New EEOC Reporting Requirements to Ensure Equal Pay

Beth A. Slagle
412-456-2890
bas@muslaw.com

Are companies discriminating against women and minorities when it comes to paying equal wages for equal work? If so, just how big is the wage gap, and how widespread is it?

The answer is that we don't really know. The federal government has never consistently collected the data needed to accurately calculate wage differences among different demographic groups that perform the same work. That's why the Equal Employment Opportunity Commission (EEOC) has proposed regulations to collect wage data in order to identify possible wage discrimination in America.

As most employers know, Title VII of the Civil Rights Act of 1964 makes it illegal to discriminate against employees based on sex, race, color, national origin, and religion. Many companies that discriminate may be inadvertently paying male and female workers unequally for a variety of reasons; although, some employers may have an unwritten policy or corporate culture that promotes discrimination in pay.

In the past, however, the only available statistics to calculate possible discriminatory wage practices were from U.S. Census data reports of median wages broken down by gender, race, and ethnicity. The problem with these statistics is that they don't take life choices into account, such as differences in chosen career fields, total hours worked, and other variable factors.

In response to President Obama's National Equal Pay Task Force, the EEOC has proposed new employer reporting requirements that will help the government identify illegal wage discrimination in the workplace.

Since 1966, the EEOC has required all employers with more than 100 employees (50 employees for federal contractors) to submit data about the number of individuals they employ broken down by job function, race, ethnicity, and sex. The proposed new reporting standard will also require all employers with more than 100 employees to report related pay data based on wages reported on W-2 tax forms. The requirement will not apply to federal contractors with 50-99 employees.

According to Secretary of Labor Thomas Perez: "We can't know what we don't know. We can't deliver on the promise of equal pay unless we have the best, most comprehensive information about what people earn. We expect that reporting this data will help employers to evaluate their own pay practices to prevent pay discrimination in their workplaces. The data collection also gives the Labor Department a more powerful tool to do its enforcement work, to ensure that federal contractors comply with fair pay laws and to root out discrimination where it does exist."

The Office of Management and Budget (OMB) will need to approve the EEOC's plans before it can begin collecting the data. If the OMB approves the plan, companies will need to begin reporting data in 2017.

Any employer that does not already maintain wage records categorized by job function, gender, race, and ethnicity should begin collecting records now. Even if the government does not approve the new data collection standards, companies will be able to use the data internally to correct any inadvertent wage discrimination among people who perform equal work.

For more information about EEOC reporting requirements and other employment law matters, contact Beth Slagle or any other Meyer, Unkovic & Scott attorney with whom you have worked.

Hot Topics in Employment Law: Tips to Stay In Compliance

Hosted by: Employment Law and Employee Benefits Group

Date: Tuesday, September 30
Time: 8:30 - 10:30 am
Location: The Rivers Club
Price: Admission is complimentary
RSVP: Send email to rsvp@muslaw.com by September 24

This seminar will discuss the following "hot topics" and recent changes in employment law that you and your company will need to know to remain in compliance with employment law matters:

• Same-Sex Marriage Issues and Implications - With the recent same-sex marriage ruling in Pennsylvania, we will discuss how HR Departments should be evaluating policies and benefit plans so they comply with the ruling.
• EEOC Guidance on Pregnancy Discrimination - Understand the EEOC's guidance on how employers must deal with pregnancy-related issues as compared to accommodations provided to other employees.
• NLRB McDonald's Franchise Ruling - Learn how joint liability corporations, far removed from day-to-day personnel decisions made by franchisees and contractors, may be exposed to new legal risks.
• Pennsylvania Non-Competes Update - The recent court ruling serves as a warning to all employers of the difficulty of enforcing non-compete agreements in Pennsylvania.
• FMLA Notices to Employees - With the recent court ruling, employers and third-party administrators responsible for sending FMLA and other employee notices need to review their current procedures for notification to employees.

Please join us to learn the various tips necessary to protect yourself and your company from employment law related disputes.

Here is the full invitation:

EEOC Issues New Pregnancy-Related Protections

Beth A. Slagle
bas@muslaw.com

In response to the steadily rising rate of pregnancy-related claims of workplace discrimination, the Equal Employment Opportunity Commission (EEOC) has issued new guidance that gives more protection to employees who are pregnant, have recently had children or want to take leave to care for a new child.

The first part of the EEOC's guidance addresses the Pregnancy Discrimination Act (PDA) in the first update since it was enacted in 1978. The PDA is an amendment to Title VII of the Civil Rights Act of 1964, which prohibits employers with 15 or more employees from discriminating against employees on the bases of race, color, religion, sex or national origin. The PDA clarifies that prohibited discrimination based on sex extends to matters related to pregnancy, childbirth or related medical conditions. Thus, employers may not fire, refuse to hire, reduce pay, demote or otherwise negatively affect the working conditions of an employee because of matters related to pregnancy or childbirth.

The EEOC's new guidelines use a variety of scenarios and examples to illustrate employers' actions that it considers discriminatory in relation to current, past or possible future pregnancies. Examples include:

• A janitor tells her boss that she is pregnant. Despite her assertions that she can still perform her job, her boss is concerned that the physical demands of the job are bad for the baby and forces the worker to take leave right away. By the time the employee gives birth, she has exhausted her leave and is fired.
• A nurse is fired shortly after returning from maternity leave, even though her supervisor assured her that her job would be safe. Although her employer claims that it had to eliminate her position because of over-staffing, it did not dismiss any other workers, nor is there evidence that there is not enough work to do.
• An executive tells her supervisor that she is thinking about having a second child. Her manager has a negative reaction, and voices concerns that she won't be able to handle her job responsibilities. Two weeks later, the woman is demoted to a lower-paid position with less demanding job duties.

The EEOC requires employers to offer the same protections to men as women when requesting leave to care for a child. For example, if an employer offers new mothers six months of paid leave to bond with their new babies, they must offer the same benefit to new fathers.

The second part of the EEOC's guidance addresses for the first time how impairments related to pregnancy and childbirth may be covered by the Americans with Disabilities Act (ADA) in certain situations. While pregnancy itself is not a disability under the ADA, medical conditions related to pregnancy may qualify as a protected disability.

The ADA requires employers to provide reasonable accommodations to employees with disabilities. For pregnant employees, the most commonly requested accommodation is a light duty, which may mean that the employee does not have to lift heavy objects or perform certain physically-taxing tasks. The EEOC does not require employers to accommodate pregnant workers' requests for light duty. If the employer provides light duty jobs to employees in other circumstances, however, such as those with an injury or recovering from surgery, it must also provide light duty options to pregnant women.

In most cases, the most important aspect of a light duty request is whether it affects the primary function of the job. For example, a pregnant woman who works in a warehouse may not be able to perform primary job functions if she cannot lift more than 20 pounds. Unless the employer accommodates other warehouse workers who cannot lift heavy weights, such as a worker with a broken arm, the employer may have the right to dismiss the pregnant employee. A contrary example may be an administrative assistant who lifts heavy boxes only when the office receives its paper supply every other month. Because heavy lifting is a very small part of her job, it would be little hardship to the company to work around her restriction.

The key theme in the EEOC's new guidance is that employers must treat employees who are pregnant, have recently had a child or may have children in the future equally with workers in comparable scenarios. Employers must make decisions based solely on employees' ability to perform the functions of their job, and not apply any stereotypes about the expectations about what an employee may or may not be able to do.

For more information about non-compete agreements and other matters related to employment law, contact Beth Slagle at bas@muslaw.com or 412-456-2890.

Beth Slagle has practiced law for more than 20 years and focuses her practice on business disputes and employment law. Beth's work has earned her a spot in Best Lawyers in America since 2010, and she is the chair of the firm's Insurance Coverage Litigation Group. She can be reached at bas@muslaw.com or 412.456.2890. 
  
This material is for informational purposes only.  It is not and should not be solely relied on as legal advice in dealing with any specific situation.

EEOC Sues CVS Pharmacy

The Equal Employment Opportunity Commission ("EEOC") recently commenced litigation against CVS Pharmacy, Inc., in the U.S. District Court for the Northern District of Illinois claiming that certain provisions of a severance agreement used by CVS violates Title VII of the Civil Rights Act of 1964 because it is "overly broad, misleading and unenforceable..." Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., Civil Action No. 14 C 0863 (N.D. Ill., February 7, 2014).


According to the EEOC, "CVS conditioned the receipt of severance benefits for certain employees on an overly broad severance agreement set forth in five pages of small print. The agreement interfered with employees' right to file discrimination charges and/or communicate and cooperate with the EEOC." (EEOC Press Release, 2/7/14.)

The EEOC identified various sections of the CVS Agreement that violated Title VII:

• A cooperation clause requiring the employee to promptly notify CVS' General Counsel if the employee is contacted related to legal proceedings including contacts by "any investigator, attorney or any other third party."
• A non-disparagement clause prohibiting the employee from making any disparaging statements about CVS and its officers, directors, and employees.
• A non-disclosure provision prohibiting disclosure to any third party of confidential information without prior written permission of CVS.
• A general release of claims that included a release of all "causes of action, lawsuits, proceedings, complaints, charges, debts contracts, judgments, damages, claims, and attorney fees," including "any claim of unlawful discrimination of any kind."
• A covenant not to sue clause where the employee represents that he/she has no pending lawsuit against CVS and prohibits the employee from filing any lawsuit. In the event of a breach, the employee is required to reimburse CVS for any legal fees that it incurs resulting from the employee's breach of the covenant not to sue.
• A provision stating that in the event of the employee's material breach of the Employee Covenants section of the agreement, CVS would be entitled to obtain injunctive and other relief, including attorney fees.

Based on these sections, the EEOC claims that CVS is engaging in a "pattern or practice of resistance to the full enjoyment of the rights secured by Title VII" alleging that such provisions deter the filing of charges and interferes with an employee's ability to communicate voluntarily with the EEOC and Fair Employment Practice Agencies. "Charges and communication with employees play a critical role in the EEOC's enforcement process because they inform the agency of employer practices that might violate the law[.] For this reason, the right to communicate with the EEOC is a right that is protected by federal law. When an employer attempts to limit that communication, the employer effectively is attempting to buy employee silence about potential violations of the law. Put simply, that is a deal that employers cannot lawfully make." (EEOC Press Release, 2/7/14.)


Although the EEOC notes that the CVS Agreement contains a statement that "[n]othing in this paragraph is intended to or shall interfere with an Employee's right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws[,]" the EEOC found this disclaimer ineffective, stating that it is a "single qualifying sentence that is not repeated anywhere else in the Agreement[.]"


While there is no ruling yet on the litigation filed by the EEOC against CVS, (and it is possible that the EEOC's complaint, ultimately, will be dismissed in its entirety), in light of the EEOC's current position about language in separation agreements, employers should carefully review their agreements, being mindful of the length of the agreement, any limitations on an employee's rights and abilities to file administrative charges alleging discrimination, as well as any provisions limiting an employee's communications to administrative agencies and third parties.
  

Beth Slagle has practiced law for more than 20 years and focuses her practice on business disputes and employment law. Beth's work has earned her a spot in Best Lawyers in America since 2010, and she is the chair of the firm's Insurance Coverage Litigation Group. She can be reached at bas@muslaw.com or412.456.2890.