the wrongdoer is a colleague, (not a superior) of the plaintiff.

4th Circuit upholds shortened limitations period in arbitration agreement

By: M. Jarrad Wright and Jonathan R. Mook, DiMuroGinsberg P.C.

Over the last several years, employers increasingly have been requiring employees to sign mandatory arbitration agreements as a condition of employment. The trend has been on the uptick because of concerns about the ever-increasing cost of litigation and the potential for runaway juries to award millions of dollars in damages. The U.S. 4th Circuit Court of Appeals (whose rulings apply to all Virginia employers) recently highlighted an additional benefit of arbitration. The court ruled an employment agreement’s requirement that any claim be made within one year was enforceable even though a number of employment-related claims the employee asserted had longer limitations periods.

Facts

Michael Bracy worked as a truck driver for Lancaster Foods LLC. When he was hired, he signed a mandatory arbitration agreement, which required any claim against the company to be filed within one year and heard by an arbitrator, not a jury.

After Bracy suffered an on-the-job injury, he and Lancaster disagreed about his work restrictions, and ultimately, the company viewed his position as a resignation. He sued the company in state court asserting various employment claims.

The case was moved to federal district court, and Lancaster sought to dismiss Bracy’s claims and compel arbitration based on the terms of the arbitration agreement he had signed. He opposed the company’s request, arguing the arbitration agreement was unconscionable and couldn’t be enforced because it shortened all applicable statutes of limitation to one year. The district court rejected his contention the arbitration agreement wasn’t enforceable and dismissed his suit.

4th Circuit’s decision

Bracy appealed the district court’s decision to the 4th Circuit, which is based in Richmond and whose decisions apply to federal courts not only in Virginia, but in West Virginia, North and South Carolina, and Maryland as well. On appeal, the court made short shrift of his argument that Lancaster’s arbitration agreement couldn’t be enforced because it shortened the statute of limitations for employment claims.

Relying on prior established 4th Circuit law, the court held that as “a general rule, statutory limitations periods may be shortened by agreement, so long as the limitations period is not unreasonably short,” and as long as the statute at issue doesn’t prohibit contractually shortened statutes of limitations.

The 4th Circuit also noted contractual limitation periods of one year or less have been found to be reasonable. Accordingly, the court affirmed the district court’s dismissal of Bracy’s lawsuit. Bracy v. Lancaster Foods, LLC, Case No. 19-1292.

Bottom line

The 4th Circuit’s decision serves to confirm the benefits of having your employees sign mandatory arbitration agreements as a condition of employment. The agreements must be properly tailored, however, to ensure they will pass court muster. Although the 4th Circuit in Bracy approved an arbitration agreement with a limitation period of one year, its reasoning makes clear a 30-day limitation for pursuing a claim, in all likelihood, would render the agreement unconscionable and unenforceable.

Where to draw the line on the statute of limitations as well as other provisions in an arbitration agreement are matters that should be determined based on consultation with experienced employment counsel. The last thing any employer wants is to require employees to sign mandatory agreements to arbitrate and, later, find out the agreements are unenforceable because of an unconscionable provision.

Jarrad Wright and Jonathan R. Mook are partners at DiMuroGinsberg P.C. in Alexandria, Virginia, and can be reached at mjwright@dimuro.com and jmook@dimuro.com.

Virginia Legislature to debate paid leave

By: Jayna Genti, DiMuroGinsberg P.C.

When the 2021 Virginia General Assembly reconvenes, the session will inevitably be colored by the ongoing COVID-19 pandemic. For starters, the House of Delegates plans to gavel in its regular session virtually, with the state Senate again planning to meet at the Virginia Science Museum to provide for greater social distancing. Significantly, lawmakers are set to resume debate over whether to require employers to offer paid sick and family medical leave.

Movement toward paid leave
About 1.2 million Virginians have no paid sick time or family leave, according to a November 2020 study by the Shift Project. To address the lack of paid leave, various members of the legislature for years have pushed to pass laws requiring most employers to provide the benefit. The members argue the legislation would help maintain the state’s competitive edge in attracting workers, as Maryland and 13 other states plus the District of Columbia have already enacted such protections for employees.

And, with the rise of the COVID-19 pandemic, the importance of paid leave legislation to both employees and the public health has never been clearer. According to Richmond and Henrico County Health Director Dr. Danny Avula, the spread of the coronavirus in the Commonwealth could have been drastically reduced if paid leave had been available to more workers. That’s because “the vast majority of our exposures and our outbreaks are happening in workplaces,” Avula said.

The situation is exacerbated by the fact that many people who lack paid sick leave earn low wages, such as grocery and fast-food workers. They don’t have the option to work remotely. “Many of them are the front-line jobs that keep this country running in the pandemic,” said Delegate Elizabeth R. Guzman of Prince William, who advocates for a paid leave mandate. “No one should have to choose between their health and a paycheck.”

“If the pandemic has taught us anything, it’s the importance of staying home when you’re sick,” said Kim Bobo, executive director of the Virginia Interfaith Center for Public Policy, which is part of a coalition called Virginians for Paid Sick Days that was formed to advance the issue.

Last year’s unsuccessful efforts
Nevertheless, actually enacting a paid leave law during the legislative session will be an uphill battle. In 2020, the Virginia House and Senate passed slightly different versions of a paid sick leave bill, but the legislation died in the Senate in March, just as the state was recording its first COVID-19 cases. A major sticking point was offering the benefit to part-time workers, many of whom don’t have the option to work remotely.

During an extra-long special legislative session that ran from summer to fall, a compromise effort to offer 10 days of paid leave if employees or their relatives contracted the coronavirus also failed. The failure occurred in part when members disagreed over what businesses to exempt: (1) employers with fewer than 25 employees under the bill backed by Governor Ralph Northam or (2) employers with fewer than six employees under Guzman’s bill. The measure advancing the furthest, from Senator Barbara A. Favola of Arlington, would have exempted employers with fewer than 15 employees.

This year’s push
In 2021, legislators are still working out their bills’ details. Favola plans to introduce a bill requiring only employers that already offer a sick leave program to allow employees to use up to five days of the benefit to care for an immediate family member who is ill. In its current form, the bill would exempt employers with fewer than 25 employees.

Guzman, who is running for lieutenant governor, plans to sponsor a much more robust measure that would apply to businesses with 26 or more employees. The legislation would require certain businesses to provide at least five paid sick days to full-time employees (part-time workers wouldn’t be covered). The paid sick leave envisioned by both bills could be used for not only the coronavirus but also any type of serious health condition.

Under Guzman’s proposal, the paid leave mandate would apply to at least eight categories of employees defined as “essential,” including those working in emergency services, food plants, child care, domestic work, education, health care, and home health care. The requirement also would cover employees of essential retail businesses, as defined by Governor Northam’s Executive Order dealing with the COVID-19 pandemic. The order encompasses staff at grocery stores, pharmacies, liquor stores, convenience stores, gas stations, banks, and pet stores, among other establishments.

“We’re really narrowing down the bill to essential workers because after speaking with a few senators, they said it’s something they could support,” Guzman said. “We would love to give it to the 1.2 million Virginians that don’t have access currently, but the reality is we don’t have the votes.” And, as a safety valve, Guzman’s bill also will include a provision allowing certain businesses experiencing serious financial hardship to be exempted from the mandate.

Outlook for legislation
The chances look good for legislation mandating some version of paid leave to pass the House of Delegates. Even in a narrowed form, however, any legislation likely will have a hard time in the Senate. Moreover, should an employer paid sick leave mandate make its way through both chambers, the legislation likely wouldn’t take effect until at least July 1, 2021.

Given the importance of the issue, we will continue to monitor the progress of the paid leave laws in this year’s Virginia legislative session. Stay tuned for further developments.

Jayna Genti is an attorney with DiMuroGinsburg PC in Alexandria, Virginia. She may be reached at jgenti@dimuro.com.

Trump’s Executive Order put on hold

By: M. Jarrad Wright, DiMuroGinsberg P.C.

Just before Christmas, outgoing President Donald Trump’s controversial Executive Order (EO) banning federal contractors and subcontractors from offering “workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating” hit a major roadblock. On December 22, 2020, California Federal District Court Judge Beth Labson Freeman granted a preliminary nationwide injunction prohibiting the EO from taking effect. The order was sought by a number of nonprofit community organizations and consultants serving the lesbian, gay, bisexual, and transgender community.

Injunction in place
In her order, Judge Freeman, an Obama appointee, found the groups seeking the injunction were likely to prevail at trial on their arguments that federal contractors’ free speech rights were being restricted. She acknowledged the government “has a legitimate interest in controlling the scope of diversity training in the federal workforce and can limit the expenditure of federal funds.” Nonetheless, she found the EO’s scope was overbroad because, as worded, it would prohibit contractors from using their own funds to train employees on matters that “potentially have nothing to do with the federal contract.”

While the nationwide injunction is in place, federal contractors are free to proceed in the normal course as long as the activity is covered by the court’s injunction. Although the Department of Justice has the right to appeal or seek modification of the order, it’s highly unlikely the appeal process could be completed before the presidential inauguration on January 20, 2021.

Spokespersons for the incoming Biden administration have already indicated the repeal of the diversity EO will occur early in his administration. Although President Trump hasn’t yet conceded, Congress has certified the election results, so Joe Biden will be sworn in as president on January 20, 2021.

Bottom line
As things now stand, it isn’t clear when repeal may occur. In the meantime, therefore, employers that have federal contracts or subcontracts should consult with experienced counsel and stay abreast of further significant legal developments in this area of the law.

Editor’s note: For an extended discussion of the EO and its implications, see M. Jarrad Wright’s article, “Trump’s Executive Order on diversity training creates new uncertainty for employers” in the December 2020 issue of Mid-Atlantic Employment Law Letter.

  1. Jarrad Wright is a partner at DiMuroGinsberg P.C. in Alexandria and can be reached atmjwright@dimuro.com.

Americans with Disabilities Act Recent Case Law Developments June, 2020

By: Jonathan R. Mook and Colete Fontenot
DiMuroGinsberg, PC

Title I – Employment Provisions

Is Plaintiff Actually Disabled Under ADA?
In order to have an actual disability cognizable under the Americans with Disabilities Act, an individual must be able to demonstrate that he or she has a physical or mental impairment that substantially limits a major life activity.  Merely having an impairment, even a permanent one, is not sufficient, as the Eleventh Circuit Court of Appeals explained in Lewis v. City of Union City, 934 F.3d 1169 (11th Cir. 2019)In that case, the court considered whether a police officer who had suffered a heart attack that left her with a permanent injury to her heart was disabled under the ADA.  The court concluded that she was not because the only limitation resulting from the officer’s heart impairment was a periodic shortness of breath.

Broad Construction of Disability
In passing the ADA Amendments Act in 2008, Congress sought to broaden the interpretation of the definition of disability and to increase the number of individuals protected by the statute.  Thus, in Morrissey v. Laurel Health Care Co., 943 F.3d 1032 (6th Cir. 2019), the Sixth Circuit Court of Appeals held that an employee had presented sufficient evidence to raise a fact question for the jury as to whether she was disabled under the amended ADA.  The employee suffered from a number of back impairments, and after working an eight to twelve-hour shift, she had difficulty walking, standing, lifting and bending and experienced pain constantly.  The employee testimony was supported by that of the employee’s daughter, who reaffirmed her mother’s limitations.  The Sixth Circuit said that because the ADA Amendments Act requires that coverage under the statute is to be construed broadly, the employee had presented sufficient evidence for her case to be heard by the jury.

Regarded as Disabled
Even if an individual does not come within the definition of having an actual disability under the ADA, the person still may be protected by the statute if the employer regards the person as disabled.  That was the case in Lewis v. City of Union City, 934 F.3d 1169 (11th Cir. 2019) in which the Eleventh Circuit Court of Appeals held that a police officer who had suffered a heart attack had raised a jury issue as to whether her employer had regarded her as disabled by placing her on leave without pay due to concerns about her heart condition.

Qualified Individual with a Disability
Not every person who has an ADA disability is entitled to the statute’s protections.  The individual must be a qualified individual with a disability, that is a person who, with or without reasonable accommodation, can perform the essential functions of the job.  What constitutes a job’s essential functions was the subject of the Fifth Circuit Court of Appeals’ decision in Clark v. Champion Nat’l Sec., 947 F.3d 275 (5th Cir. 2020).  The case involved a diabetic employee, who would fall asleep at his desk during the work day.  Since the employee’s job was to perform uniformed security services, the court held that the employee was not qualified because maintaining consciousness is a basic element of any job.

Retaliation
It is unlawful to retaliate against a disabled employee for seeking a reasonable accommodation.  That principle was reaffirmed by the Sixth Circuit in Morrissey v. Laurel Health Care Co., 943 F.3d 1032 (6th Cir. 2019), where a former employee claimed that her employer had targeted her to work a twelve-hour shift even though she had been medically restricted from doing so because the employee had requested a reasonable accommodation consistent with her medical restrictions.  The circuit court said that the employee’s requests for an accommodation constituted protected activity, and the employer’s refusal to adhere to the employee’s medical restrictions was retaliatory and unlawful.

Reasonable Accommodation
An employee need not use any magic words such as “ADA” or “reasonable accommodation” to trigger the ADA reasonable accommodation interactive process with the employer.  That principle was highlighted by the Eighth Circuit in Garrison v. Dolgencorp., 939 F.3d 937 (8th Cir. 2019), where the court held that an employee had made a sufficient request for a reasonable accommodation when the employee informed her employer that she suffered from depression and anxiety and made it clear that she was seeking a leave of absence due to her medical condition.

Title III – Public Accommodations and Commercial Facilities

What is a Disability Under Title III?
Learning disabilities are covered under Title III of the ADA.  That is the case even though an individual diagnosed with a learning disability is able to achieve academic success.  That was the situation in Ramsay v. Nat’l Bd. of Med. Examiners, 2019 U.S. Dist. LEXIS 222782 (E.D. Pa. Dec. 31, 2019)where the federal district court for the Eastern District of Pennsylvania held that a medical student who had been diagnosed with ADHD was disabled despite her prior academic successes and her performance on standardized tests.

Are Websites Covered by Title III?
In Thurston v. Midvale Corp., 2019 Cal. App. LEXIS 830 (Cal. App. Sept. 3, 2019), the California Court of Appeals ruled that Title III of the ADA applies to a restaurant’s website and that the restaurant was obligated to make its website compliant with the Web Content Accessibility Guidelines under both Title III of the ADA and California state law.

Service Animals

As an accommodation under Title III of the ADA, a public accommodation may need to alter a no dogs allowed policy to allow an individual with a disability to be accompanied by a service animal.  In Matheis v. CSL Plasma, Inc., 936 F.3d 171 (3rd Cir. 2019), the Third Circuit Court of Appeals held that it would be for a jury to determine whether a plasma donation center was obligated to alter its no animals policy to allow a patient who suffered from anxiety to be accompanied by her service animal.

Franchisor/Franchisee Liability
If a franchisee is sued for its failure to remove architectural barriers, can the franchisor be sued too?  In most cases the answer is no because the franchisor had no specific control over the franchisee’s accessibility to the disabled.  This was the outcome in Sullivan v. Doctor’s Assocs. LLC, 2020 U.S. Dist. LEXIS 11562 (S.D.N.Y. Jan. 17, 2020), where the federal district court for the Southern District of New York dismissed a franchisor as a defendant in a Title III lawsuit alleging that the franchisee had failed to remove architectural barriers.  In doing so, the district court reasoned that the plaintiff merely alleged that the franchisor exerted “general control” over the franchisee’s restaurant, but had failed to allege any facts to show that the franchisor specifically controlled the restaurant’s accessibility.

Mr. Mook is a nationally recognized practitioner in employment law and has written two treatises : Americans with Disabilities Act: Employee Rights and Employer Obligations and Americans with Disabilities Act: Public Accommodations and Commercial Facilities, both published by LexisNexis. He represents employers and businesses on matters relating to employment law, business torts and business disputes.

Mr. Mook frequently counsels employers on issues involving compliance with the ADA and accommodating disabled employees, as well as other employment related matters. Mr. Mook is a co-editor of the Mid-Atlantic Employment Law Letter and is a regular contributor to several legal publications, including Bender’s Labor & Employment Bulletin. He is included in Best Lawyers in America (2019 ed.) for employment law.

Mr. Mook is a member of the Virginia and District of Columbia Bars, and is a member of the Labor & Employment Law Section of the District of Columbia Bar and has been a member of the Alexandria Commission on Persons with Disabilities. He earned his Juris Doctor from Yale Law School.

If you’re found liable for age discrimination, it’s going to cost you

By: Jonathan R. Mook and Colete Fontenot
DiMuroGinsberg, PC

The Equal Employment Opportunity Commission (EEOC) recently scored a win for older workers when the U.S. Supreme Court declined to review the U.S. 4th Circuit Court of Appeals’ decision in EEOC v. Baltimore County. As a result, employers can look forward to paying back wages without exception as a remedy for age discrimination.

Origins of the case
The EEOC’s case began when two older Baltimore County employees filed an age discrimination charge in which they claimed they were paying a higher percentage of their salary to the county’s retirement plan than their younger coworkers paid. The plan was structured so that the amount contributed by employees rose with their age. Thus, employees who enrolled when they were 20 paid 4.42 percent of their wages, those who joined at 40 paid 5.57 percent, and those who enrolled at 50 paid 7.23 percent.

After an investigation, the EEOC determined the county’s retirement contribution structure violated the federal Age Discrimination in Employment Act (ADEA) because employees’ age was the “but-for” cause of differential treatment in their contribution amounts. The county disputed that determination, however, so the EEOC filed suit.

County found liable for discrimination
The Maryland federal district court sided with the EEOC and concluded that the county’s contribution formula discriminated against employees on the basis of their age. Unhappy with that result, the county appealed to the 4th Circuit, which is based in Richmond, Virginia, and whose decisions apply to employers in Maryland, North and South Carolina, Virginia, and West Virginia.

The 4th Circuit upheld the lower court’s finding that the county’s retirement contribution structure violated the ADEA. The court of appeals then sent the case back to the district court to calculate damages. In the renewed district court proceedings, the EEOC sought retroactive back pay based on the older employees’ higher contributions to the retirement plan.

What does this decision mean for you?
Mandatory back pay as a remedy for age discrimination can be quite substantial, which is a compelling reason to make sure all your managers are clearly aware of the liability that age discrimination presents. Here are a few steps you can take to avoid a large back-pay award being rendered against your organization:

  • Encourage employees to report anything they consider to be age discrimination at the time it happens, and move quickly to resolve any complaints that have merit.
  • Review your personnel policies to ensure there’s no “systemic” age discrimination written into your guidelines, benefits, or compensation.
  • Finally, be sure to talk with your older employees and let them know they are valued members of your organization and should tell you if they feel they aren’t being treated fairly.

The best way to avoid age discrimination claims or any other type of workplace discrimination is to work with your employees to resolve any problems they identify. That way, there’s no need for anyone to file an EEOC charge or pursue a discrimination claim against you in court.

Is back pay mandatory?
The district court refused to award back pay to the county employees. Because the language of the ADEA itself doesn’t require an award of back pay, the district court believed it had the discretion to determine whether to grant such an award, and it exercised its discretion to deny the request for back pay. The EEOC appealed the denial of back pay to the 4th Circuit, and this time, the court of appeals reversed the district court.

The appeals court reasoned that even though the ADEA doesn’t require back pay, it still had to be awarded because the Act’s remedies incorporate the terms of the Fair Labor Standards Act (FLSA). The FLSA provides that employers “shall be liable” for the payment of lost wages. Accordingly, the 4th Circuit said that upon a finding of age
discrimination, lost wages in the form of back pay are mandatory remedies under the ADEA. Because the U.S. Supreme Court declined to review the 4th Circuit’s decision, back-pay awards for violations of the ADEA are now mandatory, at least for employers within the 4th Circuit.

Virginia to ratify Equal Rights Amendment

By: Jonathan R. Mook and Colete Fontenot
DiMuroGinsberg, PC

When the Virginia General Assembly convened in January, ratification of the Equal Rights Amendment (ERA) to the U.S. Constitution was at the top of the agenda. As stated in Section 1, the ERA guarantees: “Equality of rights under the law shall not be denied or abridged by the United States or by any state on account of sex.” Section 2 provides the enforcement mechanism by which “Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.”

Since both the Virginia Senate and the House of Delegates now have a Democrat majority, there is little doubt the ERA will be ratified before the legislative session closes in March. At that point, Virginia will become not only the 38th state to ratify the ERA but also the final state to satisfy the required two-thirds majority needed to amend the U.S. Constitution.

Additional hurdles
Importantly, the General Assembly’s anticipated ratification of the ERA doesn’t necessarily mean we’ll have a new constitutional amendment this year. There are at least two key hurdles to overcome:

Deadline. When a super majority of Congress passed the ERA in 1972, the legislation included a seven-year deadline for two-thirds of the states to ratify the amendment. By 1977, however, only 35 of the necessary 38 states had endorsed ratification.

At that point, many observers thought the ERA was dead as a doornail. Yet, in 2017, 42 years after the last state ratified, Nevada became the 36th state to sign on to the amendment. In 2018, Illinois became teachers, nurses, support staff, and other jobs often held by women are just as valuable to an organization’s bottom line and should be paid in a comparable fashion to disproportionately male-held positions such as doctors, administrators, and other highly compensated professionals.

Bottom line
Section 3 of the ERA states: “This amendment shall take effect two years after the date of ratification.” The lead time will give you some breathing room to review your company’s policies and procedures to ensure all employees are treated equally. Your review should include not only employee pay but also nonmonetary benefits, perks, insurance, profit sharing, time off, disciplinary policies, and even peripheral issues like office size, dress code, and flexibility of hours worked.

As always, the best way to know how a new law affects your business is to consult with an experienced employment law attorney. It’s always a good idea to designate one person in your HR office to stay up to date on all changes affecting employment law, including the ERA. The individual also can be the point person to hear employee complaints if there is an incident of alleged discrimination. Have a workable procedure in place so you aren’t caught off guard and can handle all employee concerns or complaints in a prompt and thorough fashion.

Rescissions. The second obstacle arises because five states (Idaho, Kentucky, Nebraska, South Dakota, and Tennessee) that initially ratified the ERA have voted to rescind ratification. The issue of whether the rescissions have legal effect has yet to be determined.

Consequently, Virginia’s ratification of the ERA will not be the end of the story. Instead, ratification will likely spawn a host of lawsuits addressing those knotty constitutional issues, so stay tuned for further developments on the legal front.

What ERA means for you
What the ERA’s ratification means for employers not only in Virginia, but nationwide cannot be predicted with certainty. But, without question, an amendment to the U.S. Constitution guaranteeing women’s equal rights will be a watershed event with repercussions for years to come.

As a practical matter, regardless of whether the ERA actually makes it into the U.S. Constitution, the very vocal political movement supporting the amendment will certainly have an impact on a variety of efforts to ensure women’s equality, especially in the workplace. Proponents are focusing on the influence the amendment will have on pay equity legislation. That isn’t just about “equal pay for equal work” but also about pay differences between lower-paid jobs traditionally held by women versus jobs usually held by males, which have a higher pay level.

Consequently, we’re likely to hear more about ensuring the comparable worth of jobs traditionally performed by women versus male-dominated jobs. Thus, expect to see a public debate on whether the 37th. Even with Virginia bringing the number to 38, the question remains, “Is it too late?”