OFCCP Revises Sex Discrimination Regulation for Government Contractors for First Time Since 1970

On Wednesday, the OFCCP formally promulgated a final regulation governing government contractor obligations under Executive Order 11246 concerning sex discrimination.  It will become effective on August 15.  It was the first time it had substantively revised the regulation since 1970.  As part of this final rule, OFCCP has also replaced a significant part of the Guidelines at 41 C.F.R. 60-20.  OFCCP has not eliminated that Uniform Guidelines on Employee Selection Procedures, but has added an Appendix of “Best Practices.” 

As the OFCCP explained its objective:

OFCCP replaces in significant part the Guidelines at part 60–20 with new sex discrimination regulations that set forth Federal contractors’ obligations under E.O. 11246, in accordance with existing law and policy. The final rule clarifies OFCCP’s interpretation of the Executive Order as it relates to sex discrimination, consistent with title VII case law and interpretations of title VII by the EEOC. It is intended to state clearly contractor obligations to ensure equal employment opportunity on the basis of sex.

The final rule removes outdated provisions in the current Guidelines. It also adds, restates, reorganizes, and clarifies other provisions to incorporate legal developments that have arisen since 1970 and to address contemporary problems with implementation.

Sex is now defined to include “pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and sex stereotyping.”  Except when “sex is a bona fide occupational qualification reasonably necessary to the normal operation of a contractor’s particular business or enterprise,”  discriminatory practices will include:  

(12) Making any facilities and employment-related activities available only to members of one sex, except that if the contractor provides restrooms, changing rooms, showers, or similar facilities, the contractor must provide same-sex or single-user facilities; 

(13) Denying transgender employees access to the restrooms, changing rooms, showers, or similar facilities designated for use by the gender with which they identify; and

(14) Treating employees or applicants adversely because they have received, are receiving, or are planning to receive transition-related medical services designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth.

Disparate impact discrimination by otherwise facially neutral practices or policies is also prohibited and can include use of

recruitment or promotion methods, such as ‘‘word-of mouth’’ recruitment or ‘‘tap-on-the shoulder’’ promotion, that have an adverse impact on women where the contractor cannot establish that they are job-related and consistent with business necessity.

An entire subsection is devoted to discriminatory compensation: 

Contractors may not pay different compensation to similarly situated employees on the basis of sex. For purposes of evaluating compensation differences, the determination of similarly situated employees is case specific. Relevant factors in determining similarity may include tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors. In some cases, employees are similarly situated where they are comparable on some of these factors, even if they are not similar on others.

As for pregnancy discrimination, contractors may not, among other things, “[l]imit[] pregnant employees’ job duties based solely on the fact that they are pregnant, or require[e] a doctor’s note in order for a pregnant employee to continue working.”   Similarly, contractors must accommodate employees “who are unable to perform some of their job duties because of pregnancy, childbirth, or related medical conditions” in most circumstances.

A contractor must provide job-guaranteed medical leave, including paid sick leave, for employees’ pregnancy, childbirth, or related medical conditions on the same terms that medical or sick leave is provided for medical conditions that are similar in their effect on employees’ ability to work.

 A contractor must provide job guaranteed family leave, including any paid leave, for male employees on the same terms that family leave is provided for female employees.

Employers are also required to maintain equality in fringe benefits, including medical insurance programs.  In the lengthy preamble, OFFCP notes, among other things that:

some insurance plans have explicit exclusions of coverage for all health services associated with gender dysphoria or gender  transition. Such categorical exclusions are facially discriminatory because they single out services and treatments for individuals on the basis of their gender identity or transgender status, and would generally violate E.O. 11246’s prohibitions on both sex and gender identity discrimination.

The OFFCP notes, among other things, that:

Implicit in the provisions prohibiting discrimination on the basis of sex is the principle that distinctions for other reasons, such as differences in capabilities, are not prohibited. Distinguishing among employees based on their relevant job skills, for example, does not constitute unlawful discrimination.

The OFCCP recognized that some contractors may qualify for exemptions based on religion or First Amendment grounds and deleted an explicit requirement to provide contraception coverage on this ground:

OFCCP declines to implement a blanket exemption from these provisions because claims under RFRA are inherently individualized and fact specific. There is no formal process for invoking RFRA specifically as a basis for an exemption from E.O. 11246. Insofar as the application of any requirement under this part would violate RFRA, such application shall not be required. 

If a contractor seeks an exemption to E.O. 11246 pursuant to RFRA, OFCCP will consider that request based on the facts of the particular case. OFCCP will do so in consultation with the Solicitor of Labor and the Department of Justice, as necessary. OFCCP will apply all relevant case law to the facts of a given case in considering any invocation of RFRA as a basis for an exemption.

OFCCP also notes that the Supreme Court has recognized that the First Amendment to the Constitution requires a ‘‘ministerial exception’’ from employment discrimination laws, which prohibits the government from interfering with the ability of a religious organization to make employment decisions about its ‘‘ministers,’’ a category that includes, but is not limited to, clergy. OFCCP follows this precedent. 

Finally, OFCCP notes that E.O. 11246 contains an exemption that specifically allows religiously affiliated contractors (religious corporations, associations, educational institutions, or societies) to favor individuals of a particular religion when making employment decisions. The regulation implementing that exemption states that the nondiscrimination obligations of E.O. 11246 ‘‘shall not apply to a Government contractor or subcontractor that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities. Such contractors and subcontractors are not exempted or excused from complying with the other requirements contained in this Order.’’ OFCCP has already published guidance regarding the application of the religious exemption in Executive Order 11246 in connection with the recent Executive Order 13672 rulemaking. If, however, a contractor is unsure about whether its employment practices are shielded by this exemption, it can seek guidance from OFCCP.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Affirms $300K Jury Verdict in Same Sex Hostile Work Environment Case Despite Employer Taking Disciplinary Action within a Few Weeks

Last week, the Sixth Circuit affirmed a $300K jury verdict on a same-sex hostile work environment claim.  Smith v. Rock-Tenn Services, Inc. No. 15-5534 (6^th Cir. 2-10-16).   After the district court had granted summary judgment to the employer on the retaliation and constructive discharge claims, the jury trial focused on the male plaintiff’s claim of offensive touching by a co-worker, the employer’s slow response to his complaint, the employer’s failure to consult the co-worker’s personnel file to discover evidence of prior similar complaints and disciplinary action, and its failure to immediately separate the victim from the harasser, and otherwise ineffectively respond to the plaintiff’s concerns.  Although the plaintiff only had three interactions with the harasser, he and management were aware of other similar incidents.  The employer delayed 10 days to initiate an informal investigation and only suspended the harasser, despite threatening to fire him just a few months earlier for engaging in similar misconduct.  The decisionmaker had not been informed about, and did not consult his personnel file concerning, prior disciplinary actions or similar incidents.  Further, although the employer took disciplinary action within a few weeks, it never separated the victim from the harasser, which so distressed the plaintiff that he left and never returned to work.  The Court found that the jury was reasonable in finding harassment to exist and that the employer’s response was inadequate under the circumstances.

According to the Court’s opinion, the plaintiff received the employer’s employee handbook and sexual harassment policy during his orientation shortly after he was hired in August 2010.  The employer’s policy encouraged employees to attempt to work matters out between themselves before involving management.  In December of 2011, plaintiff observed the harasser grab a co-worker’s buttocks. A few months later, he then slapped plaintiff’s bottom when he walked by, causing the plaintiff to point at him and tell him to keep his hands off. 

The following week, the harasser grabbed the plaintiff’s bottom so hard that it hurt, which resulted in the plaintiff grabbing his harm and telling him that if he didn’t stop, someone would get hurt.  Plaintiff did not report either incident to management.  In early June, while the plaintiff was bent over picking up boxes, the harasser hunched over him and engaged in grinding.  This resulted in the plaintiff grabbing him by the throat and sharing a few choice words.  The harasser later apologized, but the plaintiff was so upset that he went home.

This final incident was brought to the attention of a few co-workers, one of whom told the plant superintendent.  The plaintiff told his female supervisor on the following Monday and learned that this had not been an isolated incident.  The plant superintendent questioned the plaintiff about it that Monday and said that nothing would be done until the operations manager returned from vacation on Friday. 

The plaintiff was sent back to the same work area as the harasser.   By this time, the plaintiff was so upset that he kept making mistakes in his work.  When he and the harasser were sent together for a hearing test, the plaintiff had become very angry.  Even though there were no other incidents with the harasser, the plaintiff suffered an anxiety attack within 10 days of the last incident.  He then requested medical leave to seek counselling from the emotional distress he suffered from the unaddressed harassment.   His request was granted.

Upon receiving the request for medical leave – 10 days after the incident had been reported, the operations manager spoke with a few employees and supervisors about the incident, but no interview notes or witness statements were taken.  The entire investigation was reflected on a single page of handwritten notes.  The harasser claimed that the plaintiff had backed into him and there were no other eyewitnesses.   There were some indications that similar incidents had happened before, but no follow up interviews were conducted. 

Although the superintendent, supervisor and human resources recommended that the harasser be terminated, the employer’s general manager only suspended him for two days.  This was supposedly without pay, but the harasser testified that he was paid.   The General Manager later admitted that he had not sought or considered the harasser’s prior disciplinary history or similar incidents. 

In fact, the superintendent and operations manager involved in this investigation were aware that the harasser had been warned in writing in March 2011 not to touch other employees or he would be terminated. He had touched a male co-worker standing at a urinal and was written up for harassment-horseplay.  Again, no witness statements had been taken.  The harassment policy had been reviewed with the harasser and the documentation had been placed in his personnel file. Human Resources had also been involved in an undocumented similar incident.    Yet, no one told the General Manager, who was in charge of disciplinary actions.

The plaintiff never returned to work and spent the next 18 months taking medication for anxiety and insomnia.  After exhausting his short-term disability, he was diagnosed with PTSD.  The harasser was not fired until July 2014 after he admitted during his deposition to mooning and/or touching other men in the workplace.   All of his misconduct had been directed against men.  There was apparently no evidence that he had ever been inappropriate with a female employee.

While the employer attempted to argue that the harasser’s conduct had simply been horseplay, the plaintiff convinced the jury that it was harassment by showing that only men were exposed to offensive touching.  “[T]he jury apparently found that pinching and slapping someone on the buttocks or grinding one’s pelvis into another’s behind goes far beyond horseplay.”  The Court also rejected the employer’s argument that the plaintiff essentially worked in a gender segregated department (rather than a mixed-sex environment) because 30% of the workforce were women (including the plaintiff’s supervisor) and women passed through the department regularly.  The Court also refused to require the plaintiff to prove more than the absence of offensive conduct towards women in order to prevail on a same-sex harassment claim.  

The Court also rejected the employer’s arguments that the harasser’s three interactions with the plaintiff were not severe or pervasive enough to constitute a hostile work environment because the plaintiff’s case could also rely on other incidents by the harasser which the plaintiff observed or learned about during his employment.  In addition, offensive touching is considered to be more severe than verbal insults or comments.  “’[W]hether harassment was so severe and pervasive as to constitute a hostile work environment to be ‘quintessentially a question of fact.’”  In particular, the Court found that the jury’s conclusion was not unreasonable based on the evidence presented.

 

The Court also found the employer’s response to be inadequate because there was documentation of recent prior similar incidents and disciplinary actions involving the harasser, but that information was not shared with decisionmakers or followed-up in any deliberate fashion.  The employer’s policy of taking witness statements and preparing a formal report were not followed.  

To impose liability on an employer for the harassing conduct of a plaintiff’s co-worker, a “plaintiff must show that the employer’s response to the plaintiff’s complaints ‘manifest[ed] indifference or unreasonableness in light of the facts the employer knew or should have known.’”  . . . A plaintiff must therefore show that the employer “knew or should have known of the harassment” and “failed to take prompt and appropriate corrective action.”  “Generally, a response is adequate if it is reasonably calculated to end the harassment.”  . . . Appropriate steps “may include promptly initiating an investigation.”  . . . Even separating the harasser and victim immediately may not be enough without further action on the employer’s part.

Although the employer argued that the steps it took were clearly prompt and appropriate under the circumstances, the employer “fails to grasp that what it failed to do is just as important.”

In this case, a reasonable jury could have concluded that Defendant’s total inaction for ten days, where Defendant knew that Leonard had touched Plaintiff, and had told Leonard that further complaints would result in termination, was unreasonable.  Defendant did not separate the two men, suspend Leonard pending an investigation, or initiate its investigation in a timely manner; a reasonable jury could find that the failure to take any of these steps or others rendered its response neither prompt nor appropriate in light of what it knew or should have known regarding Leonard’s prior misconduct.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Court of Appeals Affirms $105K in Damages for Same Sex Harassment

Earlier this month, a unanimous Franklin County Court of Appeals affirmed $105,000 in damages for a same sex hostile work environment harassment claim. Tod v. Cincinnati State Technical & Community College, 2011-Ohio-2743. In Tod, the female plaintiff complained about her female manager referring to her "Barbie doll figure," the size of her chest, her figure, as a "bit**" and other similar comments throughout her employment. After 14 months of documenting the problems, she finally reported the problem to human resources and then began to feel retaliated against. She then found another job, but did not report her present employment out of fear of further retaliation. She was then fired from both jobs. The Court rejected the employer's attempt to argue that the harassment was welcomed, not reported in a timely basis, or sufficiently hostile. The Court also rejected the contention that the harassment was not based on sex because the manager's comments were inherently sexual.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Hotel Chain to Pay $370K to Settle Same-Sex Harassment Lawsuit Filed by EEOC.

Last week, the EEOC announced that a hotel employer had agreed in a consent decree to settle a same sex-harassment lawsuit filed in federal court in Seattle, Washington, by, among other things, paying $370,000 (to be divided among the four-teenaged victims), providing anti-discrimination training for managers, supervisors and employees at the hotel resort, establishing policies and procedures to address sexual harassment issue, reporting any future discrimination complaints to the EEOC and allowing the EEOC to monitor the work site for the next three years. In its lawsuit, the EEOC alleged that the employer had failed to stop the male hotel manager from sexually harassing teenaged male employees when he “repeatedly subjected young male employees between the ages of 17 and 25 to unwelcome touching of a sexual nature, comments about their physical appearance, and sexually charged situations.”

The defendant was “WorldMark by Wyndham (formerly Trendwest) [which] employs several thousand individuals and is a wholly owned subsidiary of Parsippany, N.J.-based Wyndham Worldwide Corporation (NYSE:WYN), the world’s largest hotel franchisor, vacation ownership company and vacation exchange network, which includes chains like Wyndham Hotels and Resorts, Ramada Inn, Howard Johnson, and others.”

Insomniacs can read the full EEOC press-release at http://www.eeoc.gov/press/10-23-08a.html.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.