The Legal Line


Supreme Court Rules "But For" Causation Not Required for Federal Employees to Prove Age Discrimination

posted Apr 7, 2020, 9:29 AM by Christopher Vrountas   [ updated Apr 7, 2020, 10:36 AM ]

The Supreme Court held yesterday in Babb v. Wilkie that the plain meaning of the ADEA demands that personnel actions concerning federal government employees be untainted by any consideration of age. Typically, in private sector employment, a plaintiff can prevail in an age discrimination case by showing that age discriminatory animus was the “but for” cause of an actual adverse employment action (e.g., discharge, failure to promote, reassignment, wage cut, etc.). Under §633a(a), however, the Court held that a federal government employee may have an age discrimination claim without having to show that discrimination constituted such a “but for” cause of an adverse employment action, because that section expressly requires that all “personnel actions” in federal sector employment be “free from any discrimination on the basis of age.”  Nevertheless, the plaintiff would still need to show a “but for” cause to the extent he or she sought remedies such as job reinstatement, damages, or other relief related to the end result of an employment decision. But if age discrimination played a lesser part in the decision, other remedies may still be appropriate.

Here is a link to the decision à https://www.supremecourt.gov/opinions/19pdf/18-882_3ebh.pdf


DEPARTMENT OF THE TREASURE PROVIDES UPDATED CARES ACT Q&A FOR 1102/1106 SBA LOANS

posted Apr 3, 2020, 7:12 AM by Christopher Vrountas

The Treasury is giving away money, potentially, under the CARES Act Payroll Protection Program outlined in Title I of the CARES Act, sections 1102 and 1106 in particular. Things change daily, if not hourly. What started as 4% loans became .5% loans and are now 1% loans, all potentially forgivable if proceeds are used for "forgivable" purposes, and criminal penalties exist if proceeds are not used for "allowable" purposes such as payroll costs (as specifically defined), rent, mortgage interest payments, and "covered" utilities (undefined for now). 

Here are the Questions and Answers provided by the DOT:   

https://home.treasury.gov/system/files/136/PPP--IFRN%20FINAL.pdf

 


DOL Publishes Regulations regarding Families First Coronavirus Response Act

posted Apr 2, 2020, 8:31 AM by Allison Ayer   [ updated Apr 2, 2020, 8:38 AM ]

The onset of coronavirus has changed just about everything we all took for granted as “normal.”  Employers have been forced to make critical decisions in short-order to respond to this public health crisis, all the while trying to balance supporting their employees and sustaining the viability of their businesses.  At the same time, employers also have been called upon to learn and comply with brand new laws concerning virus-related leave benefits for their employees.  In mid-March, Congress passed the Families First Coronavirus Response Act (FFCRA)Through 2 separate provisions, the Emergency Paid Sick Leave Act (“Paid Sick Leave Act”)[1] and Emergency Family and Medical Leave Expansion Act (“EFMLA Expansion Act”)[2], the FFCRA requires covered employers (those with fewer than 500 employees) to provide 1) paid sick leave and/or 2) expanded family and medical leave, for specified reasons related to coronavirus, with 100% reimbursement by the government via a tax credit for leave time paid out.  

In the most recent development concerning the FFCRA, the United States Department of Labor issued Regulations concerning the FFCRA on April 1st.  The Regulations explain in greater detail the FFCRA’s coverage and the limitations on leave benefits available, and the Regulations also clarify issues that were not fleshed out in the legislation because the FFCRA was passed so quickly.

As with any new law, employers should, with help of legal counsel, understand all aspects of the Regulations to ensure that they are complying with the FFCRA when making decisions about leave requests. In the meantime, here are some of noteworthy highlights from the DOL’s Regulations: 

No Leave for Laid Off Employees.  As most know at this point, employees are entitled to paid leave benefits under the FFCRA if they are unable to work because of 1 of 6 very specific COVID-19 related reasons, including that the employee is subject to a government quarantine or isolation order related to COVID-19.[3]  There was some initial thought that employees let go because a business had to close in response to a Governor’s stay-at-home order would be entitled to paid leave under the FFCRA.  The Regulations clarify that stay-at-home orders are indeed the type of isolation order for which an employee would receive paid leave, but only if the employee is unable to work “but for” the isolation order.  The Regulations clarify that employees who are laid off or furloughed because of a downturn or business closure do not meet this test and are not entitled to paid leave, even if the closure or downturn is substantially related to an isolation order.  The Regulations reason is that these employees are unable to work, not because they are subject to an isolation order but because the employer has no work for the employee.  Furloughed or laid off employees in this scenario would be entitled to unemployment benefits only.  This seems to be a major loop hole to the paid leave benefits provide for in the FFCRA.

Counting Employees.  Both the Paid Sick Leave Act and the EFMLA Expansion Act parts of the FFCRA apply to private employers with fewer than 500 employees.  The Regulations clarify that employees are counted at the time an employee would take leave for purposes of determining whether or not an employer has 500 employees.  This means that an employer’s obligation to provide paid leave under the FFCRA may change over time depending on how many employees it has at the time leave will be taken.  Employers who hover around the 500 employee mark will have to assess each time an employee requests leave whether they have fewer than 500 employees and therefor have to provide leave.  The Regulations also clarify that employers must include full-time and part-time employees, employees on leave, temporary employees who are jointly employed by the employer and another employer, and day laborers supplied by a temporary placement agency. Independent contractors do not count towards the 500- employee threshold.  Employees who have been laid off or furloughed but have not been reemployed also do NOT count toward the 500-employee threshold.  This means that employers who at the time the FFCRA was passed had 500 employees, but have laid off or furloughed sufficient employees to bring them below 500 will have to provide qualifying paid leave to remaining employees.

Multi-Unit Employers.  The Regulations clarify that joint or integrated employers must combine employees in determining whether or not they employ 500 employees. The FLSA’s test applies in determining who is a joint employer for purposes of coverage, and the FMLA’s test applies in determining who is an integrated employer, under both the Paid Sick Leave Act and the EFMLA Expansion Act parts of the FFCRA.  This is a change from the DOL’s original position set forth in FAQ’s that the integrated employer test only applied to the paid sick leave portion of the FFCRA.  All of this means that in order for an employer to determine the number of employees it has, all common employees of joint employers or all employees of integrated employers must be counted together. This means that businesses who operate multiple units under one umbrella corporation, and even businesses that operate multiple locations as separate and distinct entities, must count all employees of each of these units or entities together, if they are an integrated employer.  In essence, if multi-location employers are integrated by common control, policies, pay, etc. such that they are counting all of their employees for purposes of determining if they meet the 50-employee threshold of the FMLA, then they should like count the employees of all locations to evaluate the 500 employee benchmark for the FFCRA.  

Part-Time verses Full Time.  The leave benefit available for employees under the FFCRA depends on whether they are a full or part- time employee.  Yet the FFCRA did not define those terms.  The Regulations rectify this issue.  They define a full-time employee as someone who is normally scheduled to work at least 40 hours each workweek, or is scheduled to work on average 40 hours per week, in the case of an employee whose schedule varies.  This weekly average is calculated over the six-months prior to the date leave is requested or over the entire period of employment if the employee has been employed for less than six months.   A part-time employee is an employee who is normally scheduled to work fewer than 40 hours each workweek or—if the employee lacks a normal weekly schedule—who is scheduled to work, on average, fewer than 40 hours each workweek.  The Regulations also address the amount of leave to which a part-time employee is entitled.  A part-time employee working a normal schedule is entitled to paid sick leave equal to the number of hours he or she is normally scheduled over a two-workweek period.  A part-time employee whose weekly work schedule varies is entitled to paid sick leave equal to 14 times the average number of hours that the employee was scheduled to work per calendar day over the six-month period ending when the employee takes paid sick leave, (including hours for of leave), or 14 times the expected number of hours the employee and employer agreed at the time of hiring that the employee would work, on average, each calendar day, if a part-time employee has been employed for fewer than six months.

Paying for Telework.  Employees are entitled to paid leave under the FFCRA only if they are unable to work or telework because of the qualifying COVID-19 related reasons.  Employees who are teleworking for COVID-19 related reasons must be compensated for all hours actually worked, including overtime, in accordance with the requirements of the FLSA. However, the FLSA’s continuous workday guidance which generally requires that all time between performance of the first and last principal activities is counted as compensable work time, does not apply for teleworking because of COVID-19. This means that an if an employer and employee agree to a flexible schedule, allowing telework for COVID-19 related reasons on a from 6-9 a.m., 12:00- 1 p.m., and 7-10 p.m., the employer need only pay for the 7 hours of time actually worked, not all 14 hours between the first principal activity at 7 a.m. and the last at 10 p.m. The FLSA guidance regarding the continuous workday would still apply, however, to all employees who are teleworking for reasons other than COVID-19.

Effect on other Leave.  The 12 weeks of paid expanded family and medical leave provided by the EFMLA Expansion Act of the FFCRA is a type of FMLA leave.  As such, the Regulations clarify that any time taken as expanded family and medical leave counts towards the total 12 workweeks of regular, unpaid FMLA leave to which the employee is entitled. This means that if an employer was covered by FMLA before the FFCRA’s April 1, 2020 effective date and an employee has taken FMLA time for some non-COVID19 related reason in the employer’s 12-month period, an employee will have fewer than 12 weeks of expanded family and medical leave available to take under the FFRA.  It also means that any expanded family and medical leave taken under the FFCRA would count against the employee’s entitlement to preexisting FMLA leave.  In other words, if an employee uses all 12 weeks of expanded family and medicl leave, and later in the employee’s 12-month leave period needs leave time for a different serious health condition, the employee will not be eligible for FMLA leave.  If an employer has fewer than 50 employees and becomes covered under the FMLA on April 1, 2020 on pursuant to the FFCRA, this analysis does not apply.  The Regulations further clarify that  an employee may elect or an employer may require an employee to use, accrued leave that under the employer’s policies would be available to the employee to care for a child, such as vacation or personal leave or paid time off, concurrently with the expanded family and medical leave under the EFMLEA. The DOL explained that this allows employees to receive full pay during the period for which they have preexisting accrued vacation or personal leave or paid time off, and allows employers to require employees to take such leave and minimize employee absences.

Other Suitable Child Care Provider.  The Regulations clarify that an employee may take paid sick leave to care for his or her child because school or child care is closed only when the employee needs to, and actually is, caring for the child.  According to the Regulations, this generally will not be the case if another suitable individual— such as a co-parent, co-guardian, or the usual child care provider—is available to provide the care the employee’s child needs.

Small Business Exemption.  The FFCRA includes an exemption for small employers (those with fewer than 50 employees) from having to provide certain paid leave “when doing so would jeopardize the viability of the small business as a going concern.”  The Regulations now clarify that exemption will be met if an authorized officer of the business has determined that:

1.       The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;  

2.       The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  

3.       There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

 

Importantly, the Regulations clearly state that this exemption is ONLY AVAILABLE for paid sick leave or expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related.  It is NOT available for paid sick leave available for other qualifying reasons, i.e. for paid sick leave because the employee has been advised by a health care provider to self-quarantine related to COVID-19; is experiencing COVID-19 symptoms and is seeking a medical diagnosis; or is caring for an individual subject to an order described in (1) or self-quarantine as described in (2). To elect this small business exemption, the employer must document and maintain records that support its that the 3-part exemption criteria is met.  Such documentation is not sent to the DOL, but retained in a file with the employer.  Regardless of whether a small employer elects to this exemption for one or more employees, the employer is still required to post this required FFCRA notice as a covered employer. 

 

Further considerations.  In addition to the above, the Regulations are chalk full of additional clarifications and details about the paid sick leave and expanded family and medical leave benefits provide for by the FFRCA.  Employers are well-advised to understand all parts of the Regulations applicable to their particular situation. Otherwise employers face significant potential consequences.  As noted in the Regulations, employers who fail to provide paid sick leave will be considered to have failed to pay minimum wages in violation of FLSA and will be subject to the related penalties, including multiple damages and attorney’s fees.  The FMLA’s enforcement provisions apply for purposes of a failure to provide the expanded family and medical leave benefits of the FFCRA, except that an employee’s right to file a lawsuit directly against an employer does not extend to employers who were not previously covered by the FMLA.  Given these consequences, employers who understand their obligations under the FFCRA may still wish to seek advice of employment counsel before deciding whether and to what extent employers will provide paid sick and/or expanded medical and family leave.  Such legal guidance may help employers avoid the legal pitfalls of the FFCRA and provide a sense of clarity in these uncertain times.    



[1]This part of the FFCRA generally provides for two weeks of paid sick leave to all employees, at full pay for employees out of work because the employee is him/herself dealing with COVID-19 related illness or isolation order, or at 2/3 pay when taking care of someone else dealing with COVID-19 related illness or isolation order or is caring for a son or daughter whose school or child care is closed. 

[2]This separate provision of the FFCRA provides for up to twelve weeks of expanded family and medical leave, up to ten weeks of which must be paid at partial pay, up to a specified cap, when an eligible employee is unable to work because of a need to care for the employee’s son or daughter whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.

[3] The other 5 qualifying reasons for FFCRA leave are that the employee: (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (3) is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; (4) is caring for an individual who is subject to an order as described in (1), or who has been advised as described in (2); (5) is caring for his or her son or daughter whose school or place of care has been closed or whose child care provider is unavailable due to COVID-19 related reasons; or (6) is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services

New $ 2 Trillion Dollar Emergency Relief Bill Passed and going to President

posted Mar 27, 2020, 11:54 AM by Christopher Vrountas

It finally happened. The new law is here and with it, hopefully, at least a measure of relief.  

Here is a link to the House bill passed moments ago: https://apps.npr.org/documents/document.html?id=6819239-FINAL-FINAL-CARES-ACT

The package is much as has already been reported, including: 

Emergency Funding to Contain the Covid19 Outbreak: $340 Billion to go to hospitals, FEMA, the CDC, and for vaccination programs.

Expansion of Unemployment Benefits: $260 Billion for an additional 26 weeks of unemployment benefits, including and additional $600 per week for each week normally provided by state unemployment programs, which differs each state. 

Small Business Loans: $350 Billion in guaranteed loans capped at $10,000,000 per borrower to help businesses deal with closures caused by the outbreak for use in sustaining their operations, including paying workers furloughed or laid off.  This money can be used retroactively for those workers sent home because of pandemic related closures. These loans may be forgiven so long as the borrower has maintained payroll through the end of June with the funds. 

Tax Credits: Businesses regardless of size may be entitled to tax credits to help them maintain payroll in the event the business is closed or distressed on account of the pandemic. The credit will cover 50% of payroll up to first $10,000 of compensation for each employee.

Direct Payments to People: $1,200 per person for individuals who made less than $75,000 in 2018 or for those filing jointly who make less than $150,000 that year. In addition, there will be a $500 payment for each dependent child.

DOL Publishes Guidance and Poster Re: Families First Coronavirus Response Act

posted Mar 26, 2020, 2:39 PM by Allison Ayer   [ updated Apr 2, 2020, 8:41 AM ]

As most people already know, just over a week ago, Congress passed the Families First Coronavirus Response Act (FFCRA or Act).  Generally, it requires employers with fewer than 500 employees (“covered employers”) to provide their employees with 1) paid sick leave and/or 2) expanded family and medical leave, for specified reasons related to coronavirus, with 100% reimbursement by the government via a tax credit for leave time paid out.   

 The United States Department of Labor (“DOL”) is the federal agency charged with enforcing the FFCRA.  This week the DOL issued guidance to help explain the key provisions of the Act.  Below is some critical information from the DOL Guidance regarding what covered employers must do to comply with the Act: 

·        Paid Sick Leave for Sick Employee.  Covered employers must provide 2 weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay (up to a max of $511/day) for employees unable to work because the employee him or herself is quarantined (pursuant to government order or advice of a health care provider) and/or is experiencing COVID-19 symptoms and seeking a medical diagnosis;

 

·        Paid Sick Leave for Employee to Care for Someone Else.  Covered employers must provide 2 weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s regular rate of pay (up to a max of $200/day) because the employee is unable to work in order to care for some other individual subject to quarantine or to care for a child (under 18) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and

·        Expanded Paid Family Leave for Child Out of School/Childcare.  Covered employers must provide up to an additional 10 weeks of paid expanded family and medical leave at 2/3’s the employee’s regular rate of pay (up to a max of $200/day) where an employee, who has been employed for at least 30 calendar days, is unable to work and needs leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Which employees are eligible for what?  All employees are eligible for the 2 weeks paid sick leave.  Employees employed for at least 30 days are eligible for up to an additional 10 weeks of the expanded paid family leave to care for kids out of school or child care.  For the paid sick leave, full time employees are eligible for up to 80 hours of leave, and part-time employees are eligible for the number of hours of leave that the employee works on average over a 2-week period.  Tips must be included in calculating the regular rate of pay applicable for eligible leave time. 

What are the notice requirements?  The FFCRA also requires that covered employers post in their workplaces this FFCRA notice concerning the leave rights under the Act.  According to DOL FAQ’s, covered employers must post the notice in a conspicuous place on its premises.   An employer may also satisfy the posting requirement by emailing or direct mailing the notice to employees, or posting it on an employee information internal or external website.  The notice need NOT be provided to recently laid off employees, which suggests the DOL’s view that employees who have been laid off are not covered by the FFCRA.  The FFCRA notice does have to be provided to new hires.    

Is there any exemption?  Small businesses with fewer than 50 employees may qualify for an exemption from the expanded FMLA leave requirement to provide leave due to school closing or child care if the leave requirements would jeopardize the viability of the business as a going concern.  At this point, the DOL has taken the position that covered employers should not send anything to the DOL electing this exemption.  The DOL guidance suggests that for now small business seeking to elect this exemption should document why it meets the criteria set forth in the law.  The DOL is expected to publish regulations shortly regarding the Act’s requirements and this exemption. 

How will the government reimburse covered employers?  Covered employers required to provide this paid leave will be 100% covered by a dollar-for-dollar refundable tax credit available to the employer by the Federal government for the cost of leave and the cost of the employer’s health insurance premiums during the leave.  The IRS website explains that the mechanism for the tax credit will involve employers retaining an amount of the payroll taxes equal to the amount of qualifying sick and family leave that they paid, rather than deposit them with the IRS, as more fully described here.

Can employees carry over leave required by the Act?  The law takes effect April 1, 2020, and covers leave taken between April 1, 2020 and December 31, 2020.  Paid sick leave does NOT carry over from one year to the next, and it does NOT have to be paid out upon termination. 

Domestic "Marshall Plan" to Deal with Pandemic Has Passed Congress

posted Mar 25, 2020, 8:58 AM by Christopher Vrountas   [ updated Mar 26, 2020, 2:02 PM ]

Today, the Senate introduced a massive, $2 Trillion stimulus package to address the global Covid19 pandemic.  Here is a link to the pending law:  https://www.congress.gov/bill/116th-congress/senate-bill/3548/text

There’s a lot in there. Some highlights:

  • Qualifying Small businesses will get approximately $367 billion to cover business expenses and to keep making payroll while workers have to stay home. Companies with 500 or fewer employees could tap up to $10 million to pay for salaries, mortgage payments, rent, utilities and other business debts.  These loans may also be potentially forgivable to the extent they are used to cover payroll for workers during the crisis
  • New Sick Leave / Paid Leave provisions were clarified Sections 4601 and 4602 amend the new Paid Leave and the new Paid Sick Leave law that was passed last week (see prior post to this blog) to clarify expiration (when leave is exhausted or when they return to work, whichever is sooner) and the dollar limits to be paid to employees ($511/week / $5,110 per employee for those quarantined or symptomatic; $200/day / $2,000 per employee for those home as caregivers for the sick or children home from school).
  • Federally guaranteed loans will provide eight weeks of assistance for qualifying employers who maintain payroll. Those who meet requirements would have costs such as utilities, mortgage interest and rent forgiven. 
  • Other Eligible Businesses: can obtain a total of $150 Billion dollars in guaranteed loans. 
    1. An “eligible business” includes any U.S. business that has incurred a covered loss that jeopardizes continued operations, and which has not already received other benefits under the Act (which presumably includes the relief offered for paid sick leave and family leave). See 3107(4). 
    2. In order to get these loans, a company will need to enter into a 2 year agreement providing that no employee who made over $425K / year in 2019 will make more than his or her 2019 wage in either 2020 or 2021. See 3103.
    3. The terms of these loans and the process to apply for them remain to be determined. 
    4. Lots of provisions for families and for the unemployed, but that money goes to individuals, not the businesses
  • Payroll taxes will be deferred for corporations, meaning that payment of the 2020 payroll taxes for eligible tax payers will be deferred until 2021 and 2022. Estimated corporate tax payments will also be deferred. Other tax changes regarding recognition of losses have been addressed to help businesses weather this storm and improve cash flow.
  • Further guidance and regulations will issue from the IRS and the USDOL to implement the above and the many other provisions of this stimulus package.  We will continue to monitor further developments and provide you updates on specifics as they become known. 

LAW IN THE TIME OF CORONAVIRUS

posted Mar 18, 2020, 8:19 AM by Christopher Vrountas   [ updated Mar 21, 2020, 9:12 AM ]

by Christopher Vrountas and Allison Ayer

The law is rapidly changing to meet the current reality as the coronavirus pandemic spreads.  Both Congress and the governors of several states have begun to act and the situation is fluid. Businesses will need to keep up to date on the new rules and the new obligations for employers that may come with them. In addition, there are current laws that already provide some tools for businesses to respond to the spread of this infectious disease.

Here is a current list of what is changing now and also what already exists:

The Families First Coronavirus Response Act, HR 6201:

After several rounds of change and edits, this bill passed both houses of Congress and was passed March 19, 2020.  It requires two different paid leave programs for employers with less than 500 employees.  One is referred to as The Emergency Family and Medical Leave Expansion Act and the other is referred to as The Emergency Paid Sick Leave Act.  Here is what they call for:

             The Emergency Family Medical Leave Expansion Act: 

Businesses with less than 500 employees will be required to offer FMLA leave benefits to all employees who have been on the payroll for at least 30 days.  This leave can be used for quarantine or treatment, caring for sick or at-risk family members, or caring for children sent home because of school closures.  The first two weeks can be unpaid. The following 10 weeks (should leave extend that long) will be paid at 2/3 the rate of that employee’s usual pay.

The bill also provides for some funding assistance. The government will provide covered employers a 100% tax credit for qualified family leave wages paid out by the employer for each calendar quarter, but this benefit will be capped at $200/day and $10,000 per calendar quarter. Small businesses, those with less than 50 employees, may be exempted by the U.S. Secretary of Labor.

             The Emergency Paid Sick Leave Act:

             Businesses with less than 500 employees will be required to offer full-time employees 10 days (i.e., 80 hours) paid sick leave to those who are quarantined or who seek a diagnosis or preventive care regarding Covid-19.  For part-time workers, their paid sick benefit will amount to their average pay for two weeks.  For those home to care for others at risk or with the virus, the pay during leave will be set at 2/3 their regular pay. 

 Like the FMLA Extension Act, this bill also provides for limited government funding.  Employers will receive a 100% tax credit for all wages that are paid, but capped at $511/day and $7,156 for each employee in total. 

 Both these proposed programs are now proposed to expire by December 31, 2020.  Whether that deadline will truly mark the end of the time of the coronavirus pandemic remains to be seen.

 The Family Medical Leave Act (FMLA):

Without the above proposed changes, leave under the FMLA generally is not available to healthy people or for people who need to stay home to care for healthy people.  Generally, employees are eligible for FMLA leave if they work for a covered employer and 1) have worked for their employer for at least 12 months, 2) have worked at least 1,250 hours over the prior 12 months, and 3) work at a location where at least 50 employees are employed by the employer within 75 miles. Leave is available for those who need time off to deal with their own “serious health condition” or to care for a family member who has one.

Obviously, those sick or infected with Covid-19 will have a “serious health condition”, but protected leave under the FMLA is not currently available unless it concerns such a condition. Whether an asymptomatic person who has been “exposed” to the virus or is otherwise “at risk” and therefore subject to “quarantine” is someone with a “serious health condition” remains to be seen as a matter of law.  Arguably, someone who is not sick or infected cannot have a “serious health condition”.  On the other hand, how could someone who presents a major health risk to others on account of prior exposure not in some sense have a “serious health condition”? No doubt, this may turn up in the courts for resolution.

In addition, an employer may require its employees returning from leave must to present certification from the employee’s health care provider that the employee is able to resume to work.  This is called a “Fitness For Duty Certification” and it may be required only when the employer sets such requirement in a standard policy applicable to all similarly situated employees and only if the employer notifies the employee that such certification will be required when the employer tells the employee in writing that the leave has been designated as FMLA leave. That said, a fitness for duty certification may be very problematic during a pandemic when medical resources are already stretched thin.  Flexibility and balance will be key in the time of coronavirus.

The Federal WARN Act:

Governors across the country are ordering wholesale shutdowns of restaurants and bars.  What obligations if any arise to companies who must follow those orders under the WARN Act? Specifically, does compliance with these orders constitute either a “plant closure” or a “mass layoff”?

Generally, the WARN Act requires 60 days’ notice to employees and relevant government authorities in the event of an anticipated “plant shut-down” or “mass lay off”. This law was enacted to stabilize the impact of sudden job losses upon affected employees and the community at large. The notice requirement also serves to provide essentially a 60-day transition pay for employees from the time they learn that they will lose their jobs.

A “plant closing” is any shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.

A “mass layoff” is a reduction in force that is not the result of a “plant closing” but nevertheless results in an actual employment loss at a single site of employment during any 30-day period at a level calculated under either of the following two methods:

1. the number of affected employees amount to at least 33 percent of the employees at a single site of employment, excluding part-time employees, and that number totals at least 50 employees, excluding part-time employees; or

2. the number of affected employees totals at least 500, excluding part-time employees.

One may ask, how could employers be responsible for providing a 60 day WARN notice when they have been ordered by the Governor to shut down with only 24 hours’ notice?  The answer comes under the stated exceptions to the WARN requirements under the statute.

Specifically, the WARN Act does not require employers to give WARN Act notice under three exceptional circumstances: 1) the “faltering enterprise” exception, 2) the “unforeseen circumstances” exception, or 3) the “natural disaster” exception.

A declared “state of emergency” due to a global pandemic and an order from the Governor to shut down with 24 or 48 hours’ notice should likely constitute either “unforeseen circumstances” or a “natural disaster” or both.  Accordingly, businesses who send employees home because of the government ordered shut-downs may well likely be exempted from WARN Act notice requirements.  

The Age Discrimination in Employment Act (ADEA) / Title VII Concerns:

The selection of those to be laid off, obviously, must be done in a non-discriminatory manner.  This may be simple for those who are forced to close wholesale entire restaurants and/or bars or other operations.  But for those who must simply reduce office staff or other workers because of the decline in work resulting from the pandemic, care must be taken to ensure selection is based on legitimate and defensible business needs and not in any way affected by express or latent discriminatory bias.  Check the numbers on those affected before making your decision.  Consider whether the business reasons for your selection are strong enough to justify the impacts you seen in your analysis.  

This analysis must be taken whenever the employer makes any kind of wholesale change in work conditions.  For example, the employer may need to select workers to lay off, others to work from home, others for mere furlough, others for reduced hours or reduced pay going forward.  For each action, the employer must be sure to avoid bias and, if at all possible, avoid even the appearance of bias as the appearance of bias could opportunistically be argued against you as evidence of bias, even where no bias exists. 

The Americans with Disabilities Act (ADA):

For those businesses not shutdown, how can they manage their workplace and accommodate employees affected by the coronavirus and those who do not want to be affected?  The ADA provides some guidance along these lines.

As an initial matter, you can deal with a worker exposed to the coronavirus essentially as though the worker is a person with a “disability”. This suggests you should exclude a such an employee from work when:

-        you have objective evidence that the employee poses a direct threat (i.e., a significant risk of substantial harm); and

-        you determine that there is no available reasonable accommodation (that would not pose an undue hardship upon the employer) to eliminate the direct threat.

Provide accommodations when you can.  If you can manage a work from home situation with the affected worker, you should explore such an arrangement as a reasonable accommodation.  If you cannot, you will likely need to discuss time off and an action plan with medical providers to plan for when and how such employee may return. 

The Fair Labor Standards Act (FLSA):

The federal law regarding the payment of wages, minimum wage and overtime has been in place since the New Deal, but how does it apply to companies having to send people home or otherwise change work conditions entirely in the time of coronavirus?

For exempt workers, those sent home prior to the end of their pay week must nevertheless be paid for their entire pay week.  That is the trade-off for having that worker exempt from overtime pay requirements.  In light of that requirement, there is really no rush in sending those exempt workers home before the end of their pay period (unless they are experiencing symptoms of the virus), and if there is anything to do before they leave you may as well ask them to do it before their lay off begins. 

But, there is a catch.  Once the exempt worker is sent home, the employer cannot “suffer any work” from such workers. If an exempt worker works anymore than 15 minutes in any given pay period, the employer may be required to pay that exempt worker their entire salary for the week. Avoid this risk by telling your laid off exempt workers not to work at all. Deny them remote access to their work email accounts or to your office computer system or server.  Have them return all work cell phones.  If you send them home, then send them home.

For non-exempt workers, i.e., workers who are paid hourly or are otherwise covered by the overtime requirements of the FLSA, the calculation is simpler.  They only get paid for time worked, and their pay stops immediately when sent home regardless if such occurs in the middle of the pay week.  That said, however, employers should be vigilant not to allow any “volunteering” or “helping out” during any shutdown. 

In short, workers who work must be paid. If you send people home with the intent of avoiding payment of wages, then you cannot allow them to continue to work for you in the meantime.

State Wage Acts:

Massachusetts law requires payment of all wages owed at termination, including but not limited to all earned but unused vacation time, on the date of discharge.  If you lay people off indefinitely, you will need to make this termination day payout or risk violating the Wage Act.

New Hampshire requires termination payout within 72 hours of discharge, and requires payment of earned but unused vacation only if the employer’s vacation program provides for such payout. Many do, however, and so the termination payout, while 72 hours later than what is required in Massachusetts, could still amount to a substantial cash outflow.

One potential way to avoid this risk is to temporarily furlough employees.  As the Governors of both Massachusetts and New Hampshire respectively have limited their shut down orders to April 6, 2020, respectively, a furlough of simply 19 days with the expectation of return after that short period of time, and a continuation of benefits during that same time, should not be construed as a “termination” and therefore should not trigger the termination day payout requirements.  If the furlough continues, however, you may need to reconsider whether the time off has become an indefinite layoff requiring the termination pay off called for under the state Wage Act. 

It has been reported that, to the extent there is ambiguity as to whether a separation constitutes a termination, state labor departments do not plan to prioritize enforcement in this area.

Unemployment:

Up to now, a laid off worker could apply for unemployment and be eligible for benefits only after an initial one week waiting period.  The Governor of Massachusetts has filed a bill waiving the one week waiting period so as to allow workers to be eligible immediately upon layoff. This waiver would expire 90 days after the termination of the state of emergency

 

In addition, the Executive Office of Labor and Workforce Development in Massachusetts is also expected to file emergency regulations to allow employees affected by the coronavirus to collect unemployment if their workplace shuts down with plans to reopen within four weeks. The following conditions would apply:

-Workers will need to keep in contact with their employer during the shutdown.

-Workers will need to be available to work their employer during the shutdown.

-Employers may ask for an extension to eight weeks, and workers will similarly remain eligible for the benefits during the extended period if granted.  If necessary, DUA may extend these time periods for workers and employers.

Similarly, the Governor of New Hampshire issued an order waiving the one week waiting period for workers laid off on account of the coronavirus pandemic. While the state government may also add responsive regulations similar to Massachusetts, the Governor has also ordered that utilities, landlords and mortgage companies may not take action against consumers for nonpayment of bills as long as the state remains under its emergency declaration due to COVID-19. That means residents cannot be evicted or have their utilities cut off or have their property face foreclosure for failing to pay amounts owed during the current situation. 

The Massachusetts Paid Sick Time Law:

Massachusetts requires employers to provide 40 hours of 40 hours of job-protected sick time per year to take care of themselves and certain family members who are sick or have a “condition” that requires home care or medical care or treatment. The leave may also be used to attend routine medical appointments or to deal with domestic violence situations at home. 

Employers may require workers to earn such sick time, but the rate must be at least one hour of earned sick leave for every 30 hours worked.

Employers of 11 or more employees must provide sick leave on a paid basis.  Employers with fewer employees must provide the protected leave, but need not pay those workers on leave.  

Given these rules, the sick time provided under this law must be available for those infected by Covid-19 or caring for those infected.  It is questionable, however, whether the law protects workers who are merely quarantined but are otherwise asymptomatic. Arguably, anyone who has been merely “exposed” and is now at risk of carrying the virus may have a “condition” requiring a form of “home care”, i.e., quarantine.   

Massachusetts Paid Family Medical Leave Law (“PFML”):

The Massachusetts PFML was passed last year but will not go into effect until next year. Employers are nevertheless presently required to take withholdings from their employee’s paychecks to fund the benefits provided under the law.  Although the benefits are not presently available or enforceable by employees now, the provisions of the PFML should be noted as we continue in the time of the coronavirus.   

The PFML will be a required benefit for anyone who works in Massachusetts and who will be eligible under the law to take up to 26 weeks of paid leave for medical or family reasons. For now, PFML will be funded by a payroll tax of 0.75% of an employee’s eligible wages, to be paid collectively by the employee and the employer. The specific amount each may pay will vary depending on how much is being contributed by each party. For now, the maximum amount employers require employees to contribute from their wages will be is $0.38 per $100.00. 

Depending on the type of leave, an employee may be allowed differing lengths of leave. PFML will provide Massachusetts workers with up to 12 weeks of job-protected, paid family leave, up to 20 weeks of job-protected, paid medical leave, or up 26 weeks of combined family and medical leave in a benefit year.  

Meanwhile, as under the FMLA, employers will be required under the PFML law to maintain the employee’s health insurance at the same levels the employee had prior to going on leave. Upon their return to the workforce, employee who have taken leave must be allowed to return to their previous position, or a position of similar responsibility and compensation. 

PFML benefits will become available on January 1, 2021. Paid family leave will available for workers to: 1) care for a sick family member, 2) bond with a newborn child, 3) bond with a child after adoption or foster care placement, 4) manage family affairs when a family member is on active duty in the armed forces.  Paid medical leave will be allowed for employees to manage a personal serious injury or illness.

Thus, in many ways, the PFML leaves open the same loop holes for healthy yet quarantined people, and certain for laid off workers due to shutdowns without regard to their own medical conditions.  Whether there may be tweaks in the law going forward in light of our current experience remains to be seen.

How Do We Respond?

Make an action plan. Develop a policy based on the plan. Study the components that make up the plan and the policy you will follow to implement it so that you know it will be based on solid footing.

While law is important, it is only the floor, not the ceiling, when considering the actions your business may need to take.  Know your business, your employees, your customers, and the regulatory environment.  Of course, call your counsel for extensive consultation and advice, as this article merely notes briefly some of the many issues you must consider.  In the end, facing the reality head on with all the knowledge and resources available and planning ahead will be the best way to proceed. 

DOL Issues Final Rule Clarifying Regular Rate of Pay Standards which Should Help Employers Calculate Overtime

posted Jan 2, 2020, 7:56 AM by Allison Ayer   [ updated Apr 2, 2020, 8:43 AM ]

On December 16, 2019, the U.S. Department of Labor (“DOL”) published its Final Rule concerning regular rate of pay requirements under the Fair Labor Standards Act (“FLSA”).  The Final Rule clarifies that certain employee benefits, perks and bonus payments need not be included in an employee’s regular rate of pay.  Because the regular rate of pay is the starting point for determining an employee’s overtime rate, the Final Rule should help employers accurately calculate overtime due, which should also help minimize the risk of wage and hour lawsuits that have the potential for high damages equal to double or even triple unpaid wages plus attorneys’ fees.     

As background, the FLSA is the Federal law that requires non-exempt employees to be paid at a premium overtime rate for all hours worked over forty (40) in a week.  The overtime rate paid to an employee is based on his or her regular rate of pay.  Specifically, the FLSA establishes that the premium overtime rate must be at least one and a half times the regular rate of pay.  In other words, for every hour over 40 that a non-exempt employee works during a week, he or she must be paid at least 1.5 times his regular rate of pay.  Sounds simple, right? 

The problem is that it is not always easy to determine an employee’s regular rate of pay because it is not the same as an employee’s hourly rate of pay.  The regular rate of pay includes many benefits employers might provide their workers above and beyond their salary or hourly wage.  The FLSA defines the regular rate of pay very broadly to include “all remuneration for employment paid to, or on behalf of, the employee” with very limited exceptions.  As a result, the value of things like sign-on bonuses, gym memberships, reimbursement for cell phones, or payouts for unused sick time arguably had to be included in calculating an employee’s regular rate of pay before the new Final Rule.  Yet many employers failed to add these benefits to the regular rate, and based overtime only on an employees’s hourly pay rate.  As a result, employees end up being underpaid overtime, creating significant legal exposure for wage and hour claims. 

The FLSA’s new Final Rule seeks to mitigate such confusion and the related legal exposure by helping employers understand what can be properly excluded from employee’s regular rate of pay.  According to the DOL’s Press Release, Fact Sheet, and FAQ’s, the Final Rule clarifies that employers may EXCLUDE from an employee’s regular rate of pay the following benefits:   

·                  Cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student-loan program), and adoption assistance;

·                  Payments for unused paid leave, including paid sick leave or paid time off;

·                  Payments of certain penalties required under state and local scheduling laws;

·                  Reimbursed expenses for such things as cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred “solely” for the employer’s benefit, and reimbursements that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System or the optional IRS substantiation amounts for travel expenses are per se “reasonable payments”

·                  Certain sign-on bonuses and certain longevity bonuses;

·                  Cost of office coffee and snacks to employees as gifts; and

·                  Contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense. 

 

The Final Rule retains the prior standard that discretionary bonuses are properly excluded from the regular rate of pay.  But it now clarifies that merely calling a bonus “discretionary” does not determine whether it is actually discretionary and therefore excludable.  Instead, the new Final Rule adopts a fact-based approach and provides examples of what constitutes the type of discretionary bonus that is properly excluded from an employee’s regular rate of pay.  Importantly, the Final Rule does NOT change that non-discretionary bonuses or commission pay determined in advance and based on a formula set forth in an agreement, offer letter or based on an oral prior promise MUST BE INCLUDED in the regular rate of pay.  Only genuine, bona fide non-discretionary bonuses as explained in the Final Rule are properly excluded from the regular rate of pay.    

The Final Rule also eliminates a restriction that “call-back” pay and similar type payments must be infrequent and sporadic in order to be excluded from the regular rate of pay.  The Final Rule retains the prior standard that such call-back pay must not be prearranged in order to be properly excluded. 

Lastly, the DOL’s Final Rule updates the rules concerning the “basic rate of pay” as an alternative to the regular rate.  Under the existing regulations, employers using an authorized “basic rate of pay”  as an alternative to the regular rate may exclude from an overtime calculation any additional payment that would not increase the total overtime compensation by more than $0.50 a week on average for overtime workweeks in the period for which the employer makes the payment.  The Final Rule changes the standard to allow employers using the “basic rate of pay” alternative to exclude from overtime additional payment that would not increase the total overtime compensation by more 40% of the higher applicable local, state, or federal minimum wage a week on average for the overtime workweeks in which the employer makes the payment. 

               The Final Rule, which can be found here, becomes effective January 15, 2020. 

               So where does that leave employers?  While the DOL’s Final Rule certainly makes clearer the types of payments excludable from an employee’s regular rate of pay, it does not address every possible fringe benefit an employer might decide to give its employees.  The Final Rule also creates a fact-specific approach to figuring out whether a bonus is truly discretionary.  As a result, whether a particular bonus is properly excluded from the regular rate of pay must be assessed on a case-by-case basis.  This means there still remains ambiguity whether certain types of extra pay are properly excluded from the regular rate even with the new, more specific Final Rule, and the related risk of an unpaid overtime lawsuit.  The Final Rule also obviously does not affect state or local law which may have more stringent standards than the FLSA.  Employee payments not included in the regular rate under the FLSA may need to be added to the regular rate in order to comply with these state laws.   Employers are therefore well-advised to know and understand the wage and hour rules applicable to their business, and seek legal counsel as appropriate, to make sure they are paying their employees all overtime due and hopefully avoiding costly wage and hour litigation.  

Fifth Circuit Strikes Down EEOC Guidance that Limited Employer Use of Applicant Criminal Histories

posted Nov 13, 2019, 11:22 AM by Allison Ayer

In a recent case called State of Texas v. Equal Employment Opportunity Commission, et al., the Fifth Circuit Court of Appeals held unenforceable Guidance from the Equal Employment Opportunity Commission (“EEOC”) that limited an employer’s use of criminal records in hiring.  On its face, the holding might seem to allow employers more freedom to refuse to hire an applicant because of his or her criminal past.  But, the case has significant limitations discussed below.  Employers therefore are still well-advised to tread carefully before asking applicants about their criminal history and to avoid automatic bans on hiring individuals based on an applicant’s criminal convictions.

Here’s what happened: 

The EEOC has long been concerned based on hiring data it was seeing, that bans on hiring individuals with criminal records disproportionately prevent minorities, in particular African Americans and Hispanics, from obtaining employment.  In April 2012, the EEOC issued written Guidance that essentially purported to outlaw certain practices concerning use of criminal background information.  More specifically, the EEOC took the position that if an employer’s criminal records screening practice disproportionately impacted individuals of a particular race or other protected class, the employer would be presumed liable for discrimination under Title VII unless the employer could demonstrate the policy or practice was job-related for the position sought and consistent with business necessity.  The Guidance also banned automatic across-the-board exclusions from employment of a particular class or type of crime.  In essence, the Guidance required employers to conduct individualized assessments of every person’s criminal record, using a multi-factor screening system to ascertain whether a certain individual should or should not be hired. 

Meanwhile, the State of Texas propounded a strict policy excluding individuals convicted of certain specified categories of felonies from most public jobs.  In 2012, soon after the EEOC issued its Guidance, a person who had been rejected for a Texas Department of Public Safety job filed a complaint with the EEOC challenging Texas’ no-felon hiring policy on the grounds that it had a disparate impact on certain groups in violation of Title VII.  Texas responded by suing the EEOC, claiming that the EEOC Guidance was unenforceable.  The Fifth Circuit took the case up and agreed with Texas. 

According to the Fifth Circuit, the EEOC was not authorized to issue its Guidance in the first place because it created substantive legal obligations rather than mere procedural requirements to comply with federal law.  The Court further ruled that the EEOC was barred from enforcing its unauthorized Guidance against Texas or any other employer. 

But don’t think that is the end of the story. The Fifth Circuit conceded that while the EEOC could not issue “Guidance” to create binding presumptions of unlawful disparate impact upon employers who use automatic criminal hiring bans, the EEOC could nevertheless sue to enforce Title VII against an employer for anti-criminal hiring practices and prevail if such a ban was proven to have had a disparate impact on any protected class under the statute. 

So, where does this leave employers who wish to lawfully implement criminal conviction screenings in their hiring process.  Can employers automatically refuse to hire anyone convicted of felonious sexual assault for example so long as it does not unfairly impact Hispanic applicants?  Can they ask about an employee’s criminal record without any limitation?  The short answer is any “automatic” policy is generally not a good idea as such could lead to substantial liability.  Always apply intelligence to any rule you follow.       

For one thing, the Texas case is only the law in the Fifth Circuit, at least for now.  It was decided in a jurisdiction that covers Texas, Louisiana, and Mississippi.   Accordingly, the decision is not binding on New England states.  Until there is a similar decision by the First or Second Circuit which together cover New Hampshire, Massachusetts, Maine, Vermont, Connecticut and Rhode Island, employers operating in these states should continue to comply with the EEOC Guidance to secure its best chance of avoiding a Title VII disparate impact claim of this type. 

The Fifth Circuit case also only addressed the narrow issue of whether an employer’s use of criminal histories in hiring violates Title VII.  There are other state and Federal statutes that an employer could violate when relying on criminal histories to make hiring decisions. 

For example, many states like Massachusetts have “ban the box” laws which prohibit employers from asking applicants[1] about their criminal histories including arrests or convictions.   Other states like New York, expressly prohibit denying employment based solely an individual’s’ previous conviction(s).  New York employers must go through an individualized assessment to weigh multiple specific factors before denying employment because of an individual’s criminal background. 

In 2019, New Hampshire moved closer to passing a “ban the box” although it has not yet become law.  Nevertheless, current New Hampshire law specifies what an employer is allowed ask an applicant.  In an application, a New Hampshire employer may only ask “have you ever been arrested for or convicted of a crime that has not be annulled by the court?”

There are also Federal laws like the Federal Fair Credit Report Act (“FCRA”) that address what an employer can do in terms of asking about applicant’s criminal history.  This FCRA provides for specific procedures that an employer must follow before obtaining a criminal background check from a third-party (like a credit agency) or relying on the report to make an adverse employment decision. 

The point here is that employers must understand all of these laws, not just Title VII, when deciding if and how to lawfully use criminal background information in the hiring process.  When considering whether and to what extent you will rely on criminal histories in making hiring decisions in a way that does not run afoul of the law, consider these practice tips: 

·        Avoid automatic hiring bans based solely on an applicant’s criminal conviction(s).

·        Omit from your applications a question about someone’s criminal history. 

·        Wait until after making a conditional offer of employment to ask about an individual’s criminal background, if at all. 

·        Assess each applicant on an individualized basis to determine whether there is a direct relationship between his/her previous criminal offenses and the specific position sought, and whether there exists an unreasonable risk to the safety of property, other employees or the public, in hiring this person given his/her past criminal convictions.  The specific duties of the job, the timing of the criminal conviction, the age of the person when convicted, the number and seriousness of the offenses are just some of the factors that an employer may wish to consider in making this assessment.

·        Uniformly conduct criminal record inquiries, if you decide to use them.  This means you must make sure you ask all prospective employees of the same position about their criminal conviction(s); NEVER selectively ask about conviction histories of only certain individuals because they “look like” they may have a criminal record.

·        Allow the applicant to explain the circumstances of his/her conviction(s) and to correct what may be an inaccurate criminal record, before deciding whether or not to hire the individual. 

·        Seek help from legal counsel to understand the risk of liability and balance these risks against the business interest in hiring a person with a criminal past.   



[1] In Massachusetts, employers must wait until later in the hiring process (i.e. at an interview or after a conditional offer of employment) to ask about or obtain information about an applicant’s criminal past, and must comply with specific notice requirements for obtaining a criminal record or acting on it in making a hiring decision.  

The Last Domino Falls in the Domino’s Website Accessibility Case

posted Nov 8, 2019, 2:50 PM by Christopher Vrountas

When the Supreme Court last month denied Domino’s petition to review the Ninth Circuit’s decision that allowed a website accessibility case to proceed against the pizza chain, it continued a split among the circuits. While all courts agree that Title III imposes accessibility obligations to websites connected to “brick and mortar” businesses, circuits have divided over whether Title III extends to companies that do business only “online”.  That divide remains.

The Ninth Circuit held that Title III refers to “places of public accommodation” and therefore only websites that have a “nexus” to a physical, public accommodation must comply with the accessibility requirement of the statute.  Under this approach, a public accommodation must make its website accessible to the disabled (typically, the visually impaired) to the extent such accessibility would be necessary to provide equal access to the goods or services of the physical place of public accommodation for those with disabilities. For now, that decision stands and the split amongst the circuits as to which approach to follow remains.   

While interesting, it would seem that resolving this split would not have helped Domino’s cause in any event, as its website was indeed found to have had a “nexus” to the services provided by a place of public accommodation.  Rather, it appears Domino’s highlighted the split as a reason to argue that perhaps the entire idea of applying Title III to websites at all should be reconsidered.  Indeed, the Washington Legal Foundation argued in its amicus brief that essentially all the circuits are wrong and that the Americans With Disabilities Act of 1990 simply did not cover or even anticipate websites as it was enacted before the Internet. This is not an entirely unfair argument, as Title III is clearly focused on physical barriers that must be removed for the disabled, and gaps in statutory law that might arise from  changing technology should not be filled by the judiciary but by the legislature which can readily act to implement policy in response to changing times. 

Domino’s argument failed.  Not only do all the circuits see the ADA governing websites at least to some extent, the Department of Justice also “has repeatedly affirmed the application of [T]itle III to Web sites of public accommodations.”  Really, how is the website any different from a front door if it similarly serves as the gateway to the products and services of a place of public accommodation? Neither the Ninth Circuit nor the Supreme Court was willing to go there. At least not yet.

Next, Domino’s argued that the language of Title III on its own is too vague to be followed or enforced and, as such, needs implementing regulations to establish a specific standard propounded by the Department of Justice in order to give notice of what technically must be done to comply with the law.  Domino’s argued that because the Department of Justice had failed to adopt specific technical guidelines as to how to do comply, there exists a continuing failure of notice that would amount to a denial of due process for those subject to the law.    

This also was not an unfair argument.  In an area of technical complexity and multiple potential methods to resolve an issue, it would seem fair to expect a specific standard to allow businesses to know what it must do to comply with the law and avoid substantial liability.  Indeed, a rule without enough specificity sufficient for someone to conform one’s behavior to it would seem to be the very antithesis of law.

Notably, in the absence of a regulatory standard, many including the Department of Transportation have referred to private industry standards to guide their compliance efforts. The most notable of these is what is known as WCAG 2.0.  The DOT requires airline websites to adopt these standards and the DOJ has imposed these standards on other private entities as part of some of the consent decrees it has entered.  WCAG 2.0 does not have the force of law, however, although it does serve as at least evidence of an industry standard for compliance.

In the end, the Ninth Circuit disagreed with Domino’s undue vagueness argument.  In short, the Ninth Circuit held that Title III’s provisions are clear enough to be followed and enforced notwithstanding the DOJ’s failure to adopt specific technical guidelines as to how to do so.  From the court’s perspective, Title III’s command to require accessibility so that the disabled may enjoy equal access to the products and services of places of public accommodation provides sufficient notice of the goal that must be achieved. As the court explained, since the goal is clear, “it is of no matter that the ADA and the DOJ fail to describe exactly how any given website must be made accessible to people with visual impairments . . . This flexibility is a feature, not a bug, and certainly not a violation of due process.”  

The Supreme Court did not take the bait. By rejecting Domino’s petition, the Ninth Circuit’s decision remains law, at least in the Ninth Circuit.

Indeed, courts have been dealing with this sort of ambiguity for centuries in negligence cases brought in tort.  What would the reasonable and prudent person do in any given situation? Ask a jury. The same can be said for whether a website as designed adequately allows the disabled equal access to the products and services of the place of public accommodation. Does the website do the job? Ask a jury.   

Finally, Domino’s argued under the “primary jurisdiction doctrine” that even if there is no undue vagueness the court should nevertheless stay its hand until the DOJ eventually issues its regulations, as the DOJ has said it would eventually do over several years.  Briefly, the Ninth Circuit was not convinced the DOJ was any better qualified to resolve accessibility issues than the courts and it was unwilling to force the plaintiff to wait for a remedy while the DOJ continued to delay action on propounding regulations.

So, there we have it. The Ninth Circuit’s opinion stands, the circuits remain split as to what websites must comply and the specific standard for compliance is unknown. Do not expect the DOJ to act soon, as its delay has served to delay extensive standards suggested by the predecessor administration.  Rather, expect further, opportunistic litigation.  Meanwhile, watch your website, as it could lead to liability. 

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