Category: Discrimination

September 13, 2017

Employee Releases Under the Older Workers Benefit Protection Act

The federal Age Discrimination in Employment Act of 1967 (ADEA) prohibits discrimination against employees 40 years or older because of their age. In 1990, Congress amended the ADEA through the Older Workers Benefit Protection Act (OWBPA). The OWBPA includes specific requirements that employers must meet if they want to obtain enforceable employee releases of ADEA claims.

Employers most often seek releases from employees at the end of employment. They typically offer severance pay or other benefits in exchange for a waiver of claims. But if the release doesn’t meet the OWBPA requirements, then the employee may still be able to claim age discrimination.

OWBPA Requirements for Employee Releases

The waiver of claims must be part of a written agreement between the employee and the employer. The agreement must be written in a manner “calculated to be understood by such individual, or the average individual eligible to participate.”
The release must specifically refer to rights or claims arising under the ADEA.
The employee cannot waive rights or claims that may arise after the release is signed.
The employee must receive something of value in exchange for the waiver of rights. It must be something that the employee did not already have the right to receive.
The employer must advise the employee in writing to consult with an attorney before signing the release agreement.
The employer must give the employee at least 21 days to consider the release agreement.
The release agreement must give the employee at least 7 days after signing to revoke the agreement. The agreement does not become enforceable before the end of the revocation period.

Additional Requirements for Group Programs

The OWBPA contains additional requirements for waivers connected to an “exit incentive or other employment termination programs offered to a group or class of employees.” This includes both voluntary and involuntary programs. Thus, it applies both to voluntary resignation programs and involuntary reductions in force. Most likely, it applies to any situation where you ask more than one employee to sign a release related to the same decisionmaking process. It does not, however, necessarily apply when an employer fires two employees around the same time, but for unrelated reasons

For group programs, the employer must allow employees least 45 days to consider the release agreement, rather than 21.

In addition, the employer must give the following information to employees at the beginning of the 45-day consideration period:

A description of any class, unit or group of employees covered by the program, any eligibility factors, and any applicable time limits.
A list of job titles and ages of all employees eligible or selected for the program, and the ages of all employees in the same job classification or organizational unit who are not eligible or selected for the program.

Many employers especially hesitate to provide the age lists required in group programs. However, failing to do so would render the waiver of ADEA claims unenforceable.

Use of OWBPA as a Guideline

The OWBPA only applies to waiver of ADEA claims. Accordingly, many employers choose not to follow all of its requirements for releases by employees under the age of 40. However, an employee could challenge any waiver as unenforceable on basic legal principles. Essentially, an employee could claim that they did not understand what they were signing. Using the OWBPA requirements for all employment releases promotes greater enforceability. If it is good enough for Congress and its federal age discrimination law, shouldn’t it be good enough for all employee waivers?

To reiterate, many employee releases should still be enforceable even if they don’t satisfy some aspects of the OWBPA. But it’s usually not worth taking that risk.

Of course, employers should not try to obtain a waiver of legal claims without the assistance of an experienced lawyer. Each situation may be different and necessitate different approaches.

August 30, 2017

New Form EEO-1? Not So Fast!

In February 2016, the U.S. Equal Employment Opportunity Commission (EEOC) modified the Form EEO-1 reporting requirements. The EEOC later revised the form itself on September 29, 2016. The new rules would require private employers with 100+ employees to include wage and hours data on the new Form EEO-1 beginning March 31, 2018.

However, on August 29, 2017, the Office of Management and Budget (OMB) informed the EEOC that it was suspending the new pay data collection requirements pending further review.

Existing Form EEO-1 Obligations

Private employers with 100+ employees must annually report employee data on race, ethnicity, and gender by occupational category.

In addition, many federal contractors with less than 100 but more than 50 employees also must file these EEO-1 reports.

Covered employers must file by March 31 for the preceding calendar year.

Objections to the New Form EEO-1

The U.S. Chamber of Commerce has led the opposition to the pay data components of the new Form EEO-1. It sent an extensive comment letter to the Director of the OMB on February 27, 2017. Notably, the letter specifically requested suspension and review of the 2016 changes.

The Chamber’s letter emphasized various potential deficiencies in the 2016 rulemaking.

Highlights of the letter include:

“EEOC failed to identify any significant or tangible benefit the revised EEO-1 report would generate, thereby failing the requirement that it maximize the benefit to be derived from the report.”

“EEOC ignored the significant privacy and confidentiality concerns raised in the review process . . . . The EEOC is proposing to collect highly sensitive personal data regarding compensation at thousands of U.S. companies in a format which will not serve any of its statutory purposes but which will certainly be of great use to any hacker who is interested in the compensation practices of employers.”

“Given the enormous costs associated with compliance . . . it is imperative that OMB review the information collection and either issue a stay in the effectiveness of its prior approval or rescind its prior approval altogether . . . .”

The Chamber of Commerce’s February 27, 2017 letter is available in its entirety here.

Current Regulatory Policy

The additional EEO-1 reporting obligations created in 2016 are inconsistent with the current administration’s views on federal regulations.

President Trump’s January 30, 2017 Executive Order on Reducing Regulation and Controlling Regulatory Costs stated that “it is essential to manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations.”

What Should Employers Do?

The EEOC’s statement on the suspension of the new Form EEO-1 pay data requirements notes that:

“Employers should plan to comply with the earlier approved EEO-1 (Component 1) by the previously set filing date of March 2018.”

This will include demographic information (race, ethnicity, and gender) as in the past. But it will not include information about compensation or hours worked.

The EEOC will provide additional information about the EEO-1 based on OMB’s review.

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August 22, 2017

What Is a Disability Under the ADA?

Since 1990, the Americans with Disabilities Act (ADA), has prohibited discrimination based on disability. This includes employment discrimination.

The ADA was amended in 2008 by the cleverly named Americans with Disabilities Act Amendments Act (yes, the ADAAA).

The ADA prohibits discrimination against qualified individuals with a disability. It also requires employers to provide reasonable accommodations to employees with disabilities. Reasonable accommodations can range from time off from work to making structural changes to the workplace.

So, which employees does the ADA protect?

An individual with a disability is a person who:

Has a physical or mental impairment that substantially limits one or more major life activities;
Has a record of such an impairment; or
Is regarded as having such an impairment.

Let’s break these down.

1. Has a physical or mental impairment that substantially limits one or more major life activities.

Physical or mental impairment:

(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more body systems, such as neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitourinary, immune, circulatory, hemic, lymphatic, skin, and endocrine; or

(ii) Any mental or psychological disorder, such as an intellectual disability, organic brain syndrome, emotional or mental illness, and specific learning disabilities.

Substantially limits:

This one is very complicated and discussed at length in applicable regulations from the EEOC. Generally speaking: An impairment is a disability if it substantially limits the ability of an individual to perform a major life activity as compared to most people in the general population. An impairment need not prevent, or significantly or severely restrict, the individual from performing a major life activity in order to be considered substantially limiting. Nonetheless, not every impairment will constitute a disability.

Most notably, the regulations provide that:

The term “substantially limits” shall be construed broadly in favor of expansive coverage, to the maximum extent permitted by the terms of the ADA. “Substantially limits” is not meant to be a demanding standard.

Major life activities:

Major life activities include, but are not limited to:

(i) Caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working; and

(ii) The operation of a major bodily function, including functions of the immune system, special sense organs and skin; normal cell growth; and digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions. The operation of a major bodily function includes the operation of an individual organ within a body system.

Here again, the EEOC’s regulations note that:

The term “major” shall not be interpreted strictly to create a demanding standard for disability. Whether an activity is a “major life activity” is not determined by reference to whether it is of “central importance to daily life.”

2. Has a record of such an impairment.

An individual has a record of a disability if the individual has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.

3. Is regarded as having such an impairment.

An individual is “regarded as having such an impairment” if the individual is subjected to a prohibited action because of an actual or perceived physical or mental impairment, whether or not that impairment substantially limits, or is perceived to substantially limit, a major life activity.

Prohibited actions include but are not limited to refusal to hire, demotion, placement on involuntary leave, termination, exclusion for failure to meet a qualification standard, harassment, or denial of any other term, condition, or privilege of employment.

The Scope of Disability Is Broad Under the ADAAA

The 2008 amendments did not change the definition of disability itself. However, they did expand the scope of the components of the definition. As a result, the ADA now protects many more employees than it originally did.

State and laws, such as the New York State and New York City Human Rights Laws, may also afford protections to employees with disabilities.

Accordingly, employers must proceed with caution in managing employees with known or perceived disabilities.

Check out my post on 27 Situations Where Your Business Needs an Employment Lawyer.