Employment Law 2016 Review by Barley Snyder

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Employment Law 2016 Review

In this review: Preparing for Medical Marijuana in Pennsylvania

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FSLA Overtime Update Federal Trade Secret Protections ACA’s Fate, Plus Other Big Employment Benefits Developments Employment Discrimination Law Update

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New Guidelines for Foreign Students with STEM Degrees Form I-9 Fines and Other Immigration-Related Penalties Workers’ Compensation Update National Labor Relations Board Update U.S. Supreme Court Year in Review

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The EEOC appealed the case again, arguing that the attorneys’ fees award should be vacated since the company had prevailed only because of a procedural fault related to the EEOC’s investigation. But in a unanimous opinion, the Supreme Court held that an employer-defendant doesn’t need to win a favorable ruling on the issue of whether it discriminated to be a “prevailing party.” The EEOC’s failure to investigate the case adequately or to resolve it before filing suit, although procedural in nature, might be sufficient to find that an employer is a “prevailing party” entitled to attorney’s fees. The Supreme Court, however, refused to decide whether the company qualified as a “prevailing party” entitled to attorneys’ fees. Instead, the Court remanded that issue back to the lower appellate court to decide (perhaps being inclined to issue narrow rulings in light of Scalia’s passing). Public Sector Unions May Charge Non-Members “Fair Share” Fees Friedrichs v. California Teachers Association Public sector unions scored a victory when the Supreme Court ruled that the First Amendment to the U.S. Constitution doesn’t prevent them from charging nonmembers “fair share” fees to cover expenses of negotiating and administering collective bargaining agreements. The ruling only covers states that allow such fees. The Pennsylvania Public Employee Relations Act permits such “fair share” fees. In the past, the Supreme Court had been skeptical of “fair share” fees, and some predicted the Court would find such fees unconstitutional. But with the passing of Scalia, the Court split 4-4 and issued a one-sentence decision upholding California’s “fair share” fee law. First Amendment Protects Public Employees from Retaliation Based on Mistaken Perceptions Regarding Political Activity Heffernan v. City of Paterson Under well-established precedent, the First Amendment prohibits a public employer from

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discharging or demoting an employee for supporting a particular political candidate (subject to limited exceptions). But what about when a public employer takes action against an employee based on the mistaken belief that the employee had supported a political opponent? In Heffernan v. City of Paterson, Heffernan, a police detective in Paterson, N.J., was demoted the day after he had been seen holding a sign supporting the mayor’s opponent in the upcoming election and speaking with the opponent’s supporters. Apparently, the detective’s supervisors—both appointed by the mayor—believed that Heffernan was supporting the mayor’s opponent in the election. In fact, Heffernan wasn’t involved in the opposition’s campaign at all. He had picked up the sign in response to a request from his bedridden mother. The city argued that it hadn’t violated Heffernan’s First Amendment right to engage in political activity because Heffernan hadn’t actually engaged in protected political activity. But the Supreme Court held that Heffernan could pursue his claim because the motive for and effect of the city’s demotion were the same despite its mistaken belief. Universities May Continue to Consider Race As an Admission Factor Under Certain Circumstances Fisher v. University of Texas at Austin In a 4-3 decision, the Supreme Court held that the University of Texas at Austin’s consideration of race as part of its admissions criteria didn’t violate the Equal Protection Clause of the Fourteenth Amendment. Abigail Fisher, a Caucasian Texas resident, sued the University after being denied admission to the university in 2008. The Court reiterated the three important principles it uses to assess the constitutionality of a public university’s affirmative action program. First, a university may not consider race “unless the admissions process can withstand strict scrutiny.” In other words, the institution must show that its “purpose or interest is both constitutionally permissible and

Employment Law Update

substantial, and that its use of [race] is necessary” to immigrants who are parents of U.S. citizens or lawful accomplish that purpose. Second, “the decision to permanent residents and those who entered the U.S. pursue the educational benefits that flow from student as youths but who were over 31 years old when the body diversity is, in substantial measure, an academic original DACA program became effective on June 15, judgment to which some, but not complete, judicial 2012. Note, this decision doesn’t affect the original n Preparing for Medical Marijuana in Pennsylvania deference is proper.” Third, when determining whether 2012 DACA program, which remains in effect for the Pages 1-3 the use of race is narrowly tailored to achieve the time being. The original DACA program is available for university’s permissible goals, school bears the Rules undocumented foreign nationals who entered the U.S. n Major Changes tothe FLSA Overtime on Hold For Now burden of demonstrating that “available” and “workable” before their 16th birthday and satisfy a number of other Page 4 race-neutral alternatives don’t suffice. criteria making them a low deportation priority for DHS.

Table of Contents

n New Federal Law Provides Greater Trade Secret Protections In this case, the University of Texas articulated what Page 5 were concrete and precise goals— the Court deemed

including ending stereotypes, promoting cross-racial ACA’s Fate, Plus Other Big Employment Benefits Developments *Please see page 5 for information about this author. understanding, preparing students for an increasingly Pages 6-8 diverse workforce and society, and cultivating leaders with “legitimacy in the eyes of the citizenry.” These n Employment Discrimination Law Update goals mirrored goals the Court had approved as Pages 9-12in prior cases. compelling interests

n USCIS Optional Training Program for Foreign Students Importantly, the Expands Supreme Court noted thatPractical the university with STEM Degrees has a continuing obligation to satisfy the strict scrutiny reviewPages by periodically 13-14reassessing its admission program’s constitutionality and efficacy in light of the

n Form I-9 Fines Immigration-Related Penalties Significantly school’s experience and theand dataOther it has gathered since Increased inplan. 2016 adopting its admission The Court also directed the school to tailor its approach to ensure that race Pages 15-16 plays no greater role than necessary in meeting its

n Workers’ Compensation Update compelling interests. In the majority’s words, “The Court’sPages affirmance of the university’s admissions policy 16-17

today does not necessarily mean the university may rely

n on thatNational same policyLabor without Relations refinement.” Board Update Pages 18-20 n

President Obama’s Immigration Programs Hold Year In Review: U.S. SupremeonCourt States v. Texas DecidedUnited in 2015-2016 Term

Significant Employment Cases

Pages A 4-4 tie at the 21-24 Supreme Court leaves in place a lower court order prohibiting President Obama from implementing the Deferred Action for Parental Accountability (DAPA) and an expansion of the Deferred Action for Childhood Arrivals (DACA) programs. This review has been prepared Barley Snyder LLP, Attorneys at Law for general informational purposes only and should not These programs would havebyallowed the Department be construed as legal advice or a substitute for legal counsel. We assume no responsibility for the accuracy or timeliness of any of Homeland Security (DHS) to stay deportation information provided. As information changes rapidly, the user is strongly advised to verify any information before relying on it. proceedings and issue work permits to undocumented The reader may not rely on any material provided herein, and must seek the advice of competent legal counsel.

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Table of Contents

n New Federal Law Provides Greater Trade Secret Protections In this case, the University of Texas articulated what Page 5 were concrete and precise goals— the Court deemed

n Workers’ Compensation Update compelling interests. In the majority’s words, “The Court’sPages affirmance of the university’s admissions policy 16-17

today does not necessarily mean the university may rely

n on thatNational same policyLabor without Relations refinement.” Board Update Pages 18-20 n

President Obama’s Immigration Programs Hold Year In Review: U.S. SupremeonCourt States v. Texas DecidedUnited in 2015-2016 Term

Significant Employment Cases

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U.S. Supreme Year in Review: Preparing forCourt Medical Marijuana Significant Employment Cases in Pennsylvania Decided in 2015-2016 Term By: Joshua Schwartz, Esquire

By: Jill Welch, Esquire Marijuana legalization reached Pennsylvania in 2016,

bringing with it a host of new questions employers are going to have to answer. Signed into law on April 17, The U.S. Supreme Court decided a dozen employment the Medical Marijuana Act adds the Commonwealth cases this past term, covering important issues underto theFair growing of jurisdictions in which medical use is the LaborlistStandards Act, Equal Employment permitted. Though the Act is relativelypublic-sector limited in scope, Opportunity Commission procedures, its protections foraffirmative covered individuals pose aeducation, number of employee rights, action in higher challenges for employers. and immigration. The passing of Justice Antonin Scalia left the high court split 4-4 on two employment-related The Current State of the Medical Marijuana Act decisions: Freidrichs v. California Teachers Association and States Texas. With rulings TheUnited Act went into v. effect May 17, no butmajority it will likely be from Supreme Court, the lower court decisions somethe time before employers are affected. The Act in these cases stand until (and for unless) Court provides permits marijuana use only thosethe individuals who further direction. are certified and who obtain an identification card from

an authorized dispensary, and it can be dispensed only as a pill, cream, oil, liquid, tincture, or vapor. No authorizedequipment. dispensaries exist toTyson date. paid these protective Although employees for time spent at their workstations, Tyson Employment Protections didn’t record the actual time employees spent putting on taking off the protective equipment. The Act provides that “no employer may discharge,

threaten, refuse to hire or otherwise discriminate or To prove their case, the workers’ expert recorded 744 retaliate against an employee regarding an employee’s employees and estimated that it took these employees compensation, terms, conditions, location or privileges between 18 to 21.25 minutes to put on and remove solely on the basis of such employee’s status as an the required gear. Relying on the expert’s analysis, the individual who is certified to use medical marijuana.” workers claimed that an additional 18 to 21.25 minutes should be added to each employee’s sheet users to The statute therefore doesn’t protect time marijuana determine which certified employees wereInentitled to the overtime generally—only users. addition, Act compensation. Tyson argued that the varying amounts doesn’t require employers to “accommodate” marijuana the Pennsylvania Department of Health (DOH). No Below are summaries of the major cases the Supreme of time it tookoremployees to don and doffdisciplining different use at work prevent employers from such certifications have been issued yet. Similarly, the Court decided this past term. protective made “under reliancethe oninfluence” the expert’s sample employeesgear for being at work if DOH hasn’t yet issued any regulations or guidance improper and that a “trial by formula” would lead their conduct “fallssuch below the standard of care normally implementing the Act’s employment Supreme Court Approves “Trial provisions, by Formula” in to recoveryfor forthat workers whoEmployers had not worked overlegally 40 accepted position.” may also which likely won’t beClass fully implemented untilActions 2018. Wage and Hour and Collective hours in a week. The jury disagreed prevent any employee who is “underand the awarded influence”the Nonetheless, employers mayv.wish to take certain steps Tyson Foods, Inc. Bouaphakeo class $2.9 million in unpaid wages, from (1) “performing any task whichlater the doubled employerto now to prepare for full implementation. million for liquidatedtodamages. deems life-threatening, either the employee or any The Supreme Court removed the hurdle requiring each $5.8 Who istoAuthorized to Obtainhis Medical of the employees of the employer,” (2) performing any worker prove with specificity or her Marijuana damages in Tyson appealed the case all the way to the Supreme Pennsylvania? duty which could result in “public health or safety risk,” resulting from off-the-clock work. Instead, the Court Court, which rejected Tyson’s argument. According to (3) working “at heights or in confined spaces,” or (4) approved a “trial by formula” method, which allows the Court, in “many cases, a representative sample Only someone diagnosed with one of the medical operating or controlling certain chemicals, high-voltage damages for a representative sample of workers to is ‘the only practicable means to collect and present conditions identified in the Act is permitted to obtain electricity, or any other public utility. be extrapolated across an entire group of plaintiffs, relevant data’ establishing a defendant’s liability.” If marijuana. He or she must also be under the care of despite potential differences among plaintiffs. The the employer hasn’t kept accurate records all hours a physician registered with the DOH. That physician Finally, the Act states that it doesn’t requireofan ruling came as a surprise, in light of two recent employees shouldn’t be punished because must sign a certification of the patient’s serious health worked, employer to take actions “in violation of federal law”—a Supreme Court cases involving Wal-Mart and Comcast they can’t prove the exact amount of uncompensated condition, which is also submitted to the DOH. The provision apparently designed to protect businesses Corp. that had established employer-friendly class Rather, the Court held “anmandates, employee like hastrucking patient must then apply for and receive an identification time. subject to federal drug-testing certification standards. carried out his burden if he proves that he has in card from the DOH before he or she will be permitted companies. to obtain medical marijuana. Theviolated Act doesn’t permit The workers claimed that Tyson the Fair Labor fact performed work for which he was improperly This leaves several questions unanswered, and compensated and if he produces sufficient evidence anyone in Act Pennsylvania smoke marijuana. On the Standards (FLSA) byto not paying them overtime hopefully the regulations will provide some clarification. contrary, certified users maydonning obtain the drug only from to show the amount and extent of that work as a compensation for time spent and doffing

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Employment Law Update

matter of just reasonable inference.” The employer First, the Actand is vague regarding what qualifies as “a could then present evidence of the precise amount of public health or safety risk” or working “at heights or work performed or evidence that sample wasn’t in confined spaces.” Second, thethe statute offers little representative or accurate, which didn’tthat do.an guidance on how employers can Tyson determine employee is “under the influence” or violating “the The Department of Labor’s Interpretation standard of care.” Regarding operating or being in of the “Salesman” Exemption Not control of chemicals, electricity, or a public utility, the Entitled to Deference Act specifies a threshold “of more than 10 nanograms Encino Motor Cars v. Navarro of active tetrahydrocannabis per milliliter of blood in but the there is no such limitation whenwhether it comes Inserum,” this case, Supreme Court addressed to the other tasks employers may lawfully prevent. auto dealership service advisers are exempt from the Moreover, an employer cannot requirements. know in advance FLSA’s overtime compensation The whether the employee has reached the 10 nanogram FLSA exempts from its overtime pay requirements threshold, and partsman, certified user employeesprimarily certainly aren’t “any salesman, or mechanic expectedintoselling take aorblood test before every shift. engaged servicing automobiles.” Many automobile dealerships had classified service advisers It also remains as exempt because they primarily sell vehicle service questionable whether work to customers. Several appellate court decisions employers with zeroand the Department of Labor (DOL) had supported tolerance drug policies this interpretation. Then in 2011 the DOL made a must make exceptions for 180-degree change, issuing an interpretation finding certified users. Courts in service advisers aren’t entitled to the FLSA’s exemption other states have upheld and must be paid overtime. an employer’s right to implement a zeroThe Supreme Court unfortunately didn’t issue the tolerancethe policy in the dealership industry hoped for. guidance automobile face of statutes Instead, the Courtpermitting ruled that the DOL hadn’t provided medical marijuana use. Some commentators have the necessary reasonable explanation to support also suggested a zero-tolerance policy protects changing its olderthat interpretation. Despite refusing to employers fromnew a discrimination or the retaliation charge follow the DOL’s interpretation, Court sent because the statute uses the word “solely” its the case back to the lower appellate court toindecide prohibition: in other words, an employee is terminated whether service advisers areif exempt from the FLSA’s becausepay of arequirements. positive drug test in violation of a zeroovertime tolerance policy, then an employer can argue that the Constructive Discharge Claims Begin When the employee wasn’t discriminated against “solely on the Employee Actually Resigns Green v. Brennan basis of such employee’s status as an individual who is certified” Act.that That Pennsylvania is The Supremeunder Courtthe ruled thesaid, statute of limitations somewhat unique in providing explicit protections to for pursuing a claim of constructive discharge with certified decisions other states the EEOCusers, beginssotocourt run on the datefrom the employee might be irrelevant. And while the word “solely” in the actually resigns. A “constructive discharge” occurs statute provides athat defense under the Act, when antheoretically employee establishes discriminatory certified users will also be protected from discrimination conduct makes the employee’s working conditions so under the Americans with Disabilities Act and the

intolerable that Human a reasonable person theofsame Pennsylvania Relations Act under by virtue their circumstances would feel compelled to resign. In this qualifying health conditions. Accordingly, employers case, the advised Court clarified that statute of limitations to are well to make thethe same accommodations period for users such claims when an employee certified as theystarts do toonly users of other prescribed officially resigns and gives “definite notice” of hisaor her medications, unless the employer is subject to specific decision to leave. As prohibiting a consequence, employees of are federal requirement the employment able to basewho constructive discharge on allegedly individuals use marijuana (like claims employers in the discriminatory occurred well fields). before the transportationacts andthat higher education employee’s actual resignation. Policy and Practice Recommendations A Prevailing Employer May Be Entitled Despite these uncertainties, employers to Attorneys’ Fees may wish to take the following stepsExpedited to preparev.forEEOC the Act’s full CRST Van implementation: Title VII of the Civil Rights Act authorizes the award Review and revise drug-testing and antiof• attorneys’ fees to a party who “prevails” in a discrimination discrimination or retaliation claim. As a practicalpolicies matter, Because the Act created though, courts have only awarded attorneys’ fees to a new protected category employer-defendants in the rare cases when they find under Pennsylvania law, a plaintiff’s claim frivolous or unreasonable. In CRST equalnarrowly employment and Van Expedited, the Supreme Court opened anti-discrimination policies the door by clarifying that an employer-defendant should a reference doesn’t necessarily need to “prevail oninclude the merits” of a to “certified users of discrimination lawsuit to collect attorneys’ fees. medical marijuana.” In In CRST Van Expedited, the lead plaintiff, Ms.the Starke, addition, while status filed an EEOC charge alleging of sexual harassment. zero-tolerance policies The EEOC later filed suit on her behalf, alleging that remains uncertain, over 250 female employees at the company had been employers should at least account for medical subjected harassment. As the litigation marijuanatoinsexual their drug policies—either specifying in a proceeded, every single claim was dismissed, and zero-tolerance policy that testing positive for medical the trial court awarded thetermination company $4 million for the marijuana could lead to or explicitly attorneys’ it spent for defending claims. providing fees a carve-out certifiedthe users. The EEOC appealed. Although the appellate court • Train supervisors about signs of intoxication affirmed the dismissal of almost all of thethe claims, In light of the uncertainties surrounding “under itthe reinstated Ms. Stark’s claim and that of another influence” language, employers should ensure employee. The appellate court also vacated the that supervisors can articulate specific symptoms attorneys’ feeto award and sentsuspicion” the remaining two claims contributing “reasonable drug-testing. back to the trial court. Ms. Starke settled her These symptoms will After later form the basis for an claims and the other employees’ claims were dismissed, “under the influence” determination should a drug test the trial court the previous attorneys’and fees confirm it. Byre-instated the same token, job descriptions award to the company. discipline policies should be clear about job duties and expectations so that supervisors can rely on them in

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U.S. Supreme Year in Review: Preparing forCourt Medical Marijuana Significant Employment Cases in Pennsylvania Decided in 2015-2016 Term By: Joshua Schwartz, Esquire

By: Jill Welch, Esquire Marijuana legalization reached Pennsylvania in 2016,

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Employment Law Update

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Now, if a common law employment relationship determining whetherthen an employee’s conduct “fallsjoint below exists, the question is whether the potential the standard of care.”sufficient control over employees’ employer possesses essential terms and conditions of employment to permit • DON’T ask applicants whether they are certified meaningful collective bargaining. However, the NLRB users is no longer concerned whether “actual” control is Certified users suffer from qualifying medical exercised employer, but rather is focused on the conditions.bySoanasking whether an applicant is a certified indirect or potential rightmedical to control, which may occur user is akin to soliciting information and when a business uses orstatus. contracts out to ayou third party inquiring about disability However, can and services that it may need. should ensure that prospective employees are able to perform essential of a position. And if This ruling all affects both functions franchisor-franchisee you’re notifiedand of an status as a certified relationships theapplicant’s relationships between staffing user, keep in mind the possible ADA implications and agencies and employers. Employers can no longer clearly communicate rules and procedures. insulate themselves from NLRA coverage through staffing agency contracts that designate the staffing Conclusions agency as the “employer” for purposes of employee On Election 2016, more votedother to benefits andDay wages. In eight light of this states ruling (and expand legal use of marijuana. states the similar cases), employers need Twenty-nine to examine carefully now allow medical or recreational use of marijuana. relationships they have with outside entities. Though medical marijuana is still illegal under federal Social Media Policies law, it remains unclear what approach the new federal administration willNLRB take to these new state laws. Based on recent decisions, employers areThe DOH, may change the to landscape when it issues findingtoo, it nearly impossible draft NLRA-compliant clarifying regulations. tuned for more specifics social media policies. Stay The NLRB’s approach has been regarding the Act, and don’t hesitate to contact legal to deconstruct every single word and sentence in counsel if you have specific questions or wouldtolike employers’ social media policies in an attempt limit assistance with your policies and procedures. employers’ ability to govern their workplaces. A recent case involving Chipotle provides a perfect example. In that case, the issues involved provisions in Chipolte’s employee handbook regarding confidentiality, non-disparagement, and the use of Chipotle’s corporate logo. Most employers maintain confidentiality provisions in their employee handbooks. Chipotle’s social media policy provided that, “If you aren’t careful and don’t use your head, your online activity can … spread incomplete, confidential, or inaccurate information” and prohibited employees from making “disparaging, false, misleading, harassing or discriminatory statements about or relating to Chipotle, our employees, suppliers, customers, competition, or investors.”

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An administrative law judge (ALJ) ruled that Chipotle’s About the Authoremployees from posting “incomplete, policies prohibiting confidential, or Joshua inaccurate information” and preventing Schwartz is a partner in employees fromthe making “disparaging, false, [or] firm’s Employment Law Group misleading” statements were of unlawful. The ALJ and the head the firm’s Workers’ also found the prohibition on disparaging and Compensation practice. In thatfalse statements to be overbroad because falsepublic statements capacity, Josh represents and are protected unless they are maliciously false, i.e., private employers in litigation matters, knowingly or recklessly false. administrative agency investigations, and labor arbitrations. also counsels employers on issues Like in many Josh employers’ handbooks, a provision in related to injured workers, employee policy discipline and Chipolte’s “Confidential Information” prohibited termination, harassment, and hour “the improperworkplace use of” the company’swage “name, compliance, or medical leaves of absence, trademarks, other intellectual property.and . . .”labor The relations. Board contended that this policy violated employees’ protected rights lbecause it would be understood to (717) 399-1535 jschwartz@barley.com prohibit employees from using Chipotle’s logo when engaging in protected concerted activity. Regarding the disclosure of “confidential” information, the ALJ found the term “confidential” overbroad because it wasn’t defined. Accordingly, employees reasonably could believe the handbook provision prohibited protected, concerted activity under the NLRA, such as discussions regarding employees’ wages and terms and conditions of employment. Persuader Rule Status In 2016, the U.S. Department of Labor (DOL) published its final “persuader rule,” which modified the “advice exemption” in the Labor-Management Reporting Disclosure Act of 1959 (LMRDA). Even though the NLRB didn’t promulgate this, the rule nevertheless could have a significant impact on labor relations. But whether the rule will be implemented is in serious doubt. Under the controversial final rule, an employerconsultant agreement must be reported to DOL if the consultant engages in “persuader activities,” which are defined as any “actions, conduct or communications that are undertaken with an object, explicitly or implicitly, directly or indirectly, to affect an employee’s decisions regarding his or her representation or collective bargaining rights.” Under a typical reportable

Employment Law Update

Major Changes to FLSA Overtime Rules on Hold For Now agreement or arrangement, a consultant agrees to manage a campaign or program to avoid or counter union organizing or a collective bargaining effort, either jointly with the employer or separately. Under the DOL’s prior interpretation of the law, the employer and consultant would be required to file a report only if the By: Richard Hackman, Esquire consultant communicated directly to the workers. The final persuader rule, though, would have required the The new federal overtime rule is officially on hold reporting of both direct and indirect activities. after a Texas judge granted a nationwide preliminary The persuader rule also requires the reporting of any injunction blocking the rule from taking effect on materials provided to an employer for distribution December 1 and allowing employers to stick withtothe employees any employer-consultant communications status quo or until the courts rule otherwise. about such materials. A consultant’s revision of The U.S. District Court for the Eastern District of Texas employer-created materials—including edits, additions, granted the injunction, preventing the Department of and translations—wouldn’t trigger reporting if intended Labor from implementing revised regulations to the to ensure legality. However, the reporting obligation overtime provisions of the Fair Labor Standards Act would be triggered if the revisions were intended to (FLSA). The injunction temporarily delays the new increase the materials’ persuasiveness. federal overtime rule, which would have raised the Activities that trigger reporting include direct contact FLSA’s salary threshold for exemption from overtime with with object Multiple to persuade them, pay employees from $23,660 toan $47,476. states filedas well these the categories of and indirect activities suit as to block new rule, withconsultant the injunction in undertaken with an and object to persuade effect, businesses employees are employees: now in a holding pattern. A preliminary injunction preserves the status • Planning, directing, or coordinating activities quo while a lawsuit is pending. undertaken by supervisors or other employer representatives, including meetings and interactions Until a final decision is reached, employers are NOT with employees required to implement the new changes to the overtime rules as planned on December 1. Employers may • Providing material or communications for continue to follow the existing overtime regulations. dissemination to employees Employers who have already implemented changes employees’a salaries or job descriptions may leave •toConducting union avoidance seminar for supervisors those decisions in place if they wish to do so. But they or other employer representatives aren’t legally required to do so as of now. Employers •who Developing or implementing policies, haven’t yet implemented personnel the proposed changes practices, or actions for the employer may wish to postpone those plans until a final decision has been issued. Ultimately, the DOL has sought to expand significantly the scope of reportable persuader activities well in At this point, it is unclear how this will play out. excess of any prior interpretations. rule’s vague Congress could step in and provideThe a legislative language, which is open to DOL “interpretation,” alternative, such as requiring an increase over acould potentially impactrather something asatseemingly innocuous period of years, than all once, or by enactingas handbook provisions, if those provisions arefrom designed a carve-out exempting smaller businesses the to persuade employees to forgo joining a union. requirement.

However, immediately prior to the rule taking effect on December 1, the U.S. District Court for the Northern District of Texas issued a preliminary injunction enjoining the persuader rules across the nation. Among other things, the court found that the persuader rules would require attorneys to disclose confidential client information, the DOL lacked the statutory authority to adopt and enforce the new persuader rule, and the rule The Department of Labor has already filed an appeal violated constitutionally protected rights of free speech challenging the injunction, and the United States and association. Court of Appeals for the Fifth Circuit has indicated DOLonissued a writtenbasis. directive itSubsequently, will decide thethe issue an expedited But stating that decision due to the nationwide preliminary the that almost certainly won’t be injunction, issued before new reporting requirements for employers apply President-elect Trump’s inauguration. Oncewon’t in office, until further Anddepartment in the waketoofdrop the national Trump couldnotice. order the its defense injunction, associations andin states in the case,several leavingbusiness the nationwide injunction place. have filedhe their own lawsuits seeking strikeit down Although may abandon the currenttocase, seemsthe persuader Accordingly, as of now, employers aren’t unlikely thatrule. Trump will drop the subject entirely since required to comply withforthe rule. to the overtime he expressed support revisions system during his campaign. Election Effect Because the injunction occurred so late in the The recent election results could alter dramatically process, it does little to assist companies who have the field of labor relations. The Republican-controlled spent significant funds preparing for implementation Congress and White House will likely curtail the NLRB’s of the new overtime rules. At this point, it is more of aggressive stance on workplace standards and could a business decision as to whether employers should even enact legislation to limit the NLRB’s ability to issue move forward with previously contemplated changes mandates like the quickie election rule. Further, it seems to compensation or duties. However, if these changes likely that future appointments to the NLRB will be less have already been communicated to employees, dismissive of employer’s interests than the current it may cause a serious morale issue if a company Board. now forgoes implementation. Employers who decide not to implement the changes should make clear to employees that a judge has frozen implementation of About the rulesthe andAuthor the company is awaiting further direction from the courts Richard or Congress before is moving forward Hackman vice-chair of with any changes. the firm’s Employment Law Group. He management employers If you have any represents questions about how yourand business in all aspects of traditional labor and should address FLSA compliance moving forward, employment lawEmployment issues. please contact Barley Snyder’s Law Group. (717) 852-4978 l rhackman@barley.com

*Please see page 20 for information about this author.

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Employment Law Update

*Please see page 20 for information about this author.

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New Federal Law Provides Greater Trade Secret Protections claimant does not properly raise and preserve the issue. The Pennsylvania Supreme Court denied the claimant’s appeal of the Commonwealth Court’s decision. Subrogation and the MCARE

By: Jill Welch, Esquire

In a separate and subsequent Protz case, the Commonwealth Court considered the issue of A new federal law provides uniform protections for subrogation as related to the Medical Care Availability trade secrets nationwide and allows companies to and Reduction of Error Act (“MCARE”). The claimant sue for trade secret theft in federal court. However, in that case had an accepted work-related knee to take advantage of all the benefits the law offers, injury, which resulted in surgery. The surgery led to a employers must notify employees of new whistleblower medical malpractice claim, through which the claimant protections. obtained an award for future medical expenses and lost wages. TheObama employer and insurer to subrogate President signed into lawsought the Defend Trade the claimant’s award due to the medical malpractice Secrets Act of 2016 on May 11 (“DTSA”), providing award. response,for thetrade claimant argued that the federalInprotection secrets and confidential MCARE prohibited recovery because the medical business information. The DTSA received bipartisan malpractice injury didn’t increase the employer and support in both the House and the Senate, with the insurer’s workers’ compensation liability. The WCAB, goal of developing more predictable federal case law and ultimately, thesecrets. Commonwealth sided with governing trade Prior to itsCourt enactment, trade the employer and insurer, thattoalthough “the secret protections varied holding from state state. The DTSA MCARE Act disallows subrogation with respect to adds a federal civil enforcement scheme to the existing benefits up until under the time trial, it does nothing to criminalpaid protections theofEconomic Espionage alter law with regard state to future benefits.” Act.the Butpre-existing the DTSA doesn’t preempt trade secret laws, leaving companies the option to sue in state Section 313 Notice of Injury court. In the case of Penske Logistics v. WCAB (Troxel), the The DTSA provides robust remedies to victims of trade Commonwealth Court considered whether reporting secret theft. To take advantage of these remedies, an injury to a co-worker discharges the claimant’s though, a business must ensure it provides notice of obligation to notify the employer of an injury covered the DTSA’s whistleblower protections to employees by the Workers’ Compensation Act. In this case, the in any agreement or contract regarding trade secret claimant alleged he slipped and fell at work, injuring his information, or alternatively that any such agreement back and right arm/shoulder. The claimant reported the cross references a policy document that describes incident to a co-worker and filled out an injury report, the employer’s policy for reporting a suspected which the claimant alleged he slipped under the office violation of law. So businesses should make sure this manager’s door. The office manager later testified that language is included in every type of document that he never saw the report. The claimant didn’t initially they use to protect their trade secrets. That includes seek treatment, and the report wasn’t formally filed with employment agreements, confidentiality agreements, a supervisor until nine months later. Despite the late non-disclosure agreements, proprietary information notice to the supervisor, the workers’ compensation and invention assignment agreements, company judge awarded benefits, finding that the notice to the confidentiality policies, and any other agreement or

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co-worker was sufficient.

The Commonwealth Court disagreed, holding that giving notice to another employee isn’t sufficient to satisfy the Workers’ Compensation Act’s injury notice requirements. According to the Commonwealth Court, notice must be given to an individual in a supervisory capacity, is “a person whose position policy thatwhich a business uses to protect againstjustifies trade the inference that authority has been delegated to him by secret theft. the employer, as his representative, to receive a report Annotice employer’s failure to provide notice precludes or of such accidental injury.” the award of exemplary damages or attorney fees otherwise available under the DTSA. Donald Trump has just become President-elect Trump,

About Author and the the future employment law landscape is difficult

to predict. However, given the bipartisan support for Kylie Madsen is an associate in Barley the DTSA and the protections it affords to trade secret Synder’s Litigation and Employment assets, this is a measure that appears likely to remain practice groups who has also worked in intact through the presidential transition. general civil practice in the Lancaster area. (717) 399-2160 l kmadsen@barley.com

About the Author Jill S. Welch is a partner in Barley Snyder’s Employment Law Group. She counsels companies in handling workplace challenges and helps clients resolve disputes, claims, cases, and litigation in all aspects of labor and employment law. As an employment law counselor, Jill assists in developing employment policies, employee handbook provisions, non-compete and restrictive covenants and severance agreements, and has assisted companies through difficult layoffs and reductions in force. In her employment litigation practice, Jill defends employment law claims for employers across all industries: large and small, public, private, family-owned, emerging companies, entrepreneurs, and others. (717) 399-1521 l jwelch@barley.com

Employment Law Update

National Labor ACA’s Fate, PlusRelations Other Board Update Big Employment Benefits Developments By: Richard Hackman, Esquire

By: Ledermann, Esquire As David many are painfully aware, the National Labor

days after the petition is filed or else risk waiving such Relations Board has aggressively applied the National issues The most important development of 2016 affecting in one or six—will be the last employers eligible to Labor Relations Act in the last several years. In the world of employee benefits—the outcome of submit determination letter applications under the five• Mandates that pre-election hearings commence particular, the Board has focused its efforts on striking the November elections—is only just beginning to year cycle, which effectively ends 31,petition 2017. within eight days of the filing of January an election employer policies, limiting an employer’s ability to materialize. With their party in control of the White discharge based on social media activity, and enacting Going forward, the IRS to willprovide publishthe anunion annual • Requires employers with voter House and both chambers of Congress, the longlabor-friendly regulations. “Required Amendments employers in information within twoList” daystoofassist any direction of election sought Republican goal of dismantling the Patient maintaining the tax qualification of their individually Protection and Act (ACA) be Act • Defers resolution of many voter eligibility issues until Enacted in theAffordable 1930s, theCare National Labormay Relations designed plans without the assurance of favorable within reach. Evenan so,administrative it is anticipated that acalled number (NLRA) created agency the post-election, and determination letters. The list will identify necessary ofNational ACA provisions could survive, employers are Labor Relations Board and (NLRB). The NLRB’s amendments to plans and establish to • Denies parties the opportunity to deadlines file a post-hearing advised to maintain existingelections, compliance practices until duties include overseeing conducting comply withanchanges in qualification requirements. The brief as automatic right. any changes areand finalized. investigations, deciding unfair labor practice deadline will be the end of the second calendar year charges. The NLRB regulates the power between labor The most data shows the quickie election Though perhaps less dramatic than the ACA’s following therecent year in which the that Required Amendments and management. But contrary to popular belief, the rule has achieved its goal. Elections are occurring imminent transformation, more certainty surrounds List is issued. No change in plan qualification NLRA covers both union and nonunion employers. more quickly.will Before theon rules, elections occurred other 2016 developments of importance for employers requirements appear a Required Amendments on until average 42 days after the filing of the and their employee plans. Aaggressively variety of benefitsthe IRS has issued regulations or petition. other official In 2009 and 2010, benefit labor interests pushed List Under the rules, that average has dropped to related developments willEmployee reverberate into 2017 Act and guidance onnew the topic. Congress to enact the Free Choice beyond, decisions from the U.S. (EFCA),including which was designed primarily to Supreme increase labor approximately 23 days. Plus, unions are winning a Beneficial New Rules For Defereed Comp Taxhigher percentage of elections overall, whichofisn’t Court and guidance published the Internal Revenue representation through a cardby check or an expedited Exempts surprising. The less time between petition and election, Service the Department of Labor. electionand process. Although this legislative goal failed, less the time an employer has to communicate with the NLRB enacted a series of aggressive regulations to Inthe June 2016 the IRS issued long-awaited guidance End of Five-Year Cycle for Retirement Plan employees about the downsides of unionization. implement the principles behind the failed EFCA. governing the taxation of nonqualified deferred Determinations compensation plans of tax-exempt and governmental Joint Employer Standard Quickie Election Rule A sponsor of an individually designed retirement employers. Unlike in the for-profit sector, where income The NLRB’s most dramaticbeyond impactvesting on labor relations plan had the opportunity torule” applytook to the IRSin April taxation can be postponed until actual Thehas NLRB’s “quickie election effect has been through recent decisions which have for a determination on the plan’s payment, tax-exempt organization employees must 2015. Like EFCA, letter the purpose of this tax-qualified rule was to reversed long-standing precedent the status once every five the years. An IRS announcement include in income the present value regarding of their deferred dramatically shorten potential election timeline, scope of the NLRA’s coverage. 27, in the inand 2015 subsequent issued in an 2016 at the time the rightOn to August the compensation asand a result, shortenguidance the period of time employer compensation Browning-Ferris Industries case, the NLRB “refined” eliminated the five-year remedial amendment for vests, whether or not it is paid at that time. Employees has to respond to and defend against a unioncycle election joint employer standard. Specifically, thecan Board individually designed plans andthe limited the election scope ofrule: the ofits tax-exempt and governmental employers delay petition. Among other things, quickie found that two or more statutory employers are determination letter program to initial plan qualification, including deferred compensation in their taxable joint • Permits electronic filing of election petitions employers same statutory employees if they qualification upon plan termination, and certain other income only of sothe long as the deferred compensation “share or codetermine those matters governing limited circumstances. of Cycle A remains subject to a substantial risk of forfeiture. the • Requires employersSponsors to file a statement of plans— position essential terms and conditions of employment.” sponsors employer identification numbers outliningwith all pre-election hearing issues within ending seven In an unexpected but taxpayer-friendly turn, the

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By: Jill Welch, Esquire

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co-worker was sufficient.

About Author and the the future employment law landscape is difficult

Employment Law Update

National Labor ACA’s Fate, PlusRelations Other Board Update Big Employment Benefits Developments By: Richard Hackman, Esquire

By: Ledermann, Esquire As David many are painfully aware, the National Labor

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Form I-9 Fines and Other ImmigrationRelated Penalties Significantly Increased in 2016 proposed regulations expand the circumstances in which the IRS will recognize that a substantial risk of forfeiture exists, thus delaying when employees of tax-exempt employers must recognize deferred compensation as income. Under the proposed regulations, deferred compensation that is contingent on compliance with a covenant not to compete will be considered subject to a substantial By: SIlas Ruiz-Steele, Esquire risk of forfeiture, provided certain criteria are satisfied.

retirement plan investors of a period during which trading in their accounts will be unavailable)

• Required notices to participants in a retirement plan with an automatic contribution feature

• The summary of benefits and coverage notice under a group health plan.

These (and other) increased penalty amounts will be assessed for post-August 1, 2016, violations, though The U.S. Department of Homeland Security Department of Justice (DOJ), and the U.S. Additionally, the proposed regulations in some(DHS), the U.S. certain penalties can be mitigated through a plan Department of Labor (DOL) each published separate rules in the Federal Register increasing penalties for instances permit the postponement of the lapse sponsor’s voluntary corrective action. various immigration-related violations, including of a forfeiture risk, which also postpones the timeForm I-9 paperwork violations, unfair immigration-related employment and penalty schemes to certain temporary foreign Health worker visa such Supreme Court Limits Planprograms Subrogation when deferredpractices, compensation must be includedapplying as as H-1Bincome. Labor Condition violations. increased penalties were calculated pursuant to taxable A lapse ofApplication a forfeiture(LCA) risk may now TheRights thepostponed Federal Civil Penalties Adjustment Act Improvements Act of 2015, requiring the agencies to make be pursuant to aInflation “rolling risk of forfeiture” A recent U.S.rules Supreme Court decision will restrict adjustments for inflation based on the Consumer Price Index. The new became effective August 1, 2016 provision, which would extend the period of substantial a health plan’s ability to recover funds from plan andofapply only to occurring November 2, 2015. risk forfeiture by,violations for example, addingafter additional years participants. In the case of Montanile v. Board of of service a vesting requirement shortly increases before thefor various immigration-related violations. The chart to below provides a list of penalty Trustees of the National Elevator Industry Health Benefit original vesting period is satisfied. The recognition of Plan, the health plan attempted to recover $121,000 Civil Violations Offense Second Offense Third Offense these circumstances as substantial risks of First forfeiture in medical expenses it paid for treatment of injuries will depend upon meeting a number of requirements not MINIMUM MAXIMUM MINIMUM MAXIMUM MINIMUM MAXIMUM that Robert Montanile suffered during an automobile listed here. Unlawful (knowing/willful) hiring or accident caused by a drunk driver. Montanile employment of aliens (per unauthorized $539 $4,313 $4,313 $10,781 $6,469 for $21,563 alien) successfully sued the driver and netted $240,000, after The new regulations also clarify that an employee’s paying his attorneys’ fees and litigation costs. Montanile Formto I-9 a paperwork violations (errors or elective deferrals deferred compensation $216plan may $2,156 omissions per relevant individual) then spent the $240,000 without paying back the health be deemed subject to a substantial risk of forfeiture if Violations relating to participating plan. The health plan then sued for an equitable lien specified criteria are met. employer’s failureEmployees, to notify of final therefore, may nonconfimation of employee’s $751 $1,502 to recover the $121,000 in medical expenses from also delay paying taxes on their elective contributions employment eligibility (per relevant Montanile’s other assets. until these amounts are distributed. individual) Unfair immigration-related employment In its January 2016 ruling, the U.S. Supreme Court held Taxpayers maypractices rely on the proposed until – document abuse such asregulations over $178 $1,782 documentation or under documentation that the health plan couldn’t obtain such an equitable they are finalized or withdrawn. (per individual discriminated against) lien. Although the language in the health plan required Unfair immigration-related Form 5500 Failures and Other employmentViolations Montanile to repay funds he received from a third party practices such as refusal to hire based on $455 $3,563 $3,563 $8,908 $17,816 national origin or citizenship status (per for injuries that the plan$5,345 paid to treat, the health plan On June 30, the Department Labor complied with individual discriminatedofagainst) could only require such a payment if Montanile were prior legislationH-1B bytemporary increasing maximum civil penalty foreignthe worker Labor actually in possession of the funds he received from $1,782 (LCA) violation for failing to fileCondition FormApplication 5500 (Annual Return/Report Maximum of (for misrepresentation of a material fact) the third party. The health plan, however, didn’t have Employee Benefit Plan) from $1,100 to $2,063 per day. H-1B temporary foreign worker (violation the right to recover these funds from Montanile’s other Additional lesser penalties will apply for failing to file the for willful failure pertaining to LCA $7,251 assets. Because Montanile spent the third party funds attestations or discrimination against Maximum following notices: worker) on non-traceable items (like services, travel, and food), temporary foreign worker (willful arrangements • Form M-1 forH-1B multiple employer welfare that eliminated the plan’s ability to recover funds from $50,758 violation resulting in displacement of a Maximum US worker) Montanile. • Timely “blackout notices” (informing self-directed

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Employment Law Update

Employer Obligations under the Immigration The case holds some important lessons for health Reform and Control Act of 1986 plan sponsors. A plan sponsor–particularly a selfinsured group plan–must have appropriate subrogation Form I-9 requirements come from the Immigration language in the plan document allowing it to recover Reform and Control Act of 1986 (IRCA). payments that a participant receives fromIRCA third parties. prohibits employers from hiring and employing But that language, alone, isn’t enough. The plan workers in the also U.S.move knowing thattothese workers sponsor must swiftly enforce those rights. aren’t authorized to work in the U.S. Employers In Montanile, the health plan failed to respond to a letter also are prohibited from continuing employ from Montanile’s attorney indicatingto the funds an would be individual knowing that he or she is unauthorized provided to Montanile unless the health plan objected for employment. This law also employers within 14 days. The health planprohibits then delayed another six from discriminating against individuals on the basis months before filing suit to recover the funds provided of national origin, citizenship, or immigration status. for treatment of Montanile’s injuries. Under IRCA, all employers are required to verify Guidance Rules for Retirement Plan the identity on andFiduciary employment authorization of each Advice person hired in the U.S. after November 6, 1986 and to complete and retain a Form I-9 for each employee The Department of Labor finalized its new fiduciary required to complete the form. rules governing retirement plan advice, significantly revising the rules as originally proposed by the agency In light of the significant increase in penalties for in 2015. The rules are intended to protect retirement immigration-related violations, including penalties plan investors by requiring advisors to place their for Form I-9 mistakes, employers should undertake clients’ best interests ahead of their own. A principal a thorough review of their I-9 forms and implement focus of the rules is to prevent financial advisors and (if not already in place) a robust immigration-related institutions from receiving payments that create conflicts compliance program to minimize any possible of interest with their retirement plan investors. exposure for IRCA violations. The rules, which become effective April 10, 2017— with full compliance required by January 1, 2018— include a number of limited exemptions intended to permit to receive compensation under certain Aboutadvisors the Author arrangements the rules would otherwise prohibit. These Silas Ruiz-Steele Barley 34 complex exemptions are listed chairs in the “frequently Snyder’s Immigration Group. asked questions” section of a document that the She has focused her practice Department of Labor published in October. on immigration and nationality law forwhether more than years, There is some doubt the 20 Labor Department’s regularly counseling and assisting fiduciary rules will survive the new Republican majority employers and their employees as in Congress. Short of repeal, the rules’ implementation well as private individuals with their immigration could needs.be delayed or the new presidential administration might revise the rules. (610) 898-7153 l sruizsteele@barley.com

Workers’ Compensation Update

About the Author

David Ledermann concentrates his practice in employee benefits law and ERISA, encompassing qualified and nonqualified deferred compensation arrangements, and employer-sponsored group health and welfare benefit plans. He has broad experience counseling clients, including publicly traded corporations, closely held companies, By: Kylie Madsen, Esquire tax-exempt organizations and governmental entities, inProtz connection with their retirement and other employee Update benefit programs. In September 2015, the Commonwealth Court of (717) 399-1570 held l dledermann@barley.com Pennsylvania unconstitutional Section 306.2(a.2) of the Pennsylvania Worker’s Compensation Act, which authorizes physicians to use “the most recent version” of the AMA Guides to Evaluation of Permanent Impairment when evaluating permanent impairment ratings. In Protz v. WCAB (Derry Area School District), the physician evaluated the claimant’s permanent impairment rating using the 6th Edition of the AMA Guides, the latest version. But the Commonwealth Court held that Section 306.2(a.2) was an unconstitutional delegation of legislative authority and remanded the case for consideration under the previous 4th Edition of the AMA Guides. The claimant and employer both appealed, leaving employers, insurance carriers, and third party administrators wondering whether the Pennsylvania Supreme Court would immediately take up the issue or wait until the remand was decided. On March 22, 2016, the Supreme Court granted the employer’s appeal and will now decide the constitutionality of Section 306.2(a.2). Until the Supreme Court definitively answers this question, it is recommended that an Impairment Rating Evaluation (IRE) determination be based upon both the 4th and 6th editions of the guide. Relatedly, in Winchilla v. WCAB, the Commonwealth Court held that the right to question the constitutionality of the 6th Edition may be waived if the

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retirement plan investors of a period during which trading in their accounts will be unavailable)

• Required notices to participants in a retirement plan with an automatic contribution feature

• The summary of benefits and coverage notice under a group health plan.

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Employment Law Update

Workers’ Compensation Update

About the Author

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USCIS Expands Optional Practical Employment Discrimination Training Program for Foreign Law Update Students with STEM Degrees By: Jennifer Craighead Carey, Esquire By: David Freedman, Esquire

It has been a busy year in the arena of employment discrimination law. The Equal Foreign nationals studying at colleges and universities Employment Opportunity Commission under the F-1 visa are limited in their ability to work in (EEOC) has been especially active in the United States while completing their studies. But terms of issuing guidelines, establishing upon graduation these students are eligible to work in final rules, and advancing novel theories the United States for a limited period of time through a of discrimination law in the courts. Below program called “optional practical training” or “OPT.” To are some of the highlights from 2016: be eligible, the student’s OPT work must relate to his or Pay DataofRequired for EEO-1 Form: her field study. The default OPT period is 12 months. On September 29, 2016, the EEOC published a Students, however, are eligible to extend that period if revised EEO-1 form. The new form will require private they have obtained employers and federal contractors with 100 or more at least a bachelor’s employees report pay data information for their degree in ato science, workforce. According to the EEOC, access to pay technology, data will help or themath EEOC and the Office of Federal engineering, Contract Programs (OFCCP) identify pay field fromCompliance a U.S. discrimination and focus their enforcement efforts on institution of higher employers who are more likely out of compliance with learning. Previously, federal laws. this STEM OPT extension allowed The revised form will require employers to identify qualified students employees’ total W-2 earnings for a 12 month period, to extend their looking back from a pay period between July 1st and OPT period by an September 30th. The revised EEO-1 has 12 pay bands additional 17 months, for each job category. Employers must report the giving STEM OPT number of employees whose total W-2 earnings the students a maximum prior year fell within the pay band, such as “15 African of 29 months of OPT following graduation. American females in the laborer category work in the pay band10, of $19,400 to $24,439.” On May U.S. Citizenship and Immigration Services (USCIS) enacted new regulations expanding the STEM Employers will be required to submit the pay data OPT program from 17 to 24 months. This means that information on their 2017 EEO-1 form, but the students who are eligible for the STEM OPT extension September 30th deadline has been extended to March can potentially work in the U.S. for up to 36 months 31, 2018 to give employers additional time to collect following graduation. the pay data. Employers should begin assessing

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The expanded STEM OPT period should assist employers trying to find eligible candidates for highdemand technology positions. Because there often aren’t enough qualified candidates in the U.S. to fill these positions, employers are sometimes forced to fill their personnel needs by recruiting foreign nationals. A common path for foreign students with STEM degrees their existing human information to is to work under OPTresource for an employer whosystems then then ensure that they have ready access to the information files a petition for an H-1B specialty occupation visa on needed to prepare the new report. Inforeign addition, it is the student’s recommended that employers review theThe job titles behalf. H-1Bin each of the ten EEO-1 job categories visa,toif ensure granted,that employees are appropriately classified and their allows thethat foreign job descriptions are accurate. Employers nationalshould to workalso in consider a preliminary audit of their compensation the U.S. for up to six practices within each EEO-1 category the salary yearsusing and can lay the bands established in the new formgroundwork to identify and for the correct any disparities in compensation thatattainment cannot be eventual justified by a legitimate, nondiscriminatory reason. of permanent legal National Origin Discrimination:residency. In November, the EEOC issued new guidelines Obtaining an H-1B on national origin discrimination. The guidelines visa, though, is define national origin discrimination Title VII nounder easy task. The as “discrimination because an individual (or his or employer must her ancestors) is from a certain place or has the pay for the entire H-1B process: the government physical, cultural, or linguistic characteristics of a filing fees, the attorney’s fees, and other expenses particular group.” The guidelines include related to national the visa origin application process. The employer extensive examples or what constitutes national aorigin cannot require the foreign national to contribute discrimination and provides advice to employers portion of these costs or to reimburse the employer. on how to avoid such discrimination. The new Additionally, the employer must promise to pay the guidelines—plus a Q&A section and anational’s Fact Sheet— expenses associated with the foreign return are available on the EEOC’s website. Employers travel to his or her home country in the event thatcan the expect the EEOC to aggressively enforce Title VII’s employment relationship is terminated. So the STEM

Employment Law Update

OPT program playsnational an important by providing prohibition against origin role discrimination. employers with an opportunity to evaluate a foreign Voluntary Wellness Programs: student’s skills and abilities for an extended period of On 16, investing the EEOCsignificant issued two finaltorules addressing timeMay before funds obtain an H-1B voluntary wellness programs and compliance with the visa. Genetic Information Non-Discrimination Act (GINA) and Moreover, H-1Bwith visas are in short a general the Americans Disabilities Actsupply. (ADA).As The rules rule, onlyto65,000 visas are of available each year, attempt provideH-1B clarity in light the Affordable Care unless the employer is one of a number of of Act, which permits employers tolimited offer an incentive employers exempt from the H-1B visa cap. In 2015, up to 30 percent of the cost of health plan coverage for employers filed 172,000 H-1B visa participating in aapproximately wellness program. Under the rules, petitions and only per foreignof employers arenormally permitted to one offerpetition up to 30 percent national filed eachhealth year. The ofan the the total can costbe of self-only plan expansion coverage to STEM OPT period, therefore, will allow these highly employee as an incentive to participate in a wellness skilled students to remain in the and file program. But if multiple plans areU.S. offered, themultiple incentive H-1B visa applications over successive years should applies to the lowest cost plan. Moreover, an employer their not initial applications not be picked for consideration. may receive information collected under a wellness program that identifies a specific individual; employers The changes aren’t automatic for an employer looking may only receive that information in the aggregate. to take advantage of the program. Like the previous The rules also mandate that employees receive notice STEM OPT program, an employer must be signed up of the information which will be collected under the with USCIS’s E-Verify program to participate in the wellness program, with whom it will be shared, limits new expanded 36-month STEM OPT program. But on disclosure, and how the information will be kept unlike the previous program, students and employers confidential. The rules further permit an incentive of 50 seeking to take advantage of the expanded STEM OPT percent for a smoking cessation program, with some program must now file a Form I-983. This form requires restrictions. The rules become effective January 1, the student to obtain information from the designated 2017. school official (DSO) at the institution where the student graduated, much like students were requiredClaims: to do on EEOC Litigation of LGBT Discrimination the2012, Formthe I-20 underadopted the old program. In EEOC its Strategic Enforcement Plan (SEP), which made preventing LGBT employment Although employers had very little responsibilities under discrimination a top enforcement priority. The SEP the previous STEM OPT program, the new Form I-983 includes coverage of lesbian, gay, bisexual and requires that the employer draft a training plan for each transgender discrimination under Title VII’s sex student seeking a STEM OPT extension. The plan must discrimination prohibition. In keeping with its promise, address a number of topics, like the knowledge or skills 2016 has been an active enforcement year for the that the student will attain as a result of the training, how EEOC in this area. the employer intends to assist the student in meeting his orEEOC her goals, howLGBT the training directly relates The filed one discrimination lawsuitto the student’sa STEM degree,employer and how in the2016. organization will against Pennsylvania In that case, supervise student. portion of the the EEOC the alleged that The Scottemployer’s Medical Health Center, Form I-983 must contain a description of the student’s a pain management and weight loss center, had compensation, which must be with of subjected a male employee to commensurate harassment because salaries of orientation similarly situated U.S. employees, and the his sexual and because he didn’t conform

employer must pledge that the student won’t replace to the employer’s gender-based stereotypes. The a U.S. worker. must updatesupervisor the plan if it EEOC alleged The that employer the male employee’s changes mustgay conduct regular evaluations of the knew thatand he was and subjected him to offensive student’s work. These evaluations must be submitted anti-gay epithets, which forced the employee to resign.to the DSO. The employer sought to dismiss the case, arguing that sexual orientation isn’t a protected classification under The Form I-983 is new; employers won’t be familiar Title VII. The trial judge, however, refused to dismiss with it. Additionally, the new STEM OPT regulations the case, ruling that discrimination based on sexual authorize the Department of Homeland Security to orientation and sexual stereotyping implicates sex and conduct on-site, email, or telephone reviews to confirm is therefore protected by Title VII. whether employers are complying with the STEM OPT requirements Accordingly, The EEOC is and also training actively plan. pursuing litigation employers on behalf wishing to take individuals. advantage of expanded STEM OPT of transgender Onthe July 6, the EEOC filed program would be wise to consult with experienced suit under Title VII’s sex discrimination provisions immigration counsel when completing the chain, Form I-983, against Bojangles Restaurant, a fast food alleging at least the first timeagainst throughathe process. woman by that it discriminated transgender subjecting her to a hostile work environment based on The attorneys and paralegals in Barley Snyder’s her gender identity. Immigration Group have extensive experience assisting employers and individuals with their immigration lawin The EEOC’s stepped up enforcement has resulted needs.success. We would glad28, to assist employers seeking some OnbeJune the EEOC resolved a caseto use to expanded STEM OPT with anthe employer for $202,200 in program. a suit alleging that the employer had fired a lesbian employee who complained of sexual orientation discrimination. Earlier in 2016, the EEOC settled another case against a financial services company for $115,000, alleging the company had About the Author created a sexually hostile work environment, in part, by prohibiting aDavid transgender employee from using the Freedman is an experienced labor women’s restroom. and employment litigator who represents public and private employers of all In light of the EEOC’s aggressive enforcement of LGBT types and sizes in litigation before state discrimination, employers should consider whether they and federal courts and administrative should revise their employment practices and policies agencies. David also assists multinational to ensure compliance with the EEOC’s views regarding corporations and individuals with their immigration what Title VII requires. needs. Retaliation: (717) 399-1578 | dfreedman@barley.com On August 25, the EEOC issued new enforcement guidance on retaliation. Claims of retaliation made up 45 percent of all EEOC charges filed in fiscal year 2015. Retaliation occurs when an employer takes a materially adverse action against an employee because the employee engaged in protected activity, like complaining internally about sexual harassment or filing

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USCIS Expands Optional Practical Employment Discrimination Training Program for Foreign Law Update Students with STEM Degrees By: Jennifer Craighead Carey, Esquire By: David Freedman, Esquire

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Employment Law Update

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an employment discrimination charge with the EEOC. The guidance offers detailed definitions of the terms “materially adverse” and “protected activity,” as well as examples. The guidance further describes “promising practices” that employers may consider implementing to avoid retaliation claims. The guidance is available on the EEOC’s website along with a question and answer section and a Small Business Fact Sheet. EEOC’s Select Task Force on the Study of Harassment in the Workplace: In June, the EEOC’s Select Task Force on the Study of Harassment in the Workplace issued a four-part report on workplace harassment. The reports provides direct guidance to employers on workplace harassment training, including recommendations on tailoring training to the specific workforce, bystander intervention training, and workplace civility training. Employers should reconsider using canned training programs and consult the report for ways to tailor their antiharassment training to their particular workforce. Religious Discrimination and the Vaccine Controversy: In 2010, the Department of Health and Human Services set a target requiring that 90 percent of healthcare workers receive the flu vaccination. In response, hospitals across the country have established mandatory flu vaccine programs. Such programs have caused an increase in religious discrimination claims under Title VII, which requires employers to provide reasonable accommodations for employees’ sincerely held religious beliefs. The EEOC has started taking up these employees’ cause. For example, in April the EEOC filed suit against Mission Hospital in North Carolina. The hospital’s policy required all healthcare workers to obtain a flu vaccination and set a September 1 deadline for requesting an exemption on religious grounds. The hospital terminated at least one employee who requested an exemption after the September 1 deadline had passed. In the litigation, the EEOC took the position that such a filing deadline is arbitrary and that an

employer must consider a religious accommodation at the time it receives the request. In another case, the EEOC sued Baystate Medical Center in Massachusetts for failing to accommodate a human resources employee who was granted a religious exemption from the vaccine but was required to wear a surgical mask in lieu of the vaccine. The employee alleged that the mask muffled her voice on the telephone and prevented her from performing her job. She refused to wear the mask and was fired. Additionally, in September, the EEOC filed suit against Pennsylvania-based Saint Vincent Medical Center after it denied flu vaccine exemptions to six employees whom the employer claimed failed to provide proof of religious doctrine. Very few cases have addressed the extent to which an employer must permit an employee to forgo the flu vaccination on religious grounds. But this was precisely the issue that the U.S. District Court for the Eastern District of Pennsylvania addressed in the recent case of Fallon v. Mercy Fitzgerald Hospital. In that case, the hospital mandated the flu vaccine unless a medical or religious exemption was granted, and those employees granted an exemption had to wear a mask. In 2012 and 2013, Fallon sought an exemption “on the basis of a strong moral or ethical conviction similar to a religious belief.” He provided a lengthy essay explaining his convictions. He was granted a religious exemption both years. However, in 2014, the hospital changed its policy and Fallon was asked to provide a letter from his clergy supporting his exemption request. Instead, Fallon submitted a lengthy essay explaining his moral belief system but clarifying that he didn’t belong to an organized religion. In his 22-page essay, Fallon contended that the flu vaccine is ineffective, its benefits grossly exaggerated, its dangers downplayed, and is a fraud perpetrated upon the federal government. The hospital denied Fallon’s request, and he was ultimately terminated. Fallon eventually filed suit, asserting a claim for religious discrimination under Title VII, along with other claims. Ultimately, the trial court granted the hospital’s motion to dismiss the case, finding that

Employment Law Update

Fallon’s mindset seemed to be more personal and that Fallon’s mindset seemed to be more personal and social than spiritual. Fallon’s essay disputed the effectiveness of the flu vaccine and the motives of the pharmaceutical industry and at best constituted a lengthy editorial on contentious social issues—i.e. the effectiveness and propriety of vaccinations and the motivations of those who make and sell them. Moreover, the court noted that Fallon didn’t contend that others shared his anti-vaccination belief system. It should be noted that this decision appears to take a stricter view of what constitutes a sincerely held religious belief than the EEOC has taken in recent litigation.

About the Author Jennifer Craighead Carey chairs the Employment Law Group. She regularly counsels employers on issues related to discipline and discharge, ADA and FMLA compliance, workplace harassment, wage and hour compliance, policy and handbook development and review, and other issues related to human resources matters. (717) 399-1523 l jcraighead@barley.com

EEOC Position Statements: Effective January 1, 2016, the EEOC implemented nationwide procedures that permit the EEOC to provide position statements and non-confidential attachments to position statements to the charging party or his/her representative during the investigation of a charge of discrimination. Confidential information submitted as part of the position statement must be segregated and labeled confidential. Confidential information includes sensitive medical information (except for the charging party’s medical information), confidential commercial or financial information, trade secrets, non-relevant personally identifiable information of witnesses, comparators, or third parties (like social security numbers, dates of birth in non-age cases, home addresses, personal phone numbers, personal email addresses, etc.), and any reference to charges filed against the employer by other charging parties. This shift in procedures is significant. Employers shouldn’t submit position statements to the EEOC without first consulting legal counsel.

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Employment Law Update

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USCIS Expands Optional Practical Employment Discrimination Training Program for Foreign Law Update Students with STEM Degrees By: Jennifer Craighead Carey, Esquire By: David Freedman, Esquire

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Employment Law Update

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USCIS Expands Optional Practical Employment Discrimination Training Program for Foreign Law Update Students with STEM Degrees By: Jennifer Craighead Carey, Esquire By: David Freedman, Esquire

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Employment Law Update

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retirement plan investors of a period during which trading in their accounts will be unavailable)

• Required notices to participants in a retirement plan with an automatic contribution feature

• The summary of benefits and coverage notice under a group health plan.

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Employment Law Update

Workers’ Compensation Update

About the Author

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retirement plan investors of a period during which trading in their accounts will be unavailable)

• Required notices to participants in a retirement plan with an automatic contribution feature

• The summary of benefits and coverage notice under a group health plan.

7 15

Employment Law Update

Workers’ Compensation Update

About the Author

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By: Jill Welch, Esquire

17 5

co-worker was sufficient.

About Author and the the future employment law landscape is difficult

Employment Law Update

National Labor ACA’s Fate, PlusRelations Other Board Update Big Employment Benefits Developments By: Richard Hackman, Esquire

By: Ledermann, Esquire As David many are painfully aware, the National Labor

www.barley.com

18 6

By: Jill Welch, Esquire

17 5

co-worker was sufficient.

About Author and the the future employment law landscape is difficult

Employment Law Update

National Labor ACA’s Fate, PlusRelations Other Board Update Big Employment Benefits Developments By: Richard Hackman, Esquire

By: Ledermann, Esquire As David many are painfully aware, the National Labor

www.barley.com

18 6

19 3

Employment Law Update

*Please see page 20 for information about this author.

www.barley.com

20 4

19 3

Employment Law Update

*Please see page 20 for information about this author.

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20 4

U.S. Supreme Year in Review: Preparing forCourt Medical Marijuana Significant Employment Cases in Pennsylvania Decided in 2015-2016 Term By: Joshua Schwartz, Esquire

By: Jill Welch, Esquire Marijuana legalization reached Pennsylvania in 2016,

21 1

Employment Law Update

www.barley.com

22 2

U.S. Supreme Year in Review: Preparing forCourt Medical Marijuana Significant Employment Cases in Pennsylvania Decided in 2015-2016 Term By: Joshua Schwartz, Esquire

By: Jill Welch, Esquire Marijuana legalization reached Pennsylvania in 2016,

21 1

Employment Law Update

www.barley.com

22 2

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Employment Law Update

Table of Contents

n New Federal Law Provides Greater Trade Secret Protections In this case, the University of Texas articulated what Page 5 were concrete and precise goals— the Court deemed

n Workers’ Compensation Update compelling interests. In the majority’s words, “The Court’sPages affirmance of the university’s admissions policy 16-17

today does not necessarily mean the university may rely

n on thatNational same policyLabor without Relations refinement.” Board Update Pages 18-20 n

President Obama’s Immigration Programs Hold Year In Review: U.S. SupremeonCourt States v. Texas DecidedUnited in 2015-2016 Term

Significant Employment Cases

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243

223

Employment Law Update

Table of Contents

n New Federal Law Provides Greater Trade Secret Protections In this case, the University of Texas articulated what Page 5 were concrete and precise goals— the Court deemed

n Workers’ Compensation Update compelling interests. In the majority’s words, “The Court’sPages affirmance of the university’s admissions policy 16-17

today does not necessarily mean the university may rely

n on thatNational same policyLabor without Relations refinement.” Board Update Pages 18-20 n

President Obama’s Immigration Programs Hold Year In Review: U.S. SupremeonCourt States v. Texas DecidedUnited in 2015-2016 Term

Significant Employment Cases

www.barley.com

243

Employment Law 2016 Review

In this review: Preparing for Medical Marijuana in Pennsylvania

FSLA Overtime Update Federal Trade Secret Protections ACA’s Fate, Plus Other Big Employment Benefits Developments Employment Discrimination Law Update

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