The day he took office, President Biden issued Executive Order 13988, on “Preventing and Combatting Discrimination on the basis of Gender Identity or Sexual Orientation.” The effect of this order was to undo seven months of hackneyed religious liberty arguments of the previous administration to justify transphobic and homophobic policies that circumvent the obvious application of the Supreme Court’s holding in Bostock v. Clayton County. In honor of Pride Month and Bostock’s first anniversary as law of the land, I present some thoughts on the intersection between the First Amendment’s free exercise clause and anti-discrimination legislation, as well as current attempts to curtail transgender rights.
But first, a few ground rules: This is not a peer-reviewed law journal article. It is an attempt to translate some complex legal issues into something a non-lawyer can read and think about. I have most definitely overlooked nuances, and I welcome thoughtful criticism. Further, I intend no disrespect to any religion, religious thought, or people of faith. I do, however, disrespect the use of one’s religious beliefs to limit the rights of others and my pet peeve, the ascribing of religious faith to intangible statutorily-created legal fictions like corporations.
Bostock: Discrimination Because of Sexual Orientation or Gender Identity IS Because of Sex
Bostock resolved a trio of employment discrimination cases, where the employees were fired when the employers found out the employees were homosexual or transgender. The Supreme Court acknowledged that discrimination based on a person’s sexual orientation or gender identity is included in prohibition against discrimination “because of … sex” in Title VII of the Civil Rights Act. The Court explained, “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” The employer who discriminates on the basis of sexual orientation or gender identity necessarily considers the behavior or appearance of the employee in comparison to how the employer believes a person of the employee’s sex should behave or appear and, therefore, discriminates because of the employee’s sex. The decision was groundbreaking and led to predictable backlash in the name of religious freedom.
Civil Rights Act of 1964 Prohibits Some Discrimination
Title VII of Civil Rights Act of 1964 makes it unlawful for an employer “to fail or refuse to hire or discharge any individual, or otherwise discriminate against any individual with respect to his[/her/their] compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” Title VII of Civil Rights Act does not apply to “religious corporation[s], association[s], educational institution[s], or societ[ies] with respect to the employment of individuals of a particular religion.” This makes sense: Congress did not want a world in which I could sue a Jewish congregation for refusing to hire me, a non-Jew, as a religious education teacher. That would be silly and would infringe the congregants’ rights to worship as they choose.
The Former Guy’s Shot Across the Bow
On January 19, 2021, the day before Biden’s inauguration, the former acting head of the Civil Rights Division of the Justice Department, John Daukas, issued a spite memo declaring that Division should not extend the holding in Bostock to areas such as gender-based policies on bathrooms and sports teams. The memo states, “Unlike racial discrimination, the Supreme Court has never held that a religious employer’s decision not to hire homosexual or transgender persons ‘violates deeply and widely accepted views of elementary justice’ or that the government has a ‘compelling’ interest in the eradication of such conduct.”
Albeit true, I’m calling Balderdash! at Daukas’s lofty statement. First, the Civil Rights Act exempts “religious corporation[s], association[s], educational institution[s], or societ[ies]” from its prohibitions against employment discrimination. Churches can discriminate in its employment practices because of sex with abandon. (See Female Catholic Priests. Or, more to the point, don’t see them.) Second, Daukas intentionally misstates what the Supreme Court held in Bostock. The Supreme Court did not invent two more protected categories to Title VII; it explained that discrimination because of sex includes discrimination against homosexuals and transgender people. It is natural and expected, therefore, that “the Supreme Court has never held that … [failure to] hire homosexual or transgender persons ‘violates deeply and widely accepted views of elementary justice…’” because the Supreme Court decries discrimination because of sex.
Finally, Daukas’ use of the term “religious employer,” signals that he is preaching to the interventionist religious freedom choir. No one questions the right of a religious organization to discriminate. Daukas wants individual employers and their business corporations to be able to discriminate against people based on their sexual orientation and gender identity.
The Civil Rights Division rescinded Daukas’s insightless memo two days later, as inconsistent with Executive Order 13988.
Bostock and Title IX of the Education Amendments of 1972
Title IX of the Education Amendments of 1972 states, “[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.” On March 26, 2021, the Civil Rights Division of the Justice Department issued a memorandum concerning the Application of Bostock v. Clayton County to Title IX of the Education Amendments of 1972, concluding that the textual analysis of “because of” sex in Bostock applies to Title IX’s “on the basis of sex.” The Department of Justice’s conclusion that Title IX protects transgender students is backed by two post-Bostock appellate court decisions that reach the same conclusion. This is unlikely to cause widespread pushback from colleges and universities. The National Collegiate Athletics Association has supported transgender athletes for many years, publishing its handbook entitled, NCAA Inclusion of Transgender Student-Athletes in 2011.
In general, all colleges and universities that receive federal funding are covered by Title IX. Many high schools are covered as well. There is a religious exemption for private colleges and universities that are run or controlled by religious organizations. Fear-mongers can relax: Liberty University will not be forced to amend its Honor Code and admit openly homosexual or transgender students.
Bostock and Section 1557 of the Affordable Care Act
HHS’s interpretation and enforcement are limited by challenges concerning religious freedom. In the Religious Sisters of Mercy v. Azar, decided on January 19, 2021, the Northern District of North Dakota held HHS’s interpretation of Section 1557, which could require Catholic plaintiffs to provide gender-affirming surgery and/or insurance coverage for gender-affirming surgery, violated the plaintiffs’ sincerely held religious beliefs. It is likely that Courts of Appeals reviewing the same issue would affirm the decision. This makes sense: Catholic doctrine on issues of sexuality, birth control, abortion, and the procreative purpose of humankind is well-known. If Congress cannot establish a state religion and cannot infringe individuals’ rights to worship as we choose, it cannot force religious organizations or individuals with sincerely-held religious beliefs, to perform or pay for medical procedures that violate religious doctrine.
Rant alert: I’m talking about religious organizations, not business corporations. Applying this rule to business corporations is crazy talk, Hobby Lobby notwithstanding. I cannot get behind the idea that a business corporation has sincerely-held religious beliefs. Corporations are legal fictions created by state law. The purpose of a business corporation is to create a legal “person” that can sue and be sued, to protect human owners from liability. As amusing as the Wall Street Catechism might be, business corporations do not ponder the meaning of life or their roles in it: the meanings of their lives are inscribed on certificates of incorporation and imbued in mission statements. Corporations are intentionally not the human owners. Regardless of what the human owners may sincerely believe, business corporations are no more capable of religious thought than a stapler. And at least the stapler is tangible. Rant over.
Backlash from the States
Bathroom Bills have been covered extensively and are based on the fantastic belief that allowing transwomen to TCOB in the women’s bathroom will invite hordes of pedophilic men to touch your daughters. It’s ‘nad-baiting, simple and plain.
Tennessee has added a new twist, by requiring businesses to post which biological sex is allowed in multi-person public bathrooms. It’s an exciting new way for trans-inclusive businesses to blackball themselves without ever having to answer if they are now, or ever have been, courteous to transgender patrons.
It’s almost impossible to keep current with the anti-transgender athletics laws passing state legislatures and signed gleefully into law by governors surrounded by assorted daughters and females (because, you know, as fathers of daughters, they know what it’s like). I was going to call out Mississippi, Arkansas, and Tennessee for their laws banning trans girls from participating in girls’ sports, but then the fatheriest of fathers of daughters of them all, Florida’s Ron DeSantis, signed his very own ban on trans girls and women participating in girls’ and women’s sports on June 1. A very merry Pridemas to all!
One of the assorted daughters and females surrounding Governor DeSantis was Selina Soule, a plaintiff who sued to end Connecticut’s transgender inclusion policy. Ms. Soule talked about the pain of competing against talented athletes who are different from her. Her lawsuit, by the way, was dismissed as moot in late April since the two trans athletes who were ruining her life graduated from high school. The Heritage Foundation described presiding Judge Robert N. Chatigny as “activist” for his exercise of judicial restraint.
This is a hot-button issue, so let me put it out there right now – sports are supposed to be fun. Kids should just get to play. There is no evidence that a trans girl on hormone therapy has an unfair advantage over biological girls in sports. Indeed, the medical evidence says otherwise, as does indisputable fact: if the two trans athletes in the Connecticut case had an unfair competitive advantage, they would have come in first and second in every race. But they didn’t. They were beaten regularly by the named plaintiffs, each of whom is an extremely gifted athlete in addition to being a biological girl.
Nothing but the deepest respect for the law of unintended consequences has me wondering what the biological girls’ parents are thinking. (As minors, the girls cannot bring a lawsuit themselves, it must be brought by a parent or legal guardian on their behalf.) As much fun as “owning the libs” may be, the girls will be high school seniors soon enough. Have their parents considered how their daughters’ roles in transphobic political theater will look to Division I NCAA colleges? The NCAA “firmly and unequivocally” supports giving transgender athletes the opportunity to compete. Lawsuits are forever.
Back to the law, these states enacted their laws knowing perfectly well that they will be struck down, according to long precedent concerning the interpretation of “on the basis of sex” in Title IX cases. As long as the athletic programs are connected with federal funds, they have to comply with federal law. The Fourth and Eleventh Circuits have already applied the Bostock definition of “sex” to Title IX, and the Second Circuit will likely do so if the Soule case is ever decided on the merits. (The Plaintiffs appealed Judge Chatigny’s “activist”.)
Healthcare is the final, broad backlash category. The Arkansan legislature, in overriding Governor Asa Hutchinson’s veto, decided that it is in a better position to make healthcare decisions for adolescents in the state than the adolescents’ own medical doctors. Specifically, it decided it must save the youth of Arkansas from gender affirming medical care because it is far better that transgender youth commit suicide than receive hormone therapy.
Think I’m joking? Being histrionic for dramatic effect? Look up the stats for suicidality in transgender adolescents. And then look up the stats for homelessness and sex work among transgender adolescents. After your stomach settles, you can clear your conscience with a donation to the youth shelter of your choice.
But back to healthcare, much ink has been spilled by the prospect of medical doctors of conscience being forced to perform gender-affirming surgery or being forced to prescribe hormone therapies. This is utter nonsense. Doctors choose the field of medicine in which they practice. Gender-affirming surgery, while lifesaving, is not emergency surgery. Hospital residents don’t get awakened at 3:00 am for emergency top surgery.
If you don’t want to perform gender-affirming surgery, the solution is simple: don’t become a plastic surgeon specializing in gender-affirming surgery. If you don’t want to prescribe hormone therapy to trans people, don’t become an endocrinologist specializing in gender-affirming hormone therapy. Trust me, trans people aren’t looking for resentful jerks to perform surgery on them or to provide any other medical care. The community knows who the good and empathetic healthcare practitioners are. If you have to ask, it ain’t you so don’t worry about it.
As a basic matter of Constitutional, employment, and human rights law, no one can be forced to perform gender-affirming surgery in this country. The Thirteenth Amendment ended slavery. If your employer insists you perform gender-affirming surgery and you do not want to for any reason whatsoever, you can work somewhere else. If you have a sincerely-held religious belief that prevents you from performing gender-affirming surgery, and your employer decides that starting tomorrow you must perform gender-affirming surgery or you will be fired, you still don’t have to do it. If you get fired or demoted or your pay is cut or you get switched to a bad shift, you have tidy discrimination and retaliation claims against your employer.
So, let’s talk about the true emergency situation. You arrive via ambulance in the emergency department of Religious Organization Hospital (which religious organization cleaves unto an unchangeable gender binary). You are unable to move one side of your body, experiencing altered states of consciousness, and a loss of balance. Your biological gender is relevant for the administration of anesthesia for your emergency cranial surgery, and it is important to disclose the medications you take.
There are probably more reasons to disclose your biological gender and hormone therapy – I’m not a medical professional – but the disclosures must be tied to your care. You should not be forced to answer endlessly invasive questions about your genitalia or to show your genitalia to all and sundry. You should not be misgendered or referred to by offensive terms. Simply, you should be treated with the same dignity-preserving respect as every person receiving medical care.
Providing emergency medical care to a transgender person does offend any legitimate religious doctrine I can think of, and I have to question the faith of anyone who claims their religion prevents them from preserving life.
If you are being treated unfairly at work, in school, or by medical professionals because of your gender identity or sexual orientation, please contact our employment attorneys at Carey & Associates, P.C. at email@example.com.
Is it worth it to sue your employer? Answer: Maybe. Oh honey. You weren’t expecting a straight answer from a lawyer, were you? First, this is not a decision for a lawyer to make. We can only show you the door. You are the one who has to walk through it.
Second, there are many things for you to consider before you sue your employer, and you are the only person who can weigh the pros and cons to decide what is best for you. Best for you could be total war, or it could be quietly stewing for years while maintaining a placid façade until you deliver a sweet, sweet cold dish of revenge. (Not that I would know, of course. From my first paper route at age 12, I’ve had nothing but affirming and revelatory employment experiences.)
As I was saying, here are the main factors to consider:
Is it Your Current or Former Employer?
Trick question. If you decide to sue your current employer, it will become your former employer when all is said and done. The only possible exception is if you work for the government.
Employment discrimination and whistleblower laws prohibit retaliation for filing complaints/blowing the whistle – what we call “protected activity – but that does not change the two overwhelmingly likely outcomes: (a) your employer will ignore the prohibition against retaliation and will terminate your employment, thereby giving you a new, strong claim against the employer; or (b) ending your employment is part of a settlement agreement.
It is true that your former employer can reinstate you and pay lost wages to resolve your complaint, but it is the Loch Ness monster of remedies: it is in the statutes and very smart people have written much about it. Some claim to know someone who has seen an employer offer reinstatement. Personally, I am skeptical. I’ve never seen it and I have a hard time believing the reinstatement truthers (which is to say, if there were such a thing as ReinstatementTruthers).
As a practical matter, do you think you would be welcome with open arms by the people whose actions caused you to sue your employer? Even if they’re gone, do you want to work along side people who may not like that you complained and think you got someone disciplined or fired? Of course not. And lawyers, for our parts, want any settlement to mean the end of the possibility of history repeating itself. This means the employer pays you to leave.
Bottom line: if you are going to sue your current employer, you must accept that it will become your former employer when all is said and done.
Time, Time, Time
The claim will take longer than you ever thought possible. Even for the most blatant claim, it will take longer than you think. Let’s say you tell your boss you are pregnant, and he fires you on the spot saying, “When did you get married? I won’t have no preggo dames working for me. You should be home taking care of your husband like a good wife, not taking the space of a deserving man.” This is blatant, over-the-top sexism, pregnancy discrimination, misogyny, presumptuous patriarchal nonsense from 1957, when my momma lost her job as a bank teller because she started “showing.” Easy win, right?
Yes, it is. But the employer still has a right to defend itself. No judge is going to look at your complaint and declare you the winner because our adversarial court system does not allow it. Generally speaking, we can expect your employer to act rationally and recognize that it is not 1957 and it will be damaging to the business for the public to find out the ridiculous things spouted by Mr. Dinosaur Bank Manager, but there is no guarantee. The employer could be irrational and spend two years requesting documents and taking depositions to test your stamina.
Paying the Piper
Hiring an employment lawyer to bring your claim is either going to cost money or attention. You may not have a choice but, if you do, you must decide whether to hire someone who charges by the hour and will give your case all the attention it needs, someone who takes cases on a contingent fee basis and may not have the time to give your case the attention it needs, or someone who does a combination with a lower hourly rate and a piece of your award.
Why don’t all employment lawyers work on a contingent fee basis like personal injury lawyers? Because the business model is not well-adapted to this kind of work.
Let me explain in English (or as close as possible). Every automobile accident case is run the same way. The lawyer meets with the potential client and immediately has a good idea of what the case is worth (a multiple of medical costs, usually), whether it will settle and, if so, when it is likely to settle, and whether it will go to trial. She hands the case off to her paralegal to gather medical records and contact auto insurance companies and submit claims. If there are early settlement negotiations with the insurance company, she gets involved. If not, the paralegal lets her know when it is time to file a complaint, writes the complaint from a form, gets the lawyer to sign it, and takes care of getting it filed. And on it goes. The same processes and forms for all cases and predictable outcomes. This means a personal injury attorney can run a successful volume business without charging clients by the hour for her time.
In employment law, every case is fact-intensive. The lawyer has to dig deep into the background of the case to know every fact that is helpful or potential harmful. It is hard to predict when and if cases will settle, and the value of settlement depends on the client’s income and the skill of the attorney to present the facts to the employer in a way that maximizes the employer’s perceived risk of the facts becoming public. This means the lawyer must be involved every step of the way, cannot delegate running the case to a paralegal, and really should not handle the volume of cases a PI attorney can.
Oh, those empty threats from our youth! There is no permanent record telling the world how you cut Italian several times per week in favor of breakfast sandwiches because you had an awesome teacher in junior high, mediocre teachers in high school, and you didn’t have to learn anything else to pass the Regents Exam. Hypothetically speaking, of course.
Filing a lawsuit, on the other hand, creates a public record that anyone can find online if they know where to look. If your case is newsworthy, finding your case online can be a simple Google search. And if you work in a relatively small industry, word of your lawsuit will spread.
I don’t want to overstate the significance of this, but neither do I want to pretend its all flowers and unicorns and joy. All sizeable companies have had situations arise where an employee behaved badly and a lawsuit resulted, and all sizeable companies have had situations arise where something was blown out of proportion and a lawsuit resulted.
You just have to accept that bringing a lawsuit against a former employer can have the unintended consequence of casting you in a negative light to a future employer. Smart employers will dig a little deeper before making a judgment, but not all employers are smart.
Know the Upside
Damages in employment cases are most often tied to your income. This means the more you earn, the higher your potential damages. This is awful in many ways because the same horrible behavior can be worth little if done to the lowest paid employees who are least likely to hire an attorney to fight for them, but worth a lot if done to highly paid employees who are more likely to have resources to survive without a regular paycheck and are more likely to hire an attorney.
This isn’t going to change – damages in employment law are tied to the employee’s losses, and the employee’s losses are a function of their rate of pay.
Employees also have a duty to mitigate damages, meaning you must look for another job and anything you earn will reduce your potential damages from the bad acts of your former employer. For example, if you get fired from your $50,000/year job at Company X as Social Media Manager, Widgets, because of discrimination, your damages aren’t $50,000/year until you hit 65. Instead, your damages accrue at the same rate as if you were still employed, minus any unemployment you receive, and minus any income you earn from work. If Company Y hires you at $100,000/year as Senior Widgets Influencer six months after Company X fired you, your damages stop accruing because you are earning more than you would have if you weren’t fired by Company X. Your maximum damages are the $25,000 you did not earn in the six months you were unemployed.
Potential clients usually call us before they have a new job, so they cannot predict when their damages will stop accruing. Still, it is important to understand how damages accrue so you can weigh how long it is likely to take to land a job comparable to the one you lost. This information will tell you the likely upside so you can decide if you want to fight for it, and how hard.
Anti-discrimination laws and some whistleblower laws provide for an award of your attorney fees, but that only comes up after you win at trial. It is very rare that an employer will agree to pay the employee’s attorneys fees as part of a settlement, so you should never add attorney fees reimbursement to your upside. There is hope here, you can deduct attorneys’ fees spent pursuing employment discrimination cases. Click HERE for information about IRS Publication 525 wherein you will learn you can deduct the total amount of attorneys’ fees, whether by judgment or settlement, from the gross income above the line on Form 1040.
Your Dignity and Sense of Justice
Finally, you have to consider how you will feel about yourself if you don’t bring the lawsuit. Can you live with “letting them get away with it,” or will it upset you for a long time that your employer did terrible and unlawful things and was never held accountable? I would caution against bringing a lawsuit solely to satisfy a sense of justice, but feeling some vindication after suffering a harm has a healing quality to it. And that’s not nothing. One final note, that manager or coworker who discriminated against you, well, he/she/they etc., will have to read every word of your sworn affidavit and complaint. Defense lawyers will require it. Imagine the shame and embarrassment the idiot will feel when doing the required reading. I mean, no one is immune from this sort of payback!
Is It Worth It to Sue Your Employer? There are many factors to weigh before deciding to sue your employer. If you would like more information about the factors at issue in your employment dispute, please contact Carey & Associates, P.C. at firstname.lastname@example.org
The Gathering Storm: COVID Rages While Worker Relief Laws Sunset: Way back in March, when I read the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security Act (CARES Act), I thought they were great. Increased unemployment benefits through the end of July, unemployment benefits for up to 37 weeks, unemployment benefits for gig workers, two weeks of paid leave in case you or a loved one gets sick, and up 12 weeks of paid emergency family medical leave if you are unable to work because your child’s school or child care becomes unavailable. Americas workers were being looked after when we need it most.
The laws weren’t perfect. They had loopholes that allowed large and well-capitalized businesses to grab Paycheck Protection Program loans intended for small businesses. But as imperfect as they are, no one thought we would be facing the same emergency in November as we faced in March. No one anticipated we’d have 8 months of lockdown, remote learning, masking, social distancing, and a quarter of a million dead Americans.
Yet here we are. New York City just announced that it is closing its public schools and returning to all-remote learning. My hometown’s public school system did not open at all this fall. (But we did get the John Oliver Memorial Sewer Plant. Comme ci, comme ça.)
What does this mean for American workers? It’s not good.
The worker protections in the FFCRA and the CARES Act end on December 31, 2020. Happy New Year! Congress is in recess until after Thanksgiving and no one expects them to become serious about coronavirus relief when they return. Even if Congress did, no one expects the President to focus it.
Our best-case scenario is a stopgap agreement to extend the laws for a few weeks for the new Congress to and new administration to take office. But a stopgap won’t be enough for many Americans.
Remember that generous two weeks of paid sick leave if we develop coronavirus symptoms? Common cold symptoms caused many of us to use days – and rightly so – but slow test results had us burn through more sick days than necessary waiting for the negative results that allowed us to return to work. I’ve had two coronavirus scares in the last 8 months, both negative. If I couldn’t work from home, I would have used up my emergency paid sick leave and then some.
Remember those 12 weeks of paid Emergency Family Medical Leave? If your children are especially attentive and diligent teenagers, you’ve got nothing to worry about. Everyone else, chances are good you’ve already used a lot of that time caring for your younger children and playing teacher for your older children. My youngest is 16. Brilliant, but not especially attentive. I was reminded daily why I dropped my secondary ed major, and why it was the right decision.
Next, the unemployed. The good news is that the jobs numbers have been better than many expected. We hit a high of 14.7% unemployment in April, falling to 6.9% in October. This is a wonderful improvement, but it is so much higher than the 3.6% unemployment of January. The bad news is that the enhanced unemployment benefits of $600 per week ended on July 31, 2020, and the extended benefits for 37 weeks to gig workers and regular employees alike ends December 31, 2020.
Wear your bleeping mask. And call your mother. She hasn’t seen you in months. Happy Friday!
The Gathering Storm: COVID Rages While Worker Relief Laws Sunset- If you would like more information about this article, please contact our employment attorneys at Carey & Associates, P.C. or email to email@example.com.
About a million years ago, I remember hearing that the Star Wars epic was meant to track the rise and fall of the Roman empire. It starts as a republic, becomes an empire as its boundaries grow and power is consolidated, becomes corrupt because power corrupts, and finally it falls. After the chaos, a new government starts the cycle again as a republic. I have no idea if this is true and, in any event, once Leia survived the vacuum of space with her Poppinsesque flying power it no longer mattered. But the New Path for The Workplace of Tomorrow is very different and we are going to show you why. So, let me tell you about the Old Path first so you can get your bearings.
The Old Path
Once upon a time, a person could expect to work for one or two companies (at most) for their entire adult lives, earn a decent wage, and retire with a pension. Manual laborers were unionized and enjoyed income and job protection from the strength of their ability to bargain collectively. Office workers were not typically union members, but their identities as employees of particular companies were practically encoded at the DNA level. Men (and they were nearly all men) at IBM wore dark suits, white dress shirts, rep ties, and wing tips. Men at Procter & Gamble wrote P&G Memos. In those days, a man could start off working in the mailroom with a high school diploma and, if he were hard working, smart, and white, he could make it to the Executive Suite.
Technically, most of the non-union “Organization Men” were employees at-will. They could leave at any time, for any reason, and their employers would terminate their employment at any time and for any reason. It just didn’t happen very much. The sense of community and shared purpose that eludes modern businesses was alive and well on the Old Path. Those team-building activities we “enjoy” at company retreats were unnecessary because companies fielded baseball teams and bowling teams and engaged in a variety of other activities. The International Ladies Garment Workers Union had a famous chorus that recorded tunes, gave concerts, and showed off their chops in many memorable commercials of the ‘70s.
Better Start Swimming Or You’ll Sink Like a Stone
Things began to change as union membership decreased in the 50s and 60s. The turbulent economic times of the early ‘70s through early ‘80s (oil embargo, inflation, recession, rinse, repeat), followed by the corporate raiders throughout the 80’s effectively severed the symbiotic relationship between workers and management in America. Raiders would take on huge debt to take over control of a public company, and then strip assets from the company to pay their debt or otherwise profit. These takeovers invariably involved massive layoffs and reorganizations of the companies. “Flat organizational structures” became de rigeur as middle management all but disappeared and my high school classmates’ fathers became “consultants;” i.e., unemployed.
In the 30+ years since Black Monday, October 19, 1987 – the day the stock market crashed and lost 22.5% of its value – the connection between employer and employee has become more tenuous and opportunistic. Black Monday triggered an economic downturn and both parasitic layoffs. Same thing in the Dot Com Bust, the Great Recession, and now the Covid19 era.
The flipside of knowing your employer doesn’t have your back and your employment at- will can be terminated at any moment, is a lack of loyalty to your employer. In other words, employees do not trust their employers will protect them, even though the employer needs the employees now more than ever to – just survive. Ironic isn’t it? I haven’t checked recent statistics, but GenX, Millennials, and GenZ are expected to change jobs 10-20 times in their adult working lives.
Enough with the History. Where’s this New Path?
I am not an at-will employee, nor do I breathe the rarified air of those with written contracts of employment for a specific period of time and who can only be terminated for cause. So, what am I? I am a traveler on the New Path.
Mark Carey, who has written on why at will employment is a bad rule and how it was invented by lawyer in 1877, puts his money where his mouth is. My employment is not terminable “at will,” it is terminable “for cause.” It means no one from my office has been laid off during the pandemic. We are all in this together and I have a vested interest in the success of my employer. It means if I do my job, my employer will have my back. In exchange, I’ve agreed to stay with my firm unless I have good reason to leave (i.e., reduction in pay, demotion). The Thirteenth Amendment prevents Mark from enforcing my side of the deal, but the trust engendered in his commitment to me as his employee engenders my reciprocal promise to stay.
Employers should seriously consider the current “relationship” they have with their employees. Employees are the backbone of each company and employers could not exist without them. Trust- that’s what employees want right now and presumptively have always wanted it. Now that the blinders are coming off due to Covid-19, employers must realize they cannot abuse employees and treat them like a number. There are currently Forty million plus (40,000,000) job terminations during this pandemic, this is not exactly what I would call building trust with your employees. These recently terminated employees (“Your Ex-Employees”), are real people of all races and backgrounds, with emotions, goals, financial issues just like you. If you give employees a real sense of security in their jobs, they will reword their employers tenfold- with #EmployeeTrust and increased EBITDA (aka profitability).
Employers- show your employees they can trust you at all times– that you got their backs in times of trouble. Here are a couple of suggestions:
Provide a termination for cause employment agreement-ignore your management lawyer’s advice not to follow this suggestion;
Make sure employees feel confident they will not get sick when they come back to work- give them everything they need and write if off on your PPP and SBA money you just received;
If employees want to work from home and/or the office, just let them- but remind them you do pay rent in an office they should use;
Buy them necessary computer gadgets to work remotely – anywhere;
Build a sense of a strong community experience amongst employees;
Immediately fire any employee, manager or not, who exhibits any discriminatory bias against anyone- this will deter the bad actors- as we are all in this together;
This list of perks employers can provide to develop and ensure employee trust is endless and specific to your company, but you get the main idea. Yes, employees need perks too!
If you would more information about this topic, please contact Carey & Associates P.C. at 203-255-4150 or email to firstname.lastname@example.org.
It always surprises people when they learn that they really don’t have a right to say whatever they want at work or outside work. We all have rights to free speech under the First Amendment, but what that means is often misunderstood. Everyone’s heard, “You can’t yell ‘Fire!’ in a crowded theater,” but what does that mean for everyone who doesn’t work in crowded theaters?
Answer: not a heck of a lot.
What the First Amendment Is and Is Not
First, take a look at what the First Amendment actually says: “Congress shall make no law … abridging the freedom of speech….” The First Amendment is only concerned with what the government does. Government employers have protection for speech made in their capacity as private individuals, but not in their roles as government employee. If a government employee’s freedom of speech is abridged, the employee can bring a civil rights claim under 42 U.S.C. § 1983. But your private employer? The First Amendment has nothing to do with it. Private individuals and private companies can do what they want. Even terminate your employment.
This may seem counterintuitive – how can you be fired for doing something that is 100% legal and enshrined in the Constitution? Simple: just because the government cannot stop you from doing something does not mean your employer has to like it. For example, you can be a member of the KKK and the government cannot stop you and your brother klansmen from putting on pointy hoods, and sharing secret handshakes and racist screeds (one assumes). When your employer finds out, however, she can fire you because she finds your beliefs repugnant. Many who stomped around Charlottesvillle, Virginia, shouting Nazi slogans learned this the hard way.
But this same rule works against people who are bringing attention to concerns more in line with American ideals of life, liberty, and the pursuit of happiness. For example, in 2017, Lisa Durden, a college professor, was fired for appearing on Fox News and defending a Black Lives Matter party to which only Black people were invited. There’s no question that her statements were protected by the First Amendment, but some of her statements were viewed as inflammatory, outrage was duly sparked, and her employer wanted to distance itself from her.
Don’t Embarrass Your Employer
Like it or not, we are all ambassadors for our employers and how we act/what we do reflects on them. We live in a world where the Internet can find you in hours, as certain self-involved dog owner and bullying cyclist recently learned. Both lost their jobs because their actions reflected upon their employers, and their employers wanted nothing to do with them.
These are outrageous examples that illustrate an important lesson. If keeping your job is important to you, you must consider how publicly exercising your right to free speech reflects on your employer. A vocal gun control advocate can’t expect to keep his marketing job at Smith & Wesson.
If You’re Not the Designated Spokesperson, Don’t Speak for your Company
This seems obvious, but it includes not doing or saying anything that would make anyone else think that you are speaking for the company. For example, if you work for UPS, doff the brown uniform before you join the protest rally. Don’t hold a sign that says, “Company X Employees Against World Peace.”
Before law school, I worked in human resources for a Fortune 10. One day, all hell broke loose because a vice president of training and development wrote a letter to the Wall Street Journal on company letterhead, which WSJ printed. His letter included references to “gritty inner-city streets” and addressed racial issues. He was lucky. It was the late 90s and the hubbub was almost all internal. If that were today, he would have been fired the day after WSJ published his letter.
Nevermind Your Privacy Settings, Everything on the Internet is Public
This is where people make the most mistakes. You may think you are just venting to a group of friends and no one else will see it, but anything can be forwarded, or screenshot, or found in a Google search. Don’t write anything you wouldn’t want your boss to read and you don’t want published on The Daily Beast. If you’re unsure, stick with cat memes.
Last year, agents of U.S. Customers and Border Patrol discovered that their “private” Facebook group, where they shared jokes about dead migrants and sexist memes, wasn’t at all private. Various punishments ensued and Congress is investigating the group. This is not a good look on anyone. That any of the more active members are still employed is only because they are government employees and are entitled to due process. Private employees are not.
Back to Fairness, Why Isn’t What You Say “Off the Clock” Protected?
By design, the Constitution concerns itself only with what the government can and cannot do. The idea was that if the government involves itself too deeply in the day-to-day conduct of people’s lives, it is akin to tyranny. So, we are left with an imperfect situation where white supremacist groups are protected the same as pro-democracy groups, and your private employer can fire you for involvement in either.
Still, that doesn’t feel right. Is it possible to work around it, and protect employment rights for private employees who are exercising their First Amendment rights?
Answer: Yes. Some federal statutes already protect some speech, and some states protect employees engaged in political activity.
OSHA, the NLRB, and Whistleblower Laws
As I discussed in my articles about preparing to return to work in CovidWorld and Whistleblower Laws, you have the right to a safe workplace and the right report unsafe working conditions without fear of reprisal. You also have the rights to discuss the terms and conditions of your employment with your co-workers and engage in concerted activity to change the terms and conditions. These protections are limited as to the subjects upon which you can speak, and to whom, but it is something.
Some states have passed laws that specifically protect employees from adverse action based on pollical activity. Connecticut comes right out and prohibits discipline or discharge of an employee for exercising First Amendment Rights, provided the activity does not interfere with the employee’s job performance or the working relationship between the employer and the employee. Colorado, North Dakota, and Utah prohibit workplace discrimination based on “lawful conduct outside of work.” California and New York prohibit discrimination for “recreation activities” outside work, which can include attending political events. A handful of other states protect employees engaged in “political activities,” based on their party membership, and based on their “political opinions.”
In the current divisive political environment, it is unlikely that the federal government will pass a law adding employment protection for political activity, but laws change to reflect the people’s beliefs. Twenty years ago, marriage equality seemed like an impossibility. By 2004, same sex marriage was legal in Massachusetts, followed by Connecticut’s civil union law in 2005. Over the next 10 years, same sex marriage became legal in state after state, until the watershed moment in 2015, when the U.S. Supreme Court declared same-sex marriage to be legal throughout the United States.
A sea change of societal acceptance over 15 years, from something considered virtually impossible to something legal and generally accepted by most Americans is unprecedented. But don’t be discouraged. Pressure from the general public is already causing businesses to rethink their policies about political speech at work.
Earlier this month, Starbucks suffered serious social media backlash when it was learned they instructed employees that they could not wear Black Lives Matter shirts or paraphernalia because it might amplify divisiveness. Starbucks has since announced the creation of its own Black Lives Matter t-shirts for its employees to wear. Last week, when a Taco Bell franchise employee claimed he was fired for wearing a Black Lives Matter face mask, Taco Bell was quick to respond, apologizing for the action, stating that its employees are allowed to wear Black Lives Matter masks and that it supports the Black Lives Matter movement. I doubt any of us could have imagined this reaction three years ago, when Lisa Durden was fired.
One thing is certain, support for free speech protection for private employees is gaining traction in the United States. We certainly live in interesting times.
If you would like more information about this topic please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150 or email to email@example.com.
The Workplace of Tomorrow II: Dystopia Rising: Last week, or 347 news cycles ago, I wrote that the post-COVID workplace will not be as bad as we feared. Most employers will do the right thing and provide a safe workplace for their employees. We may not have jetpacks, but the country would find its way. Today? I’m just not feeling it. After several solid days of civil unrest in the wake of the death of George Floyd in police custody, and with the government’s increasingly militaristic response to same, I can’t muster the optimism to tell you things will be all right.
With that as a backdrop, I present The Workplace of Tomorrow II: Dystopia Rising. Like any good trilogy, the second story ends with our heroes at their lowest, facing certain defeat. While reading this, despair not: The Workplace of Tomorrow III will have a happily ever after. Trust me. I’m a lawyer.
The Surveillance Workplace
While researching Montana’s Wrongful Discharge in Employment Act (much more on this to come), I discovered that as of October 1, 2019, it is unlawful in Montana for an employer to force the implantation of a microchip on its employees. The employee must consent, and the employer cannot fire or refuse to hire anyone who does not want to be treated like livestock or an errant pet. Several other states are considering similar laws. I was delighted to find states making autonomy over one’s body a priority, but I could not find the problem these laws are meant to solve. No employers are pushing for 24/7 tracking of its employees and there exist no grassroots #StopTheChip movement.
It’s easy to be cynical and cast the law as a pointless gesture that gives Montana’s elected officials a “win,” but it touches upon real concern people have about their privacy and, in particular, electronic surveillance.
Momentary Digression: I Own No Foil Hats
Let me digress for a moment and assure you that I am not a privacy freak. I consider myself concerned about privacy, but probably not as much as I should be. I put security stickers over my cameras when I’m not using them and I rarely use location services on my phone because the idea of Tim Cook keeping tabs on me is creepy. Sometimes – but not often – I use a web browser with a Virtual Private Network. By contrast, I know my Internet Service Provider knows every website that has ever been visited by any device on my wifi network and the records can be subpoenaed. I have a Google Nest Hub in my kitchen that sometimes speaks when no one asked it anything. I have a collection of 5 or 6 passwords that I use for everything. I always sign up for the membership card to get the sale price, I do not have Radio Frequency Identification-blocking anything, and I own no aluminum foil-lined garments or headgear.
Digression Completed. Let’s Continue
Now that you have the context, you can decide how to take the rest of this article.
Back when going to work involved going somewhere, employers could tell if their employees were working by confirming that they were where they were supposed to be at the appointed time. That’s not as easy with a remote and mobile workforce. As a result, many employers use software to track computer use, and can easily check what time you started working, what websites you visited, and for how long.
A lot of states require employers to inform their employees that their computer use will be monitored, but when was the last time you read your employee handbook or the bulletin board in the lunchroom with all the employment law notices? That last one is a particular challenge when your workplace has been shut down for 3 months.
My plea to you: don’t do ANYTHING on your work computer that you don’t want your mother to read. Do your mother and your lawyer a favor. Believe me, I’ve had to sit through depositions while a smug opposing counsel read sexually explicit messages my client sent some rando from his work computer.
Point Taken, But What’s This Got to Do With COVID-19?
Contact-tracing is a time-honored weapon in fighting epidemics and pandemics. If you can get in touch with people who have been exposed before they have the chance to infect others, you can limit the spread of the disease. When a disease hits the level of “community spread” – i.e., so widespread it is almost impossible to track how a person came in contact with the disease, and to whom the person may have spread it. This is where technology can help, and your privacy can become an issue.
Every day, most Americans carry around a device with which our movements can be tracked: our mobile phones. Although we tend not to think about it, we willingly permit private companies to track our movement throughout the day as our devices ping nearby cell towers. The government can access this information immediately under exigent circumstances (i.e., a kidnapping), or with a search warrant.
Over the last several months, private companies have been working on ways to use our screen addiction for the public good, by developing contract tracing apps and notification tools to combat the coronavirus pandemic. Using such an app would be voluntary, but convincing us to download something that is designed to track your every movement and report it to the government – public health officials – is outside the comfort zone of many, many people.
To ease privacy concerns, yesterday, June 1, 2020, the Senate introduced the Exposure Notification Privacy Act, a nonpartisan bill to regulate contract tracing and exposure notification apps. It would ensure that any data collected for coronavirus cannot be used for commercial purposes and that users can request that their information be deleted at any time. It’s a tightrope walk: the ability to contact trace electronically, on a grand scale, can do wonders for containing COVID-19 and, ultimately, reopening the country. But, as Republican Senator Bill Cassidy (LA), stated, “If you ask most people, ‘Do you trust Google to respect your privacy?’ … they don’t trust Google.” Nothing personal, Google, but my Nest Hub does speak out of turn. Who knows what it reports back to the baseship.
Employer Use of Tracking Apps
There is also a growing concern about how employers may use this technology. Remember those wacky microchip implantation laws? Well, it is grows from the fact that employers in some sectors have their employees use wearable tracking devices at work, ostensibly for efficiency and productivity. Amazon, for example, is famous for its tracking of warehouse employees, including the time they take in the bathroom, and terminating them if they fall under threshold.
You may not wish to have contact tracing software on your phone, but if you carry a phone issued by your employer, you may not have that choice. Indeed, employers are driving the development of contact tracing tech, with companies like PriceWaterhouseCoopers offering an app that helps businesses “access precise proximity information” and “receive near real-time information about whether your people may be at risk for exposure.”
Welcome to The Workplace of Tomorrow II: Dystopia Rising. A world where your employer knows where you are every minute of the day, every person with whom you interact, and how poorly you play Vegas rules solitaire. I look back at my earliest office job, where I transcribed dictation tapes on a Wang VS word processing terminal, and sigh.
The Workplace of Tomorrow II: Dystopia Rising: For more information about this article or to speak with one of our employment attorneys, please contact Carey & Associates, P.C. at 203-255-4150 or send an email to firstname.lastname@example.org.
The Workplace of Tomorrow: Not as Silly as They Predicted, Not as Bad as You Fear: Mid-century was the golden age of futurism and if you are of a certain (ahem) age, you spent far too many hours on Saturday morning watching cartoons about The World of Tomorrow. Flying cars and jet packs featured prominently, along with voice activated appliances, innumerable tv screens, robots that sweep up after you: everything the middle-class, white, heterosexual, single income family could need. The best minds of the Boomer generation predicted Skynet would become sentient on August 4, 1997, and set out to destroy humanity shortly thereafter. The best minds of my generation were slightly kinder: our robot overlords let us think we lived in an imperfect dream world.
I’ve been thinking about these days of past future recently because we’re at a crossroads. Articles abound predicting what our workplaces will look like as businesses reopen, but all we know for sure is that it won’t be the same. Even after a vaccine for COVID-19 is widely available and herd immunity kicks in, some changes will be permanent. There is no hard reset to January 2020.
The Discrimination We Are NOT Seeing
When the pandemic first took hold in New York, we thought we would see rampant discrimination on the basis of COVID-19 status, risk of COVID-19 exposure, or risk of serious complications from COVID-19. Frankly, our only frame of reference was HIV/AIDS in the 1980s. We expected people to have the same irrational fear or working alongside someone who had been sick or may have been exposed.
While many people are, naturally, fearful of developing COVID-19, we are not seeing the fear of the individuals affected as we did at the height of the AIDS crisis. Instead, people are behaving compassionately and, despite the outliers we see in the news, accept inconveniences like hunkering down and wearing PPE because we recognize how deadly COVID-19 is. Fogged-up glasses are no big deal compared with the inability to breath.
Funny enough, I think we have to thank Princess Diana for this. One of her greatest legacies is that she humanized people with HIV/AIDS and help the world to recognize that the sick deserve our compassion even when the illness is scary.
The Undiscovered Country
The post-COVID workplace is the great unknown. While every employer is required to provide a safe workplace, for many industries compliance has consisted of little more than making sure exit routes are unlocked in case of fire. The closest thing to safety equipment I’ve used in 30 years of office work is dishwashing gloves. Tech employers that have never considered the risks of injury their employees face, now have to consider how to force social distancing in open, sit where you want, workplaces. Law firms have to consider the time a virus can survive on the coffee machine, or how frequently keyboards should be sanitized. The healthcare and construction industries are way ahead of the game since they’ve had to think about worker safety for more than a century.
Some of the changes employers need to make will be costly, inconvenient, or seemingly illogical and unnecessary. OSHA’s Guidance on Preparing Workplaces for COVID-19 has a lot of good information for how to minimize the risk of transmission in the workplace in general, but employers have to know to look for it and use it. One family member of mine, for example, works for an engineering firm that reopened its office last week. The owners do not think it is required to make any changes to ensure its employees are safe from COVID. My family member satisfies her own safety concerns with the knowledge that she spends most of the day alone in her office and the liberal use sanitizing wipes. Her employer, however, should be analyzing the workspace and how employees interact with each other to determine if temperature checks, masks, and an aggressive cleaning schedule should be implemented.
This knowledge gap leads us to believe that we will see an uptick in OSHA-related employment issues through the end of the year, as businesses reopen. Employees will want to know their legal rights before they file a complaint with OSHA, and some employers will retaliate against whistleblowers. Unless an employer does something remarkably stupid, I don’t expect the post-COVID workplace to be a breeding ground for class action lawsuits.
Overall, I’m optimistic about The Workplace of Tomorrow. I think employers will do their best to keep their employees safe even if it requires a little nudging, and people will continue to do what we can to avoid transmitting this deadly disease. We may not have flying cars and jetpacks, but we will have compassionate people who want to do the right thing. Not a bad trade-off.
The Workplace of Tomorrow: Not as Silly as They Predicted, Not as Bad as You Fear: If you would like more information about this article, please contact our employment attorneys at Carey & Associates, P.C. or send an email to email@example.com.
It happens in every economic downturn. Companies that are doing just fine, thank you, go through rounds of layoffs to the cheers of Wall Street. Their stock value goes up because they cut expenses, and there’s no real consumer or job market backlash. So many companies are laying off workers that no one can keep track of which ones were on the brink of insolvency and which ones were riding the wave.
We see it in news and our firm has seen it in the calls we’ve gotten in the last few weeks. Last week, for example, IBM announced that it is laying off an undisclosed number of workers. Its CEO made a statement last month about uncertainty caused by COVID-19, but IBM’s current stock price is only about 6% off its price from one year ago today, and up nearly $30 per share from its low point on March 23, 2020. Bicycle shops across the US have backorders and waitlists they’ve never seen before, but we know of significant layoffs by manufacturers.
So what’s an undisclosed number of layoffs in the vast ocean of 38.6 million unemployed Americans?
I try to avoid falling into the trap of absolutes. Businesses exist to make money, so how can you fault them for doing so? Except, there is something patently unfair about firing people for no good reason at all. And mean-spirited about doing it at a time when it will be difficult for your former employees to find another job. And vulgar about using a the economic fall out of a global pandemic to deflect attention from their own opportunistic behavior.
If our Supreme Court says that corporations can have the religious beliefs of the humans who own them, then shouldn’t we expect them to behave ethically with regard to the humans who serve them?
Fortunately, some in business are beginning to recognize that “Greed is good,” isn’t the best of all possible worlds. The Business Roundtable, an association of CEOs from America’s largest companies, recently updated its Statement on the Purpose of a Corporation to recognize the company’s role in serving all stakeholders – shareholders and employees alike. If more companies adopt this approach, maybe we can disincentivize these parasitic layoffs. Maybe we can minimize the effects of economic downturns overall.
Watch Out for Parasitic Layoffs: Companies are Dropping Headcount to Boost the Bottom Line While No One’s Paying Attention: If you would like more information about whether your layoff was illegal, please contact our employment attorneys at Carey & Associates, P.C. or send an email to firstname.lastname@example.org.
With all 50 states set to lift at least some restrictions as we head into Memorial Day weekend, it is the perfect time to look at what this means – and doesn’t mean – for America’s workers.
A reopening, however broad, isn’t going to magic us back three months. Most states are following variations on the staged openings recommended by the Centers for Disease Control and Prevention, but they are not mandatory and each state has been left to decide for itself how best to open.
This leaves us with a patchwork of rules and recommendations, and no universal path forward. We must proceed according to our home state’s rules, our employer’s health and business concerns, and our own risk tolerance.
Not Every Industry Will be Open
In deciding what to open and when, states must consider the continued need for social distancing. Certain industries are just not conducive to staying 6 feet apart from each other, which is why I won’t be reveling in my field-level GA tickets to the Foo Fighters this July 4th, and instead will be trying to keep my dogs calm amidst the neighborhood fireworks displays. Simply, if you are floor trader at a stock exchange, a National Football League player, or even a Foo Fighter, you can expect to wait a bit longer before your industry opens.
Even if Industry is Open, Your Job May Not Be
Just because the state decides your industry is “open,” doesn’t mean you are going back to work right away. Your employer has to decide if it makes sense to open. Yes, they are losing money by staying closed, but they can lose more money by opening before their customers are ready to come back. When the owners feel confident, they can generate enough sales to cover payroll, utilities, and supplies, they will reopen. But, again, it isn’t a simple 3-month rewind. Businesses will have to comply with new health and safety requirements when they open, which can involve providing PPE for their employees and instituting frequent, meticulous cleaning schedules, to limiting the number of customers they can serve. All these factors will affect when a business calls back their employees, and how many they call back.
Your Job May Not Exist Anymore
This is one of the grimmer realities and I won’t dwell upon it. Ask yourself this: how likely are you to sample food at your next trip to Costco? I’ve never seen the people who offer samples doing anything remotely icky and I doubt they will start. But that won’t matter.
Before you worry about all the jobs that may become obsolete, remember that COVIDWorld has invented a host of new jobs. Grocery stores never had PPE checkers or cart cleaners before March; doctors’ offices never had temperature checkers.
That Pesky Consumer Confidence
Statisticians work tirelessly to describe numerically how consumers feel about spending money, but it’s all common sense: a person who feels confident about the economy and their personal financial situation is more likely to spend money. Someone who is worried about the economy and personal finances spend less.
What does this mean for your job in COVIDWorld? It’s another challenge. Without a universal set of rules for business reopening, having to rely on mixed messages and a patchwork of practices, it will be hard for consumers to feel confident about spending money. It means we all must follow social distancing and PPE rules so we can all can feel confident that we aren’t risking our lives by going out into the world. Then consumers will spend money and employers will recall their workers.
We must work together on this one. This time around, we don’t have the option of going to the Winchester, having a nice cold pint, and waiting for all this to blow over.
What If They Opened the Economy and No One Came? If you would like more information about returning to work and your employment rights, please contact Carey & Associates, P.C. at 203-255-4150 or send an email to email@example.com.
If you are as outraged as I am by the well-capitalized hospitality industry and publicly traded companies gobbling up Paycheck Protection Program (PPP) loans meant for small businesses desperate for a way to pay their employees, you know that yesterday was the deadline for those companies to return loan funds without risk of penalty. After all, each of the companies had to certify that the “[c]urrent economic uncertainty makes this loan request necessary to support [their] ongoing operations,” and chances are pretty good that many of these companies had cash reserves from which to draw.
Why does it matter? Because employers with fewer than 500 employees are obligated to provide up to two weeks of Emergency Paid Sick Leave to their employees and 10 weeks Enhanced Family and Medical Leave under the Families First Coronavirus Response Act.
Isn’t this obvious? Fewer than 500 employees is fewer than 500 employees? If PPP, then Paid Sick Leave and Enhanced FMLA. Simple, right? Wrong. The CARES Act had a special carve out for the hospitality industry. Instead of requiring fewer than 500 employees total, hospitality industry companies were eligible for PPP loans if they had fewer than 500 employees per location. This is how ShakeShack qualified. (ShakeShack, returned their PPP loan. Most did not.)
That seems unfair. If you take PPP funds because you are a small business, how can you claim you aren’t a small business when it comes to paying benefits to your employees?
How indeed. It is an unintended consequence of the Single Employer Doctrine. When you have two or more companies with interrelated day-to-day operations, common management, centralized HR functions, and common ownership, they can be treated as a single employer for some employment law purposes. Businesses with multiple locations often organize separate business entities for each location, but operate them as a single business.
Traditionally, employers worked to avoid being lumped together as a single employer with another entity because different employment laws kick in as the number of employees increase. But we’re in COVIDWorld now, and the single employer doctrine is flipped on its head: employers that want to avoid Emergency Paid Sick Leave and Enhanced FMLA will wish to aggregate themselves with as many related companies as they can to hit the magic number of 500 employees.
At this point, we have no way of knowing how courts will treat the Shrödinger’s paradox of having both fewer than and more than 500 employees at the same time, but courts tend to prefer consistency over illogical outcomes. As Maya Angelou said, “When someone shows you who they are, believe them the first time.” The companies who received PPP loans should expect the world to believe they have 500 employees, and should treat their employees accordingly.
Or not. I’ll find it entertaining to watch their lawyers argue both sides.
Does Your Large Employer Owe You Paid Sick Leave and Enhanced FMLA Leave? If you think you may be entitled to Emergency Paid Sick Leave or Enhanced FMLA leave but your employer says you aren’t, please give Carey & Associates, P.C. a call at 203-255-4150 or send an email to firstname.lastname@example.org.