Management Update

Weeding Out: Discrimination Against State Employees in Louisiana

By: Kayla M. Jacob

Most state marijuana legislation either exempts employers from having to accommodate medical marijuana use or restricts employers from testing for marijuana and discriminating against medical marijuana users. Thus, in some jurisdictions, such as Alabama, Alaska, Colorado, Mississippi, and Washington, employees may be terminated for a positive drug test resulting from medical marijuana use while in other jurisdictions, such as Arkansas, Illinois, New Jersey, Rhode Island, and West Virginia, terminating an employee based on their status as a medical marijuana user alone is an unlawful employment practice.

Louisiana’s therapeutic marijuana legislation was originally silent as to whether employers could discriminate against medical marijuana users. Recently, however, the State legislature has partially cleared the air on cannabis discrimination in the workplace. Effective August 1, 2022, State employers are prohibited from taking adverse employment actions against an applicant or employee based solely on a positive drug test for marijuana when the applicant or employee has been clinically diagnosed as suffering from a debilitating medical condition and has been recommended marijuana for therapeutic use by a licensed physician pursuant to the State’s therapeutic marijuana statute. The anti-discrimination provision does not apply to an employee who uses or is impaired by marijuana at the workplace or during work hours. Moreover, employees that operate or maintain State vehicles or who supervise employees that operate or maintain State vehicles, emergency medical service personnel, law enforcement, public safety officials, and any State employee of the horse racing commission and firefighter services are not covered by the anti-discrimination provisions of Louisiana’s marijuana legislation.

Discrimination based on medical marijuana use in accordance with Louisiana’s therapeutic marijuana legislation may be an unlawful employment practice for State employers, but the law remains silent as to private employers in Louisiana and neither prohibits nor exempts discriminatory employment practices based on marijuana use in the private sector. But should private employers implement similar policies or weed out employment drug testing altogether? Tune in next month as we explore this topic in more detail.

NLRB—Employer Surveillance During Remote Work May Violate Employee Rights

By: Fred Preis, Rachael Jeanfreau, and Philip Giorlando

On October 31, 2022, the National Labor Relations Board’s General Counsel issued a memorandum suggesting that employer surveillance of employees, which have increased during this post-COVID remote work era, may violate the NLRA because it may interfere with employees’ right to participate in protected activity such as discussing changes in their terms and conditions of employment or advocating for union representation.

In response to the increase in remote work, employers across the country have started implementing electronic surveillance devices to monitor whether their employees are truly working while at home. Such surveillance tools include keyloggers, webcams, and audio recording devices. The NLRB’s memorandum compares these practices to older surveillance techniques already restricted by the NLRB. For example, the NLRA prohibits employers from taking photographs of employees picketing, striking or performing other protected activities because taking such pictures may result in intimidation and “chill” the exercise of employee rights under the Act.

The NLRB’s memorandum suggests that even if the surveillance is for facially neutral legitimate business reasons, this surveillance in response to remote work may violate the NLRA. The NLRB suggests a framework in which any employer surveillance is presumed to violate the NLRA if the surveillance would “tend to interfere with or prevent a reasonable employee from engaging in activity protected by the Act.” The employer then bears the burden under this framework of establishing that their surveillance practices are narrowly tailored to address a legitimate business need which cannot be resolved through less damaging means. The NLRB also provides that employers should disclose to employees the surveillance technologies or practices being used, the reason for monitoring, and how the employer uses the information.

The NLRB’s memorandum creates more questions than it answers. Employers need to carefully review their employee surveillance practices and confirm whether they are addressing a legitimate business need. Further, employers should consider establishing a written policy notifying employees of the monitoring practices that are in place, advising them of the reasons for the monitoring practices, and specifically stating that it is not used to prohibit any activity protected by the NLRA.

New-ish Test for Worker Classification under the FLSA

By: Alexandra Cobb Hains

In October, the United States Department of Labor’s Wage and Hour Division released a proposed rule to update the test to determine whether a worker is an employee or independent contractor under the Fair Labor Standards Act (“FSLA”). The proposed rule is intended to replace the 2021 independent contractor rule advanced under the Trump Administration which was considered more favorable to establishing a worker as an independent contractor. The 2021 rule reduced the number of primary factors to consider when determining whether a worker is an independent contractor or an employee to two “core factors” – the nature and degree of control over the work and the worker’s opportunity for profit or loss based on initiative and/or investment.

The proposed 2022 rule would essentially return to the “economic realities” test and would reinstate guidance similar to that used under the Obama Administration. Under the new proposed rule, an employee is defined as any individual who an employer “suffers, permits, or otherwise employs to work,” and an independent contractor is any worker who, as a matter of economic reality, is “in business for themselves.” Whereas the rule currently in effect emphasizes whether the worker has control over his or her duties and earnings, the proposed rule would place significant weight on a worker’s “economic dependence,” which is evaluated through the following six factors:

1. Opportunity for profit or loss depending on managerial skill. This factor considers whether the worker exercises managerial skill that affects the worker’s economic success or failure in performing the work. Relevant considerations include whether the worker determines or can meaningfully negotiate the charge or pay for the services provided; whether the worker accepts or declines jobs or chooses the order and/or time in which the jobs are performed; whether the worker engages in marketing, advertising, or other efforts to expand the business or secure more work; and whether the worker makes decisions to hire others, purchase materials and equipment, and/or rent space. If a worker has no opportunity for profit or loss, the factor suggests that the worker is an employee. The agency notes that some decisions by a worker that can affect the amount of pay that a worker receives, such as the decision to work more hours or take on more jobs, generally do not reflect the exercise of “managerial skill.” In addition, “[w]orkers who incur little or no costs or expenses, simply provide their labor, and/or are paid an hourly or flat rate are unlikely to possibly experience a loss, and this factor may suggest employee status[.]”

2. Investment by the worker and the employer. This factor considers whether any investments by a worker are “capital or entrepreneurial” in nature. The proposed rule is not very clear on what types of investments the DOL has in mind, citing only those that “generally support an independent business and serve a business-like function, such as increasing the worker’s ability to do different types of or more work, reducing costs, or extending market reach.” Notably, “[c]osts borne by a worker to perform their job (tools and equipment to perform specific jobs … ) are not evidence of capital or entrepreneurial investment and indicate employee status.”

3. Degree of permanence of the work relationship. This factor supports a determination of employment “when the work relationship is indefinite in duration or continuous, which is often the case in exclusive working relationships.” Conversely, the factor supports a finding of independent contractor status “when the work relationship is definite in duration, non-exclusive, project-based, or sporadic based on the worker being in business for themself and marketing their services or labor to multiple entities.” That said, “[w]here a lack of permanence is due to operational characteristics that are unique or intrinsic to particular businesses or industries and the workers they employ, rather than the workers’ own independent business initiative, this factor is not indicative of independent contractor status.”

4. Nature and degree of control. This factor considers both active and reserved control (the right to control) by the entity receiving the services over “the performance of the work and the economic aspects of the working relationship.” Relevant facts include whether the engaging entity:

sets the worker’s schedule;
supervises the performance of the work, or reserves the right to supervise or discipline the worker;
explicitly limits the worker’s ability to work for others, or places demands on the workers’ time that do not allow them to work for others or work when they choose;
uses “technological means of supervision (such as by means of a device or electronically)”; and
controls the prices or rates for services and the marketing of the services or products provided by the worker.

5. Whether work performed is integral to the employer’s business. This factor does not depend on whether any individual worker in particular is an integral part of the business, but rather whether the function the worker performs is an integral part—whether it is “critical, necessary, or central to the [engaging entity’s] principal business.”

6. Skill and initiative. This factor considers “whether the worker uses specialized skills to perform the work and whether those skills contribute to business-like initiative.” It supports employee status where the worker does not use specialized skills in performing the work or “where the worker is dependent on training from the employer to perform the work.”

Under the proposed rule, “no one factor or set of factors is presumed to carry more weight,” and additional factors may be considered to determine if the worker is economically dependent on the employer for work. The new rule is intended to help evaluate “modern work arrangements,” such as gig workers, and bring consistency to how courts classify workers. As the Department of Labor concedes, the courts are the ultimate arbiters of whether a particular individual or group of individuals are employees or independent contractors.

The new rule is likely to take effect some time in 2023. In advance of the rule’s adoption, employers should consider auditing their existing independent contractor and employee classifications to ensure compliance under the revised test.

Holiday Party Useful Tips to Consider

By: Jerry L. "Jay" Stovall

Some employers have moved away from holiday parties. However, many, including BSW, continue to host holiday parties for employees, and some even continue to provide adult beverages at these parties. Below are some useful tips to consider if you do so.

Explain to management that they are “on duty”:

They must watch drinking and related behavior
Remember professional boundaries
Do not drive employees home after the party, regardless of how intoxicated they appear
Do not “after-party” with staff
“No” means no
Use the “mom test” (i.e. if you wouldn’t do/say it to your mom or in front of your mom, then don’t do/say it at the function.)

Remind employees that you want them to have fun, but:

Attendance is voluntary, but if they attend normal standards of conduct still apply
Misconduct at or after the party will lead to disciplinary action
Drink responsibly
"No” means no
No marijuana (even if they have a physician’s recommendation)
Encourage designated drivers or even provide free Uber or Lyft rides

For everyone:

Follow the “one wine, one water” rule (it is hard to get drunk if you drink a full glass or two of water between every alcoholic drink)
No dirty dancing
No sleep-overs after the party (or couch surfing)
And for goodness sake, please don’t hang mistletoe!

U.S. Supreme Court's Refusal to Hear EEOC Case Tells Us a Lot

By: Jerry L. "Jay" Stovall

On November 7, 2022, the United States Supreme Court refused to hear a case arising out of the 11th Circuit Court of Appeals. Usually, the Supreme Court refusing to hear a case does not tell us a lot, but this case is a bit different.

The Plaintiff, Mosby, served as the Fire Chief of Byron, Georgia for many years. One month after coming out as transgender, she was fired. Mosby filed a Charge with the EEOC, claiming violations of the ADA and Title VII.

This is the important part: Although Title VII states that charges filed “shall be in writing under oath or affirmation and shall contain such information and be in such form as the Commission requires.” (a process called verification), Mosby did not verify her charge.

Mosby filed suit after receiving her “Right to Sue” letter from the EEOC. Byron raised her failure to verify her Charge for the first time in response to her suit. The District Court held that Mosby’s failure to verify her Charge barred her from asserting Title VII and ADA claims against Byron.

In her appeal to the 11th Circuit, Mosby argued that a 2019 decision by the U.S. Supreme Court called Fort Bend required a finding that the City of Byron waived its verification defense because it did not raise the defense in its position statement submitted with the EEOC. (In Fort Bend the Defendant did not raise the verification defense until four years of litigation and an entire round of appeals had taken place. Consequently, the Supreme Court held that a failure to verify a Charge does not strip the federal courts of jurisdiction to consider in a subsequent federal lawsuit when the Defendant failed to raise it promptly at the outset of litigation.) The Eleventh Circuit disagreed with Mosby and distinguished the facts of Fort Bend: specifically, while the Defendant in Fort Bend litigated the case for four years through trial and into appeal, the city of Byron raised the verification defense in its first pleading filed with the Court.

The 11th Cir. affirmed the District Court, holding that “a charge neither filed under oath or affirmation nor subsequently cured by amendment fails to satisfy the statutory requirement that an employee submits [her] charge to the Commission.” Importantly to us, the Fifth Circuit reached a similar conclusion in 2021, making these the only two circuits that have addressed this issue thus far.

Employers need to be aware of these decisions and consider them closely when determining when and how to best raise the fact that a Charging Party has failed to properly verify their EEOC Charge. The dismissal of the case on a procedural issue may well be a stake.